Title: Russell v. Commonwealth

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  Carrico, C.J., Lacy, Hassell, Keenan, Koontz, and 
Lemons, JJ., and Whiting, S.J. 
 
JOHNNY C. RUSSELL, ET AL. 
                                    OPINION BY 
v. Record No. 001558     SENIOR JUSTICE HENRY H. WHITING 
 
 
                        April 20, 2001 
COMMONWEALTH TRANSPORTATION 
COMMISSIONER OF VIRGINIA 
 
 
FROM THE CIRCUIT COURT OF LEE COUNTY 
Ford C. Quillen, Judge 
 
 
The issue in this case is the admissibility of a prior tax 
evaluation of property being condemned to impeach the 
credibility of the property owners' appraiser. 
 
The Commonwealth Transportation Commissioner (the 
Commonwealth) filed eminent domain proceedings to acquire a 
39.125-acre parcel of land owned by Johnny C. and Phyllis 
Russell (the Russells) in Lee County.  At trial, the Russells 
sought to qualify Ed Stacy, the sole proprietor of a real estate 
appraisal firm, a certified general real estate appraiser, and 
tax assessment evaluator, as an expert witness familiar with the 
value of real estate in Lee County. 
 
In attempting to establish his general knowledge of Lee 
County real estate values on September 27, 1996, the date of the 
condemnation, Stacy testified on direct examination that he and 
members of his firm had been "involved" in the 1996 Lee County 
tax reassessment.  Stacy said that in order to make the 
reassessment, they conducted a study of all real estate sales in 
Lee County during 1995 and the first half of 1996, after which 
they valued real property in the county. 
 
Stacy further testified that approximately three years 
later, he appraised the Russells' condemned property to 
determine its fair market value as of September 27, 1996.  Stacy 
stated that on that date the fair market value of the 39.125-
acre parcel was $12,538 per acre.  During the Commonwealth's 
cross-examination of Stacy, it sought to elicit, as impeachment 
evidence, testimony from Stacy concerning his firm's earlier tax 
valuation of the 39.125-acre parcel at $1,000 per acre.  The 
Russells objected to this line of questioning, asserting that 
evidence concerning tax assessments was not relevant in a 
condemnation proceeding. 
 
During argument on this objection, counsel for the Russells 
did not disagree with the statements of the trial court and the 
Commonwealth's counsel that Lee County real estate tax 
appraisals were at the 100 percent rate of fair market value.  
Instead, counsel responded that Stacy could explain the 
difference in the two appraisals of the 39.125-acre parcel.  The 
trial court overruled the Russells' objection and allowed the 
questioning for purposes of impeachment.  Stacy then explained 
that the appraiser in his firm who performed the tax assessment 
valuation "had no way of knowing that this piece of property 
actually was part of or previously a part of a much larger 
 
2
property that was right across from where this four-lane 
[highway] was going into[,] which would significantly [a]ffect 
this piece of property."  Stacy also stated that the appraiser 
"most likely . . . had no aware[ness] of this scenic easement 
that was placed on the property."  Stacy further explained that 
based on these considerations, "that's where the $1,000.00 an 
acre [in the tax evaluation] came from." 
 
At the conclusion of the trial, the commissioners returned 
a report valuing the condemned parcel at $5,140 per acre.  
Overruling the Russells' exceptions to the commissioners' 
report, the trial court entered an order confirming the report. 
 
On appeal, the Russells argue that the trial court abused 
its discretion in allowing the Commonwealth to cross-examine 
Stacy concerning his firm's valuation of the property for tax 
assessment purposes.  The Russells assert that "[r]eal estate 
tax assessments are generated for reasons wholly unrelated to 
the criteria which govern eminent domain proceedings" and that 
the purpose of this type of valuation, to determine relative 
property values, is fundamentally different from the purpose of 
an appraisal in a condemnation proceeding, which is to 
compensate landowners fully for the loss of their property.  
Thus, the Russells contend that evidence of tax valuations was 
improper impeachment evidence regarding Stacy's valuation of the 
property to determine just compensation. 
 
3
 
In response, the Commonwealth argues that the trial court 
properly allowed Stacy to be cross-examined concerning his 
earlier valuation of the property, because that valuation was a 
prior inconsistent statement made by Stacy and his firm about 
the value of the condemned property.  Thus, we consider whether 
the prior valuation of the Russells' land made for tax 
assessment purposes presented an inconsistency bearing on the 
credibility of Stacy's valuation testimony at trial. 
 
Fundamental principles govern this issue.  In Virginia, 
real property is to be appraised or evaluated at its fair market 
value when fixing the amounts to be paid as just compensation in 
condemnation cases and when determining what amounts will be 
paid as real estate taxes.  See Lynch v. Commonwealth Trans. 
Comm'r, 247 Va. 388, 393, 442 S.E.2d 388, 389, 391 (1994) 
(condemnation); Va. Const. art. X, § 2; Code § 58.1-3201 (tax 
purposes).  In certain instances, uniformity considerations 
might affect tax assessments because Article X, § 1 of the 
Virginia Constitution requires "uniform[ity] upon the same class 
of subjects within the territorial limits of the authority 
levying the tax."  Uniformity considerations are usually 
involved when multiple or different methods were used by the 
taxing jurisdiction to determine the fair market value of 
various properties within a class of properties.  Cross v. City 
of Newport News, 217 Va. 202, 206, 228 S.E.2d 113, 116 (1976); 
 
4
Skyline Swannanoa v. Nelson County, 186 Va. 878, 881, 44 S.E.2d 
437, 439 (1947). 
 
A second fundamental consideration is that the credibility 
of a witness may be impeached by showing that the witness made 
statements on a prior occasion that are inconsistent with his 
present testimony.  Breeden v. Roberts, 258 Va. 411, 415-16, 518 
S.E.2d 834, 837 (1999).  And, we said in Spruill v. 
Commonwealth, 221 Va. 475, 485, 271 S.E.2d 419, 425 (1980): 
 
 
[The] determination of the scope of cross-examination 
in general, and of the extent of testimonial impeachment in 
particular, should be "left largely to the sound discretion 
of the trial court; and the rule is well established that 
an appellate court will not interfere, unless that 
discretion has been plainly abused." (Citation omitted.) 
 
 
In applying these principles to the facts in this case, we 
note that the record does not indicate that the tax evaluations 
made by Stacy's firm for the 1996 Lee County reassessments were 
based on any other consideration than that of fair market value.  
In fact, when Stacy attempted to explain the inconsistency in 
the two appraisals, he mentioned only his tax appraiser's 
ignorance of two factors that Stacy said would have affected the 
appraiser's evaluation of the fair market value of the 39.125-
acre parcel.  Not only is there no evidence that uniformity 
considerations or different methods of evaluation affected the 
tax evaluations made by Stacy's group of the 39.125-acre parcel, 
but neither Stacy nor the Russells claim that either of these 
 
5
considerations had any effect on Stacy's firm's 1996 Lee County 
tax assessments. 
Thus, there appeared to be an inconsistency in Stacy's 
testimony of the September 25, 1996 value of the 39.125-acre 
parcel at $12,538 per acre and his firm's evaluation of the same 
property for the tax year 1996 at $1,000 per acre.  Given (1) 
the wide disparity in the appraisals; (2) Stacy's use of his 
firm's 1996 sales studies for the tax appraisals to establish 
his general knowledge of Lee County real estate; and (3) Stacy's 
testimony that these tax sales studies "had a bearing" on his 
opinion of the value of the 39.125-acre parcel, we think that 
the prior tax evaluation could have been considered by the 
condemnation commission to properly assess the weight of Stacy's 
expert testimony.  Hence, we find no abuse of the trial court's 
discretion in permitting this impeachment evidence on cross-
examination. 
 
Accordingly, the judgment of the trial court will be 
Affirmed. 
JUSTICE KEENAN, with whom JUSTICE HASSELL and JUSTICE KOONTZ 
join, dissenting. 
 
 
I respectfully dissent.  The different purposes and 
methodologies inherent in valuations made for tax purposes and 
those made for determining just compensation undermine the 
validity of using one type of valuation as evidence to impeach 
 
6
an expert witness's testimony regarding the other type of 
valuation. 
 
Generally, the credibility of a witness may be impeached by 
showing that the witness made statements on a prior occasion 
that are inconsistent with his present testimony.  Breeden v. 
Roberts, 258 Va. 411, 415-16, 518 S.E.2d 834, 837 (1999); 
Commercial Distributors, Inc. v. Blankenship, 240 Va. 382, 394, 
397 S.E.2d 840, 847 (1990); Neblett v. Hunter, 207 Va. 335, 340, 
150 S.E.2d 115, 119 (1966).  Thus, the evidentiary issue before 
this Court is whether the prior valuation of the Russells' land 
made for tax assessment purposes presented an inconsistency 
bearing on the credibility of Stacy's valuation testimony at 
trial. 
 
This Court has recognized that the purpose of tax 
assessment valuations is to equalize the taxation burden among 
landowners.  Norfolk & W. Ry. Co. v. Commonwealth, 211 Va. 692, 
695, 179 S.E.2d 623, 625 (1971); Southern Ry. Co. v. 
Commonwealth, 211 Va. 210, 214, 176 S.E.2d 578, 581 (1970).  We 
have enforced this principle by requiring uniformity in the mode 
of assessment and in the rate of taxation.  Id.  We have stated 
that it is not important whether a tax assessment is high or 
low, as long as the assessment is uniform and made in accordance 
with the methods of valuation adopted in the taxing district as 
a whole.  City of Roanoke v. Gibson, 161 Va. 342, 347, 170 S.E. 
 
7
723, 725 (1933).  Thus, the essential characteristic of 
valuations made to determine tax assessments is the setting of 
uniform, rather than exact, values of the properties to be 
assessed. 
 
In contrast, when land has been condemned, the purpose of 
determining fair market value of the condemned property is to 
compensate the landowners fully for the value of what they have 
lost.  It is well settled that "just compensation" is the fair 
market value of the property at the time of the taking, based on 
the "most advantageous and valuable use" or the "highest and 
best use" of the land.  Lynch v. Commonwealth Transp. Comm'r, 
247 Va. 388, 391, 393, 442 S.E.2d 388, 389, 391 (1994); 
Appalachian Power Co. v. Anderson, 212 Va. 705, 708, 187 S.E.2d 
148, 152 (1972); Appalachian Elec. Power Co. v. Gorman, 191 Va. 
344, 354, 61 S.E.2d 33, 38 (1950).  The landowner is entitled to 
compensation that is the "full and perfect equivalent" for the 
property.  Appalachian Power Co. v. Anderson, 212 Va. at 708, 
187 S.E.2d at 152; Gorman, 191 Va. at 354, 61 S.E.2d at 38; 
Anderson v. Chesapeake Ferry Co., 186 Va. 481, 490, 43 S.E.2d 
10, 15 (1947).  Therefore, the essential characteristic of 
valuations made to determine just compensation is the setting of 
exact values rather than values that are uniform and 
proportional to the values of any other properties. 
 
8
 
While Article X, Section 2, of the Constitution of Virginia 
and Code § 58.1-3201 require that tax assessments be made at 
fair market value, this requirement does not render the two 
types of valuations analogous.  Article X, Section 1 of the 
Constitution of Virginia provides that all property taxes "shall 
be uniform upon the same class of subjects within the 
territorial limits of the authority levying the tax."  The 
dominant purpose of Sections 1 and 2, construed together, is to 
distribute the burden of taxation evenly and equitably, in so 
far as is practical.  Board of Supervisors v. Telecommunications 
Indus., Inc., 246 Va. 472, 477, 436 S.E.2d 442, 445 (1993); 
R. Cross, Inc. v. City of Newport News, 217 Va. 202, 207, 228 
S.E.2d 113, 117 (1976); Smith v. City of Covington, 205 Va. 104, 
108, 135 S.E.2d 220, 222-23 (1964); Skyline Swannanoa v. Nelson 
County, 186 Va. 878, 881, 44 S.E.2d 437, 439 (1947).  If it is 
impractical or impossible to enforce both the standard of fair 
market value and the standard of uniformity and equality, the 
standard of uniformity and equality must be preferred as the 
just and ultimate end to be attained.  Id.
 
In a condemnation proceeding, however, the standard of fair 
market value does not yield to any other principle.  An expert 
appraiser's determination is bound by fixed considerations such 
as the availability and suitability of the land for all 
legitimate uses, considering the existing business demands of 
 
9
the community or such demands that may reasonably be expected in 
the near future.  See Lynch, 247 Va. at 391, 442 S.E.2d at 389-
90; Anderson, 212 Va. at 708, 187 S.E.2d at 152; Gorman, 191 Va. 
at 354, 61 S.E.2d at 38.  These and other considerations 
relating to the fair market value of the property are not 
affected by concerns for uniformity and equality. 
 
Therefore, I would conclude that, based on these different 
purposes and methodologies, evidence of a valuation made for tax 
assessment purposes does not present an inconsistency bearing on 
the credibility of an expert witness who valued the property at 
a different amount for purposes of determining just compensation 
in a condemnation proceeding.  This conclusion is not altered by 
the fact that in the present case the same person made both 
valuations.  The differing nature of the two types of 
valuations, not the possibility of different appraisers, creates 
the disparity that undermines the validity of using one type of 
valuation as impeachment evidence to challenge the credibility 
of an expert's testimony concerning the other type of valuation.  
Thus, I would hold that in a condemnation proceeding, evidence 
of a valuation made to determine a tax assessment is generally 
inadmissible to impeach the testimony of an expert witness 
regarding his valuation of the property for purposes of 
determining just compensation.  Accordingly, I would conclude 
 
10
that the trial court erred in allowing the disputed impeachment 
evidence. 
 
 
11