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Dept. of Bus. & Econ. Dev. v. Pioneer Bank

OPINION FILED JUNE 8, 1976.

THE DEPARTMENT OF BUSINESS AND ECONOMIC DEVELOPMENT, PETITIONER-APPELLANT,

v.

PIONEER TRUST AND SAVINGS BANK ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Kane County; the Hon. GEORGE W. UNVERZAGT, Judge, presiding.

MR. JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:

The Department of Business and Economic Development of the State of Illinois (hereinafter the State) appeals from an eminent domain judgment awarding defendants $415,706.20 as total just compensation following a jury verdict. *fn1 The State contends that defendants' valuation witnesses used an erroneous standard of value, that evidence of other sales was admitted although they were not comparable, and that various trial errors prevented a fair trial. On January 2, 1969, the State filed its petition for condemnation for the acquisition of 49.196 acres owned by the defendants, to be used as a part of the National Accelerator Laboratory site. Defendants' property is a vacant parcel located at the southeast corner of Wilson and Kirk Roads in the city of Batavia in Kane County. The frontage on Wilson Road was approximately 1465 feet and on Kirk Road approximately 1340 feet. At the time of the filing of the petition the land was zoned R-1 (residential) under the existing zoning ordinance of the city of Batavia.

The trial to determine final just compensation was commenced on July 8, 1974. In general the State's valuation testimony ranged from $3250 per acre to $3500 per acre based on its assessment that the highest and best use of the property was for residential development. The valuation testimony for the defendants ranged from $9000 to $11,500 per acre on the basis that the highest and best use was for a planned unit development. The $415,706.20 verdict and judgment computes to a valuation of approximately $8463 per acre.

The State first contends that the trial court erred in refusing to strike the testimony of defendants' valuation witnesses, Gene Jaeger, a real estate broker, and Kent Shodeen and Raymond Lubbs, who were builders and developers. It argues that the record shows that the opinion of each of the three was based on either what a developer would pay for the property or what it would cost to develop it, not on fair market value based upon the concept of a willing buyer and willing seller.

Defendants, however, state that the witnesses gave their opinion as to the fair market value as between a willing buyer and a willing seller. They further respond that the trial court exercised its proper discretion in ruling on the admission of the expert testimony and that the weight of the evidence was for the jury. Defendants further contend that the State did not move to strike the testimony of the witness Jaeger and has therefore waived this contention as to his testimony.

• 1 The definition of fair cash market value is the amount of money which a purchaser, willing but not obligated to buy the property, would pay to an owner willing but not obligated to sell in a voluntary sale, ascertained as of the date of filing the petition to condemn. (See Eminent Domain: Property Valuation, 1973 U. Ill. L.F. 449, 450. See also Department of Public Works & Buildings v. Oberlaender, 42 Ill.2d 410 (1969).) In Oberlaender (page 415), the Supreme Court states the rule:

"[T]he measure of compensation for land taken in a condemnation proceeding is the fair cash market value of the property for its highest and best use. Fair market value can be defined as the price for which the property would sell under ordinary circumstances surrounding the sales of property, assuming both an owner willing to sell and a purchaser willing, but under no compulsion, to buy. (Forest Preserve Dist. v. Hahn, 341 Ill. 599, 602; see, Department of Public Works and Buildings v. Filkins, 411 Ill. 304, 307.)"

It is also clear that the rule takes into account the parties' right to adopt their own theory as to the highest and best use of the land taken (County of Cook v. Holland, 3 Ill.2d 36, 41 (1954)), although the elements of value which are speculative and conjectural may not, of course, be considered. Peoples Gas Light & Coke Co. v. Buckles, 24 Ill.2d 520, 531 (1962); City of Chicago v. Giedraitis, 14 Ill.2d 45, 51 (1958).

In reviewing the record we find no merit in the State's contention as applied to the testimony of defendants' expert, Gene Jaeger. We reach the same conclusion as to the testimony of Mr. Lubbs. Although he did state that his definition of market value concerned only the costs that it would take for him to develop the land, he stated on re-direct examination that when he was testifying as to what he would pay he was considering this property as what any willing buyer and willing seller would arrive at as a price.

We do, however, find that the State's contention does have merit with regard to the testimony of defendants' expert witness, Kent Shodeen who was a builder and developer in the area. Shodeen testified that the fair cash market value of the property was $11,000 to $11,500 per acre. During cross-examination when the witness was asked how he arrived at his value opinion, he said that he took into consideration what a reasonable buyer and a reasonable seller would arrive at as the value. Questioned further, he indicated that he did not consider what the hypothetical normal person in the market would pay to a normal seller for the property. The issue of fair market value is addressed to what property would sell for in the market assuming a willing buyer and willing seller under no compulsion. (Department of Public Works & Buildings v. Oberlaender, 42 Ill.2d 410 (1969).) The price which a particular person might be willing to pay for reasons of his own is not the true standard of value. The correct basis for valuation testimony is the price of the property in the market generally. (Chicago, Bloomington & Decatur R.R. Co. v. Kelly, 221 Ill. 498, 506 (1906). See also Indianapolis & Cincinnati Traction Co. v. Wiles, 91 N.E. 161, 162 (Ind. 1910).) The testimony reflected that the witness's assumption upon which he based his value assessment was in error and his testimony should have been stricken.

A further claim of error in our view requires that the judgment be reversed and the case remanded for a new trial. The admission of the so-called "Stauber" sale as a comparable value seriously prejudiced the attempt to establish the fair market value of the subject property.

The Stauber sale involved a parcel of 16 acres of vacant land diagonally across the street from the subject property which had been sold by W.M.C. Corporation to William Stauber in September of 1970 for $12,500 per acre. The substance of the State's argument on this issue is that the sale should not have been admitted because it reflected a value as of a date 21 months subsequent to the filing of a petition to condemn without a showing by the property owner that the land values had not increased in the interval. The State argues that, in fact, the evidence adduced by defendants' witnesses shows that the land values did increase subsequent to January 2, 1969, stimulated by the removal of some 6800 acres from the market in connection with the acquisition of land for the National Accelerator Laboratory. It contends that the prejudice inherent in offering post-petition sales is that if they are made a basis as here for the valuation testimony, the testimony then reflects values not as of the petition date but as of a far future date which would not have been taken into consideration by a willing buyer and a willing seller as of the petition date. It also argues that the difference in zoning of the two parcels made them dissimilar. The defendants argue that the evidence indicates that local values did not increase in the interval after the announcement of the National Accelerator Laboratory.

• 2 As a general rule, evidence of voluntary sales of similar parcels "occurring in the same vicinity at or about the time of filing are admissible unless such proof causes a confusion of issues which offsets the benefits to be derived therefrom." (City of Chicago v. Blanton, 15 Ill.2d 198, 202 (1958).) Sales of property made after the filing of a petition are not rendered dissimilar as a matter of law merely because of the date of the sale if the party proposing them can show that such later value was unaffected by the condemnation proceedings. (See Trustees of Schools v. Chicago City Bank & Trust Co., 126 Ill. App.2d 302, 306 (1970); Department of Public Works & Buildings v. Morse, 3 Ill. App.3d 721, 724 (1971).) The question of whether a sale is a comparable sale and thus entitled to admission into evidence rests largely in the discretion of the trial court and its decision will be reversed only where such discretion has been clearly abused. City of Chicago v. Blanton.

Defendant cites Illinois Building Authority v. Dembinsky, 90 Ill. App.2d 451 (1968), in support of its position. In Dembinsky the petition to condemn was filed in August of 1965 and the trial court did permit a 1966 sale of property as a comparable sale. However, in Dembinsky the only contention raised by the appellant was that the court erred in admitting other sales of property which occurred prior to the one in 1966 and prior to the filing of the condemnation petition in that case. The appellate court was not confronted with a challenge to the 1966 sale. (Illinois Building Authority v. Dembinsky, at 456.) In addition, the opinion does not state when in 1966 the comparable sale took place. Thus, it is conceivable that such a sale could have ...


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