Generally, mere offers to purchase are not admissible in eminent domain trials to show the valuation of the property, because they may be speculative, and not related to the question of value. Pennsylvania follows that general rule.
But it's not an absolute rule, by far. In Lower Makefield Township v. Lands of Dalgewicz, No. 33 MAP 2011 (May 29, 2013), the Pennsylvania Supreme Court (Middle District) held that the Pennsylvania Eminent Domain Code broadened the scope of what is admissible in condemnation cases, "thus easing evidentiary restrictions for determining fair market value of a property."
The township condemned a farm to build a public golf course on the property. The Board of View determined the value was $3.99 million, and when the parties were not able to agree on compensation, off to a jury trial they went. The owner testified to several offers to purchase the property, including a written offer for $8 million. A valuation expert also relied on the letter and offer to opine about the value of the property. Over objection, the trial court admitted the testimony and the written offer itself, concluding they were admissible to prove the property was in demand. The jury came back with a valuation of $5.85 million.
On appeal, the Commonwealth Court affirmed, holding that the usual rule of inadmissibility was not applicable because "a sufficient foundation was laid to establish that the offer was made in good faith, by a party acquainted with the value of the [p]roperty, and of sufficient intention and ability to pay." The Supreme Court affirmed, but for other reasons.
The court held that in reaction to a 1962 opinion which limited the admissibility of offers to purchase, the Pennsylvania legislature amended the Code to "substantially broaden[] the scop of admissible evidence, thus easing evidentiary restrictions for determining fair market value of a property" when a valuation expert relied on the proffered evidence. Slip op. at 5. In that circumstance, the expert may "state any or all facts and dates" which she considered in arriving at her opinion. This "liberalization" of the Code "explicitly permits testimony that may introduce 'collateral issues'" to the jury. Slip op. at 6. Because the appraiser relied on the offer to reach his valuation opinion, it was admissible.
The court also held the offer letter was admissible because the condemnor did not make a specific objection to its admissiblity on hearsay grounds, only that appraisers had not relied on the letter. The court held the letter was relevant "because it helped prove the reasonablenss of the Toll Brothers offer and it was probative of the fair market value of the property." It was recieved at the same time as other offers, and we generally on the same terms. Slip op. at 8. Because it "was helpful in demonstrating the demand for the property," it was relevant and admissible.
The court concluded:
Accordingly, we hold there is no bright-line rule prohibiting testimony of bona fide offers into evidence, especially, as in the present case, when a contract has been signed and the offer is used to show that contract’s reasonableness. In so holding, we are guided by the principle that "[t]he admission or exclusion of evidence is within the sound discretion of the trial court[.]" Lehigh-Northampton Airport Authority v. Fuller, 862 A.2d 159, 168 (Pa. Cmwlth. 2004) (citations omitted). Whether an offer is bona fide and whether it should be admitted are questions best left to the trial court as the gatekeeper of the evidence.
Slip op. at 9. More on the case here, from the local paper.
Lower Makefield Township v. Lands of Dalgewicz, No. 33 MAP 2011 (May 29, 2013)
