Kerr v. Raney

• Decision Date: 12 November 1969
• Docket Number: No. F-69-C-13.,F-69-C-13.
• Citation: 305 F. Supp. 1152
• Parties: Frank T. KERR, Plaintiff, v. Dallas P. RANEY, Leon B. Catlett, Howard Horst, John L. Wilson, Roy C. Ritter, R. E. Wilson, III, Dr. P. L. Hathcock, Fred M. Pickens, Jr., George R. Shankle and G. Thomas Eisele, as Members of the Board of Trustees of the University of Arkansas; and David W. Mullins, as the President of the University of Arkansas, Defendants.
• Court: U.S. District Court — Western District of Arkansas

305 F. Supp. 1152

Frank T. KERR, Plaintiff, v. Dallas P. RANEY, Leon B. Catlett, Howard Horst, John L. Wilson, Roy C. Ritter, R. E. Wilson, III, Dr. P. L. Hathcock, Fred M. Pickens, Jr., George R. Shankle and G. Thomas Eisele, as Members of the Board of Trustees of the University of Arkansas; and David W. Mullins, as the President of the University of Arkansas, Defendants.

No. F-69-C-13.

United States District Court W. D. Arkansas, Fayetteville Division.

November 12, 1969.

Murphy & Carlisle, Fayetteville, Ark., for plaintiff.

Putman, Davis & Bassett, Ray Trammell, Fayetteville, Ark., for defendants.

OPINION

JOHN E. MILLER, Senior District Judge, sitting by designation.

This is an action by which plaintiff seeks to enjoin the Board of Trustees of the University of Arkansas from condemning certain property owned by him in Fayetteville, Arkansas, and seeking damages allegedly caused by the failure of the Board of Trustees to negotiate with plaintiff in good faith. Defendants have filed a motion to dismiss pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, alleging that the court is without jurisdiction of the defendants and of the subject matter of the action, and that the complaint fails to state a claim upon which relief can be granted.

Rule 12(d), Fed.R.Civ.P., clearly contemplates a preliminary hearing and determination of jurisdictional issues in advance of trial unless the trial court defers such action until the time of trial. See 2A, Moore's Federal Practice, ¶ 12.16. Moreover, there is no statutory direction for procedure upon an issue of jurisdiction, and the mode of its determination is left to the discretion of the trial court. Gibbs v. Buck (1939), 307 U.S. 66, 59 S.Ct. 725, 83 L.Ed. 1111; Schramm v. Oakes (10 Cir. 1965), 352 F.2d 143; Ziegler Chemical & Mineral Corp. v. Standard Oil Co. of Cal. (D.C. Cal.1962), 32 F.R.D. 241. The determination of the issue of federal jurisdiction may be made upon affidavits or other documentary evidence, or upon oral testimony. Gilbert v. David (1914), 235 U.S. 561, 35 S.Ct. 164, 59 L.Ed. 360; Broadstone Realty Corp. v. Evans (S.D. N.Y.1962), 213 F.Supp. 261; Dr. Beck & Co. G.M.B.H. v. General Electric Co. (S.D.N.Y.1962), 210 F.Supp. 86, aff'd (2 Cir. 1963) 317 F.2d 538; Metropolitan Sanitary Dist. of Greater Chicago v. General Electric Co. (N.D.Ill.1962), 208 F.Supp. 943; Kantor v. Comet Press Books Corp. (S.D.N.Y.1960), 187 F.Supp. 321. Accordingly the court held hearings on the jurisdictional issue on October 30 and November 5, 1969, and received both documentary and testimonial evidence.

Ark.Stat.Ann. § 80-3318 (1967 Supp.) grants the University of Arkansas Board of Trustees the right and power of eminent domain to condemn property whenever and wherever the acquisition of property is necessary for the use of the University. It is therein provided, however, that before the power is exercised in any case, the Board of Trustees shall exercise every reasonable effort to obtain the property in question at a reasonable price by negotiation. Thus, there is implicit in the statute the requirement that the Board of Trustees negotiate in good faith, once it has made the determination to acquire particular property. The defendants agree, but contend that this court is powerless to remedy any breach of duty by the Board of Trustees, as a suit against the Board of Trustees of the University of Arkansas is, in effect, a suit against the State of Arkansas, which enjoys constitutional governmental immunity from suit in her own courts. Arkansas Constitution, Art. 5, Sec. 20; State Comm'r of Labor v. U. of Ark. (1966), 241 Ark. 399, 407 S.W.2d 916. The defendants are correct in that, insofar as the Trustees have acted in their official capacity and within the law, this court is without jurisdiction of the action. However, an illegal act on the part of a state official or employee, committed on behalf of an agency of the state, is not protected from suit by governmental immunity. If the defendants have breached an express or implied statutory duty or otherwise exceeded or abused their discretion, such action is ultra vires in nature, and the court may afford proper equitable relief.

In Shellnut v. Arkansas State Game and Fish Comm. (1953), 222 Ark. 25, 258 S.W.2d 570, a suit to enjoin the enforcement of a regulation of the Arkansas State Game and Fish Commission, the Arkansas Supreme Court set forth the general rule at 222 Ark. 31, 258 S.W.2d 574:

"When a State Agency acts illegally, it is subject to be restrained by suit in equity. Federal Compress & Warehouse Co. v. Call, 221 Ark. 537, 254 S.W.2d 319. In Jensen v. Radio Broadcasting Co., 208 Ark. 517, 186 S.W.2d 931, 932, we said:

"`The general rule of equity jurisdiction in suits to restrain acts of public officers is stated in 28 Am. Jur. 356, as follows: "There is no doubt but that equity will exercise jurisdiction to restrain acts or threatened acts of public corporations or of public officers, boards, or commissions which are ultra vires and beyond the scope of their authority, outside their jurisdiction, unlawful or without authority, or which constitute a violation of their official duty, whenever the execution of such acts would cause irreparable injury to, or destroy rights and privileges of, the complainant, which are cognizable in equity, and for the protection of which he would have no adequate remedy at law. An injunction to prevent an officer from doing that which he has no legal right to do is not an interference with his discretion."'"

See also Ottinger Const. Co. v. Blackwell (E.D.Ark.1959), 173 F.Supp. 817; Federal Compress & Warehouse Co. v. Call (1953), 221 Ark. 537, 254 S.W.2d 319.

It is conceded that the Board of Trustees has made the necessary determination to acquire plaintiff's property located adjacent to the University of Arkansas campus. The issue of the court's jurisdiction thus depends upon whether the Board of Trustees, through its agents, has exercised good faith, as required by statute, in negotiating with plaintiff.¹

It appears that the Board of Trustees began formulating plans for acquiring portions of plaintiff's property in late 1966, as part of the overall plan of the University for expansion and development. The certified minutes of the Board meeting held on November 11, 1966, reveal that the University administration was then given authority to select the property needed, obtain an appraisal of its value, and negotiate for its purchase. In addition, the Board determined to condemn the property needed in the event negotiations failed. The minutes of a meeting held on January 27, 1967, reflect the desire of the Trustees that land including plaintiff's property be given first priority. Late in February 1967 Dr. David W. Mullins, the President of the University, arranged a conference with plaintiff's son, Frank L. Kerr, during which the younger Kerr was informed by Dr. Mullins that the University wanted to purchase plaintiff's property but would condemn it if necessary. Part of plaintiff's property contains rental houses and an apartment complex is located on another portion. Plaintiff's son was informed that, while the University desired to eventually purchase all of the property involved, financing was then available only for the purchase of the rental houses. No firm offer was made at this initial conference. Plaintiff and Frank L. Kerr then employed a local realtor to conduct further negotiations in their behalf with the University administration in an effort to secure an offer on all of the property and to discover approximately when condemnation proceedings could be expected. Plaintiff desired to dispose of all of his property in the area of proposed expansion at the same time or not any of it. On March 9, 1967, plaintiff's representative met with University officials and conveyed plaintiff's offer to sell both the house and apartment property for a total of $600,000, or to sell only the rental houses for $210,000. The University officials were noncommittal, and negotiations temporarily lapsed. Shortly thereafter, the administration, pursuant to the authorization granted by the Trustees, secured two independent appraisals of plaintiff's property, and in a letter dated June 19, 1967, offered $114,600, the higher of the two appraisals, for the property on which the rental houses are located. This offer was refused on June 21, 1967, in a letter from Frank L. Kerr. On July 6, 1967, after reviewing the appraisals, Dr. Mullins wrote Frank L. Kerr, requesting that the Kerrs review their position and respond to the University's offer. Mullins also offerred to meet with the Kerrs at their convenience and discuss the matter. Neither plaintiff nor Frank L. Kerr replied to this letter. The realtor representing the Kerrs again met with administration officials in October 1967 in an effort to break the impasse, but received the distinct impression that the administration preferred dealing with the Kerrs, and this phase of the negotiations also proved fruitless.

Early in 1968, a certified public accountant in the employ of plaintiff also conducted rather indirect negotiations with administration officials. As a result, Dr. Mullins again wrote plaintiff on March 29, 1968, and offered to discuss the purchase of plaintiff's apartment property. Neither plaintiff nor Frank L. Kerr replied, but the apartment property was thereafter appraised, with plaintiff's permission, by two independent appraisers. On July 27, 1968, administration officials did confer with plaintiff and Frank L. Kerr and orally offered a total of $451,700 for all of the subject properties. Plaintiff replied that he would be willing to consider the offer if $100,000 were added to it. The negotiations again broke down, but plaintiff requested that the administration confirm its offer in writing. Dr. Mullins did so in a letter to plaintiff dated August 1, 1968, to which he requested a response. Neither plain...