- vs -

COUNTIES OF ONEIDA and MADISON,
Defendants.

70-CV-35

DEFENDANTS’ MEMORANDUM OF LAW ON THE
ISSUE OF GOOD FAITH

BACKGROUND

This litigation is over twenty-eight years old. It has been complex and far-reaching. Since its commencement in 1970, numerous motions have been made by the parties and entertained by the Court and two trials have been held. This case has been to the Supreme Court of the United States twice, has found itself in the United States Court of Appeals for the Second Circuit several times and now returns to this Court for yet further litigation. Its history also includes a decade’s worth of fruitless settlement negotiations.

In 1977, this Court held defendants, the Counties of Oneida and Madison, liable for the wrongful possession of the land at issue (the "subject properties") during the years 1968 and 1969. Oneida Indian Nation of N.Y. v. County of Oneida, 434 F. Supp. 527 (N.D.N.Y. 1977). In 1981, this Court awarded damages to plaintiffs in an amount equal to the fair rental value of the subject properties as unimproved. Since this Court found no evidence indicating that the Counties had acted other than in good faith when they possessed the subject properties, the Court held that the Counties were entitled to receive a set-off for the value of improvements constructed by the Counties on the properties. Partial Findings of Fact and Conclusions of Law of Judge Port, ¶ 23 at 4 (Exhibit A attached hereto).

In 1983, the United States Court of Appeals for the Second Circuit affirmed this Court’s ruling that the Counties are liable for the wrongful possession of the subject properties during the years 1968 and 1969. Oneida Indian Nation of N.Y. v. County of Oneida, 719 F.2d 525, 527 (2d Cir. 1983). However, the Court of Appeals remanded the case to this Court for further clarification on the issue of the Counties’ good faith occupation of the properties. Id. at 542. Thus, the only issue preventing this case from finally reaching a conclusion is whether the defendant Counties were "good faith" occupiers of the subject properties. It is the Counties’ position that this simple, discrete issue can be resolved by this Court without the necessity of holding yet another proceeding before the Court. Rather, as discussed below, sufficient evidence exists in the present record which supports this Court’s previous determination that the Counties occupied the subject properties in good faith and thus are entitled to a set-off for the value of improvements constructed on the properties.

A. In Order to Have Occupied The Subject Properties In Good Faith, The Law Requires That The Counties Honestly Believed They Owned The Subject Properties

It is well settled that a person occupies land in "good faith" if he honestly believes he has good title to the land. Searl v. Sch. Dist. No. 2, 133 U.S. 553, 563 (1890); Thomas v. Evans, 105 N.Y. 601, 612 (1887); Vulovich v. Baich, 286 A.D. 403, 405, aff’d, 1 N.Y.2d 735 (1956). According to the Supreme Court of the United States, "many independent facts and surrounding circumstances" may legitimately be considered to determine if a person honestly believed his title was valid. Searl, 133 U.S. at 563. The case law indicates, however, that in order for a person to establish an honest belief in his title, the facts and surrounding circumstances must show that (i) he entered into possession of the land under "color of title" and (ii) while in possession of the land, he acted as if he owned the land. Wright v. Mattison, 59 U.S. 50, 56 (1855); Jones v. Duerk, 25 A.D. 551, 561 (4th Dep’t 1898).

In order to determine whether a person held an honest belief in the validity of his title, it is first necessary to consider the circumstances surrounding his entry onto the land. Clearly, if a person initially enters into possession of land without an indication of title, he is a mere naked trespasser and certainly cannot honestly claim to believe he owns the property. Searl, 133 U.S. at 561-62; N.Y., Ontario and W. Ry. Co. v. Livingston, 238 N.Y. 300, 305 (1924). Courts have thus repeatedly held that in order to be a good faith occupier of land, a person must have entered into possession of the land under "color of title." Wright, 59 U.S. at 56; Searl, 133 U.S. at 561-

62.

"Color of title" is "that which in appearance is title, but which in reality is no title." Wright, 59 U.S. at 56. Thus, one enters into possession of land under color of title if he obtains title, albeit defective, under circumstances where it nonetheless appeared that he obtained good title. Id. Courts will examine a variety of factors to determine if a defective title appeared to be good title. Thus, courts will look to the intent of the parties to the conveyance; the conduct of the parties during the conveyance; and the reasons for the conveyance to determine if it reasonably appeared that good title to the property was conveyed. See Jones v. Duerk, 25 A.D. 551 (4th Dep’t 1898).

When title is conveyed by deed, color of title exists if the deed professes to pass title upon its face, but nonetheless fails to do so, either from a want of title in the person making it or from the defective conveyance that is used. 41 AM. JUR. 2D Improvements § 19 (1995). In such cases, the instrument purporting to convey title need only show evidence of claimed ownership by the grantor, and therefore need only show some semblance of title. 3 AM. JUR. 2D Adverse Possession § 151 (1986). Thus, in cases where entry upon land is made under deed, courts will consider whether the face of the deed would reasonably lead one to conclude that it conveyed good title to the land. N.Y., Ontario and W. Ry. Co., 238 N.Y. at 306.

Finally, the nature or capacity of the person purportedly conveying title is another important factor to consider when determining if entry upon land was made under color of title. For example, the fact that a conveyance was made by an executor or trustee - persons whom one would reasonably expect to be able to convey good title - has been considered when assessing whether one has entered land under color of title. Lyons Nat’l Bank v. Shuler, 199 N.Y. 405, 409 (1910); Thomas v. Evans, 105 N.Y. 601, 615 (1887). Similarly, the fact that a conveyance was approved by a governmental body has also been a factor in assessing whether a person entered property under color of title. Etalook v. Exxon Pipeline Co., 831 F.2d 1440, 1445 (9th Cir. 1987).

B. The Counties Entered Into Possession Of The Subject Properties Under Strong Color of Title

The present record establishes that the Counties did not enter into possession of the subject properties as mere naked trespassers without any indication of title; rather, the Counties entered into possession of the subject properties under strong color of title. N.Y., Ontario and W. Ry. Co., 238 N.Y. at 305.

As an initial matter, the present record establishes that the land ceded by the Oneidas to the State of New York in 1795 - of which the subject properties are a part - was conveyed by formal, written treaty executed on behalf of the Oneidas. Transcript of Proceedings held November 12, 1975, at 6 (Exhibit B attached hereto). Furthermore, the land was surveyed and mapped by the state shortly after the cession. Thus, the record shows that the Surveyor General of the State of New York created a field book of the boundaries of the land ceded by the Oneidas to the State of New York in 1795 and created several maps of the land after it was surveyed. Transcript of Proceedings held September 14, 1981, at 9-27 (Exhibit C attached hereto). In fact, the record reveals that a statute passed by the state legislature in April 1795 authorized the Surveyor General to survey such land, lay it into lots and file maps and field books of the land. Id. at 14-15.

Additionally, the record reflects that the plaintiffs received compensation from the State of New York in connection with the purported cession in 1795. Id. at 34-35 (Exhibit D attached hereto); Partial Findings of Fact and Conclusions of Law of Judge Port, ¶ 26 at 5 (Exhibit A attached hereto). The record further reflects that neither the plaintiffs nor their predecessors ever refused or returned such compensation to the State of New York. Partial Findings of Fact and Conclusions of Law of Judge Port, ¶ 27 at 5 (Exhibit A attached hereto).

The execution of a formal, written treaty by representatives of the Oneidas conveying land to the State of New York; the state’s payment of compensation to the Oneidas in connection therewith; and the state’s act of surveying, laying it into lots and creating maps of the ceded land, could reasonably lead the Counties to conclude that the State of New York owned and received good title to the ceded land, including the subject properties. Other factors which could reasonably lead the Counties to conclude that they appeared to receive good title to the subject properties are discussed below.

The process by which control of, and dominion over, highways within the state was granted to the Counties is evidenced by several pieces of legislation enacted by the state legislature. Such legislation, of which the court should take judicial notice, shows that the State of New York authorized the Counties to exercise control and dominion over highways and roads in the state and set forth procedures by which such control and dominion could be effectively transferred to the Counties. Since dominion over the highways and roads was transferred to the Counties from the state and other governmental bodies, and such transfer occurred pursuant to and was fully authorized by state law, the Counties could have reasonably concluded that they received the ability to exercise lawful dominion over the county highways and roads.

Since the earliest days of its history, the State of New York has expended state moneys to construct and maintain various public improvements such as canals, prisons and schools. STATE COMMISSION OF HIGHWAYS, REPORT TO THE ASSEMBLY OF THE STATE OF NEW YORK, 133d Sess., at vii (1910) (Exhibit E attached hereto). However, prior to 1898, the state did not appropriate any state moneys for the purpose of improving or maintaining its public highways. Id. Rather, at the time of its inception as a colony, the English "labor system" of building and maintaining highways was employed in New York. JOINT COMMITTEE OF THE SENATE AND ASSEMBLY OF THE STATE OF NEW YORK APPOINTED TO INVESTIGATE THE SUBJECT OF HIGHWAYS, REPORT TO THE SENATE AND ASSEMBLY OF THE STATE OF NEW YORK OF 1908, at 5 (1908) (Exhibit F attached hereto). Pursuant to the labor system, work upon the highways was performed by the owners of property abutting the highways. HISTORICAL NOTE, McKINNEY’s CONSOL. L. OF N.Y. ANN., HIGH. L., at 2 (1979). The amount of work to be performed on the highways by each owner was assessed against him in proportion to the value of his property. Id.

In the late 1800’s, the State of New York attempted to abandon the labor system in favor of the "money system" of building and maintaining highways. Id. In 1873, towns were given the option of converting from the labor system to the money system. Id. Pursuant to the money system, in lieu of an assessment for labor, an annual highway tax was levied against property owners by the towns. Id. Any work to be performed upon the highways was done by contract and paid for by funds raised through the imposition of the highway tax by the towns. HISTORICAL NOTE, McKINNEY’s CONSOL. L. OF N.Y. ANN., HIGH. L., at 2 (1979).

Thus, until the development of the automobile, the construction and maintenance of highways in the State of New York was purely a matter of local concern financed through local taxation. STATE HIGHWAY SURVEY COMMITTEE, REPORT TO THE LEGISLATURE OF THE STATE OF NEW YORK FOR THE, PERIOD JUNE 19, 1934 TO MARCH 13, 1936, at 9 (1936) (Exhibit G attached hereto). However, the advent of the automobile necessitated the development of a new, revolutionary system of highways within the state involving the participation of all levels of government. Id. at 9-10. Thus, modern highway improvement began in the State of New York upon the passage of the Higbie-Armstrong Act by the state legislature in 1898. Id. at 10.

The Higbie-Armstrong Act provided the basis for the development of a comprehensive scheme of highway improvement in which the state, counties and towns became involved in the construction and improvement of public highways. STATE COMMISSION OF HIGHWAYS, supra at vii (Exhibit E attached hereto). The Higbie- Armstrong Act established a procedure whereby a county could request that the state authorize the improvement of a public highway within the county. Higbie-Armstrong Act, 1898 N.Y. Laws 115 § 1 (Exhibit H attached hereto). If the state approved the request and the county approved the cost, plans and specifications of the construction, the highway would be improved at the direction of the state and at the joint expense of the state, county and town. Id. §§ 4, 5, 6, 8, 9. Most significantly, however, the Higbie-Armstrong Act provided that, upon completion of the highway, the state could serve notice upon the county requiring the county to "accept" the highway as a "county road." Id. § 12. The highway would be deemed "accepted" by the county twenty days after filing and service of the notice and, thereafter, the county would be charged with the responsibility of maintaining the road. Id. Thus, the Higbie-Armstrong Act provided one of the earliest authorizations for the Counties to acquire dominion over highways in the state as county roads, and set forth a detailed procedure by which such dominion could be acquired.

In 1907, after passage of the Higbie-Armstrong Act, the state legislature adopted an official map prepared by the state and the counties, on which was indicated the highways to be improved as "county highways" in the manner provided by the Higbie-Armstrong Act. STATE COMMISSION OF HIGHWAYS, supra at vii, 8 (Exhibit E attached hereto). The official map approved by the state legislature contained 7,500 miles of highways designated as "county highways" and distributed such highways among the counties in an equitable fashion. Id. at vii.

In 1908, the state legislature enacted a new Highway Law which repealed the Higbie-Armstrong Act. Highway Law, 1908 N.Y. Laws 330 (Exhibit J attached hereto). Although the Highway Law of 1908 repealed the Higbie- Armstrong Act, the Highway Law of 1908 nonetheless continued the procedure whereby a county could request that a highway be constructed or improved at the direction of the state and at the joint expense of the state, county and town. Id. §§ 122, 123. When considering whether to approve the request, the state was required to determine whether the construction or improvement of the highway would result in an equitable apportionment of highways among the counties. Id. § 124. Upon proper completion of the construction or improvement of the highway, the state was required to notify the county that the highway was completed whereupon the highway would be deemed "accepted" by the county as a county highway. Id. § 134.

In 1929, the Highway Law of 1909 was amended to include provisions for the establishment of a "county road system." Act of April 8, 1929, N.Y. Laws 362 (Exhibit L attached hereto). A new section 320-b was added to the Highway Law which set forth a specific procedure by which counties were authorized to develop such a system. Id. § 17. According to the new section 320-b, the counties were required to prepare and file a map designating the highways which would constitute the system of "county roads" within the county. Id. Although section 320-b did not permit counties to include a state or county highway within its county road system, it did not prohibit the counties from transferring a town highway to the county road system. Id. Similarly, highways of incorporated villages were also permitted to be transferred to the county road system. Id. Section 320-b also established a fund, containing state and county moneys, to be applied to the construction, reconstruction and improvement of the county roads designated on the county road system map. Id.

Under the current Highway Law, a similar procedure exists for the development of the county road system. According to section 115 of the Highway Law, counties are authorized to establish a county road system by preparing and filing a map which designates those highways within the county which comprise its county road system. N.Y. HIGH. L. § 115 (McKinney 1979). Although section 115 generally specifies that a state highway may not be included within a county road system, counties may nonetheless designate state highways which are not under state maintenance as county roads and include them within the county road system. Id.

The cited statutory provisions show that, at the time county highways existed in the State of New York, the Counties were granted dominion over such highways by, and pursuant to the direction and express authorization of, the State of New York - a sovereign whose very laws created the Counties and from which the Counties could have reasonably concluded that they received the ability to exercise lawful dominion over the highways. Furthermore, since 1929, the Counties have been directed and authorized by the State of New York to exercise control and dominion over certain highways within the state as "county roads." Since dominion over county roads was transferred to the Counties from the state and other governmental bodies, the Counties could have reasonably concluded that they received the ability to exercise lawful dominion over the roads. As such, the Counties have at all times entered into possession of the county highways and roads under strong color of title.

Champlain Battleground Park was conveyed to the County of Madison by deed dated July 21, 1930. (Exhibit M attached hereto). The deed contains a legal description of the property and professes to grant the property to the County of Madison, it representatives and assigns "to have and to hold ... forever." Furthermore, the deed states that the grantors of the property "will forever warrant the title" to the property. Thus, an examination of the face of the deed under which the County of Madison entered into possession of Champlain Battleground Park could reasonably lead the County of Madison to believe that the deed conveyed good title to the property. N.Y., Ontario and W. Ry. Co., 238 N.Y. at 306. Accordingly, the County of Madison entered into possession of Champlain Battleground Park under strong color of title.

The County of Madison entered into possession of the property upon which the Madison County Volunteer Firemens Association radio tower is built by deeds dated September 1953 and January 16, 1961. (Exhibit N attached hereto). The deeds contain a legal description of the property, including a right of way to the property, and profess to grant the property to the grantees, their heirs, successors and assigns "forever." Furthermore, the September 1953 deed also states that the grantors of the property "will forever warrant the title" to the property. Thus, an examination of the faces of the deeds under which the County of Madison entered into possession of the property upon which the Madison County Volunteer Firemens Association radio tower is built could reasonably lead the County of Madison to believe that the deeds conveyed good title to the property. N.Y., Ontario and W. Ry. Co., 238 N.Y. at 306. Accordingly, the County of Madison entered into possession of such property under strong color of title.

The County of Oneida entered into possession of the gravel pit by deed dated September 11, 1950. (Exhibit O attached hereto). The deed contains a legal description of the property and professes to grant the property to the County of Oneida, its successors and assigns "forever." Furthermore, the deed states that the grantors of the property "will forever warrant the title" to the property. Thus, an examination of the face of the deed under which the County of Oneida entered into possession of the gravel pit could reasonably lead the County of Oneida to believe that the deed conveyed good title to the property. N.Y., Ontario and Western Ry. Co., 238 N.Y. at 306. Accordingly, the County of Oneida entered into possession of the gravel pit under strong color of title.

C. At All Times After Entering Into Possession Of The Subject Properties,
The Counties Have Acted As If They Owned The Subject Properties

After finding that a person entered into possession of land under color of title, it is necessary to examine the person’s actions and conduct while in possession to determine whether he exhibited an honest belief that he owned the property. Jones, 25 A.D. at 561. Thus, actions such as paying taxes and assessments on the property; obtaining insurance for the property and paying the required insurance premiums thereon; giving mortgages on the property and paying the principal and interest thereon; improving, repairing and maintaining the condition of the property; and u sing one’s own funds and resources to maintain, improve and repair the property are the best and most reliable indicators that a person honestly believed he owned the property. Id. Quite simply, people do not ordinarily invest their valuable time, money and resources into improving and maintaining property which belongs to a stranger.

The present record clearly establishes that, while in possession of the subject properties, the Counties have acted as if they owned the properties. According to the testimony of Donald Callahan, the Chairman of the Board of Supervisors of Madison County, Madison County has maintained its county highways as long as the highways have been in place. Transcript of Proceedings held September 17, 1981, at 516 (Exhibit P attached hereto). Mr. Callahan also testified that the county maintains Champlain Battleground Park and the radio tower on Mutton Hill Road in Madison County. Id. Mr. Callahan testified that Madison County incurs expenses in connection with its maintenance of the county highways, Champlain Battleground Park and the radio tower. Id. at 516-17. Such expenses are incurred by Madison County on an annual basis and provisions are made in the county budget for such expenses. Id. at 516, 518. In fact, Mr. Callahan testified that maintenance of the radio tower is "one of the more expensive bits of maintenance that we do in Madison County on an annual basis." Id. at 519.

Furthermore, according to the testimony of plaintiffs’ real estate appraiser, Richard Kelley, Oneida County excavated gravel from the gravel pit for "fill type uses, and for any use that would be appropriate for [the] quality of gravel" contained in the gravel pit. Transcript of Proceedings held September 15, 1981, at 164 (Exhibit Q attached hereto). According to the testimony of Donald Fisher, another real estate appraiser, Oneida County excavated gravel from the gravel pit and used it "for the benefit of the county." Id. at 250 (Exhibit R attached hereto). This testimony shows that Oneida County treated the gravel pit as if it were the owner of the gravel pit: it mined the gravel pit, excavated gravel and utilized the gravel for the benefit of the County.

Provisions of the Highway Law further establish that the Counties have acted in all respects as owners of the county roads. According to the Highway Law, the Counties are charged with the responsibility of supervising and maintaining all roads comprising the county road system. N.Y. HIGH. L. §§ 102(l), 129 (McKinney 1979). In fact, under New York law, the Counties are under a nondelegable duty to maintain county roads in a reasonably safe condition. Lopes v. Rostad, 45 N.Y.2d 617, 623 (1978). The Counties’ nondelegable duty to maintain county roads is not only set forth in the Highway Law, it is also well established in the common law. Id.; Klepper v. Seymour House Corp., 246 N.Y. 85, 90 (1927). If the Counties fail to maintain county roads in a reasonably safe condition, they can be held liable for any injuries caused by such failure. Lopes, 45 N.Y.2d at 623; N.Y. HIGH. L. § 139 (McKinney 1979).

In connection with their supervision and maintenance of county roads, the Counties appropriate and attribute moneys to be applied to the construction, reconstruction and maintenance of the county roads. N.Y. HIGH. L. § 111 (McKinney 1979). Furthermore, each year, the Counties prepare a budget stating the amount necessary to be raised by the County for the improvement, construction and maintenance of county roads. N.Y. HIGH. L. § 102(3) (McKinney 1979). The Counties also award contracts for the construction, reconstruction or other work to be performed upon the county roads. N.Y. HIGH. L. § 126 (McKinney 1979).

Pursuant to the Highway Law, the Counties cut and remove weeds and other foliage growing within the bounds of county roads, construct sidewalks adjacent to county roads, erect signs on county roads and remove unattended vehicles from county roads. N.Y. HIGH. L. §§ 102(11), (15), (17), (18) (McKinney 1979). The Counties also remove snow and ice from county roads and erect snow fences and other structures to prevent the drifting of snow and ice onto the roads. N.Y. HIGH. L. § 135 (McKinney 1979).

Testimony in the present record, combined with the cited provisions of the Highway Law, clearly establish that the Counties have maintained, repaired and improved the subject properties, appropriated and invested their funds and resources for such purposes and accepted legal responsibility for certain defective conditions thereon. The only reasonable conclusion that can be drawn from such actions - particularly the imposition upon the Counties of liability for defective conditions - is that the Counties honestly believed they owned the subject properties.

The present record shows that the Counties entered into possession of the subject properties under color of title and, while in possession, acted as if they owned the subject properties. Accordingly, the Counties have established that they occupied the subject properties in good faith.

As an additional matter, the present record is devoid of any evidence which would impeach that good faith. For example, there is no evidence in the record that the plaintiffs ever told the Counties that the plaintiffs had better title to the subject properties. In fact, in response to the Counties’ Request for Admissions, the plaintiffs stated that they had no personal knowledge of and could not determine from readily ascertainable information whether any protest of the Counties’ use and occupation of the subject properties was ever made to the Counties. Response No. 7 of Plaintiff Oneida Indian Nation of New York to Defendants’ Request for Admissions; Response No. 7 of Plaintiffs Oneida Indian Nation of Wisconsin and the Oneida of the Thames Band to Defendants’ Request for Admissions (Exhibit S attached hereto). While the plaintiffs may have made protests to the United States and the State of New York, the record contains absolutely no evidence that any protest of the Counties’ use and occupation of the subject properties was ever made to the Counties. Id. If such evidence existed, plaintiffs had their opportunity to present it to this Court during the four day trial on damages in 1981.

In fact, the present record contains only evidence that the Counties had no notice of plaintiffs’ claim. According to the testimony of Mr. Fisher, his appraisal report stated that the Counties were the owners of the properties described in the report because "the county records and all other indications that we had available to us indicated that these properties were owned by the counties that they were located in." Transcript of Proceedings held September 15, 1981, at 246-47 (Exhibit R attached hereto). Mr. Fisher also testified that in the course of his research, he found "no direct evidence that the counties thought that they did not own the land." Id. at 248. According to David Townsend, Controller of the County of Oneida, to his knowledge, no notice of the plaintiffs’ claim was given to the County of Oneida prior to 1970. Transcript of Proceedings held September 16, 1981, at 472 (Exhibit T attached hereto). Similarly, Mr. Callahan testified that, until the filing of plaintiffs’ complaint in 1970, he had no knowledge of any claim that the County of Madison did not own Champlain Battleground Park, the radio tower or the county roads. Transcript of Proceedings held September 17, 1981, at 517 (Exhibit P attached hereto).

Furthermore, any possibility that the plaintiffs communicated any protests to the Counties appears to be precluded by the plaintiffs’ own admissions. In their Request for Admissions, the Counties asked the plaintiffs to admit that the plaintiffs had been aware, since well prior to 1951, of the Counties’ use of the subject properties. The plaintiffs denied such knowledge and stated that the plaintiffs were "generally aware that Oneida Territory was occupied by adverse claimants, but was not aware of the identity of the claimants or the specifics of the claimants’ use." Response No. 2 of Plaintiffs Oneida Indian Nation of Wisconsin and the Oneida of the Thames Band to Defendants’ Request for Admissions; Response No. 2 of Plaintiff Oneida Indian Nation of New York to Defendants’ Request for Admissions (emphasis added) (Exhibit S attached hereto). It is inconceivable how plaintiffs could have ever notified the Counties that plaintiffs claimed superior title to the subject properties when plaintiffs, according to their own admission, did not even know who was using or occupying the subject properties.

Even if the Counties had actual notice of plaintiffs’ competing claim to the subject properties (which the Counties deny), such notice should not impeach the Counties’ good faith for two reasons. First, until 1974, no state court, federal court or any other state or federal governmental authority would recognize plaintiffs’ claim or afford plaintiffs any sort of remedy against the Counties on account of defendants’ occupation of plaintiffs’ land. By plaintiffs’ own admission, no state court would entertain plaintiffs’ claim. Affidavit of Jacob Thompson and George C. Shattuck, ¶ 35 at 15 (Exhibit U attached hereto). Plaintiffs have further admitted that prior to seeking relief from this Court in 1970, they made repeated but unsuccessful efforts to obtain redress from many governmental authorities. Plaintiffs’ Cross-Motion to Amend Complaint; Answering Points on Defendants’ Motion to Dismiss, ¶ 10 at 5-6 (stating that plaintiffs had sought relief from the Governor of the State of New York, the President of the United States and the United States Congress) (Exhibit V attached hereto). This Court, in fact, dismissed plaintiffs’ complaint in 1971, holding that a federal court would not hear plaintiffs’ claim. Oneida Indian Nation of N.Y. v. County of Oneida, 70-cv-35 (N.D.N.Y. November 9, 1971), aff’d, 464 F.2d 916 (2d. Cir. 1972), rev’d, 414 U.S. 661 (1974).

In Searl, the defendant school district and the plaintiff both claimed to have good title to a certain parcel of property. Although the school district had actual notice of plaintiff s competing claim, it nonetheless continued to occupy the property and constructed improvements upon the property. According to the Supreme Court of the United States, the school district’s good faith occupation was not impeached by its knowledge of the plaintiffs competing claim because the school district had been advised by reputable counsel that the plaintiff s claim had no foundation and thus the school district held better title. Searl, 133 U.S. at 562. Similarly, in the present case, even if the Counties had actual notice of plaintiffs’ claim, the Counties’ good faith cannot be impeached by such notice because, until 1974, no court or governmental authority would even recognize plaintiffs’ claim. Since no court or governmental authority would entertain plaintiffs claim or grant plaintiffs relief despite plain tiffs’ repeated efforts, it would be reasonable for the Counties to conclude that plaintiffs’ claim had no foundation and thus the Counties held better title to the subject properties.

The second reason why actual notice of plaintiffs’ claim, even if somehow shown, should not impeach the Counties’ good faith is that the law is clear that notice of an adverse claim to property does not, in itself, impeach one’s honest belief in the validity of his title. According to the Supreme Court of the United States:

Thus, in order to impeach one’s honest belief in the validity of his title, such person must not only have knowledge of a competing claim, he must also exercise some improper means to defeat the competing claim. Id. This is further evident from the Supreme Court’s conclusion that "good faith" is "the opposite of fraud and bad faith" and that "good faith" is "the freedom from a design to defraud the person having better title." Id. at 562, 564 (emphasis added). Thus, the Supreme Court in Searl found that although the defendant school district had actual knowledge of a competing claim to the subject property, there was no evidence that the school district willfully employed any means to defeat or defraud the plaintiff of his title.

In N.Y., Ontario and W. Ry. Co. v. Livingston, 238 N.Y. at 300, the New York Court of Appeals considered whether a railroad company was a good faith possessor of plaintiff’s property. In holding that the railroad company had acted innocently and thus in good faith, the court distinguished the railroad company from entities in prior cases which the court had found to be "bad faith" possessors. Thus, as an example of a "bad faith" possessor, the court referred to its decision in Village of St. Johnsville v. Smith, 184 N.Y. 341 (1906), wherein a village possessed property with full knowledge of plaintiffs superior title. However, the village nonetheless continued to possess the property, outwardly defying the plaintiffs assertion of title and express command to quit the property. Id. at 344. According to the court in N.Y., Ontario and W. Ry. Co., such willful defiance of plaintiff’s title was the "decisive feature" in determining that the village had possessed plaintiffs land in bad faith and thus was not entitled to a set-off for improvements made on plaintiff s land. N.Y., Ontario and W. Ry. Co., 238 N.Y. at 305.

Not only is there no evidence in the present record that the Counties knew of the plaintiffs’ claim to the subject properties, there is no evidence in the record that the Counties defied the plaintiffs’ title, attempted to defeat the plaintiffs’ title, intended to defraud the plaintiffs of their title or otherwise employed any means to oust the plaintiffs of their title to the subject properties. In sum, there is absolutely no evidence in the record that the Counties were active wrongdoers. Oneida Indian Nation, 719 F.2d at 541. In fact, the evidence in the record leads to the opposite conclusion.

According to Mr. Callahan’s testimony, to his knowledge, no one had ever been prevented from using the county highway system in Madison County. Transcript of Proceedings held September 17, 1981, at 517 (Exhibit P attached hereto). According to Mr. Townsend’s testimony, to his knowledge, no one had ever been prevented from using the county highway system in Oneida County. Transcript of Proceedings held September 16, 1981, at 474 (Exhibit Z attached hereto). Furthermore, Judge Port found that for the years 1968-1969, plaintiffs were not prevented from using the subject properties in the same manner as the public generally. Partial Findings of Fact and Conclusions of Law of Judge Port, $25 at 5 (Exhibit A attached hereto). In short, the record reveals that the subject properties were fully available to be used by the plaintiffs just as the subject proper-ties were available to be used by any member of the public.

Any possible assertion that the Counties attempted to defeat or oust the plaintiffs of their title is also entirely discredited by the fact that the Counties’ occupancy of the subject properties has been "in no respect for a private purpose or pecuniary gain, but strictly and wholly for public use." Searl, 133 U.S. at 562. The record is filled with indisputable evidence that the Counties have not derived a profit from their occupancy of the subject properties. According to the testimony of Mr. Townsend, a review of the county records did not indicate that Oneida County has conducted a profit-making enterprise with regard to the county highway system or the gravel pit. Transcript of Proceedings held September 16, 1981 at 471-72 (Exhibit T attached hereto). According to the testimony of Mr. Callahan, Champlain Battleground Park is a free park, Madison County never made any profit from the use of the radio tower and never charged tolls or made any profit from the use of the county road system. Transcript of Proceedings held September 17, 1981, at 515-16 (Exhibit P attached hereto).

Thus, the record does not show that the Counties were bad faith occupants of the subject properties, intending to derive pecuniary gain by defrauding and defeating plaintiffs from their title. Rather, the record shows that the Counties’ occupation of the subject properties was dedicated wholly to public use and for the benefit of the public, including the plaintiffs.

It is well settled that a person who occupies land in "good faith" may set-off the value of improvements he has made on the land against any damages awarded to the true owner of the land. Oneida Indian Nation of N.Y., 719 F.2d at 541; Searl, 133 U.S. at 561; N.Y. Ontario and W. Ry. Co., 238 N.Y. at 304; 41 AM. JUR. 2D Improvements § 11 (1997). This is an equitable rule. It would be manifestly unfair to make the improver pay twice for improvements he has conferred upon the land when he honestly believed he owned the land. Oneida Indian Nation of N.Y., 719 F.2d 541; 41 AM. JUR. 2D Improvements § 11 (1997). Similarly, in such cases, awarding the value of the improvements to the true owner would unjustly enrich the owner and confer a windfall upon him. 41 AM. JUR. 2D Improvements § 11 (1997).

Since the Counties occupied the subject properties in good faith and there is no basis upon which to impeach the Counties’ good faith, the Counties are equitably entitled to receive a set-off for improvements.

It is well settled that if the true owner of property knows that a person is making permanent and valuable improvements upon the premises under a mistaken belief of ownership, he may not sit back and allow the improvements to be made without objection. Jones, 25 A.D. at 560; Lyons Nat’l Bank, 199 N.Y. at 409-10. In such cases, equity will intervene to estop the true owner from claiming that the improver is not entitled to a set-off for improvements constructed upon the property. Jones, 25 A.D. at 560. Quite simply, it would be an act of fraud and injustice to permit the true owner to allow another to expend money improving land under an erroneous belief in title and thereafter permit the owner to become enriched by the value of the improvements.

The Counties’ use of plaintiffs’ land and their construction of valuable, permanent improvements thereon has been entirely open and notorious. In fact, it would be difficult to imagine how one could make a more open and notorious use of land than by constructing and maintaining public highways on the land. However, as previously discussed, the record is devoid of any evidence whatsoever that the plaintiffs protested to the Counties concerning the Counties’ use of the land and their construction of valuable, permanent improvements on the land. Rather, the record shows that, prior to 1970, plaintiffs stood by and watched while the Counties openly expend money and resources improving plaintiffs’ land. Under such circumstances, equity demands that this Court estop plaintiffs from claiming that the Counties are not entitled to a set-off for improvements which they constructed upon plaintiffs’ land in good faith.

The present record establishes that the Counties occupied the subject properties in good faith and there is no basis upon which to impeach the Counties’ good faith. Accordingly, there is a sufficient basis to support this Court’s previous determination that the Counties are entitled to receive a set-off for improvements constructed upon the subject properties. The record is also sufficient to support a determination that the plaintiffs are estopped from claiming that the Counties are not entitled to such a set-off.

For the foregoing reasons, the issue of whether the Counties’ occupied the subject properties in good faith may be resolved by this Court without the necessity of burdening the Court with further litigation concerning this case. If the Court determines that the record provides insufficient evidence regarding this issue, defendants suggest that the parties present to the Court a procedure and schedule for the amplification of the present record.

Dated: October 15, 1998
Rochester, New York

Respectfully Submitted,

Nixon, Hargrave, Devans & Doyle LLP Attorneys for the Counties of Madison and Oneida

By:

G. Robert Witmer, Jr., Esq.
Bar Roll No. 104937
Clinton Square
P.O. Box 1051
Rochester, New York 14603-1051

Telephone: (716) 263-1000

David M. Schraver, Esq.
Stacey L. Stritzel, Esq.,
On the Brief