Rockies Express Pipeline, LLC v. Burtle, No. 11-1219 (U.S. 7th Cir. Aug. 21, 2012)

U.S. 7th Circuit affirmed district court's exclusion of expert's valuation of property


The 7th Circuit Court of Appeals recently affirmed the district court's exclusion of expert evidence regarding valuation of property.

In the recent case, Rockies Express Pipeline, LLC v. Burtle, No. 11-1219, 2012 WL 3575279 (7th Cir. Aug. 21, 2012), the 7th Circuit Court of Appeals, held that it was not an abuse of discretion for the district court to exclude the testimony and reports of the Plaintiffs' expert concerning the valuation of property as unreliable under Federal Rule of Evidence 702. The plaintiffs' claimed additional compensation was owed to them based on the impact on their land of a natural gas pipeline easement. The plaintiffs' expert used the comparable sales method of valuating property to determine the plaintiffs' economic losses. The appellate court affirmed the district court's holding that seven out of the ten comparables used by the expert were too dissimilar to the plaintiff landowners' properties. Comparables were subdivided lots, making them unsuitable for comparison with the landowners' unsubdivided properties. Comparables were also commercially zoned as opposed to agriculturally zoned. Comparables were located in municipalities with characteristics dissimilar to the that of the landowners' agricultural properties. Moreover, the expert used a sale price of $600,000 for one comparable, which was held unreliable since the sale was never completed and the property was later sold for $250,000. In addition, the court found there was no reasonable basis for the expert's determination that the highest and best use of the properties was commercial or residential use, rather than the currently zoned agricultural use, and there was no reasonable certainty that the properties might be rezoned. Finally, the appellate court affirmed the district court's refusal to allow the landowners to testify about the value of their properties, since the landowners did not give an opinion about the value of their property during discovery.

In sum, the ruling underscores the importance of offering reliable expert evidence capable of withstanding challenge by adverse parties and the scrutiny of the court. Unfortunately for the plaintiff in this case, the ruling prevented the plaintiff from offering sufficient evidence of the value of the properties to support its damages claims.

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Reference Info:Decision | Federal, 7th Circuit, Illinois | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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