United States District Court, D. South Dakota, Western Division
JEFFREY L. VIKEN CHIEF JUDGE
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.
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. (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).
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.
the close of discovery,  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
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).
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.
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.
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.” 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.
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.
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. ...