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With the increasing complexities of real estate and its valuation, an experienced counselor provides added knowledge and flexibility to customize the preparation and presentation of a case. While not all are suited and not all are willing, appropriately qualified real estate counselors provide the needed attributes. They must be disciplined to the challenges of such litigation and be confident in that role. Credibility becomes the real key in the courtroom.

ROWING ROLE OF THE REAL ESTATE COUNSELOR IN LITIGATION INCLUDING EMINENT DOMAIN

Increasing complexities of both law and real estate, including its valuation, created a growing need for real estate counselors in litigation, particularly in eminent domain or condemnation. This manuscript presents the perspectives and observations of a Counselor of Real Estate (CRE) who serves as an expert witness in support of real estate litigation.

As a profession, real estate counselors have responded to this increased real estate complexity in all aspects, not just litigation. Counselors of Real Estate are increasingly involved in high impact decisions and complex transactions. More high-profile and respected industry leaders have joined the ranks of The Counselors of Real Estate, further expanding the capabilities and network of its members. The Counselors of Real Estate was founded in 1953 by real estate leaders seeking to enhance the quality of respected professional advice available on real property matters. Their CRE Designation recognizes the invited counselor's demonstrated judgment, integrity, and experience in real estate.

There are many aspects of real estate subject to litigation which require the insights of experts. Eminent domain has been a dominant field for real estate counselors in support of litigation, usually as an expert witness, but also as a litigation consultant to the attorney and his or her client. However, other complexities of modern real estate, as they involve litigation, have also pulled upon the real estate counselor's talents and experience. Governmental regulations, tax increment financing, and regulatory takings are prominent current-day examples.

Typically, in eminent domain, the legal system relied upon the appraiser as the primary expert, usually testifying to value or changes in value. Primary disputes were over value itself, the ultimate determining factor of compensation for a taking. A traditional example would be the difference in values before and after a partial taking for highway right-of-way in order to determine just compensation. In an uncomplicated taking of an entire tract of ground, relying solely upon an appraiser may be satisfactory. Even then, highest and best use is always relevant and can complicate the valuation. Partial takings can become more difficult. Claimed changes from present use can drastically affect value. These and other complicating circumstances affecting valuation and analysis call for more innovative thinking in order to address the overall challenge, going beyond conventional appraisal and into the field of real estate counseling.1

Real estate counseling surfaced as an enlightened and encompassing approach to current real estate complexities. A determination of highest and best use serves as a foundation for valuation. The firmness of this foundation is a key. The real estate counselor can focus not only on an experienced and relevant approach to highest and best use but also on the many other factors affecting value. These factors include market and marketability, economic viability, developability, accessibility, traffic conditions, governmental regulations, and community wants and needs, just to name a few.

Attorneys, juries, and judges are often not satisfied with an over-simplistic approach, yet share a need for lucid and simple explanations to facilitate their understanding of the facts and the issues. The issues have broadened in perspective. For example, judges in Missouri have permitted juries to hear any testimony that a buyer or seller would consider or that clarifies factors affecting value. Real estate counseling has emerged as an answer. Increasingly, our complicated economic and real estate issues require complementary litigation consultants and testimony - from both appraisers and real estate counselors, as well as engineers, land planners, or architects, depending upon the issues involved.

While this manuscript relies upon eminent domain for its focus and illustrations, the same characteristics of a real estate counselor offer similar advantages for other real estate litigation. The seasoned CRE's reputation, credibility, professional presence, and ability to persuasively communicate his or her expertise to those outside of the field, strengthens his/her role on the stand.

THE STEPS

In using a Counselor of Real Estate, the attorney should pursue the following steps:

Determine the need for a Real Estate Counselor-the particular skills and knowledge needed relevant to the issues involved, especially those not provided by traditional appraisers, whose valuations are still a necessary part of the eminent domain process;

Select and qualify the Counselor - recognizing his or her ability on the witness stand, not only in terms of past litigation support or reference checks with other attorneys, but also his/her real estate experience and reputation, particularly in the issues likely to be encountered in the case;

Define the assignment-customize and adapt the qualifications of the Counselor to the case, but also broaden to allow the Counselor to pursue avenues of knowledge and insight as they unfold, including full use of the Counselor's network of resources;

Question and challenge the Counselor-demand to be taught, not only to be in a position to present the Counselor and his or her insights and opinions, but also to learn and understand the Counselor's perspective of real estate in order to develop and best present the case in trial;

Seek strategic input from the Counselor-relating to the real estate issues involved; the approaches being considered in presenting the case; the other witnesses on both sides; the strategy and possible testimony of the other side; and cross examination; and,

Confidently present the Counselor as an integral part of the case-the real estate counselor can help the attorney tie the case together.

ATTRIBUTES OF A SUCCESSFUL EXPERT WITNESS

The needs of the litigator dictate the attributes required or desired in a real estate counselor to serve well as an expert witness. Expertise in the field of the particular litigation or property is essential, but that expertise alone is not all that is needed.

Not all real estate experts are well suited to be expert witnesses - not all are willing. Many experts do not want the exposure, potential conflicts, adversarial challenges of cross examination, and schedules subject to the timing of the judicial system. Many do not want to commit the time nor wish to appear in opposition to others in their own industry. Some cannot endure the frustration sometimes resulting from the legal process. Properly executed litigation support is demanding work - detailed, thorough, and tedious, and frequently pursued solo during preparation. The expert needs to be able to testify thoroughly regarding his or her view and how he or she got there. Over reliance on subordinates or detachment from the discovery and analyses can be catastrophic in cross examination.

Obviously, credentials such as education, experience, and professional acceptance and recognition provide a key foundation. They are the trappings and initial measures of the counselor's expertise. However, such credentials must not be exaggerated or over-stated, or they can backfire. Rather, these credentials can be reinforced by the expert's testimony at trial.

Most important of all is an expert's credibility and the perception of that credibility by the judge and jury when on the stand. A lot depends upon the expert's confidence in his or her opinions and the foundation for those opinions. The expert should be perceived as fair and unbiased. The opposing counsel will try to negate, damage, or at least question that perception. That perception will be the ultimate measure of the Counselor's expertise as far as the trial is concerned. Perceptions become reality in the minds of the jury, just as they do in the real market place.

Good expert witnesses are committed to and comfortable with their role. They form firm opinions, demonstrably supportable and defendable. Expert witnesses should prepare thoroughly. An opinion based solely upon an egotistical view of their own competence likely will not stand up before a judge or a jury. Real estate counselors must be qualified to understand and perform the detailed and analytical studies, research, and investigations needed to form and support an opinion, soundly based upon years of experience as well as the data discovered. They are inquisitive, dig for more insight, and know where and what to look for in the investigation and preparation. They recognize the 'red' and 'yellow' flags. They stay current through education, professional participation, review of the current literature, maintenance of a network of professionals in real estate and related fields, and a diverse practice which increases and broadens experience. Experienced trial attorneys know the rules of litigation and the legal aspects of the cases they present. But real estate counselors serving as expert witnesses know real estate, their subject, too. Neither judge, jurors, nor attorneys are likely to know as much about many of the technical and practical aspects of real estate. Counselors, as real estate experts in the courtroom, grasp and present the big picture, yet can get into detail when needed. However, the expert witness recognizes that the attorney is the captain, the manager, and the quarterback. The expert witness surrenders a degree of control to the court and the attorneys - and shows respect for both. Good expert witnesses are not arrogant, yet have a deserved confidence in their competence and their opinion, because they are both knowledgeable and well prepared. These same attributes in turn help the attorney feel confident and well prepared. Capable experts do not stretch a weak point. They admit when they do not know an answer, rather than bluff. Effective experts communicate with the judge and jury, demonstrating firmness in a courteous and non-abusive manner. They realize that perceptions of the jury and the judge can become reality. Expert witnesses teach, inform, and persuade, rather than sell.

Expert witnesses should not fear the challenges of the witness stand, including the adversarial questions of cross examination, and need to take the heat, the abuse, and the hostility, when it occurs. Cross examination can be an opportunity to find beneficial openings and reinforce key points. Most helpful openings occur with questions aimed to refute the expert's actual testimony and to challenge his or her opinions. The questions and the permitted answers deal with the facts and opinions in the case. The ability to recognize and capitalize on such openings and use them to broaden and reinforce the expert's testimony discourages further aggression from the opposing attorney. Other questions target the witness' credibility and reputation, often by inferring bias. Rates and compensation are often a prime target to imply prejudice. These are normal frontal challenges which should be anticipated. The capable expert witness prepares for such attacks and addresses them calmly.

THE ASSIGNMENT

Frequently, real estate counselors fill in the missing pieces of the puzzle, sometimes by taking the issues apart piece by piece and then putting them back together in a way that is easily understood. Counselors help the attorney tie together the overall picture, then portray a broader, more easily understood view. Counselors serve as real estate mentors teaching attorneys some of the unique real estate issues and the answers: for example, the varied factors affecting value in a condemnation case. Attorneys should demand such a learning opportunity.

Usually, the real estate counselor brings multiple areas of expertise and experience to litigation. Real estate counselors are not created from a single mold. Each applies his or her own education, experiences, and professional networks to the thought processes needed. CREs are diverse in their backgrounds and abilities, enabling an attorney to customize available advice and testimony, once they understand the particular CRE's talents.

Some CREs are also certified appraisers. Counseling can be conducted in conjunction with valuation testimony. However, some of the complementary benefits of the two separate roles in a complex case could be lost. The attorney may prefer to keep the real estate counselor, as an expert witness, from being limited by the previously established rules of appraisal, some of which have been subject to challenge.

Thus, in eminent domain cases, a counselor's assignments may exclude valuation but include providing input which provides a foundation and support for an appraisal being prepared by a recognized appraiser. Examples include highest and best use; factors affecting value; feasibility and economic viability of contemplated or proposed uses; and land or building economics, (including challenges and costs to develop, as well as the likelihood of success if developed). The assignment can also include the review of appraisals. "The counselor can help the attorney understand the premise on which an appraisal is based and its strengths and weaknesses; the counselor also apprises the attorney of mathematical errors, unrealistic assumptions, etc."2

Counselors can contribute and suggest challenges to the other side, possible rebuttals, and questions for cross examinations. These contributions can include critique and review of the other side's experts, including their reports, depositions, testimony, designs, and assumptions. The opposing testimony may suggest other countering witnesses for the counselor to recommend.

From a more positive view, the counselor, using the insight and knowledge gained, can help develop strategies for negotiations and settlements, which may save the costs of further litigation. The counselor often can provide an understanding of the other side's reasoning, motivations and concerns, strengths and weaknesses, and even their mistakes. However, settlement also may require the counselor to provide a candid evaluation that could differ from the client's perceptions, suggesting values which may be higher or lower.

APPROACHES AND METHODS

A broad list of the approaches and methods used to gather insight and draw conclusions reflects the comprehensiveness of investigation. While focus can be important, blinders are not appropriate. A generalized list of resources and approaches used by a counselor in an eminent domain engagement might include, but not be limited to, the following:

Property visits

Area tours

History of the property and area

Photographs

Documents

Property files

Transactions

Studies/Analyses

Research

Database search and review

Governmental agencies & officials

Ordinances & regulations

Tax appeals

Loan applications

Marketing efforts

Designs

Consultants

Engineers

Architects

Planners

Attorneys

Experience

Real estate networks

Repeated visits to the property and tours of the surrounding area broaden discoveries and deepen knowledge; they are essential to be ready for cross examination where lack of first-hand insight can be damaging. Some expert witnesses prefer to shoot their own photographs as field notes and future exhibits in order to capture what is needed; to significantly ease introduction; to support testimony; and to participate in exhibit selection and design. Candor and rapport with city and county officials, coupled with knowledge of what to seek in government documents and records, provide vital evidence and insight. Recent tax appeals and loan documents on income property can provide both insight and relevant data. The attorney and counselor may be looking for evidence of the propensity of a community to allow a change in use or deny the development of a property. Although it may seem remote, history of the subject property and the surrounding area can be very enlightening and can lead to further discoveries. Attorneys should encourage their experts' further investigation and pursuit of relevant evidence for preparation and trial, setting a tenor for expansion of resources and continued search. A final visit to the property and the surrounding area just before testimony at trial often results not only in reinforcement but also in additional discovery.

THE PROCESS - THE REAL ESTATE COUNSELOR AT WORK AS AN EXPERT WITNESS

Obviously, the attorney and the expert need to temper the depth of the process and preparation to cost-effectively match the magnitude of the case and the roles of other experts, while ensuring sufficient information and preparation to draw valid and supportable conclusions. The attorney can gain from understanding the stages of a real estate counselor's approach to a litigation engagement involving eminent domain. Although the approach to each case should be customized, the following outlines steps to pursue.

Stage I - Initialization: Starting the Process Consideration - The attorney determines the applicability of a particular real estate counselor as an expert witness. This requires a candid discussion of the case, the basic issues, the expert's credentials, and potential conflicts.

Engagement - Clear understandings are required about the objectives in engaging the expert; the working relationship between the attorney and the expert, as well as other experts in the case; and the expert's compensation and the party responsible for payment, particularly if it is a new relationship.

Assignment - Ideally, the assignment should be reasonably well-defined, but subject to further modification as investigation and discovery proceeds. Almost invariably, the scope will increase beyond that originally anticipated. Sometimes the Counselor is engaged initially as a consultant in support of the litigation, with the decision deferred until later on whether to use the Counselor as an expert witness. There are cases where the Counselor may be used for support and discovery, but not for testimony.

Stage II - Basic Foundation: Gathering the Initial Insight

Assemblage of the basic facts - This should include a preliminary understanding of the subject property. This view should incorporate the expert's basic real estate background; a property visit and inspection; initial review of property descriptions and data available from the attorney; and review of readily available documents. These documents could include such basics as USGS topographic maps; street maps; municipal or county ownership maps; zoning maps; municipal or county land use or comprehensive plans; agricultural soil mapping and reports; utility maps; and flood insurance maps.

Stage III - The Discovery Chain or Loop: Finding Facts and Reaching Opinions

Many of the most relevant facts and insights, as well as evidence and exhibits, come from this core part of the process.

Discovery of additional facts and insights Information can come from a number of sources. Examples include depositions, appraisals, municipal or county documents regarding the specific property or surrounding area, interviews with planning and zoning officials, analysis of proposed development, demographic studies and reports, etc. The Internet can provide a source for research which should not be overlooked.

Revisits to the subject property - Subsequent revisits to and photographing of the property and surrounding area frequently lead to new discoveries. Sometimes such visits are needed to further verify, explore, or expand upon insight gained elsewhere.

Review of and visits to comparable properties-Visiting and analyzing comparable properties used by the appraisers, especially the adversary's comparables, can shed some light and produce real ammunition.

Networking - Networks of other professionals and officials usually produce new information relevant to the case or suggest other areas for further exploration. Access to such networks of expertise is an invaluable asset provided by the real estate counselor which is greatly appreciated by the attorney.

Solo brainstorming - Some may view this as mental gymnastics. The process needs to fit the individual expert and his or her mental style but great rewards can come from this technique. Personal computers with word processing, spreadsheet, desktop publishing and graphics software, and Internet access can be most useful. Depending upon the case, this step could include calculations and analyses. After assembling as much insight as possible, often in outline format, the counselor can reorganize and rearrange such intelligence to coincide with mental paths, and look for 'connections' or 'mental leaps! Highlighting the most significant insights or returning to an outline helps, discarding that which may mislead or sideline direction. In this way, a path to opinions and conclusions can be forged.

Group discussions - Sharing of insight among the attorneys and other experts involved helps each participant understand, learn, confirm, and challenge. However, the potential brainstorming which could occur should be done only with the concurrence and guidance of the attorney. The attorney may wish to avoid direct communications between independent consultants before initial opinions are determined.

Exploring new channels - The foregoing steps will point to other sources to pursue for insight.

Repeats of the discovery chain - This consists of repeating all or parts of the above chain, as needed, in an iterative process, but without prejudgment. Once armed with the broader and more complete picture, new details and insights can become apparent.

Stage IV - Deposition Process: Being Discovered

The Deposition - The opposing attorney will try to determine the expert's conclusions and the basis for those conclusions, while also trying to box or confine the scope of later testimony at trial. Prior guidance from the witness' attorney can be important. The expert, in response, should limit the information disclosed in deposition to responses to the specific questions, not volunteering added insights, while trying to expand the dimensions of the assignment when the questions attempt to limit such scope. The witness should listen to the questions and avoid confirming any mis-characterizations of his or her testimony, which may be offered by the opposing attorney in the form of questions misleadingly restating the testimony. The witness can respond by carefully restating the testimony in his or her own words.

Review and correction - Recognizing that the transcript can be used to benefit the opposing attorney in trial, even in subsequent trials, the expert witness normally should not waive signature but rather review and correct the record. Reviews of depositions also can become tools to learn more about the other side and their strategy. (The witness should advise his or her attorney if his or her position subsequently changes, so the attorney can conform to court rules.)

Stage V- Trial Preparation: Preparing for the Witness Stand

Repeats of the discovery chain - If needed, this step can be beneficial.

Exhibit preparation - Visual aids can be great tools with which to inform, (and hopefully persuade), the judge and jury and serve as excellent reminders for the attorney and the expert. These may include photographs, maps, lists, demographics, calculations, tables, graphs, etc. The attorney will make the final selection, sometimes altered during the trial, and will plan his or her introduction and acceptance by the Court as identified exhibits for the record. In these days of computerbased geographic information systems, customized mapping can be economically available, sometimes through on-line services, through governmental agencies such as planning or assessor/revenue functions, or through some colleges and universities.

Organizing, outlining, and highlighting thoughts - This list can be mental or written, depending upon not only the expert's preferences, but more importantly, those of the attorney. If the list is a written outline, it should be sufficient to trigger key points, but not detailed enough to cause canned answers or provide a discoverable treasure map for the opposing attorney. The attorney may request a report to use in the trial. Whether using a report, outline, or neither, the expert witness still must know his or her subject thoroughly - an outline or report does not replace or relieve the need for the expert's knowledge. The expert's opinions and their foundation need to be firmly in his or her mind.

Stage VI - The Trial: The Culmination of the Process

Discovery during trial - The attorney can call upon the expert for counsel or for further pursuit and discovery as a result of testimony brought out during other parts of the trial.

Direct examination - The witness responds to the questions from his or her attorney. This is the expert's opportunity to teach using his or her expertise by presenting facts uncovered and opinions formed during the foregoing steps of this process. However, the court has different rules than the classroom - this is not an opportunity to lecture beyond the scope of the questions asked by the attorneys. The judge sets the rules and the attorney calls the plays. A firm and courteous manner creates positive perceptions in the minds of both the judge and the jury, thereby reinforcing credibility.

Cross examination - The opposing attorney tries to refute the evidence offered by the expert or to damage the expert's credibility. The expert witness, aided by the attorney, should anticipate the areas of cross examination and possible lines of questioning. Cahn, solid answers to opposing counsel enhance credibility. Again, the expert listens carefully to the questions. Expert witnesses are entitled to explain their answers and should not compromise their concluded opinions nor accept any mis-characterizations of their testimony. From a positive perspective, reinforcement of key points through answers to questions from opposing counsel discourages further aggression. Cross examination maybe followed by redirect examination by the client's attorney to help draw out and frame those answers and to take further advantage of openings which may appear during cross examination.

WHY A COUNSELOR OF REAL ESTATE (CRE)?

The growing need for real estate counselors in litigation, including eminent domain, results from the expanding infrastructure and redevelopment of our cities, coupled with the increasing complexities of modem day real estate and its valuation. An experienced counselor provides added flexibility to customize the preparation and presentation of a case. While not all are suited and not all are willing, many times appropriately qualified real estate counselors provide the needed attributes. However, they must be disciplined to the challenges and rigors of such litigation and be comfortable with that role. Ultimately, credibility becomes the real key in the courtroom. Commitment and adherence to the Code of Ethics and the Standards of Professional Practic& of The Counselors of Real Estate provide an excellent foundation.