Opinion ID: 1103429
Heading Depth: 2
Heading Rank: 1

Heading: whether a settlement under threat of condemnation constituted a sale under the terms of the lease.

Text: ¶ 7. The Power Association's settlement over the value of the land with the Commission and the subsequent payment of the settlement amount to the Power Association did not constitute a sale under the terms of the lease; and therefore, the special court erred in finding that Eller Media's interest in the lease was terminated by the settlement. ¶ 8. On numerous occasions, we have rejected attempts to use eminent domain settlement prices for comparable sales in eminent domain valuations. See Brown v. Miss. Transp. Comm'n, 749 So.2d 948, 957-58 (Miss.1999) (Sales to an agency with condemning authority are not admissible as comparable sales because they are more in the nature of a compromise and are not fair indicators of market value) (citing State Hwy. Comm'n v. Hyman, 592 So.2d 952, 957 (Miss.1991)). See also Morley v. Jackson Redevelopment Auth., 632 So.2d 1284, 1291 (Miss.1994) (same). In so ruling, we recognized the inherent differences between a settlement price and a true sale. To be enforceable, a contract must be negotiated at arms' length. United States Fid. & Guar. Co. v. Knight, 882 So.2d 85, 92 (Miss.2004). A contract is not an arms' length transaction when the landowner has knowledge that the purchaser has the power of eminent domain. Miss. State Hwy. Comm'n v. Taylor, 293 So.2d 9, 10-11 (Miss.1974). ¶ 9. Evidence of record shows that the Power Association did not wish to sell its property. It attempted to persuade the Commission to move the road project. Its motivation for accepting the settlement was to avoid litigation, not its willingness to sell the property. On the other hand, the Commission produced no evidence of the Power Association's willingness to sell. ¶ 10. The Commission relies heavily on the recent case of Eller Media Co. v. Miss. Transp. Comm'n, 882 So.2d 198 (Miss. 2004) ( Eller Media I ), as the basis of its argument that we should affirm the special court's finding that there was a sale. There, we held that the owner of a bill-board on leased property was not entitled to compensation in eminent domain proceedings instituted by the Commission for loss of the leasehold interest where the lease provided that it terminated upon condemnation. Id. at 204. However, Eller Media I is distinguishable because the lease under consideration provided that [i]f all or a substantial part of the Premises shall be taken by right of eminent domain, this Lease shall terminate . . . . Id. at 201 (emphasis added). In the present case, the lease was silent as to its status if eminent domain proceedings were filed against the property. The lease only provided that the lease would terminate upon the sale of the property and the new owner did not wish to lease the property. [4] ¶ 11. The Eller Media I lease demonstrates that, if the Power Association and Eller Media wished to condition the 45-day termination clause upon the institution of eminent domain proceedings, they could have done so. There, the lease's 45-day termination clause only pertains to true sales of the land. ¶ 12. Therefore, we find that a sale, as contemplated by the lease, did not occur between the Power Association and the Commission, and the lease was not terminated. The special court erred in concluding otherwise.