United States District Court, N.D. Illinois, Eastern Division
BUCHANAN ENERGY (N), LLC, a Delaware limited liability company, Plaintiff,
LAKE BLUFF HOLDINGS, LLC, an Illinois limited liability company, Defendant.
MEMORANDUM OPINION AND ORDER
B. Kim United States Magistrate Judge.
declaratory judgment action, which is before the court on
consent, see 28 U.S.C. § 636(c), Plaintiff Buchanan
Energy (N), LLC ("Buchanan") and Defendant Lake
Bluff Holdings, LLC ("Lake Bluff) have filed competing
motions in limine to exclude the opinions of the
other party's real estate appraiser. Buchanan seeks to
bar expert opinions from Lake Bluffs appraiser, Michael
MaRous. Lake Bluff similarly moves to exclude expert opinions
from Buchanan's appraiser, Daniel P. Currier. For the
following reasons, both motions to exclude are denied:
seeks a declaratory judgment that it is entitled to purchase
real property in Lake County, Illinois ("the
Property") from Lake Bluff pursuant to a purchase
option in a Lease. (R. 57, Pl.'s Mot. at
The purchase option sets the price based upon the average of
three appraisals: one from an appraiser retained by Buchanan;
one from an appraiser retained by Lake Bluff; and one from a
joint appraiser. (Id. at 1, 5 n.l.) The purchase
option does not specify the methodology to be used or the
facts and assumptions to be considered by the appraisers. (R.
1-1, Compl. Ex. A at 12.) The parties' primary dispute in
this lawsuit relates to whether the appraisers should value
the Property with or without improvements. (R. 57, Pl.'s
Mot. at 1; see also R. 42, Jan. 25, 2016 Min. Entry.)
Buchanan argues that the valuation should not include any
improvements, while Lake Bluff asserts that the valuation
should include the improved gas station on the Property. (R.
57, Pl.'s Mot. at 1-2.)
calculating the "vacant land" value, Buchanan
relies upon valuations from its appraiser Currier for $295,
000, Lake Bluffs appraiser MaRous for $675, 000, and the
joint appraiser for $493, 100. (Id. at 7.) "[B]y
simply averaging the appraisers' vacant land values,
" Buchanan claims that the purchase option price should
be $487, 775. (Id. at 1, 5 n.l.) Lake Bluff, on the
other hand, calculates the price at $1, 135, 000 by averaging
the "as is, improved" valuations from its appraiser
for $1, 200, 000 and the joint appraiser for $1, 070, 000.
(Id. at 2, 7.) All appraisers used the sales
comparison approach in determining their valuations.
(Id. at 6, Ex. 1, MaRous Dep. 124:6-8, June 16,
2016; R. 58, Def.'s Mot., Ex. 2, Currier Dep. 109:11-14,
Aug. 11, 2016.) And all appraisers were retained and
performed their valuations pursuant to Buchanan's
exercise of its purchase option before the present litigation
commenced. (R. 57, Pl.'s Mot. at 2.)
parties challenge allegedly unreliable data and faulty
methodology used by the other party's appraiser.
(Id. at 12-16; R. 58, Def.'s Mot. at 3-8.)
Buchanan criticizes, inter alia, the following
purported errors in MaRous's analysis:
• MaRous assumed that Lake Bluff had purchased the gas
station improvements on the Property. (R. 57, Pl.'s Mot.
at 12-13, Ex. 1, MaRous Dep. 33:11-37:12; 108:2-20.)
• Lake Bluffs counsel directed MaRous to appraise the
Property under its "highest and best use . . . [as] a
successful operating gas station." (Id. at 13,
Ex. 1, MaRous Dep. 21:1-8; 27:2-12.)
• MaRous did not mention Buchanan's exercise of its
option to purchase the Property, even though the Uniform
Standards of Professional Appraisal Practice
("USPAP") "require the appraiser to report and
analyze any option involving the property during the past
three years." (Id. at Ex. 1, MaRous Dep.
90:2-8; 92:16-24; 102:5-103:14.)
• MaRous initially estimated the vacant Property value
to be close to the as-improved Property value but then
offered dramatically different valuations, ad. at Ex. 1,
MaRous Dep. 84:13-85:16.)
• MaRous considered monthly gallonage sales showing
gasoline volume sold. (Id. at 14, Ex. 1, MaRous Dep.
• Before MaRous finalized his report, Lake Bluffs
attorney gave MaRous Buchanan's appraisal, citing its
"ridiculous value of $295, 000" and advising that
Lake Bluff would need to pursue litigation to "throw
out" the appraisal. (Id. at 14, Ex. 1, MaRous
• MaRous testified that he considered rental properties
in his valuation as a consideration of "market activity,
" but he did not cite any specific rental properties.
(Id., Ex. 1, MaRous Dep. 98:8-100:18.)
• MaRous used non-comparable sales, including
multi-residential land, an outlot around a Home Depot, and
incorporated land, in determining his valuation.
(Id., Ex. 1, MaRous Dep. 125:21-127:23.)
• MaRous cited comparable land sales ranging from $14.95
per square foot ("psf) to $33.78 psf, but then found the
Property's land value to be $34.20, higher than the cited
range. (Id., Ex. 1, MaRous Dep. 124:19-23;
• MaRous cited improved comparable sales of $335 psf,
$328 psf, $985 psf, $303 psf, and $1, 038 psf, but then
valued the improved Property at $1, 172 psf. (Id. at
15, Ex. 1, MaRous Dep. 134:21-136:24.)
• MaRous cited improved comparable sales that included
gas stations, even though MaRous did not know who owned the
improvements. (Id. at 14-15, Ex. 1, MaRous Dep.
• MaRous made errors in his report, which he said he
would correct but did not. (Id. at 15, Ex. 1, MaRous