INTRODUCTION :: Respondent, a shopping center owner in Broward County, sought damages resulting from an eminent domain taking by Petitioner, the Florida Department of Transportation. Petitioner’s partial taking resulted in a decrease in the number of available parking spaces on Respondent’s property. Respondent sought “severance damages” and compensation for the property actually taken. Both parties agreed that the shopping center would no longer be operable if improvements to the land were not implemented after the taking.
To minimize the impact of the partial taking, both sides submitted “cures” as a way to improve the post-taking property. In support of its proposal, each party presented expert testimony on the value of the property after the taking and on the costs to cure. Petitioner’s appraiser testified regarding a cure that created additional parking by eliminating an arbor area currently on the property. The appraiser estimated severance damages resulting from the taking at $ 308,400, plus an additional $ 102,300 for the cost to cure. Respondent’s appraiser calculated severance damages at $ 493,000, and a cost to cure of $ 425,000. At trial, a jury returned a verdict awarding Petitioner $ 308,400 for severance damages and $ 318,750 for the cure. Respondent appealed to the Fourth District Court of Appeal, which reversed the final judgment. Relying on a series of cases from the First District Court of Appeal, the Fourth District held that Petitioner’s appraiser did not properly consider the necessary factors in determining severance damages. It found that the appraiser’s calculation failed to account for the loss in value caused by converting the arbor area into parking. As a result, the Fourth District concluded that his testimony should have been excluded. The Florida Supreme Court reversed and HELD, that the failure of an otherwise competent witness to consider one of many factors in determining compensation goes to the weight of his testimony, and not to his competency to testify as a witness.
In Florida, when the government appropriates private property, the affected landowner is entitled to a hearing to determine the amount of compensation due. This right applies whether the government appropriates the whole parcel or only a part of it. When the government engages in a partial taking, the landowner is entitled to a form of compensation known as severance damages. This amount is equal to the decrease in value of the remainder parcel caused by the partial taking.
Often, the loss in value caused by the taking is a contested issue between the parties. To prove its theory of damages, a party may call on expert appraisers to testify as to the amount of the decrease in value. Given that these expert appraisers have a great deal of influence on the factfinder, requirements are in place to ensure competent expert testimony. These requirements transform the scientific foundations of an expert’s testimony into initial matters of admissibility for the judge to decide, rather than questions as to the weight of evidence for the jury to decide.
As evidentiary gatekeepers, judges in Florida are generally guided by the principle laid down in Frye v. United States. Under Frye, an expert’s testimony is admissible only if the scientific principle or method upon which the expert relies has “gained general acceptance in the particular field in which it belongs.” The Frye test ensures that only those methods deemed generally accepted, and thus competent, will be heard by the fact-finder.
In State Road Department v. Falcon, Inc., the Second District Court of Appeal laid the foundation for the admissibility of expert testimony in eminent domain proceedings. In Falcon, two expert appraisers testified on behalf of the State Road Department as to the amount of compensation to which they believed Falcon was entitled as a result of the taking. In calculating damages, they analyzed sale prices of similar properties during a five-year period. However, their calculation failed to account for a transaction involving the sale of a Holiday Inn. Ordering a new trial, the trial court held that the Department’s appraisers’ testimony was prejudicial to Falcon, as the appraisers’ failure to account for the Holiday Inn sale caused them to underestimate the value of the appropriated land. On appeal, the Second District Court of Appeal reversed, and held that the failure of an otherwise competent witness to consider one of numerous factors in determining compensation goes not to the competency of the testimony, but only to its weight.
Four years later, the Second District Court of Appeal, in Rochelle v. State Road Department, further clarified the minimal burden an expert appraiser must meet. The State Road Department initiated an eminent domain proceeding against Rochelle to appropriate land for the building of a turnpike interchange. The Department’s appraiser calculated damages by looking at the capitalization of a lease on the property, a new method of appraising. The trial court held that use of this technique made the appraiser’s testimony incompetent, and the judge struck it from the record. On appeal, the Second District Court of Appeal reversed, holding that the method used by an expert appraiser does not relate to the competency of the testimony, but is only relevant to its weight. Only when the appraisal method is totally inadequate, improper, or entirely new and unauthenticated will the court exclude the appraiser’s testimony.
While the Second District Court of Appeal was crafting a lenient standard for expert appraiser admissibility, the First District Court of Appeal was establishing a higher threshold. In State Department of Transportation v. Murray, the First District Court of Appeal affirmed its prior rulings excluding expert testimony when the appraiser improperly calculated severance damages. In Murray, the Department of Transportation took a portion of a restaurant owner’s parking lot for a state road expansion. The Department of Transportation’s appraiser planned to testify that the loss could be replaced by adding parking spaces to the ends of the existing lot and by striping a paved area used for overflow parking. The trial court excluded this cure testimony on the grounds that the appraiser failed to account for certain valuation factors in calculating severance damages. Specifically, the appraiser’s method ignored the reduction in value of a restaurant with a smaller parking area for its customers. Although the First District Court of Appeal quashed the trial court’s decision on other grounds, it affirmed the exclusion of the Department of Transportation’s appraiser’s testimony.
The Murray holding demonstrates the inconsistencies that developed between the district courts of appeal in determining the admissibility of appraiser testimony. Under the Second District’s analysis in Falcon, the testimony of the appraiser in Murray would have been found to be competent, and thus admissible. Any failure to account for “valuation factors” such as overflow parking loss would go to the weight of the appraiser’s testimony, and not to its competency. Furthermore, the method used by the appraiser in Murray would likely meet the minimal threshold set by the Second District in Rochelle. So long as the Murray appraiser’s method would not “require departing from all common sense and reason,” it would be admissible under Rochelle.
In the instant case, the Florida Supreme Court resolved these prior ambiguities in determining whether expert appraiser testimony is admissible. Given that the First and Second District Courts of Appeal were at opposite ends of the admissibility spectrum, the instant court had two alternative views from which to choose. The court explicitly adopted the principles laid down by the Second District. After the instant case, expert appraiser testimony is admissible so long as the method employed is within the minimal standard set forth in Rochelle. Even unauthenticated and improper methods may be admissible, so long as they are not a complete departure from common sense.