Present: Carrico, C.J., Compton,1 Lacy, Hassell, Keenan, 

Koontz, and Kinser, JJ. 

REVOCOR CORPORATION 

 OPINION BY JUSTICE LEROY R. HASSELL, SR. 

v. Record No. 990830 March 3, 2000 

COMMONWEALTH TRANSPORTATION 

COMMISSIONER OF VIRGINIA 

FROM THE CIRCUIT COURT OF YORK COUNTY 

J. Warren Stephens, Judge Designate 

 In this appeal from a judgment entered in a condemnation 

proceeding, we consider whether the circuit court properly 

excluded evidence of adjustment costs as a factor to be 

considered by the commissioners when determining damage to the 

residue of the property. 

 The Commonwealth Transportation Commissioner (the 

Commissioner) made a bona fide, but ineffectual, effort to 

purchase approximately 8.55 acres of land in York County that 

was necessary for the construction, reconstruction, 

alteration, maintenance, and repair of Interstate Highway 64. 

This land was part of two parcels owned by Revocor 

Corporation: Parcel 023, which consisted of .4 of an acre and 

Parcel 003, which consisted of 55.5 acres. 

 At a condemnation trial, Revocor sought $484,725 for the 

value of the property taken and $453,826 for the damage to the 

 1

 Justice Compton participated in the hearing and decision 

of this case prior to the effective date of his retirement on 

February 2, 2000. 
residue. The circuit court excluded Revocor's evidence of 

adjustment costs allegedly necessary to develop the property 

as a result of the taking. The condemnation commissioners 

returned a report valuing the land taken at $403,000 and 

damage to the residue at $37,500. Revocor filed exceptions to 

the commissioners' report and requested a new trial. The 

circuit court denied Revocor's request and entered an order 

confirming the commissioners' report. Revocor appeals. 

 The approximately 56-acre parcel is near the intersection 

of Interstate 64 and Route 143. The property is zoned for 

commercial use, and the litigants agree that at the time of 

the taking, the highest and best use of the property was for 

commercial development. 

 Revocor's property consisted of land situated at several 

elevations ranging from highland to marsh. Before the taking, 

the eastern portion of the property, which was at a high 

elevation, was encumbered by several easements, including a 

Virginia Natural Gas (VNG) pipeline easement.2 The remainder 

 2

 Pursuant to the terms of the easement, Revocor, its 

successors and assigns, "may use the permanent right of way 

for any purpose not inconsistent with the rights hereby 

acquired including, but not limited to the right to construct, 

operate and maintain passways, roads, streets, railroad 

tracks, telephone, electric or other utility lines . . . 

across the permanent right of way, in such manner that the 

angle between the center line thereof and the center line of 

the permanent right of way shall be not less than forty-five 

(45) degrees, provided that such use does not interfere with 

2
of Revocor's property, which was considered the most desirable 

portion of the land for commercial development purposes, 

included a 12-acre lake. 

 In 1989, Revocor submitted a site plan for development of 

the land to York County. At that time, the property enjoyed a 

zoning classification which permitted residential uses, and 

Revocor sought to develop the property for residential 

purposes. The site plan for development, which was approved 

by the County, contained a proposed road for the property. 

The road was never constructed, and in 1995, the zoning 

classification of the property was changed from multi-family 

residential to limited business. 

 The Commissioner made a motion in limine to exclude 

evidence of damage to Revocor's property allegedly resulting 

from the relocation of a road shown on the 1989 plat for 

residential development. The circuit court ruled that the 

exhibit of the preliminary unrecorded plat could not be used 

or referred to during the trial. The Commissioner made 

another motion in limine to exclude evidence regarding "the 

alleged cost of relocating the roadway as a cost of adjusting 

the remaining property as a result of the take" because the 

evidence would be "speculative," "irrelevant and immaterial." 

 

or endanger the construction, operation or maintenance of 

[VNG's] facilities." 

3
The circuit court granted the motion stating that it "[was] 

not going to permit any consideration of relocation of any 

road because there is no road on the property at the time of 

the take." 

 Revocor sought to introduce at trial the testimony of 

Fred Watkins, a licensed professional engineer. According to 

Revocor's proffer, Watkins was retained to assess the impact 

of the taking upon Revocor's remaining property and upon the 

property's potential use and development. Watkins opined that 

"development potential of the residue was dramatically reduced 

by the taking, and that it will be very expensive to adjust 

the residue to the new conditions caused by the taking. The 

changed configuration and topography of the residual parcel 

seriously impede its use and development." 

 Watkins would have also testified as follows. "The 

access into Revocor's property from the public road remains 

the same after the take as it was before the take. However, 

once into the interior of the property, the topography and 

configuration of the post-take parcel are such that the 

interior roadway serving the highland along the lake is now 

required to pass through a steep marshy area south and east of 

the lake. Prior to the take, the interior roadbed was able to 

utilize the topography so as to maximize the use of the land, 

and minimize the effect of the steep and marshy area. The 

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effect of the taking renders the development of the residual 

parcel, and the utilization of land otherwise available, much 

more difficult and expensive. It also substantially reduces 

the proportional amount of usable land in the residual parcel, 

because of the necessity to construct retaining walls in some 

areas." 

 Watkins stated that it was his "opinion that in addition 

to the reduction in usable land in the residual parcel, the 

cost of developing the residual parcel has increased by 

$377,130.68 (exclusive of engineering costs) solely because of 

the necessity to relocate the interior roadway through the 

marshy portion of the property which has steep side slopes. 

This increased expense includes bringing in additional fill 

material, and the construction of retaining walls, neither of 

which were necessary prior to the taking." 

 Even though the circuit court refused to permit Watkins 

to testify, the court permitted Revocor's appraiser, Howard 

Clayton, to testify that before the taking, Revocor's land 

enjoyed a "favorable topography." Clayton stated that access 

to the most desirable portion of the property for development 

purposes after the taking would be "a mountain of a problem" 

because the terrain that would have to be traversed by a road 

"is wet and in a bowl." Clayton also testified that in 

arriving at his conclusions, he consulted with Watkins. 

5
Clayton opined that the total value of the taking was $484,725 

and that the damage to the residue was $453,826. 

 Henry G. Warren, Jr., an appraiser employed by the 

Virginia Department of Transportation, testified that the 

value of the taking was $355,884, and there was no damage to 

the residue. John C. Harry, a real estate appraiser who also 

testified on behalf of the Commissioner, testified that the 

taking was valued at $370,000 and that there was no damage to 

the residue. 

 Revocor argues that the circuit court erred in refusing 

to permit Watkins' proffered testimony that as a result of the 

taking, the configuration and topography of the land was 

dramatically changed and that such changes seriously impeded 

the use and development of the land which in turn reduced the 

amount of usable land in the residue. Continuing, Revocor 

asserts that Watkins would have testified that prior to the 

taking, Revocor easily could have gained access to its 

interior lakefront property along the eastern portion of the 

property without violating the VNG easement. Watkins would 

have explained the physical difficulties that Revocor would 

encounter in creating a road through the steep and marshy area 

which was necessitated as a result of the taking. 

 Responding, the Commissioner argues that Watkins' 

testimony was speculative evidence that was inadmissible in an 

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eminent domain trial. The Commissioner asserts that "the 

costs allegedly necessitated to relocate a road if [Revocor] 

develops its property in the future are remote and speculative 

and that the [circuit] court properly excluded the engineer's 

testimony concerning those costs." 

 In Lynch v. Commonwealth Transp. Comm'r, 247 Va. 388, 

391, 442 S.E.2d 388, 389-90 (1994), we discussed wellestablished principles governing the taking of property in a 

condemnation proceeding: 

"The measure of compensation for the property taken 

is the fair market value of the property at the time 

of the taking. In determining fair market value, 

consideration is given to the property's 

adaptability and suitability for any legitimate 

purpose in light of conditions and circumstances 

that exist at the time of the take or that 

reasonably may be expected in the near future. The 

test of damages to the land remaining after the 

taking is the difference in the residue's value 

immediately before and immediately after the taking. 

In determining such damages, consideration may be 

given to every circumstance, present or future, that 

affects the residue's value at the time of the take. 

Remote or speculative advantages and disadvantages, 

however, are not to be considered." 

Accord Wammco, Inc. v. Commonwealth Transp. Comm'r, 251 Va. 

132, 137, 465 S.E.2d 584, 586 (1996); Appalachian Elec. Power 

Co. v. Gorman, 191 Va. 344, 353, 61 S.E.2d 33, 37-38 (1950). 

 We stated in Dressler v. City of Covington, 208 Va. 520, 

522, 158 S.E.2d 660, 662 (1968), that it "is well settled that 

in determining the diminution of the market value of the land 

7
not taken or the damages thereto, it is proper to consider the 

expense made necessary by reason of the improvement in 

adjusting the property to the changed conditions brought about 

by the taking." Such increased development costs, commonly 

referred to as adjustment costs, are necessary to adjust the 

property to the changed conditions caused by the taking. 

Adjustment costs are relevant when determining any diminution 

in the market value of the residue as a result of the taking. 

Id. Such costs, however, are "not the measure of damages and 

cannot be recovered specifically. In other words, evidence of 

the actual cost of necessary improvements is admissible as a 

factor of evaluation, though not as a measure of damages." 

Id. The measure of damages to the residue is the difference 

in the value before and immediately after the taking, less any 

enhancement that resulted from the taking. Wammco, 251 Va. at 

137, 465 S.E.2d at 587; State Highway & Transp. Comm'r v. 

Parr, 217 Va. 522, 524, 230 S.E.2d 253, 255 (1976). 

Additionally, evidence of adjustment costs is inadmissible if 

such costs are based upon remote or speculative factors. 

Lynch, 247 Va. at 391, 442 S.E.2d at 390. 

 In Wammco, we considered whether a circuit court properly 

excluded evidence of adjustment costs as a factor of 

evaluation when ascertaining the damage to the residue of 

certain property. There, the Commonwealth Transportation 

8
Commissioner filed a petition in condemnation and requested 

that the circuit court appoint commissioners to determine just 

compensation due to a landowner as a result of a taking. The 

Commissioner had taken 17.6 acres of land in the City of 

Chesapeake for the construction of a portion of Interstate 

Highway 664. This tract of land was part of a larger tract 

consisting of 314 acres. Before construction of the 

interstate, the 314-acre parcel was bisected by Gum Road, a 

road which was then a segment of the only continuous northsouth route through the Western Branch area of Chesapeake. 

Wammco, 251 Va. at 134, 465 S.E.2d at 584-85. 

 When the interstate was constructed through the property, 

Gum Road was severed in half. A cul-de-sac was created at the 

end of Gum Road next to the highway, eliminating any access to 

the interstate. That portion of the landowner's property west 

of Gum Road was zoned for industrial use at the time of the 

taking. The portion of the property east of Gum Road was 

zoned for agricultural use at the time of the taking, but was 

later rezoned for residential development. Id. at 134-35, 465 

S.E.2d at 585. 

 The parties agreed that the highest and best use of the 

eastern portion of the property was for residential 

development. The portion of the property west of Gum Road 

enjoyed an industrial zoning classification at the time of the 

9
taking. A civil engineer testified that before the taking, 

Gum Road provided sufficient access to the property to support 

development in accordance with its highest and best use. 

However, when the road was severed by the taking, access to 

the property was so severely restricted that the western 

portion was rendered unsuitable for industrial use. Id. at 

135, 465 S.E.2d at 585. 

 Before trial, the transportation commissioner made a 

motion in limine to exclude any evidence of adjustment costs 

allegedly necessitated by the taking because such testimony 

would have been speculative. The landowner had made a proffer 

that as a result of the taking, both on-site and off-site 

improvements would be necessary to develop the property in 

accordance with its highest and best use, that additional land 

and rights-of-way would have to be acquired, and that the offsite road network to the residue would have to be improved in 

order to provide sufficient road access to develop the western 

portion of the property for industrial use. Additionally, the 

landowner presented evidence that an additional road would 

have to be built off the property in order for the eastern 

portion of the residue to be developed in accordance with the 

landowner's post-taking development plans. Id. at 135-36, 465 

S.E.2d at 585-86. 

10
 We held that the circuit court properly excluded the 

landowner's proffered evidence because the development of the 

residue was contingent upon the improvement of off-site roads 

in the vicinity of the residue and the acquisition of property 

owned by others. We also noted that the landowner's evidence 

showed that the development of the property was contingent 

upon future acts beyond the landowner's control which were 

remote and speculative. Id. at 138, 465 S.E.2d at 587. 

 Here, unlike the landowner in Wammco who was unable to 

develop its property unless it acquired the adjacent 

properties of others, Revocor, according to its proffer, would 

have been able to construct a road through the steep and 

marshy areas of its residue provided it was able to do so in 

accordance with the terms of the VNG easement. Also, unlike 

the property owner in Wammco, Revocor's ability to relocate a 

road was not predicated upon speculative factors such as the 

acquisition of rights-of-way from others. We hold that in 

determining the damage to the residue, Revocor was entitled to 

present as a factor of evaluation the actual costs of 

relocation of a road to the more desirable portions of its 

property. Therefore, the circuit court erred in excluding the 

proffered evidence. 

 The Commissioner argues that even if the circuit court 

erred in excluding the proffered evidence, such error was 

11
harmless because Clayton testified that he had consulted with 

an engineer and that this consultation led him to conclude 

that after the taking, Revocor would be required to construct 

a road in a less favorable location. We disagree. 

 Clayton's testimony simply failed to encompass the facts 

and opinions that were contained in Watkins' proffered 

testimony. Furthermore, Clayton, unlike Watkins who is a 

licensed professional engineer, could not render opinions 

about the construction of retaining walls and additional fill 

materials that might be necessary to relocate the roadway 

through the marshy portion of Revocor's property. 

 Accordingly, we will reverse the judgment of the circuit 

court and remand this proceeding for a new trial. 

Reversed and remanded. 

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