Doelle v. Mountain States Tel. & Tel., s. 87-2669

• Decision Date: 13 April 1989
• Docket Number: Nos. 87-2669,87-2811,s. 87-2669
• Citation: 872 F.2d 942
• Parties: Robert R. DOELLE, as substituted (Formerly, Wayne Wonderland Development Association, Inc.), Plaintiff-Appellant Cross-Appellee, v. MOUNTAIN STATES TELEPHONE & TELEGRAPH, also known as Mountain Bell, Defendant-Appellee Cross-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 942

872 F.2d 942

Robert R. DOELLE, as substituted (Formerly, Wayne Wonderland Development Association, Inc.) Plaintiff-Appellant Cross-Appellee, v. MOUNTAIN STATES TELEPHONE & TELEGRAPH, also known as Mountain Bell, Defendant-Appellee Cross-Appellant.

Nos. 87-2669, 87-2811.

United States Court of Appeals Tenth Circuit.

April 13, 1989.

Robert R. Doelle, La Canada, Cal., pro se.

Floyd A. Jensen, Salt Lake City, Utah, for defendant and cross-appellant.

Before ANDERSON and TACHA, Circuit Judges, and ROGERS, District Judge. ^*

PER CURIAM.

In appeal No. 87-2669, Robert R. Doelle (plaintiff) appeals the district court's judgment, supported by findings of fact and conclusions of law entered after a bench trial, granting the Mountain States Telephone and Telegraph Company (defendant or Mountain Bell) a permanent easement by condemnation on the plaintiff's property (the property). In appeal No. 87-2811, the defendant cross-appeals the district court's award of equitable damages to the plaintiff for the purpose of planting shrubs on the property to screen the plaintiff's view of the Mountain Bell facilities. ¹

The district court entered detailed findings of fact. We summarize here those findings that are not challenged by the parties on appeal. In 1948 Mountain Bell, pursuant to a right-of-way granted by one joint tenant, built an aerial telephone line on the property. In April 1982, erroneously relying on the 1948 right-of-way, Mountain Bell trespassed on the property to construct a telephone substation. The plaintiff began residing on the property in the summer of 1984, at which time the view of the substation was obscured by weeds and shrubs. The plaintiff did not discover the Mountain Bell facilities until August 1985. Wonderland Development Association quitclaimed the property to the plaintiff in July 1987. The plaintiff was the fee owner of the property at the time of trial. ²

The district court concluded that Mountain Bell had the power of eminent domain to condemn an easement for the substation on the plaintiff's land. The court further concluded, based on its findings concerning Mountain Bell's current use of the property, that the condemnation was justified under Utah Code Ann. Sec. 78-34-4 (1987). The court granted Mountain Bell a permanent easement and awarded damages to the plaintiff in the amount of $676.38.

I. APPEAL NO. 87-2669

On appeal, the plaintiff initially challenges three factual findings by the district court. First, the plaintiff challenges the finding that current and future telephone subscriptions increased the demand for service, thereby creating the need for the substation. Second, the plaintiff challenges the court's finding on the diminution in the value of the plaintiff's property caused by the condemnation. The plaintiff specifically points to a line of trees for which the district court did not award damages. Third, the plaintiff alleges that Mountain Bell forcibly entered his property with the intent to cause damage. In support, the plaintiff points to the fact that he padlocked his property and put up a no trespassing sign.

"Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses." Fed.R.Civ.P. 52(a); see Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518, 528 (1985) (standard governing appellate review of district court's finding of fact set forth in Rule 52(a)); see also Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485, 498, 104 S.Ct. 1949, 1958, 80 L.Ed.2d 502, 515 (1984) ("We have repeatedly held that ... Rule [52(a) ] means what it says."). Rule 52(a) applies to all findings of fact, including those described as "ultimate facts" because they may determine the outcome of the litigation. Bose Corp., 466 U.S. at 501, 104 S.Ct. at 1959-60, 80 L.Ed.2d at 517; see, e.g., United States Indus., Inc. v. Touche Ross & Co., 854 F.2d 1223, 1238 n. 22 (10th Cir.1988); see also Anderson, 470 U.S. at 574, 105 S.Ct. at 1511, 84 L.Ed.2d at 528 (same standard applies to findings based on inferences from other facts); Pullman-Standard v. Swint, 456 U.S. 273, 287, 102 S.Ct. 1781, 1789, 72 L.Ed.2d 66, 79 (1982) ("[Rule 52(a) ] does not divide facts into categories; in particular, it does not divide findings of fact into those that deal with 'ultimate' and those that deal with 'subsidiary' facts."). After careful review of the record on appeal, we cannot say that the district court's findings on the increased demand for telephone service from Mountain Bell and the diminution in the value of the plaintiff's property are clearly erroneous. Similarly, the district court was not clearly erroneous in not finding that the defendant intended to damage the plaintiff's property. ³

In addition to challenging the district court's findings, the plaintiff contends that the court erred by failing to recognize the importance of some of his allegations. None of the additional facts highlighted by the plaintiff, however, undermines the district court's ultimate conclusion that the defendant was entitled to an easement by condemnation. Accordingly, these arguments do not constitute grounds for reversal of the district court's judgment, and we therefore will not address them on appeal.

The plaintiff also challenges on appeal several of the district court's rulings on matters of law. The plaintiff principally challenges the district court's ultimate decision that the defendant was entitled to an easement by condemnation. ⁴ The plaintiff argues first that the district court should not have permitted Mountain Bell to seek inverse condemnation when the defendant did not raise that issue until the pretrial hearing on September 16, 1987. By failing to raise the issue earlier, the plaintiff insists, Mountain Bell forfeited its right to condemnation.

Utah's statutory law of eminent domain provides an explicit procedure for condemning property. Utah Code Ann. Secs. 78-34-1 to 78-34-20 (1987). Under Utah Code Ann. Secs. 78-34-6, 78-34-8, a corporation may seek condemnation by filing a complaint in a court of law. The Utah Supreme Court has held that a defendant in an action for trespass may not counterclaim for condemnation. Peterson v. Bean, 22 Utah 43, 61 P. 213 (1900). In Peterson, the plaintiff sought an injunction to restrain the defendant's trespass. Id. 61 P. at 214. The defendant's counterclaim alleged trespass for a public purpose and sought the right of eminent domain. The Utah Supreme Court held that the plaintiff was entitled to damages and that contemplated eminent domain did not constitute a proper defense or counterclaim to an action for trespass. Id. at 215. Here, the district court awarded damages for trespass, including the fair rental value during the time prior to condemnation. To this extent, then, there is no conflict between the holding in Peterson and the district court's disposition in the present case. The court in Peterson, however, also affirmed the granting of an injunction against further trespass, suggesting a total bar of the defendant's counterclaim, id. at 214; here, the district court denied the plaintiff's complaint for injunctive relief against the defendant and granted relief on the counterclaim for condemnation.

The Utah Supreme Court, in Peterson, reasoned that because the defendant had no right to enter onto the property at the time of the trespass, a counterclaim asserting the future possibility of condemnation did not defeat or lessen the relief to which the plaintiff had demonstrated entitlement. Id. at 215. " '[A] counterclaim, when established, must in some way qualify, or must defeat, the judgment to which the plaintiff is otherwise entitled.' The facts set up by defendant do not constitute a counterclaim or defense to the plaintiff's cause of action. The alleged counterclaim was therefore properly dismissed." Id. (citations omitted) (quoting National Fire Ins. Co. v. McKay, 21 N.Y. 191, 196 (1860)).

In the case before us, the district court permitted the defendant's counterclaim under Fed.R.Civ.P. 13. The issue is thus whether federal or state law governs counterclaim procedures in a federal diversity case. See Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). We hold that the Peterson rule, even if broadly construed to bar suit in the Utah courts, ⁵ would not bar the defendant's counterclaim in the federal district court.

If both a state rule and a federal rule cover the same situation, the analysis in Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965), applies.

When a situation is covered by one of the Federal Rules, the question facing the court is a far cry from the typical, relatively unguided Erie choice: the court has been instructed to apply the Federal Rule, and can refuse to do so only if the Advisory Committee, this Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor constitutional restrictions.

Id. at 471, 85 S.Ct. at 1144, 14 L.Ed.2d at 17.

The policy underlying Erie is "the avoidance of forum-shopping and unequal administration of justice." Olympic Sports Prods., Inc. v. Universal Athletic Sales Co., 760 F.2d 910, 916 (9th Cir.1985), cert. denied, 474 U.S. 1060, 106 S.Ct. 804, 88 L.Ed.2d 780 (1986). The federal courts should inquire whether following the federal rule will abridge a substantive right or be outcome determinative, two factors that may require the application of state rather than federal rules of procedure. Under Hanna, the assumption is that the federal rule will apply. The federal rule applies unless the court determines that "the Erie considerations are so strong that they can justify interrupting the normal function of the federal court processes." Olympic Sports Prods., 760 F.2d at...