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Gas company to pay Wythe farmers $1.8 million

Richmond Times-Dispatch
March 18, 2006
By Lindsey Nair

East Tennessee Natural Gas must pay two Wythe County farmers $1.8 million in compensation for the depreciation a natural gas pipeline caused to their land, a federal jury decided Friday.

The gas company, a subsidiary of Duke Energy, had argued that Harold Hart and his stepson, Larry Ball, deserved about $87,000 for the effects of the pipeline. The landowners were fighting for as much as $3.5 million.

Hart shed tears during closing arguments Friday but was thrilled after the verdict came down. He said a farmer knows that fate brings a dead cow on some days and the birth of twins on others.

"This was the day that the cow had twins," he said with a smile.

East Tennessee seized the Hart and Ball property at Interstates 81 and 77 in May 2003 after a judge ruled that the company could build the pipeline first, then compensate landowners. The Wythe County men argued that their land went from being useful for industrial or commercial development to being good only for agricultural or residential use.

East Tennessee began building the 94-mile-long, 24-inch-wide Patriot Extension pipeline in spring 2003 and it went into service in November 2004. But legal fallout has continued as landowners who refused to negotiate with the company are taken to court.

Despite the refusal of many landowners to give East Tennessee easements across their land for construction of the pipeline, U.S. District Court Judge Jackson Kiser ruled in May 2003 that the company could immediately seize the property under the principle of eminent domain.

About 1,000 landowners were affected by the $209 million project, but about 95 percent of them were able to negotiate with the company early on. East Tennessee placed $1.3 million in escrow to pay the remaining 137.

Only 69 of those settled with East Tennessee outside of court, said Thomas Stanton, a Boston attorney who represented the company in the Wythe County case.

A handful more were settled by a three-person commission, and seven others have resulted in jury verdicts. Duke Energy spokeswoman Gretchen Dewailly Krueger was unable to provide those verdict amounts Friday.

The pipeline extension runs through the Virginia counties of Henry, Patrick, Carroll and Wythe. Stanton said cases in Henry and Patrick already have been addressed and East Tennessee has moved on to landowners in Carroll and Wythe.

About 35 cases remain unresolved, he said, but those will not necessarily result in jury trials. The company hopes to reach settlement agreements with many of those landowners, according to Krueger.

The pipeline, along with a 50-foot easement, cut through close to 400 acres of Hart and Ball's land. Although the easement itself only took up about 8 acres when the project was complete and the remainder still belongs to Hart and Ball, their attorney said compensation should be based on the difference between the value of the entire parcel before and after the pipeline went in.

Henry Howell III of Norfolk argued that his clients' property was prime real estate before the pipeline went in. It is being used to raise cattle now.

An assessor testified that the property was worth about $10,000 per acre before the Patriot project and $1,800 per acre afterward.

But Lela Hollabaugh, another attorney for East Tennessee, argued that although the land had interstate visibility, it lacked convenient access.

And she said it was not financially feasible for the land to be industrially or commercially developed because it is too hilly.

"The devil is in the details, and it is the details that make this property not industrial/commercial, but residential," she said.

East Tennessee showed the jury many pictures of other properties where the pipeline had been constructed in order to demonstrate that roads, neighborhoods and even walking trails with gardens could be built over the easement.

After the verdict, Krueger said the company respected the jury's decision. "The jury system is working as it should," she said.

Hart, who plans to leave his land to his grandchildren, said it felt good to stand up against a big company and come out the victor.

"You spend your lifetime to get the land, and then they come in and do what they done," he said.