The opinion of the court was delivered by: Rosenn, Circuit Judge.
Before HUTCHINSON, NYGAARD and ROSENN, Circuit Judges.
The central issue of this appeal concerns the district court's exclusion of the testimony of two proposed expert witnesses as well as portions of the landowner's testimony in a land condemnation proceeding. The United States Government, through its power of eminent domain, took various property interests in parcels of land owned by the appellant Sally Dickerson, Trustee (Dickerson). During a jury trial to determine the value of the condemned property interests, the trial judge refused to allow either of defendant Dickerson's proposed experts to testify and struck portions of Dickerson's testimony regarding the value of her land.
The jury returned a judgment requiring the Government to pay Dickerson $95,709.85 as just compensation for the taking, a substantially lower figure than the one urged by Dickerson and her proposed experts. Dickerson appeals, contending that the district court abused its discretion in making its exclusionary rulings. We conclude that it was error to exclude one of the proposed experts and to strike a portion of Dickerson's testimony. We vacate the judgment and remand for further proceedings.
On April 3, 1987, the Government brought an action to acquire certain property interests in three tracts of land owned by Dickerson as sole trustee of the property. These tracts, nominated 305, 305E, and 307E, were part of a 600- acre farm owned by Dickerson in Kent County, Delaware, near the Dover air force base. The Government took a fee interest in tract 305 and avigation easements in the other tracts in order to expand a runway at the base.
Tract 305, a 20.84-acre parcel which the Government took in fee, had previously been encumbered by a federal clear zone easement and a clearance easement. Both these easements are intended to assure air force pilots clear vision when taking off and landing near the subject property; however, the clear zone easement is considerably more restrictive than the clearance easement. With the clear zone easement, the Government had previously acquired inter alia the right to make low and frequent flights, the right to remove all buildings and any obstructing vegetation, and, generally, the right to prohibit all uses of the land except for agricultural purposes.
In addition to the fee interest in tract 305, the Government took a clear zone easement in tracts 305E and 307E, consisting of 45.39 acres and 2.71 acres respectively. Prior to this taking, both tracts were previously encumbered by the less restrictive clearance easements. Dickerson did not challenge the legality of these takings but maintained that the subject property had a value far above the amount the Government offered to pay.
During pre-trial discovery, the district court ordered the parties to exchange reports of the appraisers who would be called upon at trial to proffer expert opinions of the condemned property's value. The Government subsequently provided Dickerson with an appraisal report prepared by its proposed expert, Arnold Goldsborough ("the Goldsborough report"). Dickerson, who did not hire an appraiser, provided the Government with only a "counseling report" submitted by her proposed expert, Gary Parker. Apparently, because she found the cost of a full appraisal prohibitive, Dickerson retained Parker instead to estimate the percentage diminution in value resulting from the avigation easements without testifying as to the ultimate value of the condemned property. To establish an ultimate value for the condemned property, Dickerson planned to call Dr. Susan Wachter, also not a traditional appraiser, who would have testified based upon her study of real estate development in and around Kent County. At trial, the court excluded both Wachter's and Parker's testimony.
The Government asserts that at a pre-trial conference on December 7, 1989, defense counsel represented that Dickerson's proposed expert witnesses would rely solely upon the market data contained in the Goldsborough report. Two weeks later, however, Dickerson provided the Government with copies of reports of additional market data relied upon by Parker and Wachter. Following the Government's objection, the district court ruled in a letter that according to the notes it took at the pre-trial conference, defense counsel "represented that the only data relied upon by Mr. Parker was data supplied in the Government's reports." The court concluded that Dickerson would be held to this agreement. The court's letter ruling also held that evidence of comparable sales occurring after the date of taking would be inadmissible.
At trial, the Government's expert appraiser, Goldsborough, asserted that the highest and best use of the condemned property was as farmland, that the unencumbered value of nearly all the property was $2,100 per acre,*fn1 that the pre-existing clearance easements caused a 10% diminution, and that the clear zone easements resulted in a further 40% reduction in market value. Goldsborough's calculation placed a value of the property interests taken by the Government at $76,488.10.
Following the testimony of Goldsborough and his assistant, the defendant attempted to introduce the testimony of Parker opining that the Dickerson property suffered a 90% loss of value as a result of the clear zone easements, substantially greater than the 40% diminution suggested by Goldsborough. During the ensuing voir dire, Parker disclosed that in formulating his opinion he had relied upon sources of market data other than that supplied in the Goldsborough report. The court sustained the Government's motion to have Parker disqualified. In its ruling, the district court declared,
Twice prior to trial, defendant was directed to disclose all data relied upon by defendants' experts. At the pretrial conference, defendants' attorney stated that the only data to be relied upon by the defendants' experts was the data supplied by the government. Accordingly, ... defendants' attorney was informed by the Court that, based upon his representation, any testimony reflecting data other than that provided by the government would be excluded from trial.... Mr. Parker's testimony on voir dire clearly indicated that he relied on data other than data supplied by the government when he calculated the 90-and 30-percent figures.
The court further stated that, by withholding the underlying data relied on by Parker, the defendant had engaged in "trial by ambush" and effectively foreclosed an opportunity for the Government to adequately prepare for the cross-examination of Parker.
The defendant's other proposed expert, Dr. Susan Wachter, is a real estate economist. At the time of trial, Wachter was an Associate Professor of Finance at the Wharton School, University of Pennsylvania, and a faculty member of the Wharton Real Estate Center and the Graduate Group of City and Regional Planning. She has been an advisory committee member to the Federal National Mortgage Association and a consultant to private industry and government agencies on housing and growth management issues. Wachter has published several journal articles and two books and is the past president of the American Real Estate and Urban Economics Association.
On voir dire, Wachter testified that she had conducted several formal studies of the growth patterns and real estate values in various communities, including Manhattan, New York, and Montgomery County, Maryland. In the course of these and other studies and as a board member of Beneficial Mortgage Corporation, Wachter also examined hundreds of properties within Delaware and Kent County. In preparing her opinion testimony in this case, Wachter actually visited the condemned Dickerson property. From government statistics, Wachter examined the population growth trends, expanding economy, and developing infrastructure in and around Kent County. She also studied recent sales of comparable land around the Dover Air Force Base. Based upon this information, Wachter was prepared to proffer the opinion that immediately prior to its condemnation, the Dickerson property enjoyed development potential for residential and light industrial use and that it had a value of $6,000 an acre unencumbered.
Following voir dire, the district court granted the Government's motion to exclude Wachter's testimony, referring to Wachter's data as "some kind of statistics in the air" and "purely speculative." The trial court also ruled that Wachter did not qualify as an expert "based on her knowledge of this particular condemnation at the time it was taken."
After the exclusion of Dr. Wachter's testimony, Dickerson testified that, in her opinion, the unencumbered value of her condemned property was between $6,000 and $7,000 an acre at the time of taking. In support of her conclusion, Dickerson attempted to make reference both to comparable sales occurring after the date of taking and to the study prepared by the disqualified Parker. Consistent with its ...