U.S. v. Certain Land Situated in City of Detroit, 79-CV-73934-DT.

Decision Date20 February 2002
Docket NumberNo. 79-CV-73934-DT.,79-CV-73934-DT.
Citation188 F.Supp.2d 747
PartiesUNITED STATES of America, Plaintiff, v. CERTAIN LAND SITUATED IN THE CITY OF DETROIT, et al., Defendants.
CourtU.S. District Court — Eastern District of Michigan

Ray Hamilton, Asst Us.A. — Albuquerque, NM, Matthew S. Clifford, U.S. Department of Justice, Washington, DC, for plaintiff.

Craig L. John, Willaim R. Seikaly, Bloomfield Hills, for Detroit Int'l Bridge Co.

MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION IN LIMINE AND DEFENDANT DETROIT INTERNATIONAL BRIDGE COMPANY'S VALUATION THEORIES

ROSEN, District Judge.

I. INTRODUCTION

This condemnation action is presently before the Court for trial on the issue of just compensation due to Defendant Detroit International Bridge Company ("DIBCO") for two parcels of property taken by the Government in 1979 for the expansion of the U.S. Customs secondary cargo inspection facility on the American side of the Ambassador Bridge. The property taken is comprised of two parcels (A1 and A3) between 20th and 21st Streets, south of Porter Street and north of Howard Street. As of the date of taking, October 11, 1979, Parcel A1 was improved with a 43-door truck terminal. Parcel A3 was vacant land. Both parcels are in close proximity to the Ambassador Bridge. Both the Ambassador Bridge and the property taken are owned by Defendant DIBCO.

Prior to trial, the parties filed a number of in limine motions. The Court made its rulings on the record on February 8, 2002 on all of these motions with the exception of Plaintiff's Motion in Limine to Exclude the Report and Proposed Testimony of Defendant's Expert, Jonathan Vanderveen. With regard to the Vanderveen motion, the Court took the valuation issues raised therein under advisement. This engendered a series of supplemental briefs and arguments from the parties during the course of the proceedings the week of February 11, 2002. Although the Court has verbally ruled from the bench on the issues raised by the parties, it is now issuing this Memorandum Opinion and Order so that there may be a clear record of the Court's rulings as to what matters will and will not be submitted to the jury.

II. DISCUSSION
A. EVIDENCE OF THE BRIDGE'S LOST PROFITS/DIMINUTION IN VALUE AS EVIDENCE OF FAIR MARKET VALUE OF THE CONDEMNED PROPERTY
1. DIBCO MAY NOT RECOVER LOST PROFITS SUFFERED BY THE AMBASSADOR BRIDGE AS SEVERANCE DAMAGES

DIBCO seeks to offer evidence of (1) lost profits allegedly suffered by the Bridge and/or (2) the diminution in the value of its property after the taking (i.e., the difference between the before and after taking value of the Bridge and the adjacent taken property) contending that the "highest and best use" of the condemned parcel of property adjacent to the bridge is its use as part of the Ambassador Bridge. In support of its position regarding severance damages and diminution of value, DIBCO relies principally upon United States v. 104 Acres, more or less in Keeler Township, Van Buren County, 666 F.Supp. 1017, 1026 (W.D.Mich.1987), contending that the relevant facts of this action "are identical" to those in the Van Buren County case.

In Van Buren County, the Government took in fee a small part of one parcel of defendant's property and an easement over a substantial part of the remainder of that parcel. The property was used for farming, specifically for growing corn. The parcel had a central pivot irrigation system on it. It was undisputed that the highest and best use of the property was as a farm.

The Van Buren court awarded just compensation in three parts. First, it awarded the fair market value of the portion of the parcel taken in fee based upon its highest and best use as a farm. It also awarded "partial taking" damages for the easement over the remainder of the parcel based upon the "before and after taking" value of the parcel. Third, the court found that the property owner would have also irrigated a 65-acre parcel of land he owned adjacent to the condemned property with the center pivot system that was on the principal parcel but for the Government's taking of the easement on the principal parcel which precluded such irrigation. For damage to this 65-acre adjacent parcel the Court awarded "incidental" severance damages based upon the difference in the values of irrigated and non-irrigated cornland.

It is based upon the Van Buren court's award of damages that DIBCO here contends that it can use its loss of revenues on the adjacent Ambassador Bridge allegedly due to the Government's taking of the adjacent property to establish the fair market value of the taken property.

As shown below, Van Buren is readily distinguishable from the instant case because in Van Buren, the adjacent property was at the time of the taking being put to an integrated unitary use with the condemned parcel, and as a consequence, the property owner was entitled to "severance damages" for diminution of the value of the adjacent land in addition to the fair market value of the property actually taken. Here, there is no dispute that the condemned property was not at the time of the taking being used as an integrated part of the Bridge.

The applicable rule of law in such cases was succinctly compiled by the court in Baetjer v. United States, 143 F.2d 391 (1st Cir.1944):

The first question before us here, therefore, and the basic one in all severance damage cases, is what constitutes a "single" tract as distinguished from "separate" ones. The answer does not depend upon artificial things like boundaries between tracts as established in the owner's chain of title, nor does it depend necessarily upon whether the owner acquired his land in one transaction or even at one time. Neither does it wholly depend upon whether holdings are physically contiguous. Contiguous tracts may be "separate" ones if used separately and tracts physically separated from one another may constitute a "single" tract if put to an integrated unitary use or even if the possibility of their being so combined in use "in the reasonably near future... is reasonably sufficient to affect market value...."

Integrated use, not physical contiguity, therefore, is the test. Physical contiguity is important, however, in that it frequently has great bearing on the question of unity of use. Tracts physically separated from one another frequently, but we cannot say always, are not and cannot be operated as a unit, and the greater the distance between them the less is the possibility of unitary operation, but separation still remains an evidentiary, not an operative fact, that is, a subsidiary fact bearing upon but not necessarily determinative of the ultimate fact upon the answer to which the question hinges.

Id. at 394 (citations omitted). See also United States v. 287.89 Acres of Land in Clearfield County, 241 F.Supp. 464 (W.D.Pa.1965) ("In determining just compensation in this case for the taking of one of three tracts of land which were in the same ownership and in fact have been used and treated as a unit, we think it is the law that they should be treated as a unit in estimating damages.").

In International Paper Co. v. United States, 227 F.2d 201 (5th Cir.1955), the Fifth Circuit explained the applicable principles of law as follows:

It is not denied that in rendering the "just compensation" secured by the constitution of the United States to the citizen whose property is taken for public uses it is right and proper to include the damages in the shape of deterioration in value which will result to the residue of the tract from the occupation of the part so taken. In applying this rule, however, regard is had to the integrity of the tract as a unitary holding by the owner. The holding from which a part is taken for public uses must be of such a character as that its integrity as an individual tract shall have been destroyed by the taking. Depreciation in the value of the residue of such a tract may properly be considered as allowable damages in adjusting the compensation to be given to the owner for the land taken. It is often difficult, when part of a tract is taken, to determine what is a distinct and independent tract; but the character of the holding, and the distinction between a residue of a tract whose integrity is destroyed by the taking and what are merely other parcels or holdings of the same owner, must be kept in mind in the practical application of the requirement to render just compensation from property taken for public uses. How it is applied must largely depend upon the facts of the particular case and the sound discretion of the court.

227 F.2d at 205-206 (quoting Sharp v. United States, 191 U.S. 341, 354, 24 S.Ct. 114, 48 L.Ed. 211 (1903).)

The weight of authority, however, is that there must be evidence that such an integrated, unitary use with an adjacent parcel of land must have existed at the time of the taking. See United States v. 1,162.65 Acres of Land, 498 F.2d 1298, 1300 (8th Cir.1974) ("[T]he applicable working rule requires that if, on the facts of a particular case, it is determined that the particular tracts condemned were at the time of taking, in fact being used and devoted to a unitary use together with another tract, the tracts taken and the tracts not taken must be considered as a single unit in both the before and after valuations."); Cole Investment Co. v. United States, 258 F.2d 203 (9th Cir.1958); United States v. Mattox, 375 F.2d 461 (4th Cir.1967); United States v. 765.55 Acres of Land, 174 F.Supp. 1, 14 (E.D.N.Y.1959), aff'd, 276 F.2d 264 (2nd Cir.1960) ("[T]he concept of severance damages relates solely to the depreciation to the remainder property where a part of a single parcel is taken in fee."). Accord, United States v. 104 Acres, more of less in Keeler Township, Van Buren County, supra. It is undisputed here that at the time of the taking there was no unity of use with respect to the condemned property and DIBCO's Ambassador Bridge...

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