                      IN THE COURT OF APPEALS OF TENNESSEE
                          WESTERN SECTION AT NASHVILLE


CITY OF MURFREESBORO, a               )
Municipal Corporation in Rutherford   )
County, State of Tennessee,           )
                                      )
       Plaintiff/Appellant,           )      Rutherford Circuit Consolidated
                                      )      Case Nos. 34626 and 34629
                                      )
vs.                                   )
                                      )
MARIANN M. WORTHINGTON,               )      Appeal No. 01A01-9703-CV-00124
                                      )
       Defendant/Appellee             )

CITY OF MURFREESBORO, a
Municipal Corporation in Rutherford
                                      )
                                      )
                                      )
                                                   FILED
County, State of Tennessee,           )            December 17, 1997
                                      )
       Plaintiff/Appellant,           )           Cecil W. Crowson
                                      )          Appellate Court Clerk
vs.                                   )
                                      )
THOMAS W. WORTHINGTON and             )
wife, Mariann M. Worthington,         )
                                      )
       Defendants/Appellees.          )


           APPEAL FROM THE CIRCUIT COURT OF RUTHERFORD COUNTY
                       AT MURFREESBORO, TENNESSEE

                    THE HONORABLE ROBERT E. CORLEW, III, JUDGE


For the Plaintiff/Appellant:          For the Defendants/Appellees:

Thomas L. Reed, Jr.                   Granville S.R. Bouldin, Jr.
Jerry E. Farmer                       Murfreesboro, Tennessee
Murfreesboro, Tennessee


                                      REVERSED AND REMANDED


                                      HOLLY KIRBY LILLARD, JUDGE


CONCUR:


ALAN E. HIGHERS, J.


DAVID R. FARMER, J.
                                             OPINION

       This is a condemnation case. The sole issue at trial was the amount of compensation the

landowners should receive. A jury returned a verdict awarding the landowners a total of $30,500.

On appeal, the appellant condemning authority contends that the trial court erred in allowing tax

appraisals performed on the property to be introduced into evidence and that the trial court used the

wrong valuation method. We reverse and remand for a new trial.

       This appeal arises from two condemnation proceedings filed by the City of Murfreesboro

(“City”) in 1995. The City is constructing the Stones River Greenway, a linear park or “river trail”

that borders the west bank of the Stones River. The Stones River flows in a general north-south

direction through the city of Murfreesboro. The Greenway was developed by the National Parks

Service as a means of linking together the various National Stones River Battlefield sites that exist

throughout Murfreesboro. The City acquired the rear portions of properties backing up to the west

bank of the Stones River, in some cases by voluntary sales by landowners, and in other cases by

exercising its power of eminent domain. The Greenway is about three miles long, with a trail surface

about twelve feet wide.

       In 1970, Thomas and Mariann Worthington purchased nearly 16 acres of land, bounded on

the west by Thompson Lane, a well-traveled three-lane road, and bounded on the east by the west

bank of the Stones River. A portion of this land belonged solely to Mariann Worthington; the

remainder belonged to the Worthingtons jointly. At the time of purchase, the land was low-lying

and prone to yearly flooding. The western portion of the property that fronted Thompson Lane was

capable of being filled in for a depth of 350 feet. The rear portion of the property was a no-fill zone

which extended back to the centerline of the river for a distance of 200 feet. Mr. Worthington owned

his own construction company. Over the course of several years, he filled in the western portion of

his property which fronted Thompson Lane back to the no-fill zone. This resulted in a 10-15 foot

drop off leading down to the river’s edge. The Worthingtons subdivided the land and sold all but

two non-contiguous lots (Tracts 7 & 10) at a substantial profit. The value of the subdivided lots,

including Tracts 7 & 10, is derived from the fact that they are filled, zoned commercial, and front

on Thompson Lane. Tracts 7 and 10, which were not sold, front on Thompson Lane and extend back

to the centerline of the Stones River.
       The City condemned the rear portions of Tracts 7 and 10 in order to establish the Greenway.

The City certified that the Worthingtons would receive remainder parcels from the condemned land

in order to retain irrigation rights from the river by means of an underground pipe. The larger of the

two tracts, Tract 7, is solely owned by Mariann Worthington. The total area of Tract 7 amounted

to 5.53 acres. The City condemned 2.53 acres, leaving Mariann Worthington with 3 acres. Tract

10 is the smaller tract and is jointly owned by the Worthingtons. Tract 10 encompassed 1.7 acres.

The City took 1.05 acres, leaving a remainder of 0.65 acres.

        Nearly all of the land condemned by the City fell within the no-fill zone. Of the 2.53 acres

taken from Tract 7, 0.84 acres consisted of land from the middle of Stones river to the riverbank,

with the remaining 1.69 acres running from the edge of the riverbank westward. Of the 1.05 acres

taken from Tract 10, 0.52 acres ran from the centerline of the river to the riverbank, with the

remaining 0.53 acres running from the riverbank westward. The record suggests that there were very

limited uses for the land taken by the City. Thomas Worthington testified that the land taken floods

regularly to a depth of 8-10 feet. Furthermore, the taken property had always been subject to a sewer

easement.

        The City appraised the land taken from Tract 7 at $2,550 and the land taken from Tract 10

at $1,050. The Worthingtons testified that the value of Tract 7 before the taking was worth

$442,000, and after the taking the remaining land was worth $240,000. The 2.53 acres taken from

Tract 7 was thus assigned the difference in value, $202,000. Using the same method of valuation,

referred to as the “before-and-after” method of valuation, the Worthingtons testified that the value

of the land taken from Tract 10 was $131,000. The Worthingtons did not claim incidental damages

or benefits to their properties.

        The Worthingtons’ appraiser, John Shearron, Jr., also employed the before-and-after method

of valuation. He testified that the value of the portion of Tract 7 taken by the City was $155,000,

and that the value of the portion of Tract 10 taken by the City was $67,404. Neither the

Worthingtons nor Shearron attempted to value the actual property taken, but rather arrived at their

valuation by valuing the total property before the take, and subtracting from that the value of the

remaining property after the take.




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       During cross-examination of the City’s appraiser, counsel for the Worthingtons informed the

jury of the county tax appraisals of Tracts 7 and 10 before and after the take. He noted that, before

the take, Tract 7 was worth $160,200, after the take at $114,800, for a difference of $45,400. He also

noted that Tract 10 was appraised at $77,500 before the take, and after the take at $36,600, for a

difference of $40,900. The trial court allowed these valuations into evidence, over the City’s

objection. It is undisputed that the city of Murfreesboro does not employ a property tax assessor and

that the Rutherford County tax appraiser appraises all property in the City of Murfreesboro for

property tax purposes. The trial court permitted the Worthingtons to provide exhibits to the jury

which listed the county tax appraisal values. During their deliberations, the jury requested the

exhibits containing the tax assessment valuations. The trial court refused this request.

       The jury then returned a verdict, setting the just compensation for the 2.53 acres taken from

Tract 7 at $20,000 and the 1.05 acres taken from Tract 10 at $10,500. The City filed a motion for

new trial. The City argued that the trial court improperly allowed the jury to consider the appraisal

values found in the tax assessment records of the Rutherford County assessor. The trial court denied

the City’s motion for new trial. The City now appeals the decision of the trial court.

       On appeal, the City asserts that the trial court erred in allowing the Worthingtons to introduce

into evidence the Rutherford county tax appraisals. In addition, the City contends that the trial court

erred by allowing the Worthingtons to introduce into evidence valuations deduced by using the

before-and-after method of valuation. We first consider the issue regarding the use of the county tax

appraisals.

       Over the City’s objection, the trial court allowed into evidence the Rutherford County tax

appraisals of Tracts 7 and 10, both before and after the takings, and allowed counsel for the

Worthingtons to show these documents to the jury. On appeal, the Worthingtons contend that the

tax appraisals were never offered as proof of value, but instead were used to impeach the City

appraiser. The trial court’s directions to the jury were in accordance with this. In their appellate

brief, the Worthingtons assert:

       While conceding that the tax valuations do not represent the fair cash market value
       of the property, it is nevertheless entirely appropriate to call into question the values
       of the City’s appraisal witness that are twenty and forty times less than the tax
       valuation, a figure known to be uniformly less than actual fair market value.




                                                  3
       In Tennessee, property tax valuations are not admissible to prove the value of a parcel or any

portion thereof. See Knoxville Housing Authority v. Bower, 308 S.W.2d 398, 401 (Tenn. 1957);

West Tennessee Power & Light Co. v. Hughes, 15 Tenn. App. 37 (Tenn. App. 1932); Wray v.

Knoxville, LaFollette & Jellico R.R. Co., 113 Tenn. 544, 82 S.W. 471 (Tenn. 1904). However, the

parties dispute whether property tax valuations may be used for impeachment purposes.

       Wray involved a proceeding to condemn a portion of two lots for railroad purposes. Wray,

15 Tenn. App. at 547. The only issue for the jury to determine was the amount of compensation.

Id. The condemning authority was permitted to introduce into evidence a tax assessment record,

over the landowner’s objection. The tax assessment record contained a valuation of one of the lots

by one of the appellant landowners. Id. at 559. It is unclear whether the tax assessment record was

introduced for impeachment purposes, although the Court noted that the evidence did not establish

that the signature on the record was that of the landowner. Id. Wray states:

       The law does not require an owner to value his real estate, but merely to describe it
       for the purposes of assessment for taxation. The valuation, if made of the [property]
       by the [landowner], . . . , was for a wholly different purpose from the present one.
       This court knows judicially and as a part of the financial history of the State that land
       is never assessed for purposes of taxation at its real cash market value, though that
       may be the law, but only in comparison with other lands around it, and, if
       [landowner] valued it, we would presume she placed such comparative value, instead
       of the real market value, upon it.
               It is said in Lewis on Eminent Domain, section 448, that the assessment of
       property for taxation being made for other purposes, and not at the instance of either
       party, and not usually at the market value of the property, is not admissible as
       evidence of value in condemnation proceedings.

Id. at 559-60. The admission of the tax assessment record was deemed improper, and the judgment

was reversed. Thus, the Wray court noted that valuation for tax assessment purposes was “wholly

different” from valuation to determine fair market value, and concluded that it was not admissible.

       In the alternative, the Worthingtons contend that the tax assessment records were admissible

as prior inconsistent statements. Whether this is really a different purpose is debatable, since the

overall purpose remains to discredit the state’s appraisal witness. Regardless, even though no

Tennessee case has specifically addressed this argument, the majority of states which have

considered it have deemed the tax assessment records inadmissible for this purpose. See Alabama

v. Griffith, 290 So. 2d 162, 164 (Ala. 1974) (admission against interest theory is minority theory

which Alabama does not follow); Hetherington Letter Co. v. City of Cedar Rapids, 207 N.W.2d

800, 801-803 (Iowa 1973) (tax valuation not admissible as admission against condemnor because



                                                  4
purpose is to fairly distribute costs of government, not to fix just compensation); Bergen County

Sewer Authority v. Borough of Little Ferry, 83 A.2d 4, 9 (N.J. Super. Ct. App. Div. 1951) (tax

assessments inadmissable as admission by municipality); State Hwy. Comm’n v. Anderegg, 403

P.2d 717, 718 (Or. 1965) (“great weight of authority” holds assessments not admissible as admission

against interest by condemners); Girard Trust Co. v. City of Philadelphia, 93 A. 947, (Pa. 1915)

(city cannot be held to adopt action of another independent public agency which sets tax

assessments); Wayland v. City of Seattle, 165 P. 113, 114 (Wash. 1917) (tax assessments not a

declaration against interest by city in condemnation cases because made by different officers

performing distinct functions for different purposes). The rationale for this view is set forth in

United States v. Certain Parcels of Land, 261 F.2d 287 (4th. Cir. 1958):

       It is suggested that evidence of assessed value, offered by the landowner, may be
       received as an admission against interest when the assessing authority is the
       condemnor.
                                                ***
       Aside from the general unreliability of tax assessments as an indication of market
       value, which ought to make them suspect in any case, the assessing officials are
       representatives of the public. The power of a tax official to bind the public is limited,
       and what he does for purposes of taxation, should not be binding upon the public, or
       prejudicial to the public interest, when other public officials are engaged in the
       performance of a very different public function in an unrelated field. Though the tax
       official may purport to use market value as the criterion of assessed value, his
       primary concern is with relative, not absolute, values, but however he exercises his
       judgment for purposes of a reasonable distribution of the tax burden, his act, as an
       extrajudicial declaration, may not circumscribe the interest of the public in the
       difficult process of determining just compensation for property taken for public use.


Id. at 291 (citations omitted). But see In re Site for Memorial Hall, 25 N.W.2d 174 (Mich. 1946)

(evidence of assessed value, offered by landowner, may be received as admission against interest

when assessing authority is the sole condemnor); Louisiana Hwy. Comm’n v. Giaccone, 140 So.

286 (La. 1932) (landowner allowed to use the assessed value as the minimum below which the

condemnation price should not go, when state, through a different department, was attempting to

take land for less than the assessment value.)

       We find the majority view persuasive, and hold that admission of the tax assessment

valuations into evidence in order to discredit the testimony of the City’s appraiser was error.

       The Worthingtons argue that any error in admitting the tax records into evidence was

harmless, and does not warrant reversal. The jury in this case heard references to the tax appraisal

forms during cross-examination of the City’s appraiser. Counsel for the Worthingtons published the



                                                  5
tax appraisal forms to the jury during the trial and the jurors were allowed to take notes during the

trial. The jury made a specific request during their deliberations to see the exhibits containing the

values of the tax assessments. In a case such as this, where the asserted values of the taken property

differed by such a significant amount, we cannot find that the error was harmless. The judgment

must be reversed and the cause remanded to the trial court for a new trial. This holding makes it

unnecessary to consider any remaining issues on appeal.

       The judgment of the trial court is reversed and the case remanded for a new trial. Costs on

appeal are taxed to the Appellees, for which execution may issue if necessary.




                                       HOLLY KIRBY LILLARD, J.


CONCUR:



ALAN E. HIGHERS, J.




DAVID R. FARMER, J.




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