First Bank & Trust Co. v. Commonwealth Transportation Commissioner ( 2002 )

PRESENT: Carrico, C.J., Lacy, Hassell, Keenan, Koontz, and
Lemons, JJ., and Stephenson, S.J.
FIRST BANK AND TRUST COMPANY
OPINION BY
v. Record No. 010592 SENIOR JUSTICE ROSCOE B. STEPHENSON, JR.
March 1, 2002
COMMONWEALTH TRANSPORTATION
COMMISSIONER OF VIRGINIA
FROM THE CIRCUIT COURT OF THE CITY OF BRISTOL
Charles B. Flannagan, II, Judge
The dispositive issue in this appeal in an eminent domain
proceeding is whether the trial court erred in the per se
disqualification of all customers of the landowner from serving
as commissioners.
I
On November 24, 1997, the Commonwealth Transportation
Commissioner of Virginia (the Commonwealth) condemned, as part
of a project to improve an interstate highway, a 0.571-acre
parcel of land owned by First Bank and Trust Company (the Bank)
in the City of Bristol. The trial court conducted a voir dire
proceeding to select and empanel commissioners who would serve
to determine just compensation for the condemned property, on
which was located a branch office of the Bank. Among the names
of prospective commissioners submitted to the court were four
customers of the Bank. The voir dire examination revealed that
none of these customers had any interest in the condemned
property or in the outcome of the proceeding, that they knew
nothing about the case, that they had not formed or expressed an
opinion regarding the case, that they did not have any bias or
prejudice for or against either party in the matter, and that
they could make a fair and impartial award according to the law
and the evidence presented. Nonetheless, the trial court ruled,
over the Bank's objection, that all Bank customers were per se
disqualified from serving as commissioners.
On August 3, 2000, following a trial to determine just
compensation, the commissioners filed a report fixing just
compensation of $475,000. On August 10, 2000, the Bank filed an
objection to and motion to set aside the commissioners' report
on several grounds, including the court's per se
disqualification of all Bank customers. On January 10, 2001,
the trial court entered a final order overruling the Bank's
objection and motion and confirming the commissioners' report.
This appeal ensued.
II
A
We first determine what standard we will employ in
reviewing the trial court's ruling. Generally, a trial court is
given discretionary authority to determine whether a prospective
commissioner should be stricken for cause. See, e.g., City of
Virginia Beach v. Giant Sq. Shopping Ctr., 255 Va. 467, 471, 498
S.E.2d 917, 919 (1998); Commonwealth Transp. Comm'r v. Chadwell,
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254 Va. 302, 305, 491 S.E.2d 723, 725 (1997). Relying upon this
principle of law, both parties in the present case contend that
our standard for reviewing the trial court's ruling is whether
the court abused its discretion in striking the prospective
commissioners because they were Bank customers. We do not
agree.
In so ruling, the trial court did not exercise its
discretion as to each of these prospective commissioners;
rather, it simply adopted a per se rule. Therefore, we will
determine whether the ruling is erroneous as a matter of law.
B
In State Highway and Trans. Commr. v. Dennison, 231 Va.
239, 241, 343 S.E.2d 324, 326 (1986), the trial court refused to
strike for cause two prospective commissioners. One of these
prospective commissioners had sold to the landowner certain
personal insurance policies, and the other had built for the
landowner several additions to a tobacco warehouse located on a
parcel of land adjacent to the condemned property. Both
prospective commissioners stated that they had no interest,
direct or indirect, in the outcome of the case, they had not
formed any opinion about the case, and they were capable of
making a fair and impartial award according to the law and the
evidence. Id. at 241-42, 343 S.E.2d at 326.
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In affirming the trial court, we observed that "[n]either
[prospective commissioner] had any financial interest related to
the issue they were called upon to decide" and that "[e]ach
testified that he could serve impartially." Id. at 243, 343
S.E.2d at 327. Consequently, we concluded that the court did
not abuse its discretion in refusing to strike them for cause.
Id.
Shortly thereafter, we decided State Hwy. Comm'r v.
Cardinal Realty Co., 232 Va. 434, 350 S.E.2d 660 (1986). In
Cardinal Realty, one of the prospective commissioners stated on
voir dire that, four or five years earlier, he had "done utility
work" for the landowner. Id. at 435, 350 S.E.2d at 661. A
second prospective commissioner testified that he was a builder
and that, six or seven years previously, he had built houses in
a subdivision near the condemned property. He also stated that,
in the past, he had used a realty company owned by one of the
landowner's principals to sell houses that he had built. A
third prospective commissioner testified that one of the expert
witnesses in the case managed property owned by him, and a
fourth prospective commissioner stated that he had leased land
from the expert witness. At the end of the voir dire, none of
these prospective commissioners indicated any inability to give
the parties a fair trial, and the trial court refused to strike
them for cause. Id. at 436, 350 S.E.2d at 661-62.
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In affirming the trial court's ruling, we noted that two of
the prospective commissioners had not had any dealings with the
landowner; rather, they had had dealings with one of the expert
witnesses. Id. at 437, 350 S.E.2d at 662. We also noted that
"[a]ll that was established about [another of the prospective
commissioners] was that in the past he had had business dealings
with the landowner." Id. at 438, 350 S.E.2d at 662. Finally,
with respect to the remaining prospective commissioner, we
stated the following:
[His] testimony suggests an ongoing business
relationship with the landowner. But, according to
the cases relied on in Dennison, even an ongoing
relationship does not always require that the court
refuse to seat a commissioner. The question is
whether the ongoing relationship is such that the
commissioner will have a financial interest related to
an issue the commissioner is called upon to decide.
Id. (emphasis added).
The existence of a financial interest is what distinguishes
May v. Crockett, 202 Va. 438, 117 S.E.2d 648 (1961), from
Dennison and Cardinal Realty. In May, a prospective
commissioner had interests in two parcels of land adjoining the
property being condemned, and one of these parcels was the
subject of a pending condemnation proceeding related to the same
highway project. Id. at 439, 117 S.E.2d at 648-49. We held
that the trial court should have stricken for cause the
prospective commissioner. Id. at 441, 117 S.E.2d at 650; accord
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Commonwealth Transp. Comm'r v. Chadwell, 254 Va. 302, 305, 491
S.E.2d 723, 725 (1997).
In the present case, there was no evidence that the Bank
customers had ongoing business relationships involving financial
interests related to issues the commissioners would decide.
Thus, we hold that the trial court erred, as a matter of law, in
applying a per se rule for striking the Bank customers.
C
The Commonwealth contends, however, that, even if the trial
court erred, such error was harmless because the record shows
that the parties had a fair trial on the merits. The
Commonwealth relies upon Code § 8.01-678, the so-called
"harmless-error" statute. That statute provides, in pertinent
part, that, "[w]hen . . . the parties have had a fair trial on
the merits . . . , no judgment shall be arrested or reversed
. . . for any error committed on the trial."
We have said that commissioners in an eminent domain
proceeding perform the duties of jurors in an ad quod damnum
proceeding, and, therefore, the same rule applies to both with
regard to their qualifications to serve. Commonwealth
Transportation Comm'r v. DuVal, 238 Va. 679, 683, 385 S.E.2d
605, 607 (1989); May, 202 Va. at 440, 177 S.E.2d at 649. The
proper selection of jurors and commissioners is the very
foundation for a fair trial, and we are not aware of any cases,
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and none have been cited by counsel, in which we have applied
the harmless-error statute for errors committed in jury or
commissioner selection. Therefore, we reject the Commonwealth's
harmless-error contention.
III
Accordingly, we will reverse the trial court's judgment and
remand the case for a new trial. ∗
Reversed and remanded.
∗
We do not decide the Bank's other assignment of error
because the situation could not arise upon retrial.
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