Case Title: Alabama Department of Transportation v. Donald Frank Williams and James G. Harrell, Jr.

Citation: 

Docket Number: 1060619

State: alabama

Court: Alabama Supreme Court

Date: 2007-10-19T00:00:00Z

Document:
REL: 10/19/2007
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
 OCTOBER TERM, 2007-2008
_________________________
1060619
_________________________
Alabama Department of Transportation
v.
Donald Frank Williams and James G. Harrell, Jr.
Appeal from Mobile Circuit Court
(CV-04-2823.52)
LYONS, Justice.
The Alabama Department of Transportation ("ALDOT")
appeals from a judgment of the Mobile Circuit Court awarding
Donald Frank Williams and James G. Harrell, Jr. ("the
1060619
2
landowners"), interest of $47,313.92 on a judgment in an
eminent domain case.  We reverse and remand.  
I. Facts and Procedural History
At some time before 2004, ALDOT began eminent domain
proceedings to acquire from the landowners certain real
property in Mobile County for a right-of-way project.  ALDOT
offered the landowners $137,400 in compensation; they rejected
that offer.  On January 14, 2004, ALDOT filed a condemnation
action in the Mobile Probate Court to obtain the property.
The probate court determined compensatory damages for the
property to be $352,346.  Both ALDOT and the landowners
appealed to the Mobile Circuit Court.  ALDOT deposited the
amount of the probate court's judgment into the circuit court.
The landowners withdrew $137,400 (the amount of ALDOT's
original offer for the property); $214,946 remained on deposit
with the circuit court.  On July 14, 2004, ALDOT obtained the
right to possess the property and began construction activity
shortly thereafter.  The case proceeded to a jury trial in the
Mobile Circuit Court.  On May 18, 2005, the jury entered a
verdict that determined compensatory damages for the property
to be $483,000.  On June 3, 2005, the circuit court calculated
1060619
We note that according to the record, the total principal
1
deposited with the Court by ALDOT was actually $374,346.35.
Neither party explains why the amount paid to the landowners
included a principal amount of only $374,346.  
3
prejudgment interest due on the compensatory damages to be
$28,746.35, and entered a judgment of condemnation in favor of
ALDOT, with a compensation award of $511,746.35 to the
landowners (damages of $483,000 plus prejudgment interest of
$28,746.35).  
ALDOT appealed the circuit court's judgment to this
Court, depositing an additional $159,400.35 into the circuit
court for a total principal amount of $374,346.35 on deposit
in the circuit court.  On July 14, 2006, this Court affirmed
the circuit court's judgment, without an opinion.  Alabama
Dep't of Transp. v. Williams (No. 1041564, July 14, 2006), ___
So. 2d ___ (Ala. 2006) (table).  On October 19, 2006, the
Mobile 
circuit 
clerk paid the landowners $389,060.69,
representing $374,346 in principal  (the difference between
1
the circuit court's judgment of $511,746.35 and ALDOT's
original offer of $137,400), plus $14,714.69 in accumulated
interest actually earned on the funds, which had been
deposited in an interest-bearing account.  
1060619
4
The landowners then sought postjudgment interest on the
circuit court's judgment entered on June 3, 2005, in the
amount of $511,746.35, reduced by the amount of the previous
disbursement to the landowners in the probate court of
$137,400 (hereinafter "the principal amount").  The landowners
contended that they were entitled to postjudgment interest at
a rate of 12% of the principal amount calculated pursuant to
§§ 8-8-10 and 18-1A-30, Ala. Code 1975.  ALDOT did not oppose
an award of postjudgment interest, but argued that the proper
interest rate on the principal amount should be that provided
in § 18-1A-211(a), Ala. Code 1975.  
Section 18-1A-211 states:
"(a) Except as provided in subsection (b), the
judgment shall include interest at a rate equal to
the most recent weekly average one-year constant
maturity yield, as published by the Board of
Governors of the Federal Reserve System, upon the
unpaid portion of the compensation awarded.  The
interest shall commence to accrue on the date of
entry of the judgment.
"(b) Except as provided by Section 18-1A-111,
the judgment may not include any interest upon the
amount represented by funds deposited into probate
court by the plaintiff for the period after the date
of deposit."
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5
ALDOT provided documentation to the circuit court indicating
that on June 3, 2005, the date of the judgment, the applicable
interest rate determined pursuant to § 18-1A-211(a) was 3.28%.
Both ALDOT and the landowners treated the interest due as
subject to an offset in the amount of $14,714.69, the amount
of interest earned on the additional money ALDOT had deposited
into the circuit court after the entry of the circuit court's
judgment that was due and payable to the landowners at the
conclusion of the proceedings.  Under the landowners'
calculation based on a rate of 12%, the net interest due is
$47,313.92.  Under ALDOT's calculation based on a rate of
3.28%, the net interest due is $2,239.87.  The circuit court
accepted the landowners' calculation of postjudgment interest
and entered a judgment in favor of the landowners for
$47,313.92.  ALDOT appealed.  
II. Standard of Review
Because the issue presented by this appeal concerns only
questions of law involving statutory construction, our review
is de novo.  Whitehurst v. Baker, 959 So. 2d 69 (Ala. 2006).
See also Taylor v. Cox, 710 So. 2d 406 (Ala. 1998).  
III. Jurisdiction
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6
We first address the landowners' contention that this
Court does not have jurisdiction to decide this appeal.  In
the statement of jurisdiction in their brief to this Court,
without any further discussion or citation to any authority,
the landowners state:
"This 
Court 
does 
not 
have 
subject-matter
jurisdiction because the amount involved, exclusive
of interest and costs, does not exceed $10,000.
Ala. Code, § 18-1A-288." 
Section 18-1A-288, entitled "Appeal from final judgment
of circuit court," provides:
"After entry of final judgment in the circuit
court, any party may, within 42 days thereafter,
upon giving bond or security for costs as in other
cases, file a notice of appeal to the court of civil
appeals where the amount involved, exclusive of
interest and costs, does not exceed $10,000.00.
Where the amount involved, exclusive of interest and
costs, exceeds $10,000.00, such appeal shall be to
the supreme court."
(Emphasis added.)
In its response to the landowners' contention that this
Court lacks jurisdiction over this appeal because the amount
in controversy does not exceed $10,000, ALDOT argues only that
the statutory language requires that appellate jurisdiction in
eminent domain cases be determined by the amount of
compensation awarded for the taking.  Because the taking here
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7
resulted in an award of $483,000 before interest is added, a
sum well in excess of $10,000, ALDOT contends that this Court,
and not the Court of Civil Appeals, has appellate jurisdiction
over this case.  
We need not decide whether appellate jurisdiction over
this case must be determined by the amount of interest in
controversy or by the amount of the compensation awarded the
landowners in the original judgment.  Upon reviewing the
parties' contentions, it becomes readily apparent that this
Court has jurisdiction over this appeal.  The landowners
contend that the postjudgment-interest award should be
$47,313.92.  ALDOT contends that the postjudgment-interest
award should be $2,239.87.  Because the total postjudgment-
interest calculation from the landowners' perspective exceeds
$10,000, this case is properly within the jurisdiction of this
Court.  That our rejection of the landowners' contention would
result in an award of less than $10,000 does not oust this
Court of jurisdiction to decide the merits of the issue before
us.  See Harper v. Regency Dev. Co., 399 So. 2d 248, 260-61
(Ala. 1981).  Thus, whether appellate jurisdiction is
determined by the amount of interest in controversy or by the
1060619
Section 8-8-10, Ala. Code 1975, states:
2
"Judgments for the payment of money, other than
costs, if based upon a contract action, bear
interest from the day of the cause of action, at the
same rate of interest as stated in said contract;
all other judgments shall bear interest at the rate
of 12 percent per annum ...." 
Section 18-1A-30(b), Ala. Code 1975, states:
3
"In the event of an appeal to the circuit court, the
condemnor shall pay the owner interest upon any part
of the award deposited in probate court and not made
available to the owner within 40 days of the order
of condemnation in the probate court at a rate equal
8
original judgment that determined the amount of compensation
to be awarded to the landowners, this Court has appellate
jurisdiction of this case.  
IV. Rate of Postjudgment Interest
ALDOT 
argues 
that 
the 
circuit 
court 
should 
have
calculated postjudgment interest in this eminent domain case
pursuant to § 18-1A-211.  The landowners argue that the
circuit court properly calculated postjudgment interest at 12%
pursuant 
to 
§ 
8-8-10, 
which 
provides 
generally 
for
postjudgment interest,  and § 18-1A-30(b), which provides for
2
interest to be paid on funds deposited into court when an
eminent domain case is appealed to the circuit court from the
probate court.   
3
1060619
to the rate allowed to be charged on money judgments
as set forth in Section 8-8-10 as amended at the
date of the final order in the circuit court, with
the interest to be computed by the circuit court."
9
This Court discussed the history of § 18-1A-211 in
Williams v. Alabama Power Co., 730 So. 2d 172 (Ala. 1999):
"Before the enactment of § 18-1A-211, Alabama
did not have a statute providing for the calculation
of 
prejudgment 
interest 
in 
delayed-payment
condemnation cases.  However, in 1985, Alabama
joined a majority of states in adopting a uniform
method of calculating prejudgment interest.  See the
commentary to § 18-1A-211, Ala. Code 1975.  In its
original form, § 18-1A-211(a) was a modified version
of § 1202 of the Uniform Eminent Domain Code.  It
read as follows:
"'(a) Except as provided in subsection
(b), the judgment shall include interest at
a rate equal to the rate allowed to be
charged on money judgments as set forth in
section 8-8-10 as amended at the date of
the final order in the circuit court upon
the unpaid portion of the compensation
awarded.  The interest shall commence to
accrue upon the date of valuation and be
calculated to the earlier of the date of
deposits into the probate court or date of
entry of the judgment.'
"However, § 18-1A-211(a) was amended effective
July 28, 1995.  The amended § 18-1A-211(a) no longer
addresses prejudgment interest.  It reads, in
pertinent part, as follows:
"'(a) Except as provided in subsection
(b), the judgment shall include interest at
a rate equal to the annual interest rate
1060619
10
prevailing on the 52-week United States
Treasury Bills at the date of the final
order in the circuit court upon the unpaid
portion of the compensation awarded.  The
interest shall commence to accrue on the
date of entry of the judgment.'
"(Emphasis added [in Williams].)  Although the
commentary to § 18-1A-211 was not amended in 1995
and continues to discuss the award of prejudgment
interest, the clear language of the amended § 18-1A-
211(a) addresses only post-judgment interest."
730 So. 2d at 175 (footnotes omitted).  The Court noted in
Williams that Alabama did not have a postjudgment-interest
section in its eminent domain statutes until the legislature
amended § 18-1A-211 in 1995.  In 2004, the legislature again
amended § 18-1A-211(a) to substitute "most recent weekly
average one-year constant maturity yield, as published by the
Board of Governors of the Federal Reserve System," for "annual
interest rate prevailing on 52-week United States Treasury
Bills at the date of the final order in the circuit court."
See also Samford Univ. v. City of Homewood, 959 So. 2d 64
(Ala. 2006).  Thus, in its 1995 amendment, the legislature
deleted from the statute governing postjudgment interest in
eminent domain cases any reference to § 8-8-10, the statute
generally 
addressing 
postjudgment interest.  The 2004
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11
amendment merely changed the source for determining the
interest rate.  
We agree with ALDOT that § 18-1A-211(a), rather than § 8-
8-10 or § 18-1A-30(b), controls the rate of postjudgment
interest in eminent domain cases.  Even before the legislature
enacted § 18-1A-211, this Court held that § 8-8-10 did not
apply in an eminent domain case because "'a judgment and
assessment of damages rendered in a condemnation proceeding is
not a personal, moneyed judgment.'"  State v. LeCroy, 279 Ala.
428, 429, 186 So. 2d 142, 143 (1966) (quoting Southern Elec.
Generating Co. v. Lance, 269 Ala. 25, 34, 110 So. 2d 627, 634
(1959)).  Although we have found no previous case addressing
§ 18-1A-30(b), it is clear from the face of the statute that
it does not apply to the calculation of postjudgment interest.
The landowners, in addition to urging us to embrace the
circuit court's use of an interest rate of 12% of the
principal amount pursuant to §§ 8-8-10 and 18-1A-30, Ala. Code
1975, further argue that the constitutional principle of just
compensation requires that the postjudgment interest on their
award be computed at a rate greater than the rate provided by
the legislature in § 18-1A-211.  They cite numerous cases
1060619
12
holding that the United States and Alabama Constitutions
guarantee just compensation to an owner whose property is
taken pursuant to the power of eminent domain.  In their brief
to this Court, the landowners also make the following argument
in 
connection 
with 
their 
contention 
that 
they 
are
constitutionally entitled to an interest rate greater than the
rate provided in § 18-1A-211(a):
"There is no statute or procedural rule that can
trump the Constitutional limitation on the State's
exercise of the power of eminent domain.  To the
extent that the authority cited by the State holds
otherwise, it must be overruled by this Court."
We do not dispute the principle that "just compensation"
is required in eminent domain cases, but we do not read the
cases cited as broadly as do the landowners.  The Takings
Clause 
of 
the 
Fifth 
Amendment 
to 
the 
United 
States
Constitution provides that "private property [shall not] be
taken for public use without just compensation."  In Seaboard
Air Line Railway v. United States, 261 U.S. 299 (1923),
reviewing a case in which the United States District Court had
included prejudgment interest in a judgment in an eminent
domain case, the United States Supreme Court held:
"The compensation to which the owner is entitled
is the full and perfect equivalent of the property
1060619
13
taken.  It rests on equitable principles and it
means substantially that the owner shall be put in
as good position pecuniarily as he would have been
if his property had not been taken.  He is entitled
to the damages inflicted by the taking. 
"....
"It is obvious that the owner's right to just
compensation cannot be made to depend upon state
statutory provisions.  ...  The rule above referred
to, that in the absence of agreement to pay or
statute allowing it the United States will not be
held liable for interest on unpaid accounts and
claims, does not apply here.  The requirement that
'just compensation' shall be paid is comprehensive
and includes all elements and no specific command to
include interest is necessary when interest or its
equivalent is a part of such compensation.  Where
the United States condemns and takes possession of
land before ascertaining or paying compensation, the
owner is not limited to the value of the property at
the time of the taking; he is entitled to such
addition as will produce the full equivalent of that
value 
paid 
contemporaneously with the taking.
Interest at a proper rate is a good measure by which
to ascertain the amount so to be added."  
261 U.S. at 304-06 (citations omitted).  The Supreme Court has
often reiterated this principle.  See, e.g., Jacobs v. United
States, 290 U.S. 13, 16-17 (1933) ("The concept of just
compensation is comprehensive, and includes all elements, 'and
no specific command to include interest is necessary when
interest or its equivalent is a part of such compensation.'"
(quoting Seaboard Air Line Ry., 261 U.S. at 306)); Albrecht v.
1060619
14
United States, 329 U.S. 599, 602 (1947) ("Thus, 'just
compensation' in the constitutional sense, has been held ...
to be fair market value at the time of the taking plus
'interest' from that date to the date of payment.").  In a
more recent case, Kirby Forest Industries, Inc. v. United
States, 467 U.S. 1, 9-10 (1984), the Supreme Court held:  
"The United States has the authority to take
private property for public use by eminent domain,
Kohl v. United States, 91 U.S. 367, 371 (1876), but
is obliged by the Fifth Amendment to provide 'just
compensation' 
to 
the 
owner 
thereof. 
 
'Just
compensation,' we have held, means in most cases the
fair market value of the property on the date it is
appropriated.  United States v. 564.54 Acres of
Land, 441 U.S. 506, 511-13 (1979).  'Under this
standard, the owner is entitled to receive "what a
willing buyer would pay in cash to a willing seller"
at the time of the taking.' Id., at 511 (quoting
United States v. Miller, 317 U.S. 369, 374 (1943))."
(Footnote omitted.)  These cases and others like them instruct
us that interest must be included as a part of "just
compensation," but we do not find in any of these cases that
any specific rate of interest, whether prejudgment or
postjudgment, is prescribed.
This Court has held that postjudgment interest in a
condemnation action, like the interest awarded on judgments in
most cases, "is a statutorily created right that can be taken
1060619
15
away by the Legislature."  Williams, 730 So. 2d at 176.  See
also Lance, supra, and LeCroy, supra.  It is "the prejudgment-
interest portion of a condemnation award, unlike its post-
judgment counterpart, [that] is part of the just compensation
mandated by both the state and federal constitutions."
Williams, 730 So. 2d at 176.  Courts from other jurisdictions
hold similarly. 
"Of course, preverdict interest in eminent domain
cases is based on the constitutional requirement of
just 
compensation, 
while 
post-verdict 
and
postjudgment interest are matters of legislative
grace and thus are not generally subject to said
constitutional requirement." 
Guido v. State, 187 Misc. 2d 647, 651, 722 N.Y.S.2d 694, 697
(N.Y. Ct. Cl. 2000) (citations omitted).  
"Although the district court was not restricted
by the statutory rate of interest in compensating
for the prejudgment interest, a similar argument
cannot 
be 
made 
as 
to 
postjudgment 
interest.
Disregard of the statutory rate for prejudgment
interest 
was 
based 
on 
the 
principle 
that
compensation 
under 
the 
fifth 
and 
fourteenth
amendments to the United States Constitution is a
question of fact that may not be restricted by
statute.  See Miller [v. United States, 223 Ct. Cl.
352, 620 F.2d 812, 837 (1980)].  Nevertheless, once
a 'taking' has been properly reduced to a judgment,
the 
constitutional 
requirement 
of 
'just
compensation' has been satisfied.  Application of
the statutory restrictions will not interfere with
the landowners['] right to seek full and complete
compensation." 
1060619
16
Clark County v. Alper, 100 Nev. 382, 394-95, 685 P.2d 943, 951
(1984).  
Nevertheless, we need not address at this time whether
postjudgment interest is constitutionally mandated as a part
of just compensation.  Assuming for the sake of argument that
such interest is constitutionally mandated, the legislature
has provided for postjudgment interest, as applied in this
case, and we do not find that rate to be unreasonable.  As the
United States Court of Claims stated in Miller v. United
States, 223 Ct. Cl. 352, 620 F.2d 812, 837 (1980), "the rate
of interest set by a statute can be applied to a claim for
just compensation if such rate is reasonable and judicially
acceptable."  
The rate of postjudgment interest established by the
legislature for eminent domain cases is based upon the "most
recent weekly average one-year constant maturity yield, as
published by the Board of Governors of the Federal Reserve
System."  See § 18-1A-211(a).  We note that Congress has
provided for a similar rate of interest on judgments against
the United States.  See 28 U.S.C. § 2516(b) ("Interest on a
judgment against the United States affirmed by the Supreme
1060619
17
Court after review on petition of the United States is paid at
a rate equal to the weekly average 1-year constant maturity
Treasury yield, as published by the Board of Governors of the
Federal Reserve System, for the calendar week preceding the
date of the judgment.").  We further note that the Code of
Federal Regulations provides two descriptions of the constant
maturity yield used by the Department of the Treasury and
adopted by the legislature in § 18-1A-211(a).  See 31 C.F.R.
§ 351.10 (2006) (dealing with the currentness of regulations
relating to money and finance):  
"We use market yields, or market bid yields,
derived from Treasury bills, notes, and bonds, to
create a yield curve based on the most actively
traded Treasury securities.  This curve relates the
yield on a security to its time to maturity.  Yields
at particular points on the curve are referred to as
'constant maturity yields' and are determined by the
Treasury from this daily yield curve.  Six-month and
5-year Treasury securities rates are derived from
these yield curves."
See also 7 C.F.R. pt. 1786, subpt. E, App. B (2007) (dealing
with the currentness of U.S. Department of Agriculture
regulations):
"Description of the Treasury Constant Maturity Series
"Yields 
on 
Treasury 
securities 
at 
'constant
maturity' are interpolated by the U.S. Treasury from
the daily yield curve.  This curve, which relates
1060619
The landowners also assert that the weekly average one-
4
year constant maturity yield as published by the Federal
Reserve System for each week since June 3, 2005, has been
higher than 3.28%.  They acknowledge in their brief, however,
that "[t]he rate of interest called for in Ala. Code § 18-1A-
211 would have been 3.28%."  This concession moots this issue.
18
the yield on a security to its time to maturity, is
based on the closing market bid yields on actively
traded Treasury securities in the over-the-counter
market.  These market yields are calculated from
composites of quotations reported by five leading
U.S. Government securities dealers to the Federal
Reserve Bank of New York.  The constant maturity
yield values are read from the yield curve at fixed
maturities, currently 1, 2, 3, 5, 7, 10, and 30
years.  This method provides a yield for a 10-year
maturity, for example, even if no outstanding
security 
has 
exactly 
10 
years 
remaining 
to
maturity."
We conclude that the rate for postjudgment interest adopted by
the legislature in § 18-1A-211(a) for eminent domain cases is
reasonable and acceptable, thereby satisfying the requirement
for "just compensation."  
The landowners also argue, in essence, that the interest
rate provided for in § 18-1A-211(a) is insufficient to
adequately compensate them for the loss of the use of the
proceeds from the judgment of compensation during the time
this case was pending on appeal.   Any argument that the
4
applicable rate is inadequate must be addressed to the
legislature rather than to this Court.  "Matters of policy are
1060619
19
for the Legislature and, whether wise or unwise, legislative
policies are of no concern to the courts."  Marsh v. Green,
782 So. 2d 223, 231 (Ala. 2000). 
Finally, the landowners argue that if this Court does not
affirm the 12% interest rate used by the circuit court in
computing postjudgment interest, a more appropriate interest
rate would be the 6% interest rate provided in § 23-3-5, Ala.
Code 1975, because the taking was for a limited-access road.
Section 23-3-5 deals with limited-access highways designated
as a part of the national interstate-highway system.  This
Court stated in McMillan, Ltd. v. Warrior Drilling &
Engineering Co., 512 So. 2d 14, 25 (Ala. 1986): "'[A]n
appellee, though he files no cross-appeal or cross-petition,
may offer in support of his judgment any argument that is
supported by the record, whether it was ignored by the court
below or flatly rejected.'" (quoting 9 J. Moore and B. Ward,
Moore's Federal Practice ¶ 204.11[2] (2d ed. 1985)).  The
landowners' final argument is offered neither in support of
their judgment nor is it supported by the record, having been
raised for the first time on appeal.  We therefore do not
consider the landowners' argument that we should reverse the
1060619
20
circuit court's judgment awarding postjudgment interest at a
rate of 12% in favor of a different interest rate that was
never presented to the circuit court.  
V. Conclusion
Section 18-1A-211(a) establishes the rate of postjudgment
interest applicable in an eminent domain case.  As of the date
of the judgment of compensation, June 3, 2005, that interest
rate was 3.28%.  Therefore, the circuit court erred in
computing postjudgment interest in this case at a rate of 12%.
We reverse the judgment awarding postjudgment interest, and
remand the cause for the circuit court to enter a judgment
awarding postjudgment interest at the rate of 3.28% for a
total amount of net postjudgment interest due of $2,239.87. 
REVERSED AND REMANDED WITH DIRECTIONS.  
Cobb, C.J., and See, Woodall, Stuart, Smith, Bolin,
Parker, and Murdock, JJ., concur.