{ "id": 8522846, "name": "DEPARTMENT OF TRANSPORTATION, Plaintiff v. RALPH W. FLEMING, and SEVERA FLEMING, Defendants", "name_abbreviation": "Department of Transportation v. Fleming", "decision_date": "1993-11-16", "docket_number": "No. 9230SC1086", "first_page": "580", "last_page": "586", "citations": [ { "type": "official", "cite": "112 N.C. App. 580" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "304 S.E.2d 784", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "opinion_index": 0 }, { "cite": "63 N.C. App. 349", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525087 ], "year": 1983, "opinion_index": 0, "case_paths": [ "/nc-app/63/0349-01" ] }, { "cite": "411 S.E.2d 200", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "opinion_index": 0 }, { "cite": "104 N.C. App. 760", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524143 ], "year": 1991, "opinion_index": 0, "case_paths": [ "/nc-app/104/0760-01" ] }, { "cite": "367 S.E.2d 380", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "page": "383-84" } ], "opinion_index": 0 }, { "cite": "90 N.C. App. 65", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522256 ], "year": 1988, "pin_cites": [ { "page": "70" } ], "opinion_index": 0, "case_paths": [ "/nc-app/90/0065-01" ] }, { "cite": "265 S.E.2d 227", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1980, "pin_cites": [ { "page": "233-34" }, { "page": "233-34" }, { "page": "233-34" } ], "opinion_index": 0 }, { "cite": "300 N.C. 57", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8559759 ], "weight": 3, "year": 1980, "pin_cites": [ { "page": "68" }, { "page": "68" }, { "page": "68" } ], "opinion_index": 0, "case_paths": [ "/nc/300/0057-01" ] }, { "cite": "430 A.2d 1284", "category": "reporters:state_regional", "reporter": "A.2d", "year": 1980, "opinion_index": 0 }, { "cite": "180 Conn. 579", "category": "reporters:state", "reporter": "Conn.", "case_ids": [ 1951363 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/conn/180/0579-01" ] }, { "cite": "7 N.E. 916", "category": "reporters:state_regional", "reporter": "N.E.", "year": 1886, "opinion_index": 0 }, { "cite": "102 N.Y. 734", "category": "reporters:state", "reporter": "N.Y.", "case_ids": [ 2202992, 2203160, 2203086 ], "year": 1886, "opinion_index": 0, "case_paths": [ "/ny/102/0734-03", "/ny/102/0734-02", "/ny/102/0734-01" ] }, { "cite": "37 Hun. 537", "category": "reporters:state", "reporter": "Hun.", "year": 1886, "opinion_index": 0 }, { "cite": "16 Abb. N. Cas. 159", "category": "reporters:state", "reporter": "Abb. N. Cas.", "case_ids": [ 631240 ], "year": 1886, "opinion_index": 0, "case_paths": [ "/abbn-cas/16/0159-01" ] }, { "cite": "415 S.E.2d 111", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "opinion_index": 0 }, { "cite": "106 N.C. App. 10", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 5314293 ], "year": 1992, "opinion_index": 0, "case_paths": [ "/nc-app/106/0010-01" ] }, { "cite": "126 S.E.2d 107", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1962, "pin_cites": [ { "page": "110" } ], "opinion_index": 0 }, { "cite": "257 N.C. 428", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568280 ], "year": 1962, "pin_cites": [ { "page": "432" } ], "opinion_index": 0, "case_paths": [ "/nc/257/0428-01" ] }, { "cite": "345 S.E.2d 416", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1986, "pin_cites": [ { "page": "418" } ], "opinion_index": 0 }, { "cite": "82 N.C. App. 96", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358325 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "98" } ], "opinion_index": 0, "case_paths": [ "/nc-app/82/0096-01" ] } ], "analysis": { "cardinality": 627, "char_count": 14096, "ocr_confidence": 0.773, "pagerank": { "raw": 7.215279562110702e-08, "percentile": 0.4310662513528781 }, "sha256": "995470399960695d2c7b74c3a3bb4f1ccf5ccfd55c4ad0e50b39e0835288cb77", "simhash": "1:c3ec6308766f2f73", "word_count": 2301 }, "last_updated": "2023-07-14T15:48:17.524906+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges ORR and GREENE concur." ], "parties": [ "DEPARTMENT OF TRANSPORTATION, Plaintiff v. RALPH W. FLEMING, and SEVERA FLEMING, Defendants" ], "opinions": [ { "text": "EAGLES, Judge.\nPlaintiff\u2019s only assignment of error is that the trial court erred in allowing defense witnesses Mease and McClure to give an opinion regarding the value of defendants\u2019 land because their opinions were based entirely on the net income from the operation of defendants\u2019 plumbing business. We agree and reverse the judgment of the trial court and remand for a new trial.\nThe general rule, subject to some limited exceptions not applicable here, is that loss of profits from the operation of a business conducted on the property is not an element of recoverable damages in an award pursuant to an eminent domain taking. Dept. of Trans. v. Byrum, 82 N.C. App. 96, 98, 345 S.E.2d 416, 418 (1986); Kirkman v. Highway Comm\u2019n, 257 N.C. 428, 432, 126 S.E.2d 107, 110 (1962). See also, 4 J. Sackman, Nichols\u2019 The Law of Eminent Domain \u00a7 12B.09[1] (rev. 3d ed. 1993). Both defense witnesses stated that they used the capitalization of income approach to determine the value of defendants\u2019 land. Under the income approach, an appraiser calculates the economic rent the property earns and deducts normal .operating expenses to arrive at net operating income. That figure is then capitalized by a rate of return to determine the fair market value of the property. 5 J. Sackman, Nichols\u2019 The Law of Eminent Domain \u00a7 19.01[2] (rev. 3d ed. 1993). Although the income approach is an accepted method of appraisal, \u201c[i]n assessing the value of property on the basis of income, care must be taken to distinguish between income from the property and income from the business conducted upon the property.\u201d 4 J. Sackman, Nichols\u2019 The Law of Eminent Domain \u00a7 12B.09 (rev. 3d ed. 1993).\nIn Dept. of Trans. v. Byrum, 82 N.C. App. 96, 345 S.E.2d 416 (1986), this Court upheld the exclusion of expert testimony using the income approach to determine fair market value, when it was based on the profits of the business on the property. In Byrum, defendants\u2019 expert testified on voir dire that his opinion concerning the fair market value of defendants\u2019 land was based primarily on the income approach to valuing commercial property. He admitted on cross-examination, however, that in using the income approach, he did not use the established rental value of the property. Instead, he used the gross income and the profits from the businesses operating on the property to determine the fair market value. This court upheld the trial court\u2019s exclusion of the witness\u2019 testimony because the witness\u2019 method did not distinguish between the rental income of the property, which is a widely accepted factor in determining fair market value, and income from the business being conducted on the property.\nThe facts here are similar to Byrum, supra. Both witnesses testified that they calculated the value of defendants\u2019 property by applying a capitalization rate to the net income from defendants\u2019 business as reported on their most recent tax return. It is clear that the witnesses\u2019 opinions concerning the fair market value of the property were based on the income from the business and not from any rental value attributable to the land. Accordingly, their testimony was inadmissible.\nDefendants contend that our decision in City of Statesville v. Cloaninger, 106 N.C. App. 10, 415 S.E.2d 111 (1992), allows the use of the income approach based on the net income of the business when there are no comparable sales or comparable rentals in the area. In Cloaninger, the trial court admitted into evidence schedule F of defendant\u2019s tax return relating to defendant\u2019s dairy farm business operating on the property. Defendant\u2019s expert witnesses testified to the value of the property using the income approach based on the income from defendant\u2019s dairy farm business as shown on the tax return. The Cloaninger court held that the trial court did not err in allowing defendant\u2019s expert witnesses to use the income approach even though it was based on the income of defendant\u2019s dairy farm business.\nCloaninger does not control the instant case, however, because Cloaninger involved a dairy farm business. It is a well recognized exception that the income derived from a farm may be considered in determining the value of the property. This is so because the income from a farm is directly attributable to the land itself. 4 J. Sackman, Nichols\u2019 The Law of Eminent Domain \u00a7 12B.09[1] (rev. 3d ed. 1993); 5 J. Sackman, Nichols\u2019 The Law of Eminent Domain \u00a7 19.06[3] (rev. 3d ed. 1993). The Cloaninger court noted that the city\u2019s expert witness stated in his report that the income approach was \u201cmost appropriate\u201d since dairy farms are income-producing properties. Accordingly, we view the decision in Cloaninger as approving the use of the income approach when there are no comparable sales data and the income upon which the opinion of value is based is directly attributable to the land.\nHere, the income from defendants\u2019 business was in no way attributable to the land. Defendants had no on-site business on the property. When defendants received telephone calls from customers requesting their plumbing services, they dispatched plumbers from the property to go to the customer. There was no evidence that the real estate contributed in any unique way to the income derived from the business. Defendants could have operated their business from their home or from a downtown office building instead of the premises at issue here without affecting the income from the business.\nDefendants further argue that their property falls within the uniqueness exception to the use of the income approach. \u201cWhere property is so unique as to make unavailable any comparable sales data, evidence of income has been accepted as a measure of value.\u201d 5 J. Sackman, Nichols\u2019 The Law of Eminent Domain \u00a7 19.06[6] (rev. 3d ed. 1993). We note that two of the cases falling under the \u201cuniqueness\u201d exception annotated by Nichols\u2019 involves the appropriation of Goat Island of Niagara Falls, In re State Reservation, 16 Abb. N. Cas. 159, aff\u2019d, 37 Hun. 537, appeal dismissed, 102 N.Y. 734, 7 N.E. 916 (1886), and the condemnation of a harbor and ship repair facility in Connecticut, Wronowski v. Redevelopment Agency of New London, 180 Conn. 579, 430 A.2d 1284 (1980). 5 J. Sackman, Nichols\u2019 The Law of Eminent Domain \u00a7 19.06[6], note 51 (rev. 3d ed. 1993). The unique nature of an island in Niagara Falls is obvious, and in the case of the harbor and ship facility, the Wronowski court found that the property was unique only after no similar property could be found in Connecticut, Massachusetts, or Rhode Island.\nHere, the evidence does not support the contention that defendants\u2019 property is unique. Although defendants\u2019 witnesses testified that there were no comparable land sales, both of plaintiff\u2019s expert witnesses testified that they were able to use the cost approach to value defendants\u2019 property. The difference is that defendants\u2019 witnesses were using the market data approach in which properties with similar size, shape, and improvements are compared to the subject property. It is undisputed that the market data approach could not be used here because there were no comparable land sales with similar size, shape and improvements to the property at issue here. The cost approach used by plaintiff\u2019s witnesses, however, values the land as if it were vacant and then adds the depreciated value of the improvements. Plaintiff\u2019s witnesses testified that in using the cost approach, they still had to find comparable sales to value the land and they were able to find similar unimproved land for purposes of the cost approach. Defendants\u2019 witnesses did not consider using the cost approach and they did not dispute that it could be used. Since there is sufficient comparable sales data available to use the cost approach, defendants\u2019 property here does not fall within the \u201cuniqueness\u201d exception.\nFinally, defendants contend that plaintiff has waived its objections to witness Mease\u2019s testimony because nearly identical testimony from witness McClure was admitted without objection. Generally, the benefit of a seasonably made objection is lost if the same evidence is subsequently admitted without any objection. Duke Power Co. v. Winebarger, 300 N.C. 57, 68, 265 S.E.2d 227, 233-34 (1980). However, Rule 46(a)(1) of the N.C. Rules of Civil Procedure states that \u201cwhen there is objection to the admission of evidence involving a specified line of questioning, it shall be deemed that like objection has been taken to any subsequent admission of evidence involving the same line of questioning.\u201d G.S. 1A-1, Rule 46(a)(1). Rule 46(a)(1) does not modify the general rule but preserves the effect of a seasonably made objection to a specified line of questioning. Id. A general objection will not come within Rule 46(a)(1) unless the line of questioning objected to is apparent to both the court and the parties. Butler & Sidbury, Inc. v. Green Street Baptist Church, 90 N.C. App. 65, 70, 367 S.E.2d 380, 383-84 (1988); Duke Power Co. v. Winebarger, 300 N.C. 57, 68, 265 S.E.2d 227, 233-34 (1980).\nHere, the \u201cline\u201d of questioning plaintiff objected to was apparent to both the court and the parties. Plaintiff objected six times during Mease\u2019s testimony to questions concerning the net income of defendants\u2019 business. To hold that the trial court was not aware of plaintiff\u2019s objection to this line of questioning would truly exalt form over substance. Duke Power Co. v. Winebarger, 300 N.C. 57, 68, 265 S.E.2d 227, 233-34 (1980). Cf. Badgett v. Davis, 104 N.C. App. 760, 411 S.E.2d 200 (1991); McKay v. Parham, 63 N.C. App. 349, 304 S.E.2d 784 (1983). Accordingly, plaintiff\u2019s objections to that line of questioning were preserved under the rule. Plaintiff\u2019s failure to further object to that line of questioning during witness McClure\u2019s testimony was not error.\nFor the reasons stated, we reverse the judgment of the trial court and remand to the trial court for a new trial.\nReversed.\nJudges ORR and GREENE concur.", "type": "majority", "author": "EAGLES, Judge." } ], "attorneys": [ "Attorney General Michael F. Easley, by Assistant Attorney General Charlie C. Walker, for plaintiff-appellant.", "Holt, Bonfoey, Brown & Queen, P.A., by Richlyn D. Holt and H.S. Ward, Jr., for defendant-appellees." ], "corrections": "", "head_matter": "DEPARTMENT OF TRANSPORTATION, Plaintiff v. RALPH W. FLEMING, and SEVERA FLEMING, Defendants\nNo. 9230SC1086\n(Filed 16 November 1993)\nEminent Domain \u00a7 122 (NCI4th) \u2014 business conducted on property to be condemned \u2014 loss of profits not element of recoverable damages\nIn a condemnation action, the trial court erred in allowing defense witnesses to give opinions regarding the value of defendants\u2019 land which were based entirely on the net income from the operation of defendants\u2019 plumbing business, since loss of profits from the operation of a business conducted on the property is not an element of recoverable damages in an award pursuant to an eminent domain taking.\nAm Jur 2d, Eminent Domain \u00a7 287.\nOn plaintiff\u2019s writ of certiorari from judgment entered 20 August 1992 by Judge Forrest A. Ferrell in Haywood County Superior Court. Heard in the Court of Appeals 1 October 1993.\nOn 14 January 1991, plaintiff Department of Transportation filed this condemnation action against defendant landowners pursuant to G.S. 136-103 to appropriate for highway purposes a one-fourth acre, triangular shaped tract of land adjacent to U.S. Highway 276 in Haywood County. A concrete building containing approximately 1900 square feet is located on the tract and approximately 4000 square feet of area adjacent to the building is paved. There is also a small utility building behind the main building. Defendants own the property and operate a plumbing and heating business on the property.\nPlaintiff estimated that $58,700 was just compensation for the taking of defendants\u2019 land and deposited that amount with the court. Defendants demanded a jury trial. The parties stipulated that the only issue before the jury was the amount of compensation to be paid for the taking. The case was tried on 17 August 1992.\nAt trial defendants presented the testimony of two expert witnesses, Mr. Carroll Mease and Mr. Bobby Joe McClure. Mease was. accepted by the trial court as an expert in the area of real estate appraisals. Mease testified that the value of defendants\u2019 land immediately before the taking was $231,162. He arrived at that figure by taking the 1990 net income from the operation of defendants\u2019 plumbing business and applying a capitalization rate. The small area remaining after the taking was valued at $2000, giving defendants damages of $229,162. Defense witness McClure was accepted as an \u201cexpert in real estate values\u201d after the court refused to accept him as an expert appraiser. McClure testified that defendants\u2019 property had a value of $245,116 immediately before the taking. He arrived at this figure by capitalizing the 1991 net income from defendants\u2019 business. McClure valued the remaining property at $1000, giving defendants damages of $244,116.\nPlaintiff presented the testimony of Mr. Marty Reece, who was employed by the Department of Transportation as a real estate appraiser. Reece testified that the value of defendants\u2019 land immediately before the taking was $62,425 and he assigned no value to the small remaining piece of land. Reece arrived at this figure by using the cost approach, which values the land as if it were unimproved and then adds the depreciated value of all improvements located on the land. Plaintiff also presented the testimony of Mr. Brent Anderson, who was accepted as an expert witness in the field of real estate appraisal. Anderson was hired by the Department of Transportation to appraise defendants\u2019 property. Anderson testified that he valued defendants\u2019 property at $56,275. He arrived at this figure by using the same cost approach used by plaintiff\u2019s witness Reece.\nThe jury awarded defendants $127,500 as just compensation for the taking of their property. Since plaintiff had already deposited $58,700 with the court, the court ordered plaintiff to deposit an additional $77,606.40 with the court to cover the balance of the jury verdict. Plaintiff appeals.\nAttorney General Michael F. Easley, by Assistant Attorney General Charlie C. Walker, for plaintiff-appellant.\nHolt, Bonfoey, Brown & Queen, P.A., by Richlyn D. Holt and H.S. Ward, Jr., for defendant-appellees." }, "file_name": "0580-01", "first_page_order": 610, "last_page_order": 616 }