468 F. Supp. 310 | E.D. Ark. | 1979
MEMORANDUM OPINION
This action involves the government’s condemnation of a fifteen acre rectangular tract of land located in Mississippi County, Arkansas. The land in question is situated in the western portion of the Big Lake National Wildlife Refuge
On August 16, 1972 the government filed a notice of condemnation. In due course summons were issued and served upon the defendants. The government also tendered on the same date the amount of $3,750.00, its estimated amount of compensation for the property condemned. The defendants subsequently appeared by counsel and contested the government’s valuation of the tract of land.
The fifteen acre rectangular tract is located about one quarter of a mile from a ditch on the western boundary of the Big Lake National Wildlife Refuge. There are no roads or hiways providing direct access to the property. Most of the year the property is covered by water of varying depths and even in the drier parts of the year the land has water on it since a slough meanders through the property. Access to the tract
John Charles Bright and Hayes T. Sullivan acquired an undivided three-fourths interest in the fifteen acre tract by a quitclaim deed from Mr. and Mrs. F. E. Scott. The deed was recorded on March 17, 1972, approximately five months prior to the date of taking, in Record Book 260, page 400 in the office of the Circuit Clerk of Mississippi County, Arkansas. The amount of consideration paid by Mr. Bright and Mr. Sullivan for their undivided three-fourths interest in the property was $3,750.
Every witness that testified for the defendants acknowledged that the highest and best use of the tract was for duck hunting. Mr. Lingman, the government’s appraiser, while reluctant to assign a single best use for the land admitted that the tract was locally acknowledged as a good duck hunting area. Mr. Lingman, a senior real estate appraiser who now works as a review appraiser, testified that the highest and best use of the fifteen acre tract was for “duck hunting and timber production.” Mr. Clyde A. Stewart, an employee of the United States Fish and Wildlife Service, contradicted Mr. Lingman’s testimony, however, at least to the extent of Mr. Ling-man’s conclusion that timber production was one of the best uses of the fifteen acre tract. Mr. Stewart conducted a 100% cruise
The central issue in this case is determining what constitutes the fair market value of the property in question. While none of the parties have disputed this ultimate objective their methods of reaching the desired end had differed drastically. It is thus the method of the respective parties in determining the value of the property which provides the real controversy in the present suit. The essential controversy is clearly manifested by the extreme differences in value offered by the condemnor and condemnee. For example, the defendants have earnestly contended that the tract of land has a fair market value of between $100,000 and $150,000 if the direct capitalization of net income approach is utilized to determine the value of the property. The government, on the other hand, has contended with equal vigor that the condemnees’ method of valuation is inappropriate and that the fair market value of the fifteen acre tract is only $4,325 if value is determined through comparable sales. It thus appears that the fair market value of the tract cannot be established until the appropriate method of computing the property’s value has been resolved. We proceed to the resolution of the latter issue.
The objective in any condemnation proceeding is, of course, to fairly compensate, to indemnify, the owner for the
In the present case the defendants have arrived at the fair market value of the fifteen acre tract by capitalizing anticipated profits from the prospective rental of blinds to persons desiring to hunt ducks on the tract. The evidence admitted without objection at trial clearly established that the defendants had not yet built additional blinds and had not charged any person for duck hunting on the tract prior to the date of taking.
“The sovereign ordinarily takes the fee. The rule in such a case is that compensation for that interest does not include future loss of profits, the expense of moving removable fixtures and personal property from the premises, the loss of goodwill which inheres in the location of the land, or other like consequential losses which would ensue the sale of the property to someone other than the sovereign. No doubt all these elements would be considered by an owner in determining whether, and at what price, to sell. No*315 doubt, therefore, if the owner is to be made whole for the loss consequent on the sovereign’s seizure of his property, these elements should be properly considered. But the courts have generally held that they are not to be reckoned as part of the compensation for the fee taken by the Government. We are not to be taken as departing from the rule they have laid down, which we think sound. Even where state constitutions command that compensation be made for property “taken or damaged” for public use, as many do, it has generally been held that that which is taken or damaged is the group of rights which the so-called owner exercises in his dominion of the physical thing, and that damage to those rights of ownership does not include losses to his business or other consequential damage.”
We must therefore conclude that the defendants in the instant case cannot recover, as the fair value of the land in question, the amount of future profits lost through the foreclosure of an anticipated or prospective business opportunity, United States ex rel. Tennessee Valley Authority v. Powelson, supra, 319 U.S. at 285, 63 S.Ct. 1047, especially where, as in the present case, those profits are purely speculative and conjectural. Mills v. United States, 363 F.2d 78, 81 (8th Cir. 1966); United States v. 620.00 Acres of Land, Etc., 101 F.Supp. 686 (W.D. Ark.1952); United States v. 116.00 Acres of Land, Etc., 227 F.Supp. 100, 105 (W.D.Ark. 1964).
After considering all of the evidence submitted by the respective parties, this court is persuaded that the evidence of comparable sales offered by the government provides the most accurate appraisal of the fair market value of the fifteen acre tract.
The defendants have made much of the fact that the government’s expert witness did not assign a specific value to the land as an area for duck hunting. While the defendants were entitled to establish the adaptability of the fifteen acres for a particular use, that use alone is not the only relevant consideration in determining the fair market value of the condemned property. In determining the fair market value of a condemned tract of land all factors should be considered which would influence a person of ordinary prudence desiring to purchase the property involved. See United States v. 147.47 Acres of Land, Etc., 352 F.Supp. 1055 (M.D.Penn.1972). Furthermore, while the value of the fifteen acre tract for duck hunting purposes is conceded, it does not follow that the defendants are to be compensated on the basis of that particular value alone. Particularly where, as in the present ease, the value of the property for duck hunting has been clearly enhanced by the location of the property in the midst of the Big Lake National Wildlife Refuge, an area where, although substantial efforts have been made to maintain an environment attractive to migratory waterfowl, duck hunting is specifically forbidden. It thus appears the value of the tract for duck hunting stems largely from the quality of the habitat of surrounding and adjacent properties and from the absence of competition from other hunters. It further appears, and the court so finds, that the fifteen acre tract in question was probably within the scope of the Big Lake National Wildlife Refuge Project from the project’s inception. This latter conclusion is buttressed by the fact that all lands within a significant radius of the tract had been previously condemned by the government as part of the wildlife refuge project. Under these circumstances the landowners are not entitled to be compensated for the enhanced value of the land for duck hunting where the increased value for that particular purpose is due solely to the proximity of the land to the project. United States v. 11.74 Acres of Land, Etc., 515 F.2d 1020 (8th Cir. 1975).
While the court finds the evidence of comparable sales persuasive, the court is not in complete agreement with the government’s assessment of the fair market value of the fifteen acre tract. Several of the sales offered into evidence by the govern
. The Big Lake area may be roughly divided into two halves. The eastern half or portion is owned by the Arkansas State Game and Fish Commission. The Commission maintains the major portion of the eastern half as a public shooting range, an area where, for a modest fee, a person is allowed to hunt ducks. The Commission apparently clears areas of timber where necessary and plants some of the acreage in various grain crops to facilitate duck hunting. In contrast, the western portion of the Big Lake area, with the exception of the fifteen acre tract in issue, is owned by the United States. The western portion, as its name implies, is maintained as a wildlife refuge. Duck hunting on the refuge is prohibited although the defendants were allowed to duck hunt on the fifteen acre tract until the government condemned it. As in the State owned eastern portion of the Big Lake area, food crops are planted in the wildlife refuge in order to achieve optimum conditions in waterfowl habitat. The evidence produced at trial clearly demonstrated a substantial increase in recent years in the number of duck hunters in the area and a corresponding rise in competition for available natural resources. Much of the increase in demand for additional duck hunting
. This action was one of a large number of civil cases which were reassigned to this court on September 1, 1978. This case was tried to the court sitting without a jury on December 14, 1978.
. Testimony produced at trial indicated that the government allowed the defendants and their guests access to and from the fifteen acre tract by means of a “trail” which had been marked for that purpose.
. A “duck blind” is a relatively small structure erected above the water to shelter hunters from the elements while awaiting the arrival of their quarry. The blind, which is usually built of wood or tin, can be as elaborate or simple as the hunter desires. The testimony offered by the defendants at trial indicated that the cost of constructing a duck blind in 1972 was about $200. A single duck blind can accommodate between four to six hunters.
. The government contested the amount of consideration paid by Mr. Sullivan and Mr. Bright. The government contended that only $2800 was actually paid for their undivided three-fourths interest in the tract. The actual amount of consideration paid by the owners is relevant only insofar as their purchase of the property is utilized as a comparable sale. In any event there is sufficient evidence to warrant a finding that $3750 was paid by the condemnees for their undivided three-fourths interest in the tract. The government also contested Mr. Scott’s contention that he had reserved the lifetime duck hunting rights in the land. As has been previously noted, Mr. Scott and his wife conveyed their undivided three-fourths interest in the fifteen acre tract by quitclaim deed to Mr. Sullivan and Mr. Bright. That deed conveys all right, title and interest that Mr. and Mrs. Scott may have had in the property to their successors in interest, Mr. Sullivan and Mr. Bright. Inasmuch as there was no express reservation of the interest claimed by Mr. Scott in the deed, the court must conclude that Mr. Scott possessed no enforceable right with respect to duck 'hunting rights. Assuming, arguendo, that duck hunting rights are capable of severance in a conveyance, there must still be some evidence of the reservation in order to defeat what otherwise appears to be a complete transfer of all rights in the estate.
. A “100% cruise of the timber” means going through the tract and physically counting each and every tree capable of being utilized for timber. Mr. Stewart testified that the fifteen acre tract had 273 cypress trees, 374 ash trees, 37 willow trees, 22 hackberry trees and 13 oak trees. He also testified that there were a small number of other kinds of trees. Mr. Stewart estimated that the trees capable of being used as lumber represented approximately 106,691 board feet. He further testified that a fair price for the timber would be between $25-$30 per 1,000 board feet or $3,210 for all'the timber. This latter figure assumes the maximum price per 1,000 bd. ft. or $30.
. Witnesses for the defendants testified that the fifteen acre tract could accommodate 5 or 6 duck blinds. There was only one blind on the property at the time of taking. The cost of constructing a single duck blind in 1972 was approximately $200. The evidence presented on behalf of the defendants showed that the duck hunting season was approximately 45 days in Arkansas in 1972. The defendants’ capitalization of income formula was predicated on the profits to be derived by selling duck hunting rights on a daily basis or by renting each of the proposed duck blinds for an annual fee. Several of the defendants’ witnesses testified that each blind could be rented at a fee of $1,000 per year. If this rental basis was utilized and all blinds were rented as anticipated, a gross income of between $5,000 and $6,000 could be realized from the leasing of the proposed duck blinds on the fifteen acre tract. As an alternative method for capitalizing income from the leasing of duck hunting rights, the defendants’ witnesses testified that in 1972 it was customary for established duck clubs to charge persons desiring to hunt on club property a fee of $10 per day. Thus, if 25 hunters could be accommodated each day of the hunting season, the fifteen acre tract could produce a potential gross income of 25 X $10 per day X 45 days of hunting season for a total of approximately $11,250 for the 1972 duck hunt-' ing season. This latter amount, of course, assumes a constant demand by hunters at maximum levels.
. In United States v. Petty Motor Co., 327 U.S. 372, 377-378, 66 S.Ct. 596, 599, 90 L.Ed. 729 (1946), the Supreme Court made the following comment: “ * * * it has come to be recognized that just compensation is the value of the interest taken. This is not the value to the owner for his particular purposes or to the condemnor for some special use but a so-called ‘market value’. It is recognized that an owner often receives less than the value of the property to him but experience has shown that the rule is reasonably satisfactory. Since ‘market value’ does not fluctuate with the needs of [the] condemnor or condemnee but with general demand for the property, evidence of loss of profits, damage to good will, the expense of relocation and other such consequential losses are refused in federal condemnation proceedings.” See also Bothwell v. United States, 254 U.S. 231, 41 S.Ct. 74, 65 L.Ed. 238 (1920); Joslin Mfg. Co. v. City of Providence, 262 U.S. 668, 43 S.Ct. 684, 67 L.Ed. 1167 (1923); Omnia Commercial Co. v. United States, 261 U.S. 502, 43 S.Ct. 437, 67 L.Ed. 773 (1923).
. The court is not unmindful of the special significance of this land to the defendants, their families, friends and associates. And, while the court is sympathetic to the unique problems posed by the increasing demand for the limited natural resources involved in this case, the court must resolve the issues herein on the same basis as a jury, without regard to sympathy or prejudice or like or dislike of any party to this suit.