United States v. 1,380.09 Acres of Land

COWEN, Senior Judge,

concurring in part and dissenting in part:

Although I concur in all other parts of the court’s decision, I cannot agree that the condemnee is entitled to recover the amount expended for an appraisal of its land as a part of just compensation. The majority bases its decision largely on United States v. Lee, 360 F.2d 449 (5th Cir. 1966). In reaching a contrary conclusion, I need not disagree with that decision. Rather, I would limit its application narrowly to the peculiar facts which I think led the court to reach its result in that case. As the majority has noted, the circumstances *242 in Lee were unusual. The Government’s declaration of taking described the land by metes and bounds but underestimated the acreage. The landowner complained and asked the Corps of Engineers to make a survey to determine the amount of land involved. The Government refused and informed the owner that he would have to furnish the survey himself. He did so, and the Government later stipulated that the tract actually contained 1,182.06 acres, whereas it had previously contended that there were only 1,100 acres therein.

The facts before us are wholly different. What we have here is the rather typical, oft-recurring situation where the landowner is dissatisfied with the Government’s valuation, employs an expert to appraise his land, and then utilizes the appraiser as an expert witness in litigation for the purpose of attempting to persuade the court to increase the Government’s valuation of the property. The majority recognizes that the fee paid the appraiser as an expert witness is not recoverable and has reversed the district court on that point. Nevertheless, the majority separates the appraisal fee from the other amounts paid the appraiser, classifies the fee as a non-litigation expense, and declares that it is recoverable as a part of just compensation. In my opinion, the distinction is untenable. The fee paid for the appraisal is an integral part of the litigation expenses as fully as services performed by an attorney in preparation for a trial, or the examination of books and records by an accountant in preparation for his testimony in court on accounting issues. Yet, I feel confident that the majority would readily agree that no part of the attorney’s or accountant's fees would be recoverable in a Federal condemnation action.

Ever since the Supreme Court handed down its decision in Dohany v. Rogers, 281 U.S. 362, 50 S.Ct. 299, 74 L.Ed. 904 (1930), this court and other courts have held that attorneys’ fees and other expenses incurred by the condemnee are not embraced within the concept of “just compensation for land taken by eminent domain.” United States v. 2,353.28 Acres of Land, etc., State of Fla., 414 F.2d 965, 972 (5th Cir. 1969). In the absence of an authorizing statute, courts may not award a judgment against the United States for costs or other litigation expenses. United States v. Worley, 281 U.S. 339, 344, 50 S.Ct. 291, 74 L.Ed. 887 (1930); United States v. 23.94 Acres of Land, Floyd Co., Com. of Va., 325 F.Supp. 330 (W.D.Va.1970).

There is ample authority for the proposition that the 1966 amendment of 28 U.S.C. § 2412 which authorizes the awarding of costs to the prevailing party in litigation involving the United States, is not applicable in condemnation proceedings. United States ex rel. T. V. A. v. Easement & Right-of-Way, 452 F.2d 729 (6th Cir. 1971), and cases cited therein. No contention to the contrary has been made in this case. Henning v. Lake Charles Harbor and Terminal District, 387 F.2d 264 (5th Cir. 1968), relied upon by the condemnee, is obviously inapposite. It involves a state condemnation action and the application of Louisiana law, which authorizes the recovery of appraisal fees as costs, rather than as a part of just compensation, in such actions. United States v. 71.29 Acres of Land, 376 F.Supp. 1221 (W.D.La.1974), also relied on by the condemnee, is a Federal condemnation case. The court there based its decision on and quoted from Henning, and declared that the landowners were entitled to recover the fees paid to appraisers as costs “especially under the applicable Louisiana law, as followed by the Fifth Circuit [in Henning] relative to taking of Louisiana property.” Thus the district court, in following Henning, treated the fees paid the appraisers as litigation costs and permitted the landowners to recover such costs by applying Louisiana law rather than Federal law.

When section 304 of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. § 4654(a) was enacted, Congress made an exception to the long-established rule that the appraisal fees and other expenses incurred by the owner because of condemnation proceedings may not be included in an award against the United States. The statute, Pub.L. 91-646, provides that reimbursement *243 for such expenses shall be awarded to the condemnee only if:

(1) The final judgment is that the Federal agency cannot acquire the real property by condemnation or,

(2) The proceeding is abandoned by the United States.

Neither of these conditions is met in this case.

As the Ninth Circuit has explained in United States v. 4.18 Acres of Land, etc., 542 F.2d 786, 788 (1976), Congress intended that section 4654(a) should be construed as creating only a narrow exception to the general rule which forbids the recovery of appraisal fees and expenses incurred by the owner, it being the purpose of Congress to discourage litigation in Federal condemnation proceedings. This holding is supported by the following statement in H.Rep. 91-1656, 91st Cong. 2d Sess., (3 U.S.Code Cong, and Admin.News, p. 5875 (1970)):

Ordinarily the Government should not be required to pay expenses incurred by property owners in connection with condemnation proceedings. The invitation to increased litigation is evident.

The majority has emphasized the fact that on account of its size, it was very difficult to appraise the value of the property taken on the basis of available market data. This is not an unusual situation. It is common knowledge that in many condemnation cases, there have been no recent sales of comparable properties. Other methods, including the use of expert testimony, must be used frequently to ascertain the fair market value.

Under the court’s holding today, when a condemnation proceeding is hereafter instituted in the Fifth Circuit, the condemnee may employ an expert to appraise his land, utilize the appraiser as an expert witness in litigating the valuation issue, and if no market data on sales of comparable property are available, he may recover the fee paid for the appraisal as an element of just compensation. In my opinion, such a result is contrary to the rule which the courts have followed since Dohany v. Rogers, supra, was handed down by the Supreme Court and is also in direct conflict with what Congress intended when it enacted Pub.L. 91-646, now codified as 42 U.S.C. § 4654(a).