Opinion ID: 337627
Heading Depth: 1
Heading Rank: 2

Heading: The Second Taking from a Single Tract

Text: 13 The landowner's second taking argument rests upon a single assumption that the Government, in its 1961 purchase of part of the same tract from which it now seeks an additional sixty-two acres, offset against the value of the property then acquired the enhancement to the remainder which resulted from its proximity to the Rayburn reservoir project. Given that the Government paid less than the market value of the property acquired in 1961 by deducting this enhancement to the remainder, appellee protests that exclusion of enhancement in this subsequent taking will result in less than full compensation for the sum of the acquisitions. 14 Assuming for the moment that such an offset did occur in 1961, American Lakes' conclusion is correct. A brief hypothetical will illustrate the point. Consider a ten acre tract worth $100 per acre in 1961 without reference to any proposed public project. Condemnation of the whole would cost the Government $1,000. 8 Suppose the Government takes five acres for a project which enhances the remainder of the tract $50 per acre, paying the $500 value of the acreage taken less $250 enhancement to the remainder, or $250. In 1971 it then condemns the remaining five acres. Excluding any changes in value over time for purposes of the hypothetical, if the Government pays the market value as enhanced, or $750, total compensation to the land owner will be the $1,000 that condemnation of all ten acres at once would have cost. If, however, the Government can pay without reference to enhancement, the remainder would only cost it only $500, for a total outlay of $750 for the ten acres. Clearly, if the landowner is to receive the full monetary equivalent of the property taken as required by the Fifth Amendment, United States v. Reynolds, supra, 397 U.S. at 16, 90 S.Ct. at 805, 25 L.Ed.2d at 15, any enhancement which has once been offset in a partial taking must be compensated for upon a subsequent taking from the remainder. 9 15 The problem with the landowner's theory as applied to the instant case is thus not its conclusion, but its initial assumption. Once the district judge rested his pre-trial decision to admit evidence of enhancement on an entirely different theory, 10 neither party had reason to offer any evidence at the pre-trial hearing or at the trial as to whether or not any enhancement was actually offset in the 1961 acquisition from defendant's predecessor in title. 16 The landowner would fill this evidentiary gap with a presumption that the Government offset enhancement to the remainder in the original partial taking. He would ground this presumption on the statutory authorization for the Secretary of the Army to negotiate purchases of property sought by the Government for public works projects at prices which reflect a just and reasonable consideration. See 33 U.S.C. § 596. 11 This phrase, according to the landowner, incorporates the requirement of 33 U.S.C. § 595 that, in partial takings by condemnation proceedings, compensation is to be reduced in the amount of the project's enhancement of the remainder. 12 17 It is true that this court has recently stated that 33 U.S.C. § 595 gave the force of statute to a long standing principle that enhancement of the remainder must be offset in partial condemnations. See United States v. Trout, 5 Cir. 1967, 386 F.2d 216. The Court spoke generally: 18 (T)he correct measure of value in a case involving condemnation of part of a tract is the fair market value of the entire tract immediately before the taking less the fair market value of the remainder immediately afterwards. 19 Id. at 219. 20 This measure of valuation in partial takings by judicial proceedings, to which the Government can always resort, when combined with the Government's natural desire and duty to deplete the public purse no further than necessary in carrying out its projects does give rise to a presumption that the Secretary fully offsets enhancement to the remainder in negotiating the purchase of part of a tract under 33 U.S.C. § 596. In the context of a negotiated purchase, however, one cannot be certain that the offset took place, and the presumption should not be irrebuttable. Defendant, standing in the shoes of his predecessor, cannot complain of the Government's refusal to pay compensation for enhancement that it never deducted. Just as we cannot permit a single payment for a double taking, we cannot countenance a double payment for a single taking. The Government should therefore have an opportunity to rebut the presumption of full offset. 13 21 Indeed, the landowner conceded at oral argument that the presumption he would have us invoke is not irrebuttable. He complained, instead, that the Government had made no effort below to rebut the presumption. The judge below, however, decided to allow evidence of enhancement upon a theory entirely different from the analysis urged here by the landowner. 14 That theory in no way involved, much less rested on, the validity of a presumption that the Government had fully offset enhancement at the prior acquisition, so the Government had no reason to attempt to rebut such a presumption. We can affirm the judgment below on the basis of the prior offset theory only if enhancement was deducted in the 1961 purchase. The presumption urged by the landowner initiates the fact finder on the road to truth. It does not provide him a terminus. The Government must be permitted to re-run the 1961 acquisition in order to expose whether or not enhancement was a quid pro quo in the transaction. 15 22 In sum, we agree with defendant American Lakes that any enhancement assessed against the remainder in the 1961 purchase must be compensated pro tanto upon the taking of the sixty-two remainder acres now before us. Moreover, we presume with defendant that the Government, free to institute condemnation proceedings in which the offset requirement of section 595 would be enforced and anxious to limit its expenditures to the minimum, insisted upon the deduction of full enhancement value upon its partial acquisition in 1961. The Government thus must bear the burden on remand of demonstrating that anything less than what was then the present value of the enhancement which would accrue to the remainder was actually offset in 1961. If it fails, the measure of compensation followed below, reflecting such enhancement up to the date of taking, was correct; nonetheless, appellant is entitled to an opportunity to meet the burden we have recognized.