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Katzin v. United States

United States Court of Appeals, Federal Circuit

November 19, 2018

UNITED STATES, Defendant-Appellant

          Appeal from the United States Court of Federal Claims in No. 1:12-cv-00384-CFL, Judge Charles F. Lettow.

          Roberto Eduardo Berrios Falcon, Berrios Falcon, LLC, San Juan, PR, argued for plaintiffs-appellees.

          Michael Thomas Gray, Environment and Natural Resources Division, United States Department of Justice, Jacksonville, FL, argued for defendant-appellant. Also represented by Jeffrey H. Wood, Washington, DC.

          Before Prost, Chief Judge, Newman and Linn, Circuit Judges.


          Linn Circuit Judge.

         The United States appeals from a final decision after trial by the Court of Federal Claims ("Claims Court"), holding that the government effected a physical taking of a ten-acre peninsula on the island of Culebra in Puerto Rico, when the U.S. Fish and Wildlife Service ("F&WS") faxed its claim of ownership to a gun mount located on the peninsula to a potential purchaser. Katzin v. United States, 127 Fed.Cl. 440 (2016) ("Katzin II"); see also Katzin v. United States, 120 Fed.Cl. 199 (2015) ("Katzin I") (denying summary judgment to the United States). Because the fax was not a physical taking of Appellees' land, we reverse.

         I. Background

         A. Facts

         The Claims Court admirably described the history of the disputed parcel. Katzin II, 127 Fed.Cl. at 446-57. We report only that portion of the history relevant to our decision.

         Culebra is the largest in a group of islands just east of Puerto Rico. Prior to 1898, Culebra belonged to the Kingdom of Spain. In 1887, Spain initiated a survey ("1887 Survey"), the resulting map of which is reproduced below in Figure 1, dividing the property into privately owned parcels. The peninsula in the eastern section of Parcel 24 roughly represents the land at issue in this litigation. Under Spanish law at that time, the "maritime terrestrial zone" surrounding the island-"the area of the coasts or seashore . . . that is washed by the sea in its ebb and flow, where the tide is perceptible, or the highest (Image Omitted) tidal waves in stormy weather when the tide is not perceptible"-was held by the Spanish government in the public domain. Id. at 446-47.

         In 1898, Spain transferred all lands owned by the Spanish government on Culebra to the United States. Treaty of Peace Between the United States of Am. and the Kingdom of Spain, 30 Stat. 1754 (Apr. 11, 1899) ("Treaty of Paris"). This included the maritime-terrestrial zones. In 1901, President Roosevelt issued a general order, and in 1903 a proclamation, that all public lands on Culebra would be reserved for Naval purposes.

         The Treaty of Paris did not affect the privately owned parcels. In 1903, several of the privately owned parcels, including Parcels 24 and 25, were combined into a single tract and registered with the Registry of Property of Puerto Rico ("Registry") as Property No. 117 ("Buena Vista"). On June 28, 1903, the owners of the tract signed a deed of sale, transferring a 2.25-acre plot to the Navy. It was registered on June 29, 1903. The Registry describes the plot as "bounded to the North by [property owned by] Mr. Antonio Lugo and the sea on a tip of land; to the East by the sea; and to the South and West by the main property from which it is segregated." Katzin II, 127 Fed.Cl. at 449-50. This description placed the transferred plot within former Parcel 25 on the 1887 Survey. Id. at 449. Also on June 29, the same owners and the Navy signed an "Agreement of Sale," describing the metes of the property in the same way, but indicating its location as within "Plot Number 24, Official Chart of Culebra, U.S.W.I." Id. at 450. The Navy traces the location of the gun mount to this Agreement of Sale, and has consistently referred to the location of the transferred plot as within former Parcel 24. Id. at 457. The dispute in this case revolves around the location and ownership of this transferred plot. Hereinafter, we refer to this uncertainly located plot as the gun mount site.

         After several conveyances, Plaintiffs Dr. and Mrs. Katzin became owners of an undivided 50 percent interest (Image Omitted) in Parcel 4, which roughly corresponds to Parcel 24 on the 1887 Survey, and Plaintiff Rose Marie Kjeldsen Winters became the owner of the remaining 50 percent. Id.

         In 1972, the General Services Administration ("GSA") took control of Navy lands on Culebra. GSA transferred the land to the F&WS, using Navy Map No. 323. See Figure 2. Navy Map No. 323 showed an overlay of the 1887 Survey with highlights showing Navy ownership of a coastal strip around the southern and eastern coast of the island, and a gun mount location on the southern end of the peninsula. Id. at 463. The F&WS published notice in the Federal Register that it would prepare a Draft Environmental Impact Statement on the transfer of lands from the Navy to the F&WS, as well as a Final Environmental Impact Statement. Intent to Prepare an Envt'l Impact Statement on the Proposed Disposition and Administration of Lands on the Islands of Culebra and Culebrita, 45 Fed. Reg. 16, 358-01 (Fish & Wildlife Serv. (Mar. 13, 1980)); Availability of Final Envt'l Impact Statement, 46 Fed. Reg. 50, 421-01 (Fish & Wildlife Serv. (Oct. 13, 1981)); Record of Decision on Proposed Disposition and Administration of Lands Declared Excess by U.S. Navy on the Islands of Culebra and Culebrita in Puerto Rico, 47 Fed. Reg. 11, 114-02 (Fish & Wildlife Serv. (Mar. 15, 1982)). According to the Claims Court, the Draft and Final Environmental Impact Statements included a map of the property to be transferred, including Tracts 1e (the coastal strip) and 1f (the gun mount on the northeastern side of the peninsula). Katzin II, 127 Fed.Cl. at 463-64.

         In 1985, the F&WS surveyed the eastern coast of Culebra. The survey labels several points on the boundaries (Image Omitted) of the F&WS property and includes labels for Tract 1f and 1e. See Figure 3. The survey plat shows Tract 1f bounded by points 606, 607, 609, 610, and 611. Id. at 464-65. The F&WS placed signs at some of the points on the plat that prohibited entry. See Figure 4. In 2012 and 2013, a F&WS representative located a marker at point 606, and other markers were found at points 600, 601, 602, 603, 605, 612, 613, 614, 617, and 619.

         (Image Omitted)

         In 1987, Edward Borges, the attorney representing the Katzins' neighbor Culebra Enterprises Corporation, wrote to the F&WS seeking resolution of boundary uncertainties between the maritime-terrestrial zone and Culebra Enterprises' land. Specifically, Borges explained that the boundary lines defined in the 1985 F&WS survey at some points did not secure all the sensitive wetlands for the F&WS and in other spots encroached beyond the high-water mark of the ocean and encroached on land that Culebra Enterprises claimed as its own. Id. at 465. Borges proposed that the F&WS take ownership of all the wetlands, and that Culebra Enterprises take ownership of all other areas outside the maritime zone. Id. The letter included an aerial photograph of Culebra, with a tracing matching the 1985 F&WS Survey, including the numbered markers defining an enclosed polygon on the peninsula at the east of former Parcel 24, as seen in Figure 5 below.

         In April 1987, Dr. Katzin wrote to the F&WS, identifying himself as owner or part-owner of land "from station 616 at the southern end of the refuge north to a point (Image Omitted) midway between stations 614 and 613," and "an undivided half interest in the property between that point and Mr. Mailloux's property at station 602 to the north." J. App'x 2936. Dr. Katzin also wrote that "our boundary situation has many similarities to that of Culebra Enterprises and I would like to explore with you the possibilities of a similar solution." Id. The F&WS replied that they would consider an exchange of lands to resolve the ambiguity.

         Plaintiffs listed Parcel 4 for sale, and on March 23, 2006, William Klaber signed a purchase agreement to buy it for $4 million. Katzin II, 127 Fed.Cl. at 467. Mr. Klaber deposited $50, 000 in earnest money, and the parties scheduled a closing for June 30, 2006. The agreement provided for a return of the deposit if the buyer discovered that "any fact related to zoning, title and land survey, current easements, real estate taxes and assessments (Image Omitted) or legal access are not as represented." Id. In June 2006, Mr. Klaber asked his attorney, Claudia Motta, to find a way to "get. . . out of the deal" to purchase Parcel 4. Id. The parties' communications reveal a concern about potential government claims on the property. Id. On June 15, 2006, Ms. Motta e-mailed John Beasley, a F&WS representative, to ask about the F&WS's claims on Parcel 4. Id. at 468.

         On June 22, Mr. Beasley replied by faxing several documents ("Beasley fax"), including a tracing of the 1887 Survey map with the F&WS parcel numbers added, including Tract 1e, which Mr. Beasley described as "the maritime zone," and Tract If, shown as a square north of the peninsula, and described as "an old gun mount site purchased by the Navy in 1903 from Escolastico Mulero." J. App'x at 3115, 3117; see Figure 6.

         On June 28, 2006, Ms. Motta communicated to Plaintiffs that Mr. Klaber would not buy Parcel 4. Thereafter, several potential buyers refused to buy the property.

         B. Procedural History

         Plaintiffs brought suit in the Claims Court against the United States, alleging that the Beasley fax effected a physical taking of the 10.01-acre peninsula in Parcel 24. Katzin II, 127 Fed.Cl. at 445. After trial, the Claims Court held that Plaintiffs' takings claim was not beyond the statute of limitations because it did not accrue at any time prior to the Beasley fax in 2006. This was so, the Claims Court held, because even though Plaintiffs or their predecessors in interest "knew or had reason to know of the government's claims to the maritime zone and the former gun mount site prior to the contract with Mr. Klaber," the "disputes over ownership rights prior to June 2006 were never refined to the point of interfering with plaintiffs' use and enjoyment." Id. at 473-74. The Claims Court explained that the "only evidence" of government interference was the placement of survey markers and wildlife refuge signs on the property, but the court found that those markers and signs "could have related to the maritime zone, which plaintiffs concede the government controls," and therefore did not interfere with Plaintiffs' property. Id. at 474 n.17. Separately, the Claims Court also held that Plaintiffs' title to Parcel 4 included title to the 10.01-acre peninsula, and that the government's 2.25-acre gun mount was not located on the peninsula. Id. at 476-79.

         Finally, the Claims Court concluded that the Beasley fax effected a non-possessory physical taking of the entire 10.01-acre peninsula.[1] The Claims Court understood that, in the case of a non-possessory taking, "governmental action can effect a taking when it prohibits or prevents a landowner from exercising his or her property rights because of a governmental claim of ownership of those rights." Id. at 479. The Claims Court reasoned that the government "appropriated plaintiffs' property rights such that they were not able to sell the parcel free of the government's claims," and that this was a physical taking requiring just compensation for the appropriation of the 10.01-acre peninsula. Id. at 482. The Claims Court set the value of all of Parcel 4 at $4 million, based on Mr. Klaber's contract value, and awarded a fraction of that value corresponding to the acreage of the peninsula, to arrive at a reasonable compensation amount of $610, 962.97 plus interest. Id. at 483.

         II. Discussion

         A. Standard of Review

         We review a final decision of the Claims Court by examining legal conclusions de novo and factual findings for clear error. Bass Enters. Prod. Co. v. United States, 381 F.3d 1360, 1365 (Fed. Cir. 2004). Whether a Fifth Amendment taking has occurred is a question of law, based on factual determinations. Id.

         A claim under the Tucker Act, 28 U.S.C. § 1491, in the Claims Court must be brought "within six years after such claim first accrues." 28 U.S.C. § 2501. We review whether a claim is barred by the statute of limitations de novo, and, as usual, review underlying fact-findings for clear error. Brown v. United States, 195 F.3d 1334, 1337 (Fed. Cir. 1999).

         A physical takings claim accrues when the scope of what is taken is fixed, see Samish Indian Nation v. United States, 419 F.3d 1355, 1369 (Fed. Cir. 2005)(quoting Martinez v. United States, 333 F.3d 1295, 1303 (Fed. Cir. 2003) (en banc)) (stating that a claim under § 2501 accrues "when all events have occurred to fix the Government's alleged liability, entitling the claimant to demand payment and sue here for his money"), and the plaintiff knew or should have known of the acts that fixed the government's alleged liability, Hopland Band of Pomo Indians v. United States, 855 F.2d 1573, 1577 (Fed. Cir. 1988). The Tucker Act statute of limitations is jurisdictional; we must therefore determine whether Plaintiffs' claims are timely before proceeding to the merits of the takings claim. John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 136 (2008). Because the Tucker Act's statute of limitations is jurisdictional, the plaintiffs bear the burden of proving that their claims are not time-barred. Mildenberger v. United States, 643 F.3d 938, 944- 45 (Fed. Cir. 2011); Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377 (Fed. Cir. 1998).

         B. Merits

         This case presents three distinct issues: (1) whether the Claims Court erred in holding that Plaintiffs' takings claim was not jurisdictionally time-barred; (2) whether the Claims Court erred in holding that the communication from the F&WS to Mr. Klaber's representative was a physical taking of the 10.01-acre peninsula; and (3) whether the Claims Court clearly erred in holding that Plaintiffs ...

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