Sabal Trail Transmission, LLC v. 3.921 Acres of Land in Lake Cnty. Fla.

• Decision Date: 24 November 2021
• Docket Number: 5:16-cv-178-JSM-PRL
• Court: U.S. District Court — Middle District of Florida
• Parties: SABAL TRAIL TRANSMISSION, LLC, Plaintiff, v. 3.921 ACRES OF LAND IN LAKE COUNTY FLORIDA, SUNDERMAN GROVES, INC and UNKNOWN OWNERS, Defendants.

SABAL TRAIL TRANSMISSION, LLC, Plaintiff,
v.
3.921 ACRES OF LAND IN LAKE COUNTY FLORIDA, SUNDERMAN GROVES, INC and UNKNOWN OWNERS, Defendants.

No. 5:16-cv-178-JSM-PRL

United States District Court, M.D. Florida, Ocala Division

November 24, 2021

REPORT AND RECOMMENDATION^[1]

PHILIP R. LAMMENS, United States Magistrate Judge

Before the Court is a post-trial motion filed by Defendant Sunderman Groves, Inc. (“Sunderman Groves”) seeking to tax prejudgment and post judgment interest. (Doc. 211). For the reasons discussed below, I submit that the motion should be granted in part.

I. Background

On March 18, 2016, Plaintiff Sabal Trail Transmission, Inc. (“Sabal Trail”) initiated this eminent domain action seeking to condemn property interests it deemed necessary for its interstate natural gas pipeline. (Doc. 1). On May 12, 2016, the parties filed a stipulation to immediate possession, allowing Sabal Trail to take possession of the property for the construction of the pipeline. (Doc. 24). On June 13, 2016, Sabal Trail deposited $113, 600.00

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into the court registry. (Doc. 32). On July 8, 2016, the court ordered the disbursement of the funds to Sunderman Groves. (Doc. 34).

This case proceeded to trial and on March 1, 2018, the jury found Sunderman Groves was entitled to $309, 500 in compensation for the condemnation of its property. (Doc. 126). On April 2, 2018, the court entered final judgment and ordered Sabal Trails to pay $309, 500 to Sunderman Groves. (Doc. 133). On April 23, 2018, Sabal Trail deposited $195, 900.00 into the court registry. (Doc. 139). The court determined Sabal Trails should pay prejudgment interest on the amount of $134, 500 (per the parties' previous stipulation) for the period of May 12, 2016 through the date of deposit on April 23, 2018. (Doc. 133).

On May 1, 2018, Sabal Trail filed a Notice of Appeal. (Doc. 145). On January 22, 2020, the Eleventh Circuit rendered its opinion and affirmed the district court's final judgment. (Doc. 183)

Now, Sunderman Groves requests an order taxing prejudgment interest from the date of “surrender of possession” (May 12, 2016) until the “date of deposit” (April 23, 2018) in the amount of $13, 080.17^[2] and taxing post judgment interest from April 24, 2018 to January 22, 2020 in the amount of $15, 775.88.^[3] (Doc. 211).

II. Discussion

A. Prejudgment Interest

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When property is taken by eminent domain, prejudgment interest at a reasonable rate is owed as part of the just compensation required under the constitution. See West Virginia v. United States, 479 U.S. 305, 311 n. 2 (1987) (“Prejudgment interest serves to compensate for the loss of use of money due as damages from the time the claim accrues until judgment is entered, thereby achieving full compensation for the injury those damages are intended to redress.”); United States v. Creek Nation, 295 U.S. 103, 111 (1935) (deciding that “interest at a reasonable rate” should be awarded as part of “just compensation” for a taking); Seaboard Air Line Ry. Co. v. United States, 261 U.S. 299, 306 (1923) (“The addition of interest allowed by the District Court is necessary in order that the owner shall not suffer loss and have ‘just compensation' to which he is entitled.”). This court previously determined that state substantive law governs the measure of compensation to be paid by Sunderman Groves. (Doc. 133). Sabal Trail challenges this determination and argues that prejudgment interest rate cannot be made upon state statutory provisions.

“In the absence of a controlling statute, federal courts' choice of a rate at which to determine the amount of prejudgment interest to be awarded is [] a matter for their discretion.” Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1447 (11th Cir. 1998); see also Washington Metro. Area Transit Authority v. One Parcel of Land in Montgomery Co., Md., 706 F.2d 1312, 1322 (4th Cir. 1983) (“The choice of an appropriate rate of interest is a question of fact, to be determined by the district court.”). “That choice is usually guided by principles of reasonableness and fairness, by relevant state law, and by the relevant fifty-two week United States Treasury bond rate, which is the rate that federal courts must use in awarding post-judgment interest.” Indus. Risk Insurers, 141 F.3d at 1447 (citing 28 U.S.C. § 1961). Notably, other courts awarding prejudgment interest in Natural Gas Act cases have

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found the interest rates provided by state statutes to be reasonable.^[4]

Under Florida's constitutional guarantee of “full compensation, ” Sunderman Groves is entitled to prejudgment interest. See Art. X, § 6(a), Fla. Const. (“No private property shall be taken except for a public purpose and with full compensation therefor paid to each owner. . .); Lee Cty. v. Sager, 595 So.2d 177, 178 (Fla. 2d D.C.A. 1992) (“Prejudgment interest is an integral part of “full compensation” in eminent domain proceedings.”). Florida Statute § 74.061 controls the issue of interest in eminent domain cases and allows for interest to be calculated according to the rates set in § 55.03. Behm v. Div. of Admin., Dep't of Transp., 383 So.2d 216, 217 (Fla. 1980) (“This Court has previously considered the question of interest on condemnation awards and has concluded that such interest is controlled by statute.”); Fla. Stat. § 74.061 (“[I]nterest shall be allowed at the same rate as provided in all circuit court judgments from the date of surrender of possession to the date of payment on the amount that

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the verdict exceeds the estimate of value set forth in the declaration of taking.”); Fla. Stat. § 55.03 (establishing how to determine the interest rate for judgements).

In Florida, the interest rate is determined by the Chief Financial Officer by averaging the discount rate of the Federal Reserve Bank of New York for the preceding 12 months, then adding 400 basis points to the averaged federal discount rate. Fla. Stat. § 55.03. The Chief Financial Officer set the judgment interest rate of 4.78% on May 12, 2016, 4.97% beginning in 2017, and 5.53% beginning in 2018 until April 23, 2018. (Doc. 211-1); Jimmy Patronis, Florida's Chief Financial Officer, Historical Judgment Interest Rates, Florida Department of Financial Services, Division of Accounting and Auditing, https://www.myfloridacfo.com/division/aa/localgovernments/Historical.htm (last visited Nov. 19, 2021).

Florida courts award prejudgement interest calculated under § 55.03 “as an element of damages to fully compensate the plaintiff for the value of his or her loss which was caused by the defendant's conduct.” Torpy v. Unum Life Ins. Co. of Am., No. 616CV410ORL22DCI, 2017 WL 5239451, at *5 (M.D. Fla. Oct. 18, 2017), aff'd, 741 Fed.Appx. 673 (11th Cir. 2018) (citing Argonaut Ins. Co. v. May Plumbing...