Case Title: Colonial Pipeline Co. v. Weaver

Citation: 310 N.C. 93, 310 S.E.2d 338

Docket Number: 211A83

State: north-carolina

Court: North Carolina Supreme Court

Date: 1984-01-10T00:00:00Z

Document:
310 S.E.2d 338 (1984) 310 N.C. 93 COLONIAL PIPELINE COMPANY v. H. Michael WEAVER and wife, Sonja R. Weaver. No. 211A83. Supreme Court of North Carolina. January 10, 1984. *340 Adams, Kleemeier, Hagan, Hannah & Fouts by Joseph W. Moss and Larry I. Moore, III, Greensboro, for petitioner-appellee. Brooks, Pierce, McLendon, Humphrey & Leonard by James T. Williams, Jr. and S. Leigh Rodenbough, IV, Greensboro, for respondents-appellants. MARTIN, Justice. The Court of Appeals remanded this case for a new trial based upon three errors in evidentiary rulings by the trial court having to do with the petitioner's cross-examination of respondent Weaver and his expert witness, James E. Flynt, Jr., regarding the value of the property in question. Pursuant to Rules 14, 16, and 28 of the North Carolina Rules of Appellate Procedure, the petitioner included in its brief to this Court additional questions for review. Upon careful consideration of all the issues, we modify and affirm the decision of the Court of Appeals. Petitioner's first assignment of error relates to the trial court's exclusion of evidence of the previous purchase price respondent Weaver allegedly paid for a one-half undivided interest in the subject property. On direct examination, Mr. Weaver testified that in his opinion the value of his property immediately before the taking by Colonial Pipeline was $4,500,000. On cross-examination, Weaver was then questioned at length about his acquisition of the subject property. The relevant portion of this cross-examination follows: Petitioner argues that the evidence of the 1971 purchase price was admissible for two purposes: (1) as substantive evidence of the fair market value at the time the property was taken; (2) for impeachment purposes to challenge the accuracy of Mr. Weaver's opinion of the fair market value of the property, as well as to rebut previously submitted evidence concerning the sales price of right-of-way interests in the property conveyed in 1963 and 1964. The Court of Appeals upheld the trial court's exclusion of the evidence for substantive purposes but held that the evidence was nevertheless competent for purposes of impeachment to test the accuracy of Mr. Weaver's opinion as to the value of the property. We disagree with this second conclusion. Evidence of the purchase price in this particular 1971 transaction was improper for impeachment as well as valuation purposes. First, we discuss the competency of the testimony as substantive evidence. In a case such as this, where only a part of a tract is taken, the measure of damages for said taking is the difference between the fair market value of the entire tract immediately prior to said taking and the fair market value of the remainder immediately after said taking. Gallimore v. Highway Comm., 241 N.C. 350, 85 S.E.2d 392 (1955). Light Co. v. Moss, 220 N.C. 200, 205, 17 S.E.2d 10, 13 (1941). The same factors are to be considered as in the sale of property in the open market between private parties where both the seller and buyer bargain for the sale and purchase of the property. Id. at 212, 17 S.E.2d at 18 (Clarkson, J., concurring). It follows that the basis for a fair market value determination is an arm's length transaction, negotiated between parties, each acting in his or her own self interest. We find this crucial concept to be determinative *342 of the questions concerning respondents' testimony above. In determining the admissibility of evidence of the purchase price of property, the following is applicable: Shopping Center v. Highway Commission, 265 N.C. 209, 211-12, 143 S.E.2d 244, 245-46 (1965) (citations omitted). Thus, in cases involving questions of the admissibility of the purchase price of the same or similar property, the law's insistence on an arm's length transaction as the initial basis for any determination of relevance is and has been clear. Respondent Weaver was asked on cross-examination about his purchase of the remaining one-half undivided interest in the subject property from his former business partner in 1971. It is true that the expiration of eight years from the time of the acquisition of the property until the present condemnation is significant: Respondent presented evidence tending to demonstrate changes in the northwest Greensboro vicinity of the property which might have affected its value and in addition testified that during his term of ownership he had made noteworthy improvements to the property by thinning, treating, and planting trees. This Court, however, need not proceed as far as this second requirement to determine whether evidence of the purchase price was relevant to an inquiry as to the property's market value at the time it was condemned. The determinative factor on this issue is the more basic initial requirement that the prior sale be an arm's length transaction on the open market. This, of course, goes to the nature of the sale as a "voluntary" transaction. Upon the objection being lodged, plaintiff failed to make a showing that the prior sale was an arm's length transaction in the open market. To the contrary, the evidence indicated that the prior sale was only one of several considerations between Weaver and Taylor upon the dissolution of their corporation. While specific details of the negotiations between the respondent and Mr. Taylor are not in the record, we do have respondent's account of the purchase: "[W]e dissolved W.T., and I acquired his interest, basically a simultaneous transaction." The evidence was not competent for substantive purposes. The record fails to disclose that petitioner offered the challenged evidence solely for the purpose of impeachment. The issue was raised for the first time in the Court of Appeals. Respondents made a general objection to the testimony. "[W]here a general objection is sustained, it seems to be sufficient, if there is any purpose for which the evidence would be inadmissible." 1 Brandis on North Carolina Evidence § 27 (1982). See Freeman v. Ponder, 234 N.C. 294, 67 S.E.2d 292 (1951) (rule apparently approved, although unnecessary to decide the case). See also 4 C.J.S. Appeal 291 (1957). We note, therefore, & Error § that petitioner's impeachment argument was not properly before the Court of *343 Appeals. Nevertheless, given our decision to remand this case for further proceedings, we briefly address the issue. The Court of Appeals in holding that the evidence was competent for impeachment purposes relied upon Palmer v. Highway-Commission, 195 N.C. 1, 141 S.E. 338 (1928). In Palmer, evidence of a prior sales price was admitted for both substantive and impeachment purposes. The Court did not discuss, nor does the evidence disclose, the nature of the prior sale whether it was an arm's length transaction in the open market. In addition to the preceding discussion on the lack of a proper foundation concerning the prior sale, we find the reasoning in Power Co. v. Winebarger, 300 N.C. 57, 265 S.E.2d 227 (1980), to be applicable under the facts of the present case: Respondent Weaver on two occasions testified that he did not recall the 1971 purchase price. He also stated that he could not determine it from the tax stamps on the deed. At that point the impeachment purpose of the cross-examination was satisfied with respect to that transaction under the rule in Winebarger. The trial court properly excluded the testimony for impeachment purposes. In a related assignment of error, petitioner contends that its cross-examination of respondents' sole expert value witness, Mr. Flynt, concerning his knowledge of previously existing rights-of-way on respondents' property was prejudicially limited by the trial court. The relevant portion of trial testimony follows: It is axiomatic, of course, that it is the lawful right of every litigant to expect utter impartiality and neutrality in the judge who tries his case and to have as well an equally unbiased and properly instructed jury. This right can neither be denied nor abridged. Upchurch v. Funeral Home, 263 N.C. 560, 140 S.E.2d 17 (1965). See N.C.R. Civ.P. 51(a). Any remark of the presiding judge made in the presence of the jury which has a tendency to prejudice the jury against the unsuccessful party may be grounds for a new trial. Homes, Inc. v. Holt, 266 N.C. 467, 146 S.E.2d 434 (1966). See 12 Strong's N.C.Index 3d Trial § 10 (1978). However, remarks made by the trial court in the jury's presence do not always constitute prejudicial error. Judges are not merely mute observers of the legal drama before them. They are the most important participants in the search for truth through trial by jury. 1 Brandis on North Carolina Evidence § 37 (1982). See also 75 Am. Jur.2d Trial § 87 (1974). Because the trial judge occupies an exalted station, jurors entertain great respect for his opinion and can be easily influenced by a suggestion coming from him. In cases such as this, therefore, where it must be determined whether a party's right to a fair trial has been impaired by remarks made by the trial judge, the probable effect upon the jury and not the motive of the judge, is determinative. State v. Smith, 240 N.C. 99, 81 S.E.2d 263 (1954). In applying this test, the remark of the judge must be considered in the light of the circumstances under which it was made. State v. Carter, 233 N.C. 581, 65 S.E.2d 9 (1951). This is so because "a word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used." Towne v. Eisner, 245 U.S. 418, 425, 38 S. Ct. 158, 159, 62 L. Ed. 372, 376 (1918). It is incumbent upon the appellant to show that the trial court's expression of opinion was in fact prejudicial. Kanoy v. Hinshaw, 273 N.C. 418, 160 S.E.2d 296 (1968). We do not disagree with the Court of Appeals holding that the line of questioning on cross-examination regarding the nature of the two prior easements was relevant to a determination of the market value of the property prior to the taking. However, petitioner has failed to show actual prejudice by the statement or ruling of the trial judge. Only one objection was made by respondents. The trial court properly sustained this objection because the question referred to the prior existence of temporary construction easements in 1963 and 1964. As these construction easements were temporary, they would not be relevant in determining the fair market value of the subject property immediately before the present condemnation. All other questions asked by petitioner's counsel in this regard were answered. If there was a failure to further develop this cross-examination, it cannot be ascribed to the court's actions. There was ample evidence by respondents and the witness Flynt concerning the preexisting rights-of-way. We further note, with regard to the comment itself, that the respondents' interpretation of the judge's words is quite plausible: "Viewed in context, the trial court's remark was not one directed to the entire line of questioning, but only to the relevancy of Mr. Flynt's knowledge of the exact, as opposed to the approximate, dimensions of the existing rights-of-way across the Respondent's property." More than a bare *345 possibility of prejudice from a remark of the judge is required to overturn a verdict or a judgment. State v. Carter, supra, 233 N.C. 581, 65 S.E.2d 9. Where a construction can properly and reasonably be given to a remark which will render it unobjectionable, it will not be regarded as prejudicial. See 88 C.J.S. Trial § 49 (1955). Petitioner has failed to show prejudice from the remark by the trial judge. We find no prejudicial error in the evidentiary rulings of the trial court. We do find, however, that the failure of the trial court to properly instruct the jury concerning the nature of the temporary construction easements requires a new trial. The trial court initially charged the jury: The record shows that at the conclusion of its charge and outside of the hearing of the jury, when the trial court gave counsel for both parties an opportunity to object to any portion of the charge or an omission therefrom, the following exchange took place: The court then instructed the jury over petitioner's objection: "Now, members of the jury, when the Court referred to the right-of-way or easement, I was referring to both the temporary and permanent *346 rights-of-way or easement when I used those terms." Petitioner argues that this supplemental instruction of the trial court brought the temporary construction easements to the jury's attention, erroneously equated them with the permanent easement, and was therefore tantamount to a command to the jurors to compensate respondents for the temporary easements on the same basis as it would compensate respondents for the permanent easement. Petitioner further maintains that the supplemental instruction, taken with the initial charge to the jury, conveys the false impression that 5.131 acres of the respondents' land was still encumbered by the temporary easements, so that the landowners' use of these acres continued to be restricted. Respondents contend that the petitioner's attorney had emphasized to the jury in cross-examining Mr. Flynt that the easements taken for temporary work space terminated at the completion of construction and all property taken for that purpose then reverted back to respondents. The jurors, therefore, "must have understood" that the damages they awarded the respondents for the temporary work spaces were limited to the actual damages to respondents' property occurring during and occasioned by the course of construction. Furthermore, argue respondents, the trial court could have "assumed" the jurors would use the "clearly distinguishable and commonly understood" meanings of the words "permanent" and "temporary" in complying with the judge's instructions. The trial court erred in failing to properly instruct the jury as to the nature of the temporary construction easements and what consideration should be given to them in determining the issue of damages. Where it is necessary for a condemnor to acquire a temporary construction easement in connection with a condemnation proceeding, the jury should be instructed substantially as follows: The evidence may support additional elements of damages flowing from the use of the temporary construction easements. The court should only instruct the jury on the elements of damages that are supported by the evidence, and the jury should be instructed that the burden of proof is upon the landowner. For the failure of the trial judge to properly instruct the jury with respect to the temporary construction easements, a substantive part of the charge, there must be a new trial. The decision of the Court of Appeals is MODIFIED AND AFFIRMED.