Cross-examination of the Expert: Eminent Domain Cases
| Publication year | 1972 |
| Pages | 19 |
| Citation | Vol. 01 No. 1972 Pg. 19 |
1972, January, Pg. 19. Cross-Examination of the Expert: Eminent Domain Cases
In eminent domain cases the primary issues are as follows: (1) the value of the land taken; (2) the damages, if any, to the remainder if the acquisition is only a part of a total ownership; (3) the benefits, if any, to the remainder if the acquisition is only a part of a total ownership. A finding on these three issues is specifically required by 50-1-18, C.R.S. 1963 as amended.
The landowner whose property is being acquired may choose to have either a jury or a commission determine these issues (50-1-6 and 50-1-7, C.R.S. 1963 as amended) or, by stipulation of the parties, the court may make this determination (50-1-1, C.R.S. 1963 as amended).
Because of the issues that must be determined, the principal witness in an eminent domain case is generally a real estate appraiser who is called upon to give an opinion of value. This type of witness will generally use three approaches to value as the basis for his opinion; (1) the comparable sales or market data approach; (2) the cost less depreciation approach; and (3) the income approach.
Briefly, the compartable sales approach requires an analysis of sales of property that have taken place on the open market. Those sales which are deemed to be the most comparable to the property being appraised are then used either as substantive evidence of value or as factors to form a basis for an opinion.
The cost less depreciation approach briefly may be explained as valuing the improvements by estimating the reproduction cost new and then subtracting therefrom three depreciation factors; physical depreciation, functional depreciation and economic depreciation. To the depreciated cost of the buildings there is added the value of the land
arrived at by the market data approach. Although this approach to value is used, it is currently criticized by a number of courts because it entails the valuing of the improvements separately from the land, and this may or may not show the actual value of the lands with the improvements.
The income approach entails a valuation or determination of what the gross income would be that could be derived from the property (not the profits derived from the business conducted on the property). From this gross income there are deducted various items for expenses and vacancy losses. To the net income, there is then applied a capitalization rate, which then gives an indication of value.
A good opinion of value depends not only on the facts on which it is based but on criteria which are judicially accepted. Therefore, effective cross-examination requires knowledge not only of the facts used in conjunction with the appraisal process but also of the law as it is applicable to this process.(fn1)
There are numerous reasons for crossexamining a real estate witness:
---to contradict him
---to show the improbabilities and unreasonableness of his opinion of value
---to contradict other witnesses on the same side of the case
---to modify or explain what has been said in a light favorable to the cross-examiner's case
---to develop new or old facts favorable to the examiner's case
---to secure facts or opinions which tend to confirm or corroborate what the cross-examiner's witnesses have said or will say
---to show that the appraiser may have used criteria that are judicially unaccepted
---to show bias and prejudice of the witness.
It is not simple to accomplish any of these purposes, and extensive advance preparation is necessary. Preparation actually begins from the first moment that the attorney is retained to handle the case. The facts of the entire case, both favorable and unfavorable, should be prepared. A complete investigation of all possible facts that may have a bearing on the issue must be made, studied, and analyzed. If the question of damages and benefits to the residue of the property taken is in issue, the cross-examiner must know in detail the nature of the improvement constructed or to be constructed and how this improvement affects the remainder, both favorably and unfavorably. This he can learn by a complete study of the plans and specifications of the improvement, by a physical inspection of the improvement if it has already been constructed, and, of course, through interviews with the designers, planners, engineers, and contractors.
The cross-examiner must study and analyze the appraisal reports of his witnesses and interview these witnesses extensively. He must prepare not only his own case but that of his opponent as well. Thorough investigation and preparation will help anticipate what facts and opinions the other side will seek to introduce.
After interviewing the appraisers, the cross-examiner should make a physical inspection of all properties which will be or might be referred to in the testimony.
Interrogatories should be submitted to the other side and depositions of the witnesses should be taken. If the condemnor is being represented, the deposition of the landowner should also be taken. An exchange of appraisal reports should be made by both parties. With all of this background, the cross-examiner should have no difficulty anticipating the evidence that might be introduced on direct examination, and he should be in a position to know what questions to prepare for cross-examination. More important, he will know what the answers to those questions will be.
Many factors are considered in making a decision of whether to cross-examine. These factors vary with the type of case and witnesses involved. A successful cross-examination may actually begin before the witness has completed his direct examination. At the point where the witness is about to give his opinion of value, leave of court should be asked to permit preliminary cross-examination of the witness, not as to his qualifications as an expert but as to his competency to give an opinion of value in this particular instance. This procedure gives the cross-examiner an opportunity to determine whether the appraisal process and/or criteria relied upon by the witness are judicially accepted.
Where it is shown that a witness has relied upon improper items or has included sums for noncompensable elements, there is authority to support an argument that the witness should be precluded from giving an opinion or, if he has given an opinion, that it should be stricken. No other opinions should be given unless the witness is able to abstract out of and deduct from his opinion the improper elements and noncompensable items.(fn2) It is within the discretion of the court to permit such preliminary cross-examination. Some judges refuse to allow it on the basis that extensive cross-examination will be permitted. This basis is entirely illogical; if the testimony is incompetent, no amount of cross-examination will make it competent.
The procedure of preliminary cross-examination is explained in Davis v. Penn Railroad Co., 64 A. 774 (1906). Reference to it may also be found in Vol. 58, Am. Jur., Witnesses, Sec. 845. In Davis the witness for the landowner was about to give his opinion of value of the land taken. The condemnor, at this point, asked leave to examine the witness. The trial court denied the request. On appeal the case was reversed. The Supreme Court held that an opportunity should have been afforded to enable the condemnor to show whether the opinion was incompetent. The appellate court reasoned that once the testimony goes to the jury, it is nearly impossible to eradicate it entirely from their minds by an instruction or by direction of the court. The court also said that the harm done is beyond recall and any other rule is unfair to the opposite party, as it permits incompetent testimony to go to, and influence, the jury against him.
The following are a few examples of improper items or noncompensable elements, to which the technique can be applied:
---Capitalization of income from a hypothetical or proposed structure;(fn3)
---Consideration of sales which reflect an enhancement by virtue of the announcement or construction or improvement for which the property is being acquired;(fn4)
---Appraisal of vacant land based on a sales price of lots, as if subdivided;(fn5)
---Consideration of offers and options to sell property;(fn6)
---Consideration of sales which possess elements that would render them inadmissible, such as (a) sales to a condemning agency,(fn7) (b) family transactions, and (c) forced sales;(fn8)
---Noncompensable items, such as (a) loss of profits from business,(fn9) (b) inconvenience,(fn10) and (c) access restrictions, such as circuity of route or travel, substitution of indirect for direct access (property being placed on a frontage or service road), solid median or other physical barriers within the roadway restricting traffic movements, and diversion of traffic.(fn11)
As noted above, the first decision concerning cross-examination is not how to cross-examine but whether to cross-examine at all. Cross-examination for the sake of cross-examination or to impress or fulfill the wishes of the client...
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