South Grand View Development Company Inc v. Alabaster, City of, The
MEMORANDUM OPINION regarding trial evidence. Signed by Judge Madeline Hughes Haikala on November 22, 2017. (Haikala, Madeline)
2017 Nov-22 PM 11:35
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTH GRANDE VIEW
DEVELOPMENT COMPANY, INC., *
THE CITY OF ALABASTER,
CIVIL ACTION NUMBER:
On December 5, 2011, the City of Alabaster re-zoned approximately 142
acres of land that plaintiff South Grande View Development Company, Inc. owned
and had planned to develop. SGV has asserts a claim against Alabaster under the
Fifth Amendment of the U.S. Constitution for a regulatory taking. On November
22, 2017, the Court conducted a pretrial hearing to examine a number of
evidentiary issues and to discuss the possibility of bifurcating the trial of liability
and damages issues. The Court issues this order to address various issues that
arose during the pretrial hearing.
The Takings Clause of the Fifth Amendment states that “private property
shall not be taken for public use, without just compensation.” U.S. Const. amend.
V. A taking may occur when a city “exercises its police power through regulation
which restricts the use of property.” A. A. Profiles v. City of Fort Lauderdale, 850
F.2d 1483, 1486 (11th Cir. 1988) (citations to Supreme Court precedent noted but
omitted from this opinion).1
“[I]f a regulatory undertaking is confiscatory in
nature, it is a taking.” Wheeler v. City of Pleasant Grove, 664 F.2d 99, 100 (5th
Cir. Unit B Dec.1981), cert. denied, 456 U.S. 973 (1982).
In determining whether a taking has occurred, the factfinder may consider
evidence relating to the reason for the regulatory action. See, e.g., Wheeler, 664
F.2d at 100 (“Further, the city’s purpose in enacting the measure was not rational.
A developer has its right to be free of arbitrary or irrational zoning standards.
Additionally, if a zoning ordinance is clearly arbitrary and unreasonable, having no
substantial relation to the public health, safety, morals, or general welfare, it must
be struck down.”) (citations and internal quotation marks omitted); see generally A.
A. Profiles, 850 F.2d at 1488. Therefore, subject to specific objections, SGV may
present evidence that may demonstrate that the City’s decision to rezone the
property at issue was arbitrary.
Subject to specific objections, the City may
introduce evidence to contradict evidence that SGV may offer.
“The goal of the Fifth Amendment’s just compensation requirement is to
return the affected property owner to ‘as good position pecuniarily as he would
have occupied if his property had not been taken.’” A.A. Profiles, Inc. v. City of
Fort Lauderdale, 253 F.3d 576, 583 (11th Cir. 2001) (quoting United States v.
Miller, 317 U.S. 369, 373 (1943)). “Any inquiry into just compensation must be
The Fifth Amendment applies to the states through the Fourteenth Amendment.
controlled by principles of equity and fairness to both the property owner and the
government.” Id. (citing Bauman v. Ross, 167 U.S. 548, 570 (1897)).
“The burden at trial of establishing the amount of just compensation for a
taking is on the landowner.” United States v. An Easement & Right-of-way Over
6.09 Acres of Land, More or Less, in Madison Cty., Alabama, 140 F. Supp. 3d
1218, 1231–32 (N.D. Ala. 2015) (citing United States v. 8.41 Acres of Land, More
or Less, Situated in Orange Cty., State of Tex., 680 F.2d 388, 394 (5th Cir.1982);
United States v. Smith, 355 F.2d 807, 809 (5th Cir.1966)).
“The starting point for any inquiry into damages in a takings cases is to
query ‘[w]hat has the owner lost?’” A.A. Profiles, Inc. v. City of Fort Lauderdale,
253 F.3d 576, 583 (11th Cir. 2001) (quoting Boston Chamber of Commerce v.
Boston, 217 U.S. 189, 195 (1910)). “The district court must limit its inquiry,
however, to the value of the property as of the day of the taking”; the plaintiff’s
“precarious financial state and the later foreclosure are relevant only to the extent
that they could have affected the property’s market value.” 253 F.3d at 585.
Therefore, the City may introduce evidence concerning encumbrances on the
property at issue only for purposes of assessing the property’s market value at the
time of a taking if SGV carries its burden of proving that a taking occurred.
“[T]here are no absolute standards outside of the requirement that the
compensation paid for a taking be ‘just,’” but “courts have established some
working rules to guide the inquiry. In cases where government regulation has
permanently rendered property worthless, courts have generally adopted the
‘market value’ test, which provides that the measure of just compensation is the
market value of the property at the time of the taking.” 253 F.3d at 583. “Market
value is generally determined from what a willing buyer would pay in cash to a
willing seller.” 253 F.3d at 583 (internal marks omitted). “In determining the
reduction in the market value of the parcel, the court must consider any aspect of
the property that could have affected the amount a reasonable buyer would be
willing to pay.” Id. at 585 (citing Almota Farmers Elevator & Warehouse Co. v.
United States, 409 U.S. 470, 474 (1973)).
“A long line of precedent establishes a general rule in this circuit that ‘an
owner of property is competent to testify regarding its value.’” 140 F. Supp. 3d at
1239 (quoting Neff v. Kehoe, 708 F.2d 639, 644 (11th Cir.1983)) (collecting cases).
“The owner is generally presumed to be qualified to give such an opinion based on
‘his ownership alone.’” Id. (quoting Berkshire Mut. Ins. Co. v. Moffett, 378 F.2d
1007, 1011 (5th Cir.1967)) (collecting cases). “In fact, the Eleventh Circuit has
gone so far as to suggest that a witness’s opinion of value of his personal property
is generally admissible even if ‘self-serving and unsupported by other evidence.’”
Id. at 1239–40 (quoting Neff, 708 F.2d at 644); id. at 1239 (citing United States v.
329.73 Acres of Land, Situated in Grenada & Yalobusha Ctys., State of Miss., 666
F.2d 281, 284 (5th Cir. 1982), on reh'g, 704 F.2d 800 (5th Cir. 1983) (“[O]pinion
testimony of a landowner as to the value of his land is admissible without further
qualification. Such testimony is admitted because of the presumption of special
knowledge that arises out of ownership of the land.”). The Eleventh Circuit “has
rejected arguments contesting the admissibility of an owner’s testimony on the
value of his property on the ground that it lacks a sound basis, concluding that such
matters go only to the weight of the testimony and thus are to be challenged
through cross-examination and refuting evidence.” Id. at 1240 (citing Gregg v.
U.S. Indus., Inc., 887 F.2d 1462, 1469 (11th Cir.1989)); see Neff, 708 F.2d at 943
(holding that district court should allow property owner to provide lay opinion
about value of property where lay opinion was based on publications concerning
the property, appraisals of the property, and the property owner’s experience
regarding the property).
“Deviating from the market value test is appropriate where the property’s
market value is too difficult to determine or when applying the test would ‘result in
manifest injustice to [the] owner or public....’” 253 F.3d at 583 n. 8 (quoting
United States v. Commodities Trading Corp., 339 U.S. 121, 123 (1950)); see also
United States v. 480.00 Acres of Land, 557 F.3d 1297, 1307 (11th Cir. 2009) (“In
some cases strict adherence to market value and comparable sales will result in
manifest injustice to the owner or to the public, and courts must apply special rules
and standards to arrive at “just” compensation.”). Thus, if SGV is able to establish
a taking, and if SGV has difficulty establishing a market value calculation, then
SGV may establish an alternative measure of damages that would return SGV to as
good a position pecuniarily as SGV would have occupied if its property had not
been taken. For instance, SGV potentially could recover the cost of preparing the
property at issue for R-4 lots.
DONE and ORDERED this November 22, 2017.
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE
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