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Dept. of Conservation v. Aspegren Fin. Corp.

OPINION FILED MARCH 11, 1977.

THE DEPARTMENT OF CONSERVATION, PLAINTIFF-APPELLEE,

v.

ASPEGREN FINANCIAL CORPORATION, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of McHenry County; the Hon. JAMES H. COONEY, Judge, presiding.

MR. PRESIDING JUSTICE RECHENMACHER DELIVERED THE OPINION OF THE COURT:

Rehearing denied May 2, 1977.

This is a condemnation case. The jury awarded the defendant, Aspegren Financial Corporation, $275,272, or about $1,710 per acre, as just compensation for its property. Aspegren appeals from this verdict as being inadequate and alleges the trial court erred as follows: (1) in allowing the State to introduce into evidence the purchase price paid by Aspegren when it bought the land in question in December 1970. (The condemnation petition was filed in July of 1974, about 3 1/2 years later.); (2) in permitting the State to show as comparable sales certain sales of nearby lands which were flat and unwooded and not comparable to the rolling and wooded land being condemned; (3) in erroneously excluding certain "comparable sales" offered by the defendant; (4) in not permitting the defendant to offer into evidence certain plans for the contemplated development of the property in question and the fact that the State's announcement of the proposed condemnation in 1971 had the effect of forestalling such development; (5) in not permitting the defendant to introduce evidence of the probability of rezoning of the property to permit a cluster-type residential-recreational development, and (6) in ruling that a certain amendment of the McHenry County Zoning Ordinance dated May 17, 1974, might be considered in evaluating the subject property.

The property condemned is just west of the Fox River, south of Route 173 and adjacent to Chain O'Lakes State Park, being about one-half in Lake County and one-half in McHenry County. It consists of 160 acres, is rolling on the west and flat on the east and is about 25 to 30 percent wooded. It is zoned Agricultural in Lake County and Farming in McHenry County. About 20 to 25 acres are mucky and not suitable for building. There is no water or sewer facility within several miles and it was conceded that these facilities could be supplied only by well and septic tank. The property is part of a larger tract of about 360 acres which belonged to the Carey family. The Carey heirs were getting along in years and wanted to sell the whole 360 acres. They offered it for sale in a single parcel at a price of $2,500 per acre but it did not sell, and they reduced the price to $1,500 per acre, and eventually to $1,200 per acre. In 1970 they lowered the price to $1,000 per acre. Aspegren inspected the property at that time but did not want the whole 360 acres and did not buy it. Soon after that, however, two other persons offered $1,000 per acre for the 200 acres Aspegren was not interested in (because it was flat and not wooded). The Careys then offered to sell the 160 acres remaining to Aspegren for the difference between what the other buyer would pay and the $360,000 price which they were finally asking for the entire parcel. Thus, Aspegren bought the 160-acre tract in question for $162,000, or a little over $1,000 per acre, in December of 1970.

Aspegren testified that he had planned to develop the property into a "residential-recreation" type of community with special emphasis on horseback riding, thus making it attractive to persons who owned or rode horses. He hired a planner to develop a plan for the property, taking advantage of the slopes and the trees and in December of 1970, he attended a meeting with planning officials of both McHenry and Lake Counties, at which he outlined his plan. According to Aspegren the proposed plan received an enthusiastic response from these planning officials.

The following month, in January 1971, the Governor announced plans for expanding Chain O' Lakes State Park to include the condemned property here in question. Aspegren testified that after confirming that his property would definitely be taken he abandoned any further plans for its development and began searching for a replacement property. In April 1972, he testified, he found a tract of approximately 327 acres which was compatable with his proposed plan of development and he acquired this tract at a price of $5,500 per acre. This property was about 22 miles by road — 15 miles by air — from the condemned land and was about one quarter of a mile from the city limits of Mundelein. It was served by county water and there were sewer facilities available from Mundelein. Testimony indicated that as compared with the condemned land, the new tract was in a much more heavily populated, developed and industrialized area and real estate values were admittedly higher in that area.

At the trial Aspegren contended it was error for the State to be allowed to disclose the price he paid for the condemned land in December 1970. He admits that Illinois cases allow such evidence but only where it is indicative of the present market value. He argues that where conditions in the real estate market have changed in the meantime and prices are generally higher than at the time of the original purchase, it is error to allow such evidence because, under such circumstances, the purchase price has no probative value and is prejudicial.

• 1 The general rule is set forth in the often cited case of Forest Preserve District v. Krol (1957), 12 Ill.2d 139, 147, wherein the court said:

"When a parcel of land is taken by eminent domain, the price the owner paid for it is a fact which may be considered in determining its value, provided the sale was recent and was a voluntary transaction, with no change in conditions or marked fluctuation in values having occurred since the sale."

See also Forest Preserve District v. Hahn (1930), 341 Ill. 599; Village of Broadview v. Dianish (1929), 335 Ill. 299; Forest Preserve District v. Folta (1941), 377 Ill. 158; Morton Grove Park District v. American National Bank & Trust Co. (1976), 39 Ill. App.3d 426.

Aspegren contends there was a sharp advance in real estate prices between 1970 and 1974 and therefore the original price has no relevance to the just compensation in July 1974, when the condemnation petition was filed. The State, on the other hand, submitted evidence refuting this upward trend in prices and tending to show that the price of similar land in the immediate area had advanced only slightly during the 3 1/2 years in question.

• 2 It is, of course, the burden of the State to prove that the compensation it is offering is just, where an offer has been made and refused. On the other hand, in view of the settled law as indicated above, it is the burden of the landowner to establish that the conditions of the market have changed where he challenges the probative value of the previous price paid for the property. It was more or less conceded that the period of time — 3 1/2 years — was not too remote, but the defendant attempted to show that land prices had increased sharply during this period, thus impugning the relevancy of the original sale. He introduced evidence of sales which he contended were comparable which indicated the price per acre ranged from $3,000 to $5,000 per acre at the time of the condemnation. However, the State countered this evidence by offering proof of sales it claimed to be comparable which showed there had been little increase in that particular area in the price for vacant land. Because of the sharp disagreement in the evidence as to the trend of prices in the immediate area of the condemned land and allowing some increase for the abnormal inflation which occurred during this period, we think the claim of a tremendous increase in the prices of comparable land in the immediate area was not so persuasive as to disqualify this sale as probative evidence. While the defendant's witnesses made general statements as to a sharp increase in prices, little specific and competent evidence was evinced to bear this out.

In evaluating this evidence the trial court was faced with a sharp disagreement between the parties as to what was truly a comparable sale. The State offered a number of sales it claimed were comparable. Three of these were ruled out by the court. One of those accepted was a 46-acre tract within two miles of the property condemned which sold in May 1974 for $1,300 per acre. It was partly wooded. The defendant objected to this evidence on the ground the land was simply an ordinary working farm, flat in topography, hence not comparable to the land condemned, whose slope from west to east and rolling topography made it more attractive for development. In addition, a 9-acre tract which had originally belonged to the 46 acres was sold at a much higher price than $1,300 per acre. The trial court would not allow the whole 55 acres to be treated as a unit, however, since the 9-acre tract had a house on it which the seller had greatly improved, thus the court ruled, making it not part of a comparable sale. The second comparable sale offered by the State was a 120-acre tract, 20 acres of which were wooded, within two miles of the subject property, and having a rolling topography. It sold in April 1972 for $1,000 per acre. The defendant objected to its comparability, however, arguing that it was 80 percent in a flood plain. The State's evidence indicated this was not true but that it merely had a flood ditch along 80 percent of its frontage. That question was not resolved. The defendant also objected that in any event it was a "working farm" and not suited to the type of development the defendant intended. Moreover, as the defendant revealed on cross-examination, this property was subsequently divided into a 40-acre and an 80-acre tract and was sold later the same year for $1,500 per acre, an increase of 50 percent in less than a year. The State pointed out, however, that the division of the tract into two smaller tracts, would naturally increase the price per acre and offered evidence of an expert to this effect. It may be noted that in any event the price of $1,500 per acre was far below the $3,000 to $3,500 per acre valuation claimed by the defendant's expert.

The third comparable sale was of a 122-acre tract of which 40 acres were wooded. This tract, however, was sold in December 1970. While the price was only $900 per acre, it would have no more ...


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