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comparable sales approach that functionally equivalent systems
could be purchased and installed for $21,925. Finally, Messrs.
Benn and Pooch applied an income approach, capitalizing the
stream of income to HSN that might be derived from the use of the
Local Software. Under this approach, however, Messrs. Benn and
Pooch concluded that the capitalized income stream had no effect
on the final fair market value determination, because the income
stream was indeterminate. Overall, respondent’s experts
concluded that the Local Software had a value of $58,394.12
Mr. Putnam, upon whose work the VALPRO model relies, stated
in his rebuttal report that his work was taken out of context and
inappropriately applied. Mr. Putnam also noted that he compared
the valuation of Messrs. Benn and Pooch with actual cost data on
12Respondent argues on brief that the value should be only
$42,192 after eliminating duplicate lines of code and programs
that were added to the Local Software after June 21, 1985, and
set out the revised calculations in appendices attached to her
brief. Appendix 1 was prepared by Mr. Benn and appears to be an
amendment to his valuation report. (This would actually
constitute a second amendment, since an amendment to his report
was admitted during the trial.) Appendices 2-4 were prepared by
agents of respondent and set forth a summary of the parsed
software, duplicate lines of code, and programs added after June
21, 1985. On Apr. 21, 1995, petitioners filed a Motion to Strike
Portions of Brief for Respondent, asking this Court to strike
these appendices as an improper attempt to introduce evidence
after the record was closed. We agree. Allowing respondent’s
experts to amend their report after the record is closed would
unfairly prejudice petitioners, as petitioners did not have the
opportunity to rebut or cross-examine respondent’s experts with
respect to these additional matters. Moreover, the agents who
prepared appendices 2-4 were not identified as witnesses in
respondent’s trial memorandum and did not testify in this case.
We, therefore, grant petitioners’ Motion to Strike Portions of
Brief for Respondent.
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