Free Response - District Court of Arizona - Arizona

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PAUL K. CHARLTON United States Attorney District of Arizona SUE A. KLEIN Assistant U.S. Attorney Arizona State Bar No. 11253 Two Renaissance Square 40 North Central Ave., Ste. 1200 Phoenix, Arizona 85004-4408 Telephone: (602) 514-7500 E-mail: [email protected]

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA United States of America, Plaintiff, v. 192.019 Acres of Land, more or less, located in Yuma County, State of Arizona; Glen G. Curtis, Trustee of Curtis Family Trust; Sam Perricone, Trustee of Amended and Restated Declaration of Revocable Trust of Sam Perricone and Mary Louise Perricone; Earl O. Zion and Esther E. Zion; Yuma County Tax Assessor, Yuma Hospital District No. 1; Yuma County Citrus Pest Control District; Yuma County Pest Abatement District; Yuma County Flood Control District; Farm Credit Services Southwest; Intangible property rights, Yuma Mesa Irrigation and Drainage District; and Unknown Owners, Defendants. Plaintiff, United States of America, hereby files its response to Defendants' Objection to the

CIV-03-2006-PHX-SRB

RESPONSE TO DEFENDANTS' OBJECTION TO PROPOSED FORM OF JUDGMENT

21 Proposed Form of Judgment. Defendants assert that the forms of Judgment are deficient in that 22 they do not provide for interest on the amounts previously withdrawn. The United States asserts 23 that interest is not due on such amounts. 24 The Declaration of Taking Act provides "that judgment shall include interest, in accordance 25 with § 3116 of this title, on the amount finally awarded as the value of the property as of the date 26 of taking and shall be awarded from that date to the date of payment. Interest shall not be 27 allowed on as much of the compensation as has been paid into the Court. The amounts paid into 28 the Court shall not be charged with commissions or poundage." 40 U.S.C. § 3114(c)(1).

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1 Defendants claim that the plaintiff delayed withdrawal of the initial deposit and, therefore, 2 defendants are entitled to interest on those amounts as well. The plaintiff disagrees. These cases 3 were filed on October 16, 2003. With the filing of the initial Complaint and Notice of 4 Condemnation, the United States filed a Motion for Order for Delivery of Possession pursuant 5 to 40 U.S.C. § 3114(d)(1). The Order for Delivery of Possession in United States v. 192.019 6 Acres was signed on November 4, 2003, and the Order for Delivery of Possession in United 7 States v. 33.845 Acres was signed on December 4, 2003. Orders for possession are typically 8 included in the service packet along with the Notice of Condemnation, when the cases are 9 served. Therefore, the United States does not typically begin service until receipt of the signed 10 Orders for Delivery of Possession. Service on interested parties began shortly after receipt of 11 the signed Orders for Delivery of Possession. Defendants themselves did not file an answer or 12 appear in the United States v. 192.019 Acres case until December 31, 2003, and in the United 13 States v. 33.845 Acres case until January 2, 2004. However, defendants did file a request to 14 withdraw funds in the United States v. 192.019 Acres case on December 9, 2003. 15 In United States v. 192.019 Acres it was necessary to serve Earl an Esther Zion by

16 publication. Once the Order for Delivery of Possession was entered, the United States filed a 17 certificate to allow service by publication on November 20, 2003. The United States also 18 provided information necessary for notice by publication to the Yuma Daily Sun beginning on 19 November 13, 2003. On December 1, 2003, the United States returned the final galley proof to 20 the Yuma Daily Sun for publication. The Notice was published for three consecutive weeks and 21 after receipt of the Publisher's Affidavit, the United States filed a Certificate of Publication on 22 January 15, 2004, indicating that service by publication was complete. The time between the 23 entry of the Order for Delivery of Possession and completion of service by publication was 24 approximately six weeks, a reasonable time period to complete such notice and service. 25 Additionally, on November 24, 2003, the Yuma County Treasurer filed an Answer and

26 Claim of Interest in United States v. 192.019 Acres. On December 18, 2003, the Yuma County 27 Treasurer filed a Disclaimer. A response to defendants' initial motion to withdraw funds was 28
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1 filed by the Yuma Mesa Irrigation and Drainage District (YMIDD) on December 15, 2003, and 2 by the United States on December 22, 2003. Given that electronic case filing was not utilized 3 by the District Court at this time there is a likelihood that these pleadings may have crossed in 4 the mail. The Yuma County Treasurer did not file a Disclaimer in United States v. 33.845 Acres 5 until January 9, 2004. The United States did not intentionally delay serving the Complaints in 6 these cases or in asserting its position that other interested parties may claim some or all of the 7 compensation on deposit with the Registry of the Court. 8 Defendants withdrew a majority of the compensation in both cases, the orders allowing such

9 withdrawal took into consideration the potential interest of the YMIDD. Upon resolution of the 10 claim of the YMIDD, the remaining funds on deposit with the Court in both cases were 11 disbursed to defendants with interest which accrued while those funds were on deposit with the 12 Registry of the Court. 13 The estimated just compensation which was deposited with the Registry of the Court for

14 both of these case is an estimate for all property interests condemned. "...when the government 15 exercises its power of eminent domain, it compensates the people who have possessory interests 16 in the seized land under the so-called `undivided fee rule.' The undivided fee rule essentially 17 operates by permitting the governmental authority to condemn property by providing just 18 compensation, then allowing the respective interest holders to apportion the award among 19 themselves, either by contract or judicial intervention." United States v. 1.377 Acres, 352 F.3d 20 1259, 1269 (9th Cir. 2003). In this case, the Declaration of Taking indicated that not only did the 21 Curtis entities have an interest in the property, but also the YMIDD as well as several other 22 governmental, quasi-governmental, taxing authorities and other individuals. The Declaration 23 of Taking also provided the amount of the government's estimated just compensation. That 24 amount was deposited into the Registry of the Court which utilizes interest bearing accounts for 25 its funds. 26 27 28
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1

The Declaration of Taking Act prohibits the award of interest on funds deposited with the

2 court as estimated just compensation. 40 U.S.C. § 3114(c)(1). "Absent affirmative acts of 3 delay, the government may not be required to pay interest for the period between its deposit and 4 the landowner's disbursement motion or for the period between the court's disbursement order 5 and the actual disbursement by the registry." United States v. 50.50 Acres of Land , 931 F.2d 6 1349, 1353 (9th Cir. 1991). In these cases, the government did not engage in such affirmative 7 acts as would impose interest on the amounts deposited from the date of the deposit to the date 8 of distribution. In these cases, the government pointed out that there were other potential 9 interested parties who were claiming some of the proceeds, specifically YMIDD and the Yuma 10 County Treasurer. 11 Defendants indicate that the YMIDD's initial response was merely one sentence which

12 objected to distribution of any of the compensation to defendants. YMIDD's subsequent 13 responses provided more detail. However, as previously mentioned, YMIDD was listed as an 14 interested party in the Complaint, Notice of Condemnation and Declaration of Taking. 15 YMIDD's interests and their objection to their distribution to defendants is not an affirmative 16 act of delay caused by the government. Likewise, as previously explained above, the Yuma 17 County Treasurer initially filed a claim of interest for property taxes. While those property taxes 18 were apparently subsequently paid, at the time of the initial briefing on the motion to withdraw 19 funds, that interest was still outstanding. Again, this is not an affirmative act of delay on the part 20 of the government. The majority of the funds on deposit with the Court were distributed to 21 defendants pursuant to the Court's Order of April 1, 2004. The remaining funds were distributed 22 to defendants in October of 2005, within a month after defendants filed their motion to withdraw 23 the remaining funds. The funds remaining on deposit with the Registry of the Court were 24 distributed with interest. 25 The United States is not obligated to pay interest on the deposit where any delay is caused

26 by factors such as the complexity of the interest in a single tract. United States v. 50.50 Acres 27 28
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1 of Land, 931 F.2d at 1354. The time necessary to make such a determination is not an 2 affirmative act of delay on the part of the government. 3 WHEREFORE, the United States respectfully requests that the Court deny defendants'

4 objection to the proposed form of judgment and enter the form of judgment submitted by the 5 United States which provides for the payment of interest on the deficiency from the date of 6 taking, October 16, 2003, to the date of deposit of the deficiency into the Registry of the Court. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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Respectfully submitted this 21st day of September, 2006. PAUL K. CHARLTON United States Attorney District of Arizona s/Sue A. Klein ____________________________ SUE A. KLEIN Assistant U.S. Attorney

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1 2 3 4 5 6 7 Weil & Weil
John A. Weil Attorneys at Law

CERTIFICATION I hereby certify that on September 21, 2006, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:

8 1600 S. Fourth Ave., Ste. C 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
6 Yuma, Arizona 85364
s/Nancy Stotler

_____________________

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