Edwards v. Arkansas Power & Light Co., No. 81-1865

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Writing for the CourtBefore HEANEY, McMILLIAN and ARNOLD; HEANEY; ARNOLD
PartiesRay EDWARDS and Louise Edwards, his wife, Individually, and on Behalf of a Class Similarly Situated, Appellants, v. ARKANSAS POWER & LIGHT COMPANY, Appellee.
Decision Date18 August 1982
Docket NumberNo. 81-1865

Page 1149

683 F.2d 1149
Ray EDWARDS and Louise Edwards, his wife, Individually, and
on Behalf of a Class Similarly Situated, Appellants,
v.
ARKANSAS POWER & LIGHT COMPANY, Appellee.
No. 81-1865.
United States Court of Appeals,
Eighth Circuit.
Submitted Feb. 8, 1982.
Decided July 8, 1982.
Rehearing Denied Aug. 18, 1982.

Page 1150

Bill W. Bristow, Jonesboro, Ark., Steve Bell, John Norman Harkey, Batesville, Ark., for appellants.

Robert L. Robinson, Jr. and Wm. David Duke, House, Holmes & Jewell, P. A., Little Rock, Ark., for appellee.

Before HEANEY, McMILLIAN and ARNOLD, Circuit Judges.

HEANEY, Circuit Judge.

This matter is before the Court on the appeal of Ray and Louise Edwards from the decision of the district court dismissing their section 1983 action against Arkansas Power & Light Company (AP&L). We reverse and remand to the district court, 519 F.Supp. 484, with directions to abstain until the state court, in plaintiffs' pending state lawsuit, has had an opportunity to resolve certain unsettled questions of Arkansas law that may make it unnecessary to decide or may materially alter the result of the Edwards' federal constitutional challenge.

I.

FACTS.

Pursuant to Ark.Stat. §§ 35-302 and 73-276.15, AP&L possesses the power of eminent domain and, thus, has the right to condemn private property for the purpose of constructing "electric generating plant sites and substation sites, and compressor substation sites and meter station sites." Condemnation is conditioned upon the payment of just compensation by the utility to the property owner.

On October 20, 1978, AP&L filed a petition in Independence County Circuit Court

Page 1151

to condemn several tracts of land owned by plaintiffs Ray and Louise Edwards. To immediately secure title to plaintiffs' property, AP&L deposited in the registry of the circuit court, pursuant to a court order, the sum of $136,000. 1 The amount of the deposit was based upon AP&L's estimate to the circuit court that just compensation for plaintiffs' land was $850 per acre.

The plaintiffs filed their answer, which was essentially a general denial, and counterclaimed for (1) just compensation and (2) damages for, in essence, AP& L's failure to exercise good faith in estimating the value of plaintiffs' land at $850 per acre when it knew that the property was worth at least $1,650 per acre.

The parties stipulated that plaintiffs' just compensation and bad faith counterclaims were to be tried separately. Accordingly, the issues were bifurcated, and the bad faith claim was to be tried subsequent to the jury trial on just compensation.

In October, 1979, the Independence County jury determining just compensation found that the plaintiffs' land had a fair market value of $1,700 per acre. Pursuant to a motion by AP&L, however, this verdict was set aside, and AP&L was granted a new trial. A second jury awarded the plaintiffs $2,050 per acre for 167.25 acres of land and $816.67 per acre for an additional forty acres. The circuit court entered judgment in favor of the plaintiffs on their verdict.

Subsequently, the plaintiffs moved for a voluntary nonsuit of their bad faith counterclaim against AP&L. The circuit court granted the motion, explicitly stating that the dismissal was without prejudice. Thereafter, the plaintiffs filed their bad faith claim as a separate section 1983 action in the United States District Court for the Eastern District of Arkansas. The plaintiffs also filed their bad faith claim as a separate action in state court, but have not pursued that action pending resolution of this suit in the federal courts. The federal district court dismissed the plaintiffs' complaint, and they now appeal to this Court.

II.

PLAINTIFFS' SECTION 1983 ACTION.

The plaintiffs contend that due process requires that a utility acting under the Arkansas ex parte condemnation procedure act in good faith and not engage in knowing misrepresentation to the circuit court. The plaintiffs claim that AP&L violated this duty by knowingly and intentionally misrepresenting the value of plaintiffs' property. They allege that AP&L estimated that plaintiffs' land was worth $850 per acre when it knew the property was worth substantially more because it had settled similar cases in Independence County for $1,650 per acre, and its own appraiser had advised the utility prior to the just compensation trial that the value of the land was $1,650 per acre.

The plaintiffs claim that as a result of this intentional underestimate, AP&L was unjustly enriched by making use of the difference between the deposit of $136,000 and the final jury award of $203,000. The plaintiffs also contend that because of this bad faith by AP&L, they were compelled to employ an attorney to establish the fair market value of their land, and they were denied the use of their land or a sum of money equal to its fair market value during the time prior to the determination of just compensation. Nothing in the relevant eminent domain statutes, Ark.Stat. §§ 35-301-35-316, 73-276.15, provides for an award of attorney fees to a landowner who must establish the fair market value of his or her property in a just compensation trial. Moreover, although the plaintiffs are entitled

Page 1152

to interest on the amount of the jury verdict, accruing from the date the utility posted the deposit and took possession of their land, Housing Authority of Little Rock v. Rochelle, 249 Ark. 524, 459 S.W.2d 794, 797-798 (1970), they claim that state law entitles them to no more than an interest rate of ten percent 2-even though the annual interest rate on money was approximately seventeen percent during the time between the taking and the jury award. The plaintiffs allege that there is no Arkansas constitutional, statutory or common law remedy which will compensate them for these damages. They claim, therefore, that the due process clause of the United States Constitution guarantees them a remedy. 3

III.

THE DISTRICT COURT'S OPINION.

The district court opinion can be read as dismissing plaintiffs' federal constitutional claim on three alternative grounds: (1) the claim is barred by the doctrine of res judicata, (2) the claim was a compulsory counterclaim to AP&L's condemnation petition and, hence, plaintiffs' failure to assert it in state court bars its assertion here, and (3) the claim fails to state a valid section 1983 cause of action. AP&L argues that the district court's decision can be sustained on each of these rationales.

A. Res Judicata.

The doctrine of res judicata provides that issues may not be raised in a second lawsuit when they have been or might have been litigated in a prior proceeding arising out of the same cause of action and involving the same parties or their privies. 4 E.g., Robbins v. District Court of Worth City, Iowa, 592 F.2d 1015, 1017 (8th Cir.), cert. denied, 444 U.S. 852, 100 S.Ct. 107, 62 L.Ed.2d 69 (1979). AP&L argues that plaintiffs' bad faith claim arises from the same factual events that precipitated the condemnation proceedings and involves the same parties. It argues, therefore, that res judicata bars the plaintiffs from asserting their bad faith claim here because they failed to pursue it in the prior state court proceedings.

B. Compulsory Counterclaim.

In May v. Exxon Corp., 256 Ark. 865, 512 S.W.2d 11, 12 (1974), the Arkansas Supreme Court held that Ark.R.Civ.P. 13 bars a party who fails to assert a compulsory counterclaim from bringing that claim in a separate action. A counterclaim that arises from the same transaction or occurrence that is the subject matter of the opposing party's claim is compulsory. Ark.R.Civ.P. 13. 5

AP&L argues that the plaintiffs' bad faith claim was a compulsory counterclaim to its condemnation petition. It argues

Page 1153

that both actions arose out of the same transaction or occurrence because the claims, as well as plaintiffs' counterclaim for just compensation, all are based on the same basic factual events surrounding AP&L's condemnation of plaintiffs' land. A party's counterclaim is not compulsory if it cannot be asserted in the same proceeding as the opposing party's claim. AP&L, however, contends that the plaintiffs' bad faith claim was a compulsory counterclaim because adequate state court procedures were available to the plaintiffs to try their bad faith counterclaim along with the utility's condemnation petition and their just compensation counterclaim.

Consequently, AP&L argues that because the plaintiffs failed to utilize state procedures where they could have asserted their bad faith counterclaim, Ark.R.Civ.P. 13 bars them from bringing it in a separate action.

C. Failure to State a Claim.

Apart from the res judicata and compulsory counterclaim doctrines, AP&L, relying on Light v. Blackwell, 472 F.Supp. 333 (E.D.Ark.1979), aff'd without opinion, 620 F.2d 307 (8th Cir. 1980), 6 contends that the plaintiffs have failed to state a valid section 1983 action. In Light, landowners brought a section 1983 action against the Arkansas State Highway Commission, alleging a taking of their property without just compensation and the continuing torts of trespass and maintenance of a nuisance. Id. at 336. The district court dismissed the constitutional claim, finding that the landowners had not been deprived of due process because adequate state remedies were available in the state court for the alleged wrongdoing. Id. at 336-339. In reaching this conclusion, the Light court relied on KAO v. Red Lion Municipal Authority, 381 F.Supp. 1163 (M.D.Pa.1974), which stated:

No assertion has been made that plaintiffs have been denied an opportunity to press their claims in the state court. There is no reason to believe that the Commonwealth of Pennsylvania will not accord full constitutional protection to plaintiffs' property rights. In light of this fact, there is no federal constitutional violation. * * * The fact that there allegedly has been a taking of plaintiffs' property...

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22 practice notes
  • Harrison v. Springdale Water & Sewer Com'n, No. 84-2384
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 7 Enero 1986
    ...if it cannot be asserted in the same proceeding as the opposing party's claim." Edwards v. Arkansas Power & Light Co., 683 F.2d 1149, 1158 (8th Cir.1982) (applying Arkansas law). In Edwards the Court noted that "just compensation is the sole issue for determination in an emine......
  • Bryant v. New Jersey Dept. of Transp., No. CIV. A. 97-1397.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • 18 Mayo 1998
    ...a general matter, "it is clear that abstention can apply to eminent domain cases." Edwards v. Arkansas Power & Light Co., 683 F.2d 1149, 1156 (8th Cir. 1982). That principle is widely credited to the Seventh Circuit's determination that "the mere existence of a federal co......
  • Harrington v. Inhabitants of Town of Garland, Me., Civ. No. 78-19-B.
    • United States
    • United States District Courts. 1st Circuit. United States District Court (Maine)
    • 9 Diciembre 1982
    ...constitutional issue in state court condemnation proceeding does not mean state court procedures were inadequate, rev'd on other grounds, 683 F.2d 1149 (8th The plaintiff does not, nor does it appear that she can successfully, assert that she could not have raised these constitutional claim......
  • Aaron v. Target Corp., No. 03-2825.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 3 Febrero 2004
    ...(1959) (eminent domain is "intimately involved with state prerogative"). See also Edwards v. Arkansas Power & Light Co., 683 F.2d 1149, 1156 (8th Cir.1982) (important state interests in eminent domain proceedings make abstention particularly appropriate). There is no dispute h......
  • Request a trial to view additional results
22 cases
  • Harrison v. Springdale Water & Sewer Com'n, No. 84-2384
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 7 Enero 1986
    ...is not compulsory if it cannot be asserted in the same proceeding as the opposing party's claim." Edwards v. Arkansas Power & Light Co., 683 F.2d 1149, 1158 (8th Cir.1982) (applying Arkansas law). In Edwards the Court noted that "just compensation is the sole issue for determination in an e......
  • Bryant v. New Jersey Dept. of Transp., No. CIV. A. 97-1397.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • 18 Mayo 1998
    ...as a general matter, "it is clear that abstention can apply to eminent domain cases." Edwards v. Arkansas Power & Light Co., 683 F.2d 1149, 1156 (8th Cir. 1982). That principle is widely credited to the Seventh Circuit's determination that "the mere existence of a federal constitutional att......
  • Harrington v. Inhabitants of Town of Garland, Me., Civ. No. 78-19-B.
    • United States
    • United States District Courts. 1st Circuit. United States District Court (Maine)
    • 9 Diciembre 1982
    ...constitutional issue in state court condemnation proceeding does not mean state court procedures were inadequate, rev'd on other grounds, 683 F.2d 1149 (8th The plaintiff does not, nor does it appear that she can successfully, assert that she could not have raised these constitutional claim......
  • Aaron v. Target Corp., No. 03-2825.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 3 Febrero 2004
    ...3 L.Ed.2d 1058 (1959) (eminent domain is "intimately involved with state prerogative"). See also Edwards v. Arkansas Power & Light Co., 683 F.2d 1149, 1156 (8th Cir.1982) (important state interests in eminent domain proceedings make abstention particularly appropriate). There is no dispute ......
  • Request a trial to view additional results

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