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Aube v. Aube, 94-1451 (1994)

Court: Court of Appeals for the First Circuit Number: 94-1451 Visitors: 28
Filed: Nov. 08, 1994
Latest Update: Mar. 02, 2020
Summary: November 8, 1994 [NOT FOR PUBLICATION] UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT ____________________ No. 94-1451 ROBERT AUBE, Plaintiff, Appellant, v. CYNTHIA AUBE, Defendant, Appellee. On review, the district court summarily sustained the bankruptcy court, and this appeal followed.
USCA1 Opinion









November 8, 1994 [NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT


____________________

No. 94-1451

ROBERT AUBE,

Plaintiff, Appellant,

v.

CYNTHIA AUBE,

Defendant, Appellee.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Francis J. Boyle, U.S. Senior District Judge] __________________________

____________________

Before

Torruella, Chief Judge, ___________

Boudin, Circuit Judge, _____________

and Keeton,* District Judge. ______________

____________________

Kris Macaruso Marotti with whom Thomas A. Tarro III and Fortunato _____________________ ____________________ _________
& Tarro were on brief for appellant. _______
J. Ronald Fishbein for appellee. __________________


____________________


____________________


____________________

*Of the District of Massachusetts, sitting by designation.













Per Curiam. On November 19, 1982, Robert Aube entered __________

into a 50-year lease for a 7.7-acre tract of undeveloped land

in Foster, Rhode Island, with his now deceased father, Frank

Aube. Frank Aube leased the 7.7 acres to his son for an

annual rent of $10, payable on the first business day of each

December starting on December 1, 1982. The leased land was

part of a larger piece of property owned by the senior Aube

consisting of 77 acres and including a house and a pond.

Robert Aube used the land to operate a plant nursery

from 1983 to 1987. In preparing for the nursery, Robert Aube

made several improvements to the property, including clearing

four acres of the undeveloped land, installing two wells and

an irrigation system, and constructing a greenhouse and a

barn. In 1987 Robert Aube stopped operating the nursery

because it was unprofitable, at which point he sold some of

the nursery equipment and disconnected the plumbing and

electricity to the greenhouse. Thereafter, Robert Aube

returned to the nursery every six or eight months to check on

its condition or to pick up various items he had stored

there.

In 1987 Frank Aube filed for Chapter 11 bankruptcy along

with his wife, Cynthia Aube, who is Robert Aube's step-

mother. Frank Aube died in December 1990. During the course

of bankruptcy proceedings in 1992, the trustee of Frank

Aube's estate filed an intended notice of sale to sell the



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entire 77-acre parcel, including the 7.7 acres. Robert Aube

objected to the sale, arguing that he had a valid interest in

the 7.7 acres for the remaining 40 years of the lease.

On October 2, 1992, at the hearing on Robert Aube's

objection, the bankruptcy court approved a payment of $33,000

to Robert Aube. In exchange, Robert consented to sale of the

property, which was then sold with a clear title for

$270,000. During the hearing, it was also agreed that a

further hearing would be held to determine what additional

amount, if any, Robert should receive to compensate him for

his interest. If that interest was less than $33,000, Robert

Aube was still entitled to keep the $33,000 already paid.

In April 1993, the bankruptcy court heard two days of

testimony concerning Robert Aube's claim for damages. Robert

Aube treated the lease as having been rejected by the trustee

in bankruptcy. See 11 U.S.C. 365. He then offered expert ___

testimony that the fee value of the 7.7 acres as improved was

approximately $70,000. The expert was also prepared to

testify that, on a somewhat different basis, the fee and

improvements represented $126,000. This latter figure was

adduced only as an offer of proof. In the course of the

hearings, Robert Aube testified that he had no precise

recollection as to when and where he had made the required

$10 per year payments to his father, although he said that he

was confident that he had made them at different times when



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he and his father chanced to be together. He did testify

that a final payment had been tendered by a check to Cynthia

Aube, but this occurred after Frank Aube's death, and the

check was not accepted. No receipts had been obtained for

any of the payments.

On December 16, 1993, the bankruptcy court issued a

decision and order that rejected Robert Aube's claim to any

amount beyond the $33,000 already obtained. The court said

that it did not credit Robert Aube's testimony that he had

made the lease payments and concluded that Robert Aube's

breach precluded his own suit for damages. The court also

ruled, in the alternative, that damages had not been properly

proved because damages had to be based on the value of the

leasehold interest and not on the replacement cost of the

premises as improved. On review, the district court

summarily sustained the bankruptcy court, and this appeal

followed.

In our view, the bankruptcy court permissibly rejected

the expert's testimony, and we affirm on that ground without

reaching the question whether the lease was terminated

because of Robert Aube's supposed failure to make payments.

The problem with the expert's testimony arose at the outset

when he said that he had not been able to value directly the

leasehold interest Robert Aube possessed in the 7.7 acres in

question. Apparently the expert was unable to find



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comparably improved rental property and was therefore unable

to use comparable rental transactions to measure the value of

the lease. This in turn led the expert to attempt to

determine what it would cost, starting from scratch, to

acquire unimproved land then to duplicate the improved

property that Robert Aube had ultimately possessed.

Over many objections and several adverse rulings, the

expert ultimately managed to testify that he thought that the

value of the 7.7 acres with improvements was approximately

$70,000. He was not allowed to testify, but an offer of

proof was submitted, as to a somewhat different computation

that added the replacement cost of the improvements taken

individually to annual rent for the land aggregated over a

40-year period. The total was $126,000. Our view of the

evidence is somewhat different than the view taken by the

bankruptcy judge but leads us to the same result.

As we read the expert's testimony it was a morass of

unexplained and inconsistent statements, due in no small

measure to the way in which the testimony was adduced. At

first, he appeared to say that he could not testify to the

leasehold interest. Then he offered two different figures--

$70,000 (in testimony) and $126,000 (through the offer of

proof)--apparently using the cost of the improvements as an

element in both figures but never clearly explaining the

reasons for the different treatment.



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In addition, the $70,000 figure was apparently offered

as the fee value of the improved property, not the value of

the use of the property for 40 years, although one could read

the expert's testimony as taking different positions on this

issue at different points. The $126,000 figure, which

seemingly valued the land based on 40 years of aggregated

rent, also treated the improvements as if they were owned by

Robert Aube instead of being located on rented land that

would eventually revert.

We do not see how the cost of specific improvements made

to facilitate a business that later failed could, without

more explanation, provide a reliable basis for the valuation

of property; nor do we understand how any valuation--whether

for part or all of the property--could rest on the premise

that Aube owned the land or improvements outright when at

most he possessed a 40 year lease. If there is any answer to

these flaws, both of which seem to have concerned the

bankruptcy judge, the answer is not evident from the

testimony.

If we thought that a miscarriage of justice had occurred

because of confusion in the presentation of the expert's

testimony, we might be inclined to seek some solution other

than outright affirmance. In this instance, however, we take

note of the bankruptcy judge's final observation that the

"entire 77 acre parcel of property (which included a



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substantial house) sold for $270,000 . . . ." Absent some

other explanation, one might think that Robert Aube's $33,000

amply compensated him--indeed overcompensated him--for the 10

per cent of the property for which (at best) he held a 40-

year lease.

Affirmed. ________









































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Source:  CourtListener

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