Tony Guiffre Distributing Co., Inc. v. Washington Metropolitan Area Transit Authority, s. 83-1004

• Decision Date: 01 August 1984
• Docket Number: Nos. 83-1004,83-1005,s. 83-1004
• Citation: 740 F.2d 295
• Parties: TONY GUIFFRE DISTRIBUTING CO., INC., Appellant, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; Ohio Valley Construction Co., Inc.; Bechtel Associates, Professional Corporation (Virginia), Appellees. TONY GUIFFRE DISTRIBUTING CO., INC., Appellee, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; Bechtel Associates, Professional Corporation (Virginia), Appellants, and Ohio Valley Construction Co., Inc., Defendant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 295

740 F.2d 295

TONY GUIFFRE DISTRIBUTING CO., INC., Appellant, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; Ohio Valley

Construction Co., Inc.; Bechtel Associates,

Professional Corporation (Virginia), Appellees.

TONY GUIFFRE DISTRIBUTING CO., INC., Appellee, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; Bechtel

Associates, Professional Corporation (Virginia), Appellants,

and

Ohio Valley Construction Co., Inc., Defendant.

Nos. 83-1004, 83-1005.

United States Court of Appeals, Fourth Circuit.

Argued Jan. 12, 1984.

Decided Aug. 1, 1984.

Hugh Nugent, Alexandria, Va. (Harry P. Hart, Hart, Nugent & Ahearn, P.C., Alexandria, Va., on brief), for appellant.

Benjamin J. Trichilo, William L. Carey, Fairfax, Va. (Lewis & Trichilo, Fairfax, Va., on brief) and Gary B. Mims, Fairfax, Va. (Michael L. Zimmerman, Brault, Geschickter, Palmer & Grove, Fairfax, Va., on brief), for appellee.

Before ERVIN and CHAPMAN, Circuit Judges, and BUTZNER, Senior Circuit Judge.

BUTZNER, Senior Circuit Judge:

This appeal of a judgment entered in an action brought by Tony Guiffre Distributing Co. against the Washington Metropolitan Area Transit Authority and two construction companies presents the following issues: (1) whether the district court erred by excluding unpaid rent as evidence of damages in an inverse condemnation claim; (2) whether Guiffre was entitled to interest on the inverse condemnation claim; and (3) whether Guiffre is entitled to attorney's fees from the Authority on the basis of an indemnification provision of his lease. The Authority cross-appeals from the award on the inverse condemnation claim. ¹ We affirm the judgment of the district court.

I

This action arose out of construction of a mass transit system in the Washington, D.C., metropolitan area. Guiffre owns a tract of land in Alexandria, Virginia, adjacent to a transit line. The Authority, an interstate agency established to build and operate the system, leased an undeveloped section of the tract for use during construction. The Authority breached a covenant in its lease by failing to restore the undeveloped tract to its previous condition at the conclusion of the work. Excavation caused damage to Guiffre's adjoining warehouse leased to a federal government agency. ² Construction also affected other sections of the Guiffre tract. Contractors' employees, by storing equipment and parking their cars on the property, interfered with access to, and parking for, a tennis club that leased part of the land and warehouse. The tennis club, in turn, refused to pay Guiffre rent during the construction period. This damage was the subject of the inverse condemnation claim for temporary loss of use of the property leased to the tennis club. On this claim, the jury awarded $30,000.

II

The district court allowed Guiffre to introduce evidence of the fair rental value of the tennis club parking area, which the Authority used without a lease or formal condemnation proceedings. The court, however, excluded evidence of the rent payable by the tennis club.

Guiffre contends that the district court erred in excluding evidence of the rent. It argues that the rent should have been admitted as evidence of the fair market value of the Authority's temporary occupancy.

The district court did not err in excluding evidence about the rent. The court ruled that the rent was an uncertain, speculative measure of Guiffre's damages because the relationship between the two parties to the lease was not at arm's length. Guiffre's president was acquainted with the tennis club's principals, and his family owned 40% of the club's shares. The tennis club operated at a loss, and Guiffre allowed it to fall behind in its rent well before construction began. Moreover, Guiffre and the tennis club had allowed a state court suit over responsibility for the rent to languish for four years.

Because of the facts concerning the tennis club lease and its arrearage of rent, it is doubtful that the rent was relevant evidence as defined by Federal Rule of Evidence 401. But even if it had marginal relevance, it was properly excluded under rule 403 because of the likelihood that it would mislead the jury. See 22 Wright & Graham, Federal Practice & Procedure Sec. 5217, at 293-96 (1978).

The district court's solution to the question of valuation was fair. After the court excluded evidence of the rent payable by the club, Guiffre's experts were allowed to testify about the fair rental value of the area the Authority used. They assigned a value in excess of the club's rents.

III

Guiffre also assigns as error the district court's refusal to award prejudgment interest on the inverse condemnation claim. It asserts that it is entitled to the interest from the time of taking to the time of judgment as part of the just compensation that the United States Constitution requires.

Guiffre did not, however, seek interest in its complaint, introduce evidence of an appropriate rate and the method of its computation, or request that the jury be instructed to consider the matter. Instead, Guiffre first asked for interest in a post-trial motion.

Interest, as an element of just compensation, ordinarily should be determined by the trier of fact. When a landowner does not ask the trier of fact to consider interest, the court may determine that he is precluded from making the claim. See United States v. 100 Acres of Land, 468 F.2d 1261, 1269-70 (9th Cir.1972). Application of this principle is appropriate here, for Guiffre did not request that the jury be instructed to return a special verdict as to the length of time the Authority's use of the parking area interfered with tennis club patrons. It was told only that it should determine the extent of the taking, and no objection is pressed to this instruction. The district court stated that it could not determine the appropriate time from which interest should accrue, based on this general verdict. Consequently, the court properly allowed interest only from the date of the judgment entered on the jury's verdict. See...