Although a “homeowner usually is free to offer lay opinions about the value of his home,” Rule 701 of the Federal Rules of Evidence nonetheless contains some strictures that can result in the inadmissibility of a homeowner’s testimony, as shown in a decision by District Judge Louise W. Flanagan of New Bern, N.C.
Judge Flanagan’s July 15 opinion is an excellent handbook on the admissibility of lay valuation testimony under Rule 701.
The appeal arose from a chapter 13 case where the debtor sought to avoid a judicial lien under Section 522(f) that impaired his homestead exemption. The home’s value was the pivotal factual dispute.
At trial, the homeowner testified that his home was worth $258,297. As the basis for his opinion, he cited the property’s tax assessment in exactly the same amount. The lienholder appealed and won based on Rule 701, which governs opinion testimony by lay witnesses.
Judge Flanagan cited precedents under Rule 701 for the proposition that “a homeowner is presumed to be ‘competent to testify on the value of his own house.’” Flaws in the homeowner’s opinion go “to the weight of his testimony, not admissibility.”
Even though homeowners have “wide latitude,” there are limits imposed by Rule 701, Judge Flanagan said. A lay opinion, according to the judge, “must be based on the witness’s perception, not someone else’s.”
Judge Flanagan ruled that the admission of the homeowner’s opinion on value violated Rule 701 because the homeowner “never expressed any subjective opinion” since he “based his opinion solely on the tax assessment.” She said the debtor took the tax assessment “at face value, without actually considering whether or not it was correct.”
From the opinion, it appears as though almost any follow-up question by the debtor’s counsel would have made the homeowner’s opinion admissible.
Although she remanded the case to the bankruptcy court, Judge Flanagan’s decision in reality is a victory for consumer debtors, who can now quote her opinion for the proposition that “almost any basis within the perception of the homeowner will suffice.”