United States v. An Easement & Right-of-way Over 6.09 Acres of Land

Citation140 F.Supp.3d 1218
Decision Date21 October 2015
Docket NumberNo. 5:14–cv–0032–JEO, No. 5:14–cv–0048–JEO,5:14–cv–0032–JEO
Parties United States of America upon the relation and for the use of the Tennessee Valley Authority, Plaintiff, v. An Easement and Right-of-way Over 6.09 Acres of Land, More or Less, in Madison County, Alabama, and Moores Mill Communities, LLC, et al., Defendants. United States of America upon the relation and for the use of the Tennessee Valley Authority, Plaintiff, v. An Easement and Right-of-Way over 1.04 Acres of Land, More or Less, in Madison County, Alabama, and Fanning School Communities, LLC, et al., Defendants.
CourtU.S. District Court — Northern District of Alabama

Edward C. Meade, Frances Regina Koho, Tennessee Valley Authority, Knoxville, TN, for Plaintiff.

Elizabeth L. Blair, Harlan Irby Prater, IV, David R. Pruet, III, Lightfoot Franklin & White LLC, Birmingham, AL, Joseph M. Cloud, Joseph M. Cloud, PC, Huntsville, AL, for Defendants.



, Chief United States Magistrate Judge

Acting upon the relation and for the use of the Tennessee Valley Authority ("TVA"), the United States (hereinafter the "Government") filed these two condemnation actions pursuant to FED. R. CIV. P. 71.1

and the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. § 831 –831ee. In connection therewith, the Government has condemned an easement and a right-of-way over adjoining parcels of real property located in Madison County, Alabama. In one case, 5:14–cv–0032–JEO (the "Moores Mill Case"), the parcel is owned by defendant Moores Mill Communities, LLC ("MMC"). In the other case, 5:14–cv–0048 (the "Fanning Case"), the parcel is owned by defendant Fanning School Communities, LLC ("FSC"). The two cases have been consolidated, with the parties reserving the right to seek separate trials (Doc. 34; Fanning Case Doc. 35)1 , and the parties have consented to the exercise of plenary jurisdiction by a magistrate judge pursuant to 28 U.S.C. § 636(c) and FED. R. CIV. P. 73. (Doc. 23, ¶ 4(H); id. Docs. 33–1, 33–2; Fanning Case Doc. 34). Now before the court are the Government's substantially identical motions in limine in each case, which seek to preclude MMC and FSC (collectively "Defendants") from offering at trial portions of the testimony of Defendants' retained expert or any opinions from two of Defendants' principals on the value or the highest and best use of the land. (Doc. 37; Fanning Case Doc. 39). The parties have briefed the motions and filed evidentiary materials in support of their respective positions. (Docs. 38, 41, 45; Fanning Case Docs. 40, 43, 46)2 . Upon consideration, the court concludes that the Government's motions in limine are due to be granted in part and denied in part.


Wayne Bonner, Jeff Enfinger, and Bland Warren are principals of both Defendant entities. In August 2006, Defendant MMC entered into a Development Agreement with the owners of approximately 407 acres of raw land in unincorporated Madison County (the "Moores Mill tract"), with the parties declaring their intent that the land would be developed according to a site plan to be created by MMC. (Doc. 41–5 ("Development Agreement") ¶ 2). Pursuant to the Development Agreement, MMC paid the sellers $2 million at the closing in January 2007 and promised to pay an additional 20% of the net price of each residential lot as it was developed and sold by MMC. (Development Agreement ¶ 5(a)). MMC, however, also reserved the right to sell any or all of the property as undeveloped land. (Id. ) For any such sales, MMC would pay the owners the greater of either 33% of the net sale price or a per-acre amount that increased over time, from $10,000 for closings through February 14, 2007, to $18,200 for closings occurring during calendar 2016. (Id. ) And finally, if any of the Moores Mill tract were to remain undeveloped on December 31, 2016, MMC would be obligated to buy it from the owners for an additional $18,200 per acre. (Id. )

In 2007, Defendant FSC purchased an adjoining 80–acre tract to the northwest of the Moores Mill tract. The two properties together formed an approximately 480–acre rectangle, bounded on the west by a section of Moores Mill Road, a two-lane thoroughfare also designated as County Road 53, running north/south. Moores Mill Road also marked the southern boundary of the Moores Mill tract, after having taken a 90–degree easterly turn upon meeting with Steger Road. (See Doc. 38–2 at 20, 59; Doc. 38–14 at 9, 25, 28).

In the period leading up to the purchases and in the year or so afterwards, Defendants took a number of preliminary steps under the Development Agreement and otherwise towards developing the properties as a residential subdivision. Such steps included evaluation of a soils map and having certain environmental assessments and surveys performed to map topography and to determine whether any areas were wetlands or in a floodplain. Defendants hired an engineering firm to create a site master plan with over 1,200 residential lots to be developed in several phases, and Defendants created proposed schedules for completing phases and a cash flow analysis for the project, based on projected annual lot sales. They also conducted a sewer availability analysis, entered into a sewer service agreement, and commissioned a survey to analyze the property for wetlands and flood plains and map topography. In late 2007 and early 2008, Defendants also compiled a marketing catalog for the property that included a plan that incorporated a lot reserved for commercial development at the southwest corner of the Moores Mill tract. (See Docs. 41–2, 41–3, 41–4).

In about the spring of 2008, however, the financial crisis hit. Defendants' plans were put on hold indefinitely as the recession dragged on and the real estate market continued to sag. Nothing material appears to have occurred for several years until, in November 2011, FSC entered into a land swap agreement with the Madison County Board of Education ("BOE"). Under that agreement, FSC traded about a 25–acre rectangular lot in the northwest corner of the Fanning tract to the BOE for the purpose of having it build a school there. The BOE later did just that, and it opened the Moores Mill Intermediate School on the site in August 2014. Following the swap, FSC was left with an approximately 55–acre tract (the "Fanning tract") adjoining the Moores Mill tract. According to Defendants, FSC agreed to the trade for a similarly sized piece of property elsewhere because they believed the addition of a nearby school would make the planned residential development more attractive to families and add value to the Fanning and Moores Mills tracts on the whole.

In about January 2012, however, TVA notified Defendants that TVA intended to condemn an easement on the subject properties for the purpose of erecting and maintaining electric transmission lines. According to Defendants, TVA revised its plans for the location of the power line easement several times throughout 2012 and 2013, during which Defendants tried to convince TVA to locate the lines elsewhere. Those efforts failed, however, and TVA eventually finalized the location of its power line easement: a 100–foot–wide strip starting about 25 feet inside and running essentially parallel to Moores Mill Road on the western edge of each tract. The easement would start in the north at the BOE property line of the Fanning tract and run south onto the Moores Mill tract, with a "dog leg" to the southeast as the easement approaches the Steger Road intersection. (Doc. 38–2 at 23; Doc. 41–6 at 18). When the parties were unable to agree as to the amount of just compensation, the Government filed the Moores Mill Case with a declaration of taking on January 8, 2014, condemning a permanent easement and right-of-way over 6.09 acres on the Moores Mill tract. (Docs.1, 2, 3). The next day, the Government filed the Fanning Case with a declaration of taking, similarly condemning a permanent easement and right-of-way over 1.04 acres on the Fanning tract. (Fanning Case Docs. 1, 2, 3).

It is undisputed that Defendants have not sold, improved, or developed any of the land on either the Moores Mill tract or the Fanning tract, either before or since the takings. Instead, the properties have continued to be leased year-to-year as farmland. And since their early efforts in 2007 and early 2008, Defendants have not done anything else towards actually subdividing, improving, or selling any of the land. In particular, no lots have been staked out, and no subdivision plat has been recorded or submitted for approval by the County Planning Commission. Nor have Defendants installed any sewer, water, or utility hook ups. Defendants claim, however, that they were effectively prevented from developing or selling the land ever since becoming aware in 2012 of TVA's intention to take an easement because Defendants were uncertain where the easement would be located. And they claim that, even after the location of the easements was fixed by the takings in January 2014, they have still been unable to proceed because, they say, until it is determined how much compensation they will receive in this litigation, they cannot perform the financial analysis required to apply to banks for the financing they will need to develop the land.


Under the Takings Clause of the Fifth Amendment, "private property shall not be taken for public use, without just compensation." U.S. Const. amend. V

. The instant cases revolve around the question of what amount of compensation is "just" for the Government's condemnation of the respective power line easements taken on the Moores Mill tract and the Fanning tract. "The [Supreme] Court has explained that the underlying principle is that the dispossessed owner ‘is entitled to be put in as good a position pecuniarily as if his property had not been taken. He must be made whole but is not entitled to more.’ " United States v. 320.0 Acres of Land, More or Less in Monroe...

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