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08/24/88 the City of Chicago, v. Howard A. Anthony

August 24, 1988

THE CITY OF CHICAGO, PLAINTIFF-APPELLEE

v.

HOWARD A. ANTHONY, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, THIRD DIVISION

528 N.E.2d 298, 174 Ill. App. 3d 288, 123 Ill. Dec. 753 1988.IL.1301

Appeal from the Circuit Court of Cook County; the Hon. Alfred T. Walsh, Judge, presiding.

APPELLATE Judges:

JUSTICE FREEMAN delivered the opinion of the court. McNAMARA and RIZZI, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE FREEMAN

Defendant appeals and raises the following contentions: (1) defendant's expert should have been allowed to testify on direct examination regarding sign income offered to defendant under a sign lease proposal; (2) the trial court erred by not allowing defendant's expert to testify regarding other sign income for rental of comparable signs; (3) the verdict regarding just compensation was contrary to the manifest weight of the evidence, against the preponderance of the evidence, and unreasonable and arbitrary; (4) the closing argument of plaintiff's counsel was prejudicial to defendant, and the trial court erred in overruling defendant's objection to counsel's misstatements of law and fact; (5) the sign lease proposal provided to defendant was a bona fide offer and should have been admitted into evidence as it corroborates a multiple use of the subject property; (6) the trial court improperly failed to exercise its power to correct the jury verdict, and defendant is entitled to an additur to increase the judgment; (7) the trial court erred in failing to allow into evidence a copy of the zoning ordinance and related documents; and (8) the trial Judge erred by absenting himself from an offer of proof made by defendant's attorney.

For the reasons stated below, we reverse the judgment of the circuit court and remand this matter for a new trial.

The real estate involved in this appeal is commonly known as 300 South Hermitage Avenue, 1735 West Jackson Boulevard, and 1757 West Ogden Avenue. Anthony was the owner of the land prior to the condemnation action. The land is triangular in shape, with approximately 57 feet of frontage along the easterly side of Ogden Avenue, 15 1/2 feet of frontage along the southerly side of Jackson Boulevard, and 56 feet of frontage along the westerly side of Hermitage Avenue. The site covers approximately 2,182 square feet. The property is zoned C1-3 for restricted commercial use. At the time of condemnation, a two-story brick building stood on the land.

Prior to trial, on November 25, 1985, the City filed a motion in limine seeking to exclude from trial any testimony or other evidence relating to a sign lease proposal purportedly received by defendant on February 12, 1985, nine days before commencement of the condemnation action. The proposal, submitted by Outdoor Media, Inc., concerned the leasing of space on the subject property for the erection of an illuminated electrical sign with a face measuring 20 feet by 60 feet. The proposal was for a 15-year lease, with monthly rental payments of $433 during the first three years, increasing to $625 for the last three years, for a total of $93,600 over the course of the leasehold. The proposed leasehold was for 48 inches of ground area.

On January 22, 1986, a hearing was held on the motion in limine before Judge Mary Conrad. Judge Conrad entered an order which incorporates the transcript of proceedings from the hearing on the motion. The court made the following findings of fact: the sign lease proposal is not an actual lease nor a bona fide offer to purchase the property; the document is an initial contact letter setting forth a proposed business opportunity; the proposed rental income is not only contingent upon agreement of the parties but is further subject to various contingencies, including compliance with the zoning ordinances and receipt of city council approval, and accordingly, the rental income is "speculative and certainly futuristic."

Judge Conrad also entered the following Conclusions of law: the subject property must be valued as a whole, since a leasehold interest may not be valued separately and added to other estimates of value to form an opinion as to the value of the whole property; the document entitled "sign lease proposal" will not be allowed into evidence, as its introduction would tend to confuse and prejudice the jury; and Federal Rules of Evidence 703 and 705, adopted by the Illinois Supreme Court in Wilson v. Clark (1981), 84 Ill. 2d 186, 417 N.E.2d 1322, cert. denied (1981), 454 U.S. 836, 70 L. Ed. 2d 117, 102 S. Ct. 140, and as defined in Department of Transportation v. Beeson (1985), 137 Ill. App. 3d 908, 485 N.E.2d 511, apply to this case.

The order accordingly mandated that the sign lease proposal was inadmissible as evidence at trial; testimony which separately valued the proposed sign lease was inadmissible as evidence; and testimony regarding future rental income to be derived from the sign lease proposal was inadmissible. The order further mandated:

"Within the limited context of testimony regarding highest and best uses of the subject property, testimony of experts who may have considered the sign lease proposal as a factor in reaching a determination of highest and best use of the property may be allowed; however, nothing in this order shall be considered a ruling that otherwise inadmissible evidence will be admitted for all purposes through the testimony of an expert valuation witness, and the Court will so instruct the jury."

The case was reassigned to Judge Alfred T. Walsh on January 22, 1986. On June 12, 1986, after taking the deposition of Donald Engel, defendant's valuation expert, the City filed another motion in limine. By its motion, the City sought to bar testimony from Engel regarding the sign lease proposal which had been ruled inadmissible. On July 28, 1986, Judge Walsh entered an order providing, in pertinent part:

"1. Defendant's expert may express an opinion of value and if asked on direct examination what facts or underlying data did the appraiser take into consideration in making his opinion, he will not be allowed to testify as to income as set forth in the sign lease proposal.

2. This does not prohibit Defendant's appraiser from testifying about other facts or underlying data of the type which is usually relied upon by appraisers including other sign income in formulating an opinion of value."

At trial the City called two appraisers as expert witnesses. Ripley Mead, Jr., a licensed real estate broker and appraiser, was retained by the City to appraise the subject property in 1983. Pursuant to a motion in limine granted by the court, however, Mead was called to testify only to the physical condition of the property and not to estimate its value. Mead stated that he examined the exterior of the building on the property, but did not examine the interior. Mead stated he did not enter the building since there was a sign reading "Do not enter" and due to the building's physical condition. Mead testified that the overall condition of the building was poor.

The City's second expert witness was Sylvester Kerwin, a Member of the Appraisal Institute , a real estate appraiser and real estate broker. The City retained Kerwin in December 1985 to value the property as of the February 21, 1985, condemnation date. The building on the property was razed some time between February 21, 1985, and the date when Kerwin was called to value the property. Kerwin did not contact defendant regarding the condition of the property as of the condemnation date. Kerwin relied on his prior appraisal experience in the area near the subject ...


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