Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, Owned by Frank H. Terry, Jr., John Coles Terry, III, and Elizabeth Lee Terry

CourtDistrict Court, W.D. Virginia
DecidedApril 14, 2023
Docket7:20-cv-00134
StatusUnknown

This text of Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, Owned by Frank H. Terry, Jr., John Coles Terry, III, and Elizabeth Lee Terry (Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, Owned by Frank H. Terry, Jr., John Coles Terry, III, and Elizabeth Lee Terry) is published on Counsel Stack Legal Research, covering District Court, W.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, Owned by Frank H. Terry, Jr., John Coles Terry, III, and Elizabeth Lee Terry, (W.D. Va. 2023).

Opinion

FIONR T THHEE U WNIETSETDE RSTNA DTIESST RDIICSTT ROIFC TV ICROGUINRITA ROANOKE DIVISION

MOUNTAIN VALLEY PIPELINE, LLC, ) ) Plaintiff, ) ) v. ) Civil Action No. 7:20-cv-134 ) 8.37 ACRES OF LAND, OWNED BY ) By: Elizabeth K. Dillon FRANK H. TERRY, JR., et al., ) United States District Judge ) Defendants. )

MEMORANDUM OPINION This matter was tried to a jury who, after the close of evidence, deliberated and returned a verdict of $523,327 in just compensation owed by plaintiff Mountain Valley Pipeline (MVP) for its condemnation of easements on property owned by defendants Frank Terry, Elizabeth Terry Reynolds, and John Coles Terry (the Terrys or the landowners). (Dkt. No. 95.) Before the court are MVP’s motion for judgment as a matter of law and, in the alternative, for a new trial (Dkt. No. 110) and the landowners’ motion for attorney fees (Dkt. No. 103). After the hearing, the landowners filed two notices of supplemental authority. (Dkt. Nos. 120, 124.) MVP moved to strike these submissions (Dkt. Nos. 121, 125), which motions will be granted. For the reasons stated below, the court will grant MVP’s motion for judgment as a matter of law, set aside the jury verdict, and direct the entry of judgment in the amount of $261,033. The court will also conditionally grant a new trial, with the option of remittitur. The landowners’ motion for attorney fees will be denied. I. BACKGROUND MVP has condemned easements on property owned by defendants, identified as MVP No. VA-RO-046. The subject property includes 560 acres on Poor Mountain Road in Roanoke County, Virginia. The property is improved with a two-story farmhouse, a rental dwelling, garage, storage sheds, and an efficiency apartment. It is accessed by a private driveway. A. Expert Disclosures and Pretrial Motions In his initial expert report for the landowners, real estate appraiser Dennis Gruelle notes that in 2012 the landowners entered a lease with Invenergy Wind for the development of a wind farm on the property. (Dkt. No. 12-2 at 12.) This lease followed the passing of an ordinance by Roanoke County in 2011 that permitted wind energy systems.1 (Id.) Gruelle concluded that the highest and best use of the property before the taking is “for the industrial development of a wind farm or solar farm.” (Id. at 13.) He also refers to this highest and best use as “commercial development for wind farming.” (Id. at 29.) He then determined a pre-take value of the property and noted that “[a]ll of the comparable sales are suitable for commercial uses similar to the subject.” (Id. at 21.) In his

analysis of the value of the property after the taking, Gruelle stated that “[a]fter MVP announced its project, the Invenergy Wind deal failed.” (Id. at 26.) Because of this, Gruelle concluded that another wind farm project was not “reasonable or probable after the installation of the MVP project as the market actions of Invenergy demonstrate the incompatibility of underground easements and wind farming.” (Id.) Because he believed this incompatibility was not unique to wind farms, he opined that solar farming was no longer available. (Id. at 26, 29.) Apparently, Gruelle reached this mistaken conclusion without checking with Invenergy. Based on this error, Gruelle found that the highest and best use of the property after the taking is for a “single-family residential subdivision” or a “family subdivision” (Dkt. No. 12-2 at 26, 29).

Following MVP’s disclosure of an expert rebuttal report of April Montgomery (Dkt. No. 12- 4), the Director of Site Development Services for SWCA Environmental Consultants, concluding that “a wind project on the Terry property is not negatively impacted by the construction of the

1 There is no mention of a lease for solar farm purposes or any County ordinance allowing solar farms. Mountain Valley Pipeline (id. at 1),” Gruelle issued a new report (Dkt. No. 13-1). In his new report and after checking with Invenergy, Gruelle reversed his opinion that the MVP project prevents development of the property as a wind farm. (Id. at 1.) In doing so, Gruelle found that the highest and best use of only a portion of the property—the northern 323 acres of the property—is a wind farm, both before and after the taking. (Id. at 1, 37.) Gruelle stated that he had now spoken with Invenergy and learned that the company abandoned the Terry lease for reasons unrelated to the pipeline. (Id. at 36–37.) Gruelle also admitted to knowing previously that defendant Frank Terry had only guessed that the pipeline negatively affected the Invenergy wind farm project. (Id. at 36.) Gruelle’s second report included the above new opinion and many other new opinions. Instead of requesting additional time to disclose expert witnesses, the Terrys asserted that Gruelle’s

second report was merely a supplemental report. The court found otherwise and issued an order granting MVP’s motion to exclude Gruelle’s second report as an untimely-filed new report and finding that the failure to comply with the court’s scheduling order was not substantially justified or harmless. (Dkt. No. 31 at 10–13.) B. Trial Testimony At trial, the Terrys called Gruelle as their expert on real estate valuation. Because his second report had been excluded, the landowners sought testimony from his first report wherein he was mistaken about the pipeline affecting the highest and best use of the property. Gruelle testified that the property was suitable for many uses. The property had the potential for residential use (a

family subdivision), timbering use, agritourism/ecotourism use, and wind and solar farming use. (Trial transcript, Dkt. No. 100 at 41.) He then opined that the highest and best use of the entire property before the taking was as a wind farm or solar farm, with the wind farm being the “main one.” (Id. at 46.) Of course, the highest and best use of a property is the most profitable use of a property. United States v. 8.929 Acres of Land, 36 F.4th 240, 253 (4th Cir. 2022). Gruelle testified that the value of the property before the taking was $1,900,000. (Id. at 86, 90.) He valued the land at $2,900 per acre, or $1,624,000, and he valued the improvements at $281,400. (Id.) Gruelle was not permitted to give an opinion on the value of the property after the taking or a diminution in value caused by the pipeline because, as Gruelle had recognized in his second report, the pipeline project did not affect the use of the property as a wind farm. (Id. at 7–8; see also Dkt. No. 31 at 10 (explaining that Gruelle “was mistaken and believed that the pipeline made the property incompatible for use as a wind farm”).) He testified that the termination of the Invenergy project had nothing to do with the pipeline. (Id. at 111.) Gruelle also testified that his comparable sales regarding the pre-take value were “reflective

of the residential market” and any commercial user would have to compete with the residential market. (Id. at 56.) Despite this attempt to relate his valuation of the property for commercial/industrial uses to a residential use value, he testified to the differences between the two. He stated that the property was advantageous for green energy purposes because it has a 138 kV power line crossing the top third of the property and green energy users like to co-locate with available power lines. (Id. at 38.) One can assume that such a feature is not advantageous for residential purposes. He also stated that properties with multiple possible uses could command a higher price than single use properties and that wind farm users would pay equal or more than people buying a property for a family subdivision. (Id. at 46.) Moreover, a wind farm, as

contemplated by the lease agreement between Invenergy and the Terrys, would allow the property to be income-generating as the rental rate was based on the amount of electricity produced. (Id.

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Mountain Valley Pipeline, LLC v. 8.37 Acres of Land, Owned by Frank H. Terry, Jr., John Coles Terry, III, and Elizabeth Lee Terry, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mountain-valley-pipeline-llc-v-837-acres-of-land-owned-by-frank-h-vawd-2023.