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05/22/87 the American National Bank v. the City of North Chicago

May 22, 1987

THE AMERICAN NATIONAL BANK AND TRUST COMPANY, AS TRUSTEE, ET AL., PLAINTIFF-APPELLANTS

v.

THE CITY OF NORTH CHICAGO ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

508 N.E.2d 1111, 155 Ill. App. 3d 970, 108 Ill. Dec. 534 1987.IL.668

Appeal from the Circuit Court of Lake County; the Hon. Charles Scott, Judge, presiding.

APPELLATE Judges:

JUSTICE HOPF delivered the opinion of the court. UNVERZAGT and REINHARD, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE HOPF

This appeal evolved from a suit to recover damages caused by the alleged negligence of the defendants in demolishing a building and damaging personal property belonging to plaintiff. A jury found in favor of defendants. The sole issue raised by plaintiff is whether the owner of the building was competent to testify as to the building's value.

The subject building was owned in trust by plaintiff, Kenneth Menning. Menning was a general contractor engaged in home improvement and remodeling. Prior to trial he had remodeled approximately 300 buildings, and, shortly before it was demolished he had taken steps toward rehabilitating and remodeling the building relevant to this lawsuit. Menning sued for damages for loss of the building as well as for personal property which was allegedly in the building at the time of demolition.

At trial the court barred Menning's opinion testimony regarding the value of the building prior to demolition. No other evidence of the building's value was admitted. At the close of plaintiff's case, defendants moved for a directed verdict. The court found that plaintiff had made no showing as to damages to the building and granted defendants' motion as to the issue of negligent demolition of the real property.

The trial continued on the issue of negligent damage to plaintiff's personal property. The jury rendered a verdict in favor of defendants. Plaintiff's post-trial motion for a new trial was denied, and this appeal followed.

Menning's only contention on appeal is that the trial court erred when it refused to admit his testimony as to the value of his building just prior to demolition. The lower court barred the testimony on grounds that plaintiff could not establish an adequate foundation for his opinion. The court reasoned that real estate valuation requires expertise, Menning did not have such expertise, and therefore his testimony would not be competent on the question of value. We find that, as a matter of law, the witness should have been allowed to testify.

The question of the competence of an owner to testify as to the value of his real estate was thoroughly examined in Department of Transportation v. Harper (1978), 64 Ill. App. 3d 732, 381 N.E.2d 843, in the context of a condemnation proceeding. In Harper, two landowners were allowed to testify as to the value of the land in controversy over objections made by plaintiff on the basis of insufficient foundation evidence. On cross-examination one owner admitted that he did not live in the community and that he had not bought or sold any other property in the community. He explained on redirect that he had determined the value of his property by considering what he had paid for it, the amount of money and time required to erect a building on the property, the price of other properties in the area, and the growth of other businesses. He concluded that he had knowledge of real estate prices in the local market. While the second owner did not indicate whether he was familiar with land values in the area, he was asked by his counsel to consider the size and improvements of his parcel and his familiarity with the land before placing a value on his property. Plaintiff appealed from the jury's verdict on the issue of whether the owners' testimony had been properly admitted.

The Harper court recognized that the general rule in Illinois is that any witness who is familiar with the property and has knowledge of real estate values in the area is a competent witness and that the extent of his experience goes to the weight of his testimony. (Trustees of Schools v. Kirane (1955), 5 Ill. 2d 64, 69, 124 N.E.2d 886.) The court noted, however, that the rule had only been applied to witnesses other than landowners. Failing to find any Illinois cases dealing with the specific issue of the qualification of a landowner to testify regarding the value of his own property, the court turned to cases from other jurisdictions and found two different approaches to the question.

The first approach examined in Harper requires no preliminary showing of a landowner's knowledge of real estate values before his valuation testimony is admissible. Rather, in this line of cases, an owner, merely because of his relationship as owner and regardless of his knowledge, is qualified to testify. He is then subject to cross-examination. His explanation of how he arrived at his valuation figure goes to the weight of his testimony. Department of Transportation v. Harper (1978), 64 Ill. App. 3d 732, 734-35, 381 N.E.2d 843, citing McCaffery v. Northern Pacific Ry. Co. (1912), 22 N.D. 544, 134 N.W. 749; State v. Lopez (1968), 8 Ariz. App. 61, 442 P.2d 884.

The second approach reviewed by the Harper court holds that ownership does not qualify a person to testify to the value of real estate unless he is familiar with both his own property and property values in the area. Generally, the property owner's qualifications must be shown before he can give his opinion as to market values. Department of Transportation v. Harper (1978), 64 Ill. App. 3d 732, 735, 381 N.E.2d 843, citing Utah State Road Com. v. ...


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