Opinion ID: 1714816
Heading Depth: 1
Heading Rank: 1

Heading: The Evidence of an Unconsummated Sales Transaction.

Text: During the trial of Danamere's appeal, it was permitted to offer evidence, over IDOT's objection, concerning an offer that it had received in March 1991 for another portion of its 233-acre tract consisting of approximately two acres. The price offered for this two-acre tract, which was to be purchased for use as a twenty-four-unit elderly housing project, was $31,580 per acre. Although Danamere agreed to accept this price, the transaction was never consummated because of problems with zoning restrictions and substantial citizen opposition to the location of the elderly housing project. In Hardaway v. City of Des Moines, 166 N.W.2d 578 (Iowa 1969), we considered the unreliability for valuation purposes of unaccepted offers for the sale of real property and stated our belief that, as a general rule, such transactions should not be received as evidence of the value of real estate. Hardaway, 166 N.W.2d at 580. We believe that a similar rule should apply to transactions that assume that a certain use of the property will be permitted and that subsequently fail to reach fruition because that assumption is incorrect. That was the situation in the present case. There is nothing in the record to permit a finding that there was a demand for this two-acre tract at this price for other potential uses. The fact that there were differences in location between the two-acre tract and the 5.75-acre tract involved in the taking adds to the unreliability of the aborted sales transaction for purposes of the valuation issues that were presented to the jury. We conclude that the district court erred in admitting evidence of the aborted transaction over IDOT's objection. We also conclude that this evidence was sufficiently prejudicial to warrant reversal. Multiplying the per-acre price established in the aborted transaction by the number of acres taken in the present eminent-domain dispute produces a figure remarkably close to the amount of the jury's verdict.