United States v. 10.0 Acres, Etc., and 33.4 Acres, Etc., Gesford P. Wright and Marie R. Wright

GOODWIN, Circuit Judge:

This is an appeal from a directed verdict denying compensation for appellants’ interest in a private road condemned and opened to the public by the United States Forest Service.

Gesford P. Wright and Marie R. Wright contend that the district court erroneously denied them the opportunity to present evidence of compensable loss.

The road in which the Wrights owned an interest was taken by the United States to provide public access to the Mendocino National Forest. Before the condemnation, the road served two tracts of land owned by appellants and an adjoining tract owned by a timber company (Fibreboard Paper Products Corporation). The road crossed five parcels of private property, a section owned by the United States (one mile), and then crossed Fibreboard land for another four miles.

Fibreboard, the Wrights, and one Whitely purchased exclusive easements (for themselves and their permittees) across the five privately owned parcels, and obtained a use permit to cross the federally owned lands. They then constructed a road which, with existing roads, created access to their properties. Locked gates were placed before the five private parcels, after the five parcels, at the access road to appellants’ property, and at the end of the Fibreboard tract.

Each of the deeds granting appellants an easement describes the easement as exclusive. None reserves in the grantors the right to convey similar easements to others. In two of the deeds, the grantors retained the right “to the use of said right of way in connection with the use of Grantor’s own lands adjoining said right of way.” This right is available “to the extent reasonably required by the normal and convenient use of [Grantor’s] lands, provided that the exercise by Grantees of their rights hereunder shall not thereby be interfered with * Under another deed, the right of access retained by the grantor is declared personal and nonassignable and is limited to the grantors, their employees, and family. Another deed reserves the right to use the right-of-way in common with the grantees “provided that the use of the right of way by Grantees is not thereby interfered with.” Finally, in yet another deed, the grantees acquire:

“ * * * [Exclusive possession of the surface of the whole right of way, provided Grantors shall be entitled, to the extent reasonably required by the normal and convenient use of their lands and provided that the exercise by Grantees of their rights hereunder shall not thereby be interfered with, to cross and to permit their livestock to cross from their lands on one side of the right of way to their lands on the other over any portion of the right of way.”

When the United States condemned all private portions of the deeded road and made the road public, all gates were removed, except the gates between appellants’ property and the now public road. The appellants’ lands do not abut the subject road at any point.

At trial, appellants asserted that their one-third interest in the road had a cash market value. They offered their evidence of value: (1) by showing the cost of replacing the road at the time of the taking; (2) by showing the capitalized value of anticipated income from tolls charged for the use of the road by loggers; (3) by opinion evidence of the market value of the road; and (4) by establishing the difference between the market value of their dominant land before and after the exclusive easement was extinguished — with and without the exclusive quality of the access and the right to maintain locked gates.

The district court properly rejected the first and third theories because there is no need to replace or relocate any road. Appellants had the use of a road before the taking; and after the taking they still have the use of a road.

With respect to the second theory, appellants concede that they had no proof of lost toll income. They had never used the road for income purposes and had no specific plan to do so.

The more difficult question is whether the court should have permitted the expert to express an opinion on the “before and after” value of appellants’ noncontiguous but dominant estate, when the government took the servient estate.

In United States v. Welch, 217 U.S. 333, 30 S.Ct. 527, 54 L.Ed. 787 (1910), the owner of a tract of land claimed a compensable taking when his private right-of-way across the lands of others was flooded as a result of the government’s construction of a dam. The court held that the right-of-way was an easement, which in turn was an interest in land, and that the taking thereof entitled its owner to compensation. The court valued the loss of the easement by reference to its value to the dominant estate. In Welch, the before-and-after valuation of the dominant estate was employed to calculate the loss in the context of a complete physical destruction of the easement.

In the case at bar, as in Welch, there is a taking of the servient estate and a loss to the dominant. Unlike Welch, the road and the right to use it are still intact, but the road’s exclusivity has been destroyed. It is the market value of the loss of exclusivity which appellants sought to prove.

The United States asserts that exclusivity is a noncompensable interest, citing United States v. Pope & Talbot, Inc., 293 F.2d 822 (9th Cir. 1961). Pope & Talbot denied recovery in condemnation for the increased risk of fire to claimant’s properties threatened by the projected opening of adjoining federal lands to the public. Neither the condemnation itself nor the projected use of the lands taken from Pope & Talbot increased this hazard. The hazard, if one existed, lay in the potential carelessness of the general public.

In denying recovery, the court stated:

“We can sympathize with appellee in its resentment against public intrusion upon the solitude which it has heretofore enjoyed. It has, however, no right to insist that the United States so use its forest lands as to protect appellee against such intrusion. Nor can it complain that the use made of the lands taken from it has increased the attractiveness of the government’s forest lands. For this element of depreciation there can * * * be no recovery.” 293 F.2d at 826.

The court in Pope & Talbot does not declare that loss of privacy is never compensable; but it does indicate that the law does not ordinarily provide a remedy against the government for depreciation in land value caused by changes incident to civilization. Here, however, appellants complain that the government has taken away their interest in a tract of land (the easement), destroying the exclusivity of use for which appellants paid the underlying fee owner. The value of this power to exclude others is reflected in the before- and-after valuation of the dominant estate. See United States v. Welch, 217 U.S. 333, 339, 30 S.Ct. 527, 54 L.Ed. 787 (1910). That the value of the right to exclude others may be equivalent to damage done to the dominant estate does not alter the fact that the compensation is not for the damage to the dominant estate but rather for loss of the exclusive easement itself.

No California or federal case cited to us is squarely on point, but a number of other courts have considered similar questions and have denied recovery. 1 L. Orgel, Valuation Under the Law of Eminent Domain § 111, at 470 n.25 (2d ed. 1953). The strongest case for the government is In re Appeal of Sowers, 175 Minn. 168, 220 N.W. 419 (1928).

Sowers and others owned wooded lots in a forest recreation area. To facilitate access to these lots, Sowers and associates purchased an easement across the property of another, constructed a road, and installed locked gates. The township constructed a public highway, and incorporated the Sowers road into it. When Sowers sought compensation for this “taking”, the court replied:

“In this case all the appellants had in this strip of land was the privilege of using it. The inclusion of this strip in the public road did not take from them the right to use this strip of land. * * * The broadening of the easement to the public generally did not in law destroy or take away their privilege * * * [citation omitted].” 220 N.W. at 420.

In Sowers, the deeds did not create exclusive easements. Here they did.

Appellants have argued with commendable candor that the case law seems to be against them, but that when their easement is exclusive “the law ought to be otherwise”. Appellants point out that their land is diminished in value when the government extinguishes an exclusive easement in a right-of-way leading to their land and converts what had been a quiet wooded sanctuary into just another “house by the side of the road”. The government answers, in effect, “Yes, but it wasn’t your property that was taken.”

Appellants concede that they cannot recover under the Fifth Amendment for the loss of market value to their land merely because the government takes the land of another and thereby opens up the neighborhood to potential vandals, poachers, litter throwers, and the like. United States v. Pope & Talbot, Inc., supra. Appellants point out, however, that here the government has not merely taken the lands of others (the underlying fee beneath the roadway) but has also taken and destroyed the appellants’ interest in those lands: their right to exclude all others from the roadway. This, the appellants say, is a taking, and they are entitled to be paid for that which was taken.

The offer of proof is, in effect, that real estate appraisers are prepared to describe in monetary terms the loss of value suffered by secluded forest “retreats” when nearby public improvements open the neighborhood to some of the negative aspects of civilization and progress. Once a taking “nexus” is established, argue the appellants, the resulting loss, if any, is a question for the jury to decide. We agree. If loss of value to the dominant estate is in fact caused by the government’s destruction of the exclusive easement, then there is a taking from the appellants as well as from the owners of the fee under the easement (who have been paid and are not involved in this case).¹

Here, witnesses having knowledge of the market offered to testify that, in fact, the market value of the dominant land drops when a private road leading to that land is converted into a public road. The loss of the exclusivity of the easement is a direct loss that is reflected in the market place, and, because the loss results from a taking of an interest in land, it is compensable.

In one sense, we may be going beyond the holding of the earlier cases. In the days when the building of public roads was considered a benefit to all surrounding land, the notion that the owner of a private road could force payment by the government for improving the road and making it public received short shrift in the courts.²

However, an “exclusive easement is an unusual interest in land; it has been said to amount almost to a conveyance of the fee.” 2 Thompson on Real Property § 246 (1961), citing City of Pasadena v. California-Michigan Land & Water Co., 17 Cal.2d 576, 110 P.2d 983 (1941). Where an easement owner has the right to exclude all but the grantor himself and the grantor retains no right to terminate or dilute that exclusivity, we would be ignoring reality if we said the destruction of that right was not a compensable loss.

If in fact the evidence supports the appellants’ claim, the dominant tenement suffered a decrease in value when the government opened up the exclusive road, removed the locked gates, and made the once remote property easily accessible to trespassers. This is a matter for proof. The court below denied the easement owner the opportunity to put on that proof.

We do not put this holding on the basis of state law which allows recovery for consequential damages. Cf. Cal.Const., Art. 1, § 19 (replacing former § 14, repealed Nov. 5, 1974); Rose v. State, 19 Cal.2d 713, 123 P.2d 505 (1942). We base the landowner’s right to introduce his value evidence on the theory that his exclusive easement was itself a property right that was taken from him when the fee was purchased by the government and turned over to the public.

Reversed and remanded.

1 . The government relies on Cole Investment Co. v. United States, 258 F.2d 203 (9th Cir. 1958), and other severance-damage cases in rejecting for this case a before-and-after valuation. The cases are not in point. In a claim for severance damages, the property actually taken is given a market value. The diminution in value of the remaining contiguous lands caused by the taking is then appraised and included in the recovery. The cases hold that the condemned and severed properties must have been owned together and have been either part of the same parcel or subject to unitary use to warrant a severance award. These concepts have no application to the taking of this easement. See United States v. 765.56 Acres of Land, 174 F.Supp. 1, 14 (E.D.N.Y.1959), affirmed sub nom. United States v. Glanat Realty Corp., 276 F.2d 264 (2d Cir. 1960). Here the exclusive easement is the condemned property. That the value of the easement is measured by reference to the dominant estate does not render the value analysis a severance inquiry.

2 . The court’s treatment in In re Sowers, supra, is not unique. Similar cases in other jurisdictions have either cited Sowers with approval, City of Bellevue v. Underwood, 59 Wash.2d 793, 370 P.2d 861 (1962) (nonexclusive private easement), or held, independently of Sowers, that no compensation can be recovered for the inclusion of a private road in a public highway. Clayton v. Gilmer County Court, 58 W.Va. 253, 52 S.E. 103 (1905); Cook County v. Vander Wolf, 394 Ill. 521, 69 N.E.2d 256 (1946) (dic tum); but see City of Miami Beach v. Belle Isle Apartment Corp., 177 So.2d 884 (Fla.App.1965) (portion of private road used by owners for other private purposes). The New York courts award only nominal damages when a noncommercial private way is merely opened to the public. Compare In re Avenue Between Fort Washington and Haven Avenues in City of New York, 153 App.Div. 164, 138 N.Y.S. 107 (1912), and In re East 5th St., Borough of Manhattan, City of New York, 1 Misc.2d 977, 146 N.Y.S.2d 794 (1955) (dictum), with In re West 10th St., Borough of Brooklyn, City of New York, 267 N.Y. 212, 196 N.E. 30 (1935) (private way opened and commercially valuable signs removed and parking rights ended).