Opinion
C.A. No. 05C-07-299 MMJ.
Submitted: August 16, 2007.
Decided: October 3, 2007.
Upon Defendant's Motion in Limine DENIED IN PART GRANTED IN PART .
William D. Bailey, Jr., Esquire, Biggs and Battaglia, Wilmington, Delaware, Attorney of Plaintiff.
Richard L. Abbott, Esquire, Abbott Law Firm, Wilmington, Delaware, Attorneys for Defendant Glasgow Shopping Center Corporation.
OPINION
PROCEDURAL CONTEXT
On July 28, 2005, Eastern Shore Natural Gas Company ("ESNGC") filed a condemnation action. The condemnation action involves the Peoples Plaza shopping center. Glasgow Shopping Center Corporation ("Glasgow") and First Union National Bank ("First Union") own Peoples Plaza. ESNGC seeks to acquire certain easement rights for a natural gas pipeline. On August 10, 2005, ESNGC filed a Motion for an Order of Possession under 10 Del. C. § 6110. Following oral argument, the Court granted the Order of Possession on October 3, 2005. Compensation for the condemned property must be determined.
Pursuant to 10 Del. C. § 6108, a panel of three commissioners will determine the just compensation for the condemned property. The Superior Court maintains jurisdiction over all issues of law and the admissibility of evidence.
Del. C. § 6108(e).
Glasgow plans to introduce Jeffery Merrick and Virginia Moxley to testify before the commissioners as to the value of the condemned property. On February 1, 2007, ESNGC filed a Motion in Limine to exclude the testimony of Moxley. Glasgow filed an answer on June 21, 2007. On July 6, 2007 ESNGC filed an answer in support of the Motion in Limine. The Court held oral argument on August 16, 2007.
SUMMARY OF FACTS
Moxley is an employee of Glasgow. Glasgow is a closely-held, family-owned corporation. Moxley has worked for Glasgow for 34 years and is currently the Assistant Vice President. Moxley oversees the daily operations of the corporation, including leasing and property management at Peoples Plaza shopping center. Moxley is responsible for leasing, tenant relations and maintenance. For major business decisions, she seeks authority from the Glasgow Board. Moxley does not own any portion of Peoples Plaza, nor is she a stockholder of Glasgow. Moxley is not a certified appraiser.Glasgow wants to call Moxley to testify as to the fair market value of the condemned property. Moxley's opinion uses several factors to determine value. Moxley valued the land at $375,000 per acre. This figure takes into account a real estate sale at Kohl's department store on March 20, 2002. Moxley tracked the details of the sale in the newspaper. Kohl's is located near Peoples Plaza. Moxley adjusted the figure to account for the passage of time. To determine the percentages for permanent easements, discounting, and temporary easement, she used a report presented by ESNGC's certified appraiser, Phillip McGinnis.
Moxley concludes that the compensation due to defendants is $482,400. Glasgow also will present the testimony of Merrick, a certified appraiser. Merrick prepared an appraisal report that values the condemned property at $253,825.
In support of the Motion in Limine, ESNGC makes the following arguments: (1) the record owner rule did not survive the adoption of the Delaware Rules of Evidence ("D.R.E."), specifically, D.R.E. 701, which governs the testimony of a lay witness. Thus, Moxley must testify as an expert witness, and she is not qualified. (2) In the alternative, if the Court finds the record owner rule still applicable, Moxley cannot be considered an owner of the condemned property. Therefore, she cannot testify.
ANALYSIS Record Owner Rule
Since 1960, Delaware has recognized a property owner's right to give an opinion as to the value of real estate. The rule is based on the theory that landowners have special knowledge concerning the value of their own land. During a condemnation proceeding, a landowner may testify as to the value of condemned property.
State v. 0.15 Acres or Land, 164 A.2d 591, 593 (Del. 1960).
State ex rel. Secretary of Dept. of Transp. v. Mulholland, 1994 WL 680002, at *2 (Del.Super.).
Id.
In order to testify, the landowner must be familiar with the elements of the property. Unless the Court finds that the owner has no knowledge of the value of the property, the owner will be permitted to testify. If the owner bases the opinion on the fair market value of comparable properties, the owner must establish familiarity with the comparable properties. The owner need not possess special skills in order for the testimony to be admissible. The panel of commissioners is responsible for weighing the value of the testimony based on the owner's personal knowledge.
Klair v. Day, 1988 WL 4756, at *1 (Del.Super.).
Id.
State ex. Rel. State Highway Dept. v. J. H. Wilkerson Son, 280 A.2d 700, 702 (Del. 1971).
State v. 0.15 Acres of Land, 164 A.2d 591, 593 (Del. 1960).
Id.
Adoption of Delaware Rule of Evidence 701
Delaware Rule of Evidence 701 governs the testimony of a lay witness. D.R.E. 701 provides: "If the witness is not testifying as an expert, the witness testimony or inferences is limited to those opinions or inferences which are (a) rationally based on the perception of the witness and (b) helpful to a clear understanding of the witness testimony or the determination of fact in issue and (c) not based on scientific, technical or other specialized knowledge within the scope of Rule 702."When the Supreme Court first published the Rules of Evidence in 1980, the rules were to "supersede any inconsistent rule of evidence." ESNGC argues that the record owner rule did not survive the adoption of the Delaware Rules of Evidence. However, since the adoption of the Delaware Rules of Evidence, this Court repeatedly has upheld the record owner rule. The record owner rule is well-established Delaware jurisprudence.
In re Adoption of the Delaware Uniform Rules of Evidence, Del. Supr., en banc (Feb. 1, 1980).
See Cingular Pennsylvania, LLC v. Sussex County Bd. of Adjustment, 2007 WL 152548, *7 (Del.Super.); State v. Mulholland, 1994 WL 680002, at *1 (Del.Super.) (The owner of property "can give his opinion as to the fair market value of the property before the taking [and] the owner's familiarity with the property creates "a species of special knowledge, with respect to its value.") (citing Lignon v. Brooks, 196 A.2d 200, 201 (Del.Super.)); Cronin v. Board of Assessment Review, 1992 WL 52181, at *2 (Del.Super.) ("Delaware law permits a property owner to give his opinion as to the value of his real estate.").
Repeal by Implication
ESNGC also contends that the 2001 amendment to D.R.E. 701 repeals by implication the record owner rule. Repeal by implication is not favored. Repeal by implication "will apply only if an `irreconcilable inconsistency' exists between pre-existing and subsequent enactments." No "irreconcilable inconsistency" exists between the record owner rule and D.R.E. 701. In fact, D.R.E. 701 is consistent with the record owner rule. Record owners can testify as to their perceptions of the property value, so long as those perceptions are not based on any scientific or specialized knowledge. Additionally, the testimony must be helpful to the trier of fact. The Court finds that the record owner rule was not repealed by the 2001 amendment to D.R.E. 701.
Bd. of Assessment Review of New Castle County v. Silverbrook Cemetery Corp., 378 A.2d 619, 621 (Del. 1977).
State v. 0.15 Acres of Land, 164 A.2d 591, 593 (Del. 1960).
Qualifications of a Person Testifying Under the Record Owner Rule
Moxley must testify within the confines of D.R.E. 701. Moxley is not a certified appraiser, nor has she been trained in the field. Section 4007 of title 24 of the Delaware Code provides that no person may represent themselves as an appraiser unless they have been duly licensed and certified. Moxley's testimony must be based on her personal knowledge of the property, not statistics or equations normally utilized by a certified appraiser. Therefore, the Court holds that Moxley cannot rely on the technical statistics contained in McGinnis' expert appraisal opinion.
The applicability of the record owner rule can extend to non-owners, especially when the record owner is a corporate entity. A corporation can only act through designated agents. In a condemnation proceeding, the corporation must designate an individual to testify on behalf of the corporation. In State v. Davis, this Court allowed the vice-president of a corporation to testify as to the value of company property. The corporation must designate an employee who demonstrates the requisite familiarity with the condemned property. If the employee's familiarity with the property value does not meet the requisite "special knowledge" level, the Court may exclude the testimony.
See State ex rel. Secretary of Dept. of Highways and Transp. v. Davis, 355 A.2d 883, 885 (Del. 1976).
Guthridge v. Pen-Mod, Inc., 239 A.2d 709, 711-12 (Del.Super. 1967).
Davis, 355 A.2d at 885.
See Mulholland, 1994 WL 680002.
Moxley is authorized by the Directors and Officers of Glasgow to provide testimony as to the value of the condemned property. Moxley is acutely familiar with Peoples Plaza. She is authorized to run the day-to-day operations of Peoples Plaza including tenant relations, leasing and property management. Her familiarity is compounded by 34 years of employment. The Directors and Officers of Glasgow manage Peoples Plaza at arms-length through Moxley. The Court concludes that Moxley exhibits the requisite "special knowledge" needed to testify, as the owners' representative, to the value of the condemned property.
0.15 Acres of Land, 164 A.2d at 593.
CONCLUSION
The finder of fact in this case is a three commission panel and not a jury. Therefore, the Court will err on the side of admissibility. The Court finds that Moxley is qualified to testify as a lay witness concerning the value of the condemned property under the record owner rule. However, the Court will limit her testimony.Moxley may not base her evaluation on the statistics provided by certified appraiser Philip McGinnis. Statistics created by a certified appraiser require specialized skill and training to appreciate. As a lay witness, Moxley is not qualified to integrate technical appraisal statistics into her testimony.
THEREFORE, Defendants Motion in Limine to Exclude the Testimony of Virginia Moxley is DENIED IN PART, GRANTED IN PART.