Court Opinion

ID: 9477181
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:16:39.039178+00
Date Added: 2024-06-11T17:45:44.795072
License: Public Domain

KRUPANSKY, Circuit Judge,
concurring.
Although I concur with the decision to affirm the district court’s determination that the government’s position in this case was substantially justified, I write separately to indicate my reasons for reaching that conclusion.
I take no exception to the rule adopted by this circuit prescribing that Equal Access to Justice Act (EAJA) cases should be considered and decided on an ad hoc basis,1 and accordingly direct my attention to the interfacing of the EAJA with condemnation trials and the impact of that interaction upon the award of legal fees. Condemnation proceedings, unlike most multi-issue civil actions giving rise to the award of attorneys fees pursuant to the EAJA, are unique in that they present, in most instances, a single factual issue: namely, the fair market value of the condemned parcel of real property.
Fair market value of any given parcel of property is proved by the testimony of experts-in the person of appraisers who, by the application of universally accepted and applied appraisal theories and practices, arrive at the relative value of that parcel of realty. The American Institute of Real Estate Appraisers (Institute), the Society of Real Estate Appraisers (SREA), as well as other nationally recognized professional real estate appraising societies, have accepted basically three uniform approaches to the appraisal of real estate that have been utilized by qualified practicing appraisers throughout the nation. The three recognized theories or approaches as they are characterized are as follow. First, the market data approach, which is a basic rather simplistic method employed to appraise buildings and land. This approach estimates the fair market value of the property in controversy by juxtaposing it with recent, comparable property sales in the geographic area. Second, the income approach, which is generally utilized for appraising commercial property. Under this approach fair market value is estimated by capitalizing the net income attributable to the real estate. Third, the cost approach, pursuant to which theory the fair market value of the property is determined by appropriately depreciating the replacement cost of the structures when new to arrive at their present value and adding thereto the value of the land calculated in accordance with the comparable sales approach.
Albeit, the accepted valuation approaches do not result in absolute property values and thus provide a margin of latitude within which the conclusion of different qualified appraisers acting in good faith could vary. However, the pragmatics of a condemnation trial afford the compensating factor in arriving at a reasonable fair market value of the property in issue. See, *828e.g., United States v. 1,378 Acres of Land Situate in Vernon County, 794 F.2d 1313, 1318-19 (8th Cir.1986) (Ascertainment of fair market value is “incapable of mathematical precision and implicates methods of judgment.”). In a condemnation trial, the ultimate factual issue of determining the fair market value of any given parcel of real estate is submitted to the trier of fact, which fact finder, after having had the opportunity of assigning credibility and weighing the testimony of the expert witnesses presented by the adversary parties to the action, determines that value. The government’s interest in protecting the public fisc provides substantial justification for it to insist that a finder of fact resolve factual disputes as to fair market value in a manner equitable to both parties to the action.
In light of the foregoing where the government has demonstrated that it engaged qualified real estate appraisers who have implemented accepted appraisal practices and procedures to determine fair market value, and where it has shown that it relied upon the valuations arrived at by such appraisals, I would extend a presumption of good faith to the government and conclude that it was substantially justified in pursuing its condemnation action to trial to resolve the issue of fair market value in keeping with its responsibility to protect the taxpayers’ purse.2 Under this procedure the burden of going forward is shifted to the plaintiff property owner who is free to rebut the presumption in favor of the government by affirmative, credible proof that the government has, by some collateral action, acted in bad faith.
Accordingly, I conclude that in the event the property owner has failed to carry the burden of effectively rebutting the presumption which arises in favor of the government, under circumstances where the government has engaged and relied upon the advice and evaluation of qualified real estate appraisers applying accepted appraising practices, the government should prevail in an action initiated pursuant to the EAJA for attorneys fees. In the instant case, the government introduced sufficient, competent evidence to demonstrate that it had relied upon the opinion of a qualified and independent appraiser to determine the fair market value of the property in question. Because the property owners failed to introduce any evidence that the government had acted in bad faith in pursuing a trial of this case, I concur in the decision to affirm the district court’s opinion denying attorneys fees in this case.

. See, e.g., Trident Marine Constr., Inc. v. District Eng'r, 766 F.2d 974, 980 (6th Cir.1985); Kreimes v. Department of Treasury, 764 F.2d 1186, 1190 (6th Cir.1985); Sigmon Fuel Co. v. Tennessee Valley Auth., 754 F.2d 162, 166 (6th Cir.1985).

. Accord United States v. 1,378.65 Acres of Land Situate in Vernon County, 794 F.2d 1313, 1319 (8th Cir.1986)
When in a condemnation action, the Government selects experienced, qualified, competent appraisers, and consistently relies on their valuations in its offers of just compensation, without any evidence of bad faith on its part, its course of conduct is solid, well founded and clearly reasonable. Its position therefore is substantially justified.
and United States v. 341.45 Acres, 751 F.2d 924, 940 (8th Cir.1984)
[T]he government's litigation position is substantially justified if the amount established by the government during trial is based upon and consistent with the appraisals or other evidence of valuation.