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We are unconvinced that Biles, an Arkansas appraiser who
performed only a “desk review” of the Ohrmund report and who
testified that he had never even spoken with Ohrmund about it,
was in a better position that Ohrmund, a California appraiser, to
make the key economic assumptions required for applying the
income approach in valuing the California motel. Indeed, leaving
aside faulty assumptions regarding the ownership of parcel 2 (a
matter in which the Ohrmund report and the Biles report are both
guilty, though differently), we generally found the Ohrmund
report to be better explained, better supported, and more
convincing than Biles’ “desk review” of it. Both petitioner’s
other expert, Schwartz, and respondent’s expert, Smith, utilized
Ohrmund’s report without expressing any reservations as to its
methodology.
In sum, we are unpersuaded by Biles’ conclusion that the
value of the California motel was only $819,000.6 Although it
may be true, as petitioner contends, that the divided ownership
of parcel 2 impaired the value of the California motel to some
degree, Biles’ report–-which does not purport to separately
identify the effects of the “clouded title” on the California
6 Even if we were to assume, for sake of argument, that the
Biles report appropriately adjusted the Ohrmund report’s
application of the income method of valuation, the Biles report
nevertheless fails to address the two other valuation methods
(the sales comparison method and cost method) that the Ohrmund
report also applied and correlated in reaching its final
valuation estimate.
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