Opinion ID: 1153262
Heading Depth: 1
Heading Rank: 6

Heading: Excess Deposit

Text: We are of the opinion that the trial court erred in disregarding the jury's verdict and awarding to the condemnees the City's deposit of estimated just compensation and damages for parcel 63. Though HRS § 101-31 provides for a deficiency judgment for the condemnee, in the event that the final award exceeds the estimate, HRS makes no provision to cover the situation where the verdict of the jury is less than the deposited estimate. The United States Supreme Court, in United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336 (1943), in construing the Federal Declaration of Taking Act, which also made no provision for return of excess deposit, concluded that a denial of restitution of the excess deposits would defeat the policy of the statute and work injustice. The court stated at 381-382, 63 S.Ct. at 283: The purpose of the statute is twofold. First, to give the Government immediate possession of the property and to relieve it of the burden of interest accruing on the sum deposited from the date of taking to the date of judgment in the eminent domain proceeding. Secondly, to give the former owner, if his title is clear, immediate cash compensation to the extent of the Government's estimate of the value of the property... . We find that the above purpose is similar to the purpose of HRS § 101. It is apparent that the statute's purpose is to avoid undue hardship by either party caused by protracted litigation. To hold the City rigidly to its estimate would penalize the City for utilizing a statutory procedure designed to alleviate hardships caused by the condemnation proceedings. City officials would tend to make low estimates so as to avoid any possibility that the deposit is excessive. The result of such underestimation would be that the City would be compelled to pay interest on a larger sum from the date of taking to final award. In effect the condemnee gets less cash than what he would normally have received and the City must pay interest on a larger amount. Clearly, the policy of this statute cannot be served by such a harsh approach. As was stated in Garrow v. United States, 131 F.2d 724, 726 (5th Cir.1942), cert. denied, 318 U.S. 765, 63 S.Ct. 664, 87 L.Ed. 1137 (1943): To award him (condemnee) less than the value of the property taken would be unjust to him; to award him more than its value would be unjust to the public. Further, we are of the opinion that an estimate of just compensation and damages is just that  an estimate. It was not intended in any manner to be dispositive, final or binding as a settlement on the amount due. Its singular purpose is to serve the policy of HRS § 101-29  to alleviate the hardship due to the action. Thus, this estimate has no relevance to the conduct of the primary eminent domain proceeding to determine just compensation. It follows also that the estimate cannot serve as an admission against interest. Condemnees claim that they were not given notice of the City's alleged amendment of their estimated just compensation. In fact condemnees were not entitled to any such notice. Had there been a change in the pleadings, due notice of any change is required. HRCP Rule 5. However, the estimate involved here is not part of the pleadings. It is part of a separate procedure under HRS § 101-29 for immediate possession of the condemned property. Thus, the City is entitled to a restitution of the total excess deposit made for parcel 63 with interest at the rate of 5% per annum from the date of withdrawal of such excess deposit. We believe interest at 5% in this instance is in harmony with our opinion herein relative to blight of summons damages and is proper as a matter of fairness to both parties. We are of the opinion that after a determination as to those final amounts of just compensation owing on the respective parcels taken, any excess deposit must be set off against a deposit that is deficient. Elementary equitable principles require that the deficiency with regard to parcel 64 including blight of summons damages should have been set off against the excess deposit on parcel 63 with interest at 5%.