Opinion ID: 1797621
Heading Depth: 2
Heading Rank: 1

Heading: Compensation for Property Expropriated

Text: We must first determine the compensation landowners are due for the property actually expropriated in the underlying suits. The trial court, basing its valuation of the land on the values given by landowners' appraiser, William Hartwell, valued all of the expropriated property at an average value of approximately $21,000 per acre. It is undisputed this valuation and the valuation made by landowners' other appraiser, Richard Brewster, are based on the assumption the landowners had the permits in hand or could have easily acquired the permits necessary for constructing a levee along alignment D at the time of the expropriation, thus rendering the property developable at that time for subdivision purposes. [35] It is also undisputed that as a matter of fact, at the time of the expropriation, the landowners did not have the § 404 and § 10 permits required for their construction of a levee along alignment D necessary for the development of their wetlands property into residential subdivisions. Both the District's appraisers and the landowners' appraisers agreed that when one does not assume the permits are in hand or could be obtained without difficulty, the value of the wetlands acreage at the time of the expropriation was approximately $500 to $550 per acre, based on its highest and best use as non-permitted wetlands to be used for hunting, fishing, and recreational purposes. [36] Therefore, a valuation of approximately $21,000 per acre does not comply with the requirements under La.R.S. 38:387.A. that the measure of compensation for the property expropriated is determined as of the time the estimated compensation was deposited into the registry of the court and under La.R.S. 38:301.C.(1)(a) that this measure turn on the property's fair market value unless the landowners have shown: (1) that at the time of the expropriation, the land had a potential highest and best use as residential subdivisions which would have had an effect on the fair market value of the land under its current use as unpermitted wetlands; or (2) that any devaluation of the property occurring prior to the expropriation was caused by the District's hurricane levee project such that including that devaluation in the present value of the property would constitute an impermissible consideration of a change in value caused by the proposed improvement for which the property was expropriated.
The landowners had already taken some action to develop this land through BDF's construction of the drainage facilities, sewage treatment plant and potable water lines, all of which were dedicated to the parish, as well as by the partial construction of the levee. The land was admittedly in a historical growth corridor of the West Bank. The landowners involved in BDF Development Corporation and the development of the land are all skilled and experienced at building housing developments for profit. The soil types and the land elevations were conducive to residential development with the proper engineering and preparation. While the above considerations support the landowners' contention and the lower courts' holding that the land should be valued as developable at the time of the expropriation at an approximate average of $21,000 per acre, the fact nevertheless remains that at the time of the expropriation the land was not legally developable into residential subdivisions because the landowners lacked the permits required for the construction of a levee necessary for the protection of the property as well as the permits required for the development of the remaining wetlands once the levee was constructed. Because the definition of fair market value found in La.R.S. 47:2321 turns on the price which would be agreed upon between a buyer and a purchaser who is buying with knowledge of all the uses and purposes to which the property is best adapted and for which it can be legally used,  and because use of the property as a residential subdivision was illegal at the time of the expropriation, the landowners, who are entitled to compensation to the fullest extent of their loss, are entitled to compensation at an approximate average of $21,000 per acre under the highest and best use doctrine only if they are able to show there was a reasonable probability such a use would have become legal in the reasonably foreseeable future. As explained earlier, in a case involving the necessity of a permit for development of the land into its highest and best potential use, the landowner bears the burden of proving it was reasonably probable the necessary permits could have been obtained in the reasonably foreseeable future had the expropriation and, by extension, the project for which the land was expropriated, not taken place. Specifically, in this case, in order to show their land should be valued based on a use to which the land was not being put at the time of the expropriation, the landowners herein must show it was reasonably probable they could have obtained the § 404 and § 10 permits from the Corps in the reasonably foreseeable future. The landowners failed to meet their burden of proof in this regard. To the contrary, the evidence which is in the record completely repudiates such a conclusion. The trial court did not directly address the highest and best use doctrine. In its reasons for judgment, the trial court did, however, make several statements which suggest it was implicitly applying the doctrine. The trial court stated the expropriation by the District determined [the] ultimate value of the land and, until the District accepted the Corps' permit for the construction of a levee along alignment E, no final determination for the location of the West Bank Hurricane Protection Levee had been made. The trial court also pointed out the denial of a particular permit does not preclude the issuance of that same permit at a later time. The court of appeal on this issue stated the mere fact that property is or contains wetlands does not preclude its development, assuming that a § 404 or § 10 permit could be obtained. Because a real possibility of a change in the landowners [sic] favor existed prior to the expropriation, the District's actions forever foreclosed the possibility of development and it is liable for the market value. The landowners' argument relating to the probability they would have been able to obtain permits had the expropriation not taken place is that had the District turned down the offer of alignment E, the Corps would have been forced to offer the District or BDF a permit for the construction of a levee along alignment D as the only other available alternative. This argument is apparently based on the fact, which is clear from the record, that in the reaches affecting landowners' property only two basic alignments were considered by the Corps, alignments D and E. Therefore, the landowners argue that since the levee had to be built, the Corps would have been forced to offer a permit to either the District or to BDF along alignment D. First, an expropriation determines the value of the land only to the extent the fair market value of the land taken, for compensation purposes, is based on the value the land had at the time of the expropriation or, more accurately, at the time the expropriating authority deposited its estimation of compensation into the registry of the court. By stating the expropriation determined the ultimate value of the land, the trial court erroneously implies both that the effects of the expropriation can be retroactively considered in determining the valuation of the property at the time of the expropriation, an approach specifically prohibited in La.R.S. 38:387.A., and that a court should assume a property is capable of a higher and better use simply because the expropriation has by its nature forever precluded the possibility of such use. [37] Second, while it is true the denial of a particular permit does not preclude the issuance of that same permit at a later time, the mere fact alone that the later issuance of a permit to BDF was a possibility simply because the later issuance of an earlier denied permit is not precluded by law does not meet the landowners' burden of proving there was a reasonable probability in the reasonably foreseeable future that absent the expropriation and the project, the landowners themselves would have been able to obtain a permit for the construction of a levee along alignment D. Third, while the District's acceptance of the Corps' offer of a permit for the construction of a levee along alignment E finally determined the location of the hurricane levee, insofar as the District could not build a hurricane levee without a permit from the Corps and the Corps could not build a hurricane levee without local cooperation, this fact alone merely makes the District liable to the landowners to compensate them to the fullest extent of their loss resulting from the expropriation of the land necessary to construct its levee, with the amount of the compensation to be determined as of the time of the expropriation. This in no way aids the landowners in meeting their burden of proving that absent the expropriation and the project, there was a reasonable probability they would have been able to obtain in the reasonably foreseeable future the permits necessary to construct their own levee. [38] The fact the District accepted the permit for alignment E and filed the suits for the expropriation does not give the landowner's property a value it would not otherwise have had. [39] Fourth, the landowners argue that because only two alignments were considered by the Corps in the reaches affecting their property, had the District turned down the permit for alignment E, and not later filed the expropriation suits pursuant thereto, the Corps would have been forced to offer a permit either to BDF or to the District for alignment D in order to achieve its goal of hurricane protection for the West Bank. Therefore, the landowners apparently argue that absent the acceptance of the permit along alignment E and the subsequent expropriation, it was reasonably probable that either the District or the landowners would have been able to obtain the permits for the construction of a levee along alignment D, an improvement absolutely critical to the development of the landowners' property. The possibility the Corps would have offered the District a permit to build a levee along alignment D had the District turned down the permit for alignment E, such that the District would have built a hurricane levee along alignment D, thereby protecting the landowners' land and rendering it developable, cannot be considered as such would result in impermissibly giving the land a value which has been increased because of the effect of the improvement for which the land was expropriated, in violation of La.R.S. 38:387.A. What the landowners would have to show, rather, is that if the District turned down the permit for alignment E, the Corps would have then offered BDF a permit for the construction of a levee along alignment D had BDF applied for such a permit. As will be discussed infra, we conclude, after a thorough and exhaustive review of the record, that there is no evidence to support such a finding; that, indeed, the evidence overwhelmingly indicates there was no reasonable probability BDF would have been able to obtain such permits; and, to the extent the trial court made such a finding of fact, which is not at all clear, that finding of fact is manifestly erroneous. In any case, because the lower courts made the above erroneous conclusions or applications of law regarding the highest and best use doctrine, their findings of fact are not entitled to deference.
Although the landowners have failed to meet their burden of proving the land had a highest and best use as a residential subdivision at the time of the expropriation, they are nevertheless entitled to compensation at the developable values awarded by the trial judge if they proved that any devaluation of the property occurring prior to the expropriation was caused by the hurricane levee project such that including that devaluation in the present value of the property would constitute an impermissible consideration of a change in value caused by the proposed improvement for which the property was expropriated. Specifically, the landowners would be successful if they could show their inability prior to the expropriation to obtain the permits required for the construction of their levee along alignment D and to develop their property was caused by the hurricane levee project. In response to the District's argument below that the devaluation of the landowners' property was caused by the Corps of Engineers and the federal government and not the hurricane levee project, the trial court held the levee alignment selection process was a continuous project beginning in the late 1960's and ending only when the West Jefferson Levee District finally acted upon the permit issued for levee alignment alternative modified E. The trial court also found the only reason the Corps did not issue those permits to Bayou des Families in late 1975 or early 1976 was the uncertainty over the location of the West Bank Hurricane Protection Levee, which is the Project for which the Property has been expropriated, and the denial of the Bayou des Families § 404 and § 10 permits, the selection of Alternate E, and the expropriation of the right-of-way for the West Bank Hurricane Protection Levee in these proceedings, are all part of the same Project. Finally, the trial court concluded the loss of value suffered by the Property was caused by the proposed improvement for which portions of the Property have been expropriated. Regarding this issue, the court of appeal first noted [t]he market values were destroyed by that final act [the expropriation suits]. The appellate court also stated: Even if we were to agree with the Levee District that the value of the land was nominal, both before and after the taking, we would still reach this same conclusion [that the trial court's valuation is correct] because the inability to get a permit or develop the land prior to the takings was wholly the result of governmental (all of the entities which combined to halt the project) control and in no way the result of landowner action. It was governmental action which arguably devalued the property, which was developable except for the interference of the levee project. The landowners' dreams of development were shattered, not by the expected or everyday risks of property ownership, but by a factor within the exclusive control and discretion of the governmental entities involved in the levee project. The lower courts have erred in several respects. First, the lower courts, and especially the trial court, by the above statements suggest the District should be required to pay compensation based on a valuation of the land as protected by a levee and therefore developable, because had the District built its hurricane protection levee along alignment D, the landowners' land would have had such a value. [40] This not only impermissibly gives the land a value affected by the improvement for which the land was expropriated but makes the further mistake of assuming a value the land would have had if the improvement had been built in a different location more beneficial to the landowners. The landowners make a similar argument when they assert that it was the acceptance of the alignment E permit by the District and its actions thereunder which finally determined where the levee would be built, and that such a determination decided what land uses would be permitted on the property. Every expropriation necessarily determines what land uses will be thereafter permitted on the property. It is undisputed, however, that at the time of the expropriation, the land was not legally developable into residential subdivisions because the landowners did not have the permits necessary for development. No expropriating authority has a duty to expropriate land and build an improvement in a location which will benefit a landowner by making his land developable. Neither does the expropriating authority have to pay damages based on the value the land would have had had the expropriating authority built its improvement in a location more beneficial to the landowner. [41] Likewise, the authority does not have to pay compensation based on a value of the land as developable (i.e. permitted and protected) land if the land was already undevelopable, at the time of the expropriation, for reasons unrelated to the project for which the land is expropriated. Second, the court of appeal clearly erred when it stated the expropriation suits destroyed the market value. The market value of the land had been destroyed prior to the expropriation since, at the time of the expropriation, the land was not legally developable as intended and was unpermitted, unprotected wetlands. Thus, the landowners must instead be able to show either that they would have been able to obtain the permits required to construct their own levee which was necessary for the property to be developed had the land not been expropriated (under the highest and best use doctrine), or alternatively, that their inability to obtain the permits, and the resulting devaluation to the land, was caused by the hurricane levee project. Third, the court of appeal also implies it is holding the District liable for any devaluation to the property occurring prior to the expropriation which was caused by the Corps of Engineers' actions where it states because the inability to get a permit or develop the land prior to the takings was wholly the result of governmental (all of the entities which combined to halt the project) control and in no way the result of landowner action, the District should be held liable. If the Corps had denied BDF's permit application, and would have continued to deny BDF's permit applications, had they been applied for, because of the hurricane levee project, then the District could be held liable for the devaluation of the property caused by the Corps' actions because the change in the value of the property would have been caused by the proposed improvement for which the property was expropriated. However, since the Corps denied BDF's permit application, and would have continued to deny landowners' applications, for reasons unrelated to the hurricane levee project, as the evidence in the record overwhelmingly indicates, the District cannot be held liable for any devaluation caused by the Corps' actions. Fourth, it is absolutely clear from the record, and indeed the landowners' own expert in the permitting process, Dr. Sherwood Gagliano, so testified, that BDF's application for § 404 and § 10 permits was denied by the Corps of Engineers in 1979 because of the ramifications resulting from the inclusion of landowners' land in the Jean Lafitte Park park protection zone, and that BDF would have been unable to obtain such permits at any time after 1979 for the same reason. As will be discussed infra, the evidence in the record does not support the conclusion BDF's permit application was denied in 1979 in any measure because of the existence of or uncertainty over the location of the hurricane levee project. Rather, the evidence unequivocally shows the permit application was denied and would have been continuously denied, even absent the hurricane levee project, because of the property's location inside of the park protection zone of Jean Lafitte Park and because of the growing national policy toward the more stringent preservation of wetlands. Since there is no evidence in the record to support the trial court's findings to the contrary, those findings are manifestly erroneous. Furthermore, because both lower court opinions contain the above inaccurate statements of law and factual findings which imply incorrect legal conclusions, any factual findings made by the trial judge are not entitled to deference.
The record unequivocally shows BDF's permit application was denied by the Corps in 1979 because of public and political pressure on the Corps to preserve the landowners' wetlands property as undeveloped and unpermitted wetlands because of its inclusion in the park protection zone of Jean Lafitte Park and because BDF's permit application did not meet the criteria at that time for the granting of a permit. Furthermore, the record also reveals that even if the hurricane levee project was not in existence and BDF had continued to reapply for permits up until the expropriation suits were filed, the permit applications would have continually been denied due to the land's inclusion in the park protection zone and because of the emerging national policy in favor of preserving wetlands unless development was absolutely necessary. For these reasons unrelated to the hurricane levee project, the wetlands acreage of the property had a nominal value of $550 per acre at the time of the expropriation. The District may not be held liable for this devaluation. The record also shows that for the same reasons, there was and is no reasonable probability that in the reasonably near future after the expropriation the landowners would have been able to obtain the necessary permits for developing their land into its highest and best use of residential subdivisions had the project and resultant expropriation not taken place.
The Corps of Engineers issued BDF a cease and desist order in January of 1974, prohibiting further construction of its levee and further development of the property because such construction lacked the § 10 and § 404 permits legally required under the Rivers and Harbors Act and the FWPCA. The Corps allowed BDF to apply for after-the-fact permits in 1975. This application was denied in 1979. During the pendency of the above action, Congress had begun to study the feasibility of the establishment of a national park in Louisiana in August of 1972, and, in 1978, the park was created by statute. All of the evidence in the record supports the finding that the application was denied for reasons unrelated to the existence of or uncertainty over the hurricane levee project. The District Engineer's articulated reasons for his denial of BDF's permit application state the following: I find that denial of the Department of the Army after-the-fact permit prescribed by regulations published in 33 C.F.R. 320 through 329 to Bayou Des Families Development Corporation is based on thorough analysis and evaluation of the various factors enumerated above; that there are reasonable alternatives available that will achieve the purposes for which the work is being constructed; that the proposed work is not in accordance with the overall desires of the public as reflected in the comments of state, Federal, and local agencies and the general public; that the proposed work does not comply with established State and local laws, regulations and codes; that there have been identified significant adverse environmental effects related to the work; that the denial of this permit is consonant with national policy, statutes, and administrative directives; and that on balance the total public interest should best be served by the denial of a Department of the Army after-the-fact permit to Bayou Des Families Development Corporation. The District Engineer's findings of fact in the denial of BDF's application note there were nearby undeveloped nonwetland areas which could have been developed for the same purposes, the BDF project would have had major adverse impacts on Jean Lafitte National Park and on the environment, and the approval of the project would have been in violation of national policy on the preservation of wetlands. The landowners' answers and post trial memoranda in the instant expropriation suits allege the permit was denied because of the opposition by park supporters who wanted to protect and preserve as undevelopable as much of the wetlands as possible which were located in the park protection zone. Dr. Lloyd F. Baehr, Jr., who has worked for the Corps since 1976, and who is presently chief of the permitting unit, testified BDF's permit was denied in 1979 because there was a lack of public need to destroy the wetlands, there was no need for the type of amenities suggested by the proposal, and there were available non wetland alternative sites. The federal district court in Bayou des Families Development Corp. v. United States Corps of Engineers, 541 F.Supp. 1025 (E.D.La.1982) [42] found the Corps' denial of BDF's permit was not arbitrary and capricious and was consistent with the Corps' statutory and regulatory mandate to grant no permit unless it is found to be in the public interest and to evaluate the effects of a proposed project on the wetlands with an eye toward discouraging the unnecessary alteration or destruction of wetlands. The federal district court stated: The Corps evaluated the public comments, the comments of governmental agencies, the data generated by the Corps, and the data presented by BDF and its consultants in reviewing BDF's application. Of key concern to the Corps were the comments from the public and from other federal agencies relating to the environmental effects of the proposed work. The area in question provides for water filtration, assists in maintaining the salinity regime for the Barataria Basin, provides habitat for terrestrial and aquatic fauna, and provides significant detritus export vital to the maintenance and health of Louisiana Gulf fisheries. Development of the area in question and the destruction of almost 2,000 acres of wetlands would result in the loss of wildlife habitat, the loss of water purification and filtration benefits, and have significant adverse impacts on the Barataria Bay fisheries resources due to loss of detritus contribution and habitat. After evaluating the above factors and weighing the public need against the private need for the project, as required by Corps' regulations, the District Engineer concluded that the proposed work would not be in the public interest. Based on the evidence in the administrative record before the Corps at the time it denied plaintiff's permit application on September 17, 1979, the Corps' decision was not arbitrary or capricious, an abuse of discretion, nor otherwise not in accordance with law. The Corps considered all relevant factors. The Corps was required by regulations to consider not only the flood protection aspects of the proposed project but other factors, including water dependence of the project and ecological consequences, effect on wetland water quality, and effects on fish and wildlife habitat. Bayou Des Families, supra, 541 F.Supp. at 1038. Furthermore, in addressing the reason for the Corps' four year delay in acting on BDF's application, the court stated: The Corps' consideration of the impact of possible effluent from plaintiff's proposed sewage treatment plant on the park, and respect for the park Administrator's request that a levee not be constructed within the park boundaries, did not exceed the Corps' statutory mandate to consider the environmental effects of the proposed project, although consideration of those factors may have slowed the processing of BDF's permit application. Id. at 1040 (citation omitted). Additionally, in response to BDF's argument the Corps should have granted its permit for the construction of a levee along alignment D because the Corps had previously indicated in 1972 that it wanted to build its hurricane levee along alignment D or that the Corps itself was obligated to build the hurricane levee along alignment D, the federal district court observed: In 1974 Congress amended the Flood Control Act to require the Corps, in formulating flood control plans, to employ the most economically, socially, and environmentally acceptable means of reducing or preventing flood damages. Even if the Corps did, in mid-1972, propose an alignment similar to that along which plaintiff later began construction of a levee, the Corps was not bound by that proposal. The Corps was, however, required to take subsequently enacted federal legislation, including the FWPCA, the amendment to the Flood Control Act, and the Park Act and regulations, into account in developing a proposal for hurricane protection on the West Bank. Even if the 1972 proposal had passed an earlier cost-benefit analysis, the Corps could not ignore the Congressional policies expressed in subsequent legislation. Thus, the Corps has properly considered subsequent legislation, specifically that legislation relating to environmental protection and to establishment of Jean Lafitte Park, in developing a flood control proposal for the West Bank. Id. at 1041-42 (citations omitted). The fact the Corps' preferred alignment for the hurricane levee in 1972 was along alignment D supports the conclusion BDF's permit application was denied in 1979 not because of the hurricane levee project but for other reasons. The hurricane project had been ongoing since 1965. In 1972, the Corps indicated its desire the hurricane levee be placed along alignment D. An internal memorandum of the Corps filed into evidence by landowners shows the Corps recognized there was no reason to deny BDF's permit application if the Corps's hurricane levee was to be placed along alignment D also. However, between 1972 and 1979, two important events occurred which were totally unrelated to the hurricane levee projectthe passage of the FWPCA amendments with the corresponding growing national concern over the preservation of wetlands and the creation of Jean Lafitte National Park, which included landowners' wetlands in its park protection zone. The Corps was willing to allow its hurricane levee to be built along alignment D in 1972 but was not willing to let BDF build its levee along alignment D in 1979, even though the Corps had earlier recognized the two levees would not be conflicting along such an alignment. It was the intervention of the FWPCA, the concern over preservation of the large area of wetlands, and the desire to preserve the undeveloped nature of the park protection zone of Jean Lafitte Park, and not the existence of or uncertainty over the hurricane levee project, which led to the denial of BDF's permit in 1979. One of the owners of BDF Development Corp., Wilson P. Abraham, testified at trial the existence of Jean Lafitte Park was the reason for the Corps' alleged procrastination on the permit application, and the National Park Service vigorously resisted any idea of developing BDF's property at every meeting on the topic. [43] Dr. Sherwood Gagliano, the witness whom landowners' tendered and the court accepted as an expert in the Corps' permitting process and whom the trial court found to be extremely credible, testified the delay the Corps took in acting on BDF's permit was caused by people interested in preserving the undeveloped nature of the land included in the park protection zone, and that ultimately the permit was denied because of the land's inclusion in the park protection zone. Dr. Gagliano testified numerous times during trial that in his opinion, the park was the deciding factor in the denial of the [BDF] permit. Furthermore, after reviewing various permit denials and grants by the Corps in the general vicinity of landowners' property, Dr. Gagliano testified the main difference between those projects and BDF's project was the fact that BDF's property was included within the boundaries of Jean Lafitte National Park. In the areas where permits for the development of wetlands were granted, no state or national park was in the area of consideration of those permits. Additionally, Dr. Gagliano stated the landowners had a reasonable expectation of developing their property in 1972 because BDF's levee was to follow the Corps' preferred alignment for its hurricane levee, and the only thing which affected their reasonable expectation was the creation of Jean Lafitte National Park. Landowners introduced into evidence, through Dr. Gagliano's testimony, several letters from various organizations which were circulated during the pendency of BDF's permit application and which discussed BDF's permit in relation to the park. Exhibit 127 is a letter from the director of the Louisiana State Parks and Recreation Commission which states that agency conducted an EIS which concluded the BDF levee alignment would be in conflict with the park. Exhibit 128 is a letter from the Superintendent of the Jean Lafitte Park to the regional director of the National Park Service which Dr. Gagliano interpreted as revealing the Superintendent believed he could keep the developers from developing their property, and thus, out of the park protection zone, through use of the § 404 permit process, and, that by doing so, he would keep the value of the property low for purposes of the park's acquisition of it later on. Exhibit 129 is a letter from the same Park Superintendent to the district engineer of the Corps in response to the Corps' request for comments on BDF's application. The letter objects to the permit because of its impact on the park protection zone and the core area of the park. Exhibit 130 is a letter from the Corps to the landowners dated several months prior to the permit denial discussing the comments it had received on the park and recommending BDF withdraw its application because it was likely to be denied. [44] Dr. Gagliano testified this particular letter makes it clear the BDF permit was denied because of the park protection zone. The landowners rely on an internal Corps' memorandum from 1975 for the proposition that the later denial of their permit in 1979 was related to the hurricane levee project. In this memo, introduced into evidence as LO-26, an employee of the Corps states in part: (a) It is apparent that the decision on the issuance of a permit and the decision on the West Bank Hurricane Protection project are closely related. In fact, the decisions should be made in concert. (b) If a decision is made to deny the permit application, it would be inconsistent to propose a Corps levee in the same area. If we propose to build a hurricane levee near the alinement [sic] of the Bayou des Families levee, there is no reason why a permit should not be issued. (c) Strong opposition to issuance of the permit has been expressed by EPS, NMFS, USF & WS, the State Parks and Recreation Commission, and the State Planning Office. It is probable that these same agencies will also oppose a hurricane levee which destroys the wetlands of this area. This memo does not state or imply, as asserted by the landowners, that the BDF application would be denied because of the hurricane levee project. Rather it only explains that if BDF's permit application to construct its own levee along alignment D is denied, it would be inconsistent for the Corps to later seek to build its hurricane levee along alignment D because the same groups which oppose BDF's permit application would also oppose the Corps' placement of a hurricane levee along alignment D for the same reasons. It is clear from the record that BDF's permit application was denied by the Corps in 1979 because of the desire to preserve the wetlands in the park protection zone as undeveloped wetlands and because BDF's permit application did not meet the criteria for the granting of a permit. Thus, any devaluation to the property caused by this permit denial cannot be attributed to the District as it is unrelated to the project for which the District sought to expropriate the property. [45]
Even though the landowners urge to the contrary, the evidence clearly shows that had BDF continued to reapply for permits up until the expropriation suits were filed, its permit applications would have continually been denied not because of the hurricane levee project but because of the land's inclusion in the park protection zone and the park supporters' desire to preserve the land in the park protection zone as undeveloped wetlands and, for the additional reason that the trend of emerging national policy was ever-increasingly in favor of preserving wetlands unless development was absolutely necessary. The record also shows that, for the same reasons, there was no reasonable probability in the reasonably near future after the expropriation that the landowners would have been able to obtain permits necessary for developing their land into its highest and best use of residential subdivisions had the project and the expropriation not taken place. That BDF's permit application for the construction of a levee along alignment D would have been denied for the above reasons, had BDF reapplied in the early 1980s, is supported by several sources in the record, but is bolstered most convincingly by the fact the Parish Council's own application for the construction of its hurricane levee along alignment D, as well as a compromise alignment suggested by the landowners and supported by the parish, were both rejected by the Corps. On November 20, 1980, the District Engineer wrote to the Parish Council to inform it that its application for the construction of a levee along alignment 3-C, an alignment similar to BDF's alignment in the reaches affecting BDF's property, would be denied because it encompassed too much wetlands, allowing for their development. The Parish Council's application for a permit along Alignment D, made on June 19, 1981, was also later denied. During the consideration by the Corps of the parish's permit, the park proponents continued to vigorously contest the placement of any levee, be it BDF's or the parish's, along Alignment D. [46] Several federal and state agencies wrote to the Corps, recommending it deny the parish's permit for alignment D because of its significant impact on the wetlands and on the park. Dr. Sherwood Gagliano, at the behest of the landowners and the parish, presented a compromise alignment located at the midpoint between alignments D and E to the Parish Council and to the Corps at a public hearing on April 17, 1984. The Parish Council adopted a resolution approving of the compromise alignment and urging the Corps to consider it. On June 18, 1984, the Corps denied the Parish Council's application for a permit to construct a levee along alignment D. The denial of the parish's application for a permit on alignment D was also an implicit denial of the compromise alignment. The Findings of Fact of the Corps' denial note the Parish Council had requested the Corps consider the compromise alignment. Furthermore, Dr. Lloyd F. Baehr, Jr., who has worked for the Corps since 1976 and is the current head of its permit division, testified the Corps considered the compromise because it considers all comments made during a public hearing concerning a permit application, and the Corps' rejection of the Council's permit along alignment D and its offering of a permit only along alignment E and not along the compromise alignment, indicate the Corps also rejected the compromise alignment. [47] The Corps eventually offered the parish a permit for the construction of a levee along alignment E only. [48] The record does not support the conclusion that had the District turned down the Corps' offer of a permit along alignment E, the Corps would have offered BDF a permit to construct its levee along alignment D. The landowners argue that the Corps would have been forced to offer a permit along alignment D if the District turned down alignment E because the Corps knew that a levee to protect the West Bank from hurricanes had to be built. To the contrary, the record does not reveal the Corps' primary concern was the prompt construction of a hurricane protection levee. The record is clear the Corps knew the District/Parish Council had, from the 1970s, wanted either its levee or BDF's levee to be built along alignment D. The Corps knew the District/Parish Council strongly desired to provide hurricane protection to its citizens. Yet, the above considerations did not preclude the Corps from: (1) taking four years to act on BDF's alignment D permit application, (2) from denying BDF's permit application in 1979, (3) from taking three years to act on the parish's alignment D permit application, (4) from denying the parish's permit application in 1984, or (5) from denying a permit for the compromise alignment. Nor did it preclude the Corps, and the federal government, from failing to agree to provide any federal funding for the parish's hurricane levee until 1990. Furthermore, testimony at trial bears out the conclusion the Corps would offer a permit for the construction of a levee, be it BDF's or the parish's, only along alignment E. Ronald R. Besson, president of the District from 1980 through 1990, testified the Parish Council was told by the Corps it would only grant a permit along alignment E. [T]he Corps of Engineers came back to the parish council, denied the permit for alignment D and told them that the only alignment that they would grant a permit would only be the modified alignment E. Regarding the Corps' intent, after it had denied the parish's application for alignment D but prior to the parish's acceptance of a permit along alignment E, Besson further testified as follows: Q: Had you ever been advised or the Corps, the Levee District ever been advised to your knowledge or have you ever been advised when you were president of the West Jefferson Levee District by anybody from the Corps that the reach of the levee along modified alignment E was ever in question of being changed or modified? A: No. Q: So to your knowledge there was never in your mind, in the minds of the West Jefferson Levee District any question about where this levee was going to be built insofar as it affects the property that's the subject of this litigation? A: No question at all. .... A: [I]t was never a doubt to us of where the alignment was [despite the fact that several alignments were discussed in the February 1984 EIS issued by the Corps] because the federal government and Corps of Engineers made it very very clear to us that it was either alternative alignment E or nothing. We have explained earlier why the landowners must be able to show the Corps would have offered BDF, and not the District, a permit for alignment D, had the District turned down the permit for alignment E. In any case, however, the testimony of Dr. Baehr, head of the permit division for the Corps, and one of the Corps' employees who worked on the parish's permit, indicates the Corps only considered alignment E for the hurricane levee. He testified the permit for alignment D was denied mainly because the hurricane levee was intended to protect developed areas, and landowners' wetlands property was not developed and therefore did not need protection. A: [I]t was still going to impact a great deal of wetlands unnecessarily because the basic purpose of the project was to protect developed property on the Westbank and this was not going to protect developed property but protect wetlands and we saw that as an unnecessary activity since the basic purpose of the project was not stated to protect undeveloped property for future development. .... A: See the idea behind the permit as we understood it is that the permit was requested to protect developed property on the Westbank of Jefferson Parish. We did not consider wetlands as developed property. And therefore, we eliminated wetlands from the evaluation process because it was the least damaging environmental alternative. Thus, even if the Parish Council had turned down the permit for alignment E, no evidence adduced indicates the Corps would have offered the District a permit for alignment D, as Dr. Baehr testified the hurricane levee was not intended to protect undeveloped wetlands. Furthermore, Dr. Gagliano also testified that had the District/Parish Council turned down the Corps' offer of alignment E, the Corps would not have offered alignment D. Q: [D]o you feel that the only alignment that the Corps would allow a levee to be built on in 1986 was the alignment known as modified E? A: Yes. Q: Do you feel that in 1989 had, had not the parish not accepted the permit for modified E, that the Corps would have allowed construction of a levee along a different alignment? .... A: Not without opening the whole new process. The Corps made a decision and they said alignment E is where the levee will be built, yes. Q: I'm talking about 1989 had not had the parish not accepted the permit for modified E, do you feel that the Corps would allow a levee to be built on any other alignment other than that which we have identified as E? A: No. The testimony of Dr. Terry Howey, the director of the Coastal Management Division in the Office of Coastal Management and Restoration in the Department of Natural Resources, further indicates that even assuming the project and the expropriation had not taken place, the landowners would have been unable from 1985 and into the future to get the permits necessary to develop their land. Under federal law, the Corps will not issue a § 404 permit unless the state coastal management program, which came into existence in 1980 and of which Dr. Howey is the director, has issued the corresponding state permits. [49] Dr. Howey, after being shown an aerial photo of BDF's property, testified regarding the probability BDF could have obtained the state permits where such land has been designated wetlands by the Corps. He stated: I would characterize the probability of getting a permit for a type of development [for the construction of a levee and the development of the remaining land into subdivisions] such as you have described in this type of area, and of this magnitude in terms of acreage, as an extremely difficult proposition and it would be very difficult to obtain a permit for this area. I know of no permits that have been issued for similar types of areas of similar acreage in the period of time that I have been working for the Coastal Management Division. Although Dr. Howey agreed the parish had been able to obtain the state permit for the construction of the levee alone when it applied to the Corps for a permit to build a levee along alignment D in 1981, he pointed out the probability of obtaining the same permit today is considerably lower. One of the landowners himself testified the failure of landowners to be able to develop their land in 1984 was based on the cease and desist order issued by the Corps and the Corps' denial of BDF's permit in 1979, which we have already found to be unrelated to the hurricane project. Wilson Abraham, a BDF principal, testified: A: The Corps of Engineers had a cease and desist. We couldn't move. We could do absolutely nothing with that property. We had paid a twenty-five thousand dollar fine to the federal government with specific orders to stop. That was back in seventy something and we stopped. Q: So as a result of the Corps' denial of your permit, you could do nothing with the property? A: Absolutely nothing, yes sir. .... Q: Is it your position or contention then that the inability of BDF to be able to get a permit to build the levee along the rear of its property line to the west was the cause or reason you weren't able to develop this property? A: You're one hundred percent correct sir. Mr. Abraham was also asked about the probability BDF would have been able to obtain the permits from the Corps assuming the hurricane project was not in existence. Q: [A]ssume alignment E and construction of the levee is not going on along Barataria Boulevard and it's 1986 and 1985, do you feel that you could get a permit from the Corps of Engineers to develop your property in 1985? A: No.... They wanted it for Lafitte Park all indications were and I think the Corps might have acquiesced in the earlier letter as I read they were in favor of it and then the Lafitte Park, Isenogle [the park superintendent] and that bunch got involved and it was hopeless. Q: So in 1988 and 1989 even if there was no levee along Highway 45, you don't believe you could get a permit to develop it then? A: No sir; I really don't. .... Q: So is it fair to say you do not feel you would have gotten a permit from the Corps at any time after 1979? A: I don't thinkwe might have a little bit later on but again as I stated they did turn us down [in 1979] and I think had not the park come into being, we would have gotten our permit. An additional impediment to the landowners' attempting to prove the reasonable probability of BDF obtaining the necessary permits in the late 1980s and up until the present, is the growing difficulty in obtaining permits for development of wetlands. Dr. Gagliano testified that in February of 1989, the so-called manual for wetland delineation was made public by four agencies; the Corps of Engineers; US Fish and Wildlife Service; National Marine Fisheries Service; and Soil Conservation Service which significantly changed the permitting process. This was followed shortly thereafter by the signing of a memorandum of agreement between the US Army Corps of Engineers and EPA which made it even more difficult to acquire permits for any type of development in wetland areas.  (emphasis added). [50] Additionally, Dr. Gagliano testified quite pointedly that even absent the hurricane levee project, the landowners would have been unable to obtain the required permits necessary for the development of their property from 1980 up until the present because of the land's inclusion in the park protection zone, a factor totally unrelated to the hurricane project, and for which the District should not be held liable. Q: [W]e all know that the BDF permit application for, to build the levee along the rear of their property which coincides with the alignment that we've been referring to as D was denied in 1979 by the Corps and I believe your opinion was that the reason for that denial was really because of the Jean Lafitte Park and the park protection zone? A: Yes. Q: That's basically correct? And as a result of that denial, they were not able to develop their property; is that correct? A: Yes. Q: And not being able to develop their property took it out of commerce; is that correct? A: They took it out. Q: In other words, the denial of the permit prohibits the landowner from developing the property. If he can't develop his property, it's taken out of commerce; is that correct? A: Yes. Q: In your opinion, if the landowners in this case had applied to the Corps in 1980 or a permit to develop their property as a residential subdivision, could they have gotten a permit from the Corps? A: In 1980? Q: 1980. A: No. Q: Why? A: Because of the park protection zone. Q: In 1981, the landowners had applied to the Corps for a permit to develop their property, in your opinion, would they have gotten a permit? A: No, because of the same issue, because of the park. Q: In 1982 if the owners had applied to the Corps of Engineers to develop their property, in your opinion could they have gotten it? A: No, because of the park. Q: In 1983 if the landowners had applied to the Corps for a permit to develop their property in your opinion could they have gotten it? A: No, for the same reason. Q: In 1984 if the landowners had applied to the Corps of Engineers for a permit to develop their property in your opinion, would they have received it? A: No, because of the presence of the park. Q: In 1985, if the landowners had applied to the Corps for a permit to develop their property, could they have received it? A: No, for the same reason. Q: In 1986, if the landowners had applied to the Corps for a permit to develop their property, could they have gotten it? A: No, for the same reason but I must add ... that in all of these time frames had the park not been a major driving issue in the permit decision in my opinion they would have had a very good opportunity, very good chance of acquiring a permit.... Q: In 1987 if the landowners had applied to the Corps of Engineers to develop their property, do you think in your opinion that the Corps of Engineers would have granted that permit? A: No, because of the park issue. Q: In 1988 if the landowners had applied to the Corps of Engineers for a permit to develop their property, do you think they would have received it? A: No, because of the park issue, and I put the same explanation on those dates as well. Q: And in 1989 if the landowners had applied to the Corps of Engineers for a permit to develop their property, do you think that they in your opinion, do you feel that it would have been granted? A: No, subsequent to the passage of the introduction of the wetland delineation manual and the new memorandum of agreement and the President's no net loss of wetland policy, it becomes increasingly difficult to acquire a permit. In fact, I really, it's my opinion that permits may be in a state of limbo at present because of uncertainty as to how these programs are going to be administered. So I can't give you a definitive answer to that question. .... A: [I]f the park were not an issue, there would be other elements coming into play in 1989 that might cause denial of a permit.... Q: In 1990 if the landowners had applied to the Corps of Engineers for a permit to develop their property in your opinion, do you think they would have received it? A: I think the park again would be a major issue in the issuance of the permit. The landowners seek to tie the effect the park protection zone has on their ability to get their own permits to the hurricane levee project by asserting the ultimate location of the hurricane levee was to decide the boundaries of the park protection zone. The landowners assert this in brief, and Dr. Gagliano made this statement several times during his testimony. To the extent the trial judge made such a finding of fact, it is manifestly erroneous, as it is unsupported by the record and legally incorrect. Dr. Gagliano gave no reason for his conclusion in his testimony. The boundaries of the park protection zone were set by statute in 1978. See 16 U.S.C. §§ 230, 230a(a), and 230a(b). Therein, it is stated that the Barataria Marsh Unit of the park would include 20,000 acres, 8,600 of which would comprise the core area and 11,400 of which would comprise the park protection zone. The statute refers to a map, numbered 90,000B and dated April, 1978, as depicting the boundaries of these areas. The landowners introduced into evidence a map one of its experts had drawn in 1987 in order to show the location of landowners' property in relation to the park protection zone boundary. That exhibit states on its face that the expert used map 90,000B dated April 1978 as the basis for his drawing. Although 16 U.S.C. § 230a(f) states: The Secretary [of the Interior] may revise the boundaries of the park protection zone, notwithstanding any other provision of law, to include or exclude properties, but only with the consent of Jefferson Parish, no documentary or testamentary evidence whatsoever was offered to indicate the Secretary intended to revise the boundaries of the park protection zone depending on where the hurricane levee was to be built or that there was even any discussion by any of the parties involved that such would occur. The only indication of this in the entire record were the statements by Dr. Gagliano, who gave no factual basis for this conclusion. Finally, the lower courts seem to rely on the existence of the Local Cooperating Agreement signed by the parish and the Corps in 1990 in reaching their decisions. While we agree with the lower courts and with landowners that the record shows the Agreement which deals with the sharing of costs between the federal government and the District for the construction of the West Bank Hurricane Protection Levee, a much more extensive levee than the locally funded levee which the District expropriated landowners' land for, is intended to include the costs of the instant expropriation, such a fact does not change the valuation of the property at the time of the expropriation. That the Corps has agreed to share the costs of this expropriation does not give the property a higher value than it would have had had the Corps not agreed to share the costs. Furthermore, the Local Cooperating Agreement does not reveal an intent that the District be held responsible for any devaluation to landowners' property caused by the Corps, the National Park Service, or the federal government occurring prior to the expropriation in this case where that federal action and the resultant devaluation were unrelated to the project covered by the Agreement. [51]
Because we have concluded the property was not developable into residential subdivisions at the time of expropriation and did not have a reasonable probability of becoming so developable in the reasonably near future, both for reasons unrelated to the hurricane levee project, we find the values ascribed to the property by the trial court to be manifestly erroneous. We instead find the evidence indicates the property at the time of the expropriation had a value based on its highest and best use as nonpermitted wetlands which could be used only for recreational purposes. Thus, we must determine the fair market value of nonpermitted wetlands from the evidence introduced in this case. All experts testified the mere possibility unpermitted land might be able to obtain the necessary permits some time in the future would have no effect on the market value of unpermitted, wetlands property. In other words, based on the evidence adduced in this case, it does not appear the value of wetlands property lacking a permit would ever increase to more than the nominal value of $550.00 per acre based on some possibility that a permit may be able to be obtained in the future, as all appraisers herein testified such a possibility has no effect on the fair market value of wetlands. According to the record, the landowners, whose burden it is to prove entitlement to compensation over and above that deposited into the registry of the court, had their appraisers base their appraisals of the property on the assumption either that the property had the permits necessary for construction of a levee or that there was no impediment to the acquisition of such permits. As explained, earlier, this assumption, made by the landowners and their appraisers, is erroneous. Although the landowners did not introduce into evidence appraisals of their land as unpermitted, undevelopable wetlands, their appraisers agreed with the District's appraisers at trial regarding the valuation of unpermitted, undevelopable wetlands. Additionally, all of the appraisers negated the proposition that purchasers are willing to pay a premium for the land (a value over and above the actual wetlands value of $550.00 per acre) despite the uncertainty of ever obtaining permits for the development thereof. The appraisers testified that such a premium, or sliding scale based on the possibility of obtaining a permit, did not exist in the market, and that unpermitted wetlands were only worth $500 to $550 per acre. Landowners introduced the testimony of two appraisers. William Hartwell testified as follows: Q: Now, with the fact, in 1986, and without knowing whether or not a permit could be granted or denied in 1986, what would your estimate of value be of the property prior to the taking? (Emphasis added). A: The five hundred dollars per acre. Q: And that is true also in 1987 and 1988, and 1989? A: Yes. Q: And thereafter, I gather? A: Yes. Q: Foreseeable future? A: Yes. Q: So, I guess in truth and in fact your actual opinion of the value of the property in 1986, was up to and including the foreseeabletoday, and the foreseeable future after that is that it is worth five hundred dollars an acre? A: If it is jurisdictional wetland? Q: Yes. A: And a 404 permit cannot be obtained? Q: No, I did not say can't be obtained, I said we don't know whether they can be obtained or not, but we do know they were denied in 1979. A: Speculate on whether they could be obtained? Q: Yes, we don't know. A: Then it is five hundred dollars per acre.... Q: So, the mere fact that you don't have a permit in hand, makes it speculative and only worth five hundred dollars an acre prior to the taking, is that correct? A: Yes. Richard F. Brewster testified he could not give a value for wetlands property if he had to make the assumption that he did not know whether a permit could be obtained or not. At the same time, however, Brewster testified that the property was worth only $500 an acre in 1979 and thereafter because of the Corps' denial of BDF's permit application. Q: [T]aking into consideration a denial of a permit on this property in 1979, it's your opinion that that property was thereafter worth five hundred dollars an acre, is that correct? A: Assuming a denial of permit at any point in time, the property in my opinion would be five hundred dollars an acre from that point in time, no matter where you are. Q: So, after 1979, thisand the permit was denied thereafter, up to and including 1989, this property is only worth five hundred dollars an acre, is that correct? A: Take it as far as you want to go. Q: So, as far as 1989, it's only worth five hundred an acre. 1986, it is only worth five hundred dollars an acre. And for the foreseeable future, it is only worth five hundred dollars an acre. And that is as a result of the denial of the permit in 1979? A: Yes. .... Q: So then until something different happens, it is still worth five hundred dollars an acre, is that what you're telling me? From '79 on until it becomes permittable, it is only worth five hundred dollars an acre? Until it receives a permit, it is only worth five hundred dollars an acre? A: Basically, yes. [52] Irvington Eppling, one of the District's two appraisers, testified as follows regarding the value of wetlands property where the purchaser does not know whether or not he will be able to obtain a permit. A: I'm saying that based on my research of the denials and approvals of the Corps of Engineers 404 applications in the marketing area, this property could be in that, the probability of that property being permittable in the near future is not there and this would be reflected in the market. People are not buying those properties at this point. They have not been marketed. People have not marketed these probably in the last ten years or so, ever since the wetlands, the Clear Water Act came out and Clean Water Act came out, there's been a lot of problems with marginal properties that have 404 classifications on them. Nobody wants to buy them. Q: In their unpermitted states? A: People will take options and if they can get a permit, you might find no sales, but there are no sales out there. I looked and looked and looked. This court is constrained not only by the record but also by La.R.S. 47:2321 which defines fair market value as: the price for property which would be agreed upon between a willing and informed buyer and a willing and informed seller under usual and ordinary circumstances; it shall be the highest price estimated in terms of money which property will bring if exposed for sale on the open market with reasonable time allowed to find a purchaser who is buying with knowledge of all the uses and purposes to which the property is best adapted and for which it can be legally used. According to the evidence in this case, the value of unpermitted wetlands to a purchaser who does not know whether or not he will be able to obtain a § 404 permit is $550.00 per acre.