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United States v. 4.70 Acres of Land

United States District Court, D. South Dakota, Western Division

February 2, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
4.70 ACRES OF LAND, MORE OR LESS, IN THE COUNTY OF PENNINGTON, STATE OF SOUTH DAKOTA, and SHARON NORMAN, Defendants.

          ORDER

          JEFFREY L. VIKEN CHIEF JUDGE

         INTRODUCTION

         Plaintiff United States filed a motion seeking to exclude testimony by defendant Sharon Norman that “residential development” is the “highest and best use” of the property which is the subject of this eminent domain proceeding. (Docket 47). Ms. Norman resists the government's motion. (Docket 50). For the reasons stated below, the government's motion is denied.

         ANALYSIS

         The United States filed a complaint seeking condemnation of real estate for an easement for a transmission line and access road against property in rural Pennington County, South Dakota. (Docket 1). The real property subject to the easement is described as Tract 141ET, consisting of 4.20 acres, and Tract 141EA, consisting of .50 acres, for a total of 4.7 acres. (Docket 1-3). Through the Declaration of Taking Act, 40 U.S.C. § 3114, title to the real property transferred to and became vested in the United States upon the filing of the declaration of taking and the deposit of just compensation into the registry of the court on July 30, 2015.[1] (Dockets 3, 6 & 7). “[P]ursuant to 40 U.S.C. §§ 3113 & 3114” the court required the government to “deposit the sum of $63, 500 with the Clerk of Court, ” as the “estimated just compensation in this eminent domain action . . . .” (Docket 6). The government made the deposit required by the court's order. (Docket 7). The court entered an order granting the government's motion for immediate possession of the 4.7 acres effective September 1, 2015. (Docket 13).

         Ms. Norman moved the court “for the distribution of funds deposited by the United States with the Registry of the Court.” (Docket 27 at p. 1) (referencing Docket 24). “Ms. Norman's ownership interest in the subject real property is undisputed.” Id. (internal citations omitted). The court granted Ms. Norman's motion, “without prejudice to [her] right to demand and receive additional compensation for the taking of the property which is the subject of this litigation.” Id. at p. 3. “[T]he disbursal . . . constitute[s] a credit against the final judgment . . . to Ms. Norman in the event a final judgment . . . exceeds the amount of the present disbursal.” Id.

         Following the close of discovery, [2] the government timely filed a motion seeking to preclude Ms. Norman from testifying that the “highest and best use” of the 4.7 acres is “for residential development, ” instead “limiting [her] testimony on the value . . . after the taking . . . .” (Docket 47). “While the property has historically been used as pasture land for grazing, ” the government contends “[Ms.] Norman plans to testify at trial that it should be valued as if residential ‘ranchettes' would be developed on the property.” (Docket 48 at p. 1). The government asserts Ms. Norman's anticipated testimony should be excluded because:

1. Residential development is “not reasonably probable in the reasonably near future.” Id. at p. 6 (capitalization omitted); and
2. Her testimony “is derived from a speculative highest and best use and is not supported by objective data.” Id. at p. 9 (capitalization omitted).

         The government argues that under Fed.R.Civ.P. 71.1(h), Ms. Norman's opinions are not grounded “in market data or objective facts, ” but are “only conclusory assertions about the effects of the easement.” Id. at p. 2. “To establish a different highest and best use [other than current use], ” the government submits Ms. Norman “must show, by a preponderance of the evidence, that the jury could reasonably conclude that the land is physically adaptable to the proposed use, and also that there is a need or demand for such use either in fact, at the time of the taking, or in the reasonably near future.” Id. at p. 7 (references omitted). “Absent such a showing, ” the government argues “the trial court must exclude that unsupported highest and best use from the fact finder's consideration.” Id. (reference omitted). Notwithstanding its motion, the government contends her testimony regarding highest and best use should be limited “to the six sales that she identified as comparable at her deposition.” Id. at p. 6 n.2.

         Ms. Norman counters the government's argument by asserting that “[a]s a landowner, [she] is qualified to testify to the value of her property.” (Docket 50 at p. 2). She contends her testimony must be allowed because as “a landowner [she] is presumed to have special knowledge [about] her property . . . [and] her testimony . . . is ‘admitted in federal courts without further qualification.' ” Id. (citing United States v. 79.20 Acres of Land, More or Less, Situated in Stoddard County, Missouri, 710 F.2d 1352, 1357 (8th Cir. 1983) (internal citation, some brackets and italics omitted). Ms. Norman argues her testimony, as well as that of the government's expert witness, is admissible and their opinions can be challenged through cross-examination at trial. Id. at p. 7.

         Fed. R. Civ. P. 71.1 governs this eminent domain proceeding. It provides in part: “the court tries all issues, including compensation, except when compensation must be determined . . . by a jury when a party demands one within the time to answer or within any additional time the court sets, unless the court appoints a commission.”[3] Fed.R.Civ.P. 71.1(h)(1) & (h)(1)(B). “[T]he trial judge should screen the evidence concerning potential uses . . . . Then . . . decide whether the landowner has produced credible evidence that a potential use is reasonably practicable and reasonably probable within the near future . . . . If credible evidence of the potential use is produced, the jury then decides whether the property's suitability for this use enhances its market value, and, if so, by how much.” United States v. 341.45 Acres of Land, More or Less, Located in St. Louis County, State of Minnesota, 633 F.2d 108, 111 (8th Cir. 1980) (internal citations and quotation marks omitted). “The trial judge's screening of the evidence does not require an extensive and detailed review of all the evidence. Rather, the judge need only find that there is credible evidence that the property is adaptable to the use and that there will be a need or demand for such use in the near future.” Id. at pp. 111-12.

         Relevant to the question before the court is the following information which is stated in the parties' legal memoranda without reference to the underlying documents. Ms. Norman owns a 133-acre parcel, which includes the 4.7 acres, that is approximately two miles south of Rapid City, South Dakota, along Old Folsom Road. (Docket 48 at p. 2). The entire parcel is zoned by the City of Rapid City as A-2 Limited Agriculture, which permits agricultural uses, as well as residential uses with a minimum lot size of 10 acres. Id. The easements in this case “restrict additional construction within the easement area, but they permit continued grazing, as well as cultivation and other uses that do not interfere with the transmission line.” Id. at p. 3.

         Ms. Norman did not designate an expert witness. (Docket 48 at p. 3). Rather, Ms. Norman intends to testify at trial as to the highest and best use value of the 4.7 acres based on her experiences with the sale of six other lots adjacent to the 133-acre parcel. Id. at p. 4. Two of the earlier sales to Basin Electric involved 20-acre lots which sold for $15, 000 and $20, 000, per acre, respectively. (Docket 49-1 at p. 7:8-11). Three other lots sold for about $18, 000, per acre. Id. at p. 7:11-12. The sixth sale to Red Truck Lines, LLC, involved a lot of between 16 and 20 acres and sold for $18, 000, per acre. Id. at pp. ...


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