Free Pretrial Order - 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] JOHN A. WEIL Arizona State Bar No. 005621 Weil & Weil, PLLC 1600 S. Fourth Avenue, Ste. C Yuma, Arizona 85366-1977 Telephone: (928) 783-2161 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. Pursuant to the Scheduling Order previously entered, the following is the Joint Proposed CIV-03-2006-PHX-SRB

JOINT PROPOSED PRETRIAL ORDER

25 Pretrial Order to be considered at the final Pretrial Conference set for July 24, 2006 at 10:30 a.m. 26 before Judge Bolton.

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A.

TRIAL COUNSEL FOR THE PARTIES Plaintiff: Sue A. Klein, Assistant U.S. Attorney, Two Renaissance Square, 40 N.

3 Central Avenue, Ste. 1200, Phoenix, Arizona 85004-4408, phone: (602) 514-7740, fax: (602) 4 514-7760 5 Defendants: John A. Weil, Weil & Weil, PLLC, Attorneys at Law, 1600 S. Fourth

6 Ave., Ste. C, Yuma, Arizona 85364, phone: (928) 783-2161, fax: (928) 783-6082. 7 8 B. STATEMENT OF JURISDICTION/VENUE Jurisdiction is proper in this case pursuant to 28 U.S.C. § 1358 (Eminent Domain) and

9 40 U.S.C. § 3114 (Declaration of Taking Act). Venue is proper pursuant to 28 U.S.C. § 1403. 10 11 C. NATURE OF CASE This is an action for eminent domain. The United States acquired 33.845 acres of land

12 owned by Defendants in Yuma County, Arizona, commonly referred to as the "Bend Ranch," 13 for the expansion of the Yuma Marine Corps Air Station. The property was acquired on October 14 16, 2003, by the filing of the Complaint, Notice of Condemnation, Declaration of Taking, and 15 deposit of estimated just compensation with the Court. The issue to be determined at trial is the 16 amount of just compensation, measured by the fair market value on the date of taking, to be 17 awarded to the defendant landowners in this case. 18 19 D. JURY/NON-JURY A jury trial has been requested by the defendants pursuant to Fed R. Civ. P. 38(b) and

20 71A(h). Plaintiff does not object to the jury demand. 21 22 E. CONTENTIONS OF THE PARTIES

When the United States condemns a piece of property, the owners are entitled to "just

23 compensation," which is generally measured by the fair market value of the property taken. 24 United States v. 429.59 Acres of Land, 612 F.2d 459, 462 (9th Cir. 1980). The proper date to 25 determine this value is the date the Government takes the property, which in these cases in 26
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1 October 16, 2003, the date of the filing of the Complaints in Condemnation, Notices of 2 Condemnation and Declarations of Taking. United States v. Miller, 317 U.S. 369, 374 (1943); 3 United States v. 100 Acres of Land, more or less, in Marin Cty., State of California, 468 F.2d 4 1261, 1267 (9th Cir. 1972). The only issue for trial is the amount of just compensation to be 5 awarded for the property acquired. United States v. Reynolds, 397 U.S. 14, 20 (1910); 6 Fed. R. Civ. P. 71A(h). All other issues are to be determined by the Court. In condemnation 7 actions, the Court's role is much broader than in a conventional jury trial. United States ex rel. 8 TVA v. Powelson, 319 U.S. 266, 273 (1943). The fair market value means the price in cash or 9 its equivalent that the property would have brought at the time of the taking, considering its 10 highest and most profitable use, if then offered for sale in the open market with a reasonable time 11 allowed to find a purchaser. United States v. 174.12 Acres of Land, 671 F.2d 313 (9th Cir. 1982). 12 It is the "price which a reasonable seller who decides to sell but is not required to sell would 13 demand for the property and, the price which a reasonable buyer who desired to buy but was not 14 required to buy would pay for the same." United States v. 429.59 Acres of Land, 612 F.2d 459, 15 462 (9th Cir. 1980). The highest and best use is that use, not necessarily the present use, which 16 would give the property its highest value on the date of taking and that may be anticipated with 17 such reasonable certainty that it would enhance market value. United States v. Twin City Power 18 Co., 350 U.S. 222 (1956). Highest and best use is the highest and most probable use for which 19 the property is adaptable and needed or likely to be needed in the reasonably near future. Olson 20 v. United States, 292 U.S. 246, 255 (1934). Any alteration in the market value of the property 21 being acquired that is attributable to the announcement of the project for which it is being 22 acquired must be disregarded. United States v. Reynolds, 397 U.S. 14, 16-17 (1970). However, 23 the United States must pay only for what it takes and not for opportunities which the owner may 24 lose. United States ex rel. TVA v. Powelson, 319 U.S. 266, 282 (1943). The burden of proof is 25 on the landowner to establish by a preponderance of the evidence the fair market value of the 26
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1 property at the date of the taking. United States v. 429.59 Acres of Land, 612 F.2d 459, 462 (9th 2 Cir. 1980). In order to establish fair market value, the law permits an owner of property to 3 testify as to the fair market value at the time of the taking and the landowner may submit 4 testimony of an expert who is qualified to appraise the condemned property. United States v. 5 429.59 Acres of Land, 612 F.2d 459, 462 (9th Cir. 1980). In determining the fair market value 6 of the property, the jury may consider not only the opinions of the owner and experts but also 7 all other evidence in the case which may aid in determining market value, such as location of the 8 property, the surroundings and general environment, any peculiar suitability of the property for 9 particular uses, and the reasonable probabilities as to future potential uses, if any, for which the 10 property was suitable or physically adaptable. United States v. 429.59 Acres of Land, 612 F.2d 11 459, 462 (9th Cir. 1980). 12 These cases involve a total taking and the parties agree that considerations of severance

13 damages or special benefits are not applicable. 14 15 16 17 18 19 F. The parties' contentions regarding just compensation are as follows:
A. Case No. CV-03-2006-PHX-SRB (Velda Ranch and 14th Street Ranch) 1. Owners' contention: $30,000 per acre, rounded to $5,761,000.00 2. Government's contention: $12,500 per acre, rounded to $2,400,00.00

STIPULATIONS AND UNDISPUTED FACTS 1. The United States acquired a fee interest in 192.019 acres from Glen T. Curtis,

20 Trustee of the Curtis Family Trust and Sam Perricone, Trustee of Amended and Restated 21 Declaration of Revocable Trust of San Perricone and Mary Louise Perricone, by filing a 22 Declaration of Taking, Complaint in Condemnation and Notice of Condemnation on October 23 16, 2003, the date of taking. 24 2. The properties have multiple owners including a limited liability company,

25 trusts, individuals and other legal entities. Defendants are the owners of the property and are 26 entitled to 100% of the just compensation award, and have agreed upon a division of the just compensation among themselves.

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3. The 192.019 acres was correctly described in the Notice of Condemnation. 4. The United States has authority to condemn this property and that authority is set

3 forth in the Declaration of Taking and Notice of Condemnation. 4 5. The case involves a total taking and there is no remainder, no issue of severance

5 damages and no special benefits. 6 7 Station. 8 9 10 7. The property is located in Yuma County, Arizona, along County 14th Street. 8. Glen T. Curtis is the authorized representative of all of the owners. 9 There are no liens, encumbrances, or other title issues that would impact on 6. The property was acquired for the expansion of the Yuma Marine Corps Air

11 the determination of just compensation. 12 10. All of the properties are located within an area of the Joint Land Use Plan

13 Land Use Element Amendment of City of Yuma General Plan and Yuma County General Plan 14 for "industrial agriculture/industrial" use. 15 11. On the taking date, the 192.019 acres, the Velda Ranch and the 14th Street Ranch,

16 were zoned Agriculture. 17 18 19 20 12. All of the properties have access to County 14th Street.
13. The Bend Ranch also has access to Avenue A.

14. Both Avenue A and County 14th Street are designated as truck routes.
15. On the taking date, both Avenue A and County 14th Street were asphalt, hard

21 surface roads consisting of two lanes. 22
16. Under the 2002 Major Roadways Plan, both Avenue A and County 14th Street

23 are designated to be improved as "expressways." 24
17. A portion of the Bend Ranch is located within an area designated as APZ-2

25 under the Yuma County Land Use Regulations. 26
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G.

PLAINTIFF'S CONTENTIONS OF DISPUTED FACT 1. What is the amount of just compensation to be awarded for the 33.845 acres

3 acquired in this case? 4 The United States contends that the amount of just compensation to be awarded

5 for the 192.019 acres acquired in this case is $2,400,000. 6 The Defendants contend that the amount of just compensation to be awarded for

7 the 192.019 acres acquired in this case is $5,761,000. 8 9 10 H. a. DEFENDANTS' CONTENTIONS OF DISPUTED FACT Velda Ranch and 14th Street Ranch 1. The Velda Ranch and the 14th Street Ranch are located approximately one

11 mile east of the Bend Ranch north of County 14th Street. 12 2. Both the 14th Street Ranch and the Velda Ranch are designated in the City of

13 Yuma and Yuma County Joint Land Use Plans for development as an industrial use. 14 3. On the date of the taking, the 14th Street Ranch and the Velda Ranch had not

15 yet been re-zoned and were zoned agricultural. 16 4. The property is part of the same 1,047 acre acquisition wherein the United

17 States Navy is acquiring the Bend Ranch and other properties for expansion of the ordnance 18 storage facilities at Marine Corps Air Station, Yuma, Arizona. The acquisition area is depicted 19 in Exhibit 4. 20 5. The Marine Corps Air Station (also known as Yuma International Airport)

21 is a "joint use airport" and has both civilian and military aircraft: two of the runways are 22 dedicated for civilian use (Runway 17/35 and Runway 8/26) and the remaining two runways are 23 dedicated for military use (Runway 3/21 Left and Runway 21/3 Left). The military runways are 24 considered "main military runways." 25 26
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6. This is important because, under Arizona law, only "main military runways"

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1 have clear zones and accident potential zones. These land use restrictions do not exist on 2 civilian runways. 3 7. Specifically, there are no clear zones or accident potential zones on the south

4 end of Runway 17/35. This means that neither the 14th Street Ranch or the Velda Ranch are 5 impacted in any way by clear zones or accident potential zones. 6 8. On the date of the taking, both the 14th Street Ranch and the Velda Ranch

7 were developed for an interim use as citrus groves. 8 9. As citrus properties, both ranches enjoyed the same favorable attributes as the

9 Bend Ranch, to include: (a) the ranches were located within the Yuma Mesa Irrigation and 10 Drainage District and, therefore, received adequate, convenient, and low cost irrigation water; 11 (b) they were in a "warm growing area" because of their proximity to the large, concrete 12 runways which stored heat and radiated heat in the evenings, and thereby avoiding risk of frost 13 damage to the fruit; (c) both ranches had direct access to County 14th Street, an existing asphalt14 paved hard surface road, and both ranches were in close proximity to agricultural support 15 industries such as harvest companies, trucking companies, and citrus packing houses; and (d) 16 both ranches were planted in excellent fruit varieties on premium root stocks with a high citrus 17 production history. 18 10. In the year 2003, the City of Yuma was the third fastest growing

19 metropolitan area in the United States (behind Las Vegas, Nevada, and Naples, Florida). Yuma 20 also had the highest job growth of the "Best 96 Cities in America" according to the Milken 21 Group. 22 11. In the three years preceding the taking, there was a dramatic and sustained

23 appreciation in land values of all types in Yuma, Arizona. In the year 2003, the Yuma 24 Metropolitan Planning Organization (YMPO) forecasted growth in acreage needed for industrial 25 uses at (112%) one hundred twelve percent.. The YMPO further predicted that 1,045 acres 26 would be developed for industrial use south of MCAS.
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12.

In 2003, there were at least 12 industrial areas under development in

2 Yuma, Arizona, and there was an unprecedented high number of re-zonings for land from 3 agricultural use to industrial use. 4 13. As noted, the Bend Ranch was re-zoned from agricultural to Heavy

5 Industrial in 1995. In 2003, two properties immediately adjacent to the Bend Ranch were also 6 re-zoned to industrial (Charles Lakin re-zoning and Gutierrez re-zoning). The increase in re7 zonings from agriculture to industrial evidenced an anticipation by owners/developers and 8 market participants that there was a need for additional industrial property in Yuma. 9 14. The same comparable sales are applicable to the Velda Ranch and 14th

10 Street Ranch. 11 15. Defendants believe that based upon the highest and best use as industrial

12 property, the Velda Ranch and 14th Street Ranch's value on October 16, 2003, was $30,000 per 13 acre or rounded to $5,761,000.00. 14 15 (c) Project Influence. 1. The Supreme Court has ruled that any alteration in the market value of

16 property being acquired that is attributable to the project for which it is being acquired must be 17 disregarded. United States v. Reynolds, 397 U.S. 14, 16-17 (1970). 18 2. Thus, the Uniform Appraisal Standards for Federal Land Acquisitions,

19 Section B-10, page 46, provides that "any decrease in value caused by the likelihood that the 20 property would be acquired by the government must be disregarded in estimating the market 21 value." 22 3. In this case, Defendants placed the Bend Ranch on the market in 1994 and

23 entered into a contract to sell the property to a fertilizer company, the Dune Company, for 24 purposes of constructing a fertilizer mixing plant, storage facility, administrative offices, repair 25 facilities and storage area, for a price of $25,000 per acre. The contract for sale included a due 26 diligence inspection and was contingent upon Defendants having the Bend Ranch re-zoned from
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1 agricultural to heavy industrial. Defendants filed a re-zoning application which was approved 2 by the Planning and Zoning Commission and the Yuma County Board of Supervisors. The Bend 3 Ranch was re-zoned to H-I (Heavy Industrial) in 1995. 4 4. However, prior to closing the sale, the Government's intent to acquire the

5 Bend Ranch was announced to the public in connection with a Commission Initiative to rezone 6 property south of the airport. That is, the City of Yuma publicly announced the intent of the 7 Department of Defense to acquire the 1,047 acres (including the Bend Ranch) to construct 8 ordnance and munitions bunkers. 9 5. Defendants disclosed this information to the Dune Company and

10 the Dune Company elected not to go forward with the purchase of the Bend Ranch. The Dune 11 Company did not want to construct a fertilizer plant knowing that the property was to be 12 acquired by the government. 13 6. Because of the public announcement of the intent of the U.S. Navy to acquire

14 the 1,047 acres, no sales occurred within the acquisition area and development of properties 15 within this area for industrial use was halted in 1995. Unfortunately for Defendants, the 16 Government delayed from the public announcement in 1995 until 2003 (8 years) to acquire the 17 Bend Ranch. 18 7. Defendants contend that but for the announcement of the intent to acquire the

19 property, Defendants would have sold the Bend Ranch in 1995 for $25,000 per acre for heavy 20 industrial use. The Dune Company would have built the fertilizer plant and industrial 21 development would have continued east on County 14th Street. In other words, but for project 22 influence, there would be additional industrial development in the area on the valuation date 23 possibly extending to the Velda Ranch and 14th Street Ranch. 24 25 (d) Highest and Best Use. 1. Market value is to be determined with reference to the property's highest and

26 best use which is the highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future. Olson v. United States, 292 U.S. 246, 255 (1934); paragraph B-3, Uniform Appraisal Standards for Federal Land Acquisitions.
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1 At the time of the taking, good citrus property was selling for $16,500 per acre. Industrial land 2 was selling for $35,000 to $40,000 per acre. Defendants contend that the Bend Ranch's highest 3 and best use was heavy industrial and that its value was $35,000 per acre. 4 2. The Bend Ranch, Velda Ranch and 14th Street Ranches are all located within an

5 area which is designated under the Yuma Joint Land Use Plan as industrial. Thus, when 6 Defendants agreed to sell the Bend property to the Dune Company in 1995 for $25,000 per acre, 7 Defendants were able to have the property re-zoned to Heavy Industrial. 8 9 3. Heavy Industrial (H-I) was the Bend Property's zoning designation and its "legally

10 permissible use" on the valuation date, October 16, 2003. The Velda Ranch and 14th Street 11 Ranch were zoned RA-10 (Residential, Agriculture, 10 acre minimum), an

12 agricultural/residential zoning, but there was an overwhelming probability that the properties 13 could be re-zoned for industrial use. In fact, the industrial use was preferred by the Yuma 14 County Zoning Authorities and the Marine Corps Community Planner (Tom Manfredi). 15 4. An important attribute of industrial land is convenient access to

16 transportation routes. The government's appraiser contends that industrial development of the 17 Bend Ranch, Veld Ranch, and 14th Street Ranch are "blocked" because the properties are 18 located at the southwest corner of MCAS. Of course, any corner in the square surrounding 19 MCAS ­ 32nd Street, Avenue 3E, County 14th Street and Avenue A ­ is in a sense "blocked" by 20 MCAS for the reason that parties must drive around the base. 21 5. The Bend Ranch is located at a prime signalized intersection on two of the

22 major industrial truck routes (arterial roads) in Yuma County, Avenue A and County 14th Street. 23 The Velda Ranch and 14th Street Ranch are about 1-1/4 mile east on 14th Street. 24 6. County 14th Street is the first road south of MCAS that runs from the

25 Colorado River to the Gila mountains. On the taking date, it was an existing two-lane paved, 26 hard surface highway, and there were publicly announced plans to improve County 14th Street to five lanes in the year 2007. County 14th Street provided direct connection to State Route 95

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1 (and, thereby, connections to Mexico and the prime agricultural growing areas in the Yuma 2 Valley), to the proposed Area Service Highway and Interstate 8. 3 7. Also, it is important that County 14th Street and Avenue A provide immediate

4 access to the other industrial areas in Yuma, Arizona, including those surrounding MCAS. 5 Travel time to all of these industrial areas is between 3 minutes and 15 minutes. Also, MCAS 6 is unique in that it is a joint civilian military airport. Thus, the Bend Ranch also has close 7 proximity to the civilian airport, which is important for may businesses. Indeed, both appraisers 8 acknowledge that industrial development is common around airports. 9 8. An important aspect of the subject properties are their proximity to market

10 participants and suppliers. The properties are accessible, convenient access to agricultural 11 processing plants, agricultural service facilities, air cargo facilities, construction and building 12 trade businesses, and is in very close proximity to the City of Yuma's largest employers (Russell 13 Coil and Bose factories and Johnson Controls. 14 9. The government's appraiser incorrectly concluded that the highest and best

15 use of the subject properties was agriculture. Accordingly, he based his appraisal on agricultural 16 land transactions and did not consider a single transaction involving property zoned heavy 17 industrial. 18 19 (e) Market Trend. 1. An adjustment for market conditions must be made if property values have

20 appreciated since the transaction dates of the comparable sales and the valuation date due to 21 inflation or change in investors' perception of the market over time. Appraisal of Real Estate, 22 page 434. 23 2. The evidence in this case is overwhelming that, in the years preceding

24 the taking, Yuma experienced a dramatic appreciation in all types of property values. 25 3. The local Yuma appraisers, brokers and market participants all told the

26 government's appraiser, Mr. Dorchester, that there had been a substantial increase in prices for land in Yuma reflective of a general anticipation of Yuma growth in the last five years.
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4. The annual increase was estimated by a local Yuma appraiser, Bill Moody,

2 as being not less than 10 percent each year, increasing to 20 percent in the year 2003. 3 5. The government's appraiser lists eight sales in his appraisal report that

4 precede the valuation date by four years (1999 sales). Mr. Dorchester lists seven sales that 5 precede the valuation date by three years (2000 sales), five sales that are over two years old 6 (2001 sales), and twelve more that are one year old. Mr. Dorchester considers seven sales that 7 occurred in the year 2003 and no sales occurring after the valuation date (contrary to popular 8 belief, sales after the valuation date are admissible particularly where there is an upward market 9 trend). 10 6. Appraisal methodology requires that an appraiser consider "elements of

11 comparison" and make a "time adjustment." 12 7. This time adjustment is labeled a "market condition." In this case, the

13 government's appraiser considered the market condition of the subject property and all 14 comparable sales to be "equal." Incredibly, Mr. Dorchester made no market conditions 15 adjustment regarding sales that preceded the valuation date by over four years. 16 8. Furthermore, the Government appraiser arrived at his valuations simply by

17 taking a mathematical average of all sales (the old sales and newer sales). Obviously, the lower 18 prices reflected in the outdated sales skewed the average lower than the "average" of current 19 sales. Thus, the Government's appraiser's methodology is fundamentally flawed because he 20 made no adjustment for market conditions. 21 9. This defect is particularly egregious because accurate data was available to

22 make an accurate calculation of market conditions. Indeed, the most widely utilized method is 23 called a "paired sales analysis" which considers the resale, or resales of the same property. That 24 is, if all other considerations are equal (i.e., the same piece of property) and the price increases, 25 then the appraiser is able to isolate the effect of time on the price. 26 10. In this case, a paired sales analysis was available by reason of a transaction

that occurred December 11, 2002 (Goldsmith to Tanaka at $14,500.00); the property was resold by Mr. Tanaka to Tuffley Enterprises, LLC, for $18,500.00 an acre, and then resold again by
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1 Tuffley Enterprises to Alan Loghery at $40,000.00 per acre. Indeed, a different Government 2 appraiser who appraised property within the acquisition area (Mr. Wheyland) used this paired 3 analysis to calculate that there existed in the market during this period of time a fourteen percent 4 (14%) annual increase in Yuma land values. 5 6 7 the data. 8 2. Defendants owned a 60 acre citrus grove referred to as "Yuma (f) ACP Exchange Transactions/Government Sales Data. 1. The Government's appraiser used selected sales data, and has misrepresented

9 Lemons/Andrews #1 (C) Ranch." In October 2001 (two years prior to the valuation date), 10 Defendants traded the Yuma Lemons/Andrews #1(C) Ranch to Associated Citrus Packers for 11 a 40-acre citrus ranch located immediately east of the main gate at MCAS Yuma, known as the 12 "Kachina Ranch." 13 3. Twenty acres of the Kachina Ranch was then re-sold by Defendants to Fresh

14 Innovations/ Sky View Cooling, for $32,500 per acre ($650,000.00). 15 4. The remaining 20 acres of the Kachina Ranch was traded by Defendants to

16 Fresh Innovations/Sky View Cooling for a 40 acre parcel located on Avenue 4E and 40th Street 17 called the "12th Street Ranch." 18 5. The Yuma Lemons/Andrews #1(C) Ranch and the 12th Street Ranch are not

19 comparable to the Bend Ranch. Those properties were not zoned heavy industrial. 20 6. Also, the 12th Street Ranch could not be economically developed for an

21 industrial use because its access was blocked by a large canal elevated above the access point 22 on 40th Street. 23 7. This series of trades by Defendants (when the facts are fully disclosed)

24 establish a value for industrial property (the Kachina Ranch) at $32,500.00 per acre. However, 25 the Government's appraiser concealed the facts and manipulated this data to reach a lower price: 26 (a) ACP to Curtis. Mr. Dorchester lists the trade of the Yuma Lemons/Andrews #1(C) Ranch to Associated Citrus Packers for the Kachina Ranch in his comparable sales as sale LI-05. Mr. Dorchester states that the price was $600,000.00 ($15,000.00 per acre). He based
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1 the $15,000.00 per acre figure on a price stated in the exchange agreement. He did not interview 2 any of the participants. Shockingly, Mr. Dorchester did not disclose that this was an exchange 3 and not a sale of property, or the fact that the parties placed the valuation of $600,000.00 only 4 for title insurance and real estate broker commissions. That is, this was not a bona fide price and 5 should not have been represented as one. 6 (b) DJKM to Skyview. The 40-acre 12th Street Ranch was purchased by Fresh

7 Innovations/Skyview Cooling in June 2003 from DJKM for the purchase price of $600,000.00 8 ($15,000 per acre). This transaction was listed in Mr. Dorchester's report as a "Light Industrial 9 Sale No. 13" or LI-13. 10 8. As noted, the 12th Street Ranch was zoned agriculture and was not suitable

11 for industrial development. Nevertheless, Mr. Dorchester portrays this as a transaction 12 evidencing a $15,000 per acre valuation for light industrial properties. As noted, the Bend 13 Ranch is heavy industrial property. Mr. Dorchester did not consider a single heavy industrial 14 sale in his appraisal. He only purports to consider four comparable properties with light 15 industrial potential. As it happens, this is the same property that Fresh Innovations/Skyview 16 Cooling later traded to Defendants for half of the Kachina Ranch (20 acres of the Kachina Ranch 17 for the 40-acre 12th Street Ranch). Of course, the value of the Kachina property was established 18 by a cash sale by Defendants to Fresh Innovations/Skyview Cooling of 20 acres at $650,000.00, 19 or $32,500 per acre. 20 9. Flip Side, Curtis to ACP. Mr. Dorchester also listed the Defendants to

21 Associated Citrus Packers sale twice. It is listed both as Sale LI-05 and as Sale C-03, or Citrus 22 Sale No. 3. As C-03, the same transaction is listed at a price per acre of $10,000.00. That is, 23 Mr. Dorchester uses the 60-acre Yuma Lemons/Andrews #1(C) Ranch divided by the arbitrarily 24 stated amount for title insurance and broker's commissions of $600,000.00, and concludes a 25 value of $10,000.00 per acre. Again, the reasoning, the fact that it is an exchange and the fact 26
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1 that the $600,000.00 figure listed in the exchange agreement does not reflect the value of the 2 property was not disclosed by Mr. Dorchester. 3 4 (g) Government Other Inaccurate Sales Data. 1. Mr. Dorchester stated that he performed a "retrospective appraisal," and was

5 not retained for over a year after the valuation date. He relied exclusively upon prior appraisals 6 obtained by the Government from appraiser William Acton. He did not associate a Yuma broker 7 or appraiser, and Mr. Dorchester did not make an independent investigation. As a consequence, 8 he has misrepresented critical facts regarding sales transactions. Examples include the 9 following: 10 (a) Insider Transactions. Mr. Dorchester uses an insider transaction as a

11 comparable sale. Specifically, Mr. Dorchester's comparable sale C-08 is a transaction between 12 Mr. Wayne Keys to Associated Citrus Packers. Mr. Keys is a long-time director and stockholder 13 of the corporation, Associated Citrus Packers. The parties to this transaction will testify that the 14 valuation listed in the sales document was arbitrary. It did not reflect the fair market value of 15 the property. Of course, it is a basic tenet that appraisers should not consider insider transactions 16 because a financial, business or family relationship between the parties to a sale may affect the 17 price of the property. Appraisal of Real Estate, page 433. This sale should not have been listed 18 and should not have been averaged into the other transactions to establish a value. 19 (b) Dissimilar Citrus Properties. A property that has no similarity to the subject

20 property is not useful as a comparable sale for establishing value. The Bend Ranch attributes 21 are already set forth and it should be valued as industrial property. However, even if it is valued 22 as merely a citrus ranch, it has favorable attributes, such as being within an irrigation district, 23 located on a paved hard surface road, warm temperature conditions (caused by its proximity to 24 the large concrete runways that retain heat), an excellent variety of fruit and growing condition 25 of trees with high production. In short, even if its highest and best use is ignored, the Bend 26
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1 Ranch is a premium citrus property. Nevertheless, Mr. Dorchester considered "junk" citrus 2 properties in his comparable sales. An example is his Sale C-2 or Citrus-2, Leroy Donley to 3 T&A/Curtis. Defendants were a party to this transaction and are very familiar with the property. 4 The C-2 property is located on a dirt road (not even gravel), outside the irrigation district, it is 5 on private wells and drip irrigation which is more expensive and less productive, is in a cold area 6 that subjects the citrus to frost damage, and is planted with a variety of lemons (Eurika lemons) 7 that have a rough texture and typically are downgraded and sold at a lower price. In fact, this 8 400-acre parcel was an experiment that failed. 9 (c) Land Sales Called Citrus Sales. Mr. Dorchester lists as a "citrus sale" several C-04 is a sale from Bell/Wallace to Al-

10 transactions that did not include citrus.

11 Saihaki/Linarez/Lopez/Garcia. This is one of the sales that preceded the valuation date by four 12 years. It was an interior parcel located on a dirt road. The most egregious misrepresentation was 13 for Mr. Dorchester to portray this is as a "citrus sale" when, in fact, only five acres of the 14 property was planted to citrus (Orlando oranges). The remaining 30 acres was vacant desert 15 land. Not surprisingly, the property sold for a mere $6,625.00 per acre. Nevertheless, this sale 16 is averaged in with all other sales by Mr. Dorchester to arrive at his valuation. Mr. Bell was an 17 investor who purchased properties not suitable for agricultural production, split the parcels into 18 10-acre tracts, and resold the parcels. Mr. Bell looked for the least expensive properties in 19 Yuma County. Surprisingly, Defendants' appraiser, Jim Sanders, without knowing any of the 20 facts about Mr. Bell, isolated his sales solely on a statistical analysis. Mr. Sanders discovered 21 that, statistically, all of the sales wherein Mr. Bell was a seller sold for disproportionately low 22 prices. 23 (d) Lack of Access. One of the "light industrial sales" listed by the

24 Government's appraiser is a sale from J.R. Stephens to Bill Jewett in February 2002 for a price 25 of $10,250.00 per acre (Dorchester LI-14). Mr. Dorchester considers this agricultural land with 26
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1 potential for a light industrial use, but does not disclose that this is an interior parcel with access 2 restricted to a dirt farm road. Indeed, Mr. Dorchester lists the "physical features" of the property 3 as being "equal" without any analysis or explanation of the property's lack of access. 4 Obviously, an interior citrus grove with no access cannot be considered to have potential for 5 industrial use and is not comparable to the subject property. 6 (e) Selective Exclusion. The government's appraiser selectively excluded all

7 current sales of industrial property. He considered none of the comparable Heavy Industrial 8 sales. He made no effort to update the information compiled by Mr. Acton in 1999, but 9 intentionally avoided considering any current information. 10 (h) Flawed Methodology. The government's appraiser did not follow recognized

11 appraisal methodology. He compiled a large group of "land transactions." At his deposition, 12 he insisted that none of these transactions could be considered as a "comparable sale." He made 13 no quantitative adjustments for location, zoning or other elements of comparison. The groupings 14 of land transactions were simply totaled and a mathematical average arrived at. Mr.

15 Dorchester's valuation is based upon an arbitrary mathematical average, without making the 16 adjustments for elements of comparison required. 17 18 I. ISSUES OF LAW IN CONTROVERSY

There are no substantive issues of law identified by the parties at this time. The parties

19 have identified evidentiary/procedural issues which are addressed in the Motions in Limine 20 which have been filed by the parties and which will be determined at the Joint Pretrial 21 Conference: 22 23 24 25 26
17

(a) Government's Motions. 1. Motion in Limine to Exclude Offers to Purchase. 1. Motion in Limine to Exclude Evidence of Pre-Condemnation Activities and Consequential Damages.

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1 2 3 4 5 6 7 8 J.

2. Motion in Limine to Exclude Portion of Appraisal Report of Jim Sanders. 3. Motion in Limine Regarding Prices Paid for Similar Property. (b) Owners' Motions. 1. Defendants' Motion in Limine (Arizona Board of Appraisal). 2. Defendants' Motion in Limine (Defendants' Financial Status). 3. Defendants' Motion in Limine (Revised Appraisal Report). SEPARATE TRIAL OF ISSUES The parties have agreed to try this case jointly with case number CIV-03-2006-PHX-

9 SRB as the witnesses and much of the evidence is duplicative. Separate verdict forms will be 10 provided to the jury. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
18

K.

WITNESSES United States: 1. Karen Ringel Real Estate Contracting Officer Department of the Navy Ms. Ringel will testify about the purpose of the project and the acquisition process. Ms. Ringel replaces Gary Peña and Jennifer Weilbacher-Arbesu as those individuals are no longer employed by the Department of the Navy. 2. Don Dorchester The Dorchester Group Mr. Dorchester will testify as to the fair market value of the property acquired. Mr. Dorchester will testify to matters contained in his appraisal report and file. 3. Monty Stansbury Yuma County Planning and Zoning Mr. Stansbury may testify as to current and proposed zoning and planning for the area.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

4. Tom Manfredi Mr. Manfredi will testify to topics covered in his deposition. 5. All witnesses listed by defendants. Defendants: (1) Glen T. Curtis. Glen T. Curtis is the person designated to represent all Defendants at trial. Mr. Curtis will testify regarding all issues in the cases including physical characteristics of the property, suitability for development, favorable attributes for development in the property's before condition, all comparable sales (both Plaintiff's and Defendants'), the fair market value of the land taken, the impact of the public announcement of the intent to condemn the property, recent purchases and sales of similar properties, his opinion of the fair market value and severance damages, and his opinion of the amount of just compensation. (2) Mark Spencer. Mr. Spencer is the vice president of Associated Citrus Packers (ACP) and supervises the purchase, sale, lease and development of citrus properties owned by Associated Citrus Packers in Yuma County, Arizona. Mr. Dorchester has listed several transactions involving ACP and has not correctly reported the facts surrounding those transactions. Mr. Spencer will testify as to the true facts surrounding the transactions. Mr. Spencer is knowledgeable regarding real estate matters, highest and best use, zoning and other governmental restrictions, and other aspects of the neighborhood. Mr. Spencer will provide testimony regarding the specifics as to comparable sales listed by Don D. Dorchester, Jim L. Sanders, and Defendants, to include Sanders Farm Sale #3, Sanders Farm Sale #10, Dorchester Citrus Sale #1, Dorchester Citrus Sale #3, Dorchester Citrus Sale #12, Dorchester Land Sale #2, Dorchester Land Industrial Sale #5. Mr. Spencer will also testify to other sales to which Associated Citrus Packers has been a party in the neighborhood, to include exchange agreements. Mr. Spencer will explain the basis for the values attributed to the comparable sales
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1 listed by Don D. Dorchester and that, in fact, many of the values relied upon by Mr. Dorchester 2 were artificial in that the transactions were actually exchanges and not bonafide sales. Mr. 3 Spencer will testify regarding market trends, specifically the fact that the dramatic appreciation 4 of land values started in 1999 and that land values had substantially appreciated as of the 5 valuation date of October 16, 2003. Mr. Spencer will not express an opinion of fair market 6 value. 7 8 (3) Robert Woodman. Mr. Woodman is a licensed real estate broker in Arizona and specializes in agricultural and industrial properties. Mr. Woodman will testify regarding

9 specific facts related to comparable sales listed by Mr. Sanders, Mr. Dorchester and Defendants, 10 including, but not limited to, Sanders Farm Sale #3, Sanders Farm Sale #8, Sanders Farm Sale 11 #9, Dorchester Citrus Sale #14, Sanders Industrial Sale #2, and to the comparable sales listed 12 by Defendants in the foregoing Interrogatories. Mr. Woodman will testify regarding the 13 Commission Initiative, community plans for developing property south of the airport, the impact 14 of the Department of Defense's announcement that properties would be condemned, highest and 15 best use, zoning and other governmental restrictions, and all aspects of the neighborhood, 16 including the practice of farming citrus as an interim "holding" use pending development of the 17 property for an industrial use. Mr. Woodman will provide testimony regarding the specifics as 18 to numerous comparable sales listed by Don D. Dorchester, Jim L. Sanders, and Defendants. 19 Mr. Woodman will also testify to other sales to which Mr. Woodman has been a party in the 20 neighborhood, to include exchange agreements. Mr. Woodman will explain the basis for the 21 values attributed to the comparable sales listed by Don D. Dorchester. Mr. Woodman will not 22 express an opinion of fair market value. 23 24 25 26
20

(4) Monty Stansbury. Mr. Stansbury is the Director of Planning and Zoning

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1 for Yuma County and will testify regarding community plans for industrial development, 2 transportation routes, expressways, improvement of 14th Street, industrial truck traffic routes, 3 and matters relevant to zoning and airport restrictions. He will testify that Yuma County did not 4 adopt any map or amendment incorporating an APZ for runways 17/35 (north/south runways). 5 APZs are not incorporated or part of the Joint Land Use Plan or the 2010 Comprehensive Plan. 6 The official Yuma County map does not show APZs regarding runways 17/35 (north/south 7 runways). As of the valuation date, October 16, 2003, neither the Velda Ranch nor the 14th 8 Street Ranch were located within an APZ and there were no restrictions other than those 9 applicable to properties lying within the 70 decibel noise zone. 10 (5) Laurie Lineberry. Ms. Lineberry will testify regarding community plans for

11 industrial development, transportation routes, expressways, improvement of 14th Street, 12 industrial truck traffic routes, and matters relevant to zoning and airport restrictions. She will 13 testify that at one point in time, some maps included APZs on runway 17/35 because the original 14 legislation made no distinction between "main military runways" and other runways. However, 15 this situation changed in 2002 under Senate Bill 1393, which clarified that the previous 16 legislation limited APZs to main military runways. The north/south (runway 17/35) runway is 17 not a main military runway. On May 1, 2002, the City planning staff sent a request that the City 18 Council take action to reflect the change in its airport zoning district. The change was adopted 19 and any references to an APZ regarding runways 17/35 ­ the north/south runway ­ were deleted 20 from the City's official maps and plans for all purposes regarding zoning and development. 21 Lauri Lineberry will testify that under the City maps and ordinances, there is no APZ zone 22 regarding runways 17/35. 23 24 25 26
21

(6) Anne Eichberger. Ms. Eichberger is the Planning Manager for Yuma

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1 County and will testify regarding community plans for industrial development, transportation 2 routes, expressways, improvement of 14th Street, industrial truck traffic routes, and matters 3 relevant to zoning and airport restrictions. She will testify that Yuma County did not adopt any 4 map or amendment incorporating an APZ for runways 17/35 (north/south runways). APZs are 5 not incorporated or part of the Joint Land Use Plan or the 2010 Comprehensive Plan. The 6 official Yuma County map does not show APZs regarding runways 17/35 (north/south runways). 7 As of the valuation date, October 16, 2003, neither the Velda Ranch nor the 14th Street Ranch 8 were located within an APZ and there were no restrictions other than those applicable to 9 properties lying within the 70 decibel noise zone. 10 (7) Thomas A. Manfredi. The Defendants will call Thomas A. Manfredi to

11 testify to all the matters set forth in his deposition taken September 8, 2005. 12 (8) Maggie Carrasco. Ms. Carrasco is Monty Stansbury's assistant on zoning and

13 land use matters. In the event that Mr. Stansbury is unavailable at trial, she will be called in his 14 place. 15 (9) Glen G. Curtis. Mr. Curtis has health problems but may testify regarding

16 ownership of the property, its suitability for industrial development, project influence, and 17 communications with John D. Dorchester, Jr. 18 (10) Robert O. Curtis. Mr. Curtis may testify regarding the Dunes Company sale,

19 suitability for industrial development, favorable attributes, project influence, the fair market 20 value of the land taken, purchases and sales of similar properties, comparable sales and his 21 opinion of the fair market value. 22 (11) Guillermo Galindo. Mr. Galindo is a citrus farmer and land developer on the

23 Yuma south Mesa. Mr. Galindo may testify in rebuttal regarding comparable sales to which he 24 was a party listed by Mr. Sanders, Mr. Dorchester and Defendants, including, but not limited to, 25 Sanders Farm Sale #6, Sanders Farm Sale #7. 26
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1 2 3 4 5 6 7 8 9 10

L.

EXPERTS United States: 1. Don D. Dorchester Arizona General Certified Appraiser Member of the appraisal Institute Counselor of Real Estate Mr. Dorchester will testify as to the fair market value of the property acquired including an analysis of the highest and best use of the property. Mr. Dorchester will give an opinion as to the amount of just compensation to be awarded in this case. Defendants: (1) Jim L. Sanders. Mr. Sanders is certified as a General Real Estate Appraiser,

11 number 30203 by the Arizona Board of Appraisers. Mr. Sanders is qualified to state an opinion 12 as to the amount of just compensation due Mr. Curtis. Mr. Sanders is in the process of 13 completing an appraisal regarding the property. Mr. Sanders will testify as to all matters 14 contained in his appraisal, and as to all matters relevant to the valuation of the property, 15 determination of severance damages and determination of just compensation in this case. 16 (2) Glen T. Curtis. Glen T. Curtis is the owner representative; however, to the extent 17 he may be considered an expert, Mr. Curtis will testify regarding all physical characteristics of 18 the property, its suitability for development, favorable attributes for development in the 19 property's before condition, the fair market value of the land taken, the loss in value to the 20 adjoining land due to the condemnation, recent purchases and sales of similar properties, his 21 opinion of the fair market value and severance damages, and his opinion of the amount of just 22 compensation. 23 24 M. EXHIBITS AND DEPOSITIONS The parties are filing exhibit lists with the Pretrial Order. However, counsel have agreed

25 to meet and confer regarding the sharing of maps, photographs and other demonstrative exhibits. 26
23

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1 The parties request the opportunity to file amended exhibit lists after they have met in the hopes 2 of reducing the number of exhibits at trial. The parties have agreed upon a deadline for filing 3 final exhibit lists of July 31, 2006. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
24

(A) United States' Proposed Exhibit List: 1. 2. 3. 4. 5. 6. 7. 8. 9. Plat map of 33.845 acres Plat map of 192.019 acres Assessor's parcel map of 33,845 acres Assessor's parcel map of 192.019 acres Original Declaration of Taking 33. 845 acres Amended Declaration of Taking 33.845 acres Original Declaration of Taking 192.019 acres Amended Declaration of Taking 192.019 acres Appraisal report of Don Dorchester 33.845 acres

10. Appraisal report of Don Dorchester 192.019 acres 11. Condition of Title report 33.845 acres 12. Condition of Title report 192.019 acres 13. Curriculum Vitae of Don Dorchester 14. Joint Land Use Plan 15. Yuma County Zoning Ordinance 16. Environmental Impact Statement for Improved Ordnance Storage 17. Exhibits attached to Deposition of Tom Manfredi 18. Deposition of Tom Manfredi 19. Depositions of Jim L. Sanders 20. Deposition of Glen T. Curtis

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21. Deposition of Don Dorchester 22. Location Map 192.019, Figure I, Dorchester Appraisal Report 23. Location Map 33.845, Figure I, Dorchester Appraisal Report 24. Photograph Location Map, 192.019 acres 25. Photographs, 38, of subject properties in 192.019 acres from Dorchester Appraisal 26. Photograph Location Map, 33.845 acres 27. Photographs, 10, of subject property in 33.845 acres from Dorchester Appraisal 28. Map depicting assessor parcel numbers for properties in 192.019 acres, Figure II - 1 Dorchester Appraisal report 29. Map depicting subject property boundary measurements in 192.019 acres, Figure II - 2 Dorchester Appraisal report 30. Map depicting assessor parcel number for 33.845 acres, Figure II - 1, Dorchester Appraisal report 31. Map depicting subject property boundary measurements in 33.845 acres, Figure II - 2 Dorchester Appraisal Report 32. Map of Yuma County Regional Transportation Plan, Figure II - 9, Dorchester Appraisal Report 33. Map of Roadway Plan, City of Yuma General Plan, Figure II - 10, Dorchester Appraisal Report 34. Joint Land Use Plan Map, Figure II - 14, Dorchester Appraisal Report 35. Table and Map depicting Yuma County Industrial history and growth, Table II 11 and Figure II - 15, Dorchester Appraisal Report

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36. Table depicting agricultural production and values in Yuma county, Table II 13, Dorchester Appraisal Report 37. Map depicting City of Yuma and MCAS in 192.019 acres, Figure II - 16, Dorchester Appraisal Report 38. Map depicting City of Yuma and MCAS in 33.845 acres, Figure II - 16, Dorchester Appraisal Report 39. Map depicting Noise contours, clear zones, Figure II - 17, Dorchester Appraisal Report 40. Map depicting access to the subject property in 192.019 acres, Figure II - 18, Dorchester Appraisal Report 41. Map depicting access to subject property in 33.845 acres, Figure II - 18, Dorchester Appraisal Report 42. City of Yuma Land Use Map, 192.019 acres, Figure II - 21, Dorchester Appraisal Report 43. City of Yuma Land Use Map, 33.845 acres, Figure II - 21, Dorchester Appraisal Report 44. Map depicting land uses south of MCAS, 192.019 acres, Figure III - 2, Dorchester Appraisal Report 45. Map depicting land uses south of MCAS, 33,845acres, Figure III - 2, Dorchester Appraisal Report 46. Close up map depicting noise contours, clear zones, APZ, 192.019 acres, Figure III - 3 , Dorchester Appraisal Report 47. Close up map depicting noise contours, clear zones, APZ, 33.845 acres, Figure III - 3, Dorchester Appraisal Report

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48. Figure indicating improvements on the subject property, 192.019 acres, Figure III - 4 A, Dorchester appraisal Report 49. Figure indicating improvements on the subject property, 192.019 acres, Figure III - 4 B, Dorchester Appraisal Report 50. Figure indicating improvement on the subject property, 33.845 acres, Figure III 4, Dorchester Appraisal Report 51. Table III - 14 listing light industrial sales, Dorchester Appraisal Report 52. Table III - 15 listing residential sales, Dorchester Appraisal Report 53. Table III - 16 listing sales comparison 192.019 acres, parcel A, Dorchester Appraisal Report 54. Table III - 17 listing sales comparison 192.019 acres, parcel B, Dorchester Appraisal Report 55. Table III - 8 listing cost analysis 33.845 acres, Dorchester Appraisal Report 56. Table III - 9 listing income and expense analysis, 33.845 acres, Dorchester Appraisal Report 57. Table III - 14 listing sales comparison 33.845 acres, Dorchester Appraisal Report 58. 59. 60. Sales transaction location map, 192.019 acres Sales transaction location map, 33.845 acres Supplemental disclosure of landowners regarding substance of landowner's testimony 61. Letters regarding rezoning application on parcels including 192.019 acres, a. May 24, 1995 letter with enclosures from Woodman to Yuma County Planning and Zoning Department

27

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 N. 70. 69. 68. 67. 62. 63. 64. 65. 66.

b. June 28, 1995 letter from Steele to Merrell c. Oct. 12, 1995 letter from Woodman to Aldrich d. Oct. 31, 1995 letter from Mabry to Woodman e. Nov. 20, 1995 memo from Mabry thru Stansbury Defendants' response to plaintiff's first set of interrogatories, 192.019 acres Defendants' response to plaintiff's first set of interrogatories, 33.845 acres Defendants' second supplemental disclosure statement, 192.019 acres Defendants' second supplemental disclosure statement, 33.845 acres Defendants' supplemental response to plaintiff's first set of interrogatories nos. 6, 10, and 14, 192.019 acres Defendants' supplemental response to plaintiff's first set of interrogatories nos. 6, 10, 14, 33.845 acres Defendants' response to plaintiff's additional interrogatories incorporated into its first set of interrogatories, 33.845 acres Defendants' response to plaintiff's additional interrogatories incorporated into its first set of interrogatories, 192.019 acres Aerial photographs of Yuma area, including MCAS

(B) Defendants' Proposed Exhibit List: See Exhibit A attached. MOTIONS IN LIMINE AND REQUESTED EVIDENTIARY RULINGS (a) United States: 1. Motion in Limine to Exclude Offers to Purchase 2. Motion in Limine to Exclude Prices Paid for Similar Property 3. Motion in Limine to Exclude Pre-Condemnation Activities and Consequential Damages
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4. Motion in Limine to Exclude Portion of Jim Sanders Appraisal Report (b) Defendants: 1. Motion in Limine re: State Appraisal Board 2. Motion in LImine re: Appraisal Report 3. Motion in Limine re: Financial Status of Defendants The motions have been filed. Responses are due on July 19, 2006. The motions are scheduled to be ruled on at the Pretrial Conference. (a) United States - objections/support: 1. Offers to purchase are irrelevant to the issue of just compensation and fair market value and are based on hearsay. (Fed. R. Evid. 403, 801). 2. Prices paid for similar property are irrelevant to the issue of just compensation and fair market value as the motivation for the sale, characteristics of the property and timing of sale do not reflect the fair market value of the subject property. Fed. R. Evid. 403. 3. Evidence of pre-condemnation activities and consequential damages are not relevant and prohibited as a matter of law. Fed. R. Evid. 403. 4. The portion of the appraisal report prepared by Jim Sanders evaluating the subject property for industrial use is irrelevant and unreliable. Fed. R. Evid. 403. 5. Evidence of the State Board of Appraisals' action regarding Mr. Sanders is relevant to his qualifications and credibility as an expert witness and should be admitted. Fed. R. Evid. 607, 608, 702.

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6. The United States Appraisal report should be admitted as in compliance with Fed. R. Civ. P. 26 and Fed. R. Evid. 702. The issues raised by defendant can be easily remedied. 7. The financial status of defendants is relevant to the basis for their lay opinion as to the fair market value of the subject property. Fed. R. Evid. 403, 701. (b) Defendants - objections/support 1. Defendants do not intent to submit evidence of mere offers on the issue of fair market value. Defendants are entitled to prove that the Bend Ranch was sold to the Dunes Company in 1995 for industrial development and that the buyer cancelled the escrow on learning of the Department of Defense's intent to condemn the property. 2. Prices paid for similar property near the date of taking constitute relevant evidence of just compensation. 3. The value of the properties is to be determined without regard to the negative impact on industrial development in the neighborhood resulting from the announcement of the project. 4. Regression analysis is a recognized scientific method of evaluating the effect of time on sales prices and Mr. Sanders is a highly qualified expert in the area. 5. Mr. Sanders' controversy with the Board of Appraisers does not impact on his qualifications, and admission of evidence of this matter is prejudicial, raising a host of complex collateral issues. 6. Appraisal reports are not admissible in evidence because the reports are too lengthy and confusing to be of assistance to the jury, contain inadmissible hearsay and raise a host of collateral issues.

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1 2 3 4 O.

7. Evidence of the financial status of a defendant is per se inadmissible because juries are likely to be biased against wealthy defendants. PROBABLE LENGTH OF TRIAL The parties have agreed to jointly try cases CIV-03-2006-PHX-SRB and CIV-03-

5 2007-PHX-SRB. It is anticipated that the joint trial will last 6 days. 6 7 P. TRIAL DATE The trial is set for August 8, 2006. Counsel for plaintiff is available as follows -

8 August 8 - 16, 2006; October 16 - 25, 2006. Counsel for defendants is also available as follows 9 August 8 - 16, 2006; October 16 - 25, 2006. 10 11 12 13 14 15 16 17 18 19 20 S. R. Q. FOR A JURY TRIAL Simultaneous with the filing of this Pretrial Order, the parties have filed: 1. stipulated proposed statement of the case 2. stipulated jury instructions 3. stipulated voir dire questions 4. stipulated jury questionnaire, and 5. stipulated forms of verdict MISCELLANEOUS No other matters need be addressed. MODIFICATION OF ORDER The Court may, in order to prevent manifest injustice or for good cause shown at the

21 trial of the action or prior thereto upon application of counsel for either party, made in good 22 faith, or upon motion of the Court, modify the Final Pretrial Order upon such conditions as the 23 Court may deem just and proper. 24 25 26
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1

Pursuant to Paragraph II(C)(3), District of Arizona ECF Administrative Policies and

2 Procedures Manual (April 3, 2006), both parties certify that the content of this Joint Case 3 Management Plan is acceptable to all registered signatories required to sign it. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
32

Respectfully submitted this 17th day of July, 2006. PAUL K. CHARLTON United States Attorney District of Arizona s/Sue A. Klein ___________________________ SUE A. KLEIN Assistant U. S. Attorney s/Sue A. Klein ____________________________ JOHN A. WEIL Attorney for Defendants

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1 2 APPROVED AS TO FORM AND CONTENT: WEIL & WEIL, PLLC PAUL K. CHARLTON 3 United States Attorney 4 District of Arizona

__________________________________ 5 __________________________________ SUE A. KLEIN JOHN A. WEIL Attorney for Defendants 6 Assistant U.S. Attorney Attorney for Plaintiff 7 8 9 10 THE JOINT PRETRIAL ORDER IS HEREBY APPROVED ON THIS 24th DAY OF

11 July, 2006. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
33

DATED this 25th day of July, 2006.

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