United States v. 1.604 Acres of Land, more or less, Situate in Norfolk

844 F. Supp. 2d 685, 2011 WL 1843029, 2011 U.S. Dist. LEXIS 52039
District Court, E.D. Virginia·Decided May 16, 2011·No. Case No. 2:10-cv-00320·Published·Cited by 1 cases

Opinion

MEMORANDUM OPINION

NORMAN K. MOON, District Judge.

This matter is before the Court upon several pretrial motions filed by the parties. The Court’s opinion dated April 25, 2011, 844 F.Supp.2d 668, 2011 WL 1566015 (E.D.Va.2011), disposed of five of those motions (docket nos. 136-37, 139, 141^42). The parties’ arguments on the remaining motions were heard on May 13, 2011. This memorandum opinion sets forth the Court’s ruling on the remaining pretrial motions.

This is a land condemnation action initiated by Plaintiff United States on July 1, 2010 to take the parcel of land designated “1.604 Acres of Land, More or Less, Situate in the City of Norfolk, Commonwealth of Virginia” (“the property”) for the purpose of constructing an annex to the Walter E. Hoffman United States Courthouse (docket no. I).1 The property is located in downtown Norfolk, Virginia, across the street from the existing federal courthouse, at the southwest corner of Granby Street and Brambleton Avenue. The defendants claiming interest in the property are 515 Granby, LLC (“Defendant”), which is the fee owner of the property, and Marathon Development Group, Inc. (“Marathon”), which was hired by Defendant to manage development of the property. The background and findings of fact made in the Court’s opinion dated April 25, 2011 are hereby incorporated by reference. In that opinion, the Court excluded from trial all evidence based on influence of the government project and the continued development of Granby Tower as the highest and best use of the property. The opinion allowed the presentation of evidence related to costs and entrepreneurial incentive at trial, while reserving the right to exclude such information if it was unfounded or improper.

Defendant’s Motion to Exclude the Purchase of Condominium Units by Counsel for 515 Granby, LLC and Marathon Development Group, Inc. (docket no. 130) appears to be moot in light of this Court’s prior orders on project influence and highest and best use. If Plaintiff seeks to admit this evidence at trial, I will address its admissibility at that time.

In Defendant’s Motion in Limine to Exclude Real Estate Tax Assessment (docket no. 131), Defendant seeks to exclude the tax assessed value of the property and any real estate tax payments. Based on the parties’ substantial agreement on this issue, I will exclude any evidence of the tax assessed value of the subject property and any real estate tax payments for that property introduced for the purpose of proving the market value of the property. If objections are raised at trial to Plaintiffs expert’s testimony on tax assessments tracked over time in the Norfolk market, I will address those objections then.

[688]*688In Defendant’s Motion in Limine to Exclude Evidence of Prior Litigation and Unpaid Construction Costs (docket no. 132) , Defendant seeks to exclude from trial evidence of several suits filed against it, against its managing member Frank T. “Buddy” Gadams, and against other business entities associated with Mr. Gadams. The suits concerned, among other things, unpaid construction costs, unreturned sales deposits, and unpaid advertising expenses. Defendant also seeks to exclude evidence related to various construction costs billed to Defendant but never paid. Defendant argues that evidence whether the costs incurred by the landowner have been paid is not probative to the value of the property and would be prejudicial to Defendant. I agree. Although evidence introduced for the specific purpose of showing that Defendant has not paid its bills is generally inadmissible in this matter, every possible situation in which admission of such evidence would be sought cannot be anticipated. Therefore, I will rule on this motion, if necessary, when evidence is heard at trial.

Defendant’s Motion in Limine to Exclude Offers of Settlement (docket no. 133) under Federal Rule of Evidence 408 will be granted.

With respect to Defendant’s Motion in Limine to Exclude the Purchase Price of the Subject Property (docket no. 134), Defendant acquired the subject property in three separate transactions. The first parcel was acquired on August 27, 2003 for $950,000. The second parcel was acquired on May 24, 2004 for $1,250,000. The third parcel was conveyed to Defendant by the City of Norfolk via quitclaim deed and subject to certain conditions and consideration, on November 9, 2005. Defendant argues that the sales prices of the separate parcels should be excluded because they are not probative to the fair market value of the property as of July 1, 2010 and are unfairly prejudicial. Defendant’s expert Mr. Marchitelli estimates the fair market value of the land as of July 1, 2010 to be $11,200,000 and Mr. Cantrell figures it to be $10,480,000. Plaintiffs expert valued the property as if vacant at $7,000,000. None of the expert opinions on the value of the land are close to the total value of the individual parcels before they were assembled, which amounts to $2,200,000. Evidently, the parties agree that the value of the assembled property as a whole on July 1,. 2010 is significantly more than the sum of the prices paid for the three individual parcels before their assembly. None of the experts used the sale prices of the property’s constituent parcels as comparable market sales in order to value the land. Nor did they arrive at the value of the land by estimating the sum of the value of the constituent parcels.

The trial court has discretion to exclude evidence of prior sales of the property being valued or of portions thereof when such evidence would confuse or mislead the jury on the question of value. United States v. 5139.5 Acres of Land, 200 F.2d 659, 661 (4th Cir.1952). Relevant evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. Fed. R.Evid. 403. Although Plaintiff cites authority allowing for the admission of the prior sales prices of a property being valued or of portions thereof, in each of those cases the evidence was probative and the balancing requirement of Rule 403 was satisfied. See Dickinson v. United States, 154 F.2d 642, 643 (4th Cir.1946) (directing admission of evidence of sale price of subject property or a portion thereof that occurred six years before its taking); 5139.5 Acres of Land, 200 F.2d at 661 (stating that sales of timber on subject property that occurred shortly before its [689]*689taking “certainly tended to establish its value”); United States v. 100.01 Acres of Land, 102 Fed.Appx. 295, 298 (4th Cir.2004) (unpublished) (stating that the purchase price of the entire subject property less than a year before its taking was “extremely probative of fair market value”). Here, the assembly of the three parcels into one fee simple substantially increased their value. The jury is tasked with determining the value of the property as a whole. Where that value cannot be reliably estimated by considering the sum of the value of the property’s constituent parcels, the probative value of the prior sales prices to the jury is quite minimal.

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United States v. 1.604 Acres of Land, more or less, Situate in Norfolk, 844 F. Supp. 2d 685, 2011 WL 1843029, 2011 U.S. Dist. LEXIS 52039 (E.D. Va. 2011).

844 F. Supp. 2d 685 (United States v. 1.604 Acres of Land, more or less, Situate in Norfolk) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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