Water Authority of Dickson County v. Hooper, No. M2009-01548-COA-R3-CV (Tenn. App. 4/28/2010)

• Court: Tennessee Court of Appeals
• Writing for the Court: Richard H. Dinkins
• Decision Date: 28 April 2010
• Docket Number: No. M2009-01548-COA-R3-CV.,M2009-01548-COA-R3-CV.
• Citation: Water Authority of Dickson County v. Hooper, No. M2009-01548-COA-R3-CV (Tenn. App. 4/28/2010), No. M2009-01548-COA-R3-CV. (Tenn. App. Apr 28, 2010)
• Parties: WATER AUTHORITY OF DICKSON COUNTY, v. CHARLES B. HOOPER, GENE C. HOOPER, AND DICKSON COUNTY, TENNESSEE.

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WATER AUTHORITY OF DICKSON COUNTY, v. CHARLES B. HOOPER, GENE C. HOOPER, AND DICKSON COUNTY, TENNESSEE.

No. M2009-01548-COA-R3-CV.

Court of Appeals of Tennessee, at Nashville.

January 6, 2009 Session.

Filed April 28, 2010.

Appeal from the Circuit Court for Dickson County; No. CV-1594; Larry J. Wallace, Judge.

Judgment of the Circuit Court Vacated and Remanded.

Benjamin C. Regen, Dickson, Tennessee, on behalf of appellant, Water Authority of Dickson County.

Henry F. Todd, Jr., Dickson, Tennessee, on behalf of appellees, Charles B. Hooper, Gene C. Hooper, and Dickson County, Tennessee.

Richard H. Dinkins, J., delivered the opinion of the court, in which D. Michael Swiney and Frank G. Clement, Jr., JJ., joined.

OPINION

RICHARD H. DINKINS, JUDGE.

This is a condemnation case in which the Water Authority of Dickson County acquired an easement by eminent domain for the purpose of installing a subsurface water transmission line. The Water Authority's ability to take the land is not in question; this appeal only involves the amount of compensation to which the landowners are entitled. Following a trial without a jury, the court awarded $12,526.56 for the taking of the permanent easement and incidental damages. The Water Authority appeals. Finding error, we vacate the judgment of the court and remand for further proceedings.

I. Background

The Water Authority of Dickson County (the "Authority") acquired by eminent domain a twenty-foot wide permanent easement on March 5, 2002, for the purpose of constructing a subsurface, 24 inch transmission waterline across a portion of two tracts of real property. One tract is owned by Gene Hooper and his brother, Charles Hooper, and consists of 86.27 acres of undeveloped land used to make hay at the time of the condemnation. This tract has frontage along three roads — the southern boundary line follows Hooper Road for the entire length of the property, the western boundary follows Liberty Road and a small portion of the northern boundary, approximately 250-300 feet, follows State Route 47. The other smaller tract, consisting of 26.5 acres of undeveloped land, is owned by Gene Hooper and his wife, Vera Hooper.¹ This smaller tract is located near the larger tract with its eastern boundary line following Liberty Road across from the larger tract; the entire length of the tract's northern boundary follows Shelton Road while its entire western boundary follows Cleve Road. The Authority's ability to condemn the properties was not challenged; however, the property owners challenged as unreasonable the amount the Authority deposited with the trial court, $3,579.00, for the taking. This appeal concerns the larger tract.

A trial was held on the issue of damages wherein testimony was given as to the estimated value of the property, the value of the easement and the available uses to which the property could be put both before and after the taking. Gene Hooper, one of the landowners and an executive in banking and financial services for 52 years, testified that he estimated the value of the larger tract at the time of the taking in 2002 to be approximately $15,000 per acre. With respect to the smaller tract, he testified that he thought it was slightly more valuable than the larger tract such that he estimated its value at no less than $15,000 per acre.

Charles Hooper, who jointly owns the larger tract, testified that he is the former chief of real estate for the Nashville district of the U.S. Army Corps of Engineers and that he estimated the value of the larger tract at the time of the taking to be around $15,000 per acre; he did not opine as to the value of the smaller tract. Charles Hooper explained that his opinion was based in large part on sales of nearby lots in 2002 that averaged $15,000 per lot as well as his experience selling a six-acre piece of property he owned in the area for around $6,000 per acre despite having significantly less frontage to a road than the properties at issue.

The landowners retained an expert witness, Bob Gerdeman, to opine on the value of the easements taken; he suggested two different methods for the Court to utilize in determining the value of the easements. The first method compared the prices paid for recorded easements in Dickson County in the late 1990s and early 2000s. Mr. Gerdeman chose several recorded easements at random and found that the range for 100-foot wide easements purchased by the Tennessee Valley Authority ranged from $15.00 to over $50.00 per running foot while 20-foot wide easements purchased by BellSouth were between $3.00 and $3.45 per running foot. Mr. Gerdeman testified that he based his testimony solely on the information contained in the recorded easements; he did not visit the comparison easements nor did he visit and inspect the properties at issue. The second method involved comparing sales of tracts of land similar in size to the easements taken in this case, which was approximately 1.6 acres on the larger tract and .84 acres on the smaller tract. Mr. Gerdeman examined sales of one and two-acre tracts within a 5 or 6-mile radius of the property and found that the sales price ranged from $15,000 to $22,800 per acre.

The Authority also retained an expert witness, Chris Chatham, to provide an appraisal of the property and opine as to the appropriate compensation owed the landowners. Mr. Chatham testified that he inspected the property and estimated the value of the larger tract at $3,250.00 per acre for a total value of $292,175.00 based on comparable sales of similar sized properties. He estimated the value of the smaller tract at $6,500 per acre for a total value of $166,465. Mr. Chatham determined, however, that in his opinion the landowners were only entitled to nominal damages, approximately $1.00 per foot, because "there was [sic] no damages" to the property as a result of the easement.

With respect to possible uses of each of the properties at the time of the taking, Gene Hooper testified that both properties were currently used to make hay, but that it was possible to develop the land for residential use since there were electric, gas, water and sewer lines available to the property. Mr. Chatham testified that, based on his inspection of the properties, the use of the properties at the time of the taking was agricultural and that this was also the highest and best use of the properties. Mr. Chatham admitted on cross-examination, however, that the highest and best use of the properties would be to sub-divide and develop them for residential use. Mr. Chatham also admitted that 30 percent of the surrounding area was used for single family residences while the remaining 70 percent was vacant.

The Authority also called Judy Alford, an environmental engineer involved in the design and construction of the water transmission line, to testify. Ms. Alford testified that the waterline was generally laid 30 inches below the surface of both tracts, but that the depth varied at certain points depending on the topography of the land. She testified that in planning the placement of the line, her team tried to keep the line close to roads to make it easily accessible for maintenance. Ms. Alford testified that the easement on the rectangularly shaped larger tract runs a total of 3,579 feet and generally follows the northern boundary of the property except for approximately 750 feet, when it then gradually diverges southwesterwardly up to 200 feet toward the interior of the tract to avoid a pond; it then follows the western boundary line to its point of exit from the property. On the "L" shaped smaller tract, the easement enters the property at the boot portion of the "L" and follows what is the southern property line for 398 feet; the property line then turns in a southerly direction and proceeds along the eastern boundary of the property, while the easement continues west across the middle of the property for 672 feet until it reaches the western boundary line, where it makes a 90 degree turn and follows Cleve Road. Ms. Alford did not identify any topographical features on the smaller tract that influenced the placement of the easement and subsequent pipeline.

Ms. Alford also testified regarding the use of the land on top of the pipeline. She explained that no permanent structures should be constructed on top of the easement because the Authority would need access to the waterline for maintenance. For example, Ms. Alford did not recommend building a house or a barn over the easement. She explained that a concrete driveway could be placed on top of the easement, though she admitted that the concrete would have to be torn up and replaced to maintain the line. She further testified that the land on top of the line could be plowed to a depth of approximately 12 inches. Finally, she testified that the waterline was for transmission purposes only and offered no benefit to the property.

The trial court did not find that the taking was complete or absolute; however, the court found that the easement adversely affected the properties because of the reduction in available uses of the property within the easement. The trial court explained that, while the landowners could use the land "to some degree[,] . . . they cannot use it in every way possible." The trial court noted that the landowners would not want to build a house on top of the easement and, as a practical matter, would not want to build any kind of driveway that involved concrete or pavement; the court found, though, that a gravel driveway "possibly would not be a problem." The trial court also noted that the land within the easement could continued to be used for farmland, but cautioned against plowing the land where the pipe was laid for fear of tearing up a tractor or other implement. Consequently, the trial court found "it would be better if nothing is on it" so that the utility can readily access it for maintenance. The court concluded that, since it was...