Opinion ID: 901347
Heading Depth: 1
Heading Rank: 12

Heading: Whether admission of a business appraisal was prejudicial error.

Text: [¶ 61.] Before selling their business, Behrens asked Ketel, Thorstenson & Co., an accounting firm, to perform an appraisal. In performing the appraisal, Ketel Thorstenson sent a letter to Loewen asking for Loewen's estimate of the value of Behrens Mortuary. Ketel Thorstenson used this and other information to determine the fair market value of Behrens Mortuary. Ketel Thorstenson ultimately provided Behrens with an Informal Business Valuation Report. [¶ 62.] Wedmore offered the appraisal during his cross-examination of Don Behrens to prove his opinion of the value of the business. Although Behrens objected, the trial court admitted the appraisal because Behrens had previously produced it as his sworn response to an interrogatory asking his opinion of the value of the business. [¶ 63.] We review a trial court's evidentiary rulings under an abuse of discretion standard. Novak v. McEldowney, 2002 SD 162, ¶7, 655 NW2d 909, 912 (citations omitted). An evidentiary ruling will not be overturned unless error is `demonstrated ... [and] shown to be prejudicial error.' Error is prejudicial when, `in all probability ... [it] produced some effect upon the final result and affected rights of the party assigning it.' Id. (internal citations omitted). Thus, in order to prevail on appeal, Behrens must show both that the trial court abused its discretion and that the error was prejudicial. [¶ 64.] Behrens argue that the trial court abused its discretion by concluding that through the mere production of the appraisal in discovery, Behrens waived their right to an evidentiary objection. Behrens contend that [a] document does not become admissible simply by being produced in response to a discovery request. We generally agree. However, this evidence was not admitted solely because it was produced in discovery. It was introduced because it was Don Behrens' sworn opinion of value. Therefore, it was admissible for reasons other than the fact that it was simply produced in discovery. [¶ 65.] We also reject Behrens' broad argument that conclusions contained in an appraisal cannot generally be sought from a party other than the person who prepared it. Although we acknowledge the potential foundational problems in admitting Ketel Thorstenson's work product as Behrens' opinion, Don Behrens adopted this valuation opinion in his answers to interrogatories. Moreover, a business or property owner is clearly qualified to testify to the value of his business or property. See Geo. A. Clark & Son, Inc. v. Nold, 85 SD 468, 474, 185 NW2d 677, 680 (1971). Therefore, because Don Behrens had previously adopted the appraisal as his sworn opinion of the business's market value, it was admissible as Behrens' opinion. [22]