Opposition Brief — Davenport v. United States

Gu the Supreme Gourt of the United States

OctToBER TERM, 1970

No. 1489

LAWRENCE C,. DAVENPORT, ET UX., PETITIONERS

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION

The opinion of the court of appeals (Pet. App. A)

is reported at 436 F. 2d 395. The report of the com-

mission (Pet. Supp. App. 1-10) and the district .

court’s order affirming that report (Pet. Supp. App.

11-12) are not reported.

JURISDICTION

The judgment of the court of appeals was entered

on December 22, 1970. The petition for a writ of cer-

tiorari was filed on March 19, 1971. The jurisdiction

of this Court is invoked under 28 U.S.C. 1254(1).

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QUESTIONS PRESENTED

1. Whether the court of appeals correctly held that,

on the record in this condemnation case, project-

created enhancement must be considered in fixing the

value of the remainder because such enhancement was

a special and direct benefit to the remainder.

2. Whether the court of appeals properly deter-

mined the issue of just compensation in the circum-

stances of this case.

3. Whether petitioners’ rights were violated because

the estimated just compensation deposited by the

government with the district court before trial was

greater than the value proved by the government

at the trial.

STATEMENT

In this condemnation action the government sought

to acquire for use in connection with the J. Percy

Priest Dam and Reservoir Project on the Stones

River in Tennessee fee title to 144.8 acres of a 218.8-

acre tract owned by petitioners.

Petitioners originally owned some 170 acres in the

project area, all of which initially was to be taken by

the government. Subsequently it was determined that

only the 144.8 acres here in issue would be needed,

and thus petitioners would be left with a 24.85-acre

remainder. After announcement of the project but

before filing of the declaration of taking, petitioner's

acquired an adjoining 49-acre tract and thereby pro-

vided road access for the 24.85-acre remainder. As a

result of this acquisition petitioners owned approxi-

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mately 74 acres following the taking (Pet. App. A17,

Pet. Supp. App. 3-4).

The 74-acre remainder was contiguous to the proj-

ect. While no private lands were to front on the

reservoir, petitioners’ remainder would overlook the

reservoir with an unobstructed view (Pet. App. A17).

One of the petitioners (Mr. Davenport), an expert

for them, and a government expert testified concern-

ing the values of the original tract before the taking

and of the remainder tract after the taking. Mr. Daven-

port estimated the before value at $155,000, and the

value of the remainder at $5,000. However, he did not

include in his computations the recently acquired

49-acre tract, and admitted that he based his estimates

on a personal rather than a market standard. Accord-

ingly the commission discredited his testimony (Pet.

Supp. App. 7). Petitioners’ expert estimated the be-

fore value at $109,000 and the after value at $4,600.

He, too, omitted from his estimates the 49-acre tract

and did not support his valuation with comparable

sales, and his testimony was largely disregarded by

the commission (Pet. Supp. App. 7-8).

The government’s expert was an appraiser-employee

with the government exclusively assigned to appraise

properties in the project area, which he had been do-

ing for some four years prior to the commission hear-

ing. He testified to a before value of $80,000 and an

after value of $30,000, supported in each instance by

comparable sales. He included the 49-acre tract in his

deliberations, and also considered project-created en-

hancement in valuing the remainder. The commission

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found his before value testimony highly useful. But it

determined that any project enhancement was only gen-

eral and thus should not have been considered in estimat-

ing the remainder’s value; it therefore rejected the

witness’ after valuation (Pet. Supp. App. 4-5, 8-10).

On this record the commission fixed the before value

of the entire 218.8-acre tract at $97,000, and the after

value of the 74-acre remainder tract at $24,600; it

awarded petitioners the difference ($72,400) as just

compensation for the land taken (Pet. Supp. App.

10). The commission did not, however, indicate the

basis for its ultimate findings of value. The district

court summarily affirmed (Pet. Supp. App. Al1-12).

The court of appeals reversed (Pet. App. A). That

eourt concluded first (Pet. App. A20) that because

the commission had not specified the basis for its

valuation of the entire tract before taking, that valua-

tion could not stand under United States v. Merz, 376

U.S. 192. It then held that the asserted project-created

enhancement was special and direct, not general, and

hence that the commission ‘‘erred factually and

legally’? in not considering evidence relating to the

enhancement (Pet. App. A21-24). Because the only

probative evidence as to both the before and the after

valuations was that of the government’s expert, the

court remanded the case to the district court under 28

U.S.C. 2106 with instructions to enter judgment in

accordance with that evidence (Pet. App. A25-29).

ARGUMENT

1. Petitioners contend (Pet. 7-12) that the court

of appeals incorrectiy held on the record before it that

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the remainder tract was benefited by special and direct

project-created enhancement that had to be considered

in determining the value of that tract.

The just compensation requirement of the Fifth

Amendment is fully satisfied when the property owner

from whom property is taken is “put in as good a posi-

tion pecuniarily as if his property had not been

taken.’’ Olson v. United States, 292 U.S. 246, 255. In

making this determination, the government and the

courts properly take into account value created by the

project for which the taking is made. United States v.

Reynolds, 397 U.S. 14, 16; United States v. Cors, 337

U.S. 325, 332-334; United States v. Miller, 317 U.S.

369, 376. “[I]f the taking has in fact benefited the

remainder, the benefit may be set off against the value

of the land taken.” United States v. Miller, supra, 317

U.S. at 376. This principle has been codified by Con-

gress in the Rivers and Harbors Act of 1918, 40 Stat.

904, 33 U.S.C. 595, which directs that ‘“‘any special and

direct benefits to the remainder from the improve-

ment’’ shall be taken into account “by way of

reducing the amount of compensation or damages”’

(see Pet. App. A20).

There is no quarrel here with this well-established

rule, but only with its application to the facts of this

case. This issue, which in any event does not warrant

review by this Court, was correctly decided by the

court of appeals. Uncontradicted market evidence es-

tablished that the project had directly enhanced the

market value of the lands surrounding the project.

Indeed, petitioners’ purchase of the 49-acre tract after

announcement of the project itself indicated that en-

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hancement had occurred. Petitioners paid $408 per

acre for this tract, substantially in excess of the pre-

project market data and approximately the per-acre

value of the remainder determined by the govern-

ment’s expert ($404). On these facts the court of

appeals rightly held that the enhancement to the re-

mainder was special and direct, and had to be con- ,

sidered in fixing its value.

2. Nor is there substance to petitioners’ claim (Pet.

5-7) that the court of appeals improperly ‘‘tried the

issue of just compensation de novo”’ by directing that

judgment be entered for the highest amount sup-

ported by the only testimony of probative value. The

commission disregarded the valuations proferred by

Mr. Davenport and his expert. The market informa-

tion and valuations supplied by the government’s ex-

pert, on the other hand, were ‘‘very helpful;’’ the

commission in fact relied on his before values, and

discarded the after values only because of its mis-

taken view as to the enhancement issue (see Pet.

Supp. App. 9). The court of appeals did not reweigh

the evidence and determine anew the factual questions

involved, but rather merely accepted the commission’s

determination as to the relative weight of that evi-

dence. The government’s experi was the only witness i

whose testimony the commission credited. Once the

commission’s error on the enhancement issue was rec-

tified, that testimony was correct on both the before

and the after valuations, and was the only competent

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evidence on these matters. The court of appeals, there-

fore, properly exercised its powers under 28 U.S.C.

2106 in ordering that judgment be entered in accord-

ance with that evidence. United States v. Eaton, 169

U.S. 331, 352; Westchester Fire Ins. Co. v. Hanley,

284 F. 2d 409, 418 (C.A. 6), certiorari denied, 365

U.S. 869. See, also, United States v. Pope & Talbot,

Inc., 293 F. 2d 822 (C.A. 9); ef. Umted States v. 44.00

Acres in Town of Greece, 234 F. 2d 410 (C.A. 2), cer-

tiorari denied sub nom. Odenbach v. United States, 352

U.S. 916.

3. There was no unfairness to petitioners because

the government presented at trial evidence of a value

that was less than estimated just compensation it had

previously deposited with the court. A deposit of esti-

mated just compensation is required by the Declara-

tion of Taking Act, 46 Stat. 1421, 40 U.S.C. 258a, the

purpose of which is to afford condemnees immediate

eash relief and the government immediate possession

and defeasible title. Wnited States v Miller, supra, 317

U.S. at 381; In re United States, 257 F. 2d 844 (C.A.

5), certiorari denied sub nom. Certain Interests in Hills-

borough County, Florida v. United States, 358 U.S. 908.

The Act requires only a deposit of estimated compensa-

tion, and that estimate is not even admissible as evidence

of the compensation due. See Evans v. United States,

326 F. 2d 827, 829-830 (C.A. 8); Chapman v. United

States, 169 F’. 2d 641 (C.A. 10), certiorari denied, 335

U.S. 860. The amount of the deposit was thus irrelevant

to the issues in this case,

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CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be denied.

Respectfully submitted.

ERWIN N. GRISWOLD,

Solicitor General.

SuHiro KasHiwa,

Assistant Attorney General.

RaYMOND N. ZAGONE,

J ACQUES B. GELIN,

Attorneys.

Aprit 1971.

U.S. GOVERNMENT PRINTING OFFICE: 1971