Opinion ID: 2402175
Heading Depth: 2
Heading Rank: 3

Heading: Comparable-Sales Data

Text: The plaintiff advances three particular arguments in asserting, overall, that the trial justice committed reversible error in accepting Mr. Vincent's comparables. First, while conceding that the comparable-sales method is generally the best gauge of fair market value, plaintiff argues that sales data must, as a preliminary matter, be obtainable in the market. At the time of the taking, he argues, properties surrounding the subject parcel were either: (1) zoned residential and thus not similarly situated; or (2) owned by only a handful of owners who wished to retain their land for later development. This, he asserts, made it difficult for him to find local data of comparable sales and therefore plaintiff was forced to search distinct and far-flung municipalities such as Providence and Portsmouth. Second, and related to that, plaintiff argues that the trial justice placed almost dispositive weight on the location of his expert's comparables instead of emphasizing the similar characteristics shared among them and the subject parcel. Third, given the paucity of ascertainable sales data in Smithfield, plaintiff argues that the subject parcel possessed a certain uniqueness that necessitated alternate appraisal methods beyond the comparable-sales method. Finally, plaintiff simply identifies distinguishable characteristics between Mr. Vincent's comparables and the subject parcel, concluding that the trial justice erred in accepting Mr. Vincent's analysis. As we explained previously, this Court has held that the comparable-sales method is the preferred way in which to ascertain fair market value. E.g., Capital Properties, 636 A.2d at 321. The comparable sales methodology assumes that the best estimates of the market value of a property can be determined by analyzing recent sales in the open market during a similar timeframe for substantially similar or comparable properties, and making adjustments for minor differences between the properties or the circumstances of the sales. Sun-Lite Partnership v. Town of West Warwick, 838 A.2d 45, 47 (R.I.2003). Significant factors that affect comparability include location and character of the property, proximity in time of the comparable sale, and the use to which the property is put. Serzen, 692 A.2d at 674 (quoting Warwick Musical Theatre, Inc., 525 A.2d at 910). Generally, existing sales data concerning similarly situated and comparable properties serve to exclude the use of other methods for deducing fair market value. Corrado, 117 R.I. at 654, 370 A.2d at 230. We have allowed for the departure from this preferred method, however, at the discretion of the trial justice, when the fair market value established through comparable sales did not adequately reflect just compensation because the condemned property was unique or suited for a special purpose. J.W.A. Realty, Inc., 121 R.I. at 381, 384, 399 A.2d at 483, 484 (apartment project with no comparable sales that reflected [its] special characteristics); see also, e.g., Warwick Musical Theatre, Inc., 525 A.2d at 910 (structure used as a musical theater); Trustees of Grace and Hope Mission of Baltimore City, Inc. v. Providence Redevelopment Agency, 100 R.I. 537, 538, 543, 217 A.2d 476, 477, 479 (1966) (structure used as a religious and benevolent mission); Assembly of God Church of Pawtucket, R.I. v. Vallone, 89 R.I. 1, 10-11, 150 A.2d 11, 15-16 (1959) (building used as a parsonage); Hall v. City of Providence, 45 R.I. 167, 168-69, 121 A. 66, 66-67 (1923) (highly improved country estate that was one of the first in the area). Either way, [t]he availability of such comparable sale is a question addressed to the discretion of the trial justice whose determination will be reversed only if `palpably or grossly wrong.' Warwick Musical Theatre, Inc., 525 A.2d at 910 (quoting Thomas B. Gray, Inc. v. Providence Redevelopment Agency, 114 R.I. 370, 374, 333 A.2d 143, 145 (1975)). Mr. Andolfo began his market-value calculation on the premise that the most advantageous and valuable use to which the subject parcel could be put was as a medical office facility. Based on the subject parcel's presumed highest and best use, Mr. Andolfo examined six real estate transactions including properties in Providence, Portsmouth, East Providence, Johnston, and Warwick. The sales prices of the six comparables ranged from $185,000 to $800,000, and from $4.31 to $13.10 per square foot. To derive a suitable amount per square foot between these two extremes, which amount Mr. Andolfo then could apply to the subject parcel, Mr. Andolfo considered a series of observations or factors, known as adjustments. Although factoring in the time of sale is a typical means of adjusting sales data, Mr. Andolfo testified that the market was stable from '92 to '96 and no time adjustments whether negative or positive were reflected. The witness continued, however, that he considered as a positive adjustment the general location of the subject parcel, including its adjacency to the corporate park and the fact that Fidelity investments was going to be there. Further, in his appraisal, Mr. Andolfo identified the following factors that he employed in adjusting the sales data: [T]he State of Rhode Island was proposing to construct a $5 million golf course adjacent to Bryant College. Similarly, there were a number of hotel proposals along various sites on Douglas Pike from Route 116 north to the subject property (one of which was developed). A Wal-Mart had been proposed for a parcel location along Route 7 opposite the 295 Office and Industrial Park (now the site of the New Life Worship Center), and the Town of Smithfield had also suggested that they [ sic ] would be a good choice as a home for the New England Patriots when considering that the Patriot[s'] summer training camp is located at Bryant College. Based on these adjustments, Mr. Andolfo narrowed the range from $6 to $8.07 per square foot. Mr. Andolfo then reconciled the mean indicated value ($6.82 per square foot) with the median indicated value ($6.48 per square foot) to derive a value of $6.75 per square foot. Considering the subject parcel's 90,917 usable square feet, Mr. Andolfo calculated that the subject parcel carried a market value of $614,000, which, less the demolition costs associated with razing the extant residential structures, amounted to a net present value of $600,000 on the date of the taking. Testifying for the EDC, Mr. Vincent presented three comparables based on his opinion that the subject parcel's highest and best use was as vacant, industrially zoned land with the opportunity for future development. [9] Although Mr. Vincent slightly and upwardly adjusted his comparables, he disagreed with the sheer breadth of adjustments Mr. Andolfo employed with respect to location. As Mr. Vincent indicated, all his comparable sales took place in Smithfield, two of which sales occurred within a mile of the subject parcel. Mr. Vincent said that he did not make adjustments based on future market trends, such as the prospects of Fidelity's relocation, the New England Patriots' relocation, or the construction of a $5 million golf course, because such trends were speculative and may not eventuate. As Mr. Vincent explained: [A]t a certain level of market, what I have called dormancy, a certain level of investigatory rigor is not called for. Adjustable components such as have been asked about during my cross-examination tends to collapse against each other   . [I]f you can find comparables with points of comparability, and I believe we have, those are indicative. They are market signals in a very dormant market of what's possible in the market area. Based on his minor adjustments, Mr. Vincent estimated a value of $1 per square foot, which, when multiplied by the subject parcel's 158,285 square feet of both usable and unusable land, resulted in a rounded market value of $158,000. [10] Although each party presented the expert testimony of a real estate appraiser who possessed the appropriate qualifications necessary to render an opinion on the subject parcel's fair market value, the trial justice accepted Mr. Vincent's opinion and rejected Mr. Andolfo's. A trial justice retains the authority to determine the credibility of each expert's evidence, and to decide whether to accept or reject a proffered valuation. Sun-Lite Partnership, 838 A.2d at 48. Both the trial transcript and the written decision reflect the detailed consideration that the trial justice afforded to each expert's testimony concerning the comparables employed in preparing the respective appraisals. The trial justice's thorough and well-articulated findings, along with our deferential review in such cases, persuade us that plaintiff's allegations of error must fail. Although sales data were not as abundant in Smithfield as in other markets, the trial justice determined that sufficient data of comparable sales existed from which the witnesses could calculate the market value of the subject parcel. Moreover, the subject parcel was not, by any stretch of the imagination, unique or suited for a special purpose, see J.W.A. Realty, Inc., 121 R.I. at 381, 399 A.2d at 483, but was vacant, industrially zoned land. The trial justice appropriately evaluated the witnesses' respective comparable sales, giving due consideration to their particular location, character, proximity in time, and uses compared with the subject parcel. In the final analysis, plaintiff suffered not from an error on the part of the trial justice, but from a failure to satisfy his burden at trial to present persuasive evidence supporting his opinion of fair market value as of May 28, 1996, the date of condemnation. The trial justice simply found Mr. Vincent's comparables to be more probative than Mr. Andolfo's, and we cannot say, based on our review of the record, that the trial justice misconceived or overlooked material evidence or was otherwise clearly wrong in doing so.