*1 Tennessee, CITY, CITY OF JOHNSON
Plaintiff-Appellant, WEST, Tennessee,
OUTDOOR INC. of
Defendant-Appellee. Tennessee, Appeals
Court of
Eastern Section.
Dec. Appeal
Permission to Denied
Supreme 19, 1997. May Court *2 Culp, Attorney, D.
James Staff Johnson City, Appellant. for Jessee, Jessee, Thomas Jessee & John- C. City, Appellee. son for OPINION SUSANO, Judge. ease, City
In this condemnation a City acquired eminent domain Johnson purpose of strip of land for the widen- small city ing realigning street. The con- a ato leasehold inter- demned land was defendant, held Outdoor est1 (Outdoor West). The lease Inc. of Tennessee billboard, space granted West Outdoor it advertisers. The which rented various in City’s authority to the land is not take us is the question; issue before compensation Outdoor to which amount taking lease- West entitled for the Following proof, hold the close interest. jury that it had judge the trial instructed the $59,500to a value in the to arrive at determined $72,000 and interest was leasehold City accordingly. returned a verdict appealed, contending prejudicial error in his instruc- committed City jury. rais- Specifically, tions to the issues2, present substance es two following questions: allowing Did trial court err 1. its value the leasehold base expectation part of a renewal the lease? argu- underlying sepa- specifically in the fee settled issue is not discussed 1. The owner of brief, rately City party City's given and is to this with the our ment section of the case. unnecessary disposition we deem it opinion. in detail in this Suffice to address it City appears to raise third issue in its provi- say presence that the brief, suggesting court erred jury’s consid- sion a relevant matter preventing arguing that the eration. presence diminish- of the cancellation However, this ed the value of the leasehold.
2. Did the effectively prevent trial court ran for the current term and an additional considering the lease’s can- point, term. At that cellation clause? and, discussion, interrupted, in a side bar argue stated that the could not
I jury could consider three different values for *3 At the taking, time of the Outdoor West the leasehold. He stated that Mr. Miller’s subject had maintained a billboard on the opinion as to the fair market value of the property years. for sixteen $59,500, The current $4,600, leasehold was and not and lease, which atwas least the third between that he would therefore instruct the that owner, Outdoor property West and the had $59,500 $80,918. the value was between and years eight seven remaining and months judge subsequently The trial instructed Although term. the lease did as follows: provision, not contain a renewal it was the leases, You must determine the fair market custom of Outdoor cash West to renew its company’s only and it was the value of the leasehold interest intention to renew opinions provides lease. The lease of the witnesses who have party either can cancel relationship testified. You not find the market giving six months’ property written notice to the other. value of the less than or be by any more than that testified witness. Three regarding witnesses testified at trial words, your In other verdict must be the value of Outdoor West’s Each leasehold. highest between the lowest and based his calculations of value on the net testimony, testimony and the lowest was income received Outdoor West from the $59,500.00 that of Mr. Miller at He round- first, Justice, rental of the billboard. The Ed $59,300 up dollars; ed his and some who was manager at Outdoor high testimony ... $59,- present calculated the value to be cents, I and know it was and some $918 witness, Miller, 823.20. The second Bill ar- $80,920. up I think but he rounded it rived at a value of On cross-exami- high But those were the and low testimo- nation, Mr. Miller testified that the leasehold nies in this ease. would be worth about if it was canceled with six months’ notice. Both Mr. City request spe- had submitted a for a Miller Mr. and Justice their based calcula- regarding cial instruction the cancella- remaining tions on the lease term of seven provision. judge gave tion The trial the re- years eight months. substance, quested instruction and also possibility discussed witness, of the lease’s renew- Rikard,
The third David conclud- al: $80,918.133. ed that the leasehold was worth Despite objection, City’s Mr. Rikard was Paragraph provided of the lease predicate allowed to of value on party upon could cancel the lease term, plus the remainder of the current lease giving party the other six months notice ten-year period. an additional Mr. Rikard writing. was that this lease acknowledged that the lease contained no twice, possibly been had renewed more. renewal but stated that it was position Outdoor West takes the the lease reasonable to assume that the lease would likely would have been at renewed for least at
renewed least one more time. year another term after the ten term
During closing argument, counsel for the that ran from 1991 to 2001. if it Even City suggested fig- had three were renewed in the terms and con- in arriving might ures to consider at a value: might dition[s] of the lease be or $4,600, if the lease was canceled with six be the same as this lease. Of course it notice; $59,500, might months’ if the ran for lease not have been renewed in term; $80,918, the lease we know it could have at been canceled originally monthly figure 3. Mr. Rikard testified that the value income he had used was $84,200.00. $80,- slightly higher figure He later modified that than the reflected Out- 918.13, suggested after counsel for the door West’s records. time, over and above the rentals would present term of even within lease, unexpired term. giving of six months due for writing. You must take con- notice Barden, 129; ex see State also fixing fair cash market sideration in Teasley, rel Comm’r interest as of Octo- value of this leasehold Dept. ex rel. State (Tenn.App.1995); Of factors, all ber Gee, 498, 502 Transp., etc. v. you pertinent deem to arrive other factors Chambers, (Tenn.App.1977), and buyer willing pay at what would [sic] at 274. willing seller for this leasehold what have broad discretion Trial courts considering those accepted, have all would concerning over the admission factors. property. Smith the value condemned *4 The trial made no further mention of 366, Eatherly, 369 County v. 820 S.W.2d might or how it be cancellation course, to be admissi (Tenn.App.1991). Of factored, all, into of the at the calculation ble, first be relevant must such evidence lease’s value. of Rules Evidence. under the Tennessee a verdict of is defined as returned “Relevant evidence” trial or remittitur After its motion for new tendency to any make having denied, City appealed. consequence of any of fact that is existence more of the action
to the determination probable probable than would or less II the evidence. without jury charge We review the its a con- In the absence of Tenn.R.Evid. 401. entirety to determine whether trary statutory relevant evidence error. Otis v. Cam committed reversible 402, admissible, Co., 439, generally is Tenn.R.Evid. 850 bridge Mut. Fire Ins. S.W.2d Elam, (Tenn.1992); 446 In re 738 unless Estate of 169, 174 (Tenn.1987); and v. S.W.2d Grissom substantially is out- probative value Nashville, Metropolitan Gov’t 817 S.W.2d prejudice, danger weighed by of unfair Jury (Tenn.App.1991). instructions 685 issues, misleading the or confusion against are not the standard measured delay, jury, by of undue or considerations Grissom, perfection. at 817 S.W.2d 685. time, presentation waste of or needless charge “fairly will not be invalidated if it cumulative evidence. legal issues involved in the case defines TenmR.Evid. 403. Otis, jury.” not mislead the 850 does Therefore, propriety order assess Grissom, 446; at S.W.2d at 685. S.W.2d 817 instructions, deter- of the we must first Furthermore, particular instruction must expectancy of mine of the whether evidence considered in context the entire existence of the the lease’s renewal and the Elam, 738 S.W.2d at charge. provision is a deter- relevant mination of the leasehold’s value. addressing propriety
Before instructions, lease we note that a compensable under Ill when the hold interest is by domain. lying property is taken eminent have concluded that evidence We Barden, County 527 Shelby probability of lease’s renewal both the (Tenn.1975); Advertising 129 Lamar Ten provision is un the cancellation Metropolitan Dev. Hous. nessee v. 401 der Tennessee Rules Evidence Auth., (Tenn.App.1990); contingency arguably affects 403. Each Chambers, Hous. Auth. v. Gallatin interest. The leasehold (1962). Tenn.App. generally factor entitled to consider of valuation of a leasehold basic rule lease might or reduce the tend enhance interest is well-settled: particular val thereby making hold’s than with probable probable ue more or lessee or tenant is entitled [t]he 401. See unexpired out that evidence. Tenn.R.Evid. of his leasehold excess Brandon, also State 227 the fact that this lease had been renewed before, (Tenn.App.1994) (holding least twice it was not unreasonable to that evidence of relevant, predict soil that it an addi- and water contamination is would be renewed for ten-year say tional term. This is not to since it makes a lower market value of con- renewed; necessarily been would have likely demned land more such without nevertheless, renewal, evidence). probability of a The leasehold’s value would natu- incorporated one of the witness’ rally probability be increased of an- properly leasehold’s could be consid- term, other and decreased jury along ered with the other rele- specter only of a cancellation with six vant evidence on value. months’ notice. The likelihood of either of events, weight as well as the to be token, By entitled to same calculating allocated each in the amount of consider the fact that the lease was compensation due Outdoor are matters party upon to cancellation six for the to resolve. Obviously, months’ notice. if the lease was canceled, to be Outdoor West would cases, weight In other eminent domain have the benefit of an additional six months’ given contingencies to be various income, rather than that of the full affect the value of condemned has earlier, term. As indicated Mr. Miller testi- *5 province been held to fall within the of the fied that the value of the leasehold would jury. example, For the likelihood of rezon- $4,600 diminish to about the lease was ing restrictions, or removal and its effect canceled. value, questions are of fact left to the jury’s Comm’r, determination. judge State ex rel. The contends that the trial Cox, (Tenn. 357, prevented jury any meaningful D.O.T. v. 840 S.W.2d the 362 con- Comm’r, App.1991); provision, sideration State ex rel. of the cancellation D.O.T. v. Williams, 397, potential 828 of the leasehold’s value in the event (Tenn.App. 400-01 1991); cancellation, Shelby by instructing jury of a County Mid-South Ti Co., it had to a verdict tle reach between (Tenn.App.1980). 615 S.W.2d 680 agree. jury We was restricted contingency of the lease’s renewal or which, effect, range figures, ato in did not the instant case was no more permit jury to consider the cancellation speculative remote or possibili- than was the Therefore, though clause. even ty rezoning change or restric- jury instructed the that it could consid- tions in the cases cited above. provision, effectively er the cancellation he expert an When testifies as to his words, precluded doing it from so. In other opinion property, of the condemned problem judge’s charge with the trial credibility is entitled to consider the not that he instructed the to base its light of that witness’ of all rele suggested by verdict on the values the evi- vant Bradley evidence. Chambers v. Coun dence, but rather he forced the to ty, Tenn.App. 384 S.W.2d 45 ignore potential suggested by one (1964) (“The general weight rule that the to witnesses, by confining to verdict given expert or evidence is for the range charge. mentioned justify is too familiar to extended cita The record little offers indication cases.”). stated, tion of- As our court has power as to whether of cancellation required accept is not to or [t]he or not would would have been exercised. reject theory party, in toto the of either However, possibility of a lease’s cancella concept arrive at its but own of truth tion, specifically where the lease contains justice from the evidence. certainly is a factor to such Shofner, State ex rel. Shaw v. arriving the trier of fact in considered 169, 174(Tenn.App.1978). the value of a leasehold interest. We there that the trial did not fore find that the trial court in its We find erred jury regarding allowing err in to consider the ex instructions to the the effect pectation of a renewal of the lease. Given of the cancellation range ed market values established
range its verdict could to of values proof, including impact competent jury’s fact verdict fall. Given the tending to imposed all factors —those have squarely parameters fell relevant within the as on value as well those judge, cannot find this error a downward effect we 36(b), of the date of tending On to enhance to be harmless. Rule T.R.A.P. factors contrary, taking. In this the downward that the instructions we find right jury’s to cancel. probably “more than not included the owner’s affected” the value of the lease- to much evidence is clear that restricting verdict hold, right assuming an of the to exercise more narrow than that which could have cancel, taking. as of the date of divined the evidence. See Otis Cam Co., possible this as a bridge The evidence established Mut. Fire Ins. (Tenn.1992); regardless expert actu- Metropolitan whether Grissom v. Nashville, ally adopted opinion of value. it as his Gov’t. (Tenn.App.1991). juryA all entitled consider reasons, that a foregoing For the we find evidence, i.e., any having “evidence judgment new trial is warranted. The of the tendency to make existence appeal trial court is Costs on are vacated. the determina consequence fact that is of against appellees. This case is assessed or probable more tion of action trial, court for a new remanded the evi probable it would be without opinion. consistent with this Among Tenn.R.Evid. dence.” Rule things, jury in ease could con other FRANKS, INMAN, J., Judge, Senior following value-impacting facts and sider the concur. (1) of the fee had that the owner inferences: on six months’ right cancel the lease PETITION REHEAR OPINION ON TO (2) notice; previously that the owner had *6 re- appellee petition has filed a for The so, as to do evidenced shown an inclination petition, appellee con- hearing. In the the by the had been renewed the fact that lease properly to opinion (3) our “failed tends that twice; assume that it reasonable to was specifics of the right consider the evidence and the of that would not exercise the owner ruling” concerning the judge’s ap trial arrangement was the cancellation since Miller, experts him, property’s one of the who profitable of William parently size; conceding by testified on market value. While its potential uses were limited twice, (4) “if a petition that testified that renewed Miller that the lease had been $4,600”, expert be worth David Rikard’s supporting canceled lease would fact out, agree, that which was based on higher opinion and we appellee points opinion plus projected a adopt remaining as his term Miller did not respect testimony with value; however, appellee’s All of the disagree with renewal. we question of on the of this lat- facts was relevant regarding significance opinion jury could consider concludes, fair market value. The as appellee did ter fact. The effect, any, of these factors if that each in- jury properly judge, trial that was fair market val already upon had “[had] a could not return verdict structed taking.” property on date $59,500, adopted ue of the that was Cohen, 541 Housing Auth. Nashville opinion of by Miller as his (Tenn.1976). adopted by of S.W.2d opinion of value lowest Appellee contends expert witnesses. evidence, it jury consider If a can wrong held that the were when we that we evidence, if on that permitted to act must be when error judge committed reversible trial was In desires. so $59,500 on the limit of placed a lower he fully charge to trial court’s permitted disagree. respectfully jury’s verdict. We all of the upon act consider and right cancel except the owner’s incorrectly position appellee’s The judge placed a range of the lease. When to the is limited assumes jury could value the on the “floor” adopted the witnesses expressly values consider, jury that it told the in effect he is too restric value. This opinions their side, any consider, fac- the low stated, could not correctly jury is limit- tive. More contrary tor that was to or inconsistent with $59,- the factual opinion basis of Miller’s DEWEES, Plaintiff/Appellant, Jennie A. 500. That monetary was the result of Miller’s mathematical pres- calculation of value, i.e., ent advertising “stream” of net SWEENEY, Defendant/Appellee. Sean term,
revenues remaining due taking, lease at the time pres- reduced to Tennessee, Appeals Court of ent applying appropriate dis- Section, Middle at Nashville. count rate. say, Needless to a cancellation of the lease is inconsistent with an income Dec. Hence, “stream” for the term. Appeal Permission to while told by Supreme Denied Court that it could consider right the owner’s 27,1997. May cancel, it is clear that it could not act instruction because the trial told effect, jury, in that it could not factor the right to cancel into its calculation of value if $59,-
to do so would reduce its award below
500. This clearly was error and one that was
prejudicial Again, in nature. we would em-
phasize, legitimately can consider evidence, permitted it must be to factor that verdict, evidence into its if that is what it
chooses to do. error this case inwas suggestion
court’s to the range. suggestion
amounts as a on the clearly
low side prejudicial, because proof $4,600—in
there was of a lower value —
the event of cancellation. It was for the
to decide whether and to what extent the
right to cancel affected the lease’s value at taking. instruction,
the time of pattern *7 values,
with no mention of is the
appropriate instruction on the
hand. T.P.I. See Civil 11.30.
haveWe considered the cases1 cited
petition rehearing. nothing We find
those authorities at holding odds with our
this case. petition rehearing is DENIED at appellee’s costs.
IT IS SO ORDERED.
FRANKS, J., INMAN, Judge, Senior
concur. Cohen, 1977). Housing (Tenn.App.
1. Nashville
Auth. v.