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Present: Hassell, C.J., Keenan, Koontz, Lemons, and Millette,
JJ., and Carrico, and Lacy, S.JJ.
SUNTRUST BANK, INDIVIDUALLY
AND AS TRUSTEE OF THE TRUST
UNDER THE LAST WILL AND TESTAMENT
OF CHARLES E. WILSON, DECEASED
OPINION BY
v.    Record No.  080550                                           JUSTICE LEROY F. MILLETTE, JR.
April  17,  2009
SYDNEY D.F. FARRAR, ET AL.
FROM THE CIRCUIT COURT OF NOTTOWAY COUNTY
Thomas V. Warren, Judge
In this appeal, we consider whether the circuit court
erred in entering a monetary judgment against the trustee and
in favor of the beneficiaries of a trust for breach of
fiduciary duty arising from the management of a coal mining
property when the only evidence of damages presented by the
beneficiaries was based on an appraisal without evidence of a
willing buyer at the appraised value.
BACKGROUND
Charles E. Wilson  (Mr. Wilson) died in  1921, survived by
his wife, Mary C. Wilson, and two sons, Charles Everett Wilson,
Jr.  (Everett) and Richard B. Wilson  (Richard).    In his will,
Mr. Wilson established a trust  (the Wilson trust) that
contained land in Harlan County, Kentucky  (the property), upon
which a coal mine  (the coal mine) was located.    Old Dominion




Trust Company in Richmond, Virginia, now SunTrust Bank  (the
Trustee), was named as co-trustee, along with Mrs. Wilson.1
The property was the sole principal asset of the Wilson
trust from  1921 until it was sold in  1997.    Believing there to
be  “no safer or more permanent or more profitable investment,”
Mr. Wilson used strong language in his will directing the co-
trustees to hold the coal mine  “unless conditions undergo a
very radical change from what they are at present.”    According
to the will, the income from the coal mine was to be paid to
Mrs. Wilson, Everett, and Richard, during their lifetimes.2
Following their deaths, the income would be distributed to Mr.
Wilson’s remaining beneficiaries.    The Wilson trust was to
terminate  20 years from the date of death of the last of the
three income beneficiaries, and income and principal
distributed to  “such persons as shall at that time be  [Mr.
Wilson’s] heirs at law under the Virginia Statute of Descents
and Distributions.”
Everett, who became the last surviving income beneficiary,
died in  1984.    Following Everett’s death, the Trustee
petitioned the Circuit Court of Nottoway County to terminate
the Wilson trust or, in the alternative, to obtain authority to
1 Mrs. Wilson died in January  1976, leaving only the
Trustee charged with the administration of the Wilson trust.
2 Richard died in  1926.
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sell the property and reinvest the proceeds into  “more
profitable and safer investments.”
At the June  1987 hearing, in support of its petition, the
Trustee presented evidence that the coal mine’s income had
dropped significantly in the preceding few years.3    Hartwell
Harrison, the Trustee’s vice president and administrative
officer responsible for the Wilson trust since  1983, testified
that the trust was on an August fiscal tax year and from
September  1983 to August  1984, the trust had a total income of
approximately  $113,000, the vast majority of which was income
from the property.    For the fiscal tax year  1984 to  1985, the
trust income, which was still primarily income from the
property, was approximately  $110,000, but dropped to  $52,000
for the fiscal tax year  1985 to  1986 and down to  $13,000 from
September  1986 to May  1987.    Harrison acknowledged that the
“income ha[d] dropped quite drastically.”    When asked
“generally how the assets of th[e] trust could be converted
into safer and more profitable investments,” Harrison replied
that  “the bank would pro[b]ably use a balanced approach, and a
balanced approach would mean an allocation of the  [proceeds
from the sale of the property] between common stocks of maybe
3 The Honorable Thomas V. Warren also presided over the
1987 hearing.
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55 to  65 percent, and the balance would be exposed to fixed
income securities or bonds.”
William H. Eanes, head of the Trustee’s real estate
division with primary responsibility for the Wilson trust since
1960, testified that when Everett died in  1984, the coal market
was on a  “trend downward” and there had been little mining
activity on the property since that time.    Eanes also testified
that the property was encumbered by coal mining leases,
including a lease in which the lessee was  “in bankruptcy.”
Nevertheless, Eanes stated:
It is my opinion that the property could be
sold.    I think the timing of the sale is
critical.    I believe there is a market for the
property.    It is a risky asset in terms of
management, a lot of labor problems associated
with it, a lot of negotiations, and it is an
expensive asset to manage.
Following the  1987 hearing, the circuit court entered an
order granting the Trustee authority to sell the property.    To
accomplish a sale, the Trustee sought the assistance of Dennis
D. Willis, a licensed professional engineer.4    In  1986, the
Trustee had asked Willis to appraise the property.    Willis
appraised it at  $1.1 million  “[b]ecause that  [was] the value of
the property  .  .  . if all the coal was indeed there, the
4 In Kentucky, Willis was classified a  “professional mining
engineer.”    It was undisputed at the trial underlying this
appeal that Willis is an expert appraiser and engineer.
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measured, the indicated and the inferred.”5    The property was
sold in  1997, for  $350,000.
In October  2004, twenty years after Everett’s death, the
Wilson trust terminated.    Thereafter, the Trustee sought
guidance from the circuit court regarding distribution of the
trust assets to its beneficiaries.    In August  2007, beneficiary
Sydney D.F. Farrar, on behalf of himself and other
beneficiaries  (collectively, the Beneficiaries), filed an
amended complaint against the Trustee, alleging breach of
fiduciary duty and seeking compensatory as well as punitive
damages.    At a bench trial conducted in December  2007, the
Beneficiaries maintained that for years the property could have
been sold for the  $1.1 million appraised value and presented
evidence of damages based on that premise.
The only witness offered by the Beneficiaries at trial to
prove damages was Robert W. Cook, Jr., an expert in economics.
Cook testified that he gleaned the Trustee’s  “investment
5 At trial, Willis explained that:
Reserves are classified as measured and
proven or probable reserves and inferred
reserves.    There’s  [sic] three
classifications.    Proven or measured
reserves are the most reliable because you
have more measurements to take at known
points.  .  .                                                        .  [T]he indicated reserves would
be further out, and inferred reserves are
much further out.    They are just like the
name implies, inferred.
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philosophy” of allocating the trust portfolio between common
stocks and fixed income securities or bonds from Harrison’s
testimony at the  1987 hearing.    Cook used this hypothetical
allocation to construct investment scenarios to determine the
value of the trust portfolio in  1997 if the property had been
sold for  $1.1 million at the time the Trustee was granted
permission to sell, and the  $1.1 million had been invested on
September  1,  1987.    The September  1,  1987 date was suggested to
Cook by the Beneficiaries’ counsel, based upon the premise that
since the hearing was in June  1987, it  “[gave] a reasonable
period of time here so that the property could in fact be sold
and these investments could be made.”    Cook employed the  $1.1
million figure because  “[t]hat’s all  [he] knew,” but conceded
on cross-examination that the  $1.1 million appraised value
would not actually have been placed into the investment
portfolio.    Instead, what would have gone into the portfolio
would have been the net proceeds after deduction of the
commission on the sale.
Cook determined that if, on September  1,  1987,  65 percent
of  $1.1 million was invested in stocks and  35 percent in bonds,
trust distributions would have been  $1,761,000, and the
remaining trust portfolio would contain  $3,709,000 in stocks
and bonds, totaling  $5,470,000.    Cook testified that he used a
mathematical formula to create his scenarios:
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Arithmetic and algebra.    That is all that’s
required here, because I was looking back
rather than in the future.    The numbers that
I was adding and subtracting and multiplying
were known with certainty.    I looked them up
from documents that I had at my disposal
that I researched, and then I applied some
arithmetic and division that I used to get
to the results.
However, Cook acknowledged that he was not testifying that on
September  1,  1987 there was a buyer willing to purchase the
property for  $1.1 million.
Willis testified that his  $1.1 million valuation took into
account existing coal market conditions, which he described as
in a state of decline from  1975 until  2003 or  2004.    However,
Willis was not aware of any buyer willing to pay  $1.1 million
for the property as of the  1986 appraisal.    According to
Willis, the property was not sold in  1987 because no one was
interested in it.    In addition, Willis acknowledged that  “[t]he
appraisal was probably somewhat high.    Based upon the declining
coal market it was high, but it was based upon available
information at the time.”    Further, a sale of the property was
not feasible until the termination or expiration of all of the
coal mining leases encumbering the property, because there was
not any production or very little production of coal on the
property at that time and the leases would have a considerable
negative effect on the value of the property.    Willis could not
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recall if he took the existence of the leases into
consideration in the  1986 appraisal.
The circuit court found that the Trustee failed to
appropriately market the property, allowed the coal mine to
become  “unproductive of income,” allowed it to become a
“wasting asset,” and failed to diversify the trust assets in a
timely manner.    For these reasons, the circuit court determined
that the Trustee did not act as a prudent person would,
constituting a breach of its fiduciary duty to the
Beneficiaries.    The circuit court awarded judgment to the
Beneficiaries for  $2.4 million, which was  “a net judgment
considering  [a]  5% brokerage fee, the  $350,000 received from
sale,  [the] date of court authorization  [of the sale],  [the]
date of sale, and accrued interest.”
In a separate action on the Trustee’s objections to the
Commissioner of Accounts’ reports, the circuit court held that
the Beneficiaries’ incurrence of  $89,028.30 in trust
expenditures from September  1992 through August  1998 resulted
from the Trustee’s breach of its fiduciary duty.    The circuit
court concluded that these expenditures, which included
engineering fees in maintaining the property, would not have
been incurred had the Trustee not breached its fiduciary duty
by failing to sell the property and diversify the Wilson trust
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portfolio.    The circuit court ordered the Trustee to reimburse
these fees, with interest, to the Beneficiaries.
DISCUSSION
The Trustee assigns error to the circuit court’s holding
that the Trustee breached its fiduciary duty and to the damages
awarded to the Beneficiaries.    The Trustee alleges that the
Beneficiaries failed to prove there was a buyer willing to pay
the appraised value for the property.    In addition, the Trustee
contends the circuit court erred in disallowing certain
engineering expenses and trustee’s fees, as that ruling was
based solely on the circuit court’s erroneous conclusion that
the Trustee breached its fiduciary duty by not selling the
property and timely diversifying the trust assets.
The Trustee argues that the circuit court’s judgment in
effect made the Trustee an insurer of the appraised value of
the property, which the evidence showed was unobtainable given
the actual market conditions.    The Trustee maintains the
Beneficiaries did not meet their burden of proving damages,
because the award of damages was based upon the assumption that
there was a willing buyer for the property at the appraised
value when the circuit court granted the Trustee the authority
to sell, and the proceeds of the sale would be available for
investment by September  1987.    The Trustee contends that, by
making this assumption, the circuit court disregarded the
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depressed coal market conditions and other impediments to the
sale of the property existing at that time.
The Beneficiaries contend the circuit court’s conclusion
that the Trustee breached its fiduciary duty to preserve the
value of the property and to timely diversify the trust
portfolio must be upheld because the circuit court’s judgment
is supported by sufficient evidence and is not plainly wrong.
The Beneficiaries assert that the Trustee failed to market the
property in a manner that satisfied the prudent person
standard, and sold the property at a sacrificial price of
$350,000 despite its appraised value of  $1.1 million.
According to the Beneficiaries, no law exists to support the
Trustee’s contention that the damages award must be reversed
because the Beneficiaries failed to show that there was a buyer
willing to pay the appraised value.
It is well-settled that when a decision is rendered
following a bench trial and a party objects to the ruling on
the ground that it is contrary to the evidence, the judgment
shall be upheld unless it appears from the evidence to be
plainly wrong or without evidence to support it.    Pizzarelle v.
Dempsey,  259 Va.  521,  527,  526 S.E.2d  260,  263  (2000); Code
§  8.01-680.    We hold that the circuit court’s judgment was
erroneous, because the Beneficiaries failed to meet their
burden of proof on the issue of damages.
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The Beneficiaries, as the plaintiffs below, had the
“‘burden of proving with reasonable certainty the amount of
damages and the cause from which they resulted; speculation and
conjecture cannot form the basis of the recovery.’”    Shepherd
v. Davis,  265 Va.  108,  125,  574 S.E.2d  514,  524  (2003)  (quoting
Carr v. Citizens Bank & Trust Co.,  228 Va.  644,  652,  325 S.E.2d
86,  90  (1985)); Sunrise Continuing Care, LLC v. Wright,  277 Va.
148,  156,  671 S.E.2d  132,  136  (2009).    Damages cannot be
recovered if derived from uncertainties, contingencies, or
speculation.    Saks Fifth Avenue, Inc. v. James, Ltd.,  272 Va.
177,  188,  630 S.E.2d  304,  311  (2006); Shepherd,  265 Va. at  125,
574 S.E.2d at  524.    In Shepherd, we held that the evidence of
damages was speculative because the calculations submitted were
based on the assumption that the property could be sold to a
large, well-known home and building supply retailer.                      265 Va.
at  125,  574 S.E.2d at  523-24.    Likewise, in this case, the
evidence of damages was premised on the assumption that the
property could have been sold for  $1.1 million in  1987.
Although there was testimony from a developer regarding an
offer to purchase the property in Shepherd,  265 Va. at  125-26,
574 S.E.2d at  524, damages calculated from that offer were
rejected because of the need for rezoning and other
contingencies rendering the valuation speculative.    Here, the
Beneficiaries presented no evidence that there was a buyer
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willing to purchase the property, regardless of the
encumbrances, for  $1.1 million in  1987 or at any time
whatsoever.    In fact, evidence to the contrary was presented to
the circuit court.    Willis, the expert appraiser and engineer,
and Cook, the Beneficiaries’ economics expert, each testified
that he was not aware of the existence of such a buyer.    Willis
specifically testified that the property was not sold in  1987
because  “no one was interested in it.”
Nowhere in the record of this case is there evidence of a
willing buyer or other proof to show the existence of a viable
market for the property at the appraised price.    This Court has
held that damage calculations based on unsupported projections
are improper.    See Saks Fifth Avenue, Inc.,  272 Va. at  187,  630
S.E.2d at  310.    Estimates of damages based entirely upon such
assumptions  “are too remote and speculative to permit  ‘an
intelligent and probable estimate of damages.’”    Vasquez v.
Mabini,  269 Va.  155,  159,  606 S.E.2d  809,  811  (2005)  (quoting
Bulala v. Boyd,  239 Va.  218,  233,  389 S.E.2d  670,  677  (1990)).
Willis described the depressed coal market in Harlan
County, Kentucky during the relevant period.    He explained that
the coal market peaked in  1974 and  1975 due to an oil embargo
that caused coal prices to escalate rapidly.    After the embargo
ended, the coal market was in a continuous state of decline
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until  2003 or  2004.    Eanes confirmed that by the end of the
1980s,  “the bottom had fallen out” of the coal market.
Willis testified that he was familiar with the coal market
in Harlan County in  1986, and that the price per ton of coal
continued to decline from the  1970s peak.    Willis wrote a
letter dated February  11,  1987 to Eanes, informing him that
“[i]n recent months, it has come to our attention that the
depressing coal market has caused a decrease in the activity on
the C. E. Wilson Estate property.”    In an interoffice
memorandum written in April  1987, with  “C.E. Wilson Estate  -
1600 Acres in Harlan, KY” as the subject, Eanes stated:
At present, due to the depressed coal
market, there  [is] little or no mining
activity on the property or in the area.  .  .
. Coal is selling for  $19.00 to  $20.00 per
ton; the cost to mine the coal is almost
$19.00  -  $20.00 per ton so it is not
economically feasible to mine and sell coal
in today’s market at a profit.
At trial, Eanes testified that  “[a]ny purchaser would buy the
property for the reserves, but if he couldn’t mine the reserves
and he couldn’t sell the coal, it had a very negative impact on
the ability to sell the property.”
Although the Trustee introduced only scant evidence of its
efforts to market the property from  1987 to  1997, the
Beneficiaries presented even less evidence as to anyone’s
reasonable interest in purchasing the property.    Based upon the
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lack of evidence of a market for the property, it is impossible
to conclude that anything the Trustee did or did not do caused
any damage to the Beneficiaries.    We have cited with approval
the legal principle that a trustee who retains a trust asset
during a  “‘precipitous decline in the market,’” when there was
no market for the asset,  “‘cannot be held to account,’” so long
as the trustee acted as a reasonable and prudent person would
act in light of then existing conditions.    Harris v. Citizens
Bank & Trust Co.,  172 Va.  111,  125-26,  131,  200 S.E.  652,  657,
659  (1939)  (quoting In Re Pettigrew’s Estate,  171 A.  152,  155
(1934)).
To appraise the property in  1986, Willis had employed
present worth, price per ton, and comparable sales approaches.
However, the present worth and price per ton approaches
utilized estimates only, and the comparable sales Willis relied
upon were sales in  1979 and  1980, when the uncontroverted
testimony was that the coal market was in a continuous state of
decline from  1975 until  2003 or  2004.    While comparable sales
often provide the soundest basis for an appraisal, in a
declining market, sales completed six or seven years prior to
the appraisal date cannot provide an accurate means of
valuation.    The comparable sales were also of properties  “much
larger than the C.E. Wilson Estate.”
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The goal of an appraisal is to reflect the fair market
value of the subject property.                                          “We have defined the fair
market value of a property as its sale price when offered for
sale  ‘by one who desires, but is not obliged, to sell it, and
is bought by one who is under no necessity of having it.’”
Keswick Club, L.P. v. County of Albemarle,  273 Va.  128,  136,
639 S.E.2d  243,  247  (2007)  (quoting Tuckahoe Woman’s Club v.
City of Richmond,  199 Va.  734,  737,  101 S.E.2d  571,  574
(1958)).    The record is devoid of sufficient evidence to
substantiate the  $1.1 million appraisal.    Eanes’ testimony at
the  1987 hearing that the property  “could be sold” and that
there was  “a market for the property,” without factual support,
was insufficient to show there was a willing buyer.
The earliest evidence of a willing buyer for the property
was an offer in October  1992 for  $75,000.    Thereafter, the
following offers were made:    August  1996  -  $281,190, November
1996  -  $25,000, and March  1997  -  $100,000.    The last offer was
countered by the Trustee at  $350,000 and accepted in May  1997.
The record contains no evidence of a willing buyer prior to
1992 or of a buyer at any time willing to pay close to  $1.1
million for the property.    With no evidentiary support for the
$1.1 million figure, and evidence contrary to the accuracy of
the appraisal, it was an improper figure to serve as the
expert’s foundation for the damages award.
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The circuit court’s order that the Trustee reimburse
$89,028.30, plus interest, in engineering fees and trust
expenses from  1992 through August  1998 rested on its conclusion
that the Trustee’s failure to sell the property and timely
diversify the Wilson trust portfolio resulted in additional
damages to the Beneficiaries.    We need not resolve the issue of
whether the Trustee breached its fiduciary duty to the
Beneficiaries, because the Beneficiaries failed to present
sufficient evidence that a sale of the property before  1997 was
possible, and therefore failed to prove damages.    Since there
was insufficient evidence to show that any action or inaction
by the Trustee resulted in a failure to sell the property prior
to  1997, and to invest the sale proceeds to accomplish
diversification, there is insufficient evidence to support the
circuit court’s order that the Trustee repay fees and expenses
incurred in maintaining the property.
CONCLUSION
The circuit court erred in awarding damages to the
Beneficiaries for breach of fiduciary duty on this record,
which contained no evidence supporting the appraiser’s
assumption and premise that there existed a willing buyer or
other circumstances creating a viable market at the appraised
or other reasonable value to enable the Trustee to diversify
the Wilson trust portfolio in  1987.    For the reasons stated, we
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will reverse the judgment of the circuit court and enter final
judgment in favor of the Trustee.
Reversed and final judgment.
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