Connecticut Light and Power Company v. United States

• Decision Date: 10 November 1966
• Docket Number: No. 4-62.,4-62.
• Citation: 368 F.2d 233,177 Ct. Cl. 395
• Parties: The CONNECTICUT LIGHT AND POWER COMPANY and Subsidiaries v. The UNITED STATES.
• Court: U.S. Claims Court

177 Ct. Cl. 395, 368 F.2d 233 (1966)

The CONNECTICUT LIGHT AND POWER COMPANY and Subsidiaries v. The UNITED STATES.

No. 4-62.

United States Court of Claims.

November 10, 1966.

N. Barr Miller, Washington, D. C., for plaintiff. J. Marvin Haynes, Washington, D. C., attorney of record. Haynes & Miller, Joseph H. Sheppard and Arthur H. Adams, Washington, D. C., of counsel.

Robert Livingston, Washington, D. C., with whom was Asst. Atty. Gen. Mitchell Rogovin, for defendant. Lyle M. Turner and Philip R. Miller, Washington, D. C., of counsel.

Before COWEN, Chief Judge, LARAMORE, DURFEE, DAVIS and COLLINS, Judges.

OPINION

PER CURIAM:

This case was referred to Trial Commissioner Roald A. Hogenson with directions to make findings of fact and recommendation for conclusions of law. The commissioner has done so in a report of findings of fact filed June 10, 1964, which was amended, supplemented and made a part of a further report and opinion filed on July 9, 1965, after the court had granted plaintiff's motion to "Reopen Record and for Supplemental Report of Trial Commissioner." Plaintiff requested that the court adopt the findings of fact as amended and supplemented by the opinion and report filed July 9, 1965, and excepted to the trial commissioner's recommended conclusions of law. Defendant excepted to the supplemental findings and the recommended conclusions of law. The case was submitted to the court on the briefs of the parties and oral argument of counsel. Since the court agrees with the trial commissioner's findings, opinion and recommended conclusions of law as set forth in the report and opinion as amended and supplemented, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Therefore, plaintiff is not entitled to deduct as ordinary and necessary business expenses the amounts expended to Bleachery and the pertinent attorneys' fees paid for services in the promotion and defeat of legislation, and as to these claims the petition is dismissed. However, plaintiff is entitled, beginning in the year 1955, to include in its composite depreciation account as capital expenditures the payments to Bleachery to the extent of $987,558.29, and judgment is entered to that effect with the amount of recovery to be determined pursuant to Rule 47(c).

OPINION OF COMMISSIONER^*

HOGENSON, Commissioner:

Plaintiff is and was at all pertinent times a Connecticut public utility corporation, hereinafter called Connecticut Light.¹ During the years involved in the present action, 1954 and 1955, plaintiff was engaged in the production and sale of gas and electricity and the sale of water. In March 1953, plaintiff began constructing a dam and hydroelectric power plant (hereinafter referred to as the Shepaug project) on the Housatonic River in the State of Connecticut.

The purpose of the dam was to impound the river water to an elevation of 200 feet above sea level, create a lake covering 1,870 acres, and to back water up to plaintiff's Rocky River hydroelectric development which was situated 14 miles up the Housatonic River from plaintiff's Shepaug dam site.

Approximately 10 miles above the site of the new dam, the Robertson Bleachery & Dye Works, Inc., (hereinafter called Bleachery) owned about 23 acres of land, above water, fronting on the Housatonic River, and 7 acres of land below water. Bleachery also owned an island in, and maintained a spillway and main dam across the Housatonic River. Its business operations consisted of bleaching, dyeing, mercerizing, shrinking, and finishing fabrics shipped to it by its customers; its plant consisted of five sizable buildings and several other smaller ones which were used for these operations.

Upon completion and operation of the dam, the pond, when elevated to 200 feet, would extend upstream beyond the Bleachery property. In addition to the 7 acres of Bleachery property already under water, an additional 9.135 acres, owned by Bleachery, were located below the maximum ponding elevation of 200 feet above sea level. The balance of land, approximately 13.20 acres, which included the land upon which the buildings were located, had an elevation between 200 and 210 feet above sea level.

In order to complete the Shepaug project it was necessary that plaintiff obtain flowage rights and immunity from future tort liability for any damages which would result to the Bleachery property. Plaintiff attempted to purchase such rights and immunity, but such negotiations were unsuccessful. Exercising its power of eminent domain, plaintiff instituted a civil action against Bleachery in the Superior Court of Litchfield County, Connecticut. Connecticut Light alleged that for the construction of the dam across the Housatonic River and creation of the pond, it was "necessary and convenient" for it to take and use the following interests and rights in the premises of Bleachery:

The easement, privilege and right to raise the waters of the Housatonic River in front of the aforesaid premises of The Robertson Bleachery & Dye Works, Incorporated, and to maintain them at a height not to exceed elevation 200 * * *, and to flood, and to set back and deposit water in, on and upon so much of the aforesaid premises as lies at or below the aforesaid elevation 200, and the right to store, use and dispose of, or draw off and lower the level of any water in front of or so set back upon said premises.

On July 29, 1954, the Connecticut court on petition of Connecticut Light and the answer of Bleachery, entered judgment and ordered a three-man committee (hereinafter called the committee) to assess the amount of damages which would arise to Bleachery out of the taking and using of the "aforesaid easements, privileges and rights." On December 1, 1954, the committee filed its report, and on January 7, 1955, the Connecticut court entered judgment accepting the report and directed Connecticut Light to pay the Bleachery $960,000. The following are excerpts of the pertinent parts of the committee report:

The rights and easements acquired by the petitioner include the right to set back and flood so much of the respondent\'s premises as lie at or below the aforesaid elevation 200 and the right to store, use and dispose of, or draw off and lower the level of any water in front of, or so set back upon, the respondent\'s premises.

Ponding by the petitioner\'s dam to the 200 foot elevation will raise the water about one foot above the level of the respondent\'s dam and will flood the basement of the respondent\'s plant between two and three feet and render the factory inoperable without extensive protective measures. It will prevent the use for water power of the respondent\'s dam, and flood land adjacent to the buildings.

* * * * * *

The petitioner offered evidence of protective measures which it claims would prevent any flooding of the respondent\'s plant that might result from raising the water level to elevation 200. The plan is to encircle the works with steel sheet piling driven on an average of forty feet to rock with the top of the sheet piling at an elevation of 201. The claim is that this plan, if carried out, would enable the respondent to operate substantially the same as at present, would not interfere with the operation of the respondent\'s plant during construction and would not increase flood hazards. It would take about six months to install such measures.

The cost of such protective construction and its amortized maintenance cost were estimated by the petitioner\'s experts to be $650,884. This was based in part on a bid of $490,884.00 for construction, if accepted within two months. The petitioner offered evidence of additional damage of $9,000 for other land flooded. The petitioner claims that the cost of the protective plan is the measure of the respondent\'s damages with the additional $9,000.

The respondent offered evidence that the cost of such protective measures would be greatly in excess of the petitioner\'s estimate, would not provide for a proper discharge of waste and would not be a justifiable expense from an economical standpoint. It further offered evidence that the taking would prevent it from making repairs on its own dam which it would have to maintain to impound water when the petitioner\'s pond was drawn down, and that the petitioner\'s dam would cause greater flooding of its property in flood periods. It offered evidence as to the cost of removal of its heavy machinery.

The respondent claims that the true measure of its damage is the difference in the fair market value of its property before and after the taking including the cost of removal of its heavy machinery.

* * * * * *

Our conclusions from the evidence and a thorough examination of the premises are as follows:

We find that the prospective use of the property for hydro-electric power is of no value.

We find that the petitioner\'s estimated cost of protective measures would not fully compensate the respondent for its loss.

We find that the estimated cost of removal of the heavy machinery would not affect the market value of the property to the extent claimed, although this item has been given consideration in establishing the value of the property before taking.

We find the fair market value of the respondent\'s property before the taking to be $1,125,000 and its fair market value after the taking to be $165,000.

We assess the respondent\'s damages at $960,000.

Plaintiff deposited its check for $960,000 with the clerk of the Connecticut court on December 23, 1954, and such check was delivered to Bleachery on January 7, 1955. In 1954, plaintiff paid the costs of the condemnation proceedings in the amount of $8,626.77. On April 29, 1955, the Connecticut court in supplemental proceedings ordered plaintiff to pay, and plaintiff then paid $30,000 for appraisal and attorneys' fees in connection with the condemnation proceedings and $360.38 for costs of such supplemental proceedings.² Plaintiff on its...