A property owner appealed after the Department of Transportation assessed the damages at $125,000 after taking the property for automotive-related services. After a hearing, the Superior Court reassessed damages as $243,840, and the property owner appealed.
The primary issue was whether the trial court erred in reevaluating the amount of damages to which Property Owner was entitled as just compensation for the taking of its parcel of commercial property, which the Department of Transportation (DOT) condemned for a roadway. Property Owner disputed the valuation of the land and claimed that the trial court erred in admitting certain expert evidence in the course of reaching its decision.
The trial court heard testimony at a hearing from both parties’ real estate appraisal expert witnesses. Using a sales comparison approach, Property Owner’s first appraisal expert determined that the fair market value of the property was $320,000, basing this on recent sales of four properties in the city that he believed to be comparable. The second real estate appraisal expert—also using a sales comparison approach— found that the Fair Market Value (FMV) of the property was $340,000. This expert based his conclusion on the recent sales of four other local properties that he considered comparable to the subject property, although these properties weren’t in the city.
The DOT’s appraisal expert also used a sales comparison approach to assess the value of the property. Using three sales of comparable properties in the city, he concluded that the FMV of the property at the time of its taking was approximately $125,000.
The trial judge found that two of the properties used as comparables by the testifying experts were most similar to the subject property. The judge increased the amount of damages awarded to Property Owner by $118,400. Property Owner filed this appeal claiming that the court shouldn’t have considered DOT’s appraisal because the expert listed the incorrect zone for the property in his report. As a result, Property Owner argued that DOT’s appraiser’s sales comparison analysis was in error.
Judge Michael R. Sheldon of the Connecticut Court of Appeals explained that the appellate court focused on the conclusion of the trial court and the method by which it arrived at that conclusion to determine if it was legally correct and factually supported.
The Court of Appeals held that at trial, DOT’s real estate appraisal experts acknowledged that he incorrectly identified the zone of the property in his report and testified that this error didn’t have an effect on his sales comparison analysis. This was because the criteria he used to select comparables was the highest and best use of the property, which he determined was its continued use for automotive-related services. The appraiser testified that he selected properties that were commercially zoned and adapted for similar purposes and that his comparables were all located in either a business or industrial zone.
Judge Sheldon found that the trial court used the sales comparison approach to assess the value of the property. It chose one property in the DOT’s appraiser’s appraisal that it held comparable to the subject property, an automotive garage similarly zoned that sold for $300,000. The court also looked at a sale identified by the Property Owner’s expert, which was an auto repair shop that sold for $337,000. On the basis of these two sales, the court concluded that a fair determination of the market value of the property was $245,000.
Although the expert appraisals used other methods of valuation, the trial court relied on the sales comparison approach to reach an opinion as to the property’s value because it was the most credible method of valuation given the relevant facts.
Judge Sheldon explained that the factors that affect the comparability of sales and bear on their usefulness in determining the value of the subject property include, location, size, shape, time of the sale, similarity of use to which the property is put, adaptability, zoning and available utilities. Differences as to these factors generally go to the weight of the evidence of the comparable sale, the judge wrote, not its admissibility.
Property Owner argued that DOT’s appraiser’s sales comparison incorrectly excluded other legally conforming potential uses for zoned properties and, thus, reliance on his report somehow tainted the court’s valuation was unpersuasive. The trial court found that Property Owner’s own experts—like DOT’s appraiser—narrowed the highest and best use of the property to automotive-related purposes. As such, Property Owner’s claim as to the DOT’s appraiser’s allegedly failed methodology was “strained at best.” In addition, the sales comparables that the court ultimately relied on to reach an opinion as to the FMV of the property were both commercially zoned and put to similar use for automotive-related purposes.
Judge Sheldon noted that, even though the DOT’s appraiser incorrectly identified the zone in his report, he identified the existing use of the subject property and found comparable properties based on their use for similar purposes. By doing this, he implemented a methodology that was similar to that of Property Owner’s own experts. The Court of Appeals held that the trial court was free to accept and give effect to the testimony of the witnesses as he believed to be helpful. He considered those methods valid to the situation. The trial court approved certain aspects of DOT’s appraiser’s testimony that it deemed credible and reliable, weighed the evidence, and reached an independent agreement as to the property’s value.
The appellate court held that the trial court didn’t err in considering DOT’s appraiser’s report and reaching its determination as to the value of the property utilizing elements of that report.
Department of Transp. v. Cheriha, LLC, — A.3d —-, 155 Conn.App. 181, 2015 WL 249148 (Conn.App. Jan. 27, 2015)