United States District Court, D. Vermont
CHARLES GORDON, ALICIA GORDON D.J. ENTERPRISES LLC, A.C. LAWN MOWING, DENIELLE GORDON, individually and doing business as DEN & COMPANY, Plaintiffs,
NEW ENGLAND CENTRAL RAILROAD, INC., Defendant.
OPINION AND ORDER GRANTING IN PART AND DENYING IN
PART PLAINTIFFS' MOTION TO EXCLUDE EXPERT TESTIMONY OF
DEFENDANT'S APPRAISER STEPHEN O'TOOLE (DOC.
CHRISTINA REISS, DISTRICT JUDGE.
Charles, Alicia, and Denielle Gordon (the
"Gordons"), D.J. Enterprises LLC, and A.C. Lawn
Mowing, (collectively, "Plaintiffs") bring this
action against Defendant New England Central Railroad, Inc.
("Defendant"), alleging that Defendant's
failure to appropriately maintain track facilities caused a
railroad embankment adjacent to the Gordons' land located
at 68 Old River Road in Hartford, Vermont (the
"Property") to collapse following a July 1, 2017
rain event. Plaintiffs further allege that Defendant's
efforts to repair the embankment resulted in a trespass on
the Property. The First Amended Complaint ("FAC")
asserts the following claims against Defendant: trespass
(Count I); negligence (Count II); unlawful mischief in
violation of 13 V.S.A. § 3701 (Count III); and unjust
enrichment (Count IV).
before the court is Plaintiffs' June 18, 2019 motion to
exclude expert testimony of Defendant's appraiser Stephen
O'Toole. (Doc. 134.) Defendant opposed the motion on July
2, 2019 and Plaintiffs replied on July 16, 2019, at which
time the court took the pending motion under advisement.
are represented by R. Bradford Fawley, Esq., and Timothy C.
Doherty, Jr., Esq. Defendant is represented by Michael B.
Flynn, Esq., Matthew M. Cianflone, Esq., and Mark D.
Factual and Procedural Background.
Gordons purchased the Property in 2009 for $150, 000. Three
buildings are situated on the Property: (1) a 1,
120-square-foot, three-bay garage; (2) a 1, 500-square-foot,
five-bay garage; and (3) a 6, 492-square-foot, mixed-use
building. In 2017, tax assessment records indicate that the
appraisal value for the Property was $ 189, 600 and the
appraisal value of the mixed-use building on the Property was
$112, 100. Prior to July 1, 2017, the mixed-use building was
comprised of garage bays, warehouse storage space, a
residential apartment, and commercial space that served as a
day-care center and a beauty salon.
Property is situated directly adjacent to Defendant's
mainline railroad tracks. On July 1, 2017, more than four
inches of rain fell in a twelve-hour period in Hartford,
Vermont. Following the July 1, 2017 rain event, the railroad
embankment adjacent to the Property collapsed, causing rocks
and debris to enter and damage the mixed-use building on the
expert witness, Stephen O'Toole, is the owner of New
England Commercial Realty Advisors, Inc. ("NECRA"),
a commercial real estate appraisal and consulting firm that
provides professional valuation services throughout the
United States. Mr. O'Toole has a Bachelor of Arts degree
in Business Management from Assumption College and has taken
additional business and real estate courses at Worcester
Polytechnic Institute, the Boston Architectural Center, and
the Appraisal Institute. He has experience providing real
estate valuations and appraisals in multiple states,
contracted Mr. O'Toole to provide an "as is"
appraisal of the Property using a "Sales Comparison
Approach." Mr. O'Toole describes this approach as
sales comparison approach produces an estimated value for
real estate by analyzing closed sales, listings or pending
sales of properties that are similar to the subject
property." (Doc. 134-1 at 33.) Defendant further
directed Mr. O'Toole to prepare a "Restricted
Appraisal Report" for client use only. Mr. O'Toole
The rationale for .. . the opinions and conclusions set forth
in this report may not be understood properly without
additional information contained in the appraiser's work
file. The contents of the work file include sufficient
information indicating adherence to the requirements of
Standard 7 of [Uniform Standards of Professional Appraisal
Practice], and to be able to produce an Appraisal Report.
with the client deemed a Restricted Appraisal Report was
reasonable considering the following:
• The client is the only intended user of the
appraiser's opinions and conclusions;
• The client understands the limited utility of this
• The client does not need the level of information
required in an Appraisal Report.
(Doc. 134-1 at 18.)
O'Toole selected three comparable properties in or near
Hartford, Vermont and determined the price per square foot of
gross building area for those properties. Using those
comparison values, Mr. O'Toole found that, if the
Property were in marketable condition, it would be valued at
$45.00 per square foot of gross building area. He then
multiplied $45.00 by the square footage of the mixed-use
building at 6, 492 and opined that this resulted in a total
value of $292, 140, which he rounded to $290, 000. Because
the mixed-use building was damaged and was not in marketable
condition, Mr. O'Toole deducted "costs to shore and
repair the existing building in order to estimate an 'as
is' value." (Doc. 134-1 at 44.) Mr. O'Toole
obtained an estimate from GZA GeoEnvironmental, Inc. dated
November 30, 2018 for "shoring/stabilization;
design/permitting, [and] for construction that ranged from
$100, 000 to $150, 000." Id. Based on this
information, Mr. O'Toole found that "a projected
estimate of costs to shore, stabilize, and repair the
existing building of $120, 000 is reasonable[.]"
Id. at 45. Mr. O'Toole therefore deducted $120,
000 from his estimate of $290, 000 to arrive at a final
"as is" value of $170, 000 for the Property.
O'Toole's deposition, Plaintiffs' attorney
questioned him regarding his decision to use a 6,
492-square-foot measurement to calculate the Property's
gross building area:
Q. ... So, in order to conclude that the undamaged value of
the property on November 27th 2018 is $290, 000, am I correct
that you took 6, 492 square feet and multiplied it by $45 a
Q. And what does the 6, 492 square feet reflect?
A. That's the gross building area of the property, the