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CITY OF VIRGINIA BEACH v. GIANT SQUARE SHOPPING CENTER COMPANY


CITY OF VIRGINIA BEACH
v. GIANT SQUARE SHOPPING CENTER COMPANY


April 17, 1998
Record No. 971746

CITY OF VIRGINIA BEACH

v.

GIANT SQUARE SHOPPING
CENTER COMPANY

OPINION BY JUSTICE A. CHRISTIAN COMPTON
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH

Thomas S. Shadrick, Judge
Present: All the Justices


The main appellate issue in this eminent domain case is
whether the trial court abused its discretion in refusing to
strike for cause a prospective commissioner. An additional issue
involves refusal of a proposed instruction.

Appellant City of Virginia Beach instituted in 1994 eminent
domain proceedings against two parcels of land owned by appellee
Giant Square Shopping Center Company, a general partnership. The
City took the property in connection with the widening of
Independence Boulevard adjacent to the appellee’s shopping
center. The two actions were consolidated.

During the April 1997 trial, the court denied the City’s
motion to strike for cause prospective commissioner George
R. C. McGuire. At the conclusion of the evidence, the court
refused to give proposed instruction B, tendered by the City.
Following deliberations, the commissioners filed a report fixing
the value of the land taken at $129,700 and the damage to the
residue at $335,000. After overruling the City’s exceptions and
denying its motion for a new trial, the trial court confirmed the
report in a May 1997 judgment order, from which we awarded the
City this appeal. The City assigns error to the seating of
McGuire and to the refusal of the instruction.

The facts are undisputed. The partnership (hereinafter, the
landowners) consisted of a trust and six individuals, including
D. L. McKnight. Attorney Grover C. Wright, Jr., represented the
landowners at trial.

During voir dire, the trial court asked the prospective
commissioners as a group the following two questions in
succession: "Do any of you have any business associations or
are you in any joint ventures or business ventures with any of
the owners of this property? Have any of you worked in any
capacity with any of these landowners?" McGuire responded,
"I’ve used Mr. McKnight as an appraiser."

Later, the court asked the group, "Are any of you
acquainted with any of the lawyers involved in this case?"
McGuire responded, "Mr. Wright is my attorney, and I know
[the City's attorney], and I don’t think there is anything that
would affect my decision." The court then stated: "Mr.
McGuire I believe said that he has been a client of Mr. Wright.
Have any of the rest of you ever been a client of Mr.
Wright?" The court immediately asked eight additional
questions in succession, the first of which was: "Anybody
currently a client of Mr. Wright?" McGuire did not respond
to any of these questions.

Next, the court asked: "Have you ever had any of your
property acquired by the city?" McGuire responded: "We
had some negotiations with the city and they acquired some land
which they paid for." To the court’s question: "Would
that experience affect your ability to be fair and impartial to
both sides in this case," McGuire answered: "No,
sir."

At this point during the voir dire, the court granted the
City’s motion for individual examination of the prospective
commissioners out of the presence of the others. Then, the City’s
attorney called McGuire for "follow-up questions."
During examination by the City, McGuire said that his earlier
reference to prior "negotiations" with the City
actually entailed "negotiations followed by a purchase"
and "a condemnation trial" involving land owned by
"Indian River Associates," a partnership in which
McGuire had a one-third interest. According to McGuire, attorney
Wright represented that partnership at trial, held "[t]wo
years, three years" prior, and "[m]y appraiser was Mr.
McKnight." McGuire stated he sat in the courtroom as the
representative of the partnership during the "entire"
trial of the prior case. At the conclusion of his interrogation,
McGuire answered affirmatively the court’s question whether he
"could be fair and impartial to both sides in this
case."

As noted, the court denied the City’s request to strike
McGuire for cause. He served as one of the five commissioners.
McKnight, whose interest in the Giant Square partnership was
12 ? percent, testified as an appraiser for the landowners.

On appeal, the City argues "McGuire should have been
struck for cause from the panel of commissioners because of his
previous, close, relationship with the landowner and its counsel
in nearly identical circumstances." The landowners contend
the "trial court in the instant matter was correct not to
disqualify Dr. McGuire automatically. The correct procedure was
to conduct a voir dire examination and assess from his demeanor
and answers to questions posed whether he could serve
impartially. Having done so, the trial court was well within the
bounds of its discretion when it concluded that Dr. McGuire was
unbiased and impartial." We disagree with the landowners.

The principles applicable are settled. Code ? 25-46.20
provides that when, as here, the issue of just compensation is to
be determined by a commission, "disinterested
freeholders" shall act as commissioners. Discussing the
disqualification of condemnation commissioners for cause, we have
said the maintenance of public confidence in the integrity of
commission reports is vital. "[S]uch reports should be kept
free from the suspicion that the commissioners may have been
improperly influenced." May v. Crockett, 202
Va. 438, 440, 117 S.E.2d 648, 649 (1961). Accord Commonwealth
Transp. Comm’r
v. DuVal, 238 Va. 679, 683, 385 S.E.2d
605, 607 (1989). The eminent domain statutes, designed to
implement constitutional mandates, "must be administered in
a manner which promotes confidence in the integrity of the
process." State Highway and Transp. Comm’r v. Dennison,
231 Va. 239, 242, 343 S.E.2d 324, 326 (1986).

However, the trial court is given discretionary authority to
decide whether a prospective commissioner should be stricken for
cause, and the court’s judgment on this issue will not be
reversed on appeal unless there has been an abuse of discretion. Commonwealth
Transp. Comm’r
v. Chadwell, 254 Va. 302, 305-06, 491
S.E.2d 723, 725 (1997).

Considering all the circumstances of this case, we hold the
trial court abused its discretion in refusing to dismiss McGuire
from the panel for cause. First, the record shows that, at the
time of trial, McGuire was a client of the landowners’ counsel:
"Mr. Wright is my attorney." The trial court obviously
misunderstood that response as shown by its statement: "Mr.
McGuire I believe said that he has been a client of Mr.
Wright."

We have not overlooked the fact that McGuire subsequently did
not respond to any of the court’s set of eight questions, the
first of which was: "Anybody currently a client of Mr.
Wright?" Nevertheless, McGuire’s positive, affirmative
response, "Mr. Wright is my attorney," must be accepted
as the truth when measured against mere silence that tends to
contradict the stated fact.

Second, in the present case, landowner McKnight served as the
landowners’ appraiser with McGuire sitting as a commissioner. In
the prior condemnation case, McKnight served as the appraiser for
landowner McGuire, who was the landowners’ designated
representative sitting at counsel table. In these similar cases
tried two or three years apart, McGuire has moved from counsel
table in the prior case to the commissioners’ box in the present
case to sit in judgment when his former hired appraiser is the
present appraiser and one of the parties litigant. This scenario
was forecast by the City during voir dire and called to the trial
court’s attention.

Under these circumstances, it is extremely unlikely the public
would have confidence in the integrity of the process when a
commissioner has the identity of interests demonstrated by this
prospective commissioner. This is true even though, as the record
shows, the commissioner is a "respected member of the
community" and "known to be a man of integrity,"
who may be determined to discharge his duties in a forthright and
unbiased manner.

Thus, the trial court committed reversible error in refusing
to strike McGuire for cause. Because the case will be remanded,
we shall address the other error assigned should the issue arise
upon retrial.

The landowners presented evidence about the value of a portion
of the shopping center land as an outparcel to be used for a
restaurant. They asserted that this portion was suitable for
separate development before the take, but that the City’s
widening project had eliminated this development potential by
reducing the area available for shopping center parking.

Refused instruction B, tendered by the City, was based on
principles relating to compensability of damages attributed to
frustration of an owner’s plans for development. See State
Highway and Transp. Comm’r
v. Lanier Farm, Inc., 233
Va. 506, 510-11, 357 S.E.2d 531, 533-34 (1987). We reject the
City’s contention the trial court erred in refusing the
instruction. The subject was covered adequately in granted
instructions 8 and 11.

Accordingly, the judgment below will be affirmed in part and
reversed in part, and the case will be remanded for a new trial.

Affirmed in part,

reversed in part,

and remanded.

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