Opinion ID: 1245955
Heading Depth: 2
Heading Rank: 1

Heading: Heggen Equipment Real Estate

Text: The trial court valued the Heggen Equipment real estate, consisting of some 11.38 acres containing several buildings, at $40,000. [1] The only support in the record for that valuation is the testimony of John Heggen and David Brendsel, a vice-president at First International Bank. In ascribing a $40,000 value to the property, John testified that in his opinion, the Heggen Equipment real estate is only worth what you can dump it for at auction. An owner of property may testify as to the value of his own property. Meyer v. Hansen, 373 N.W.2d 392, 397 (N.D.1985). However, an owner's opinion of value is insufficient to support a value determination by the factfinder if it is given without a valid basis or is based upon improper facts or analysis. Jim's Hot Shot Serv. v. Continental West. Ins. Co., 353 N.W.2d 279, 282 (N.D.1984). Ordinarily, fair market value, not liquidation value, is the proper method of valuing property in a divorce. Liddle v. Liddle, 140 Wis.2d 132, 410 N.W.2d 196, 199 (Wis.Ct.App.1987); Corliss v. Corliss, 107 Wis.2d 338, 320 N.W.2d 219, 222 (Wis.Ct.App.1982). Fair market value is the price a buyer is willing to pay and the seller is willing to accept under circumstances that do not amount to coercion. Mike Golden, Inc., v. Tenneco Oil Co., 450 N.W.2d 716 (N.D.1990). John's opinion of the value of the property as the price it would bring dumped at auction is based on improper facts and analysis because it is based on liquidation value rather than fair market value. While liquidation value, rather than fair market value, may be appropriate under certain circumstances involving distressed conditions, there is no evidence that the property in question was threatened by foreclosure or other market stress. [2] Brendsel's opinion was also based upon liquidation value. Although at one point Brendsel referred to fair market value, he testified that $40,000 is a liquidation value for the real estate, buildings and fixtures. He explained that he based his $40,000 valuation on recent foreclosure sales by the Small Business Administration of similar commercial buildings in Rugby, Bottineau and Carrington. Thus, Brendsel's testimony, as well as John's, focused on coerced sales at which the seller accepts a depressed price and takes a beating on the market. Foreclosure sales, because of the coercive circumstances surrounding them, should not be used to establish fair market value. It is clear from both John and Brendsel's testimony that, in placing a valuation of $40,000 on the Heggen Equipment, Inc., property, neither had in mind a sale by a willing seller to a willing buyer. Therefore, their testimony did not establish the property's fair market value. Consequently, the trial court's finding of $40,000 value is unsupported by the evidence and is clearly erroneous. There was other evidence of value of the Heggen Equipment property. Patricia valued the property at $259,000, a figure supported by a tax assessment which identified the true and full value of the property as $259,000 and the assessed value at $129,500. There was also testimony that just ten months before the trial, Brendsel's bank appraised the property at $350,000 and loaned John and Patricia approximately $150,000 secured by a mortgage on the property. However, on remand the trial court is free to receive additional evidence of fair market value.