LaCombe v. A-T-O, Inc.

Decision Date28 June 1982
Docket NumberNo. 81-3591,INC,A-T-,81-3591
Citation679 F.2d 431
Parties10 Fed. R. Evid. Serv. 1476 Warren J. LaCOMBE, et al., Plaintiffs-Appellants, v., Interstate Engineering, Defendant-Appellee. Summary Calendar.
CourtU.S. Court of Appeals — Fifth Circuit

Donald Juneau, New Orleans, La., for plaintiffs-appellants.

Guste, Barnett & Shushan, Sidney L. Shushan, New Orleans, La., for defendant-appellee.

Appeal from the United States District Court for the Western District of Louisiana.

Before CLARK, Chief Judge, REAVLEY and RANDALL, Circuit Judges.

RANDALL, Circuit Judge:

The issue in this case is whether the trial court erred in refusing to allow testimony by the Plaintiff-Appellant as to the value of his property allegedly destroyed by fire. We hold that it did.

I. Statement of Facts.

Plaintiff-Appellant Walter J. LaCombe's home and much of its contents were destroyed by fire on January 4, 1978. LaCombe, along with Blue Ridge Insurance Company, sued A-T-O, Inc., Interstate Engineering Division, (Interstate) and Masterguard Corporation (Masterguard) 1 under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., 28 U.S.C. §§ 2201-2202, Louisiana tort and contract law, La.Civ.Code arts. 2475, 2476 and 2540-47, and the Louisiana Unfair Trade Practice Law, La.Rev.Stat. § 51:1409(A). LaCombe had purchased fire detection and alarm systems from Interstate and from Masterguard which allegedly failed to function properly to detect and to warn of the fire.

At the trial, counsel for plaintiffs attempted to introduce into evidence, through LaCombe, a list of items in his home at the time of the fire, prepared by LaCombe and his wife, together with their estimated valuations of the items. In response to the objection of Interstate to the admission of this evidence, the trial court indicated a willingness to admit the list to show the items lost in the fire, but the trial court also indicated an unwillingness to admit the valuations of the items without further documentation and foundation. At that point, the trial court proceeded to allow a voir dire examination of LaCombe, outside of the presence of the jury, to determine if LaCombe was qualified to give valuation testimony regarding movables and home improvements. LaCombe testified that the valuations of the movables consisted of the amount of money that he paid for each item less the depreciation of the item. The amount of depreciation he deducted was taken from guidelines given to him by an adjusting company-"for instance, like on an appliance we had a depreciation of maybe ten percent per year, and on furniture was maybe five percent a year, or on clothes and so forth, it might be quite a bit more depreciation." He testified that the figure of the value of the improvements was arrived at as follows:

The insurance companies that we represent 2 give us a cost guide chart based upon the value, the current value of a home at the time we insure it. This cost guide chart is based upon location, construction of the home, age of the home, quality of the materials put into it, the square footage; if it has central heat and central air, carpet, fireplace. And those factors-after you combine all of those factors and you multiply the square footage, then you come up with an accurate current value of a home.

At the conclusion of the voir dire examination of LaCombe, the trial court ruled that LaCombe could not testify regarding the establishment of the value of the items by subtracting a certain percentage depreciation for a certain number of years from the purchase price of the item. The trial court thought that such testimony was "too close to speculations" and that "speculative testimony is not admissible for the purpose of establishing damages." The trial court further stated that with respect to the improvements "here again he is just applying a formula that was given to him and not really something that he worked out for himself. He doesn't have any way to justify, he is not subject to cross-examination for the validity of that, how it came about.... I don't think that I can conclude from the fact that an insurance company uses a formula that it is necessarily sufficient to establish a value in a suit of this kind." In addition to ruling that LaCombe could not testify to the valuations arrived at through the use of the depreciation formulae, the trial court ruled that LaCombe could not testify to the date and price of purchase because that would be prejudicial in that the jury might use this undepreciated figure to establish on its own a market value. The trial court clarified that its ruling also applied to LaCombe's testimony as to the replacement value of the home.

Following the evidentiary ruling of the trial court, plaintiffs rested their case, pursuant to an agreement between the parties, reserving the right to introduce further evidence on all issues of liability raised by the pleadings in the case in the event the case was remanded for trial at a later date. Interstate then moved for a directed verdict, consenting to the reservation of rights to introduce further evidence on the issues of liability, and the trial court granted the motion.

II. The Exclusion of LaCombe's Testimony.

Plaintiffs contend that, as owner, LaCombe was qualified to give opinion testimony on the value of his home and the furnishings within it which were destroyed by fire, even though he is not an expert in the area of valuation. They rely on the general principle, acknowledged in this circuit, 3 that the owner of property is qualified by his ownership alone to testify as to its value. United States v. 329.73 Acres of Land, 666 F.2d 281, 284 (5th Cir. 1982) (land); Dietz v. Consolidated Oil & Gas Inc., 643 F.2d 1088, 1094 (5th Cir.), cert. denied, --- U.S. ----, 102 S.Ct. 513, 70 L.Ed.2d 385 (1981) (growing crops); Meredith v. Hardy, 554 F.2d 764, 765 (5th Cir. 1977) (trucks, camper and personal property); Kestenbaum v. Falstaff Brewing Corp., 514 F.2d 690, 698 (5th Cir. 1975), cert. denied, 424 U.S. 943, 96 S.Ct. 1412, 47 L.Ed.2d 349 (1976) ("good will" value of a business); Berkshire Mutual Insurance Co. v. Moffett, 378 F.2d 1007, 1011 (5th Cir. 1967) (personal property).

"The admission or exclusion of expert testimony 4 is a matter within the sound discretion of the trial judge. Only if we determine that his decision is 'manifestly' erroneous may we find that he has abused his discretion and that reversal is required. Salem v. United States Lines Co., 1962, 370 U.S. 31, 35, 82 S.Ct. 1119, 1122, 8 L.Ed.2d 313, 317; Scott v. Fancher, 5 Cir. 1966, 369 F.2d 842, 844." Stancill v. McKenzie Tank Lines, Inc., 497 F.2d 529, 535-36 (5th Cir. 1974). Accord Page v. Barko Hydraulics, 673 F.2d 134 (5th Cir. 1982); Scheib v. Williams-McWilliams Co., Inc., 628 F.2d 509, 511 (5th Cir. 1980).

Observing that LaCombe would be testifying "in something that is not akin to what he is doing for a living" and that "you cannot testify without a background," the trial court conducted a voir dire "to qualify Mr. LaCombe to give testimony, valuation testimony regarding movables and the replacement value of the improvements." LaCombe, however, was automatically qualified to give such testimony by virtue of his being the owner of the property. Whether or not his background in the insurance industry would have qualified him as an expert was therefore irrelevant. In Meredith, supra, we stated that "(a)n owner is always competent to give his opinion," 554 F.2d at 765 (emphasis added), and in 329.73 Acres, supra, we stated that "the opinion testimony of a landowner as to the value of his land is admissible without further qualification," 666 F.2d at 284 (emphasis added). "Such testimony is admitted because of the presumption of special knowledge that arises out of ownership of the land." Id.

The real issue in this case is not testimonial qualification but admissibility. See District of Columbia Redevelopment Land Agency v. Thirteen Parcels of Land, 534 F.2d 337, 341, 347 (D.C.Cir.1976). The trial court in this case refused to admit LaCombe's testimony as to the value of his property because the testimony would have been based at least in part on depreciation schedules as to the accuracy of which he was not qualified to testify. The basis of LaCombe's value testimony goes to its weight, however, not to its admissibility. Again we quote this circuit's opinion in 329.73 Acres :

(A)ppellant attacks the probative value of this testimony on the grounds that it was not based on any accepted method of valuation, but this overlooks the fact that the opinion testimony of a landowner as to the value of his land is admissible without further qualification.

666 F.2d at 284 (emphasis added.) This testimony is then "subject to attack through cross-examination or independent evidence refuting the owner's estimate ..., with the jury as fact-finder shouldering the responsibility of judging the credibility of the witness, resolving the conflicting evidence, and assessing the weight of opinion testimony." Kestenbaum, supra, at 699 (citations omitted). Accord Dietz, supra, at 1011. It would totally emasculate the rule that an owner is always qualified to testify as to the value of his property to turn around and require a threshold basis for that testimony before it may be admitted. As stated in Arkansas State Highway Commission v. Russell, 240 Ark. 21, 398 S.W.2d 201, 202 (1966), quoted in District of Columbia Redevelopment Land Agency, supra, 534 F.2d at 343 n.15 (emphasis added by D.C.Cir.):

In nearly every instance, a landowner who has known his land for years, or an expert witness who has acquainted himself with a piece of property, takes into account facts that he knows only by hearsay or that for some other reason would not be admissible as independent evidence upon the examination in chief. If the witness' candid admission that he has considered such matters destroys his testimony, only a dishonest or an...

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