Ocoee Utility District Of Bradley And Polk Counties, Tennessee v. The Wildwood Company, Incorporated
E2016-00382-COA-R3-CV
| Tenn. Ct. App. | Oct 6, 2016Background
- Ocoee Utility District (Utility) condemned a 7.39-acre tract owned by The Wildwood Company (Wildwood) that included a spring used historically to supply water under a long‑term lease.
- Parties negotiated a new lease in 2012 but Wildwood withdrew the proposed contract; the Utility thereafter offered $35,000 (with an appraisal at $21,500) and initiated condemnation after offer was rejected.
- The trial court entered possession for the Utility but reserved just compensation for jury determination; Wildwood retained appraiser Henry Glasscock.
- Glasscock valued the tract at $417,000 using an income-capitalization approach based primarily on projected income from sale/rental of water to the Utility; his report and deposition showed the valuation was tied to that particular use.
- The Utility moved in limine to exclude Glasscock’s testimony arguing it impermissibly valued the land solely for the condemnor’s special purpose and based value on the water rather than fair market value considering all uses; the trial court allowed Glasscock to testify.
- The jury returned $417,000 (the exact figure Glasscock proposed); the Court of Appeals vacated the judgment and remanded for a new trial, holding Glasscock’s valuation testimony should have been excluded.
Issues
| Issue | Plaintiff's Argument (Utility) | Defendant's Argument (Wildwood) | Held |
|---|---|---|---|
| Whether the trial court erred by admitting Wildwood’s appraiser whose valuation violated the Davidson County rule by valuing land for a particular purpose | Glasscock based value solely on the property's use as a water source for the Utility, improperly making the condemnor’s necessity the measure of value | Glasscock considered multiple uses and applied appropriate appraisal methods; rental/income evidence is admissible | Court: Admission was error — expert based valuation on single special purpose and should have been excluded |
| Whether the appraiser improperly valued the water (right to water) rather than the land | Valuation relied on income from sale of water and the Utility’s willingness to pay, effectively valuing the water and the condemnor’s interest | Water income and historic rental income are proper factors and can inform an income approach | Court: Using rental income from water as the sole basis was impermissible; cannot base fair market value solely on that special-use income |
| Whether the expert relied on irrelevant or unsupported data (e.g., unpublished calculations, lease drafts) | Glasscock failed to disclose key inputs (rental or cap rate) at trial and relied on lease negotiations and Utility statements | Wildwood argued reliance items were relevant to rental expectation and market income | Court: Because the overall valuation was inadmissible for using a single-use income approach, reliance issues were pretermitted; expert’s opaque calculations contributed to exclusion decision |
| Whether the jury verdict was supported by material evidence (sufficiency) | Jury’s award matched Glasscock’s figure and was driven by his inadmissible testimony; verdict therefore unsupported | Wildwood argued evidence of income and adaptability supported verdict | Court: Verdict influenced by improperly admitted testimony; vacated and remanded for new trial |
Key Cases Cited
- Alloway v. City of Nashville, 13 S.W. (Tenn. 1890) (property value must consider every element of usefulness and not be measured solely by one special purpose)
- McKinney v. City of Nashville, 52 S.W. (Tenn. 1899) (market value must reflect all adaptable uses, not only the most valuable single use)
- Davidson County Bd. of Educ. v. First Am. Nat’l Bank, 301 S.W.2d 905 (Tenn. 1957) (Tennessee measures just compensation by market value in view of all available uses; rejects valuation solely for special purpose)
- Memphis Hous. Auth. v. Mid‑South Title Co., 443 S.W.2d 492 (Tenn. Ct. App. 1968) (reversed where experts overemphasized value for a specific use and unduly influenced jury)
- Love v. Smith, 566 S.W.2d 876 (Tenn. 1978) (expert may not base opinion solely on highest and best use to the exclusion of present/use and other uses)
- City of Gatlinburg v. Fox, 962 S.W.2d 479 (Tenn. 1998) (expert testimony was improper where valuation was computed solely from highest and best use and other uses were not factored into calculations)