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"Discoverability of Pre-Litigation Expert Appraisal Reports: The Consistent and the Dead "

By: Rick E. Rayl, John C. Murphy
02/01/00

Aldous Huxley once observed that "the only completely consistent people are dead." Huxley, once an inarguably great novelist (and now inarguably consistent) had a point. Opinions - - even well researched, thoughtful opinions - - can change over time. Once a condemnation case is filed, depositions and other discovery occur. New facts may emerge. Even a good pre-litigation appraisal report may become obsolete.

Most business and real estate appraisal experts understand this fact. Many, however, express extreme reluctance about ever changing any pre-litigation opinion. Most appraisal experts - - particularly those who testify in court - - strongly prefer to remain consistent.

The pertinent California jury instruction gives such expert witnesses good reason for this attitude. One instruction, BAJI 2.20 ("Believability of Witnesses"), permits jurors, in evaluating a witness, to consider "a statement previously made by the witness that is consistent or inconsistent with the testimony of the witness." In others words, trial testimony inconsistent with a pre-litigation report can sink an expert. On a fundamental level, most appraisal experts, like most people, hate to be caught in an inconsistency; this is a situation, they claim, in which they wouldn't be caught . . . well, dead.

For this reason, attorneys for condemnees often search for inconsistencies between an expert's pre-litigation opinions, and the opinions to which the same expert testifies at trial. Public agency attorneys, in turn, try to keep their experts' pre-litigation appraisals confidential. They argue that a pre-litigation appraisal report is privileged even when they later designate the report's author as a trial witnesses. The arguments:

Arguments for Keeping Pre-Litigation Appraisal Reports Private:

Most public agency lawyers focus on Code of Civil Procedure section 1255.060, subdivision (b). That code section provides:

In the trial of the issue of compensation, a witness may not be impeached by reference to any appraisal report, written statement and summary of an appraisal, or other statements made in connection with the deposit or withdrawal pursuant to this chapter, nor shall such a report or statement and summary be considered to be an admission of any party.

Public agency lawyers also point to the Tentative Report of the Law Revision Commission (September 27, 1967), the group which proposed section 1255.060, subdivision (b). The Tentative Report states that the statute "precludes impeachment of a witness at trial by reference to appraisal reports, statements of valuation data other statements made by him in connection with (1) a deposit and notice thereof . . . ." (California Law Revision Commission, Tentative Recommendation and a Study (September 1967), p. 1151.) The Law Revision Commission, in its 1967 Tentative Report, reasoned that "if such evidence could be used, it is likely that the plaintiff would make an inadequate deposit in order to protect itself from the use at trial of evidence submitted in connection with the deposit." (Id. at p. 1785.)

A national treatise on condemnation tends to support this position. Nichols on Eminent Domain states that those statements of the condemning authority which "may become admissions" only include appraisals "of the property prepared and adopted for purposes other than acquisitions, negotiations or condemnation." (5 Nichols on Eminent Domain (3d ed. rev. 1977), § 18.12[2], emphasis added.) Nichols is quite explicit. It states:

In the context of an eminent domain case, the concept of being compelled to produce drafts of an appraiser's report is a sobering thought. In most cases, the appraiser will work closely with the attorney in an attempt to refine (not sanitize) the report so that it accurately reflects current market data as well as acceptable methods of appraisal in a particular jurisdiction . . . . [If produced] it is likely that those reports would be used to impeach the appraiser at trial. This author believes that the production of preliminary reports clearly encroaches on the work-product doctrine and should be discouraged. (7 Nichols, § 7A.02[1].)

Other arguments are available to public agencies. They may also argue that preliminary appraisal work is inadmissible under Evidence Code section 1152 - - a statute which protects materials generated for purposes of settlement discussions. Some agency attorneys also argue that pre-litigation reports should admissible only if they are truly inconsistent. (See El Monte Union High School District v. Consumer Holding Co. (1966) 247 Cal.App.2d 173 [155 Cal.Rptr. 467].)

No question exists, of course, that pre-litigation reports are usually inadmissible when prepared by a different appraiser than the one who will testify at trial. An expert cannot usually be impeached with a report he or she did not write, and has never seen or relied upon. But when an agency designates as its expert witness the same person who prepared the pre-litigation report, problems can arise.

Counter-Arguments:

Most landowner or business owner attorneys begin and end their arguments with a citation to County of Contra Costa v. Pinole Point Properties, Inc. (1984) 27 Cal.App.4th 1105 [33 Cal.Rptr.2d 38]. The Pinole Point court held squarely that the condemnor can impeach the condemning agency's trial expert through an earlier appraisal report by that same expert. (Pinole Point, supra, 27 Cal.App.4th at pp. 1112-1113.)

Moreover, the official Law Revision Commission Comment, 1975 addition, contains some significant differences from the earlier Tentative Report. Unlike the Tentative Report, the official Comment does not explicitly address earlier reports by the witness him or herself. (Cal. Law Revision Comment, 1975 addition, West's Ann. Code Civ. Proc., § 1255.060 (1982) pp. 691-692.)

Also, the leading California treatises contradict Nichols, the national treatise quoted above. (See 14 Dankert, Cal. Real Estate Law & Practice (1997) Prejudgment Possession, 505.06, p. 505-10; 1 Matteoni & Veit, Condemnation Practice in California (1997), Trial Preparation in Trial, § 9.62, p. 448.) Both cite Pinole Point as the applicable California rule.

Most important, the general law of expert discovery, both in California and federal courts, contradicts Nichols. One federal district court observed, "Discovery of the reports of experts, including reports embodying preliminary conclusions, can guard against the possibility of a sanitized presentation at trial, purged of less favorable opinions expressed at an earlier date." (Hewlett-Packard Co. v. Bausch & Lomb, Inc. (N.D. Cal. 1987) 116 F.R.D. 533, 537, affd. (Fed. Cir. 1990) 909 F.2d 1464, quoting Quadrini v. Sikorsky Aircraft (D. Conn. 1977) 74 F.R.D. 594, 595; but see Taylor v. Anderson-Tully Company (W.D. Tenn. 1993) 151 F.R.D. 295, 297 [disagreeing in part with Quadrini: "On balance, the court concludes that where there is no showing of any particularized need for such reports, such as might be the case in a particularly complex expert dispute, parties should not be required to produce their expert witness' reports which have been prepared in anticipation of litigation."].)

Conclusion:

California trial courts are likely to compel production of preliminary reports of those experts designated to testify at trial. Public agencies should (1) insist that an appraiser complete his pre-litigation work carefully enough to withstand cross-examination in court; or (2) consider hiring different experts to testify at trial - - and avoid contaminating those trial experts with earlier, inconsistent reports from others.

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