United States v. 131.76 ACRES OF LAND, ETC., BENTON COUNTY, MO.

• Decision Date: 20 March 1969
• Docket Number: No. 1307.,1307.
• Citation: 296 F. Supp. 1381
• Parties: UNITED STATES of America, Plaintiff, v. 131.76 ACRES OF LAND MORE OR LESS, Situate IN BENTON COUNTY, MISSOURI; and Dessie House, et al., Defendants.
• Court: U.S. District Court — Western District of Missouri

296 F. Supp. 1381

UNITED STATES of America, Plaintiff, v. 131.76 ACRES OF LAND MORE OR LESS, Situate IN BENTON COUNTY, MISSOURI; and Dessie House, et al., Defendants.

No. 1307.

United States District Court W. D. Missouri, C. D.

March 20, 1969.

Calvin K. Hamilton, U. S. Atty., Patrick K. Monahan, Asst. U. S. Atty., Kansas City, Mo., for plaintiff.

Stanford M. Katz, Kansas City, Mo., for defendants.

MEMORANDUM OPINION, FINDINGS OF FACT AND CONCLUSIONS OF LAW

JOHN W. OLIVER, District Judge.

I.

This is a jury-waived condemnation case. The government condemned fifty of a sixty acre tract of land in Benton County, Missouri, for the Kaysinger Dam project. Defendants purchased the subject unit in 1959 in contemplation of retirement. The date of taking is March 21, 1968. The government's initial deposit in the amount of $2,330.00 was paid pursuant to an order entered by Chief Judge Becker on March 28, 1968.

After this action was re-transferred to the Central Division of this Court, it was set for trial on the next regular trial docket in Jefferson City. Additional evidence, for reasons to be stated, was adduced at a later hearing in Kansas City.

The testimony of the government's only appraisal witness was received at the hearing in Jefferson City on October 22, 1968. It became apparent during the course of that witness' testimony that he did not commence work on his appraisal until October 14, 1968, some eight days before the case was tried (Tr. 47). That witness testified that he had made his appraisal in accordance with instructions given him by the Corps of Engineers in Washington, D.C. (Tr. 42-43). It requires but a glance at those instructions, contained in Department of the Army Regulation No. 405-1-300 (Court Exhibit 1, Tr. 64) to understand that, so far as this case is concerned, the government's appraisal witness had not complied with that regulation.

Paragraph 3 (f) of the Regulation entitled Policies and Standards states:

Evidence in Legal Proceedings. The appraiser must bear in mind that he may be called upon, in condemnation proceedings or otherwise, to establish the validity and competence of his estimates. He must, therefore, familiarize himself with and be guided by basic rules of trial evidence so that his testimony will be admissible and of probative value. Since, as a witness, he must be prepared to offer convincing testimony, his report should contain an analysis of all factual data upon which his estimates are based.

Assuming, but without deciding, that someone other than the Department of Justice and the United States Attorney's office should instruct the expert witnesses who appear in condemnation cases, the principle stated in Paragraph 3 (f) of the regulation is consistent with the familiar and controlling rule recently applied in Hodges v. United States (8th Cir. 1969), 408 F.2d 543, decided March 11, 1969 that "expert opinion * * * rises no higher than the reasons on which it is based."

Paragraph 3 (i) of the regulation contemplates that the government's appraiser "during the course of his personal inspection of a property being appraised * * * is expected to see and talk personally to the owner or, in the owner's absence, his agent or representative." Paragraph 4 (c) states that "the proper approach to an appraisal problem is generally determined by the type, character and most proper use to which the property is adaptable. * * *" Paragraph 7 (c) requires that, if the comparative method of sales is used, "this process contemplates the compilation and analysis of all evidences of value with recent actual sales of similar properties a predominating comparative influence where all the terms, circumstances, and conditions under which such transfers were made are known to the appraiser by verification from the buyer and the seller and preferably both whenever possible." As will be apparent from our findings, the government's appraisal witness failed to comply with those instructions in this case.

Paragraph 31 of the regulation states that no real estate appraisal report would be considered acceptable to the government without an appropriate certification by the appraiser. No certified report of any government appraisal was offered in evidence. Indeed, the government appraiser on whose judgment the $2,330.00 deposit was apparently made was not called by the government nor was his name revealed during the trial.

Paragraph 5 of the regulation appropriately states that:

The importance of sound appraisals for the Department of the Army cannot be over-emphasized not only because the courts have established basic rules governing exercise of the power of eminent domain, but because of the governmental obligation to serve the general public and to protect the common welfare in such manner as to meet the acid test of severe criticism of methods employed in estimating compensation for the taking of private property for public use.

That principle is equally applicable to small tracts as to large. The explicit principles of the Fifth Amendment require that no tract of land, however small, be taken for public use without just compensation. Due process commands that the standards governing the exercise of the power of eminent domain be applied in the same manner in all cases regardless of the amount of money involved in a particular case.

It became apparent during the government's appraisal witness' testimony that he had not talked to the purchaser in sale B-282 which involved a 1966 sale of property directly adjacent to the subject property for $200 an acre. The witness had quite accidentally talked to the seller of that property but that social conversation took place before the witness even knew he was going to testify in this case (Tr. 32-35).

The government's appraisal witness, however, made very clear that he had assumed the 1966 sale of adjacent property was what he called "under the influence of Kaysinger Lake" and was therefore to be disregarded (Tr. 9, 13). Government's exhibit 3 established that sale B-282 was "very similar to the subject tract" but some unidentified person stated his conclusion that the "sale was motivated by Kaysinger Bluff Reservoir." No factual data to support that conclusion was included in government's exhibit 3 nor was any evidence adduced to support that conclusion.

In spite of the fact that government Exhibit 3 purported to be and was introduced in evidence as "additional testimony of the government's trial appraiser," the government's witness testified:

Q. Now, these exhibits that the defendant has, 2 through 12, did you prepare these? Were these prepared by you, that is, as far as the data is concerned and the remarks thereof?

A. No sir. I agreed with it but I did not prepare it.

Q. Who put in the words, who made the opinion where it says motivations?

A. I do not know, and I paid no attention to it.

The government's appraisal witness testified about sale B-107 involving property sold in 1963 at $63.89 per acre and a resale of the same property at $100 per acre in 1966. Some unidentified employee of the Corps of Engineers had labeled the 1963 sales as having been "bought for speculation." The government's appraisal witness testified in regard to those two sales as follows:

Q. I am going to show you this and ask if this is the previous sale to it. This shows a sale of April of 1963, is that correct?

A. Yes, sir.

Q. And it shows a sale price of 180 acres at an average price of $63.80 an acre, is that correct?

A. Yes, sir.

Q. And it shows on that that it was bought—the motivation is "bought for speculation," is that true, sir?

A. I do not know, sir.

THE COURT: Let me see this motivation business.

MR. KATZ: Each one of these has a motivation, Your Honor, on each one of these exhibits. It shows motivation, bought for rural home site, rural residential building site * * *.

THE COURT: Did you say you did not fill this out?

A. No, sir.

THE COURT: Who did?

A. I do not know, sir.

THE COURT: Who formed the judgment that this was bought for speculation?

A. I do not know, sir.

THE COURT: You don't know whether it was bought for speculation or whether it wasn't?

A. No, sir, I paid no attention to that statement that it was bought for speculation. Tr. 22-23

Later testimony by the government's appraisal witness established that it was quite accidental that the facts concerning the 1963 sale and 1966 resale of B-107 was ever adduced in evidence. That later testimony further revealed that the witness had not personally verified either of the sales and that "it just happened that those the 1963 sale and the 1966 resale are stapled together. I did not intend this original purchase to be in here but it is" (Tr. 24).

The government's appraisal witness' reluctance to concede that those two sales of the same property illustrated the well known general increase in property values in the area (Tr. 24-25) was consistent with his rationalization that the existence of a pond on the subject property would not affect its market value. The pond did not appear on government's exhibit 1 which was an aerial photograph taken in 1959 (Tr. 6, 17). In answer to the question: "Doesn't a pond make it convenient for watering stock?" the witness stated: "It may. It may also create a hazard to the stock, depending on the pond" (Tr. 18). Although the witness testified that he did not remember much about the pond (Tr. 18), he stated that "I don't believe it would make a nickel's difference in the purchase price of it" (Tr. 47). The government's appraisal witness' knowledge about the fencing and other improvements on the property followed the same pattern of lack of knowledge and concern (Tr. 46-47).

One of the most sharply contested issues of fact in this case related to the highest and best use of the property. The government contended and the government's appraisal witness testified that the highest and best use of the property was agricultural (Tr. 40-42). The government's contention was...