United States v. 8.0 Acres of Land

• Court: Court of Appeals for the First Circuit
• Decided: December 7, 1999
• Docket: 98-2257
• Status: Published

Opinion

USCA1 Opinion

                 United States Court of Appeals

                     For the First Circuit


No. 98-2257



                         UNITED STATES,

                                

                      Plaintiff, Appellee,

                                

                               v.

                                

8.0 ACRES OF LAND, MORE OR LESS, SITUATED IN BARNSTABLE COUNTY,

        COMMONWEALTH OF MASSACHUSETTS; RAYMOND W. COBB,

                                

                           Defendants


MARY VIRGINIA BRANDT RUXTON; ESTATE OF JEAN STEVENSON CLARK;

         NORMAN S. ROSE; ELMER Q. ROSE; AUSTIN L. ROSE,

         ESTATE OF PRISCILLA L. ROSE; JOHN D. HALLISEY,

                                

                     Defendants, Appellees

                                

      ROGER TREAT JACKSON, JR.; MARGERY JACKSON CHAMBERS;

      BETSEY JACKSON PATTERSON; BARBARA JACKSON ALLGEIER,

                                

                     Defendants, Appellants

                                

                        ARTHUR C. CROCE

                                

                           Appellant.


No. 98-2313



                          UNITED STATES,



                       Plaintiff, Appellee,



                                v.

8.0 ACRES OF LAND, MORE OR LESS, SITUATED IN BARNSTABLE COUNTY,

        COMMONWEALTH OF MASSACHUSETTS; RAYMOND W. COBB,

                                

                           Defendants

                                

  MARY VIRGINIA BRANDT RUXTON; ESTATE OF JEAN STEVENSON CLARK;

        NORMAN S. ROSE; ELMER Q. ROSE; AUSTIN L. ROSE; 

         ESTATE OF PRISCILLA L. ROSE; JOHN D. HALLISEY,

                                

                     Defendants, Appellants

                                

       ROGER TREAT JACKSON, JR.; MARGERY JACKSON CHAMBERS;

       BETSEY JACKSON PATTERSON; BARBARA JACKSON ALLGEIER,



                      Defendants, Appellees,



                        ARTHUR C. CROCE,

                                

                           Appellee.


APPEALS FROM THE UNITED STATES DISTRICT COURT



               FOR THE DISTRICT OF MASSACHUSETTS



             [Hon. Mark L. Wolf, U.S. District Judge]


Before

                                 

                      Selya, Circuit Judge,

                    Cyr, Senior Circuit Judge,

                    and Lipez, Circuit Judge.


John D. Hallisey for Mary Virginia Brandt Ruxton et al.

     John T. Stahr, Dept. of Justice, with whom Lois J Schiffer,

Asst. Attorney General, Donald K. Stern, United States Attorney and

George B. Henderson, II, Asst. United States Attorney, John A.

Bryson and Joy Ryan, Attorneys, Dept. of Justice were on brief, for

appellee United States.

     Arthur C. Croce, for Roger Treat Jackson, Jr., et al. and pro

se.


November 30, 1999


LIPEZ, Circuit Judge.  Mary Brandt Ruxton, the estate of

Jean Stevenson Clark, Norman S. Rose, Elmer Q. Rose, Austin L.

Rose, and the estate of Priscilla L. Rose (collectively the "Ruxton

heirs" or "Ruxton claimants") appeal from an order of the United

States District Court for the District of Massachusetts

establishing the interest of several dozen claimants in a

condemnation award.  The Ruxton heirs argue that, in addition to

the share awarded to them by the trial court, they are entitled to

claim the interest of absent heirs who did not appear in court and

whose existence, in some cases,  cannot be confirmed (the "absent

heirs").   The Ruxton heirs claim that the district court deprived

them of this entitlement by ruling that the unclaimed funds would

escheat to the United States. The Ruxton heirs also argue that the

trial court awarded inadequate attorneys' fees under the common

fund doctrine.  Arthur C. Croce, an attorney representing different

claimants in an earlier, related, action, also appeals, asserting

that the trial court erred in concluding that he was not entitled

to attorneys' fees in the instant case.  

  We affirm the district court's order, finding that it did

not escheat funds to the United States and that it properly

apportioned the condemnation award according to largely uncontested

genealogical evidence.  Pursuant to that order, the Ruxton heirs

may still claim that they are entitled to collect a portion of the

award reserved for the absent heirs.  Their entitlement to the

funds of the absent heirs is, therefore, not yet ripe for our

resolution.  We likewise affirm the district court's judgment as to

attorneys' fees.    

                                I.

Background

  The instant dispute has a long history, discussed also in

our decision in Cadorette v. United States, 988 F.2d 215 (1st Cir.

1993).  Here, we sketch the outlines, focusing on the specifics

relevant to this dispute.

A. The Land Purchase

  In 1972, the United States purchased eight acres of land

in Truro, Massachusetts (the "eight acres") for inclusion in the

Cape Cod National Seashore.  Regrettably, the seller of the

property, Elizabeth Freeman, owned only a small fraction of the

land she purported to convey.  Elizabeth's great grandfather,

Edmund Freeman (referred to as "Edmund the Elder"), had owned 100

percent of the land when he died intestate in 1870.  At his death,

his three surviving children and the direct descendants of his

fourth child each received an undivided twenty-five percent

interest in the property.  We shall refer to these four lines as

"Charles," "Betsy I,"  "Edmund  II," and "Richard Sr."  These four

twenty-five percent interests continued to descend over the next

century, through more than 100 heirs, most of whom did not know

that they owned an interest in the eight acres.

B. The Quiet Title Action

  The defects in the land sale came to light in 1984, when

Jean Stevenson Clark sued the United States pursuant to 28 U.S.C.

 2409(a) to "quiet title" to what she claimed was her share in the

eight acres. Soon, others intervened in the lawsuit, all claiming

that they too were heirs of Edmund the Elder and thus owned a share

of the property that Elizabeth had sold to the government.  The

trial court (Skinner, J.) divided the interests in the property

based on its reading of the Massachusetts law governing descent and

distribution. See Cadorette v. United States, 1990 WL 149979 (No.

84-2428-S) (D. Mass Sept. 18, 1990).  The United States appealed,

arguing that the trial court misapplied Massachusetts law.  While

the appeal was pending, the United States filed a complaint in

condemnation pursuant to 40 U.S.C.  257, seeking to acquire

whatever interest in the land that it did not own already. 

          On appeal, we concluded that the trial court had properly

distributed the interests of two of the four original heirs to the

eight acres, Charles and Richard Sr.   See Cadorette v. United

States, 988 F.2d 215 (1st Cir. 1993).  That part of the judgment

was final.  But we vacated the trial court's decision to distribute

the interest of the other two original heirs, Betsy I and Edmund

II, solely to those litigants who were presently before it.  We

observed that the district court had learned "very little" about

these two lines and that the record contained "no evidence of any

significant effort to locate, or to provide notice to, the

descendants of Betsy I or Edmund II."  Id. at 219, 221.  Given the

sparsity of information, the district court had inappropriately

presumed that Betsy I and Edmund II's lines had died out, and it

had been particularly inappropriate to presume that they had died

out during the one seven-year period under which the parties before

the court would be entitled, under Massachusetts law, to their

entire interest in the land.  See id.

          In Cadorette, we declined to determine "precisely how

Massachusetts law ought to apply" because the government had since

filed a condemnation action.  Id. at 222.  We ruled that the

initiation of condemnation proceedings mooted the "quiet title"

dispute, and thus displaced any further need for the trial court to

determine the interest of Betsy I and Edmund II in the quiet title

action. By filing a condemnation action, the government would

acquire the fifty percent interest in the eight acres that had

passed through Betsy I and Edmund II upon payment of "just

compensation."  See id. at 222-226.  We ruled that upon a further

search for heirs of Betsy I and Edmund II, "the district court

should determine afresh whom to compensate for those shares." Id.

at 222.

C. The Condemnation Proceedings

          In the condemnation proceedings that followed our

decision in Cadorette, the parties stipulated that the "just

compensation" for Betsy I and Edmund II's fifty percent interest in

the eight acres was $162,000.  The issue turned, once again, to

distribution.  The United States presented the findings of its

expert genealogist, George M. Dallas, who had authored a report

tracing the devolution of ownership interests of Betsy I and Edmund

II (the "Dallas Report").  Although Dallas identified some direct

descendants of Betsy I and Edmund II who had inherited an interest

in the property,  the information about these lines was still

incomplete.  For example, Dallas learned that Betsy I had eleven

children between 1830 and 1854 and that she left her estate to

thirteen children and grandchildren.  What became of all of these

heirs, however, was (and is) unknown.  For example, the Dallas

Report concluded that the "Heirs of William Edward Sargent" (Betsy

I's grandson) were entitled to a specific share of the eight acres,

but it failed to specify who those heirs were.  

          The Ruxton heirs did not contest Dallas's genealogical

findings.  They did, however, file motions arguing that the court

should award them the shares of heirs whose existence was unknown

and who had failed to appear in court. They argued that given the

failure of other parties to appear, the trial court should conclude

that the Ruxton heirs were the closest heirs with a claim to the

property and, consequently, award them the interests of the absent

parties pursuant to Mass. Gen. Laws ch. 190  3, governing the

intestate descent and distribution of land.

          On September 28, 1998, the district court (Wolf, J.)

entered an order termed "Final Judgment of Distribution and

Entitlement" (the "Distribution").  The Distribution divided the

condemnation proceeds according to the Dallas Report, with only

minor exceptions not relevant here.  Paragraph one of the order

distributed a portion of the award to the Ruxton heirs, and other

parties before the court, based on the percent that the Dallas

Report stated they had inherited.  Paragraph two specified the

interests of the absent parties.  Some of these absent parties were

identified by name and awarded a specific share of the condemnation

proceeds.  Other absent parties, due to the incomplete information

in the Dallas report, were identified merely as heirs of various

Betsy I and Edmund II sub-lines about which little information was

known after the late 1800s or early 1900s.  For example, the court

awarded the "Heirs of Amy Swett Higgins" approximately three

percent of the proceeds.  Dallas had determined that Amy Higgins

died on January 3, 1878, but he was unable to locate her probate

records or determine whether she had children. 

          In addition to affirming the Dallas Report's genealogical

evidence, the district court established procedures for the parties

to claim their shares.  The court ruled that "any person identified

in this paragraph 2 [listing awards for the absent heirs] or any

person entitled to take such person's share under applicable law

may, on petition to the court and upon notice to the United States

Attorney and full proof of right thereto, obtain an order directing

payment to him or her."  The court also provided that five years

following the date of the judgment, unclaimed funds would be

removed from the court's own registry and deposited in the Treasury

of the United States, pursuant to 28 U.S.C  2042.  The Ruxton

heirs brought this appeal and Attorney Croce appeals the district

court's refusal to award him attorneys' fees.  

                               II.

Distribution of the condemnation award

          Rather than challenging the specific percentages awarded

in the Distribution, the Ruxton heirs argue that they, as the

closest heirs to come forward, are entitled to collect the shares

of the absent heirs pursuant to Mass. Gen. Laws ch. 190  3. 

Section 3 establishes a hierarchy of claims to an intestate's land,

giving the first claim to children and grandchildren, then to

parents, then to brothers and sisters and their children.  If none

of these direct heirs exist, the statute provides for inheritance

by "collateral heirs": 



          (6) If [the intestate] leaves no issue, and no father, mother,

     brother or sister, and no issue of any deceased brother or

     sister, then to his next of kin in equal degree; but if there

     are two or more collateral kindred in equal degree claiming

     through different ancestors, those claiming through the

     nearest ancestor shall be preferred to those claiming through

     an ancestor more remote.

Under  3, the Ruxton heirs are "collateral heirs" to all of the

descendants of Betsy I and Edmund II.  Although they are only

remote relatives of some of the absent parties, under  3 they have

inheritance rights to the interests of the absent parties if more

direct heirs do not exist.  The Ruxton heirs suggest that the non-

appearance of more direct heirs creates a presumption that they do

not exist, and that their interest in the property would therefore

pass to the Ruxton claimants, the closest heirs who have appeared.

          The Ruxton heirs argue that the district court denied

them their claims to the funds of absent parties by escheating the

interests of the absent heirs to the United States.  However, the

district court did not award the beneficial interest in these funds

to the United States and the Ruxton heirs' challenge to the

Distribution fails when deprived of this premise.  We start by

analyzing the escheat claim, and then turn to the language of the

Distribution free from the misconception that it effects an

escheat.

A. 28 U.S.C.  2042 and Escheat

          According to the Ruxton heirs, the district court

effectuated an escheat by first setting aside approximately two-

thirds of the condemnation award for the absent heirs, and then

stating that these interests, if they went unclaimed for five

years, would be transferred to the United States Treasury in the

name and credit of the United States, pursuant to 28 U.S.C.

 2042. If  2042 awarded the interest of the absent heirs to the

United States, the Ruxton heirs would have a plausible argument

that the district court deprived them of their interest in the

condemnation fund.  But  2042 does no such thing.  While  2042

does provide that unclaimed funds will be deposited in the  United

States Treasury "in the name and to the credit of the United

States," the statute goes on to state that "[a]ny claimant entitled

to any such money may, on petition to the court and upon notice to

the United States attorney and full proof of the right thereto,

obtain an order directing payment to him."  The statute does not

extinguish claims to the moneys held in a condemnation fund; it

merely provides for the transfer of these funds to the United

States Treasury.  

          The Supreme Court has confirmed that the transfer of

funds from a district court to a general account in the United

States Treasury does not extinguish valid claims.  See United

States v. Klein, 303 U.S. 276, 282 (1938).  In Klein, the state of

Pennsylvania sought to collect funds transferred to the United

States Treasury pursuant to the largely identical predecessor to 

2042. The United States argued that since the funds had been

transferred to the Treasury, Pennsylvania could no longer recover

on its claim.  The Court rejected this claim, noting that even

after deposit in the United States Treasury, "the fund remains

subject to the order of the District Court to be paid to the

persons lawfully entitled to it upon proof of their ownership." 

Id. at 280.  Other courts have reached the same conclusion. See In

re Moneys Deposited, 243 F.2d 443, 445 (3d Cir. 1957) ("[A]lthough

such subsequent deposit in the federal Treasury is required by the

statute to be 'in the name and to the credit of the United States'

the fact is that the United States has no beneficial interest

therein but holds the money as statutory trustee for the rightful

owners when and if they are determined by the court.");United

States v Iovenelli, 403 F.2d 468, 469 (7th Cir. 1968); Hansen v.

United States, 340 F.2d 142, 144 (8th Cir. 1965). 

          The language of  2042 and the case law make clear that

the Ruxton heirs' entitlement to these funds, if any, exists

irrespective of whether the funds sit in the court registry or the

United States Treasury.  Although we understand the Ruxton heirs'

desire to have their allotted interest in the funds of the absent

heirs finally decided, their assertion that the district court has

already ruled against them by escheating these funds to the United

States is erroneous.

B. Remaining Challenges to the Distribution

         Once we reject the Ruxton heirs' premise that the funds

escheated, it becomes clear that the district court has not yet

ruled on the Ruxton heirs' claims. Rather, the court, after

identifying the entitlements of the absent parties in paragraph

two, left open the question of who could claim their shares.  The

court provided:

               Pursuant to 28 U.S.C.  2042, any person identified in

     this paragraph 2, or any other person entitled to take such

     person's share under applicable law, may, on petition to the

     court and upon notice to the United States Attorney and full

     proof of the right thereto, obtain an order directing payment

     to him or her." (emphasis added) 



This order does not bar the claims of the Ruxton heirs to the

portion of the award set aside for the absent parties.  The Ruxton

heirs, if their claim has merit, are "identified in paragraph two"

or are entitled to these shares "under applicable law."  The Ruxton

heirs are actually "identified" in some cases because, due to the

imperfect genealogical information, paragraph two often speaks of

categories of individuals entitled to make claims, such as "Heirs

of Lucille Elaine Sargent" or "Heirs of Lilla Rich Higgins."  The

Ruxton claimants' central argument is that they are "heirs" of

these individuals and that they should inherit these interests

since more direct heirs have not appeared.  Nothing in the

Distribution prevents the Ruxton claimants from filing a motion

below stating that they are, for example, the "heirs of Lilla Rich

Higgins" and thus entitled, under the very terms of the

Distribution, to these funds.  

          In other cases, the Ruxton heirs can claim that they are

"entitled to take such person's share under applicable law." The

Ruxton heirs can rely on this provision of the Distribution to take

the share of individuals who were specifically named in paragraph

two but who have not appeared in court (for example, John S.

Higgins and Richard H. Farmer). The Ruxton heirs have argued that

the failure of these individuals to appear creates a presumption in

Massachusetts law that they do not exist, and gives the Ruxton

heirs an entitlement to claim their shares "under applicable law." 

Thus, in cases where the absent parties are specifically named, as

well as those in which they are identified merely by category,  the

Distribution does not foreclose the Ruxton heirs' Massachusetts

law-based claims.  

           Although we conclude that the Distribution does not

foreclose the Ruxton heirs' claims, we are not unsympathetic to

their predicament.  The Ruxton heirs have moved on several

occasions to collect the portion of the fund set aside for absent

parties.  Nonetheless, there is no ruling of the court that bars

them from asserting a claim under the terms set forth in the

Distribution, or otherwise conclusively determines that they could

not collect the shares of the absent heirs.  Indeed, the record is

devoid of any indication that the district court evaluated  whether

the funds set aside for absent parties could be claimed by

"collateral heirs."  Given our involvement with this "collateral

heirs" issue in the Cadorette appeal, and our remand with the

instruction that the parties relitigate their claims, we conclude

that the silence below cannot be construed as an implicit denial of

the claims of the Ruxton heirs.  Clearly, the district court cannot

defer indefinitely a ruling on the Ruxton heirs' claims.  At the

same time, as we noted in Cadorette, "the court apparently retains

a degree of freedom to divide compensation (and to condition its

distribution) in a manner that seems fair, in light of the

possibility that 'lost' heirs may eventually appear." 988 F.2d at

224. Thus it was not error for the court to order that the funds be

distributed in accordance with the uncontested genealogical

evidence and then wait some additional time to see which, if any,

additional heirs appear.   

           There remains the question of the finality of the

Distribution for purposes of appeal.  See Catlin v. United States,

324 U.S. 229, 233 (1945) ("[O]rdinarily in condemnation proceedings

appellate review may be had only upon an order or judgment

disposing of the whole case . . . . ").  Although we have rejected

the escheat argument and concluded that the district court has not

yet ruled on the Ruxton heirs' claims, we affirm the judgment as

final pursuant to 28 U.S.C.  1291.  The judgment is final in that

it conclusively (1) determines title to the eight acres, (2)

establishes the just compensation for that land, and (3)

establishes a right to collect those funds on the basis of

essentially undisputed genealogical evidence.  The fact that the

Distribution does not always identify the specific individuals

entitled to bring claims against the fund (instead referring to

"Heirs of x" and to absent individuals whose existence is unknown)

does not defeat that finality.  The attenuated interests in this

case make it difficult to establish with precision the claimants to

this fund.  It thus made sense for the district court to determine

finally the genealogical breakdown before evaluating individual

claims that may fall under this breakdown. This approach is

analogous to that used in a complex class action, where a court may

enter a final judgment establishing an award for the class, but

leave for further hearings individual proof of class membership.

See, e.g. In re "Agent Orange" Product Liability Litigation, 818

F.2d 179, 181 (2d Cir. 1987) (reviewing as final a class action

distribution plan for victims of "Agent Orange" even though the

identification and entitlement of all class members had not yet

been determined). 

          The Ruxton heirs are free to return to the district court

and assert their claims to the funds of the absent parties.  As we

noted in Cadorette, these claims raise the question of how best to

apply the Massachusetts law of descent and distribution to a

situation of considerable factual complexity.  We will leave that

determination, in the first instance, to the district court.

                              III.

Attorneys' Fees

          The Ruxton heirs argue that the district court awarded

inadequate fees to their attorney, John Hallisey, under the "common

fund" doctrine.  Attorney Arthur Croce separately appeals, claiming

that the district court improperly denied him a share of the common

fund.  

          A common fund award "is an equitable award made at the

discretion of the district court."  Kargman v. Sullivan, 589 F.2d

63, 69 (1st. Cir. 1978).  "Moreover, because each common fund case

presents its own unique set of circumstances, trial courts must

assess each request for fees and expenses on its own terms." In re

Fidelity/Micron Securities Litig., 167 F.3d 735, 737 (1st Cir.

1999).  The trial court enjoys "extremely broad" latitude in

determining the appropriate shares of the common fund, and may

calculate such an award either on the basis of a reasonable

percentage of the fund, or using a lodestar method to multiply a

reasonable hourly rate by the compensable hours the attorney worked

on the matter.  In re Thirteen Appeals Arising out of the San Juan

Dupont Plaza Hotel Fire, 56 F.3d 295, 307, 309 (1st Cir. 1995).

          The district court did not abuse its discretion in

awarding Hallisey $37,500, approximately twenty-three percent of

the $168,000 common fund.  In reaching this decision, the district

court closely reviewed the hours Hallisey worked generating the

condemnation fund, and used these hours to generate a "lodestar"

fee (250 hours multiplied by $150 per hour).  The district court

then concluded that this fee amounted to a reasonable percentage of

the common fund and was "consistent with the court's evaluation of

Hallisey's contribution to the case."  We find this fee to be

reasonable, and we are unwilling to second-guess the district

court's assessment of Hallisey's efforts.

          Likewise, the court did not abuse its discretion in

denying Croce any award under the common fund doctrine.  The court

found that although Croce had generated a portion of the award in

the Cadorette quiet title action (where he had been compensated),

his submissions in the condemnation proceedings "were not valuable

to this court" and that "it was evident from the outset that Croce

was involved to pursue his interest in obtaining attorney's fees." 

Indeed, Croce represented only nominal parties in the condemnation

action who themselves received no compensation.  Given the district

court's findings, there was no abuse of discretion in denying Croce

a share of the common fund.   

          AFFIRMED.