Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-00238/USCOURTS-caed-2_02-cv-00238-7/pdf.json

Nature of Suit Code: 210
Nature of Suit: Land Condemnation
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

SOUTH TAHOE PUBLIC UTILITY 

DISTRICT, a public utility

entity, NO. 2:02-cv-0238-MCE-JFM

Plaintiff,

v. ORDER

1442.92 ACRES OR LAND IN

ALPINE COUNTY, CALIFORNIA; 

F. HEISE LAND & LIVESTOCK

COMPANY, INC., a Nevada

corporation, WILLIAM WEAVER;

EDDIE R. SNYDER; CROCKETT

ENTERPRISES, INC., a Nevada

corporation,

Defendants.

----oo0oo----

Following entry of judgment in this matter on April 28, 2006

in accordance with the jury’s verdict of April 27, 2006,

Plaintiff South Tahoe Public Utility District (“the District”)

has timely moved for judgment as a matter of law pursuant to

//

//

Case 2:02-cv-00238-MCE -JFM Document 641 Filed 08/09/06 Page 1 of 7
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All further references to “Rule” or “Rules” are to the 1

Federal Rules of Civil Procedure unless otherwise noted.

Because oral argument would not be of material assistance, 2

this matter was deemed suitable for decision without oral

argument. E.D. Local Rule 78-230(h)

2

Federal Rule of Civil Procedure 50(b). Alternatively, the 1

District has requested either that the judgment rendered against

it be reduced pursuant to Rule 59(e), or that a new trial be

granted in accordance with Rule 59(a). The District’s motion is

denied.2

The District’s motion is premised on two grounds. First, it

argues that the jury separately valued the water rights

associated with the property at issue in this litigation, in

violation of both the so-called “unit rule” and Jury Instruction

No. 22. Secondly, the District claims that the verdict was based

on false or perjured testimony provided by George Thiel and Ross

de Lipkau, experts who testified for Defendant Integrated Farms. 

Neither contention has any merit.

The “unit rule” embodies the notion that just compensation

for condemned property cannot be determined by separately

valuing, then adding, the separate components of land value. See

United States v. 6.45 Acres of Land, 409 F.3d 139, 146 (3 Cir. rd

2005; City of Stockton v. Albert Brocchini Farms, Inc., 92 Cal.

App. 4 193, 200 (2001). Application of the “unit rule”, th

however, is subject to an exception in this case if the property

at issue possessed excess water rights (beyond those necessary to

sustain its alleged highest and best use), and if an active

Case 2:02-cv-00238-MCE -JFM Document 641 Filed 08/09/06 Page 2 of 7
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According to Integrated Farms’ expert, Arthur Gimmy, 3

treating such excess rights as an enhancement factor is in

accordance with the procedures set forth by the Appraisal

Institute, Uniform Appraisal Standards for Federal Land

Acquisitions, 5 Ed. 2000 (published in cooperation with the th

United States Department of Justice).

3

market exists for such excess water rights. An enhancement to 3

value premised on those rights does not run afoul of the “unit

rule”, as the Court made clear in Jury Instruction No. 22, which

provided as follows:

INSTRUCTION NO. 22

The defendant is not entitled to have all factors

affecting the value of its property added together and to

have the total of the additions taken as the reasonable

market value of its land. There can be no separate

valuation of natural attributes of the land whenever the

separate valuation of natural attributes of the land

whenever the comparable sales method of valuation is used. 

One of the purposes of this rule is to avoid the duplication

of compensation.

The water rights associated with the Heise Ranch are

one element among many in determining the market value of

the Heise Ranch. Such rights as an enhancement to the land

value are admissible when there is a market for such rights. 

However, the water rights cannot be considered as an

independent factor whose value is to be added to the value

of the land.

The District’s argument that Instruction No. 22 required the

jury to adhere to the “unit rule” is disingenuous given the

language of the instruction providing for an “enhancement” in

value provided that a market has been established for water

rights. Moreover, in accordance with the instruction, the jury

assigned a lump sum value to the property in question

($12,659,429.00), then added by way of explanation that water

rights associated with the property constituted $3,174,600.00 of

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that total value. The jury’s verdict is not inconsistent with

the instruction.

In addition, with respect to application of the “unit rule”

itself, the District persists in asserting that the rule

precludes any separate assessment of water rights in this case,

despite the fact that the Court has rejected that very argument

on two previous occasions. On March 20, 2006, prior to

commencement of trial, the Court rejected the District’s Motion

in Limine No. 13, which sought to preclude Arthur Gimmy’s

enhancement value adjustment of the Heise Ranch’s excess water

rights as a component of the property’s fair market value. The

Court specifically found that Gimmy’s methodology in that regard

was appropriate while, at the same time, recognizing that it

could be subject to rigorous cross-examination. Then, on April

10, 2006, during trial, the District renewed its motion to

exclude Mr. Gimmy’s testimony on grounds that an active market

for excess water had not been established. The Court denied that

renewed motion as well.

In attempting to once again assert that the “unit rule”

precludes any assessment of excess water rights, the District in

effect seeks to revisit the same arguments already rejected twice

by this Court. The District’s inappropriate attempt to take “a

third bite at the apple” is summarily rejected. A motion for

judgment is a matter of law is appropriate “only if the verdict

is against the great weight of the evidence, or it is quite clear

that the jury has reached a seriously erroneous result.” McEuin

v. Crown Equipment Corp., 328 F.3d 1028, 1036 (9 Cir. 2003), th

citing E.E.O.C. v. Pape Lift, Inc., 115 F.3d 676, 680 (9 Cir. th

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Preliminarily, in opposing the District’s motion for 4

judgment as a matter of law under Rule 50(b), Integrated Farms

argues that the District has not established the predicate for

such a motion by showing that a Rule 50(a) motion was brought

prior to the close of evidence. To the extent that the

District’s motion amounts to a challenge to the consistency of

the jury’s verdict, however, the Court may consider a Rule 50(b)

motion even in the absence of a prior motion. Pierce v. Southern

Pacific Transp. Co., 823 F.2d 1366, 1369 (9 Cir. 1987). Here, th

because one of the District’s arguments is that the verdict was

inconsistent with the instructions provided to the jury, the

Court will proceed to dispose of the District’s motion on its

merits.

The Court rejects the District’s argument that the 5

$3,174,600.00 enhancement component of property value constitutes

duplicative compensation, since Integrated Farms’ expert

testimony showed that the enhancement related to excess water

rights above and beyond that necessary to sustain the highest and

best use of the property. Arthur Gimmy took those excess water

rights into account, for example, when considering comparable

property values.

5

1997). Here no such result has occurred with respect to

application of the unit rule. The District has similarly not 4

demonstrated its entitlement to a new trial. The jury’s verdict

was not contrary to the clear weight of the evidence, and it is 5

not necessary to vacate (or reduce) the verdict in order to

prevent a miscarriage of justice. Passantino v. Johnson &

Johnson Consumer Products, Inc., 212 F.3d 493, 510 (9 Cir. th

2000). 

The second argument advanced by the District in support of

its motion goes to another recognized ground for granting a new

trial; namely, the propriety of affording such relief when a jury

verdict is based on false or perjurious evidence. Id. In order

to justify a new trial, however, the purportedly defective

testimony must have materially affected the jury’s verdict in the

sense that a different result would likely have been reached in

the absence of such testimony. See Coastal Transfer Co. v.

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Toyota Motor Sales, USA, 833 F.2d 208, 211-12 (9 Cir. 1987). th

Here, the District has identified two alleged falsities in

testimony offered on behalf of Integrated Farms. First, the

District claims that both George Thiel and Ross de Lipkau 

indicated that Lyon County itself had bought water rights

belonging to a comparable property, the O’Callaghan Ranch,

whereas in actuality those rights had been acquired by a

developer for dedication to (and joint ownership with) the County

in connection with the developer’s building project. 

Significantly, in Integrated Farms’ rebuttal case, the abovedescrived factual discrepancy was recognized and disclosed to the

jury. Any associated inconsistency was minor, and under no

stretch of the imagination could such inconsistency have risen to

the level of affecting the jury’s verdict and justifying a new

trial.

The District fares no better with respect to the second area

of allegedly false testimony it identifies. That testimony

relates to Mr. Thiel’s claim that he offered $3.9 million to

purchase the O’Callaghan property, whereas in actuality only $3.0

million was offered in writing through a lease/purchase

agreement. The declaration of Jeff Kirby, a managing member of

Thiel Engineering Consultants, however, explains both that

lease/purchase agreements were commonly used in the sale of

undeveloped property like the Heise Ranch, and that Kirby, on

Thiel’s behalf, ultimately did offer $3.9 million orally for the

property. (See Kirby Decl. in Opp. to Pl.’s Mot., ¶ 5, 9). Any

factual discrepancy in this regard hardly goes to the crux of the

case and not even the District can adequately explain, as it

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must, how the testimony would have affected the case’s outcome in

order to justify a new trial.

For all the foregoing reasons, the District’s Motion for

Judgment as a Matter of Law, or Alternatively for New Trial

and/or remittitur, is DENIED. 

IT IS SO ORDERED.

DATED: August 8, 2006

_____________________________

MORRISON C. ENGLAND, JR

UNITED STATES DISTRICT JUDGE

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