BRIEF OF APPELLANT, MISSISSIPPI TRANSPORTATION COMMISSION

E-Filed Document Feb 4 2015 08:12:11 2014-SA-01181 Pages: 17 IN THE TIIE SUPREME SU1'REME COURT OF MISSISSIPPI CASE NO. 2014-SA-01181 2014-SA-01l81 MISSISSIPPI TRANSPORTATION COMMISSION APPELLANT VERSUS UNITED ASSETS, LLC APPELLEE EE BRIEF OF APPELLANT, MISSISSIPPI TRANSPORTATION COMMISSION On Appeal from the Special Court COUl't of Eminent Domain of Forrest County, Mississippi Cause No. C012-0806 ORAL ARGUMENT REQUESTED Jack H. Pittman MSB#04394 Christopher M. Howdeshell MSB #10688 Pittman Law Firm Post Office Drawer 17138 Hattiesburg, MS 39404-7138 Telephone: (601) 264-3314 Facsimile: (601) 261-3411 Attorneys for Appellant

IN THE SUPREME COURT OF MISSISSIPPI MISSISSIPPI TRANSPORTATION COMMISSION APPELLANT VERSUS CAUSE NO. 2014-SA-OI 181 UNITED ASSETS, LLC APPELLEE CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the fo llow ing listed persons have an interest in the outcome of this case. These representations are made in order that the Justices of the Supreme Court and/or the Judges of the Court of Appeals may evaluate possible disqualification or recusal. For Appellant: I. Mississippi Transportation Commission, Appellant (Mr. Mike Tagert; Mr. Dick Hall; and Mr. Tom King). 2. Jack H. Pittman, Esq., Counsel for Appellant. 3. Christopher M. Howdeshell, Esq., Counsel for Appellant. 4. United Assets, LLC, Appellee; (Mr. Louis J. Tortorich, Jr.). 5. Mark D. Herbert, Esq., Counsel for Appellee. 6. Lisa A. Reppeto, Esq., Counsel for Appellee. 7. Sabrina B. Ruffin, Esq., Counsel for Appellee. 8. Honorable Michael W. McPhail, Trial Court Judge I.

TABLE OF CONTENTS CERTlFICA TE OF INTERESTED PERSONS............... I. TABLE OF CONTENTS.............................. ii. TABLE OF AUTHORITIES........ iii. STATEMENT OF THE ISSUES................................. I STATEMENT OF THE CASE..................... I A. NATURE OF THE CASE............. I B. STATEMENT REGARDING ORAL ARGUMENT............... I C. COURSE OF THE PROCEEDINGS...................... I D. STATEMENT OF TH E FACTS................... 2 SUMMARY OF THE ARGUMENT................................ 6 ARGUMENT...... 6 I. THE TRIAL COURT ABUSED ITS DISCRETION BY ALLOWING A.PPELLEE'S EXPERT TO TESTIFY TO THE VALUE OF APPELLEE'S REMA.INING PROPERTY WITHOUT PROVlDING ANY MARKET DATA TO SUPPORT THE VALUE................... 6 II. Ill. THE TRIAL COURT ERRED IN NOT GRANTING A.PPELLANT'S MOTION FOR NEW TRIAL......... 9 T HE TRIAL COURT ERRED IN NOT GRANTING A.PPELLANT'S MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT....... 10 CONCLUSION................................................. II CERTlFICATE OF SERVICE......................... 13 II.

TABLE OF AUTHORlTffiS CASES Adcock v. Miss. Transp. Comm'n, 981 So.2d 942, 946 (Miss. 2008)............................... 6, 9, 10 Edmonds v. State, 955 So.2d 787, 792 (Miss. 2007)..........,.................... 6 Gulf South Pipeline Co., LP v. Pitre, 35 So.3d 494 (Miss. 20 I 0.......................... 6, 7, II Hemphill v. Mississ ippi State Highway Comm'n, 145 So.2d 455 (Miss. 1962)............... 8 Johnson v. st. Dominic's Jackson Memoriall-losp.. 967 So.2d 20, 23 (Miss. 2007)... 9, 10 Miss. State Hwy. Comm'n v. Hillman, 198 So. 565, 569 (Miss. 1940)............. 7 Mississippi State Highway Comm'n v. Stout, 134 So.2d 467 (Miss. 1961 )................ 9 Mississippi Transp. Comm'n v. McLemore, 863 So.2d 31, 38 (Miss. 2003).............. 7 Rebelwood, Ltd. v. Hinds County, 544 So.2d 1356, 1360 (Miss. 1989)................ 7 Troupe v, McAuley, 955 So.2d 848, 856 (Miss. 2007)................................. 6 OTHER AUTHORITY Mississippi Rule of Evidence 702.................. 7 Ill.

STATEMENT OF THE ISSUES 1. Whether the Forrest County Special Court of Eminent Domain abused its discretion by allowing the appraiser for the Appellee to testify to the va lue of Appellee's remaining property without providing any market data to support the value. 2. Whether the Trial Court erred in denying Appellant's Motion for Judgment Notwithstanding the Verdict. 3. Whether the Trial COUl1 en"cd in denying Appellant's Motion for a New Trial. STATEMENT OF THE CASE A. Nature of the Case. This matter involved an eminent domain proceeding filed by the Mississippi Transportation Commission (hereinafler "Appellant") in the Special Cow1 of Eminent Domain of Forrest County. Mississippi. B. Statement Regarding Oral Argument. Pursuant to Mississippi Rule of Appellate Procedure 34, Appellant respectfully requests oral argument. This appeal involves complicated engineering plans and evidentiary issues regarding testimony of experts that could create precedent for subsequent eminent domain cases. Appellant herein respectfully submits that the adjudicative process will be substantially aided by oral argument. C. Course of Proceedings and Disposition Below. On October \6, 20 12, Appellant herein filed a Complaint to Condemn in the Special Court of Eminent Domain of Forrest County, Mississippi to acquire real property and certain access rights from United Assets, LLC (hereinafter "Appellee"), as described in Exhibit "A" Page 1 of 13

attached to the Complaint. (R. 15-24; R.E. 4). Service of process was completed accordingly, and the Court entered an Order Granting Plaintiff Right ofimmediate Title and Possession 10 the property pursuant to Mississippi Code Annotated 11-27-83, el. seq. on the 9 lh day of April, 2013. (R. 82-85; R.E. 5). Trial of this matter was eventually scheduled for May 19, 2014. (R. 189; R.E. 6). Prior to trial, Appellant herein filed an Amended Statement of Values asserting total compensation and damage in the amount of$826,035.00. (R. 190-191; R.E. 7). Appellee's Second Amended Statement of Values filed prior to trial asserted just compensation in the amount of$2,255, 145.20. This Statement of Values also asserted that the after value octhe property, or the value of the property remaining after the acquisition, was $30,050.00. (R. 201-202; R.E. 8). After two days of testimony, the jury returned a verdict awarding Appellee $1,620,060.66. (R. 232; R.E. 9). Final Judgment in this amount was entered on June 4, 2014. (R. 233-238; R.E. 2). On June 9, 2014, Appellee filed a Motion for Judgment Notwithstanding the Verdict or for a New Trial and Additur, and, on that same date, Appellant filed a Motion for Judgment Notwithstanding the Verdict or for a New Trial. (R. 239-246; R.E. to). The motions were heard by the Court on August 6, 20 t4, and the COW1 denied both motions by Order dated the 13" day of August, 2014. (R. 27 1-272; R.E. 3). It is from the Final Judgment and Order denying Appellant's Motion for Judgment Notwithstanding the Verdict or for a New Trial that Appellant prosecutes this appeal. D. Statement of the Facts. Appellee owns 23.52 acres in the northeast quadrant of the interseclion of Interstate 59 and Evelyn Gandy Parkway. also known as State Route 42. Appellant initiated eminent domain proceedings to acqujre 12.02 acres and access certain rights from Appellee as described in the Complaint, leaving 11.5 acres. (Tr. 85; Exhibit P-l, P-2; R.E. 11). Prior to condemnation, the Page 2 of 13

property was vacant except for an old house and a shed. (Tr. 133; R.E. 12). The property acquired from Appellee was needed to expand the intersection oflntcrstate 59 and Evelyn Gandy Parkway because of increased traffic. (Tr. 82; R.E. 13). The project involved two phases. The first phase involved widening Evelyn Gandy Parkway to four lanes and reconstructing the access ramps between Interstate 59 and Evelyn Gandy Parkway. The second phase of the project involves the construction ofa flyover, an elevated roadway, which will assist the traffic in existing Interstate 59 and entering on Highway 42. (Tr. 83-85, 100; R.E. 14). One ofu,e flyovers wi ll be constructed on Defendant's property and wi ll be approximately thirty-six feet in height. (Tr. ) 07; R.E. 15). Also acquired were certain access rights which prevented Appellee from accessing its property along a service road after construction. During construction, the property could be accessed by an existing drive located at the southern boundary of Appellee's property. After construction, a new access road, constructed by Appellant, will provide access to the remaining property near the same location. (Tr. 85-89; Exhibit P-l; R.E. 16). Mr. Jonathon NuH (hereinafter "Null"), Appellant's expert appraisal witness, testified that the highest and best use of the property was commercial. (Tr. 13 1; R,E. 17). Nu ll, utilizing the comparable sales method, offered four (4) comparable sales in support of his value. The Court allowed three (3) of Null's sales into evidence, including the subject property, which sold in 2006 for the amount of$ I,353,576.00. (Tr. 137-172; R.E. 18). From these sales, Null adopted a value of $60,000.00 per acre or $ 1,41 1,200.00 in the before condition. (Tr. 173; R.E. 19). In the after condition, Null stated that there were no damages to the remainder because the highest and best use and access remained essentially the same. Null used the same three sales to adopt a $60,000.00 per acre value in the after condition for the 11.5 acres remaining, which totaled $721,200,00. Null lhen deducted from his after val ue the cost to construct a service road similar Page 3 of 13

to that which existed in the before condhion in the amount of$75,ooo.00, and also deducted the loss of use under tl,e service road in the amount of$30,780.00. Null further deducted $30,255.00 from the after value to pay for paved access into the remaining property. Null then subtracted his after value $585,165.00 from his before value, and testified to the amount of $826,035.00 as just compensation. (Tr. 174-181; R.E. 20). Appellee's first witness was Mr. Louis J. Tortorich, Jr., who is managing member of Appellee. Mr. Tortorich testified that Appellee purchased the property to develop commercial out-parcels which they would then lease to businesses such as fast food companies, hotels, and other related businesses. When asked how the acquisition would impact his development plans, he slated as follows: (Tr. 239-243; R.E. 21). My personal opinion is that no one in their right mind would want to use what is remaining for what we intended from the beginning. Appellee then called Mr. John Stribling, who is a real estate broker and owner of Stribling Realty. Mr. Stribling testified that. after the taking, the remainder would not be a viable site for commercial real estate. (Tr. 255; R.E. 22). Appellee's final witness was Mr. Joe Parker (hereinafter "Parker"). who was admitted as an expert in the field of real estate appraisal. Parker also testi_fied that he adopted the comparable sales approach in appraising the subject property and appraised thc property as commercial development. (Tr. 27 1-274; R.E. 23). Before Parker testified as to specific sales, the sales were proffered to the Court outside the presence ofajury. Parker submitted twcnty-tlrree comparable sales to the Court, including twelve (12) in the before condition, and eleven (11) in the after condition. Of the twelve (12) salcs offered to support Parker's valuation in the before condition, Page 4 of 13

the Court allowed four (4) sales into evidence. As to Parker's sales in the after condition, one was witlldrawn by Appellee and all others were deemed inadmissible. (Tr. 276-372; R.E. 24). Using the four (4) sales allowed by the Court, Parker testified to a $2.25 per square foot value for the land, or a before value of$2,305,195.00. He then deducted $20,000.00 from that amount for the demolition ofa old house and shed 011 the propel1y, Ieaving a total before value of $2,285,195.00. (Tc. 38 1; R.E. 25). Regarding the after condition, Parker testified that the highest and best use of the property would change to "some potential future use". (Tr. 382; R.E. 26). When Parker was asked on direct examination abo ut the value of the remaining property. counsel for Appellant herein objected because he had not provided any data to support his auer value. (Tr. 386-39 1; R.E. 27). Counsel for Appellant also objected because this testimony differed from Appellee's Statement of Values, and moved to strike Parker's testimony. The Court overruled the Motion. (Tr. 400-40 I; R.E. 28). Parker fai led to ofier sales or other market data to support an after value, testifying as follows : Q: As a professional appraiser, knowing the information you sat through and listened to and the information that has been fum ished to you in this case, are yoll in a position to give an expert opinion as to the after value of this property? A : Yes sir. Q: Okay, and what would that value be? A: Zero. (Tc. 39 1; R.E. 29). The Court supported its ruling by stating that Mr. Tortorich had testified that the property had "no value". (Tc. 389; R.E. 30). At the conclusion of the trial, the jury then awarded Appellee $1,620,060.66. (Tr. 433; R.E. 31). Page 5 of 13

SUMMARY OF THE ARGUMENT The Trial Court abused its discretion by allowing Parker to testify that Appellee's remaining 11.5 acres had no value. Mississippi Rule of Evidence 702 requires expert testimony to be based upon sufficient facts or data and the product of reliable principles and methods as a prerequisite to admission into evidence. Parker submitted no comparable sales or other market data to support his opinion that the remaining 11.5 acres had no value whatsoever. Thus, Parker's opinion was based upon unsuppoited speculation, and should not have been allowed into testimony. Because Parker's testimony was inadmissible, the jury verdict was unsubstantiated by the evidence, and a Judgment Notwithstanding the Verdict or, at the least, a New Trial should have been ordered. I. ARGUMENT. THE TlUAL COURT ABUSED ITS DISCRETION BY ALLOWING APPELLEE'S EXPERT TO TESTIFY TO THE VALUE OF APPELLEE'S REMAINING PROPERTY WITHOUT PROVIDING ANY MARKET DATA TO SUPPORT THE VALUE. A. Standard of Review. A trial court's decision to admit expert testimony is reviewed on an abuse of discretion standard. Adcock v. Miss. Transp. Comm'n, 981 So.2d 942, 946 (Miss. 2008). An abuse of discretion standard requires reversal if the trial court's discretion is found to be arbitrary and clearly erroneous. ~ Troupe v. McAuley, 955 So.2d 848, 856 (Miss. 2007). Merely speculative expert opinions should not be admitted, GulfSolllh Pipeline Co., LP v. Pitre, 35 So.3d 494 (Miss. 2010) (citing Edmonds v. State, 955 So.2d 787, 792 (Miss. 2007». B. Applicable Law. When palt of larger tract of land is taken for public use, the owner should be awarded the difference between the fair market value of the whole tract immediately before the taking, and Page60f 13

the fair market value of that remaining immediate after the taking. Miss. State Hwy. Comm'n v. Hillman, 198 So. 565, 569 (Miss. 1940). as follows: Mississippi Rule of Evidence 702 governs the admission of expclt testimony, and reads If scientific, technical, or other special.ized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in Ole form of an opinion or otherwise, if (I) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. Under Mississippi Rule of Evidence 702, the Trial Court must determine whether the proffered testimony is relevant, and then whether the proffered testimony is reliable. Mississippi Transp. Comm'n v. McLemore, 863 So.2d 31, 38 (Miss. 2003). There must be a "valid scientific connection to the pertinent inquiry" as a pre-condition to admissibility. The party offering the expert's testimony must show that the expert has based his testimony on the methods and procedures of science, not merely his subjective beliefs or unsupported speculation. McLemore, 863 So.2d at 36. There are tluee accepted standards in detennining fair market value for real properly, (I) the cost approach, (2) the income capitalization approach, and (3) the market data or comparative sales approach. Pitre, 35 So.3d at 498 (citing Rebelwood, Ltd. v. Hinds County, 544 So.2d 1356, 1360 (Miss. 1989)). As to the determination of fair market value of the property in the after condition, this Court has held that it is an abuse of discretion to admit values of property in the after condition with no supporting comparable sale or other market data. Pitre a1499. Page 7 of 13

C. Argwnent. Although Parker's testimony was relevant, it was not re liable, and the Trial COUIt abused its discretion ill allowing Parker to testify that Appellee's property in the after condition was valueless. Parker admittedly used the comparable sales approach to value the subject property in the before condition, but did not offer any comparable sales or other market data to support a value in the after condition. Appellee's Second Amended Statement of Values indicated that the value of Appellee's remaining property was $30,550.00 and there is nothing in the record to suggest Parker did not intend to testify to this value prior to taking the witness stand. However, when the Court excluded all of Parker's sales in the after condition, Parker was forced to change his testimony, and, instead of admitting that he could 110t testify to a value in the after condition, he concocted a value which had no scientific basis, was speculative, and was contrary to Appellee's pleadings. Parker's desperate, last-minute attempt to justify an after value can only be described as subjective. At best, Parker's testimony seems to be relying on the testimony of the landowner, Mr. Tortorich, and the real estate broker, Mr. Stribl.ing. However, the record reflects that neither of these witnesses gave an opinion as to the value oftlle property in the after condition, and that the Trial Court was mistaken as to Mr. Tortorich's testimony. Mr. Tortorich merely stated that he could not use the property in the after condition for Appellee's original intended purpose. No value was given by him. [n Hemphill v. Mississippi State Highway Comm'n, 145 So.2d 455 (Miss. 1962). This COUl1 states as follows:,.. it is difficult to conceive of such a thing as property wholly separated from the element of value. Page 8 of 13

Further, in Mississippi State Highway Comm'n v. Stou!, 134 So.2d 467 (Miss. 1961), the COllrt, in addressing ajury instrllction, stated as follows: It was error to tell the jury that the land would be of no value to Appellee. He will still OWl] the land even ifhe cannot get to it. There was no proof that it would not have some market value. It cannot be said as a matter of law that lack of access to a tract of land completely destroys its value. Because Parker provided no comparable sales or other market data to support his contention that the property was valueless in the after condition, and because the Court all owed Parker to testify based on the incorrect recollection that Mr. Tortorich had testified as to value of the remaining property, the Trial Court abused its discretion and was clearly erroneous in allowing Parker to testify that Appellee's remaining property was valueless. II. ARGUMENT. THE TRIAL COURT ERRED IN NOT GRANTING APPELLANT'S MOTION FOR NEW TRIAL. A. Applicable Law. A Motion for New Trial is a challenge to the weight of the evidence and is reviewed under an abuse of discretion standard. Adcock, 98 1 So.2d at 949 (citing Johnson v. St. Dominic's - Jackson Memorial Hospital, 967 So.2d 20, 23 (Miss. 2007)). A new trial is warranted only if the verdict is contrary to the substantial weight of the evidence. Jd. B. Argument. The substantial weight of tile evidence established just compensation in the amollnt of $826,035.00. Appellant's expert appraiser performed a before and after appraisal which met the requirements of Mississippi Rule of Evidence 702 and other applicable law. Appellee's expert appraiser, as set forth above, did not present an opinion that met the requirements of Mississippi Page 9 of 13

Rule of Evidence 702. Therefore, the only proper opinion of value that was before the Court was Mr. Null's value of$826,035.00. The jury returned a verdict of$i,620,060.66, which is twice the amount of Null 's opinion. Considering that the Appellee only paid $1,353,576.00 for the entire propelty in 2006, and also considering that Appellee retained ownershi p to 11.5 acres, the jury verdict is clearly contrary to the substantial weight of the evidence. Therefore, the Court erred in not granting Appellant a New Trial on this matter. III. ARGUMENT. THE TRIAL COURT ERRED IN NOT GRANTING APPELLANT'S MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT. A. Applicable Law. A de novo standard of review is applied to a trial court's denial ofajudgment notwithstanding the verdict. Johnson v. St. Dominic's - Jackson Memorial Hospital, 967 So.2d 20, 22 (Miss. 2007). A motion for JNOV is a challenge to the legal sufficiency of the evidence, and this Court will affirm the denial ofa JNOV if there is substantial evidence to support the verdict. Adcock v. Miss. Transp. Comm 'n, 981 So.2d at 947 (Miss. 2008). "Substantial evidence" is information of such quality and weight that reasonable and fair-minded jurors in the exercise of impartial judgment might have reached different conclusions. The evidence is viewed in the light most favorable to the verdict. Adcock at 947. The Trial Court erred in denying Appellant's Motion for Judgment Notwithstanding the Verdict because there was not substantial evidence to support the verdict. Parker's after value was not based upon market data or any other accepted principle or method; therefore, Parker should not have been allowed to present his opinion of just compensation to the jury. In contrast, Appellant's appraiser did perform a before and after valuation based on comparable sales, which Page 10 of 13

properly suppol1ed his opinion of just compensation 0[$826,035.00. The jury verdict in this matter was $ 1,620,060.66. Since Parker's testimony was erroneously admitted, the verdict was based upon insufficient evidence, lacking the quality and weight necessary to reach an impartial verdict. In fact, the only evidence of val ue that was before the Court in accordance with Mississippi Rule of Evidence 702 was the opinion of Null, and Null's opinion should have been the only value considered by the jury. Because the only substantial evidence as to value was the value being offered by Null, and because the jury verdict was more than twice of Null 's opinion, the Tri al Court erred in not entering a judgment notwithstanding the verdict in the amount of $826,035.00. CONCLUSION The Trial Court abused its discretion and was clearly erroneous in allowing the landowner's expert appraiser to testify that the property remaining the after condition was valueless. Similar to the testimony in Pitre, Supra, Parker provided no comparable sales or market data to SUppOJ1 his lack of value in the after condition. Further, Appellee's witnesses did not testify that the property had no value in the after condition, and the Trial Court erred in justifying the a1iowance of Parker's opinion upon this misconstrued testimony. By allowing Parker to testify, the Court a1lowed the jury to consider an opinion of the expert that was unreliable, not based upon sufficient facts or data, and not the product of any principle or method. Based upon the foregoing, Appellant herein would respectfully request that this matter be reversed and a verdict rendered for Appellee in tbe amount of$826,035.00, as testified to by Appellee's expert appraisal witness; or~ alternatively, that this matter be reversed and remanded for a new Lrial requiri ng the expert appraiser for Appellee to testify in accordance with a propcr Page 11 of 13

before and after appraisal consistenl with Mississippi Rule of Evidence 702. And if Appe ll ant has prayed for wrong or insufficient relief, Appellant prays for such relief to which it may be entitled. Respectfully submitted this the 4'" day of February, 2015. MISSISSIPPI TRANSPORTATION COMMISSION BY: s/christopher M. Howdeshell Its Attorney Page 120f 13

CERTIFICATE OF SERVICE I, Christopher M. Howdeshell, do hereby ce1tify that on thjs day, I electronically filed the foregoing pleading or other paper wilh the Clerk of the Court using MEC System which sent notification of such filing to the following: prepaid to: L isa A. Reppeto, Esq. Jones Walker, LLP Post Office Box 427 Jackson, MS 39205 Further I hereby certify that I have mailed by United States Postal Service, postage Honorable Michael W. McPhail Forrest County Court Judge Post Office Box 190 Hattiesburg, MS 39403-0190 This, the 4th day of February, 2015. s/christopher M. Howdeshell Prepared by: Christopher H. Howdeshell MSB #10688 Pittman Law Firm Post Office Drawer 17138 Hattiesburg, MS 39404-7138 Telephone: (601) 264-3314 Facsimile: (601) 261-3411 Page 13 of 13