Lemmons v. United States

Decision Date15 May 1974
Docket NumberNo. 513-71.,513-71.
Citation496 F.2d 864
PartiesFloyd N. LEMMONS v. The UNITED STATES.
CourtU.S. Claims Court

James C. Meers, Washington, D. C., attorney of record, for plaintiffs. John E. Early, Evansville, Ind., of counsel.

Joel Henry Meshorer, Washington, D. C., with whom was Asst. Atty. Gen. Wallace H. Johnson, for defendant.

Before COWEN, Chief Judge, DAVIS and BENNETT, Judges.

OPINION

PER CURIAM:

This case comes before the court on defendant's motion, filed February 26, 1974, requesting that the court adopt the recommended decision of Trial Judge Thomas J. Lydon, filed January 18, 1974, pursuant to Rule 134(h), as the basis for its judgment in this case since plaintiff has failed to file a notice of intention to except thereto and the time for so filing pursuant to the Rules of the court has expired. Upon consideration thereof, without oral argument, since the court agrees with the said decision, as hereinafter set forth,* it hereby affirms and adopts the same as the basis for its judgment in this case. Therefore, defendant's motion of February 26, 1974, is granted, plaintiff is not entitled to recover and the petition is dismissed.

OPINION OF TRIAL JUDGE

LYDON, Trial Judge:

Plaintiff seeks to recover damages in the form of just compensation for an alleged taking by defendant, acting through the Corps of Engineers, Department of the Army, of his property on or about June 25, 1965. Plaintiff claims he is entitled to recover the value of a sand and gravel tipple (which he estimates to be $55,000), the labor costs which would be incurred in installing a new tipple in another location (which he estimates would be $35,000), and the value of his leasehold interest (which he estimates to be $15,000).

The basic question presented in this case is whether there was a taking by defendant of plaintiff's property entitling him to a just compensation award. Subsidiary questions to which the parties have directed their briefs are whether the tipple is to be considered a part of the realty, as claimed by plaintiff, or personalty, the position advanced by defendant, and whether plaintiff's leasehold interest was a viable property right possessing value on or about June 25, 1965. For reasons which follow, it is concluded there was no compensable taking by defendant of plaintiff's property.

In 1957, plaintiff was President of Mid-West Sand and Gravel Co., Inc. (Mid-West) which had its main office in Boonville, Indiana. For purposes of this litigation plaintiff and Mid-West will be considered one and the same. On November 23, 1957, plaintiff, as lessee, entered into a special purpose "Sand And Gravel Lease", subsequently reassigned to Mid-West, with Marion D. Vanada and his wife, Lillian E. Vanada, lessors, whereby plaintiff was given the right to conduct a sand and gravel business on property, known as tract 114, owned by the lessors. Under this lease plaintiff had the right to dredge and pump sand and gravel from the Ohio River and to process the sand and gravel by means of a tipple located on the riverbank on tract 114 for commercial sale. At or about the same time that he entered into the lease, plaintiff purchased from the lessors the sand and gravel tipple consisting at the time of three hoppers or bins, which was then located on tract 114 — having been moved there from an upstream location at a prior time.

The lease was for a term of 20 years with the lessee having the privilege of renewing the lease for a period of 5 years thereafter. It set up a schedule of rents and royalties which plaintiff was to pay the lessors, said schedule varying within different established time periods. For example, it provided that from January 1, 1965, to and including December 31, 1969, plaintiff was to pay the lessors an amount per ton of sand and gravel removed equal to 9 percent of the prevailing market price per ton for sand and gravel at the Evansville, Indiana, market as of January 1, 1965. Plaintiff, in any event, had to pay the lessors at least $2,000 annually as rent and royalties under the lease. The lease provided in pertinent part:

* * * * * *
(1) * * * * *
(h) Lessee shall have the right to remove all of his personal property and improvements made by him on said real estate at the end of the term of this lease.
(2) Lessors agree to permit the Lessee to use a reasonable portion of their land on the river bank refers to tract 114 for hoppers the tipple or other equipment necessary for Lessee\'s operation * * *.
(3) Lessee agrees to carry on the work of pumping sand and gravel in a diligent manner. Lessee\'s failure to pump sand and gravel for a continuous period of six (6) months or more shall constitute an abandonment and termination of this lease, unless the river conditions, strikes, or other unavoidable circumstances in some way prevent the Lessee from conducting a normal operation.

* * * * * *

The lease also allowed plaintiff to use a plot of land known as tract 111 owned by the lessors for storage of sand and gravel, as well as use of a scales office building and maintenance shop located thereon.

It is important to understand that plaintiff's lease was a special purpose lease and only empowered him to conduct a sand and gravel business on the lessor's property. Plaintiff's sole purpose in obtaining the lease and purchasing the tipple was to engage in the business of producing and selling sand and gravel, dredged from the Ohio River. He was not allowed to farm the land or engage in any other activity thereon.

The lease drew its vitality, and indeed its very existence, from a permit issued by the Corps of Engineers. Plaintiff conceded he could not operate his tipple and conduct his sand and gravel business without the permit. His entire operation on tract 114 was completely dependent on the flow of the Ohio River to carry sand and gravel downstream to where it could be dredged from the riverbed in an area known as Scuffletown Bar adjacent to tract 114, and processed by means of the tipple located on said tract. The Corps of Engineers had initially issued the permit in question, without any fee or cost attached thereto, in 1951 to Hageman Sand and Gravel Co. of Mt. Vernon, Indiana, and it was subsequently extended and/or reassigned until June 11, 1959, when it was assigned to Mid-West. Mid-West also had the permit extended, the last extension to expire on December 31, 1966.

The Corps of Engineers issued the permit, pursuant to the Rivers and Harbors Act of 1899, 33 U.S.C. § 401 et seq., and it allowed the holder to conduct sand and gravel dredging operations for commercial purposes on the Ohio River at the Scuffletown Bar. Attached to the permit was a drawing showing the proposed dredging operations. The drawing noted the "Proposed Location of Pump, Pipe Line, 3 Hopper For Storage and Screening" and schematically depicted the tipple on the riverbank and the 8-inch pipe leading from the dredge barge in the river to the tipple on the bank. The permit reserved the right of defendant to revoke it at any time in the interests of navigation and provided that no claim shall be made against defendant on account of revocation nor shall defendant incur any expenses as a result of revocation of the permit.

Plaintiff spent most of 1958 in preparation for the conduct of his sand and gravel business. He made considerable improvements to the tipple, e. g., he added five additional hoppers or bins to the tipple in 1958, and in 1962 he made additional improvements to the tipple in order to increase production, e. g., he added a gravel screw and installed a new-type pump. The record does not indicate the initial purchase price of the tipple, the costs of improvements thereto, nor any depreciation data bearing thereon.

Tract 114 was a triangular-shaped plot of land lying immediately east of an area known as tract 108 and immediately south of an area known as tract 110 along the right bank of the Ohio River near Newburgh, Indiana. It consisted of 5.40 acres of which 3.47 acres were below normal pool (elevation 347.0 m. s. 1.). Under his lease, plaintiff, as noted supra, was entitled to use a reasonable portion of tract 114 on the riverbank for his tipple. The tipple was located in the northwest corner of tract 114, quite close to the boundary lines of tract 108 on the west and tract 110 on the north. The evidence presented at trial was inconclusive as to the elevation of the ground on which the tipple was located, varying from a low of 355 m. s. l. to a high of 366.5 m. s.l.

The purpose of the tipple was to size and separate sand and gravel. Sand and gravel was dredged from the Ohio River and pumped through an 8-inch pipeline into the tipple where it was processed by means of conveyors, screens, vibrator, scrubbers and washers and separated into the various hoppers or bins as sand or gravel. Chutes located at the bottom of the hoppers permitted trucks beneath the hoppers to be loaded with the final product for delivery to storage bins for commercial sale. Dredging operations were conducted from a steel barge located out in the river anywhere from 100 to 125 feet from the water's edge. The pipe through which the dredged sand and gravel was pumped rested on pontoons from the barge until land was reached at which point it rested on supports until the pipe reached the tipple.

In December 1964, the tipple consisted of eight steel hoppers or bins and assorted electrical and other equipment necessary for its operation. The tipple sat on steel beam legs which were either embedded in concrete footings or bolted to steel plates embedded in concrete footings. The steel beam legs individually supported the various component parts of the tipple which were welded together to form a cohesive water-tight structure. The tipple itself was not designed to be a monolithic structure. Instead, elements were added and/or welded to the tipple as the need arose. The hoppers were from 8 to 12 feet off the ground in order to enable ...

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