Free Trial Brief - 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. I. Nature of Action This is an action in eminent domain where the United States acquired 33.85 acres of land CIV-03-2006-PHX-SRB

PLAINTIFF'S TRIAL BRIEF

23 which expanded the Yuma Marine Corps Air Station. A Declaration of Taking, Complaint and 24 Notice of Condemnation were filed on October 16, 2003. 25 26 27 1. Federal Law Controls: II. Applicable Law

Both federal substantive and procedural law control this action. Because condemnation

28 involves essential governmental functions, federal law rules. United States v. 93.970 Acres

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1 of Land, 360 U.S. 328, 332-333 n. 7 (1959). Local law need not be determined as it does not 2 affect questions of substantive rights. United States v. Miller, 317 U.S. 369, 379-380 (1943); 3 State of California v. United States, 169 F.2d 914, 917 (9th Cir. 1948). Procedural aspects are 4 governed by Fed. R. Civ. P. 71A. Rule 71A and the Advisory Committee notes provides that 5 the rule affords a uniform procedure for all cases invoking the national power of eminent 6 domain. 7 2. Landowner has the Burden of Proof:

8 It is well established that the landowner has the burden to prove the fair market value on the 9 date of taking. United States ex rel TVA v. Powelson, 319 U.S. 266, 273 (1943); United 10 States v. 429.59 Acres, 612 F.2d 459, 462 (9th Cir. 1980). In United States v. 174.12 Acres 11 of Land, 671 F.2d 313, 314 (9th Cir. 1982), the Ninth Circuit approved the following 12 instruction concerning the burden of proof: 13 14 15 3. 16 The title of property vests in the government and the land is condemned when the 17 government files a declaration of taking and makes a deposit with the court in the amount of 18 the estimated compensation stated in the declaration to be used by the person who is entitled 19 to the compensation. 40 U.S.C. § 3114(a)-(b) (2006). Once it has been determined that 20 condemning land serves a public purpose, the amount and character of property to be taken 21 and the need for the particular property rests with the discretion of the legislative branch. 22 Berman v. Parker, 348 U.S. 26, 35-36 (1954). Furthermore, only the purpose of the taking 23 must pass scrutiny in order to meet the standards of the public use clause of the Fifth 24 Amendment. Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 244 (1984). Therefore, 25 federal courts only have jurisdiction to review one aspect of a condemnation action: whether 26 the purpose for the condemnation was congressionally authorized. United States v. .95 Acres 27 28
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In a condemnation case, the burden is on the defendant landowner to establish, by a preponderance of the evidence in the case, that the fair market value at the date of taking, of his estate or interest in the property which has been taken by the government, was as much as he alleges. Government's Authority to Condemn Land:

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1 of Land, 994 F.2d 696, 698 (9th Cir. 1993)(citing, United States v. 416.18 Acres of Land, 514 2 F.2d 627, 631 (7th Cir. 1975). The necessity of condemning property for public use is of a 3 legislative nature and one in which the courts lack jurisdiction. United States v. .95 Acres of 4 Land, 994 F.2d 696, 698 (9th Cir. 1993). The nature and extent of the interests to be acquired 5 by condemnation lie within the discretion of authorized federal officials. United States v. 6 40.60 Acres of Land, 43 F.2d 927, 928 (9th Cir. 1973). 7 8 4. Only Issue for Jury is Issue of Just Compensation:

In the trial of condemnation actions, the jury has one function and that is to determine

9 the amount of just compensation to be awarded for the property. United States v. Reynolds, 10 397 U.S. 14, 20 (1970). The structure of Rule 71A(h) makes it clear that the a jury is to 11 determine only the issue of just compensation. United States v. Reynolds, 397 U.S. at 20; 12 United States v. 158.24 Acres of Land, 515 F.2d 230, 232 (5th Cir. 1975)(under Rule 71A(h), 13 party may have a jury trial on single issue of just compensation); United States v. 320 Acres 14 of Land, 605 F.2d 762, 808 (5th Cir. 1979)(jury to decide issue of just compensation only). 15 Therefore, in condemnation cases, the court's role is much broader than in a conventional 16 jury trial. United States v. Reynolds, 397 U.S. at 20; United States v. 99.66 Acres of Land, 17 970 F.2d 651, 656 (9th Cir. 1992). 18 The court cannot allow speculative and conjectural evidence to become a guide for the

19 ascertainment of value; Olson v. United States, 292 U.S. 246, 257 (1934) and must, 20 therefore, make a threshold determination as to the sufficiency of the evidence. United 21 States v. 341.45 Acres of Land, 633 F.2d 108, 111 (8th Cir. 1980); United States v. 320 Acres 22 of Land, 605 F.2d 762, 815, 819 n. 30 (5th Cir. 1979)(trial court has responsibility under 23 71A(h) to screen proffered evidence); United States v. 158.24 Acres of Land, 696 F.2d 559, 24 564 (8th Cir. 1982)(trial court has independent obligation to see that landowner's claim is 25 submitted only on competent evidence. 26 27 28 5. Valuation Evidence: A. Landowner Testimony
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A landowner may testify as to the value of his property and may do so without being

2 qualified as an expert. United States v. 10,031.98 Acres of Land, 850 F.2d 634, 636 (10th 3 Cir. 1988). "But the owner's qualification to testify does not change the `market value' 4 concept and permit him to substitute a `value for me' standard for the accepted rule, or to 5 establish a value based entirely on speculation." United States v. Sowards, 370 F.2d 87, 92 6 (10th Cir. 1966). A landowner's testimony regarding the value of his property does not 7 always provide sufficient evidence upon which to base a verdict. "There must be a basis for 8 the landowner's valuation, and when the landowner's testimony shows that his valuation has 9 no probative value, the district court may determine that the landowner's testimony alone is 10 insufficient to support a jury verdict." United States v. 10,031.98 Acres of Land, 850 F.2d at 11 637. Further, any evidence regarding the special value of the property to the landowner 12 arising from its adaptability to his particular use is inadmissible. United States v. 79.20 13 Acres of Land, 710 F.2d 1352, 1357 (8th Cir. 1983)(any special value to the owner or to the 14 condemnor must be disregarded in arriving at the fair market value); United States v. 215.7 15 Acres of Land, 719 F. Supp. 273, 277 (D. Del 1989)(evidence of special value to the 16 landowner arising from the property's adaptability to their particular use is inadmissible). In 17 a condemnation case, "[t]he trial court has an independent obligation, to a reasonable extent, 18 to see that the landowner's claim is submitted only on competent evidence." United States v. 19 10,031.98 Acres of Land, 850 F.2d at 637-638 (citing, United States v. 158.24 Acres of 20 Land, 696 F.2d 559, 564 (8th Cir. 1982)). 21 22 B. Appraisal Testimony

There are three generally recognized methods for determining fair market value: (1) the

23 comparable sales approach, (2) the income approach, and (3) the cost approach. United 24 States v. 100 Acres of Land, 468 F.2d 1261, 1265 (9th Cir. 1972). Ordinarily if there are 25 sales of comparable property at or near the time the condemned property was acquired, such 26 sales would be more appropriate than any other method of determining value. United States 27 28
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1 v. 100 Acres of Land, 468 F.2d at 1265 (citing, Fairfield Gardens, Inc. v. United States, 306 2 F.2d, 167, 172 (9th Cir. 1962)). 3 Comparable sales may be used by an expert as the basis for his opinion on the value of

4 the property. United States v. 429.59 Acres of Land, 612 F.2d 459, 462 (9th Cir. 1980). 5 6 7 8 United States v. 429.59 Acres of Land, 612 F.2d at 462. 9 6. 10 Just compensation for condemned property is generally measured by the fair market 11 12 13 14 value of the property. "Market value is the price which a reasonable seller who desires to sell but is not required to sell would demand for the property, and the price which a reasonable buyer who desired to buy but was not required to buy would pay for the same..." United States v. 429.59 Acres of Land, 612 F.2d 459, 462 (9th Cir. 1980). It is the amount in Determination of Just Compensation: [t]he proper inquiry is whether the expert has made careful inquiry into the facts of the other sales, and whether his opinion is founded on such careful inquiry. In situations where there are few instances of comparable sales in recent times, the expert is only expected to make a reasonable estimate of the market value of the subject property after examining all of the facts.

15 cash or terms reasonably equivalent to cash, for which, in all probability, the property would 16 be sold by a knowledgeable owner willing but not obligated to sell to a knowledgeable 17 purchaser who desired but is not obligated to buy. Consideration should be given to all 18 matters that might reasonably be given weight in bargaining by persons of ordinary 19 prudence, but no consideration whatever should be given to matters not affecting market 20 value. United States v. 50 Acres of Land, 469 U.S. 24, 29 (1984). "[S]trict adherence to the 21 criterion of market value may involve inclusion of elements which, though they may affect 22 such value, must in fairness be eliminated in a condemnation case, as where the formula is 23 attempted to be applied as between an owner who may not want to part with his land because 24 of its special adaptability to his own use, and a taker who needs the land because of its 25 peculiar fitness for the taker's purpose. These elements must be disregarded by the factfinding body in arriving at a `fair' market value." United States v. Miller, 317 U.S. 369, 375 26 (1943). 27 28
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7.

Pre-Condemnation Activities, Consequential Damages and Project Influence

The Fifth Amendment does not require any award for consequential damages arising

3 from pre-condemnation activities. United States v. 50 Acres of Land, 469 U.S. 24, 33 4 (1984). The United States must pay only for what it takes, not for the opportunities which 5 the owner may lose. United States ex rel. TVA v. Powelson, 319 U.S. 206, 282 (1943). The 6 Fifth Amendment allows the owner only the fair market value of the property. It does not 7 guarantee him a return on his investment. United States ex rel. TVA v. Powelson, 319 U.S. 8 at 285. Frustration and appropriation are essentially different things. Omnia Commercial 9 Company v. United States, 261 U.S. 502, 513 (1923); United Stats v. Powelson, 319 U.S. at 10 282. "[M]ere fluctuations in value during the process of governmental decision making 11 absent extraordinary delay, are incidents of ownership. They cannot be considered a `taking' 12 in the constitutional sense." Tabb Lakes, Ltd., 10 F.3d at 801 (citing, Agins v. City of 13 Tiburon, 447 U.S. 225, 263 n.9 (1980)(quoting, Danforth v. United States, 308 U.S. 271, 285 14 (1939)). Governmental interference as a part of preliminary decision making does not 15 amount to a taking. Tabb Lakes, Ltd., 10 F.3d 801. Where the government lays out a project 16 involving the taking of lands, no increment of value arising by virtue of the fact that a 17 particular tract is clearly or probably within the project may be added. United State v. Cors, 18 337 U.S. 325, 332 (1949) (citing United States v. Miller, 317 U.S. 369, 376-379 (1943)). 19 Market value does not fluctuate with the needs of the condemnor or the condemnee, but with 20 the general demand for the property. Therefore, evidence of lost profits or frustrated plans 21 are consequential losses not recognized in federal condemnation proceedings. United States 22 v. Petty Motors, 327 U.S. 372-378 (1946), rehearing denied, 327 U.S. 818. A condemnation 23 suit is not a damage suit allowing for recovery of damages incident to the taking, such as lost 24 profits or frustration of plans. These are not items for which recovery is permitted. Rather, 25 the landowner is entitled to be paid "just compensation as measured by the fair market value 26 of the property or interest taken as of the day of the taking." United States v. 38.60 Acres of 27 Land, 625 F.2d 196, 198 (8th Cir. 1980). 28
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The Supreme Court has recognized that `market value' of condemned property can be

2 affected, negatively or positively, by the project that makes the condemnation necessary. 3 United States v. Reynolds, 397 U.S. 14, 16 (1970)(citing, Shoemaker v. United States, 147 4 U.S. 282 (1893)). Also, the Court found that if the compensation to be awarded to the owner 5 would be either reduced or increased because of the change in market value because of the 6 project then `just compensation' would not be met. United States v. Reynolds, 397 U.S. 14, 7 16 (1970))(citing, Shoemaker v. United States, 147 U.S. 282 (1893)). However, even if a 8 property's marketability has been impacted by the creation of a government project, which 9 may reduce the number of potential buyers for the subject property, just compensation is not 10 affected unless that impact is reflected in the market. A landowner whose property is taken 11 often receives less for his land than whatever special value the land had to him before the 12 taking. Cloverport Sand and Gravel Co. v United States, 6 Cl. Ct. 178, 187 (1984) (citing 13 United States v. Petty Motors, 327 U.S. 372, 377 (1946)). 14 15 8. Price Paid by Condemnor for Similar Property Not Admissible:

"The price paid by condemnor in settlement of condemnation proceedings or in

16 anticipation of such proceedings is inadmissible to establish value of comparable land as 17 `such payments are in the nature of compromise to avoid the expense of uncertainty of 18 litigation and are not fair indications of market value.' United States v. 10.48 Acres of Land, 19 621 F.2d 338, 339 (9th Cir. 1980)(quoting, Slattery Company v. United States, 231 F.2d 37, 20 41 (5th Cir. 1956)) . 21 The general rule is that evidence of prices paid by the government for the purchase,

22 through private negotiations, of lands in connection with the project for which land is being 23 condemned cannot be received. United States v. 46,672.96 Acres of Land, 521 F.2d 13, 17 24 (10th Cir. 1975)(citing, Slattery Company v. United States, 231 F.2d 37 (5th Cir. 1956) and 25 Evans v. United States, 326 F.2d 827 (8th Cir. 1964)). For instance, a condemnor may be 26 willing to pay more and a landowner may be willing to take less in order to avoid a lawsuit. 27 Transwestern Pipeline Co. v. United States, 418 F.2d 15, 18 (5th Cir. 1969). Such payments 28
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1 are in the nature of a compromise and are not evidence of what constitutes fair market value. 2 United States v. 46,672.96 Acres of Land, 521 F.2d at 17. 3 4 9. Offers to Purchase Subject Properties:

The general rule is that evidence of offers to purchase are not admissible for

5 determining the reasonable market value of property because the evidence to establish offers 6 to purchase is often speculative and collateral inquiries enter the case that may confuse the 7 main issue. United States v. Regents of New Mexico School of Mines, 185 F.2d 389, 391 8 (10th Cir. 1950); see also, United States v. 10,031.98 Acres of Land, 850 F.2d 634, 637 (10th 9 Cir. 1988)("It is well settled that a mere offer, unaccepted, to buyer or sell is inadmissible to 10 establish market value.")(citing, United States v. Smith, 355 F.2d 807, 811 (5th Cir. 1966)). 11 The United States Supreme court described an offer to purchase property by saying, "It is, at 12 most, a species of indirect evidence of the opinion of the person making such offer as to the 13 value of the land." Sharp v. United States, 191 U.S. 341, 348-349 (1903). The Court went 14 on to explain that offers to purchase involve no responsibility on either side and therefore are 15 not able to help in the valuation of subject properties. Sharp v. United States, 191 U.S. at 16 348-349. Therefore, admitting evidence of offers to purchase the property would allow 17 speculation and conjectural evidence to enter the case, and speculation and conjecture cannot 18 be a guide for ascertaining value. Olson v. United States, 292 U.S. 246, 257 (1934). While a 19 landowner may testify as to the value of his property without being qualified as an expert, 20 like an expert, the landowner's testimony must be based on competent evidence. However, 21 offers to purchase are not competent because they are based on speculation and conjecture. 22 23 24 25 26 27 28 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
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CERTIFICATION I hereby certify that on July 17, 2006, I electronically transmitted the attached

3 document to the Clerk's Office using the CM/ECF System for filing and transmittal of a 4 Notice of Electronic Filing to the following CM/ECF registrants: 5 John A. Weil
Weil & Weil

6 Attorneys at Law
1600 S. Fourth Ave., Ste. C

7 Yuma, Arizona 85364 8
s/Nancy Stotler

9 ______________________ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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