ROVER PIPELINE LLC v. ROVER TRACT NO. PA-WA-HL-001.000T et al
Filing
128
MEMORANDUM OPINION re 111 Objections to Commission's Report filed by ROVER PIPELINE LLC, and 113 Objections to Commission's Report filed by JAMES M. BUCHANAN AND DIANE ZACK BUCHANAN FARM #4 LP Signed by Judge Arthur J. Schwab on 2/21/2019. (lmt)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
ROVER PIPELINE LLC,
Plaintiff,
17cv0170
ELECTRONICALLY FILED
v.
ROVER TRACT NO. PA-WA-HL-004.500T
COMPRISED OF PERMANENT EASEMENT(S)
TOTALING 0.9 ACRES, MORE OR LESS, AND
TEMPORARY EASEMENT(S) TOTALING 1.33 ACRES,
MORE OR LESS, OVER A PARCEL OF LAND IN
HANOVER TOWNSHIP, WASHINGTON COUNTY,
PENNSYLVANIA, TOTALING 49.571 ACRES, MORE
OR LESS,
JAMES M. BUCHANAN AND DIANE ZACK
BUCHANAN FARM #4 LP
ET AL.,
Defendants.
MEMORANDUM OPINION
This condemnation case was brought by Plaintiff pursuant to the Natural Gas Act, 15
U.S.C. § 717 et seq., and 15 U.S.C. § 717f (h) and Federal Rule of Civil Procedure 71.1 (“Rule
71.1”). ECF 1. In its Complaint, Plaintiff sought an order of condemnation for a permanent
pipeline, temporary work space, surface site, permanent and temporary road access, and other
rights-of-way and easements, which would enable Plaintiff to enter, commence, and complete
clearing, construction, and restoration efforts on Defendants’ properties, while the amount of just
compensation due to Defendants for the taking was resolved. Id. Subsequent to the filing of the
Complaint, most of the named Defendants reached a settlement with Plaintiff concerning just
compensation, and thus, their claims were not adjudicated.
For those Defendants who could not reach a settlement with Plaitniff as to just
compensation, this Court appointed a three-person Commission in accordance with Rule 71.1.
Pursuant to the Court’s Order and Rule 71.1, the Commission prepared a Report (ECF 108)
containing findings of fact and conclusions of law and ultimately, arrived at the just
compensation due and owing to the remaining landowner-Defendants by the Plaintiff.
Presently before the Court in this condemnation proceeding are Plaintiff’s Objections to
the Report of the Commission (ECF 111), as well as Defendant’s Objections to the Report of the
Commission (ECF 113). The Court will overrule all of the objections and adopt the
Commission’s Report in total. In so doing, while conducting its de novo review of the
Commission’s factual findings and conclusions of law to which the Parties objected, the Court
relied heavily on the wisdom of the United States Supreme Court in United States v. Merz, 376
U.S. 192 (1964).
I. Standard of Review
In accordance with Rule 71.1, this Court appointed a three-person Commission to
determine just compensation given the character, location, and quantity of the property to be
condemned, and for other just reasons. Fed.R.Civ.P. 71.1 (h)(2)(A). Rule 71.1 empowers the
Commission to perform its duties with the authority of a master under Fed.R.Civ. P. 53(c) (“Rule
53”), and notes that Rule 53(d), (e), and (f) also applies to the Commission’s actions and its
Report. Fed.R.Civ.P. 71.1(h)(2)(D).
Rule 53 requires that the Court decide, de novo, all objections to findings of fact made or
recommended by a master (in this case the Commission), unless the parties, with the Court’s
2
approval, stipulate that: “(A) the findings will be reviewed for clear error; or (B) the findings of a
master appointed under Rule 53(a)(1)(A) or (C) will be final.” Fed.R.Civ.P. 53(f)(3). Neither
occurred in this case, so this Court must review all objections in this matter de novo, and all
objections to the Commission’s rulings on procedural matters under an abuse of discretion
standard. Fed.R.Civ.P. 53(f)(3-5).
In Merz, supra., the United States Supreme Court set forth guidelines for a Commission’s
report. Id., 376 U.S. at 198. Specifically, the Merz Court held that Commissioners “need not
make detailed findings such as judges do who try a case without a jury[,]” but the
Commissioners cannot merely issue conclusory findings. Id. The Commissioners must “reveal
the reasoning they used in deciding on a particular award, what standard they tr[ied] to follow,
which line of testimony they adopt[ed], what measure of severance damages they use[d], and so
on.” Id. The Supreme Court also noted that not “every contested issue raised on the record
before the commission must be resolved by a separate finding of fact[,]” nor “that there must be
an array of findings of subsidiary facts to demonstrate that the ultimate finding of value is
soundly and legally based.” Id. The path followed by the Commissioners in reaching the
amount of the award can, however, be distinctly marked. However, “[c]onclusory findings alone
are not enough.” Id. at 198.
The Commission in the instant case filed a comprehensive 15–page Report setting forth
the path it took in reaching its valuation conclusion, the reasoning it employed, the testimony the
Commissioners adopted, and other record evidence upon which it based its decision. ECF 108.
The Court finds that this Report more than satisfies the requirements set forth in Merz, such that
this Court may conduct a meaningful de novo review of the Commission’s factual findings and
conclusions of law.
3
II. Background
As noted above, this condemnation case was brought by Plaintiff, (“Rover”) pursuant to
the Natural Gas Act, 15 U.S.C. § 717 et seq., and more specifically, 15 U.S.C. § 717f (h), and
Federal Rule of Civil Procedure 71.1. ECF 1. In its Complaint, Rover sought an order of
condemnation for a permanent pipeline, temporary work space, surface site, permanent and
temporary road access, and other rights-of-way and easements, which would enable Rover to
enter, commence, and complete clearing, construction, and restoration efforts on each of
Defendants’ properties, while the amount of just compensation due to Defendants for the taking
was resolved. Id. Most of the named Defendants in the instant case reached just compensation
settlements with Rover prior to Rover taking any further action.
The owner of two tracts of land could not settle with Rover, prompting Rover to file a
Motion to Appoint a Commission pursuant to Rule 71.1. ECF 83. The owner of the two tracts
of land, hereinafter “the Buchanan Farm,” filed an Objection in Opposition to the Appointment
of a Commission (ECF 86), and Rover filed a Response. ECF 87. This Court granted Rover’s
Motion to Appoint a Commission. ECF 89.
In its Order granting the Motion to Appoint a Commission, the Court explained its
reasons for ruling in Rover’s favor and appointing a Commission:
Therefore, given the complex appraisal methodologies and valuation
issues involved, and so as to ensure a more just, fair, and uniform
determination of the Properties’ valuation, this Court finds that
compensation should be determined by a Commission of three individuals
who possess a background of knowledge sufficient to enable them to cope
with the expert testimony which undoubtedly will be offered in bringing
about a solution.
Moreover, if the case was tried by a jury, the burden on the time of the
Court would be excessive and Parties entitled to the just compensation
would not get justice as speedily as they would with a three-person
Commission. In short, the compensation issues presented by this case can
4
be resolved more competently, consistently, and expeditiously by a
commission of three with experience in the field of land valuation than by
various lay persons who comprise a jury.
ECF 89, p. 5-6 (footnote omitted) (emphasis added).
Subsequent to publishing its Order indicating its intent to appoint a Commission in
accordance with Rule 71.1, the Court provided counsel for the parties with the names of the three
proposed Commissioners and allowed time for the parties’ counsel to object to one or more of
the proposed Commissioners. In proffering names of potential Commissioners to the parties’
counsel, the Court considered the guidance provided by the 1985 Advisory Committee Note to
former Rule 71A (now Rule 71.1):
The amended Rule does not prescribe a qualification standard for
appointment to a commission, although it is understood that only persons
possessing background and ability to appraise real estate valuation
testimony and to award fair and just compensation on the basis thereof
would be appointed. In most situations the chairperson should be a lawyer
and all members should have some background qualifying them to weigh
proof of value in the real estate field and, when possible, in the particular
real estate market embracing the land in question.
Fed. R. Civ. P. 71(A)(h) advisory committee’s note to 1985 amendment.
Based on the foregoing, the Court appointed three individuals to serve as Commissioners
in accordance with Rule 71.1: (1) Former Pennsylvania Court of Common Pleas Judge, Thomas
T. Frampton, of Goehring, Rutter and Boehm1; (2) Andrea Geraghty, Esquire, of Meyer Unkovic
and Scott2; and (3) LuAnn Datesh, Esquire, of Sherrard German and Kelly3. ECF 89. The Court
did not receive any objections to any of the three Commissioners named above. Id.
1
As a Judge for the Mercer County Court of Common Pleas for ten years, Judge Frampton presided over hundreds
of jury trials. His alternative dispute resolution practice focuses on commercial and business disputes, medical
malpractice and other professional negligence, products liability, employment issues and personal injury. GOEHRING
RUTTER & BOEHM, https://www.grblaw.com/Attorney-Thomas-T-Frampton.
2
Ms. Geraghty Andrea Geraghty focuses her practice in real estate law. With over 30 years of experience, she has
developed her career on the accumulation of knowledge from advising clients through land acquisition,
development, construction, access and rights of way, and management of a variety of real estate endeavors. She has
5
A. Work Performed by the Commission
Shortly after the appointment, the Commission filed its first status report on March 27,
2018, with this Court. ECF 99. In this report, the Commissioners reported the work performed
by them up and the parties in preparation for a hearing and a site inspection. This interim status
report reads in relevant part as follows:
3. The Commissioners have held status conference calls with
counsel for the parties and on October 17, 2017, the Commissioners
provided a Case Management Order to counsel setting dates for the
exchange of expert reports; the exchange of rebuttal expert reports and the
deadline for the taking of expert depositions, as may be necessary.
4. The parties submitted expert valuation reports, and thereafter,
at the request of the Commissioners, submitted briefs by March 1, 2018,
on the issue of valuation.
5. A status conference was held on Thursday, March 15, 2018, at
the office of the Commission Chairman. Present for the conference were
the three Commissioners, Defendant Diane Buchanan and her attorney
Harry F. Kunselman, Esquire, and Brian J. Pulito, Esquire, counsel for
Rover Pipeline, LLC. Lawrence E. Bolind, Jr., Esquire, counsel and
Trustee for Defendant Old Wilson Farm Land Trust, did not appear at said
conference despite having been properly notified of same.
6. At the conference the Commissioners and counsel arrived at
hearing dates and deadlines for pre-hearing actions and submissions as
follows:
a. By March 30, 2018, counsel will identify and advise opposing
counsel of any depositions that he desire to take in advance of the
hearing and all discovery will be completed by May 9, 2018.
b. On or before May 16th at 5:00 p.m., counsel will email and deliver
a paper version to the Commissioners and exchange with each other significant litigation experience in diverse real estate-related matters such as eminent domain, property tax
assessment appeals, title and boundary disputes, real estate broker’s commissions, and leasing. MEYER UNKOVIC
SCOTT, https://muslaw.com/member/andrea-geraghty/.
Ms. Datesh is a Shareholder and Director of the firm and a member of her law firm’s Corporate, Real Estate,
Energy and Natural Resources, and Financial Services Groups with a 30+-year legal career. Ms. Datesh has worked
at law firms and has held a number of executive positions and in-house counsel roles. She has worked on hundreds
of energy-related mergers, acquisitions, dispositions, joint ventures, and surface use and midstream transactions
totaling in excess of $11B. SHERRARD GERMAN & KELLY P.C., https://sgkpc.com/attorneys/luann-datesh/.
3
6
any Motions in Limine; Pre-hearing statements which should include
the names of the witnesses to be called at the hearing; Pre-hearing
memoranda to include but not be limited to addressing the issue of
whether state or federal law applies to the determination of damages in
this matter and outline the differences (if any) in damage calculations
under each and whether the Commissioners are bound by the damage
numbers submitted by the expert appraisers in determining the
damage award or can they award a damage amount that they believe
is appropriate based on the evidence; and a binder with numbered
exhibits to be submitted at the hearing. The parties’ memoranda do
not need to repeat law previously presented in briefs to the
Commissioners. Also[,] on or before said date counsel will submit one
Viewers Plan for the combined Buchanan properties and one for the
Old Wilson Farm Land Trust property.
c. On May 22, 2018, at 9:30 a.m. the Commissioners and counsel
will conduct a view of the Buchanan property which is the subject of
this action. Counsel will advise the Commissioners of an appropriate
meeting location and counsel for Rover will arrange for transportation.
After the view at a location to be determined, the Commissioners will
entertain argument from counsel on any Motion in Limine or other
pre-hearing matter that needs to be addressed.
d. On May 23, 2018, at 9:30 a.m. the hearing in this matter will be
conducted at the offices of Goehring Rutter & Boehm, 437 Grant
Street, 14th Floor, Pittsburgh, PA 15219.
e. All dates and requirements set forth herein apply to the case
involving Old Wilson Farm Land Trust, Lawrence E. Bolind, Jr.,
Trustee.
ECF 99.
On August 1, 2018, the Commission filed its Second Status Report on the docket. ECF
101. In this Report, the Commissioners noted ,in pertinent part, as follows:
4. A status conference was held at the office of the Commission
Chairman on March 15, 2018. The conference was attended by the three
Commissioners and counsel for the parties with the exception of Lawrence
E. Bolind, Jr., Esquire; counsel and Trustee for Defendant Old Wilson
Farm Land Trust, despite having been properly notified of same.
5. At said status conference, among other items, May 22 and 23,
2018, were set as the hearing dates in this matter, and were included in the
Interim Status Report filed on March 27, 2018.
7
6. The hearing, including a view of the Buchanan property,
occurred as indicated in the previously filed Interim Status Report.
7. The hearing testimony was transcribed by a certified court
reporter.
8. As to the Buchanan Defendants, counsel for the parties are in
the process of preparing proposed findings of fact and written closing
statements after the receipt of which the Commissioners will prepare and
file with the Court its opinion and recommended decision.
9. Lawrence E. Bolind, Jr., Esquire, counsel and Trustee for
Defendant Old Wilson Farm Land Trust, despite having received notice of
the hearing dates, did not appear at said hearing, nor did anyone else on
behalf of Old Wilson Farm Land Trust.
10. At the conclusion of the hearing on May 23, 2018, Old Wilson
Farm Land Trust, not having appeared or having presented any evidence
despite having the burden of proof, Rover Pipeline LLC moved that a
nonsuit be entered against Old Wilson Farm Land Trust and that damages
for the taking be set in the amount of $5,564.00 as established in the
appraisal of Rover’s expert, James A. Herbig, SRA. Rover Pipeline LLC
also requested that no current damages be awarded as $125,000.00 was
previously paid to Old Wilson Farm Land Trust in conjunction with the
condemnation and obtaining Permission for Immediate Access for said
property.
11. The Commissioners would recommend that the Court enter an
Order consistent with Paragraph 10 above and attach a Proposed Order.
ECF 101.
The Court did enter such an Order on August 2, 2018, and entered a nonsuit in favor of
Plaintiff. ECF 103. On October 2, 2018, a Motion to Enforce Order of August 3, 2018 (ECF
104) was filed, and the Court issued a Rule to Show Cause ordering that the Buchanan Farm file
a statement of reasons as to why it and/or its counsel should not be adjudged in civil contempt
for failing to comply with this Court’s August 3, 2018 Order. ECF 105. On October 12, 2018,
counsel for the Buchanan Farm filed a Response to the Rule (ECF 106), and as a result, the Court
8
dissolved the Rule on October 17, 2018. Thereafter, the Commission resumed its work with the
parties to determine just compensation.
B. The Commission’s Final Report (ECF 108)
On November 15, 2018, the Commission filed its Final Report on the docket. This
Report notes that the Property owned by the Buchanan Farm, and at issue in this case, consists of
two tracts of land of approximately 49.571 and 73.874 acres (the “Subject Tracts”) for a total of
123.445 acres. ECF 108, p. 2. The Commissioners’ Report further notes that the Commissioners
had viewed not only the Subject Tracts on May 21, 2018, but also, “the development of the
surrounding areas, and the character, location[,] and potential of the Subject Tracts were all
factors relevant to the disposition of this matter.” Id. Based in part on their observations, as well
as testimony and other evidence presented by the parties, the Commissioners further noted that,
“[b]oth Subject Tracts are presently unimproved, mostly woodland, generally rolling with some
sloping in certain portions of the Property, and in the ‘Clean and Green’ program.” Id.
The Commission also held a hearing on May 21, 2018 and May 22, 2019, and all
testimony was recorded and transcribed, thereby enabling this Court to review same. ECF 116.
In addition to the site inspection, in their Final Report the Commissioners reference their review
of the videotaped depositions of James Herbig, Rover’s expert, and Anthony Barna, the
Buchanan Farm’s expert. The Commission also heard testimony from Rover’s witness, Richard
Huriaux, and Rover’s representatives, Messrs. Chris Lason and Mathew Florian. Testifying on
behalf of the Buchanan Farm were Ms. Diane Buchanan and Mr. James Buchanan.
Based on their own observations as well as the testimony and other evidence from the
hearing, the Commissioners found the following as facts relevant to their analysis:
9
Finding No. 1: Pre-Take Highest and Best Use.
The parties disagree as to the highest and best use of the Property
before the taking. Buchanan Farm assembled that the highest and best use
before the taking was for a 157-lot subdivision (Hr’g Tr. 270), whereas
Mr. Herbig, Rover’s appraiser, testified that a presumption exists that the
current use, rural residential, is the highest and best use of the Property.
(Hr’g Tr. 29).
The proposed high-density subdivision plan presented during the
testimony of Mr. Barna, Ms. Buchanan, and Mr. Buchanan was not
created until June 2017, a few months after Rover’s taking of the
Easements, and about two years after Buchanan Farm first learned of the
proposed Rover project. (Hr’g Tr. 159-160; Defs.’ Ex. 24). The
subdivision plan was never approved or even submitted to the appropriate
authorities for any kind of vetting or approval, nor was any evidence
submitted as to the probability that the plan would be approved. (Hr’g
Tr. 161-162, 332). Moreover, Buchanan Farm and Mr. Barna admitted
that, aside from a letter to inquire about sewage plant capacity and
drawing the 157-lot plan, no engineering, geotechnical, wetland, or any
other studies have ever been conducted, nor has there been any surveying
or staking of the proposed lots or other acts taken in furtherance of a
residential subdivision. (Hr’g Tr. 161-163, 332, 335). In the twenty-two
years that Buchanan Farm owned the Property, it had never been marketed
for sale as a location for subdivided residential units that would meet the
requirements of the high-density subdivision plan. (Hr’g Tr. 164-165).
*
*
*
. . . Here, Buchanan Farm has not taken any significantly “meaningful
steps” for the development of the high-density subdivision.
Moreover, Buchanan Farm has not proven that a market demand
existed as of the date of the taking for the proposed 157-lot subdivision.
Although Mr. Barna testified at length about the “economic drivers” in
the area, the objective data shows a population decline trend for a number
of years, and only a slight forecast for an increase in the future. (Herbig
Dep. 78). One of the “economic drivers” that Mr. Barna pointed to was
Starpointe Business Park. That Business Park, however, has been in place
since at least the end of 1990. (Barna Dep. 61, Jun. 22, 2018). There
was no evidence of an increase in home sales during the period when
Starpointe Park was in the vicinity of the Property. Id. at 64.
Similarly, there was no objective evidence that the market would
support the 157-lot proposed subdivision based on its affordability. Mr.
Barna projected an average lot price of $85,000, but the evidence offered
10
on behalf of the Buchanan Farm was not sufficient to show comparable
subdivision residential sales from which to justify an $85,000 lot price.
Based on Mr. Barna’s estimated lot price of $85,000, Mr. Herbig
calculated that home prices would need to be in the $275,000 to $475,000
price range. Home pricing within a 5-mile radius of the Property is about
$125,000. (Herbig Dep. 82). The median income of approximately
$55,000 in the area surrounding the Subject Tracts (Herbig Dep. 82) does
not support the projected $85,000 lot sales price.
However, evidence was offered that persuaded the Commission of
the desirability of the area for less dense residential and recreational uses.
In this regard, Mrs. Buchanan explained that the conservation areas, parks,
golf courses and other recreational amenities make the Property
particularly attractive to potential buyers who are looking for space
without high tax burdens and proximity to work. (Hr’g Tr. 210-212).
Similarly, nearby game lands and state parks (Hr’g Tr. 88-91), shopping
and entertainment venues (Hr’g Tr. 96) employment opportunities and
easy access to highways and the Greater Pittsburgh Airport also enhance
the desirability and value of the Property. (Hr’g Tr. 95-96).
While there was insufficient evidence to conclude that the
Property’s highest and best use before the taking was for a high-density
residential subdivision, the evidence supports the use of the Property for a
less dense multi-family residential use. Accordingly, the Commission
unanimously determines that the pre-taking highest and best use of the
Property is rural recreational and residential uses, which includes a less
dense multi-family residential and recreational use.
Having determined the highest and best use, the Commission
reviewed the offered evidence on value. Mr. Herbig offered pre-taking
comparables in a range between $2,500 to $4,800 per acre (Herbig Dep.
39) based on a highest and best use of rural residential and the
undeveloped state of the Property. However, the Commissioners find that
the adjustments made for these comparables did not fairly take into
consideration the distance of the comparables from the Property, the size
of the comparable properties, and the access to highways and other
economic drivers. On the other hand, the appraisal performed by Mr.
Barna provided pre-taking comparables in a range between $6,300 to
$18,600 per acre (Hr’g Tr. 288-289) based on a highest and best use of
high-density residential subdivision. Mr. Herbig separately appraised the
two Buchanan tracts and concluded that the before-taking value of the
49.571-acre tract was $3,600 per acre, and the before taking value of the
73.784-acre tract was $3,400 per acre, for total tract values of $178,460
and $251,170, respectively, for a total before-taking value of $429,630.
(Hr’g Tr. 33-37). Mr. Barna’s before-taking value was $1.1 million. (Hr’g
Tr. 289).
11
In light of the appraisals and testimony, the Commissioners find
that the values offered by Mr. Herbig are understated and those provided
by Mr. Barna are overstated. After considering all comparables offered
by the expert appraisers, the testimony offered at hearing and considering
the location, the surrounding uses, amenities and development, the access,
parcel size, economic drivers, the topography, the recency of the sales and
prices, and other factors that would be given substantial weight in the
acquisition of land, the Commissioners conclude that the value per acre of
the Property at the time of taking is $6,400 per acre.
Finding No. 2: Post-Take Highest and Best Use.
There was conflicting testimony as to use of the Property
subsequent to the taking. Mr. and Ms. Buchanan and Mr. Barna all
testified that they believed that the existence of the Rover Pipeline made
the Property no longer developable as a residential subdivision. (Hr’g Tr.
244). Mr. Barna opined, based on a conversation with one unidentified
developer and such developer’s alleged subjective beliefs, that because of
the presence of a pipeline on the property, no developer would invest in
the property. (Hr’g Tr. 304, 310). Mr. Herbig disagreed, and Rover
argued that the pipeline had no such impact on the development of the
Property. (Herbig Dep. 51-52).
Buchanan Farm further attributed the alleged undevelopability of
the Property to the restrictions on its possible uses of the pipeline right-ofway. Based on communications with Rover’s representatives, Buchanan
Farm understood that it would not be able to bring electric lines, sewer, or
other utilities, or build roadways across the Permanent Pipeline Easement,
and that this would effectively isolate the northern part of the Property.
Rover claimed that the language of the Complaint does not impose
material restrictions on the uses of the Property.
*
*
*
. . . The limitations imposed upon the servient tenement, Buchanan Farms,
by the dominant tenement, Rover, are far more extensive than those
typically found in a generic easement. These limitations may be
necessary and appropriate for high pressure gas line installation and
maintenance; however these limitations do have a significant negative
impact on the post-taking value of the Buchanan Farms property.
Specifically, the provisions of paragraph 37 of the Complaint demonstrate
that Buchanan Farm’s ability to construct roads and utilities across the
easement is not unfettered, and, in fact, is restricted in multiple ways
and subject to factors and decision-making discretion of Rover and others:
12
Defendants (i) may use lands lying within the Permanent
Pipeline Easements and Permanent Road Access Easements
for all purposes which do not destroy or interfere with
Rover’s permitted uses of same, including, without
limitation, agricultural, open space, setback, density, street,
utility, and roadway purposes; (ii) after review and
approval by Rover which will not be unreasonably
withheld, may construct and install any and all streets and
roadways, at any angle of not less than forty-five degrees
(45°) to Rover’s Facilities, across the Permanent Pipeline
Easements which do not interfere with, damage, destroy
or alter the operation of the Facilities; (iii) may construct
and/or install water, sewer, gas, electric, cable TV,
telephone or other utility lines across the Permanent
Pipeline Easements at any angle of not less
than forty-five degrees (45°) to Rover’s Facilities, across
the Permanent Pipeline Easements which do not
interfere with, damage, destroy or alter the operation of
the Facilities, and provided that all of Rover’s required
and applicable spacings, including depth separation
limits and other protective requirements are met; and
(iv) may construct and/or install water, sewer, gas, electric,
cable TV, telephone or other utility lines across the
Permanent Road Access Easements so long such
construction, installation, and maintenance of same does
not unreasonably interfere with Rover’s use of same, or
damage or destroy the roads located within such
easements.
(Pl.’s Comp1. ¶ 37) (emphasis added).
Moreover, in many cases, a condition precedent to the exercise of
the limited rights retained by Buchanan Farm is the prior approval of
Rover. In certain situations, whether to grant approval is in the sole
judgment of Rover. (See, e.g., Pl.’s Compl. ,¶¶ 39, 40).
According to Rover’s expert Huriaux, if houses were built as
contemplated by Buchanan Farm, the Property would be within a Class 3
High Impact Area, which would trigger higher requirements on Rover’s
part, “such as thicker walled pipe and so on.” (Hr’g Tr. 464). This might
require Rover to change operation or construction of the pipeline and other
facilities (Hr’g Tr. 465), most likely at great expense, making it unlikely
that Rover would give its unilateral consent to roads or utilities crossings,
particularly without requiring that Buchanan Farm pay for the costs that
would be incurred.
13
Hence, the Commission unanimously determines that the highest
and best use after the taking is for long-standing existing rural recreational
and residential uses. The Commission finds that while the Property is not
rendered undevelopable, the various restrictions on the landowner’s right
and on the ability to construct roads and utilities across the easement
interfere with what would otherwise be Buchanan Farm’s unfettered
ability to use, enjoy and develop the Property and that such restrictions
have an adverse effect on the value and desirability of the Property to a
knowledgeable and prudent purchaser. The Commission further concludes
that the mere presence and location of a pipeline creates uncertainties and
would impact development of the Property and cause a diminution in
value of the residue.
Having determined the post-taking highest and best use, the
Commission considered the evidence offered by the parties on the
question of value. Mr. Herbig offered post-taking comparables in the
same range as his pre-taking comparables of $2,500 to $4,800 based on a
highest and best use of rural residential: resulting in a per acre post-taking
value of $3,400 to $3,600 per acre. (Herbig Dep. 39-44). Mr. Barna
generally agreed and provided post-taking comparables in a range between
$3,000 to $4,000 (Hr’g Tr. 312-313) based on a highest and best use of
agricultural, conservation, recreational or single-family residence. Id.
Thus, the comparables applicable to post-taking value ranged between
$2,500 and $4,800.
In light of the limitations on the use of the Property, and after
considering the uncertainty of development opportunities due to the
approval rights of the dominant tenement, the restrictions necessitated by
the nature of the high-pressure interstate natural gas transmission pipeline,
and considering its location, high pressure, size, and future access and
maintenance requirements, the Commissioners find that the foregoing
have a material adverse effect on desirability, use and value, resulting in a
post-taking value of $3,400 per acre.
ECF 108, p. 6-13.
Based on these factual findings, the Commission drew the following conclusions:
1. The conclusions of the Commission in this case were, in all relevant
respects, unanimous.
2. The parties agreed and the Commission therefore finds that the date of
the taking was February 24, 2017.
3. The Commission finds that the pre-taking highest and best use of the
Property is for rural recreational and residential uses.
14
4. The Commission finds the fair market value of the Property, as a
whole, immediately prior to the taking to be $790,048.00. [$6,400 x
123.445 acres]
5. The Commission finds that the post-taking highest and best use of the
Property is for rural recreational and residential uses.
6. The Commission finds the fair market value of the Property after the
taking of the Permanent Pipeline Easement to be $419,713.00 [$3,400 x
123.445 acres]. The Property and such use after taking is impacted and
devalued by the limitations imposed upon the servient tenement.
7. The Commission finds the just compensation for the condemnation of
the Permanent Pipeline Easement, as of the date of taking of February 24,
2017, to be $370,335.00.
8. The Commission finds the just compensation for condemnation of the
Temporary Work Space Easement to be to be $4,224.00 which is
determined by taking the $6,400 per acre amount the Commission
determined to be the before-taking value of the land, and then multiplying
this figure by 10% and then by the 3.3, the Temporary Work Space
Easement acreage, and then by 2 (the number of years the land is subject
to the Temporary Work Space Easement).
9. The Commission therefore finds the total just compensation for the
condemnation of the Easements, as of the date of taking of February 24,
2017, to be $374,559.00 comprised of: (a) $370.335.00 for the Permanent
Pipeline Easement which consists of the difference between the value of
the Property, as a whole, before the taking and the value of the Property
after the taking, and (b) $4,224.00 for the Temporary Work Space
Easement.
10. Rover has made a payment of $65,628.00 to Buchanan Farm for the
Permission for Immediate Access dated February 23, 2017. Accordingly,
the Commission finds that Rover owes Buchanan Farm the remaining
balance of the just compensation award, which remaining balance is
$308,931.00.
11. The Commission finds no law to support an award of attorney’s fees or
other professional fees or costs as part of just compensation. Moreover,
no evidence was offered to support an award of attorney’s fees or other
professional fees or costs.
ECF 108, p. 13-15 (emphasis in original).
15
III. Analysis
Following the Commission’s filing of its Report, Rover filed a set of Objections to same.
ECF 111. Similarly, the Buchanan Farm filed Objections to the Commission’s Report. ECF 113.
The Court will discuss the parties’ Objections, seriatim, below.
A. Rover’s Objections
Rover raised three objections arguing that: (1) the Commission improperly considered
“stigma” or “fear” evidence in arriving at its determination of post-taking value; (2) the
Commission’s conclusions regarding restrictions on the Buchanan Farm’s use of its Property
were purely speculative and contrary to the express language of the Complaint and the objective
evidence; and (3) the Commission’s determination of the pre-taking highest and best use, as
including a less dense multi-family residential and recreational use, was unsupported by any
evidence and improperly inflates the pre-taking valuation. ECF 111 p. 3.
In condemnation actions such as this one, brought in accordance with the Natural Gas
Act, the landowner has the burden of proving just compensation owed for the condemned
property. United States v. 33.92356 Acres of Land, 585 F.3d 1, 7 (1st Cir. 2009); United States
v. 68.94 Acres of Land, 918 F.2d 389, 392 (3d Cir. 1990). Just compensation is measured by
“the fair market value of the property on the date it is appropriated.” Kirby Forest Indus., Inc. v.
United States, 467 U.S. 1, 9-10, 104 S.Ct. 2187, 81 L.Ed.2d 1 (1984) (citations and internal
quotation marks omitted). Fair market value is determined by considering the property’s
“highest and best use,” which means that the landowners whose property is condemned must
“receive the value of the highest and best use for which the property is adaptable in the
reasonably near future from the vantage point of the date of the taking.” 68.94 Acres, 918 F.2d
at 393 (citing Olson v. United States, 292 U.S. 246, 255, 54 S.Ct. 704, 78 L.Ed. 1236 (1934)).
16
The “guiding principle” of just compensation is that the property owner “must be made whole
but is not entitled to more.” United States v. 6.45 Acres of Land, 409 F.3d 139, 145 n.11 (3d Cir.
2005). See also, Columbia Gas Transmission, LLC v. An Easement To Construct Operate &
Maintain a 20 Inch Gas Transmission Pipeline Across Properties in Washington Cty.,
Pennsylvania By Quarture, 745 F. App’x 446, 449-50 (3d Cir. 2018). A landowner may
establish just compensation through expert testimony as to the property’s value before and after
the taking, but “mere speculative uses of the property should not be entertained by the
factfinder.” 68.94 Acres, 918 F.2d at 393.
1. “Stigma” or “Fear” Evidence
Rover’s first objection to the Report argues that the Commission improperly considered
“stigma” or “fear” evidence to arrive at the post-taking land value. In making this first argument,
Rover relies upon two unreported decisions, one rendered by the United States District Court for
the Southern District of Indiana, and the other decided by the United States District Court for the
Southern District of Ohio. Rover cited these cases for the proposition that the Commission in
this case improperly considered “stigma” or “fear” evidence when it determined the post-taking
value of the Buchanan Farm. See ECF 111, p. 7-8, citing to Rockies Express Pipeline LLC v.
Hopkins, No. 1:08-cv-00751-RLY-DML, 2012 U.S. Dist. LEXIS 65122 (S.D. Ind. May 9, 2012)
and Rockies Express Pipeline, LLC v. 4.895 Acres of Land, No. 2:-8-cv-554, 2011 U.S. Dist.
LEXIS 27568 (S.D. Ohio Mar. 16, 2011). Specifically, Rover claims that these cases stand for
the proposition that a fact-finder in a Natural Gas Act just compensation case cannot consider the
fear people may have and/or the stigma which follows condemnation of real property because of
the existence of a pipeline on that property. Rover suggests that the above-cited cases label such
evidence as speculative and, therefore, inadmissible.
17
Despite the fact that neither of these decisions are binding on this Court, the Court
reviewed the cases, but is not entirely persuaded by them. Rather, the Court’s own research led
the Court to a more recent decision, one rendered by Judge Matthew Brann, a District Judge in
the United States District Court for the Middle District of Pennsylvania, who held as follows:
Plaintiff further anticipates that the Defendants will attempt to offer
evidence at trial regarding the purported dangers that natural gas pipelines
present in an attempt to establish a diminution in value of their respective
properties. Because it alleges that Defendants’ expert opinion fails to
establish the requisite nexus between property values and the alleged
stigma pipelines create, it suggests that such testimony be excluded.
The Court has reviewed the pertinent portions of Mr. Mignogna’s
deposition testimony and agrees that the nexus between generalized fears
or stigma damages and Mr. Mignogna’s valuation is unclear and
sometimes minimized by Mignogna’s own observations. Nevertheless, as
stated earlier, the task of evaluating the bases for Mr. Mignogna’s
valuation rests solely with the jury, his analysis having cleared the
threshold Daubert analysis.
Thus, counsel for Columbia Gas is free to cross-examine Mr. Mignogna
on the extent to which stigma damages truly bear in any objective manner
on the calculations contained within his report.
Columbia Gas Transmission, LLC v. 101 Acres & 41,342 SQ. Ft. More or Less in Heidelberg
Twp., York Cty., Pennsylvania, No. 4:13-CV-00783, 2016 WL 6248071, at *6 (M.D. Pa. Oct. 26,
2016).
This Court concurs with the overall principle set forth in Columbia Gas. Specifically,
that evaluating the bases for an expert’s valuation (once the person is qualified as an expert) lies
with the factfinder – in this case the Commission, and now, this Court.
As applied to the instant matter, the Commission had an opportunity to weigh the
testimony of the Buchanan Farm’s expert, Anthony Barna, a professional appraiser with the firm
of Kelly Reilly Nell Barna Associates, after Rover had ample opportunity to cross-examine him.
It is true that Mr. Barna, as well as Mr. and Mrs. Buchanan, testified that existence of the
18
pipeline made the property undesirable and unable to be developed to the fullest extent of its
potential. It is clear from the Report that the Commission took note of this testimony and even
commented that Mr. Barna alluded to the diminution of value of the Property because of the
pipeline’s mere existence. However, it is equally clear that the Commission did not ascribe
much, if any weight to this sort of “stigma” or “fear” testimony. In fact, the Report largely
discredited this portion of Mr. Barna’s testimony, noting that Mr. Barna based his testimony that
the land was not developable as a residential subdivision based upon a conversation “with one
unidentified developer and such developer’s subjective beliefs . . .” concerning the existence of a
pipeline on the Property. ECF 108.
Accordingly, the Commission did rejected the portion of Mr. Barna’s testimony which
was based upon the “one unidentified developer,” who seemed to have an opinion that the
pipeline diminished the value of the Property, and neither does this Court. Although Rover
labels this portion of Mr. Barna’s testimony (referenced in the Commission’s Report) “stigma”
or “fear” evidence, this Court chooses to disregard the evidence because there is little to no
scientific basis for Mr. Barna’s conclusion that the Buchanan Farm at issue is now
“undevelopable.”
However, as the Commission’s Report notes, and as this Court also finds, the Buchanan
Farm faces significant impediments to its development as a residential subdivision because of the
many conditions precedent which must be met in order for Buchanan Farm, or any future
developer, to exercise their limited rights retained after Rover’s taking of Property. The Court
concurs with the Commission’s finding that the “limitations imposed upon the servient tenement,
Buchanan Farms, by the dominant tenement, Rover, are far more extensive than those typically
found in a generic easement.” ECF 108. In addition, the Court also concurs with the portion of
19
the Commission’s report which noted, “if houses were built [on the Property] as contemplated by
Buchanan Farm, the Property would be within a Class 3 High Impact Area, which would trigger
higher requirements on Rover’s part, such as thicker walled pipe and so on.” Id. The likelihood
of Rover approving such a use would require Rover to change its operation or construction of the
pipeline at great expense, then Rover would most likely not give its consent to such land use.
None of these findings turn on any “stigma” associated with the pipeline, or “fear” of the
existence of a gas pipeline on the Property as Rover suggests. These findings are based on the
conditions precedent which are extensive and exist in the easement allowing Rover to limit the
use considerably. These are solid bases upon which this Court (and Commission) forms its
opinion as to the post-taking land value.
Moreover, despite arguing that the Commission improperly relied upon “stigma” and
“fear” evidence, Rover admits that “the Commission did not explicitly state [that it had]
considered ‘stigma’ or ‘fear’ in arriving at its post-taking value.” ECF 111, p. 6. Rather, Rover
predicates its Objection relating to “stigma” and “fear” evidence on its belief that the
Commission did so.
This Court disagrees with Rover that “stigma” and “fear” evidence were used by the
Commission in determining the post-taking value of the Property. To the contrary, the Court
finds that even though the Commission noted that Mr. Barna alluded to the opinion of “one
unnamed developer,” the Commission quickly discredited this portion of Mr. Barna’s testimony
in their Report. Instead, the Commission relied upon sound factors such as the onerous and
extensive conditions precedent placed on the easements which afford Rover great power to
prevent the Buchanan Farm from using the land as a residential subdivision. Accordingly, this
20
Court concurs that the evidence supports the Commission’s finding on post-taking value, and
reiterates that which the Commission stated at the end of the factual finding number 2:
In light of the limitations on the use of the Property, and after considering
the uncertainty of development opportunities due to the approval rights of
the dominant tenement, the restrictions necessitated by the nature of the
high-pressure interstate natural gas transmission pipeline, and considering
its location, high pressure, size, and future access and maintenance
requirements, the Commissioners find that the foregoing have a material
adverse effect on desirability, use and value, resulting in a post-taking
value of $3,400 per acre.
ECF 108. Accordingly, after conducting a de novo review, Rover’s first Objection is overruled
and Court adopts the Commission’s factual finding number 2 in its entirety.
2. Conclusions Regarding Farm Use
Rover’s second objection concerns the Commission’s conclusions whereby the
Commission found that there would be restrictions on the use of the Property. Specifically,
Rover challenges these conclusions as “speculative” and claims that these conclusions are, in
some instances, predicated on “unfounded assumption[s].” ECF 111. Moreover, Rover argues
that the Commission’s conclusions are contrary to the express language of the Complaint, noting
that case law suggests that the express language of the Complaint defines the rights that Rover
condemns. Id. The Court finds that Rover’s recitation of the law is correct, albeit somewhat
incomplete.
In Columbia Gas Transmission, supra, Judge Brann noted:
Federal Rule 71.1 dictates that the complaint in condemnation “contain a
short and plain statement of . . . the interests to be acquired.” As the
Supreme Court has stated, that rule “requires the filing in federal district
court of a ‘complaint in condemnation,’ identifying the property and the
interest therein that the United States wishes to take.” I therefore agree
with Defendants’ argument that “[w]hat controls is the acquired rights, not
intent.” Of course, Plaintiff remains free to advance factual arguments
relating to the burden on the land caused by the condemnation, such as
21
whether the right-of-way agreements preclude the use of Defendants’ farm
machinery.
2016 WL 6248071, at *10 (footnotes and citations omitted).
This Court, again, concurs with outcome of Columbia Gas with respect to this issue, as
well as the application of the law announced above to facts that arise during condemnation
proceedings. Simply put, while the Complaint in this case “outlines” the rights to be acquired by
Rover, the Buchanan Farm was free to advance argument relating to the burdens caused – either
directly or indirectly – by the condemnation proceedings. If the Commission considered any or
all of the Buchanan Farm’s arguments advanced by it and/or its expert, which described the
burdens directly or indirectly caused by the condemnation of the land, this consideration does not
automatically render the Commissions findings “speculative” or “unfounded.”
The Court’s review of the Complaint filed in this case identifies numerous rights which
Rover sought to acquire. A sample of a few of those rights is set forth herein4:
38. . . . Defendants must notify Rover in writing before the construction or
installation of any streets, roadways, utilities or other encroachments on
the Permanent Pipeline Easements and/or the Permanent Road Access
Easements.
39. Defendants may not use any part of the Permanent Pipeline Easements
and/or the Permanent Road Access Easements if such use may damage,
destroy, injure, and/or interfere with the Rover’s use of same . . . .
Defendants . . . are not permitted to conduct any of the following activities
on the Permanent Pipeline Easements and/or the Permanent Road Access
Easements without the prior written permission from Rover: (i) construct
any temporary or permanent building or site improvements, other than
streets and roads as provided above; (ii) drill or operate any well; (iii)
remove soil or change the grade or slope; (iv) impound surface water; or
(v) plant trees or landscaping. Notwithstanding anything herein to the
contrary, no above or below ground obstruction that may destroy or
materially interfere with Rover’s permitted uses shall be placed, erected,
installed or permitted within or upon the Permanent Pipeline Easements
4
As noted by the Commission, there are 19 paragraphs in the Complaint prepared by Rover which specify
all of the restrictions placed on the Buchanan Farm Property. Thus, the portions of the three paragraphs
from the Complaint (above) are just a sample of the total restrictions placed on the Property by Rover.
22
and/or the Permanent Road Access Easements without the prior written
permission of Rover. In the event the terms of this paragraph are violated,
Rover shall have the immediate right to correct or eliminate such violation
at the sole expense of Defendants.
40. Rover has the right from time to time on the Permanent Pipeline
Easements, Surface Site Easements, and/or the Permanent Road Access
Easements to trim, cut down or eliminate trees or shrubbery . . . the right
to remove or prevent the construction of any and all buildings, structures,
reservoirs or other obstructions on the Permanent Pipeline Easements
and/or the Permanent Road Access Easements that, in the sole judgment of
Rover, may endanger or interfere with the efficiency, safety or convenient
operation of the Facilities.
ECF 1.
The objective evidence of record includes the inspection performed by the
Commissioners themselves as well accepting testimony from the parties’ representatives and the
parties’ experts. This evidence, upon this Court’s review of same, supports the conclusions the
Commission drew relating to the extremely restrictive nature of the easements acquired by
Rover.
For example, the Buchanans were initially informed by Rover that the pipeline was to go
across the northeast corner of the larger of the two parcels which comprise the Buchanan Farm
Property; however, the pipeline’s location had to be moved because of a cemetery. ECF 116-1,
p. 108-109. As a result, the pipeline (along with all of its temporary and permanent restrictions)
had to be moved to a more central location within the Property, according to Mr. Buchanan. Id.,
p. 109. Mr. Buchanan further testified that he was told by a Rover representative that no roads
could be built over Rover’s permanent pipeline easement. Id. at 111.
The two-day transcript is replete with examples such the one above. ECF 116-1 and ECF
116-2. The pipeline easement and restrictions associated therewith essentially isolated a large
swath of the northern portion of the Buchanan Farm Property because no roads, electric lines,
23
sewer lines or other utilities could cross the pipeline easement. Id. Moreover, the record is clear
that the Buchanans purchased the Buchanan Farm Property as an investment, and this R-1 zoned
Property allowed for the development of single-family dwelling(s) on the Buchanan Farm
Property. Thus, because of the final location of the pipeline easement, no such development can
occur in the northern portion of the Property. Accordingly, this Court concurs with the
Commissioners’ conclusion that the Property’s highest and best use of the Property (pre-taking
and post-taking) was for rural and recreational use – which by definition, includes multi-family
residential and recreational use .
That said, the Court also agrees with the Commissioners’ finding that although the
Property was not rendered completely undevelopable by the pipeline easement, “the various
restrictions on the Buchanans’ right[s] and on the ability to construct roads and utilities across
the easement interfere with what would otherwise be Buchanan Farm’s unfettered ability to use,
enjoy and develop the Property and that such restrictions have an adverse effect on the value and
desirability of the Property to a knowledgeable and prudent purchaser.” ECF 108, p. 12-13.
Finally, the Court further concurs with the Commission’s finding that the “presence and
location of a pipeline creates uncertainties” which “would impact development of the Property
and cause a diminution in value of the residue.” Id., p. 13. Importantly, as noted in the
Commission’s report, Rover’s expert testified that the pipeline easement would create no impact
on the development of the Property, yet Rover’s Complaint clearly asserts that the Buchanan
Farm (their developer, or any future developer) would not be permitted to construct temporary or
permanent buildings, grade soil, plant trees, landscape, etc., “without the prior written permission
from Rover.” ECF 1, ¶ 39. This Court finds that the requirement of “prior written permission,”
from Rover to perform any work that a developer would need to perform in order to develop the
24
Buchanan Farm Property for any purpose, absolutely “create[d] uncertainties” as found by the
Commission. If Buchanan Farm was uncertain whether Rover would grant permission to
develop its own land within the vicinity of the pipeline, this uncertainty has the effect of
diminishing the Property’s value.
Accordingly, Rover’s second objection is overruled and this Court adopts the second
factual finding of the Commission and its conclusions of law relating to same in their entirety.
3. Conclusions Regarding Pre-Taking Highest and Best Use
Rover’s final objection concerns the Commission’s determination that the pre-taking
highest and best use of the Property included a “less dense multi family residential and
recreational use.” ECF 111, p. 25-29. More specifically, Rover complains that given the dollar
values ultimately used by the Commission to determine the pre-taking value of the Property, it
“appear[ed]” to Rover that the Commission was attempting to improperly “split the baby” based
on speculative evidence and a use for which neither party had advocated.
In this case, the Commissioners as fact-finders weighed two conflicting expert reports
and various expert opinions. Rover’s expert saw the Buchanan Farm Property’s current use
(rural residential) as the highest and best pre-taking use of the Property. The Buchanans’ expert
testified that the highest and best use of the Property was for high density (a 157-lot) subdivision.
The Commission disagreed with both experts as to the highest and best use of the Property, pretaking – specifically finding that Rover’s expert understated the value, while the Buchanan
Farm’s expert overstated the value. Moreover, the Commission completely discounted the
opinion of the Buchanans’ expert’s opinion that a subdivided 157-lot was the highest and best
use of the Property before the taking, finding this opinion to be speculative.
25
However, the Commission found Mrs. Buchanan’s testimony compelling when she
testified that the Property was desirable for some less dense residential and recreational uses. As
the Commission noted, “In this regard, Mrs. Buchanan explained that the conservation areas,
parks, golf courses and other recreational amenities make the Property particularly attractive to
potential buyers who are looking for space without high tax burdens and proximity to work.”
ECF 108, p. 8. The Commission also noted that its own observations and evidence of nearby
game lands and state parks, shopping and entertainment venues, as well as employment
opportunities and “easy access to highways” and the airport, enhanced the desirability, and thus,
the value of the Buchanan Farm Property. ECF 108, p. 9.
In addition, the Court concurs that the evidence of record suggests that when Rover’s
expert placed a value on the Buchanan Farm he failed to properly consider the distance of his
comparables to the Buchanan Farm, the size of his comparables to the Buchanan Farm, and the
access to highways and other economic drivers in relation to the Buchanan Farm. As a result of
Mr. Huriaux’s incomplete considerations when deriving his value, the Commission could not
adopt Mr. Huriaux’s valuation of the Buchanan Farm without adjusting same upward.
Given the Commission’s observations of the Property and surrounding areas (including
the proximity of businesses, entertainment venues, recreational spaces, and the proximity of
various transportation routes), as well as the credible testimony of Mrs. Buchanan, as well as the
other evidence which did not support Mr. Huriaux’s valuation determination, this Court concurs
that evidence of record supports the conclusion that the highest and best use of the Property (pretaking) included a “less dense multi[-]family residential and recreational use.”
Despite the fact that final determination made by the Commission as to the post-taking
value was a value that rests between the two experts’ conflicting values, there is ample record to
26
support the Commission’s ascribed value. Accordingly, this Court overrules Rover’s third
objection to the Report, and adopts the Report of the Commissioners, in its entirety.
B. The Buchanan Farm’s Objections
The Buchanan Farm also filed objections to the Commissioners’ Report. ECF 113. First,
the Buchanan Farm objected to the Commission’s failure to include several of the Buchanan
Farm’s proposed findings of fact. Although there are many proposed findings the Buchanan
Farm references, the Buchanan Farm did not offer any basis as to why the Commission erred in
not adopting them, nor why this Court should do so. In addition, the Buchanan Farm did not
explain how the Commission’s adoption of these ignored proposed findings would have led to a
different valuation outcome. Moreover, the he Court notes that the Commission, as the factfinder, was free to adopt in whole or in part any proposed factual finding which it deemed to be
true, accurate, and relevant to the issues before it. There is no obligation on the part of the
Commission to respond to every proposed factual finding submitted by any party.
Next, the Buchanans, like Rover, objected to the pre-taking highest and best use of the
Property. This Court has already carefully reviewed the portion of the Commission’s Report
which set the highest and best use of the Property (see “A. Rover’s Objections,” above) and has
concluded that there exists ample and substantial evidence in support of the findings and
conclusions of the Commissioners with respect to the highest and best use of the Buchanan Farm
Property, pre-taking. Moreover, to the extent that the Buchanan Farm argues that the testimony
of either Mr. or Mrs. Buchanan was not meaningfully considered or taken into account by the
Commissioners with respect to the highest and best use of the Property, the Court utterly
disagrees. The Commission very carefully considered their testimony and partially relied upon
27
Mrs. Buchanan’s testimony to establish a post-taking value. Accordingly, the Buchanans’
objections are overruled on this matter.
The Buchanans further contend that the Commissioners erred in determining that the
Buchanans had not taken “meaningful steps” to utilize the Property for a residential subdivision.
The Buchanans argue that “the four-factor test” does not include consideration of any
“meaningful steps” they took or failed to take with respect to developing the Buchanan Farm
Property prior to the taking. This Court first notes that the “four factor test,” to which the
Buchanans refer, is really a four-step process used by appraisers to value property, and thus, it is
not a binding legal standard to be employed by a fact finder in a condemnation proceeding to
establish highest and best use. The Court also notes that the law governing highest and best use
forbids a fact-finder from basing a fact or conclusion as to the value upon mere speculation. See
68.94 Acres, supra., 918 F.2d at 393. Merely because the Buchanans could have used the
Property for a high density, residential subdivision prior to the taking, is not sufficient to value
the land under that rubric. The reality is the land was not used, nor had any work whatsoever
been performed to ready the Property (pre-taking), so as to enable the Property to be used, as a
157-lot subdivision. Thus, any valuation based on a 157-lot residential subdivision would,
indeed, be speculative and, therefore, violative of the law governing condemnation pre-taking
valuation. Accordingly, this Court finds that the Commission properly disregarded such
speculative evidence when assigning the Property’s pre-taking value.
Of the twenty-two additional objections raised by the Buchanan Farm, this Court notes
that some of the objections rely upon the “four factor test” which this Court has already stated is
not the proper legal standard. Others call into question the Commissioners’ credibility findings
with respect to Mr. Barna (the Buchanans’ expert) as well as their decision to disregard certain
28
pieces of documentary evidence. This Court finds that, based on the record evidence, it concurs
with the Commissioners’ decisions with respect to the portions of Mr. Barna’s testimony they
chose to accept and those they chose to reject or disregard. Similarly, the Court finds no abuse
of discretion with the Commissioners’ decision to include as well as exclude certain pieces of
evidence.5
In addition, the Buchanan Farm also objected to the Commissioners’ decision to not
recommend that the Buchanans’ attorneys’ fees be paid by Rover. The Buchanan Farm cites no
authority for the proposition that it is entitled to same from Rover. Thus, this Court will not
impose any requirement that Rover pay the Buchanan Farm’s attorneys’ fees.
The Court, in short, after reviewing all of the objections raised by the Buchanan Farm
overrules each one and adopts the Commissioners’ Report (ECF 108) and all of its findings of
fact and conclusions of law without any modifications.
IV. CONCLUSION
After conducting a de novo review of the evidence, this Court hereby adopts the
Commission’s Report filed at ECF 108 in its entirety. An appropriate Order of Court setting
forth the just compensation shall follow.
s/ Arthur J. Schwab
Arthur J. Schwab
United States District Court Judge
cc:
All ECF registered counsel of record
Andrea Geraghty, Esquire
LuAnn Datesh, Esquire
Thomas T. Frampton, Esquire
5
The Buchanans primarily objected to evidence which was submitted to the Commissioners but not
“timely disclosed” to the Buchanans.
29
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?