Landowners win eminent domain valuation case

In March, a jury trial involved landowners who had easement rights taken by Sabal Trail Transmission, LLC, under the power of eminent domain. The case was heard in a federal court before U.S. District Court Judge James S. Moody, Jr. in Ocala, Florida.

According to the landowners' attorneys, the case – Sabal Trail Transmission, LLC v. +/- 3.921 Acres of Land, Sunderman Groves, Inc., No. 5:16-cv-00178-JSM-PRL (M.D. Fla. 2017) – is allegedly the first jury trial in which property owners have challenged Sabal Trail regarding the measure of compensation for the taking of both temporary and permanent easements as part of its 516-mile natural gas pipeline project that will span Alabama, Georgia and Florida.

According to court documents, landowners Chuck and Jan Sunderman had a 40-acre tract of land in Bay Lake, Florida, split down the middle by Sabal Trails natural gas pipeline – a distance of 1,336 feet. Sabal Trail (owned by Spectra Energy, NextEra Energy and Duke Power) says that the pipeline project uses 36-inch diameter pipe with a maximum operating pressure of 1,456 psig to transmit up to 1 billion cubic feet of natural gas a day to power plants in Florida owned by Duke Energy and Florida Power & Light.

Sabal Trail filed its eminent domain case against the Sundermans in March 2016 and soon after was granted immediate possession of the condemned easements to begin pipeline construction.

Although unable to stop Sabal Trail from taking their land, the Sundermans have litigated the amount of their compensation for the past two years.

Sabal Trail's land valuation

Court documents show that Sabal Trail contended that because its pipeline is buried 4 feet underground, there are no damages to market value other than for bifurcation. This could include the devaluation of the land as a future buyer would have to accept the legal limitations of an easement through the property. More specifically, Sabal Trail contended that there are no damages to market value based on fear or stigma.

In light of this, the Sundermans received an initial offer of $56,800 by Sabal Trail for the right to use the temporary and permanent easement areas and a 25 percent damage to their remaining property.

Sundermans' response

The Sundermans disagreed and retained lawyers Andrew Brigham, Trevor Hutson, Scott Copeland and Brett Tensfeldt of Brigham Property Rights Law Firm, which now represents the Sundermans and approximately 40 other landowners against Sabal.

During court discovery, Brigham's firm found that Sabal Trail paid three appraisal firms in excess of $8 million to prepare studies that show that market participants don't distinguish natural gas pipelines from other pipelines that, say, transmit water. Through depositions, the law firm says it found that the three appraisal firms had long-standing track records working for pipeline companies and always find in their studies that there is no difference in the amount buyers or sellers transact on land with or without pipelines.

As a result, Brigham had the Sundermans retain their own appraiser, Matthew Ray, to prepare a damage study. Ray used a technique that appraisers call Paired Sales Analysis. It calls for the appraiser to compare sales of impact and non-impact properties that are similar in all respects, but one has a pipeline running through it and the other does not.

After researching data in six Florida counties, Ray published his opinion in court documents. He estimated that the measure of compensation for the Sundermans was $310,000, considering a 60 percent damage for not only bifurcation, but also for aesthetic loss, loss of privacy, public fear and stigma relating to Sabals easement.

After the Sundermans trial, the jury rendered a verdict for the homeowners in the amount of $309,500 – over five-times the amount offered by Sabal and only $500 less than Rays estimate.

© 2018 Florida Realtors®