CO UR T OF AP P E ALS E I G H T H D I S T RI C T O F T E X AS E LP AS O , T E X AS C AB O T C AP I T AL C O RP O R AT I O Nand CABOT E S T A T E S , LL C, A

pp ell an t s, v. U SD R , IN C . an d

J O HNR O B IN SO N , A

pp ell ees. § § § § § § No . 08 - 07 - 00 20 2- CV

Ap p e a l f r o m t he 9 6 t h J u d i c i a l D i s t ri c t C o urt o f T arr an t Co un t y , T ex as (TC # 0 9 6 -2 0 3 8 4 7 -0 4 )

O P IN IO N T hi s i s an a

p p e a l o f a t ak e - no t hi

ng j u d g me nt f

r o m a d e f i c i e nc y c l a i m o n s e c ur e d

l o ans a f te rf or e c l os ur e of

r e a l p r op e rty , an d

a c l a i m s e e k i ng e qu i ta b l e s u b r og ati on to ta x li e n s u p on a d jo inin g p r o p e rt y fo rt ax e s p a id in e rr o rb y C a

b o t C a p it a l t o T arr an

t C o un t y. A ppell an t , Ca b o t Ca pi t al Co rpo rat i o n

(“ Ca b o t Ca pi t al”), i s a C ali f

o rn i a co rpo rat i o n

t h at a c te d a s a l oa n s e rv i c i ng a g e n t f r om N ov e m b e r2 0 0 2 f

or c e rta i n l e n d e r s , wh i c h

f un d e d l oa n s to US DR, I n c. ( “US DR”) , a Nev ada co r po r at i o n li cen sed t o do b usi

n ess i n T ex as. Cab o t E st at es, L L C ( “C a bo t E s t at e s ” ) i s a

T e xa s c o m

p any , and i s t he s u c c e s s o ri

n i nt e r e s t t o t he l e nd e r s and curr en t h o l deran d o wn ero f

t h e n o t es m

ade t o US DR. US DR o wn ed r eal pr o per t y i n T ex as, whi c h w a s mo rt g a g e d

t o s e c ur e t he l o ans . J o hn R o bi ns o n i s t he ma

j o r i t y s har e ho l d e r , C E O , and di rect o r o f USDR. Mr. Ro b i

n s o n was guaran

t o r f o r t h e lo an s made t o USDR. A ll t h e lo an s h ad matur e d b y J u l y 1 , 2 0 0 2 , an d

at l e a s t on e e xte n s i on

a g r e e me n

t w a s e n te r e d i n to. U S D R

d i d n ot c om p l y w i th th e e xte n s i on

a g r e e me n

t b y f a i li ng to mak e th e M ar c h

2 0 0 3 p ay me n t, a n d C a b ot Ca pi t al s en t n o t i ce t o USDR t h ati

t wo ul d f o recl o s e o n

t h e pro pert y

t h ro ugh n o n j udi ci al-2-

f o re c l o s ure . C a

b o t C a p i t a l s u c c e s s f u ll y b i d $ 4 ,0 0 0 ,0 0 0 at t h e f

o re c l o s ure s a l e o n

M ay 6 , 2 0 0 3 . USDR h ad f

ail ed t o pay

ad v alo rem

t ax es o n t h e pro pert y , and Ca

b o t Ca pi t al was requi

red t o pay t he am o unt d u e t o ha l t f o r e c l o s ur e li

t i g at i o n t hat ha d

be e n c o m

me nc e d by M ans f i e l d I nd e p e nd e nt S c h o o l D is t r ic t an d

T arr an t C o un t y. W h ile p aying t h e s e t ax e s , C a b o t C a p it a l in a dv e rt e n

t ly p a id $ 8 , 3 8 0 . 0 6 a f

t e rr e c e i vi ng a bi ll f o rp a s t d u e t axe s o n a

c o nne c t e d

t r a c t o f l and o f 1 0 . 0 4 6 a c r e s ( t he

“ o ut parcel”), whi ch

was t h o ugh

t t o b e part o f

t h e m o rt gaged pro pert y . Ca

b o t Ca pi t al di s co v ered t he o ut p ar c e l

w a s no t p art o f

t he mo rt g a g e d

p r o p e rt y a f t e ro bt a i ni ng a c o m p l e t e s urve y

o f t he lan d . C a b o t C a p it a l inqu ir e d

a b o ut r e c e iv ing a

r e fun d fo rt h e mis t ak e nly p a id

t ax e s , b ut w o u ld n o t recei v e i t un t i l t h e t ax es were paid b y

USDR. T h e t ri al

co urt f o un d t h at Ca

b o t Ca pi t al was e n t it le d t o b e e qu it a

b ly s u b r o g at e d t o r ig h t s o f t h e T arr an

t C o un t y t ax ing a

ut h o r it ie s an d

t h e ir li en s o n t h e o ut parcel . T h e t ri al

co urt f o un d USDR a

n d M r. Ro b i

n s o n o wed C ab o t Ca

pi t al $ 6 , 0 0 2 , 4 0 7 . 8 3 a s of

th e d ate of

f or e c l os ur e , an d

th e p r op e rty

h a d a f a i rmark e t v a l

u e of $ 7 , 6 0 9 , 8 0 0 . T he f

a i rmark e t va l

u e w a s r e a c he d

by s um m i ng t he va l u e o f t he o ne bu i l d i

ng o n t he pro pert y , $2, 884, 800 (72, 120 s q. f t . × $40.00 pers q. f

t . ), and t h e v al

ue o f t h e raw ac reage, $ 4 ,7 2 5 ,0 0 0 (1 3 5 a c re s × $ 3 5 ,0 0 0 p e r a c re ). A t t ri a l , b o t h

s i d e s p rodu c e d

a p p ra i s e rs t o p rov e t h e v a l u e o f t h e p rope rt y . J o dy

B rig g s , a c e rt i f i e d g e ne r a l r e a l e s t at e a p p r a i s e rand

me m be ro f t he Ap p r a i s a l

I ns t i t ut e , w a s r e t a i

ne d by t he Pl ai n t i f f s . In 2006, M r. Bri ggs apprai s ed t h e pro pert y f o r f ee s i m pl e wi t h an ef f ect i v e dat e o f M ay 6 , 2 0 0 3 . M r . B r ig g s u s e d t h e c o s t a

p p r o a c h , t h e s a le s c o mp ar is o n a p p r o a c h , an d

t h e in c o me a p p r o a c h in v a lu ing t h e p r o p e rt y. M r . B r ig g s d id a r e t r o s p e c t iv e a

p p r a is a l an d

lim it e d h is co m pari s o n s al es t o M ay

t h ro ugh J un e o f 2003. M r. Bri ggs apprai s ed t h e v al ue o f t h e pro pert y

at $ 3 , 5 0 0 , 0 0 0 . M r . B r i g g s t e s t i f i e d t hat t he p r o p e rt y

ha d s i g ni f i c ant l y c hang e d f r o m t he e f f e c t i ve-3-

dat e o f t h e apprai s al

t o wh en h e v i s i t ed t h e s i t e. T h ere h ad b een

o ri gi n all y t wel v e bui l di ngs , b ut whe n M r . B r i g g s vi s i

t e d o nl y o ne w a s l e f

t s t and i ng . M r . B r i g g s w a s aw ar e o f t he amo unt o f

t he fo r e c lo s ur e b id

p r io rt o a p p r a is in g t h e p r o p e rt y. Ms. Mi st y

Go o dr i ch

t est i f i ed un dersubpo en a f

o rt h e Def

en dant s. Ms. G o o dr i ch

i s a T e x a s c e rti f

i e d g e n e r a l r e a l e s tate a p p r a i s e r , h a s a

r e a l e s tate b r ok e r ’ s li c e n s e , an d i s a me m b e rof t he Ap p r a i s a l

I ns t i t ut e . M s . G o o dr i c h f

i r s t a p p r a i s e d t he p r o p e rt y

f o rM r . R o bi

ns o n i n 1 9 9 6 . T he f i rs t a p p ra i s a l i s o nl y f o r B u i l d i ng A i n R e s e arc h Pa rk , wh i c h w a s t h e a dm

i ni s t rat i v e b u i l d i ng . T h e app r ai sal

v al ue o f t h e b ui l di ng b y i t sel f was $1 , 60 0, 00 0. T h e seco n d ap pr ai sal co v er ed P h ase I o f Re s earch Park. T h e s eco n d apprai s al v al ued t h e pro pert y

at $8, 050, 000 o n

Oct o b er 30, 1 9 9 6 . T he s e c o nd

a p p r a i s a l w a s a d i s c o unt e d

p r e s e nt w o rt h o f

t he p r o p o s e d

p r o p e rt y . T he seco n d ap pr ai sal

was o f 16 1. 5 acr es o f

pr o per t y . P l ai

n t i f f s’ o b j ect ed t o t h e adm

i ssio n o f t h ese t wo apprai s al

repo rt s b as ed o n

rel ev ancy

and t h at t h e apprai s al s were n o t o f t h e pro pert y

at i s s ue s i nc e o ne w a s o f

a s i ng l e bu i l d i

ng and t he o t he ri

nc l u d e d a c r e a g e t hat w a s no l o ng e rp art o f t he pr o per t y at i ssue. Ms. G o o dr i ch ’s t h i r d ap pr ai sal

was dat ed N o v em

b er1, 20 00 an d wa s a r e s t r i c t e d u s e li m i t e d a p p r a i s a l . T he p r o p e rt y

w a s a p p r a i s e d u s i ng t he s a l e s c o m

p ar i s o n a p p r o a c h, and us i ng t h e i n co me appro ach

t o an al y ze i m pro v ed pro pert y . T h e apprai s al co v ered 135. 686 a c r e s of l an d , an d f oun d a v a l u e r ang e of

$ 1 1 , 4 6 0 , 0 0 0 to $ 1 1 , 9 5 5 , 0 0 0 . M s . G oo dr i c h ’ s f ourth apprai s al was do n e f

o r t h e purpo s e o f

dev elo pi ng an o pi ni o n o f t h e m arket v al ue o f t h e l eas ed f

ee i nt e r e s t i n t he s u bj e c t p r o p e rt y

a s o f S e p t e m be r1 , 2 0 0 1 . T he a

p p r a i s a l w a s c o nd

u c t e d u s i ng t he s a le s c o mp ar is o n

a p p r o a c h . T h e a

p p r a is a l s t at e s t h e le a s e d

v a lu e o f t h e p r o p e rt y in u s e is $7, 437, 000. Ho wev er, J

uli e Seam an t es t i f i ed t h at t h e ren

t ro ll s us ed b y

M s . Go o dri ch

co n t ai n ed i n c o rre c t d at e s , t e n an

t n ame s , an d

re n t a l rat e s . Th e t o t a l

v a l u e a p p ra i s e d w a s $ 1 1 ,5 0 0 ,0 0 0 .-4-

P l a i n ti f f s ob j e c te d to t h i s a p p r a i s a l s tati ng th at th e a

p p r a i s a l i s too r e mote i

n ti me to b e r e l e v an

t, an d a l s o t h e l at e p rodu c t i o n

o f t h e a p p ra i s a l . Th e a

p p ra i s a l w a s p rodu c e d

t h re e d ay s b e f

o re t ri a l . M s . G oo dr i c h

te s ti f i e d on c r os s - e x am

i n ati on th at an a p p r a i s a l ni n e a n d h a l f ye ar s p r i or

to apprai s al wo ul d n o t b e a reli ab l e i

n di cat o r o f

v al ue. Ms . Go o dri ch

al s o t es t i f

i ed t h at Sept em

b er 11, 2001 caus ed a s i gni f

i can t n egat i v e i m pacto n t h e ec o n o m

y and co ul d h av e i

m pact ed h er o pi ni o n o f t h e v al ue. M r . B r i g g s t e s t i f

i e d i n r e but t a l t o M s . G o o dr i c h’s t e s t i

mo ny , and

s t at e d t hat t he c o m p ar a bl e s a l e s u s e d

w e r e no t c o m

p ar a bl e , and i n f a c t w e r e me ani

ng l e s s i n c o m p ar i s o n s i nc e t he oth e rp r op e rti e s w e r e i

n m u c h mor e d e v e l op e d

ar e a s . M r . B r i g g s a l s o o p i n e d th at th e a d

j u s tme n ts ma d e f o r t he p r o p e rt i e s w e r e i

m p r o p e r . Whe n a s k e d

by t he t r i a l c o urt , M r . B r i g g s t e s t i f

i e d t he b u i l d i ng w o u l d b e w o rt h $ 3 5 t o $ 4 0 p e r s qu are f

o o t i n t o d ay ’ s d o llars . Marv i n Do n al d Ber gman , t h e pr esi dent o f Cab o t Capit al

an d man agero f

Cab o t E st at es, t e s t i f i e d t h at h e h a d

b e e n i n v o l v e d w i t h t h e U SD R

l o an s f rom t h e f i rs t o n e t h at w a s ma d e . M r . B e r g man be li e ve d

t he p r o p e rt y

t o be w o rt h $ 4 , 0 0 0 , 0 0 0 ba s e d o n r e nt a l va l u e s o f t he b u i l d i ng s , v a l u e of th e l an d to b e d e v e l op e d

i n to r e s i d e n ti a l p r op e rty , an d

th e c os ts to c om

p l e te th e p r op e rty

b a s e d on th e c ond i ti on of th e p r op e rty

at th at ti me . I t w a s a l s o b a s e d

on th e c oun ty t ax app r ai sal v al ue o f $4 , 14 0, 00 0 f

o r14 7 acr es. M r . R ob i n s on te s ti f i e d b y w ay of h av i ng h i s d e p os i

ti on r e a d i n op e n c ourt. Mr . R ob i

n s on s t at e d t h e p rope rt y , h a d

i t n o t b e e n f o re c l o s e d o n , w o u ld

h av e a mark e t v a l

u e o f $ 1 1 ,4 0 6 ,0 0 0 . Pl ai n t i f f s o b j ect ed t o t h e l ay

o pi ni o n t es t i mo n y . M r. Ro b i

n s o n s t at ed h e di d n o t kn o w i f h e wa s c urre n t l y an o f f i c e r of U SD R , an d

d i d n o t b e li e v e h e w a s c urre n t l y t h e d i re c t o r of U SD R . M r . R ob i n s on s tate d th at th e c oun

ty tax a p p r a i s a l s ar e n ot r e li a

b l e , ar e u s u a ll

y tw o- th i r d s b e l ow-5-

wh at t h e pri ce s h o ul d b e, an d are al ways s i gni f

i can t l y l o wer t h an

market v al

ues . W h en ques t i o n ed ab o ut wh en

h e ac qui red a s t ake i

n USDR, Mr. Ro b i

n s o n s t at ed t h ere were a n

um b er o f USDR c om p ani e s an d

h e w a s n ot s ur e wh i c h

w a s wh i c h . H e s tate d

h e h a s a l w ay s b e e n

th e ma j or i ty s h areh o l der i

n all t h e co m pani es . M r. Ro b i

n s o n s t at ed t h at h i s o pi

ni o n was b as ed o n

t h e apprai s al marked Depo s i

t i o n E x h i b i t 4, wh at t h e m

arket was do i

ng, wh at t h e pro pert y

was li ke, an d wh at co ul d b e do n e wi

t h t h e undev elo ped po rt i o n

o f t h e pro pert y . Def

endan t ’ s E x h i b i t 3 was adm

i t t ed duri ng t h e t es t i

mo n y o f M r. Ro b i n s o n b as ed o n Pl ai n t i f f s ’ co un s el ref eren ci ng t h e apprai s al d oc ume n t dur i ng c r os s - e x am

i n ati on . M r . R ob i

n s on c ou l d n ot r e c a ll wh i c h te n an ts w e r e s ti ll

on t h e pro pert y

as o f M arch 2003. T h e t ri al co urt f o un d n o def

i ci ency ex i s t ed as a res ul

t o f t h e f o recl o s ure o f

t h e s ecured pro pert y and en t ered a t ake-n o t h i

ng j udgmen

t f o r t h e Pl ai

n t i f f s . T h e t ri al

co urt en t ered f i n di ngs o f f a c t and c o nc l u s i o ns o f l aw . P l a i nt i f f s mo ve d t o ame nd t he c o urt ’s f

i nd i ng s o f f a c t and co n cl us i o n o f l aw a n d reques t ed addi

t i o n al f i n di ngs and co n cl

us i o n s , and f

i l ed a s uppl em

en t al r e qu e s t f o ra d d i t i o na l f i nd i ng s and c o nc l u s i o ns . T he s e mo t i o ns w e r e o ve rru l e d by t he f i li ng o f t he ju d g me n t . P la in t iffs file d a mo t io n t o a lt e ro rame n d

t h e ju d g me n

t an d a mo t io n fo rn e wt r ia l, wh i c h t h e t ri a l c o urt d e ni e d . O n a p p e a l , P l a i

nt i f f s ar g u e t hat t he t r i a l

c o urt e rr e d : ( 1 ) a s a

mat t e ro f l awi n c a l c u l at i

ng pl ai n t i f f s ’ def i ci ency cl ai m b as ed o n t h e co urt ’ s det erm

i n at i o n o f market v al

ue o f t h e m o rt gaged pr o per t y ; ( 2) i

n admi t t i ng De f en dan t s’ E x h i b i t 4 an d p erm

i t t i ng ex per t t est i mo n y o n i t ; ( 3) as a mat t er o f l aw i n gran t i ng t h e De f

endan t s t h e b en ef

i t o f T ex as Pr o pert y

Co de § 51.003 wit h o ut s u f f i c i e nt c o m

p e t e nt e vi d e nc e ; ( 4 ) i

n r e f u s i ng t o ru l e o n M r . R o bi

ns o n’s w a i

ve ro f t he a f f i rmat i ve def en s e under T ex as Pr o pert y Co de § 51.003; (5) b y

f i n di ng a m arket v al ue o f t h e pro pert y

t h at-6-

w a s a g a i n s t th e g r e at w e i g h

t of th e e v i d e n c e ; ( 6 ) i

n a dm i tti ng th e op i ni on te s ti mon y of M r . R o b in s o n

w it h o ut an

y s h o w ing o f c o mp e t e n c y un d e rT e x a s R u le o f E v id e n c e 7 0 1 ; an d

( 7 ) in re f u s i ng t o g ran

t Pla i n t i f f s an e qu i t a b l e li e n o n t h e o ut p arc e l . W e w i ll ad dr ess I ssu es Fi

v e an d S i x f i r st . I n I ssu e Fi v e, A p p el l ant s ar g u e t h e t r i al

co urt ’s d e t e rminat io n

o f mark e t v a lu e o f t h e mo rt g a g e d p r o p e rt y w a s s u

p p o rt e d b y no e v id e n c e , an d

in t h e al t ern at i v e, was agai

n s t t h e great weigh

t o f t h e evi dence. F i

n di ngs o f f actmade by

t h e t ri al j u d g e , s i t t i ng a s t h e f

a c t f i n d e r, are t re at e d

t h e s ame a s f

i n d i ng s f rom a j ury . A nder

s on v. City of Se v e n Poin ts , 8 0 6 S . W . 2 d 7 9 1 , 7 9 4 ( T e x . 1 9 9 1 ) . W h e r e t h e p art y w it h

t h e b ur d e n

o f p r o o f is ch al l en gi ng t h e f act ual suf f i ci en cy o f t h e f i n di ngs, t h e app r o pr i at e co m

pl ai n t i s t h at t h e adverse f i n di ngs are “ agai

n s t t h e great weigh

t and prepo n deran ce o f

t h e evidence.” Tatev . Tate , 55 S . W . 3 d 1 , 5 ( T e x . A

p p . - - E l P a s o 2 0 0 0 , n o p e t.) . W

h e n th e p arty w i th out th e b ur d e n

of p r oof s u f f e r s an unf avo r a bl e f i nd i ng , t he c ha ll e ng e o n a

p p e a l i s o ne o f “no e vi d e nc e t o s u

p p o rt t he f i n di ng. ” In re Estate of

Livingston , 9 9 9 S.W .2 d

8 7 4 , 8 7 9 (Te x .A

p p .--El Pa s o 1 9 9 9 , n o p e t .). A n o ev i dence, o r l egal

i n s uf f i ci ency , po i

n t i s a ques t i o n

o f l aw whi ch

ch all enges t h e l egal

s uf f i ci ency o f t h e e v i d e n c e t o s u

p p o rt a p art i c u l ar f

a c t -f i n d i ng . S e r r a n o v . U n io n P la n te r

s Ba n k , N .A. , 162 S . W . 3 d 5 7 6 , 5 8 0 ( T e x . A

p p . - - E l P a s o 2 0 0 4 , p e t. d e ni e d ) . I n r e v i e w i ng a f a c tu a l s u f f i c i e n c y p oi n t, w e m u s t c o ns i d e ra ll

o f t he e vi d e nc e and

d e t e rm i ne whe t he rt he a dve r s e f

i nd i ng w a s s o a g a i

ns t t he g re at w e i g h

t an d p re p o n d e ran c e o f

t h e e v i d e n c e t h at i

t w a s c l e a rl y wron g an d

un j u s t . Or tiz v . Jones , 917 S. W . 2d 770, 772 (T ex . 1996). A n appell at e co urt will

s us t ai n a l egal s uf f i ci ency c h a lle ng e , if t h e r e c o r d s s h o w s : ( 1 ) t h e c o mp le t e a b s e n c e o f av it a l fa c t ; ( 2 ) t h at t h e c o urt is b arr ed b y rul es o f l aw o r ev i den ce f

ro m gi v i ng weigh t t o t h e o nl

y evi dence o f

f ered t o pro v e a vi

t al f a c t ; ( 3 ) t hat t he e vi d e nc e o f f e r e d t o p r o ve a

vi t a l f a c t i s no mo r e t han a

s c i nt i ll a ; o r( 4 ) t hat t he-7-

e v i d e n c e e s t a

b li s h e s c o n c l

u s i v e l y t h e o p p o s i

t e o f t h e v i t a l f a c t . City of

Ke ller v. Wils on , 168 S . W . 3 d 8 0 2 , 8 1 0 ( T e x . 2 0 0 5 ) . W e d o not p a s s u p on th e w i tn e s s ’ c r e d i

b i li ty n or d o w e s u b s ti tute o ur j u d g me n

t f o r t h at o f t h e f a c t f i n d e r, e v e n

i f e v i d e n c e w o u l d

c l e arl y s u p p o rt a d i f f e re n t re s u l t . Mar iti meOv e r

s e asC or p. v . E lli s , 9 7 1 S.W .2 d

4 0 2 , 4 0 7 (Te x .), cert. denied, 525 U.S . 1017, 119 S . C t . 5 4 1 , 1 4 2 L . E d . 2 d

4 5 0 ( 1 9 9 8 ) . I n c o nd

u c t i ng a s u f f i c i e nc y r e vi e w , w e c o ns i d e ra ll

t he e v i d e n c e a dm

i t t e d at t ri a l , e v e n

i m p rope rl y a dm i t t e d e v i d e n c e . Mof

f v . State , 131 S. W . 3d 485, 4 8 8 (Te x .C ri

m .A p p . 2 0 0 4 ). Fa i rmark e t va l

u e i s d e f i ne d a s t he p r i c e t he p r o p e rt y

w i ll br i ng whe n o f

f e r e d f o rs a l e by o n e wh o d e s ir e s t o s e ll, b ut is n o t o b lig e d t o s e ll, an d

is b o u g h t b y o n e wh o d e s ir e s t o b uy, b ut is un d e r n o n e c e s s i

t y o f b uy i ng . City of

Pearland v. A lexande r , 4 8 3 S.W .2 d 2 4 4 , 2 4 7 (Te x . 1 9 7 2 ). I n t hi s c a s e , t he f

a i rmark e t va l

u e t o be d e t e rm

i ne d w a s t he va l

u e o f t he p r o p e rt y

at t he t i me o f t he f o re c l o s ure . SeeT EX .P ROP .C O D E A NN . § 5 1 . 0 0 3 ( b ) , ( c ) ( V e rn on 2 0 0 7 ) . T h e b ur d e n

of p r oof of t h e f ai r market v al

ue wa s o n A ppell ees s i

n ce t h e o f f s et un der T ex as Pr o pert y

Co de § 51.003 i s an af f i rmat i v e def en s e. M r . B r i g g s r e tr os p e c ti

v e l y a p p r a i s e d th e v a l u e of th e p r op e rty

at $ 3 , 5 0 0 , 0 0 0 at th e ti

me of fo r e c lo s ur e . M s . G o o dr ic h p r o vid e d fo ura p p r a is a ls o f t h e p r o p e rt y. I n h e rfir s t a

p p r a is a l, M s . G o o dr ic h

v a lu e d a b u ild ing o n

t h e p r o p e rt y t o b e w o rt h $ 1 , 6 0 0 , 0 0 0 . H e rs e c o n d a p p r a is a l, whi ch i n cl uded a po rt i o n

o f t h e pro pert y

t h at was s ub s equen

t l y s o l d, v al ued t h e pro pert y

at $8, 050, 000 o n

Oct o b er 30, 1996. T h e t h i rd appr ai s al , whi ch

was a li m i t ed us e apprai s al , f

o un d a v al ue range o f

$11, 460, 000 t o $11, 955, 000 o n No v em b er 1, 2000. T h e f

o urt h apprai s al v al ued t h e p rope rt y

at $ 1 1 ,5 0 0 ,0 0 0 a s o f

Se p t e m b e r 1 , 2 0 0 1 , b ut w a s b a s e d o n i n c o rre c t re n

t rol l s . M s . G o o dri c h ’ s f

o urt h a p p ra i s a l a l s o s h o w e d

c o m p ara b l e s a l e s f o r $ 3 2 ,6 6 6 -$ 3 5 ,0 8 1 p e r a c re .-8-

M r. B e rg man

t e s t i f i e d h e v a l u e d t h e p rope rt y

at t h e t i me o f f o re c l o s ure t o b e $ 4 ,0 0 0 ,0 0 0 . M r. Ro b i n s o n t es t i f i ed t h at h e b eli ev ed t h e v al ue o f t h e pro pert y

t o b e $11,406, 000. T he t r i a l c o urt f o und t he f a i rmark e t va l

u e by s um m i ng t he va l u e o f o ne bu i l d i

ng o n t he pro pert y , $2, 884, 800, (72, 000 s q. f t . × $40.00 pers q. f

t . ), and t h e v al

ue o f t h e raw ac reage, $ 4 , 7 2 5 , 0 0 0 ( 1 3 5 a c r e s × $ 3 5 , 0 0 0 p e ra c r e ) . M r . B r i g g s ha d t e s t i f i e d t hat i n t o d ay ’s d o ll ar s t he b u ild ing w o u ld

b e w o rt h t h irt y- fiv e t o fo rt y d o lla

r s p e rs qu ar e fo o t . T h e e v id e n c e c o n c lu s iv e ly es t ab li s h es t h at t h e t ri al

co urt ’ s v al

uat i o n was made us i

ng t h e v al ue att h e t i

me o f t ri al rat h er t h an t h e m arket v al ue att h e t i

me o f f o recl o s ure. Iss ue F i

v e i s s us t ai

n ed. I n I s s u e S i x , A p p e ll an t ar g u e s th e c ourt e rr e d

i n a dm i tti ng op i ni on te s ti mon y of M r. Ro b i n s o n wi t h o ut an y s h o wi ng o f co m pet ency un der T ex as Rule o f

E v i dence 701. Rul e 701 s t at e s : “I f

t he w i t ne s s i s no t t e s t i f

y i ng a s an e xp e rt , t he w i

t ne s s ’ t e s t i

mo ny i n t he f o rm o f o p i ni o ns o ri nf e r e nc e s i s li

m i t e d t o t ho s e o p i

ni o ns o ri nf e r e nc e s whi c h ar e ( a ) r at i o na ll y ba s e d o n t he p e rc e p t i o n

o f t h e w i t n e s s an d (b ) h e l p f u l t o a c l e a r un d e rs t an d i

ng o f t h e w i t n e s s ’ t e s t i

mo n y o r det erm i n at i o n o f a f acti s s ue.” T EX .R .E V ID . 7 0 1 . A p p e ll an ts ar g u e i t w a s e rr or

f or th e c ourt to a ll owte s ti

mon y f r om M r . R ob i n s on r e g ar d i ng th e v a l u e of th e mortg a g e d

p r op e rty . A

p r op e rty o wn e r i s qu a li f

i e d t o t e s t i f y t o t h e mark e t v a l

u e o f h i s p rope rt y . R edman Hom es, Inc. v. I vy , 920 S. W . 2d 664, 669 (T ex . 1996). T h e t es t i mo n y m us t i n di cat e t h at t h e o wn er’ s as s es s men t i s b as ed o n t h e mark e t an d

n o t o n t h e i n t ri n s i c v a l u e o f t h e p rope rt y

t o h i m . Jabri v. A lsay

yed, 145 S . W . 3 d 6 6 0 , 6 6 7 ( T e x . A

p p . - - H o u s t o n

[ 1 4 t h D is t . ] 2 0 0 4 , n o p e t . ) . T h e p r in c ip a l o f ac lo s e ly he ld c o rp o rat i o n

may t e s t i f y a s t o t h e v a l

u e o f l an d o wn e d b y t h e c o rp o rat i o n . Maxey v . Texas Com mer ce Bank of

Lubbock, 5 7 1 S . W . 2 d

3 9 , 4 6 ( T ex. Ci

v . A p p . - - A mar i ll o 1 9 7 8 , wr i

t r ef ’d n . r. e.) . T h e s o l e s h areh o l der an d presiden t o f a clo s el y h eld co rpo rat i o n

h as al s o b een

perm i t t ed-9-

t o t e s t i f y a s t o t h e v a l

u e o f p rope rt y o f a c o rp o rat i o n . B ow

er v. Pr ocess or and Che mical Ser

vice , Inc. , 6 7 2 S . W. 2 d

3 0 , 3 2 ( T e x. Ap p . - - H o u s t o n [ 1 4 t h D i s t . ] 1 9 8 4 , no wr i t ) . M r . R o bi

ns o n w a s t he maj o rit y s h areh o l der an d s o l e di

rect o r o f USDR at t h e t i

me o f f o recl o s ure. M r. Ro b i

n s o n s t at ed t h e m arket v al ue o f t h e pro pert y

was $11, 406, 000. T h i s det erm i n at i o n was b as ed o n

kn o wl edge g a in e d t h r o u g h e x p e r ie n c e in

t h e p ur c h a s e an d

s a le o f p r o p e rt ie s , r e v ie wo f p r iv at e ly c om m i s s i on e d a p p r a i s a l s , an d

r e v i e wof c oun ty tax a p p r a i s a l s . T h e op i

ni on w a s b a s e d

i n p art on M s . Go o dri ch ’ s li

m i t ed us e apprai s al . T h e apprai s al v al ued t h e pro pert i es us i

ng t h e l eas es t h at w e re i n e x i s t e n c e at t h e t i

me . Th e a

p p ra i s a l d e t e rm i n e d t h e p rope rt y

v a l u e t o b e $ 1 1 ,4 6 0 ,0 0 0 . H o w e ve r , M r . R o bi

ns o n a l s o t e s t i f

i e d t hat he w a s no t aw ar e o f whi c h t e nant s w e r e s t i ll

o n t he p r o p e rt y an d

p ayin g r e n

t . W h e n s p e c if ic a lly qu e s t io n e d

a b o ut U S D R

an d t h e p r o p e rt y, M r. Ro b i n s o n co ul d n o t recall

t h e det ail s . W e f

i n d M r. Ro b i

n s o n ’ s t es t i

mo n y s h o ul d h av e b een e x c l u d e d un d e r Te x a s R

u l e o f Ev i d e n c e 7 0 1 . Is s u e Si

x i s s u s t a i n e d . Si n c e Is s u e s F i

v e an d Si x are di spo si t i v e, we d o n o t addr ess A

pp ell an t s’ r emai ni ng i ssues. T EX .R .APP .P. 4 7 .1 . W e r e v e r s e t h e ju d g me n

t o f t h e t r ia l c o urt an d

r e man d fo ra n e wt r ia l.

A pri l 30, 2009 DA VID WE L L INGT ON C HEW , Chi ef J us t i ce Bef o r e Ch ew, C. J. , McCl

ur e, an d Ri

v er a, JJ.