United States ex rel. TVA v. 137 ACRES OF LAND, ETC., 18410.

• Decision Date: 21 February 1969
• Docket Number: No. 18410.,18410.
• Citation: 406 F.2d 1283
• Parties: UNITED STATES of America upon the relation and for the Use of the TENNESSEE VALLEY AUTHORITY, Plaintiff-Appellee, v. 137 ACRES OF LAND, MORE OR LESS, IN MARION COUNTY, TENNESSEE, Hunley W. Acuff, et ux., Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

406 F.2d 1283 (1969)

UNITED STATES of America upon the relation and for the Use of the TENNESSEE VALLEY AUTHORITY, Plaintiff-Appellee, v. 137 ACRES OF LAND, MORE OR LESS, IN MARION COUNTY, TENNESSEE, Hunley W. Acuff, et ux., Defendants-Appellants.

No. 18410.

United States Court of Appeals Sixth Circuit.

February 21, 1969.

Howard G. Swafford, Jasper, Tenn., for appellants, Raulston & Swafford, Jasper, Tenn., on the brief.

Thomas A. Pedersen, Asst. Gen. Counsel, Knoxville, Tenn., for appellee, Robert H. Marquis, Gen. Counsel, James H. Eldridge, Tennessee Valley Authority, Knoxville, Tenn., on the brief.

Before WEICK, Chief Judge, and PHILLIPS and PECK, Circuit Judges.

WEICK, Chief Judge.

This appeal is by the landowner defendants in a condemnation action instituted in the District Court by Tennessee Valley Authority (TVA) in the name of the United States of America. They complain of an award of $34,000, made by the District Court for their 137-acre farm, which award they assert was grossly inadequate.

The complaint was filed in the District Court by TVA on August 4, 1966, to condemn the farm for "the construction, operation and maintenance of Nickajack Dam and Reservoir." TVA filed a declaration of taking on the same day and deposited with the Clerk of the Court $34,000, which it had estimated to be just compensation for the property taken.

The District Court appointed a Commission, consisting of three members, to ascertain the value of the farm and to assess the compensation to be paid. The Commission heard the evidence and arguments of counsel and filed a report awarding $121,700 to the landowners. One Commissioner, who would have awarded only $34,000 (the exact amount deposited by TVA), filed a minority report. Exceptions to the report were filed by both parties, who entered into a stipulation waiving a hearing by a three-Judge panel and agreeing to submit the case to a single Judge. The District Judge heard the exceptions on the record made before the Commissioners and handed down an opinion which followed the recommendation of the minority Commissioner, and awarded the landowners $34,000. 275 F.Supp. 386 (1967).¹

The farm is located on East Shellmound Road in Marion County, Tennessee, about four miles from Jasper, Tennessee. It has a frontage on East Shellmound Road of around 3,000 feet and extends back to a depth varying from 1,500 to 2,700 feet, and abuts against Little Cedar Mountain. A two-story farm house in a moderate state of repair was located thereon. The farm had been used for raising cattle. A barn located thereon had burned about one month before the taking by TVA.

Prior to the taking of the farm by TVA, the State of Tennessee had taken twelve acres off the north end of the farm for a new interstate highway designated as I-24, which would link Chattanooga with Nashville. The new interstate route had been under construction for some time prior to the taking by TVA of the farm. The state highway project had been planned in 1960 and was approved by the Bureau of Roads on August 20, 1960.

Originally the plans for the new Route I-24 did not include an interchange at the intersection of East Shellmound Road, which was north of the Tennessee River, but provided instead for an underpass for said road to cross I-24. The state plans did provide for an interchange south of the Tennessee River at the intersection of S. R. 134 and U.S. 41. Subsequently, on September 17, 1964, the state decided upon an additional interchange at the intersection of East Shellmound Road. Thus interchanges were provided on both sides of the Tennessee River. One or more of the ramps for the additional interchange was located on the twelve acres taken from the north end of the farm.

The construction of the additional interchange by the state and the connection of I-24 with state routes 2, 28 and U.S. 41 afforded by the interchange, would accommodate a heavy flow of traffic. The interchange provided an exit and property adjacent thereto greatly increased in value as it could be used for business, such as restaurants, motels, gasoline filling stations, and other purposes.

The Nickajack Dam and Reservoir project had not been conceived until 1963. The Board of Directors of TVA approved it on February 18, 1963. It was announced publicly on April 5, 1963. Congress did not approve funds for it until December 31, 1963. The additional interchange had been approved by the state two years prior to the date of taking by TVA.

The substantial question in this case is whether the increment in the value of the farm occasioned by the construction of the additional interchange by the state should accrue to the benefit of the landowners or the TVA.

Four witnesses who testified for the landowners gave values as to ten acres of the farm adjacent to the interchange ranging from $70,000 to $90,000. They placed values on the farm, if enhancement is allowed, ranging from $114,000 to $138,000. Four witnesses who appeared for TVA valued the enhancement from $45,000 to $69,000. Without the enhancement their values of the farm ranged from $31,000 to $34,000; with the enhancement, from $75,000 to $100,000.

None of the witnesses, either for the landowners or for the TVA, included in his appraisal any enhancement derived from the construction of Nickajack Dam and Reservoir project.

It is the landowners' contention that the enhancement resulting from the construction of the interstate highway project, for which the state had already taken twelve acres of their farm, ought to inure to their benefit rather than to TVA.

On the other hand, TVA contends that it was the Nickajack project that brought about the establishment of the interchange, hence the landowners are not entitled to the enhancement in value. It relies on the rule that a landowner is not entitled to the increment in value of the property condemned caused by the improvement made by the condemnor. United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336 (1943), rehearing denied, 318 U.S. 798, 63 S.Ct. 557, 87 L.Ed. 1162.

The trouble with the contention of TVA is that it was not the construction of the Nickajack Dam and Reservoir that enhanced the value of the farm, but rather the interchange constructed by the state for an interstate highway improvement for which it had already taken twelve acres from the farm. None of the enhancement testified to by all of the witnesses was attributable to the construction of the dam and reservoir which was the project of TVA.

The Commission made findings which we approve. It found:

"The original plans of the Tennessee Highway Department did not include an interchange at I-24 and East Shellmont Road. The plaintiff, Tennessee Valley Authority, through its engineers, recommended that the State construct an interchange at this intersection. A study was made which indicated that it would be desirable to put in an interchange at this intersection. Some of the considerations for the interchange were that an average of 400 to 500 vehicles per day would use this exchange for recreational purposes because of the Dam Project and that an additional volume of 2,532 vehicles would use it in going to and from State Route 2 (U.S. 41) and State Route 28. That State Route 28 would eventually be widened and improved north on up Sequatchie Valley.

"The interchange was formally approved and authorized on September 17, 1964, and on November 6, 1964, Tennessee Valley Authority and the State of Tennessee entered into a contract outlining the roads in the vicinity and leading up to the interchange which they each would construct. The interchange was to be, and actually is being, constructed by the State."

It further found:

"In the instant case, while the increase in the on and off traffic at this interchange caused by the construction of the project for which the land was condemned was taken into consideration by the State when it revised the plans to include the interchange, it was not the only consideration. The proof fails to show that without the Dam Project there would have been no interchange here."

The state engineer, Sam M. Morrison, testified upon direct examination by TVA counsel, as follows:

"Q (By Mr. Eldridge): Now, Mr. Morrison, with regard to this interchange at East Shell Mound Road, without the TVA project Nick-A-Jack Dam, would there have been an interchange there according to the plans?

"A According to our planning, prior to the dam the Nick-A-Jack Dam, we did not contemplate putting one there. Now, of course, as the years roll around, well that is something else. I couldn\'t say just outright that there would not be one there if it wasn\'t for that." (Italics ours)

Four years did "roll around" since original interstate highway plans were made in 1960. It was not until September 17, 1964 that ...