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United States v. Eltzroth

September 4, 1997

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,

v.

CLYDE A. ELTZROTH; RANDOLPH MURDAUGH, JR.; NATIONSBANK OF SOUTH CAROLINA, N.A., AS PERSONAL REPRESENTATIVE OF THE ESTATE OF HENRY H. EDENS, DECEASED, DEFENDANTS-APPELLANTS, STATE OF GEORGIA, DEFENDANT-APPELLEE, AND 465 ACRES OF LAND, MORE OR LESS, SITUATED IN JASPER COUNTY, STATE OF SOUTH CAROLINA; TAX ASSESSOR OF JASPER COUNTY; UNKNOWN OWNERS, DEFENDANTS.



Appeal from the United States District Court for the District of South Carolina, at Charleston.

David C. Norton, District Judge. (CA-94-2335)

Before MURNAGHAN, Circuit Judge, PHILLIPS, Senior Circuit Judge, and BRITT, United States District Judge for the Eastern District of North Carolina, sitting by designation.

MURNAGHAN, Circuit Judge

Argued: July 14, 1997

Reversed and remanded by published opinion. Judge Murnaghan wrote the opinion, in which Senior Judge Phillips and Judge Britt joined.

OPINION

Plaintiffs-Appellants Clyde Eltzroth, Randolph Murdaugh, Jr., and NationsBank of South Carolina (collectively, the"Landowners") own land on Barnwell Island (the "Island" or the"Property"), which sits in the Savannah River. South Carolina deeded the Property to the Landowners' predecessor in interest in 1942. In the 1950s, the United States Army Corps of Engineers (the "Government") began dredging the Savannah harbor, and it wanted to deposit the dredged material, known as "spoil," on the Island. After the Government instituted condemnation proceedings to obtain a perpetual easement over the Property, the United States Court of Appeals for the Fifth Circuit held that the Island actually fell within the boundaries of Georgia, not in South Carolina. The court subsequently determined that the Landowners did not have valid title to the Property from South Carolina, and Georgia granted a perpetual easement to the Government to deposit spoil on the Island (the "Georgia Easement").

In 1990, in an unrelated case, the United States Supreme Court held that the Island belongs to South Carolina, not Georgia. The United States District Court for the District of South Carolina subsequently declared the Georgia Easement invalid. The Government then filed the instant action to have the Property condemned. An issue arose, however, regarding the date of the Government's "taking," and thus the proper date for determining the market value of the Property. The Government contends that the taking occurred on March 9, 1956 when it entered into physical possession of the Property pursuant to the Georgia Easement, and it therefore argues that the Landowners should receive compensation for the market value of the Property on March 9, 1956. The Landowners, however, contend that the taking did not occur until August 30, 1994 when the Government filed the instant condemnation action and that they should receive compensation for the market value of the Property on that date. The district court adopted the Government's position and held that the Government took the Property in fee simple on March 9, 1956. For the reasons stated below, we reverse and remand the district court's judgment. Although the Government did take an easement in the Property on March 9, 1956, we conclude that it did not take the remaining interest in the Property, the fee simple subject to an easement, until August 30, 1994.

I.

In 1787, Georgia and South Carolina signed the Treaty of Beaufort (the "Treaty"). The Treaty defined the boundary between the two states, and it reserved all of the islands in the Savannah River to Georgia. The legislatures of each state and the Continental Congress ratified the Treaty in due course. See Georgia v. South Carolina, 497 U.S. 376, 380-81 (1990). Nonetheless, in 1940, the sheriff of Beaufort County, South Carolina conveyed one such island, Barnwell Island, to the Beaufort County Forfeited Land Commission (the "Commission") because the Barnwells failed to pay property taxes that Beaufort County had assessed. In 1942, South Carolina, through the Commission, deeded Barnwell Island *fn1 to Eustace Pinckney.

In 1952, the Government filed a condemnation action in the United States District Court for the Southern District of Georgia to obtain a perpetual easement over the Island to deposit spoil from the Savannah harbor. The district court dismissed the action for lack of jurisdiction because it found that the Island fell within South Carolina's boundaries due to prescription and Georgia's acquiescence to South Carolina's exercise of sovereignty over the Island. Georgia intervened and claimed sovereignty to the Island based on the Treaty. The United States Court of Appeals for the Fifth Circuit reversed. Relying on the Treaty, the Fifth Circuit held that the Island fell within Georgia's border, and it remanded the case to the district court for further proceedings. See United States v. 450 Acres of Land, 220 F.2d 353 (5th Cir. 1955).

During the interim, the Government entered into possession of an easement on the Island pursuant to an April 3, 1953 district court order that granted immediate possession to the Government under the Rivers and Harbors Appropriation Act of 1918, 33 U.S.C.A. Section(s) 594 (West 1986). *fn2 On March 9, 1956, after the Fifth Circuit held that the Island belonged to Georgia, Georgia deeded a perpetual easement over the Island to the Government for spoil disposal. In 1957, on remand from the Fifth Circuit, the district court dismissed Pinckney as an improperly joined party on the ground that South Carolina did not pass good title to him in 1942 since the Property actually fell within Georgia's borders. The Government subsequently dismissed the condemnation action because it had obtained the perpetual Georgia Easement, the interest that it sought in the condemnation action, and it began to deposit spoil on the Island. In 1960, Pinckney quitclaimed whatever interest he held in the Property to the Landowners.

In an unrelated case, Georgia sued South Carolina in 1977 after a long dispute between the two states over the exact location of their boundary along the lower Savannah River. In 1990, the United States Supreme Court determined the location of the boundary, and it held that the Island belongs to South Carolina. The Court concluded that South Carolina acquired sovereignty over the Island by prescription and acquiescence, as evidenced by its taxation, policing, and patrolling of the Island. See Georgia v. South Carolina, 497 U.S. 376, 38893 (1990).

In 1991, the Landowners filed a quiet-title action in the United States District Court for the District of South Carolina to divest the Government of the Georgia Easement. The district court concluded that South Carolina exercised sovereignty over the Island on the date of the Georgia Easement and that the Government therefore never acquired a valid easement because Georgia did not have the right to convey such an interest. Accordingly, the court invalidated the Georgia Easement. See Eltzroth v. United States, C.A. No. 2:91-2139-18 ...


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