FRONT ROYAL AND WARREN CTY. v. Town of Front Royal

• Citation: 749 F. Supp. 1439
• Decision Date: 22 October 1990
• Docket Number: Civ. A. No. 87-0019-H,87-0020-H.
• Court: U.S. District Court — Western District of Virginia
• Parties: FRONT ROYAL AND WARREN COUNTY INDUSTRIAL PARK CORP., Plaintiff, v. TOWN OF FRONT ROYAL, VIRGINIA, et al., Defendants. Fred W. McLAUGHLIN, et ux., Plaintiffs, v. TOWN OF FRONT ROYAL, VIRGINIA, et al., Defendants.

749 F. Supp. 1439

FRONT ROYAL AND WARREN COUNTY INDUSTRIAL PARK CORP., Plaintiff, v. TOWN OF FRONT ROYAL, VIRGINIA, et al., Defendants.

Fred W. McLAUGHLIN, et ux., Plaintiffs, v. TOWN OF FRONT ROYAL, VIRGINIA, et al., Defendants.

Civ. A. Nos. 87-0019-H, 87-0020-H.

United States District Court, W.D. Virginia, Harrisonburg Division.

October 22, 1990.

Myron C. Smith, Robert C. Fitzgerald, Fairfax, Va., for plaintiffs.

David N. Crump, Jr., Adamson, Crump & Sharp. P.C., Front Royal, Va., and Glenn M. Hodge, Douglas L. Guynn, WAW, Harrisonburg, Va., for defendants.

MEMORANDUM OPINION

MICHAEL, District Judge.

Plaintiffs in these consolidated actions own land in the town of Front Royal, Virginia. As a result of the town's failure to supply the plaintiffs' properties with sewer and water service in a timely fashion, as required by a decree of a state annexation court, this court previously held as a matter of law that the defendants had effectuated a taking of the plaintiffs' properties. Front Royal & Warren County Industrial Park Corp. v. Front Royal, 708 F.Supp. 1477, 1484 (W.D.Va.1989) ("Front Royal I"). The court also granted plaintiffs' motions for summary judgment on their Fourteenth Amendment Equal Protection claims. Id. at 1487. Subsequently these actions came before the court, sitting without a jury, for a trial on damages. The court heard testimony from January 30 to February 1 and also on February 21, 1990. Plaintiffs seek both actual and punitive damages. This court has jurisdiction pursuant to 42 U.S.C. § 1983 and 28 U.S.C. §§ 1331, 1343(a)(3), (a)(4). Both parties have submitted post-trial memoranda and proposed findings of fact and conclusions of law; this matter is now ripe for disposition.

The court fully set forth the facts which supported the finding that a taking had occurred in Front Royal I and will not recite them again here. The court will, however, briefly summarize the facts from its previous explication in order to place the present issue — the amount of damages which the plaintiffs claim — in context.

Plaintiffs are several individuals and a corporation who own land in an area annexed from Warren County by the Town of Front Royal (the "Town") under separate Annexation Court orders of 1976 and 1978. The orders of annexation required the Town to extend sewer service to the annexed areas as expeditiously as possible, but not later than five years after the entry of the orders. At the time the plaintiffs filed the present suits, the Town had not yet provided sewer service to any of the subject parcels. Because the failure to provide the sewer rendered the land unusable,¹ this court found that a taking in violation of 42 U.S.C. § 1983 had occurred. Additionally, although the Town had not made sewer available to the plaintiffs' properties, it had made the service available to other similarly situated parcels in the area. Most notably, the Town provided sewer to property belonging to the then Mayor of the Town, who was subsequently able to develop the property into a subdivision. Based on these facts, the court further found that the defendants' actions violated plaintiffs' Equal Protection rights.

I

Pursuant to Federal Rule of Civil Procedure 52(a), the court finds the following facts.

Plaintiffs Fred W. McLaughlin and his wife, Gladys L. McLaughlin, own as tenants in common a tract of land of approximately 55 acres known as Happy Creek Knolls. The McLaughlins purchased this tract of land for $14,350.00 as an investment property in July of 1964 when it was a part of Warren County. On December 31, 1976, the Town annexed a large parcel of land including the Happy Creek Knolls tract. Immediately before the annexation, the plaintiffs subdivided their property and it was taken into the Town as a subdivision. The property is zoned R-1, which allows the construction of single family homes on lots of at least 10,000 square feet.

The Front Royal and Warren County Industrial Park Corporation (the "Corporation") is a private stock company of which Fred W. McLaughlin is President. In 1973 and 1974 the Corporation purchased parcels of land totalling 86 acres in Warren County. The purchase price was approximately $107,000.00. The Town annexed this land, along with other property, in 1978. The Corporation's property was zoned industrial and had been subdivided into 16 lots before the annexation.

By Order of the annexation court in 1976, the Town was given a maximum of five years within which to provide sewer service to the Happy Creek Knolls property. In accordance with the annexation court's order, sewer was to have been available to the property no later than December 31, 1981. Sewer service was not actually available to the property until October 11, 1989.

Because sewer service is now available to the Happy Creek Knolls property, the court finds that the taking of that property has ceased. The plaintiffs are entitled, however, to appropriate damages for the period of the taking.

By Order of the annexation court in 1978, the Town had a maximum of five years within which to provide sewer service to the Industrial Park property. In 1983 the annexation court granted the Town a two year extension of the sewer provision date. In accordance with the annexation court's order, the property was to be provided with sewer no later than December 31, 1985. As of the date of trial, sewer service was not yet fully available to the Industrial Park property.²

The court finds that the failure of the Town to provide sewer service in a timely fashion was the sole reason why the plaintiffs were unable to develop their property: the defendants' failure to provide appropriate sewer service prevented the plaintiffs from putting their property to its fullest and best use. Even though at various times during the relevant period the property was not appropriately configured to comply with local zoning ordinances, the court finds that this was due entirely to the absence of sewer service. For the plaintiffs to have undertaken the efforts necessary to comply with the ordinances when it was readily apparent that sewer service would still be unavailable, thus leaving the property still unsalable, would have been futile.

II

As noted previously, the sole issue before the court is the amount of damages to which the plaintiffs are entitled. The court's previous Orders have established that a constitutional taking has occurred and that the defendants are not immune from liability for damages. Some of the evidence offered at the hearing on damages represented efforts of the parties, principally the defendants, to offer new evidence which would bolster their arguments in opposition to the court's previous rulings on liability. The court cautioned counsel on several occasions that it would consider only the evidence adduced at the hearing solely in regard to the issue of damages as the liability issues had previously been resolved. Whether such non-damages evidence was offered for the purpose of making a record is immaterial; it was not considered on the damages issue and obviously was not considered on the liability issue.

A. Compensatory Damages

A takings action can fall under two constitutional provisions, the fifth amendment of the United States Constitution or 42 U.S.C. § 1983.³ In Front Royal I, this court found that the defendants had effectuated a compensable taking by violating the plaintiffs' due process rights under § 1983. That the plaintiffs' action arose under § 1983 and not the fifth amendment does not affect the appropriate measure of damages to which they are entitled. Wheeler v. City of Pleasant Grove, 833 F.2d 267, 270 n. 3 (11th Cir.1987) Wheeler III.⁴

The question of which measure of damages the court should employ in this case is hardly clear. The court has looked to the vast array of takings jurisprudence and cannot find definitive precedent on the issue before it. As noted previously, this case does not involve condemnation proceedings, nor does it concern a taking which resulted from an unconstitutional regulation. The defendants effectuated the taking by failing to act on the annexation court's order. However, when examined in light of the Eleventh Circuit's definition of a regulatory taking in Wheeler III — "a taking that is ultimately invalidated by a court" — id., the facts of this case can most appropriately be analogized to a regulatory takings case.⁵ Even so, the lack of definitive precedent on compensating a temporary regulatory taking compels the court to examine the relevant case law.

Just compensation for the government's permanent acquisition of private property is the property's fair market value at the time of the taking. Kirby Forest Industries, Inc. v. United States, 467 U.S. 1, 10, 104 S.Ct. 2187, 2194, 81 L.Ed.2d 1 (1984). In a temporary taking, however, "the Just Compensation Clause of the Fifth Amendment requires that the government pay the landowner for the value of the use of the land during this period." First Lutheran Church, 482 U.S. at 319, 107 S.Ct. at 2388; Yuba Natural Resources, Inc. v. United States, 904 F.2d 1577, 1580-81 (Fed.Cir.1990) (just compensation "is the value of the use of the property during the temporary taking, i.e., the amount which the owner lost as a result of the taking."); Nemmers v. City of Dubuque, 764 F.2d 502, 504-05 (8th Cir.1985) ("for a temporary taking, the government is responsible for compensating the owner for the interim during which it effected the taking.").

The issues before the Supreme Court in First Lutheran unfortunately did not include how to measure appropriately "the value of the temporary use of the land" in temporary regulatory takings cases. The Court offered some guidance, however, when it held that a temporary regulatory taking is no different from the government's temporary use of private property and should be similarly compensated.⁶ First Lutheran, 482 U.S. at 318-19, 107 S.Ct. at 2387-88. Indeed, the Court...