Damages for failure to sell real property not properly measured by appraised value

A coal mine was the sole principal asset of a testamentary trust created in 1921. The testator directed the co-trustees to hold the mine absent “very radical change” from current conditions.

The revenue from the mine began to decline greatly during the mid-1980s and in 1987, the then sole trustee obtained an order from the appropriate court allowing the mine to be sold. In 1986, the mine was appraised at $1.1 million and was finally sold for $350,000 in 1997.

In 2007, the beneficiaries sued the trustee and won damages for failure to diversify based on a failure to sell for $1.1 million in 1987.

The Supreme Court of Virginia in Suntrust Bank v. Farrar, 675 S.E.2d 187 (Va. 2009), reversed and rendered judgment for the trustee because the beneficiaries failed to bring forward evidence showing the existence of a willing buyer at the appraisal price at any time after 1987.