Court Opinion

ID: 8916707
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:23:53.339877+00
Date Added: 2024-06-11T17:09:03.523642
License: Public Domain

K.K. HALL, Circuit Judge,
dissenting:
I cannot agree with the majority’s conclusion that the damages awarded by the Commissioners have in any way overcompensated the landowners. Because I believe that the approach taken by the majority in this case has the result of seriously undercompensating the landowners for their loss, I must dissent.
In calculating the award, the Commissioners first determined the fair market value of the entire 25.59-acre tract before the taking to be $296,870.00. This included the value of all of the land and the improvements thereon. They then determined the value of the land and improvements which would remain after the taking to be $240,663.00. By subtracting the second figure from the first, the Commissioners concluded that the fair market value of the taken area was $56,207.00. Next, the Commissioners calculated severance damages of $146,000.00. This amount included the costs of replacing and relocating all of the improvements located within the taken area in order to make the residue functional in the landowners’ warehousing business. Consequently, by adding the fair market value of the taken area plus the severance damages and rounding up, the Commissioners reached their final award of $202,500.00.
In my view, this award, including the separate award for severance damages, was entirely proper and in no way includes double damages. It is well-established that there are two methods for determining just compensation in any case of a partial táking. The first is to determine the value of the entire property before the taking and subtract the value of the remaining property after taking. When this method is used, the amount by which the remaining property or residue is damaged by the taking is an additional factor considered in determining the diminution in value of the remaining property. Thus, the difference between the before and after figures automatically includes severance damages and it is unnecessary to make a separate award for these damages. See United States v. 91.90 Acres of Land, 586 F.2d 79, 81 (8th Cir.1978).
Under the second approach, the intrinsic value of the property actually condemned is first calculated to determine how much the condemnor must pay for that which is physically taken. That figure, however, does not include any amount for damage or injury to the residue which necessarily results from the taking. Thus, over and above the value of the condemned property, the landowner is entitled to separate severance damages in order to be compensated for the diminution in value of the property with which he is left. West Virginia Pulp & Paper Co. v. United States, 200 F.2d 100, *732102 (4th Cir.1952). Although the two methods differ, it is important to note that, in any given case, if both methods are applied correctly, they will yield the same result.
In the instant case, although the Commissioners used a “before and after” method to compute the value of the property actually taken, it is clear that they applied the second method of calculating just compensation and, therefore, contrary to the majority’s conclusion, their separate determination and award of severance damages was proper. The Commissioners subtracted the value of the land and improvements immediately after the taking from the value of the entire tract before the taking to determine the value of the property taken. However, in computing the value of the residue, the Commissioners did not include any diminution in the value of the remaining improvements or in the value of the landowners’ warehousing operation that resulted from the government’s taking. This is evidenced by the fact that in listing the “after-taking” values of those improvements that were not to be taken either in whole or in part, such as the “Remaining buildings,” the “Fire hose building,” and the “Sprinkler system, pipes, nozzles, connections and controls,” the Commissioners simply carried down the same values that they had assigned to these improvements “before the taking.” Since the Commissioners had found that the improvements which were to be removed were essential to the warehousing operation, those improvements which were physically unaffected by the condemnation could only have the same value after the taking if the taken improvements were replaced. Otherwise, the improvements . which remained would be worth much less because, in the absence of the taken improvements, they could no longer be employed in the landowners’ warehousing operation. Consequently, it is clear that the after-taking value of $240,-663.00, which the Commissioners assigned to the residue, represents the value of the remaining land and improvements only after the taken improvements are replaced. Therefore, in my view the Commissioners were correct in awarding an additional amount of $146,000.00 (the severance damages) in order to enable the landowners to replace the taken improvements.
The majority, on the other hand, concludes that the landowners received excess compensation at least in the amount of $6,000.00 for the “fencing and- gate” and $17,850.00 for the “250,000 gallon storage pool.” The majority further suggests that there may be other items for which the landowners received overcompensation. I am filled with a sense of frustration because of my inability to make my brothers of the majority understand what is so clear to me. To carry the majority reasoning to its logical conclusion would lead to ridiculous results. For example, suppose there was no need to replace the fence. Would the landowner get nothing for the $6,000.00 worth of fence taken? Or, suppose a replacement of the storage pool had cost only $5,000.00. Would $12,850.00 have been deducted from the amount awarded for the taking of the old storage pool?
There is no question but that the landowners will have to pay $146,000.00 before their remaining property can be used. Anything subtracted from that amount will in effect be deducted from the $56,000.00 they were supposed to have received for the land and improvements taken. Logically all of the $146,000.00 in severance damages could be disallowed, in which case the landowners would end up with a net loss of $89,793 as a result of this taking. That would hardly place the landowners in the same pecuniary position occupied before the property was taken, a position to which they are clearly entitled. United States v. Miller, 317 U.S. 369, 373, 63 S.Ct. 276, 279, 87 L.Ed. 336 (1943).
Finally, as the district court judge noted below, simple mathematics reveals that there was no double-counting in the condemnation award.
That the Commissioners did not undertake to award severance damages for improvements for which the landowners had already been compensated is further illustrated by the fact that the fair market *733value of the severed area immediately after the taking, $240,663.00, plus the amount of the award, $202,500.00, total $443,163.00, less the amount of severance damages awarded, $146,000.00, gives a total of $297,163.00 which is within $300.00 of the fair market value of the entire tract immediately before the taking which was $296,870.00.
United States v. 2.33 Acres of Land, No. 78-247-Civ-5 (E.D.N.C. Nov. 6, 1981). In other words, given the total award of $202,-500.00, after the landowners spend $146,-000.00 to replace the taken improvements, they will be left with $297,163.00 in cash and property, which is almost exactly the value of the property they held before the taking. Consequently, as the district court found, “it is obvious that the Commissioners did not undertake to compensate the landowners twice for any of the improvements which were the subject of severance damages.” Id. I agree with the conclusion reached by the district court and would, accordingly, affirm its order, awarding damages to the landowner in the amount of $202,500.00.