the-metropolitan-gov-of-nashville-and-davidison-county-tennessee-and-the ( 1995 )

THE METROPOLITAN GOVERNMENT OF )
NASHVILLE and DAVIDSON COUNTY, )
TENNESSEE, and )
THE METROPOLITAN NASHVILLE )
AIRPORT AUTHORITY, )
)
Petitioners/Appellants, ) Appeal No.
) 01-A-01-9503-CV-00089
v. )
) Davidson Circuit
OVERNITE TRANSPORTATION ) No. 87C-181
COMPANY, a Virginia )
Corporation of Nashville and
Davidson County, Tennessee,
)
)
)
FILED
Respondent/Appellee. ) Oct. 19, 1995
Cecil Crowson, Jr.
Appellate Court Clerk
COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
APPEAL FROM THE CIRCUIT COURT FOR DAVIDSON COUNTY
AT NASHVILLE, TENNESSEE
THE HONORABLE HAMILTON GAYDEN, JUDGE
CHARLES W. BURSON
Attorney General and Reporter
MICHAEL E. MOORE
Solicitor General
MICHAEL W. CATALANO
Associate Solicitor General
Office of the Attorney General and Reporter
Executive Offices
500 Charlotte Avenue
Nashville, Tennessee 37243-0497
ATTORNEYS FOR PETITIONERS/APPELLANTS
HARWELL HOWARD HYNE
Gabbert & Manner, P.C.
Jonathan Harwell
C. Mark Pickrell
1800 First American Center
Nashville, Tennessee 37238
ATTORNEYS FOR RESPONDENT/APPELLEE
VACATED AND REMANDED
SAMUEL L. LEWIS, JUDGE
O P I N I O N
This is an appeal by the petitioners/appellants, Tennessee
State Department of Transportation ("TDOT") and Metropolitan
Nashville Airport Authority ("MNAA"), from a jury verdict and
judgment valuing four acres of condemned property owned by the
respondent/appellee, Overnite Transportation Company ("Overnite"),
at $1,759,578.10.
ISSUES
The petitioners/appellants raise two issues on appeal:
1) Whether the evidence preponderates against
the trial court's finding that the petitioner's
property, which was condemned as part of the
discrete access road connecting Interstate 40 to
the new airport terminal complex of the
Metropolitan Nashville Airport, was not within the
scope of the project?
2) If so, whether the petitioner is entitled to
a new trial on the grounds that evidence was
introduced to the jury by the [respondent], which
included the enhanced value of the property taken
for the discrete access road, based upon the
relocation of the new terminal complex?
In April 1979, MNAA began the Metropolitan Airport Master
Plan Update, a study of the development of a new terminal complex
at the Metropolitan Nashville Airport. The Update included five
alternatives for the construction of a discrete access road to
serve the airport from Interstate 40. Of the alternatives, two
required the taking of Overnite's property and two did not. The
fifth alternative did not specifically mention Overnite's property,
but MNAA's Director of Planning and Programming testified that it
did not require the taking of Overnite's property. The Update
recommended the fifth alternative. MNAA's Board of Commissioners
approved the study and incorporated it into the Board's resolution
verbatim. In December 1980, the Board announced to the public its
plans to construct the new terminal.
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In August 1981, the original grading plans for the new
terminal project showed that MNAA might need a small portion of
Overnite's property to build the discreet access road. In 1982,
the Metropolitan Planning Commission approved MNAA's plans for the
construction of the new terminal, including the construction of the
discreet access road. The project required that MNAA obtain a
zoning variance. The Metropolitan Board of Zoning Appeals sent
hearing notices to all neighboring and affected property owners,
including Overnite, and approved the variance in June 1982. Also
in 1982, the Department of Public Works issued a letter approving
the grading, drainage, and erosion control plans for the entire
project. Those plans showed the discrete access road crossing
through Overnite's property. The trial record, however, is unclear
as to whether the grading plans showing the taking of Overnite’s
property became part of the public record through the zoning appeal
or through the letter issued by the Department of Public Works.
Despite the grading plans, evidence presented at trial
indicated that in 1982 and for some years thereafter MNAA had not
decided the exact location of the discrete access road. In 1983,
TDOT agreed to purchase the right-of-way for the discrete access
road in exchange for a conveyance of airport property. MNAA asked
TDOT to acquire property for the discrete access road because MNAA
did not have the power to exercise eminent domain. Though ultimate
design questions had not been answered, by 1986, TDOT was
appraising Overnite's property so it could make an offer to
purchase land for the discrete access road. TDOT based its
appraisals of Overnite's property on the property's proximity to
the airport and reported that in the rapidly expanding airport
commercial area the highest and best use of the property was
intense hotel/motel commercial development. TDOT hired another
appraiser in 1993 who also considered the location of the new
terminal in valuing Overnite's property.
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In January 1987, TDOT filed a petition for condemnation of
4.257 acres of Overnite's land and tendered $741,980.00 to the
Davidson County Circuit Court Clerk. This amount represented
TDOT's estimation of Overnite's damages. The Davidson County
Circuit Court entered an order of possession in February 1987.
Overnite filed an answer denying that $741,980.00 represented the
fair market value of the property TDOT sought to condemn. In
answer to interrogatories from Overnite concerning the valuation of
the property, TDOT provided Overnite with the appraisals conducted
in 1986 which valued the property based on its proximity to the new
terminal. TDOT never updated its answers to these interrogatories.
The case was originally set for trial on 6 December 1993,
but the court continued the case and eventually set it for 20 June
1994. On 6 May 1994, TDOT filed a motion requesting that the
court not allow Overnite to introduce evidence of the value of its
property based on its proximity to the new terminal. On 26 May
1994, TDOT filed a notice that its appraisers could present a
valuation of the property excluding the effect of the new terminal
before trial. TDOT also said that it would submit the valuation
and its basis to Overnite; however, Overnite never received such a
submission.
On 4 June 1994, the trial judge denied TDOT's motion. The
judge found that TDOT's request to change its legal theory of just
compensation came "too late" and that TDOT failed to show that the
taking of Overnite's property was probably necessary in 1980.
Consequently, the judge held that Overnite could offer evidence of
the value of its property based on its proximity to the new
terminal, and at trial, he issued instructions to the jury
reflecting that holding.
Regarding the valuation of the property, the jury returned
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a verdict of $1,759,578.10. The trial judge entered a judgment to
that effect which also provided for the payment of interest on
$1,017,778.10, the difference between the jury award and the amount
deposited with the court clerk. The trial court denied a motion
filed by TDOT requesting a judgment not withstanding the verdict
and a new trial. On 28 November 1994, TDOT filed a notice of
appeal.
We will address appellants' issues together by discussing
the proper formulation of the scope of the project rule and its
application to the case at bar.
(I)
Under the most recent formulation of the scope
of the project rule, the state need not compensate
condemnees for any enhancement in the value of
their property caused by the project which makes
condemnation necessary if, at the time the state
committed to the project, it was reasonably
foreseeable that the government might take the
condemnees' property.
The United States Constitution and the Tennessee
Constitution mandate that landowners be paid "just compensation"
when their property is taken for public use. U.S. Const. amend. V;
Tenn. Const. art. I, § 21. Traditionally, just compensation was
the market value of the property to be taken. United States v.
Reynolds, 397 U.S. 14, 16-17, 90 S. Ct. 803, 805, 25 L. Ed. 2d 12,
16 (1970). When the market value of the property rises solely
because of governmental demand for the property, however, it is not
just to require the public to pay the above normal market value.1
1.
United States v. Reynolds, 397 U.S. 14, 16-17, 90 S. Ct. 803, 805, 25 L.
Ed. 2d 12, 16 (1970). Three considerations support this proposition. United
States v. 320.0 Acres of Land, 605 F.2d 762, 782 (5th Cir. 1979). First, by
entering the market as a purchaser with a unique and pressing demand, the
Government has distorted the market. Thus, the selling price is not the actual
fair market value. Second, forcing "the Government to pay ... a premium over
that which the property would bring on the open market absent the Government's
demand would increase the cost of public projects and perhaps frustrate some
public objectives." Id. Third, permitting "recovery of value that is not
created by fair, open market conditions would be to award a few private
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Consequently, courts created the scope of the project rule. Lands
situated near public improvement projects tend to increase in
value. United States v. Miller, 317 U.S. 369, 376, 63 S. Ct. 276,
281, 87 L. Ed. 336, 344 (1943). Courts designed the scope of the
project rule to allow landowners to benefit from enhancement in the
market value of their land caused by its being close to a public
improvement. Simultaneously, the rule prevents speculation on the
government's activities at the public's expense by landowners or
prospective purchasers. See Layne v. Speight, 529 S.W.2d 209, 212
(Tenn. 1975) (quoting Miller, 317 U.S. at 376-77).
The scope of the project rule, formulated by the United
States Supreme Court in Miller and later adopted by the Tennessee
Supreme Court in Layne, is easy to state: If the property being
condemned was "probably within the scope of the governmental
project from the time the Government was committed to it," the
landowner is not entitled to compensation for any increase in value
caused by the project. Miller, 317 U.S. at 376-77. The rule,
however, is not so easy to apply. United States v. 320.0 Acres of
Land, 605 F.2d 762, 782 (5th Cir. 1979) [hereinafter Monroe
County]. Consequently, the Court clarified the federal scope of
the project rule in United States v. Reynolds. Although dicta, the
Court restated Miller's rule and noted the following:
As with any test that deals in probabilities, its
application to any particular set of facts requires
discriminating judgment. The rule does not require
a showing that the land ultimately taken was
actually specified in the original plans for the
project. It need only be shown that during the
course of the planning or original construction it
became evident that land so situated would probably
be needed for the public use.
Reynolds, 397 U.S. at 21 (footnote omitted).
propertyholders windfall gains solely because of public needs and exigencies."
Id.
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The Tennessee Supreme Court has cited the Reynolds'
clarification of the federal scope of the project rule. Layne, 529
S.W.2d at 212-13. In Layne, the court noted that Reynolds had
"merely restated the crux of Miller," but the court also seemed to
cite with approval the additional Reynolds' clarification quoted
above. Id. In a later case, the Court of Appeals of Tennessee,
Eastern Section, adopted the Reynolds' clarification. State v.
Hodges, 552 S.W.2d 400, 402 (Tenn. App. 1977). In Hodges, the
State condemned 57 acres of the defendant landowner's property for
a highway construction project in 1971. Three years later, after
the State had completed part of the project, the State discovered
that it would need an additional 1.75 acres of the defendant
landowner's property to maintain a stable slope. Id. at 400. The
trial judge, relying on Miller, held that the additional 1.75 acres
was outside the scope of the original project. Id. at 401. In
light of Reynolds, the court reversed the trial court, but limited
its holding to the particular facts of the case. Id. at 402.
Since Layne and Hodges, only one other case in Tennessee has dealt
with a scope of the project rule issue. State Ex rel. Comm'r,
Dep't of Transp. v. Veglio, 786 S.W.2d 944 (Tenn. App. 1989)
(affirming the trial court's finding that interchange upgrade and
road widening projects were distinct). Veglio did not explicitly
adopt, renounce, or mention the Reynolds' clarification.
Nevertheless, based on Layne and Hodges, the Reynolds'
clarification seems to be part of the scope of the project rule as
adopted in Tennessee.
Since Reynolds, courts have refined the federal scope of the
project rule to reflect landowners' and prospective purchasers'
reasonable expectations as to whether a piece of property will be
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taken.2
In anticipation of a proposed project, real
property adjacent to or near land to be taken
frequently increases in value; however, the land
which is expected to be taken does not legitimately
share in this enhancement because its inclusion in
the project will make it unavailable for private
development. Any enhancement in the value of the
land necessarily would result from speculation that
the Government might be compelled to pay an
artificially inflated price.
United States v. 2,353.28 Acres of Land, 414 F.2d 965, 967-68 (5th
Cir. 1969) [hereinafter Brevard County].
As a result, land is within the scope of the project when a buyer
in the real estate market could reasonably expect that the property
in question might become part of the project and when the increase
in value of the property is attributable to speculation on the
government's activities. See Monroe County, 605 F.2d at 791.
(II)
To apply the scope of the project rule to the case at bar,
the court must decide two issues. The first is when did MNAA
commit to the new terminal project. The second is whether, on that
date, Overnite or a prospective purchaser could have reasonably
expected that Overnite's property might become part of the new
terminal project. The burden of proving whether the condemned
property was probably within the scope of the project is on the
State. Layne, 529 S.W.2d at 213. We review the trial court's
2.
See, e.g., United States v. 49.01 Acres of Land, 669 F.2d 1364, 1367
(10th Cir. 1982) (holding that the scope of the project rule, as enunciated by
Miller and Reynolds, requires the Government to pay the enhanced value of the
land if "the landowner reasonably believed that subsequent government action
removed the property from the project's scope." United States v. 320.0 Acres of
Land, 605 F.2d 762, 793 (5th Cir. 1979) (noting that the "crucial inquiry" is
whether a landowner or a private purchaser could reasonably anticipate that he
would be able to devote the property to its highest and best economic use without
serious fear that the government would soon condemn the land); United States v.
31.43 Acres of Land, 547 F.2d 479, 481-82 (9th Cir. 1976) (finding no error in
the trial court's finding that property lay within the scope of the project where
no public information existed that could lead a property owner to believe that
his land would not be a probable object of condemnation); United States v. 172.80
Acres of Land, 350 F.2d 957, 959 (3rd Cir. 1965) (holding that a landowner was
entitled to the enhanced value of his property because a purchaser contemplating
acquisition and development of the property could have reasonably anticipated
that, at the time the Government committed to the project, he would be able to
devote that land to its highest economic use without serious apprehension of
condemnation); United States v. Eastman, 528 F. Supp. 1177, 1182 (holding that
the Fifth Circuit's reasonable-expectations test requires that the enhanced value
be an element of a landowner's condemnation award).
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finding on the scope of the project de novo accompanied by a
presumption that the finding is correct unless the preponderance of
the evidence is otherwise. Tenn. R. App. P. 13(d).
(A)
As of 1980, after the State funded and
announced the project to the public, the prospect
of the project becoming a reality became
sufficiently definite such that, at that time,
MNAA can be said to have committed to the new
terminal.
According to the reasonable expectations formulation of the
scope of the project rule, the commitment date is the date on which
the prospect of imminent condemnation becomes "sufficiently
definite" or, in other words, when the prospect of imminent
condemnation would be a "major factor in the decision of any
reasonable person to buy or develop the property." Baylin v. State
Roads Comm’n, 475 A.2d 1155, 1161 (Md. 1984) (quoting Monroe
County, 605 F.2d at 807). In Baylin, the State Roads Commission
developed a plan for the construction of an expressway in 1948.
The State budgeted funds for the project as of 1954. Id. at 1156.
Nevertheless, construction on the expressway did not begin as
planned because the State transferred the funds to another highway
project. In the early 1970s, the State proposed a plan to combine
the expressway project with a mass transit project. The addition
of the mass transit project required the taking of additional acres
of the appellant landowner’s property. Id. at 1157. In 1981, the
State commenced condemnation proceedings against 137 acres of the
appellant landowner’s property, 118 acres more than originally
planned. Id. at 1158.
On appeal, the court cited the trial court’s finding that
the State committed to the project in 1954 with approval. The
court found that the State announced the project to the public and
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funded it in 1954. As of this time, people were familiar with the
expressway's planned location and its general path. Consequently,
the court found that as of 1954 landowners and prospective
purchasers could not expect to devote their property to its highest
and best use. Id. at 1161.
In the instant case, the trial court found that MNAA
committed to the new terminal project in 1980. Appellants argue
that MNAA had not committed to the project until 7 June 1982 when
the Metropolitan Board of Zoning Appeals granted MNAA a conditional
use permit. Without such approval, appellants argue, MNAA could
not have built the new terminal project. The date of commitment,
however, is not the date on which the occurrence of the project
becomes a legal certainty, but is the date on which the probability
that the project will occur becomes a major factor in a person's
decision to buy or develop the property. Id. (quoting Monroe
County, 605 F.2d at 807).
Here, MNAA announced the new terminal project to the public
in December 1980. In some condemnation cases, a just commitment
date is the date the state announced the project. Monroe County,
605 F.2d at 806; Baylin, 475 A.2d at 1161. Once the State
announces the project, the probability of condemnation will affect
the decisions of ordinary investors in the real estate market.
See United States v. Miller, 317 U.S. 369, 377 (1943). Further,
MNAA approved funding for the new terminal project in December
1980. Money approved is usually spent, and thus, the likelihood
that a prospective project will become a reality is far greater.
In the face of a public announcement and approved funding, the need
for a zoning permit does not create sufficient uncertainty to
compel this court to hold that the trial court erred in finding
that MNAA committed to the new terminal project in 1980.
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(B)
At the time the MNAA committed to the new
terminal project, the possibility of condemnation
of Overnite's property was sufficiently serious
such that the property can be said to be within
the scope of the project.
Knowing the commitment date, the court must decide
whether, on that date, the owner of the land to be taken could
reasonably expect to be able to devote his land to its highest
economic use without serious apprehension that the State would
soon condemn the property. See Monroe County, 605 F.2d 762, 793
& n.44 (5th Cir. 1979). Several courts consider the following
three factors to determine if the taking was reasonably
foreseeable: (1) the foreseeability that the government would
change the original plans to include the property, (2) the
length of time between the commencement of the project and the
taking in question, and (3) the Government's representations
concerning the finality of the original plans. See, e.g., United
States v. 62.17 Acres of Land, 538 F.2d 670, 680 (5th Cir. 1976)
[hereinafter Jasper City]; Baylin, 475 A.2d at 1162-64; State
Dep't of Transp. v. Montgomery Ward Dev. Corp., 719 P.2d 507, 513
(Or. App. 1986).
(i)
The foreseeability that MNAA would change the
1980 Master Plan Update, a continuing planning
document, to include Overnite’s property weighs in
favor of a finding that the property was within
the scope of the new terminal project.
The application of the scope of the project rule calls for
"discriminating judgment." Jasper City, 538 F.2d at 678. The
Government need not actually specify the land ultimately taken in
the original project for the land to come within its scope; it
need only be evident that the Government might take the given tract
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for the project. Id. In Jasper City, the Government did not
specify the landowner’s property in the original plans.
Nevertheless, the Government's representations that it would take
all of the property within the five year flood line and the
probability of mistakes in surveying made it reasonably foreseeable
that the Government would take the landowner’s property. Id. at
681.
The court in United States v. Crance, 341 F.2d 161 (8th Cir.
1965), reached a similar result. In 1958, the Government purchased
five acres from a landowner for a dam and reservoir project.
Crance, 341 F.2d at 162. From its inception, the project called
for recreational facilities around the reservoir, but neither a
1956 preliminary design memorandum nor a 1960 public proposal of
sites approved by the Chief of Engineers included taking any of the
remainder of the landowner’s tract. Id. at 162-63. After persons
protested the lack of recreational facilities on the landowner’s
side of the reservoir, the engineers inspected additional sites
including the landowner’s tract. Id. at 163. After public
meeting, the Government took the remaining 35 acres of the
landowner’s tract for the creation of a public use area. Id. The
district court found that the property was not within the scope of
the project. Thus, it allowed evidence concerning the enhanced
value of the property. Id. at 162.
On appeal, the circuit court reversed the judgment of the
district court. Id. at 167. The circuit court noted that none of
the plans that excluded the landowner's additional property were
final plans. Id. at 164. The circuit court found the significant
factor to be that "the project contemplated recreational areas from
its very inception." It stated as follows:
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[C]ertainly property lying beyond a perimeter of
the reservoir would probably be incorporated for
recreational purposes if the land acquired for the
reservoir alone was not also sufficient for
recreational utilization. Since the [landowner’s]
property abutted the reservoir line, it was within
the sphere of probable acquisition for recreational
use.
Id. at 165.
Another court reached a different result on similar facts.
United States v. 172.80 Acres of Land, 350 F.2d 957 (3d Cir. 1965)
[hereinafter Mercer County]. In this case, the Government
purchased 20 acres of a landowner’s 100 acre tract for a dam and
reservoir project. Id. at 958. During negotiations, the
Government representative assured the landowner that the Government
would not need other parts of his land for the project. Though the
original project did not call for the creation of recreational
areas, a change in the Government's policy concerning public
developments and the use of reservoir areas prompted a decision to
acquire the remainder of the landowner’s property for recreational
use. Id. The circuit court affirmed the holding of the district
court that the enhanced value of the property was includable in the
condemnation award. Id. at 959. Noting that the possibility of
project expansion to include the property in question might have
occurred to a perceptive landowner or prospective purchaser, the
circuit court distinguished Mercer County from Crance based on the
differences between the Government’s representations and the
original plans of the projects.
In the instant case, the discrete access road was part of
the project from the time MNAA committed to it. The Airport Master
Plan Update specifically called for the construction of a discrete
access road to the new terminal. Overnite argues that it had no
notice that appellants required its land for the discrete access
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road. However, MNAA’s resolution adopting the Update incorporated
it as if MNAA had copied it verbatim. The Update included two
discrete access road alternatives which required the taking of
Overnite’s property. That MNAA considered Overnite's property for
use in the construction of the planned discrete access road would
likely have put Overnite on notice that MNAA might need its
property for the project.
Also, because the alternative chosen by MNAA did not
require the taking of Overnite’s property, Overnite argues it was
reasonable for it to expect that MNAA would not take its property.
As noted in Reynolds, the Government does not have to specify the
land to be taken in the original plans for the land to be within
the scope of the project. United States v. Reynolds, 397 U.S. 14,
21 (1970). "It need only be shown that during the course of the
planning or original construction it became evident that the land
so situated would probably be needed for the public use." Id. "We
cannot straightjacket the government in defining scope of the
project, but on the other hand, we cannot permit global meanderings
to enclave areas not reasonably to have been conceived as included
at inception." Jasper City, 538 F.2d 670, 678 (5th Cir. 1976).
From its inception, the new terminal project contemplated
a discrete access road. Further, the Master Plan Update, a
"continuing planning document" considered Overnite’s property for
public use. According to early plans for the new terminal project,
the discrete access road was a small part of a much larger project,
and the plans did not schedule it for construction until MNAA had
almost the entire project completed. As in Jasper City, the
possibility that MNAA would need to make some adjustments to allow
the discrete access road to accommodate the rest of the new
terminal construction was reasonably forseeable. Once the court
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accepts the possibility of adjustment as reasonably foreseeable,
the taking of Overnite’s property, property that the State had
already publicly considered for taking, is reasonably foreseeable
as well. Thus, a holding that the 1980 Update was a final
expression of the project for the purposes of defining the
project’s scope is unrealistic and would unnecessarily
"straightjacket" the State in the construction of public projects.
See Jasper City, 538 F.2d at 678. Further, a narrow interpretation
of the scope of the project rule would encourage the State, when
acquiring property, to obtain more land than it felt was absolutely
necessary to avoid the risk of having to acquire additional
property at an enhanced value. State v. Hodges, 552 S.W.2d 400,
402 (Tenn. App. 1977).
Overnite also argues that because TDOT, and not MNAA, took
Overnite’s property to build the discrete access road, the discrete
access road and the new terminal construction were separate
projects. In John L. Roper Lumber Company v. United States, 150
F.2d 329 (4th Cir. 1945), the court addressed a similar question.
There, the Government authorized the Secretary of the Navy to
establish a Marine Corps Training Area. Roper, 150 F.2d at 330.
The Federal Works agency condemned Roper’s property, which was
across the highway from the training area, to house defense
personnel. Id. The original plans for the Marine Corp Training
area contemplated a housing project. Id. at 331. The court
rejected Roper’s contention that because a different government
agency condemned the property, the property was outside the scope
of the project:
We cannot believe that the rule set forth in the
Miller case should be nullified by the mere chance
that an agency of the Government different from the
one for whose use the land is taken, should, by
reason of the fact that it holds available funds,
be directed to institute condemnation proceedings.
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Id.
Roper stands for the proposition that as long as the
property in question is part of the project, the fact that the
condemning authority is a different government agency is not
relevant. As a result, the fact that TDOT condemned Overnite’s
property for MNAA does not render the discrete access road outside
the scope of the new terminal project.
(ii)
Six years, during which the project was
continuously under construction, is a relatively
short amount of time between the commencement of
the terminal project and the taking of Overnite’s
property such that it weighs in favor of finding
that Overnite could not reasonably expect to be
able to devote its property to its highest
economic use without serious apprehension of
condemnation.
Even where a condemnee's land is within the scope of the
project at the time the state becomes committed to it, there comes
a point in time when it would no longer be just to apply the scope
of the project rule in the government's favor. Monroe County, 605
F.2d at 797. At that time, the government's delay has removed the
specter of condemnation created by the project's original scope.
See Jasper City, 538 F.2d at 680. Because of additional factors in
Monroe County, the court did not define the "just" limits on the
temporal reach of the scope of the project rule, but it did warn
the Government that eighteen years might exceed those limits.
Monroe County, 605 F.2d at 797.
However, other courts have directly addressed the temporal
reach of the scope of the project rule. In Jasper City, the
Government delayed the taking for ten years. Jasper City, 538 F.2d
at 680. For the first five years, the Government was not aware
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that an additional taking was necessary. Id. at 673. For the
last five years, a lack of funding delayed the taking. Id. The
circuit court noted that the delay in taking in the first five
years was acceptable because there was a high probability of the
need for adjustment given the nature of the project and because the
need for adjustment would not reveal itself for five years. Id. at
680. Regarding the second five years, the circuit court remanded
the case to the district court to determine if the delay in the
second five years constituted a representation to the landowner
that additional adjustments would not be necessary. Id.
In addition, the court in Baylin addressed the temporal
reach of the scope of the project rule. Baylin v. State Roads
Comm'n, 475 A.2d 1155 (Md. 1981). As previously discussed, in
Baylin, the State committed to a highway project in 1954, but did
not take the appellant landowner’s property until twenty-seven
years later. Id. at 1163. Plans for the project in the late
1950's showed that the State would require nineteen acres of the
appellant landowner’s property. Id. at 1156. The final plan,
accepted in 1976, called for significantly more than nineteen acres
of the appellant landowner’s property. Id. at 1158.
At trial, the appellant landowner prayed for the enhanced
value of the land above the original nineteen acres. Id. The
trial judge found that the property was part of the scope of the
project, and the appellate court reversed. Id. at 1165. The court
noted that the length of time between the commencement of the
project and the condemnation was an important factor because of the
protracted time involved. Id. at 1163. The court found that it
would be "incompatible with the principles underlying just
compensation for the Government ... to announce a project and then,
27 years later, build a substantially enlarged project and say that
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this is one project and one taking." Id. at 1164.
The case at bar is unlike either Jasper City or Baylin.
First, in the present case, only six years elapsed from the
commencement of the project to the taking while in Jasper City and
Baylin it was eleven and twenty-seven years respectively. Second,
here, the delay between the commencement of the project and the
taking was not the result of an intervening event such as a
surveying error or a loss of funding. Instead, it was part of the
ongoing process of construction. As noted in Jasper City,
"gradualism in acquisition is oft times fact and not fiction."
Jasper City, 538 F.2d at 680. That the delay was part of the
normal process of construction makes the eventual taking more
foreseeable. Third, in Jasper City and Baylin, the plans that did
not require the landowner’s property were in place for several
years. Here, MNAA changed the plan for the discrete access road
requiring no taking of Overnite’s property in 1981, eight months
after MNAA announced it.
Overnite argues that until 1986 it had no knowledge that
MNAA had changed the plans to include Overnite’s property, and
thus, the changes could not have affected Overnite’s reasonable
expectations. The trial record is ambiguous as to whether the
public record included MNAA’s new plans which showed that
Overnite’s property might be taken. Unlike Baylin, however, there
is no evidence in the trial record that after the commencement of
the project Overnite received representations from MNAA or TDOT
that they would not take its property.
In other cases, courts have found delays of much longer than
six years insufficient to remove the condemned property from the
scope of the project. An Oregon appellate court found that a 14
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year delay was insufficient to render the property outside the
scope of the project. State Dep't Of Transp. v. Montgomery Ward
Dev. Corp., 719 P.2d 507, 514 (Ore. App. 1986). One reason for the
courts decision was that "[a]lthough the plans changed frequently
during the 14 years before the actual taking, most plans called for
some kind of taking similar to that which occurred." Id. at 514.
Also, the court relied on the fact that "[t]here was no evidence of
government representations which misled defendants or caused them
any prejudice." Id. Similarly, the Utah Supreme Court held that
an 11 year delay between the first and second condemnation was not
so lengthy as to "constitute two separate projects." Board of
County Comm'rs v. Ferrebee, 844 P.2d 308, 311 (Utah 1992).
Specifically, the Utah Supreme Court stated that "[w]hile the
County deserves no praise for speed, we cannot say that its actions
constitute two separate projects, especially when it consistently
and openly contemplated acquiring all of Ferrebee’s property." Id.
at 311.
(iii)
MNAA's representations as to the finality of
the 1980 Master Update Plan were not so definite
as to lead Overnite to believe that it could
devote its property to its highest use without
serious apprehension of condemnation.
Courts give crucial consideration to the government's
representations when determining scope of the project cases.
Monroe County, 605 F.2d at 792. If the government unequivocally
represents to the landowner or the public that it will not need a
certain parcel of property for a project, the government, in
effect, assures the landowner that any enhancement in the value of
that parcel will be based on its proximity to the government
project. Id. at 793; see also Mercer County, 350 F.2d 957, 958 (3d
Cir. 1965).
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In Brevard County, 414 F.2d 965 (5th Cir. 1969), the court
considered the effects of the Government's representations. In
that case, NASA condemned over 72,000 acres of land in August 1961.
Id. at 967. The Government did not include the appellant
landowner's property in the original condemnation nor was there any
evidence at that time that the Government intended to acquire the
property. In September 1961, before a Senate committee, a public
official testified that NASA would not need any additional lands
for the project. Id. at 969. Subsequently in 1962, the need for
additional launch pads necessitated the acquisition of an
additional 14,800 acres including 654.43 from the appellant
landowner. Id. at 966, 969-70 & n. 12. The court reversed the
judgment of the trial court which excluded evidence of the enhanced
value of the appellant landowner's property. Id. at 972. The
court found that the public officials testimony in 1961 destroyed
the persuasiveness of the Government's argument that its 1961
plans were not conclusive. Id. at 971.
The instant case is distinguishable from both Mercer County
and Brevard County. In both of those cases, after the Government
committed to the project, it made definitive representations that
its plans were final and that the Government would not require the
landowner's property. Here, no such statements were made.
Further, as previously noted, the nature of the document which
marked the State’s commitment to the new terminal project, the
importance of the discrete access road in relation to the entire
project, and the scheduling of the construction of the discrete
access road after MNAA completed most of the remainder of the
project indicated that one could not reasonably expect the 1980
Master Plan Update to be MNAA’s final expression of its plans for
the discrete access road.
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Consequently, the foreseeability that the State would take
Overnite’s property, the length of time from the date the State
committed to the new terminal project to the date of the taking,
and the State’s representations as to the finality of the original
plans all support a finding that Overnite's property was within the
scope of the new terminal project. It therefore results that the
judgment of the trial court is vacated and the case is remanded to
the trial court for a new trial and any further necessary
proceedings. Costs on appeal are taxed to appellee.
___________________________________
SAMUEL L. LEWIS, JUDGE
CONCUR:
_____________________________
HENRY F. TODD, P.J., M.S.
_____________________________
BEN H. CANTRELL, J.
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