dissenting:
In his treatise on Damages, Professor McCormick noted that “market value” is a relative term. (C. McCormick, Damages sec. 44, at 166 (1935).) The market value of standardized goods such as stocks and bonds or commodities on the major exchanges, where the prices are recorded at least day to day, can be determined with a high degree of certainty. (C. McCormick, Damages sec. 44, at 166 (1935).) However, when commodities are not standardized, “ ‘market value’ becomes an inference as to the action of an imaginary purchaser, based upon data more or less conjectural, as to which inferences different persons sitting on the bench or in the jury box might reasonably differ within limits wider or narrower as to each kind of property mentioned.” (C. McCormick, Damages sec. 44, at 166 (1935).) Illustratively, Professor McCorimck observes that one cannot appraise the market value of the Empire State Building on a given day. “The process of securing a purchaser or syndicate of purchasers for such a building is too long and too much attended with uncertainty as to outcome for any two experts to arrive independently at similar results. The expression ‘market value’ in this latter instance becomes a vague ideal rather than a reasonably definite standard.” C. McCormick, Damages sec. 44, at 166 (1935).
Professor McCormick’s observations are particularly pertinent to the facts presented in the instant case. The trial court was charged with the responsibility of determining the fair market value of this unique property, a 20-story, 90-unit apartment building, on the date of the breach of contract in December, 1977. The trial judge was presented with two separate theories of market value. First, there was evidence that the fair market value was in excess of $1.8 million on the date of the breach. B&B submitted an offer in June 1977 for that amount, which was satisfactory to Associates but not to Statesman. A short time later, Statesman bought Associates’ one-half interest for one-half of the amount offered by B&B. The second item of evidence was Statesman’s actual subsequent sale of the property to a third party, Amvest, for $2,300,000 seven months after the breach. The trial court accepted the latter value as the fair market value. The majority of this court has reweighed the evidence and has found that “the resale to Amvest was inadequate evidence to establish fair market value on the date of the breach.” For the following reasons, I respectfully dissent from the majority opinion.
Although the majority states that the resale to Amvest was inadequate evidence, the only support for the assertion is that the contract with B&B was in August or September of 1977, while the resale to Amvest was in December of 1978. I question the relevance of those dates. The breach occurred in December 1977. Although the Amvest deal closed in December 1978, the actual contract for sale between Amvest and Statesman was consummated in July of 1978, seven months after the date of the breach. However, the date of the sale is the majority’s only direct comment upon the evidence of the subsequent sale that it finds to be “inadequate evidence.” The majority’s conclusion on that point is that it is a “definite factor.” I agree. It is a definite factor that the trier of fact should consider, which it did. It is a sale within a reasonable time. (Kemp v. Gannett (1977), 50 Ill. App. 3d 429, 365 N.E.2d 1112.) The majority does not argue that it is inadmissible evidence, but only that it should be disregarded.
Although the above-cited language is the majority’s only comment upon the evidence, there are a number of insinuations concerning the subsequent sale. The majority comments that the purchaser should not be put in a “better position” or receive “a windfall recovery.” Further, the majority comments that the resale price was “closer to $1/2 Million greater than the original contract price.” The presumption underlying these comments is that the subsequent sale indeed generated a windfall profit or a price greater than market value. That, of course, is the issue and not the answer to the problem before this court.
In considering the evidence of the subsequent sale, the majority also observes that there is no evidence that “B&B could have turned around on the date of the breach * * * and sold the subject property for $1/2 Million more ***.” The buyer, however, has no legal duty to present such evidence. Rather, he must prove the fair market value on the date of the breach. As Professor McCormick observed, fair market value is an ideal, not a definite standard, and finders of fact may differ as to what constitutes value. I fail to see why the evidence of the subsequent sale in this case is not evidence upon which the trier of fact could have based its finding.
Although the majority’s opinion on this issue is based upon the inadequacy of the evidence of the subsequent sale, a few comments must be made concerning the transactions between B&B, Statesman, and Associates that the majority apparently finds most persuasive. The majority states that this was an arms-length transaction negotiated over a period of six months. I question the soundness of that line of reasoning. In a negotiating situation, an offer by a prospective purchaser is only marginal evidence of fair market value. The purchaser quite obviously is interested in obtaining a bargain and may well formulate his offer in anticipation of counteroffers by the seller or other specialized circumstances peculiar to the parties or the property. Evidence of an offer becomes more persuasive, although not conclusive, when the seller actually accepts the offer. In this case, only one of the two owners of the property, Associates, accepted the offer. Even Associates’ acceptance as evidence of fair market value is questionable because William Wilkow of Associates testified he was “anxious to get out of the investment.” Allen Bachewicz testified that Wilkow stated he “wasn’t looking to make any more than his original investment in the property.” Associates’ sale in 1977 to Statesman simply allowed Associates to recoup the original investment it had made over four years earlier. Although this was an arms-length transaction, the trier of fact could consider whether factors other than market factors influenced Associates to accept the offer. The trier of fact could further consider that, although Associates’ acceptance of the offer was some evidence of fair market value, Statesman not only rejected the offer but was willing to purchase Associates’ interest in the property for half of the amount of the offer. I believe that the trial judge could conclude from this evidence that the B&B offer did not reflect fair market value.
The majority’s emphasis upon the B&B offer and its subsequent acceptance by Associates appears to suggest that the contract price is conclusive evidence of fair market value. With that contention I disagree. Subjective factors may prompt the acceptance of an offer at something less than market value. Further, and more importantly, even if the parties negotiate extensively and in good faith, the buyer may have actually received what he was looking for, a bargain. Similarly, the seller may also have sold the property for more than fair market value.
The majority observes that there is no evidence in the record that, during the protracted negotiations, Statesman demanded the offer to be increased. The majority further states that Statesman’s dissatisfaction was with financing and not with the purchase price. The majority’s evidentiary support for this statement is that Bachewicz testified that at one of the meetings, one of two people from Statesman was there. Baehewiez was uncertain which person was present. He further testified that “No one objected to the purchase price, to my recollection at those meetings.” No one else testified as to the participation of Statesman in the negotiations. There is very little evidence at all as to what actually transpired during the negotiations. In fact, Statesman found the offer so unacceptable that Statesman itself was willing to purchase Associates’ interest at that same price. The majority’s citation of this rather sketchy testimony as persuasive evidence of fair market value eludes me.
This 20-story, 90-apartment building may not be the Empire State Building Professor McCormick discussed in his treatise. However, it is a unique piece of property not readily admitting to a precise determination of its value. The inferences that the trial court drew in determining its value were certainly within the range of permissible inferences that the trier of fact could draw. I would affirm the trial court on this issue.