Samford University v. City of Homewood, No. 1050444 (Ala. 8/18/2006), 1050444.

CourtSupreme Court of Alabama
Writing for the CourtStuart
PartiesSamford University v. City of Homewood.
Docket NumberNo. 1050444.,1050444.
Decision Date18 August 2006

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Samford University
City of Homewood.
No. 1050444.
Supreme Court of Alabama.
Decided August 18, 2006.

Appeal from Jefferson Circuit Court (CV-04-2282)

STUART, Justice.

On April 23, 2003, the City of Homewood filed in the Probate Court of Jefferson County an application for an order of condemnation. The application was to condemn certain property, formally described as Lot 1 of University Park West,

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owned by Samford University. At the same time, Homewood filed a notice of lis pendens, pursuant to § 18-1A-75, Ala. Code 1975, giving prospective purchasers and encumbrancers of the property notice of the condemnation action. On August 28, 2003, the probate court entered an order granting the application for the order of condemnation and appointing commissioners to assess the compensation to which Samford was entitled. §§ 18-1A-279 through -281, Ala. Code 1975. On November 4, 2003, the probate court recorded the report of the commissioners, which awarded Samford $1,500,000 as compensation for the condemnation of Lot 1. On November 10, 2003, the probate court then entered its order confirming the report of the commissioners and condemning the land upon payment of the award.

On November 21, 2003, Samford filed a notice of appeal in the Jefferson Circuit Court for a trial de novo from the order of the probate court confirming the report of the commissioners and condemning the land upon payment of the award. Five days later Samford amended its notice of appeal to challenge Homewood's right to take the property. On February 19, 2004, Homewood paid into the probate court the

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sum of $1,505,054, the amount of damages and costs assessed by the probate court's November 10, 2003, order. On April 12, 2004, after receiving notice of the appeal, the probate court certified and transferred to the circuit court various documents pertaining to the condemnation and checks in the amount of $1,500,000. On June 10, 2004, Samford moved the trial court to invest the $1,500,000. On June 23, 2004, the trial court granted Samford's motion and directed that the $1,500,000 be placed in an interest-bearing account.

On March 15, 2005, Homewood moved for a summary judgment. On April 22, 2005, the trial court entered a summary judgment for Homewood declaring that Homewood had a right to condemn the property. The case then went to trial on the compensation issue.

On July 14, 2005, following a jury trial, the jury awarded Samford $2,650,000 as just compensation for the property. The trial court entered its order on that verdict on July 14, 2005. On August 10, 2005, Homewood deposited $1,150,000, the difference between the jury verdict of $2,650,000 and $1,500,000 awarded by the commissioners and previously paid with the clerk of the Jefferson Circuit Court.

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On August 26, 2005, Samford filed a motion requesting that the trial court invest the $1,150,000 deposited by Homewood on August 10, 2005, in an interest-bearing account. The trial court granted Samford's motion and ordered the $1,150,000 be deposited in an interest-bearing account.

On October 12, 2005, the trial court entered a final judgment, awarding Samford $2,650,000 for Lot 1 and setting the amount of interest awarded. On October 21, 2005, Samford moved to alter or amend the final judgment. Homewood responded, and on November 18, 2005, the trial court amended its judgment as to the amount of the interest award. The trial court in its amended judgment held that Samford was not entitled to prejudgment interest because Homewood had not taken actual or physical possession of the property. Samford appealed.

Standard of Review

The facts of the case are not in dispute. The dispute involves when Homewood's actions constituted a legal taking of Samford's property; therefore, this Court is presented with a question of law. Thus, there is no presumption of correctness in favor of the trial court's judgment, and this

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court's review of the legal issues presented is de novo. Allstate Ins. Co. v. Skelton, 675 So. 2d 377 (Ala. 1996).


In 1985 the Alabama Legislature passed the Eminent Domain Code, §§ 18-1A-1 through 18-1A-311, Ala. Code 1975. The Eminent Domain Code provided for prejudgment interest on condemnation awards, to be computed from the "date of valuation" to the date of the circuit court's judgment. Williams v. Alabama Power Co., 730 So. 2d 172, 175 (Ala. 1999). Before the enactment of the Eminent Domain Code, prejudgment interest was an element of compensation to be determined by the jury. McLemore v. Alabama Power Co., 285 Ala. 20, 228 So. 2d 780 (1969); Southern Natural Gas Co. v. Ross, 290 Ala. 195, 275 So. 2d 143 (1973).

In 1995, the legislature amended the Eminent Domain Code to address only postjudgment interest, providing that the judgment would include interest at the 52-week United States Treasury Bills rate. § 18-1A-211, Ala. Code 1975. It was again amended in 2004. Section 18-1A-211 now provides, in pertinent part, as follows:

"[T]he judgment shall include interest at a rate equal to the most recent weekly average one-year

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constant maturity yield, as published by the Board of Governors of the Federal Reserve System, upon the unpaid portion of the compensation awarded. The interest shall commence to accrue on the date of entry of the judgment."

(Emphasis added.)

Clearly, the language in § 18-1A-211, Ala. Code 1975, as amended in 1995, does not provide for prejudgment interest. The Commentary to § 18-1A-211, however, was not amended to reflect this change; it states that § 18-1A-211 addresses pre-judgment, rather than postjudgment, interest. This Court, in an opinion issued four years after § 18-1A-211 was amended to delete the reference to prejudgment interest, held that prejudgment interest was a component of the just compensation mandated by the Alabama Constitution for a taking of private property. Williams v. Alabama Power Co., supra.

Today, we are presented with the following question — when does prejudgment interest begin to run on a condemnation award? Our analysis requires us to address the history of prejudgment interest on...

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