City of Stilwell v. Ozarks Rural Electric Cooperative Corp.

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JAN 26 1999
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

CITY OF STILWELL, OKLAHOMA, a municipal
corporation,

Plaintiff-Appellee,
No. 97-7104
v.

OZARKS RURAL ELECTRIC COOPERATIVE
CORPORATION,

Defendant-Appellant,

and

RURAL ELECTRIC COMPANY, United States of
America (ex rel.); NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION,

Defendants.

Appeal from the United States District Court
for the Eastern District of Oklahoma
(D.C. No. 94-CV-293-S)

Lloyd E. Cole, Jr., Stilwell, Oklahoma, for Plaintiff-Appellee.

Patrick D. Shore (John R. Eldridge, III of Burke & Eldridge, P.A., Fayetteville,
Arkansas, with him on the briefs) of Derryberry, Quigley, Solomon & Naifeh,
Oklahoma City, Oklahoma, for Defendant-Appellant.
Before BRORBY, BARRETT and EBEL, Circuit Judges.

BRORBY, Circuit Judge.

This appeal involves a dispute over the calculation of just compensation in

a condemnation proceeding under Oklahoma law, and whether the commissioners

appointed by the district court and charged with calculating damages qualify as

“disinterested” parties. Appellee, the City of Stilwell, Oklahoma, seeks to

condemn certain electric distribution facilities of Appellant, Ozarks Electric

Cooperative Corporation (“Ozarks”), located within newly annexed portions of

the City of Stilwell. Ozarks, a rural electric power distribution cooperative,

appeals the district court’s order confirming the Commissioners’ Report

establishing damages the City of Stilwell must pay Ozarks for the condemned

facilities. We exercise jurisdiction pursuant to 28 U.S.C. § 1291, and affirm.

BACKGROUND

The City of Stilwell, located in Adair County, Oklahoma, owns and

operates a municipal electric utility providing service to customers within and

outside the corporate limits. The city recently expanded its corporate limits to

encompass territory initially served and developed by Ozarks. Under authority of

Okla. Stat. tit. 18, § 437.2(k), the City of Stilwell sought to condemn Ozarks’

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facilities and commence operation of its municipal electrical utility within the

newly-annexed territory. The Oklahoma statute allows municipalities owning

and operating electric service utilities to condemn the facilities of rural electric

cooperatives operating within the boundaries of the municipality upon payment

of fair value. 1
Since the parties could not agree on the amount the city should

pay for Ozarks’ facilities, the City of Stilwell commenced this action in Adair

County, Oklahoma, for a judicial determination of just compensation. See Okla.

1
Okla. Stat. tit. 18, § 437.2(k) states if a:

city, town or village ... owns and operates a system for the furnishing
of electric energy to its inhabitants, the cooperative furnishing
electric energy in such area shall transfer to such city, town or
village, upon its request, the cooperative's electric distribution
facilities used in furnishing electric energy in said area, other than
facilities used in furnishing electric energy for resale or to premises
of the cooperative, subject, however, to the following requirement:
The city, town or village shall pay to the cooperative an amount to
compensate the cooperative for the fair value of the cooperative's
facilities to be acquired by the city, town or village. If such
cooperative and city, town or village cannot agree upon the amount
to be paid to the cooperative, the city, town or village is authorized
to file a proceeding in the district court of the county in which such
city, town or village, or any part thereof, is located, for the
acquisition of the cooperative's electric distribution facilities used in
furnishing electric energy in said area, other than facilities used in
furnishing electric energy for resale or to premises of the
cooperative, and the procedure followed and the method of
ascertaining just compensation to be paid the cooperative will be as
provided in Article 2, Section 24, of the Oklahoma Constitution and
Sections 53 to 58, inclusive, of Title 66 of the Oklahoma Statutes.

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Const., Art. II, § 24; Okla. Stat. tit. 66, §§ 53 through 58. The case was later

removed to the United States District Court for the Eastern District of Oklahoma,

after the City of Stilwell joined the Rural Electrification Administration 2
and the

National Rural Utilities Cooperative Finance Corporation as parties to the

lawsuit. 3

Following removal, Ozarks filed a motion for summary judgment. The

district court granted the motion, finding federal law preempted the City of

Stilwell’s proposed condemnation of Ozarks’ facilities because it would frustrate

the purpose of the Rural Electrification Act, 7 U.S.C. § 901, et seq . See City of

Stilwell v. Ozarks Rural Elec. Coop. Corp ., 870 F. Supp. 1025 (E.D. Okla. 1994).

This court later reversed the district court’s ruling in City of Stilwell v. Ozarks

Rural Elec. Coop. Corp ., 79 F.3d 1038 (10th Cir. 1996), applying a narrow

reading to the Rural Electrification Act, and finding no clear federal preemption

of the states’ traditional authority under the police power to regulate utilities. Id.

2
The Rural Electrification Administration is now known as the Rural
Utilities Service.

3
The Rural Electrification Administration and National Rural Utilities
Cooperative Finance Corporation provide financing and other services to rural
electric cooperatives. Both of these entities are secured creditors of Ozarks,
holding mortgage interests in its facilities.

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at 1044.

After this court remanded the case, the district court continued the

condemnation proceedings. It appointed commissioners and instructed them to

determine the amount the City of Stilwell owed to Ozarks in damages for the

condemnation of its facilities. After completing their analysis, the commissioners

filed a report on February 18, 1997, recommending Ozarks receive $1,515,000 as

just compensation for the taking. This figure included $170,000 for facilities,

$1,200,000 in lost revenue, $26,000 for stranded costs, and $119,000 for

reintegration expenses. The commissioners included no amounts for either the

value of the territory or the going concern value of the facilities. Ozarks

subsequently filed objections to the Commissioners’ Report, and the district court

held an evidentiary hearing on the matter. Following the hearing, the district

court issued an order denying Ozarks’ objections and confirming the

Commissioners’ Report. Although Oklahoma law entitled Ozarks to a jury trial

on the issue of damages, the district court denied Ozarks’ request as untimely.

However, Ozarks does not contest the denial of a jury trial, only the district

court’s confirmation of the Commissioners’ Report.

Ozarks argues that in approving and adopting the Commissioners’ Report,

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the district court erred in several ways. First, it contends the commissioners

appointed by the court to calculate just compensation are not “disinterested” as

required under Oklahoma law. See Okla. Const. Art. II, § 24; Okla. Stat. tit. 66,

§ 53(A). It argues the district court erred in not utilizing the procedures under

Rule 71A(k) of the Federal Rules of Civil Procedure calling for election or

selection of commissioners. Second, Ozarks alleges the commissioners’

calculation of damages fails to properly assess reintegration costs because the

court should require the City of Stilwell to condemn all Ozarks’ facilities within

the city limits. Finally, Ozarks challenges the Commissioners’ Report for failing

to include the value of future revenue streams, “going concern” and lost service

territory, and revenue losses of KAMO Electric Cooperative (KAMO) – Ozarks’

power supplier. 4

For purposes of our review, we treat the district court’s order confirming

the Commissioners’ Report as we would a judgment sustaining a jury verdict.

See United States v. Wallace , 201 F.2d 65, 67 (10th Cir. 1952) (finding

commissioners appointed under federal law to determine just compensation in a

4
In its brief, Ozarks claims the commissioners failed to follow the
calculation method and manner prescribed by the district court but does not
elaborate further. We will not address a conclusory allegation without further
support. An issue listed but not argued is waived. See Abercrombie v. City of
Catoosa, 896 F.2d 1228, 1231 (10th Cir. 1990).

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condemnation proceeding, serve the function of a jury because the proceeding

before the commissioners is quasi-judicial in nature). In the context of this

diversity action, Oklahoma law controls the substantive issues involved. Barrett

v. Tallon , 30 F.3d 1296, 1300 (10th Cir. 1994) (ruling federal courts sitting in

diversity should apply the substantive law of the forum state, including choice of

law rules).

Appointment of the Commissioners

The district court appointed commissioners to assess damages for the City

of Stilwell’s taking of Ozarks’ electric distribution facilities because the parties

could not agree on a fair price for the transfer. 5
In situations where the parties

cannot agree, Oklahoma law calls for a calculation of just compensation by a

board of at least three “disinterested freeholders” selected from the regular jury

list as prescribed by the legislature. Okla. Const. Art. II, § 24; Okla. Stat. tit. 66,

§ 53(A). In conformity with the state law procedures, the district court appointed

three commissioners to make the appraisal. Each of the commissioners the court

5
The City of Stilwell is “authorized to file a proceeding in the district
court of the county” for the determination of just compensation under the method
and procedures outlined in Okla. Const. Art. II, § 24 and Okla. Stat. tit. 66, §§ 53
through 58. Okla. Stat. tit. 18, § 437.2(k). The constitutional and statutory
provisions cross-referenced in § 437.2(k) govern the appointment of
commissioners.

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selected resided in Adair County, received electric service from Ozarks, and was

considered an owner-member of Ozarks Electric Cooperative Corporation. 6

Additionally, two of the commissioners also had indirect ties to the City of

Stilwell Electric Utility. One worked as a manager of a bank in the City of

Stilwell, which received its electric service from the city, and the other owned

rental property in the City of Stilwell, which also received electric service from

the City of Stilwell Electric Utility.

Ozarks argues the district court improperly appointed commissioners from

among the residents of Adair County because virtually every resident in the

county is either an owner-member of Ozarks or a customer of the City of Stilwell

Electric Utility with a pecuniary interest in the outcome of the appraisal.

According to Ozarks, this pecuniary interest in the outcome of the damages

calculation requires the court to presume bias and disqualify the commissioners.

We agree with Ozarks that bias or prejudice is often an elusive condition

6
The term “owner-member” is somewhat misleading in this instance. On
its face, it implies the owner-member holds some substantial interest in the
financial success of the cooperative. However, in this case, the term “owner-
member” merely designates a customer of the cooperative. As owner-members of
Ozarks, the commissioners received no dividend income or share of profits.

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of the mind, and the law sometimes requires a presumption of partiality – even in

the absence of actual proof – if the mere potential for a conflict of interest exists.

Nevertheless, the decision to apply this presumption remains within the discretion

of the court. See Gonzales v. Thomas , 99 F.3d 978, 987 (10th Cir. 1996)

(applying this proposition in the context of juror selection), cert. denied , 117 S.

Ct. 1342 (1997). We find – in the context of selecting commissioners – the

court’s decision about whether implied bias exists should turn on an objective

legal evaluation of the challenged commissioners’ “experiences and their relation

to the case.” Id. (citation omitted). The district court must determine whether

the commissioners “may have such a close connection to the circumstances at

hand that bias must be presumed.” Id. Accordingly, we will not disturb the

court’s appointments absent some evidence of error causing harm to Ozarks.

Our review of the law and the record leaves us unpersuaded that the court

abused its discretion in appointing the commissioners. We do not interpret

Oklahoma law to require the commissioners to possess the level of complete and

absolute impartiality Ozarks claims. Such an inflexible interpretation of the

statute would disqualify virtually every person in Adair County from serving as a

commissioner merely because of his or her status as either a customer of the City

of Stilwell Electric Utility or owner-member of Ozarks. This is an unnecessary

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conclusion. In the context of jury selection, a situation analogous to the selection

of commissioners, 7
we do not automatically exclude a juror simply because he

holds an opinion on a particular subject or knows something about the case. See

Irvin v. Dowd , 366 U.S. 717, 722-23 (1961) (finding in a world of “widespread

and diverse methods of communication,” courts need not require that jurors be

totally ignorant of the facts involved in the case, nor lack preconceived notions

about the proper outcome); Brecheen v. Reynolds , 41 F.3d 1343, 1351 (10th Cir.

1994), cert. denied , 515 U.S. 1135 (1995). Instead, the goal of our system is to

find a juror who “can lay aside his impression or opinion and render a verdict

based on the evidence presented.” Irvin, 366 U.S. at 723. The court asked the

commissioners to perform a task, which they swore an oath to execute

“impartially and justly” under Okla. Stat. tit. 66, § 53(C). We assume, absent

compelling evidence to the contrary, the commissioners faithfully performed their

task and acted without personal bias or improper motivation.

Additionally, even if we found the commissioners held an “interest” in this

7
For the purpose of our discussion of this issue, we assess the
qualifications and competency of the commissioners under the standards applied
to jurors because we believe the basic principles governing the impartiality of
jurors are equally applicable to the district court’s appointment of “disinterested”
commissioners.

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proceeding, it is so tenuous that the district court did not abuse its discretion in

refusing to imply any bias. Even reading the record most favorably to Ozarks’

position, we find the commissioners’ assessment in the condemnation proceeding

will only modestly affect the rates Ozarks and the City of Stilwell charge their

customers for electric service. Since Ozarks’ basis for alleging prejudice is so

attenuated, the presumption of bias is unnecessary. See, e.g., Smith v. Phillips ,

455 U.S. 209, 221-22 (1982) (O’Connor, J., concurring) (finding implied bias

appropriate only in extreme and exceptional situations where a party is subjected

to “manifestly unjust procedures resulting in a miscarriage of justice”); United

States v. Bradshaw , 787 F.2d 1385, 1390 (10th Cir. 1986) (finding a juror’s prior

business dealings with a key witness in the trial “does not compel an imputation

of inherent bias to the juror as a matter of law”) (internal quotations omitted).

Absent more compelling proof of the commissioners’ pecuniary interest in the

outcome of their appraisal, we find Ozarks’ unsubstantiated assertion insufficient

to show the district court erred, or that Ozarks suffered any harm from the court’s

decision. See Arkansas Louisiana Gas Co. v. Maggi , 409 P.2d 369, 370-71

(Okla. 1965) (ruling that in condemnation proceedings, irregularities connected

with the appointment of appraisers must be prejudicial to the right of a party

asserting error to merit reversal).

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 Examining this case in retrospect, we find perhaps the district court should

have gone outside the county to find citizens to serve as “disinterested”

commissioners. However, for the reasons stated above, we hold the court did not

abuse its discretion in appointing commissioners from Adair County. Any

interest in the outcome, based upon the record, would be minuscule.

Challenges to the Commissioners’ Report

Ozarks asserts the district court erred in adopting the Commissioners’

Report because it allegedly contained several mistakes in the calculation of just

compensation. In order to address these claims, we first examine the process the

commissioners used to calculate damages, and then address Ozarks’ arguments in

turn. For purposes of our review of damages established in the Commissioners’

Report, we treat the report as a final jury verdict. Accordingly, we will not

substitute our judgment for that of the duly appointed commissioners, and we are

hesitant to disturb their report unless unsupported by competent evidence. City

of McAlester v. Delciello , 412 P.2d 623, 627 (Okla. 1966); Eberle v. Dep’t of

Highways , 385 P.2d 868, 872 (Okla. 1963).

1. Damages Calculation

Before making their damages calculation, the commissioners toured the

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property subject to condemnation in the presence of representatives from both

Ozarks and the City of Stilwell, and consulted with experts provided by both

parties. After these meetings and presentations, the commissioners met in private

to assign monetary values to various factors as instructed by the district court.

The commissioners ultimately calculated $1,515,000 as the amount of just

compensation for the taking.

In order to calculate the final amount, the commissioners first estimated the

value of facilities and properties acquired at $170,000. The commissioners

adopted this figure from a document submitted by the City of Stilwell containing

a detailed listing all of the facilities it planned to acquire, including the number

of poles, transformers, meters, and wire. In this document, the City of Stilwell

set the value of the condemned facilities and property at $295,000. The

commissioners reduced this figure by forty-three percent to reflect the applicable

depreciation and arrive at the final amount of $170,000.

Next, the commissioners calculated lost revenue at $1,200,000. The

commissioners arrived at this figure by examining the revenue history Ozarks

provided for the years 1993-1996, and computing an average annual gross

revenue amount based on that data. The commissioners reduced the gross

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revenue figure by seventy percent to reflect the cost of power and by an

additional fifteen percent to reflect the average rate of return for utilities in

Oklahoma. This left fifteen percent of the average annual income figure as net

revenue. The commissioners then computed the present value of the average net

revenue to arrive at $83,550. They used this amount to calculate the present

value of a twenty-year income stream, assuming a growth rate of two percent and

a discount rate of 5.35 percent, 8
to reach $1,200,000.

Next, the commissioners assigned a value of $26,000 for stranded costs.

This amount reflects the cost to Ozarks to reconfigure its distribution facilities to

provide electric service to areas left without service after the City of Stilwell’s

proposed expropriation of Ozarks’ existing facilities. The commissioners toured

the area with representatives from both the City of Stilwell and Ozarks, and

found only two small areas left stranded. The commissioners adopted the

$26,000 figure from the City of Stilwell’s expert.

8
The 5.35 percent discount rate reflects Ozarks’ average cost of
borrowing. The commissioners used a two percent growth rate based on figures
provided by the City of Stilwell, even though Ozarks experienced a decline in
revenue through the years 1993-1996. The commissioners assumed, for the
purposes of their calculation, Ozarks was entitled to the same growth rate as the
City of Stilwell.

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 The commissioners then assigned a cost of $119,000 for reintegration. The

reintegration cost reflects Ozarks’ estimated cost to reconfigure their system to

provide service to remaining customers around the City of Stilwell. The

commissioners accepted Ozarks’ estimate of this cost.

The commissioners decided to assign no amount for either the value of the

territory, or the value of the going concern. The record indicates they assumed

the value of the territory was included in their assessment of lost revenue and the

presumed growth rate, and the commissioners deemed the going concern value

inappropriate for the ultimate calculation because the City of Stilwell planned to

acquire only a portion of Ozarks’ facilities – not the entire service area.

2. Errors Alleged

a. Reintegration Costs and Value of Facilities Acquired

Ozarks disputes the accuracy of the Commissioners’ Report for a variety of

reasons. First, it argues the Commissioners’ Report drastically underestimates

the reintegration costs and the value of facilities and property acquired because it

does not contemplate the City of Stilwell’s obligation under Okla. Stat. tit. 18,

§ 437.2(k) to condemn all Ozarks’ facilities within the corporate limits – not just

the facilities it wants or needs. Specifically, Ozarks contends the City of Stilwell

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must pay for two three-phase feeder lines running within the corporate limits of

the city. Ozarks used these feeder lines to service customers in the newly-

annexed areas of the City of Stilwell prior to the city’s decision to take over the

territory, and it continues to use the lines to service its customers outside the

corporate limits of the City of Stilwell. The City of Stilwell does not want to

condemn the feeder lines, because it already maintains parallel distribution lines

running in the same area and does not need to utilize Ozarks’ feeder lines to

provide service to city customers. If we find Oklahoma law requires the City of

Stilwell to condemn these feeder lines, the cost of reconfiguring Ozarks’ power

distribution facilities would rise drastically and significantly affect the

calculation of damages. 9

We disagree with Ozarks’ construction of Oklahoma law and arguments on

this point, and find nothing in the language of Okla. Stat. tit. 18, § 437.2(k)

affirmatively requiring the City of Stilwell to take all of the electric distribution

facilities within the annexed area. The statute only requires the City of Stilwell

to pay Ozarks “fair value ... for the acquisition of the cooperative’s electric

9
Ozarks’ expert estimated the reintegration cost at $959,000 if the City of
Stilwell took the feeder lines, compared to the commissioners’ $119,000
calculation which did not include the added reintegration costs associated with the
loss of the feeder lines.

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distribution facilities used in furnishing electric energy in [the annexed] area.”

Okla. Stat. tit. 18 §, 437.2(k) (emphasis added). Although we realize this

provision of the statute is open to conflicting interpretations, common sense and

equity compel us to construe it to require the city to pay only for the facilities it

takes from the cooperative and uses to provide electric service in the condemned

area. Since the City of Stilwell already maintains parallel lines to service

customers in the newly-annexed area and does not need to use Ozarks’ feeder

lines, we see no reason to interpret the statute to force the City of Stilwell to

condemn and pay for the unneeded lines – especially when we consider Ozarks

continues to retain substantial, valuable use of the feeder lines in servicing its

rural customers outside the City of Stilwell. 10

We also agree with the district court that general principles of eminent

domain law permit the City of Stilwell to select the facilities it determines are

necessary for public use. City of Cushing v. Gillespie , 256 P.2d 418, 420 (Okla.

10
We emphasize, however, if the condemnation by the City of Stilwell had
rendered the feeder lines worthless or virtually worthless to Ozarks, the City of
Stilwell could not have avoided paying the damages associated with taking the
feeder lines by arguing it did not want or need them. Such an argument would
contravene traditional principles of eminent domain. The City of Stilwell would
have to compensate Ozarks for the loss. We distinguish this present case on its
facts, however, because the City of Stilwell did not actually take the feeder lines,
and Ozarks is left with substantial, valuable use of the facilities.

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1953) (allowing a condemnor to voluntarily restrict itself to as much or as little

of the property owner’s interest as the public need requires); see also United

States v. 20.53 Acres of Land , 478 F.2d 484, 487 (10th Cir. 1973) (stating how

much or how little property the condemnor elects to take is a legislative, not a

judicial, question and a judicial order should not expand the extent of the taking).

The City of Stilwell neither needs the feeder lines to service its customers nor

denies Ozarks the right to continue to use the feeder line to serve its customers

outside the city limits. Therefore, we are reluctant to require the City of Stilwell

to condemn and pay for the facilities.

We are similarly unpersuaded that the City of Stilwell’s decision to take

Ozarks’ facilities and customers within the city limits will affect Ozarks’

continuing legal authority to use the feeder lines to provide service to its

customers. We do not read Oklahoma law to abrogate a rural electric

cooperative’s right to use city streets and right-of-ways for electric distribution

purposes after condemnation. The City of Stilwell’s decision to condemn only

selected facilities inside the corporate limits of the city does not, and need not,

impact Ozarks’ continuing right to use the remaining feeder lines to serve its

customers outside the City of Stilwell.

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 Because the condemnation leaves Ozarks undisturbed in its right to use the

feeder lines, and Oklahoma law does not require the City of Stilwell to condemn

unneeded facilities, we hold the district court did not err in adopting that portion

of the Commissioners’ Report pertaining to reintegration costs and the value of

facilities taken.

b. KAMO’s Revenue Losses

Ozarks also claims the commissioners’ damage calculation is flawed

because they failed to consider and include an amount for the revenue losses

suffered by KAMO (Ozarks’ power supplier) as a result of the condemnation.

We disagree. Ozarks may not seek compensation on KAMO’s behalf because

KAMO is not a party to this action, and even if it was a party, it lacks a

compensable interest to assert.

Ozarks’ argument misapplies our prior ruling in City of Stilwell v. Ozarks

Rural Elec. Coop. Corp ., 79 F.3d at 1042-43, where we affirmed the district

court’s denial of KAMO’s request to intervene. We based our decision in that

case on our finding that KAMO held only a contingent interest in the subject of

the City of Stilwell’s condemnation proceedings. As Ozarks’ power supplier,

KAMO stands to “benefit financially if Ozarks is allowed to continue to service

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its customers in Stilwell.” Id. at 1042. However, KAMO’s contingent interest in

lost revenue is only a collateral economic harm and not ordinarily a compensable

property interest under general principles of condemnation law. See State Dep’t

of Highways v. Bowles , 472 P.2d 896 (Okla. 1970) (affirming the general rule

that just compensation does not include damages for loss of business profits); see

also United States v. 99.66 Acres of Land , 970 F.2d 651, 658 (9th Cir. 1992)

(stating generally, only persons with ownership interests at the time of taking are

entitled to compensation for a taking). 11
Since KAMO is not a party to these

proceedings and has no compensable property interest at stake, we find no error

in the Commissioners’ Report excluding any consideration of lost revenue for

purposes of calculating just compensation.

c. Value of Lost Territory and Going Concern

Finally, Ozarks argues the district court erred in approving the calculation

contained in the Commissioners’ Report because it did not contain any value for

loss of territory or going concern. Although it is difficult to ascertain from its

brief, we assume Ozarks is treating these factors as interrelated and subsumed in

11
The only reason the commissioners considered business revenue at all –
even for the damages payable to Ozarks – was for the limited purpose of
establishing the value of the facilities and territory the City of Stilwell
condemned, not as an independent compensable interest.

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the return on investment factor the commissioners deducted from their

calculations. Accordingly, we consider them together.

Under Oklahoma law, “the extent of the range of inquiry to be permitted

regarding the value of property taken or damaged in eminent domain

proceedings, is largely in the discretion of the trial court.” Oklahoma Turnpike

Auth. v. Williams , 257 P.2d 1052, 1054 (Okla. 1953). Accordingly, we will set

aside an award only if the commissioners fail to consider an element of damage

for which the law entitles Ozarks to be compensated, or if we find the

commissioners’ appraisal is so excessive or inadequate that it shocks our sense of

justice. However, we will not ordinarily substitute our judgment for that of the

commissioners or set aside an award merely because it is different from the

amount we would have given. If substantial evidence supports the amount of just

compensation the commissioners found, and their conclusion did not result from

a mistaken view of law, we will affirm the district court’s adoption of the

Commissioners’ Report. See Rose v. Bd. of County Comm’rs , 241 P.2d 399

(Okla. 1952) (holding in a condemnation case if the evidence reasonably supports

the verdict of the jury it will not be disturbed on appeal).

However, because the issues of the value of lost territory and going

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concern were not raised below or properly preserved for appeal, we decline to

reach the merits of Ozarks’ claim. After a thorough examination of the record,

we are unable to find where Ozarks made its argument regarding lost territory,

going concern value, or return on investment in any of the proceedings before the

district court. Ozarks’ objections to the Commissioners’ Report contain no direct

claim of error with regard to these issues, nor can we find anywhere in the

transcript where Ozarks argued these claims during the evidentiary hearing. In

its objections to the Commissioners’ Report, Ozarks included only broad,

sweeping claims that the commissioners did not comply with the directions of the

trial court, and that the commissioners did not consider the value of the lost

territory. Such an undefined, nebulous approach to objections does not allow the

district court to adequately address the parties’ contentions. Indeed, the district

court order confirming the Commissioners’ Report contains no reference to any

of the arguments Ozarks now raises on appeal, 12
presumably because Ozarks

failed to articulate any answerable claim with regard to them. In light of Ozarks’

apparent failure to raise these issues in its objections to the Commissioners’

Report, we will not conduct a de novo review to consider them for the first time

12
The district court’s order addressed only: (1) whether the
commissioners’ appointments met the requirements of Oklahoma law, (2) whether
KAMO was entitled to compensation for lost revenue, and (3) whether the
commissioners assessed sufficient reintegration costs.

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on appeal. See, e.g., Walker v. Mather (In re Walker) , 959 F.2d 894, 896 (10th

Cir. 1992) (refusing to consider an issue on appeal not raised below);

Rademacher v. Colorado Ass’n of Soil Conservation Dists. Medical Benefits

Plan , 11 F.3d 1567, 1571 (10th Cir. 1993) (finding issues raised, but not argued

to the district court, “ordinarily will not be considered on appeal” (citations

omitted). 13

Even if we give Ozarks the benefit of the doubt, construe its arguments

broadly, and assume it properly argued and preserved the issues for appeal, we

find insufficient evidence on which to base any objection or change to the

Commissioners’ Report. Ozarks simply argues the commissioners failed to

consider certain compensable interests. We find these unsupported claims

insufficient to allow us to make an informed assessment regarding the propriety

of the Commissioners’ Report. Ozarks asks us to reverse and remand for further

proceedings but gives us no basis on which to determine whether the

commissioners actually committed some reversible error. We will not indulge in

speculation, second-guess the report of the commissioners, or reverse the district

13
Ozarks discussed this issue during oral argument. However, an issue not
adequately briefed will not be considered even though a party attempts to assert
the claim during oral argument. Gross v. Burggraf Constr. Co., 53 F.3d 1531,
1547 (10th Cir. 1995).

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court, absent citation to record evidence, persuasive authority, or compelling

argument demonstrating how or why the Commissioners’ Report under-

compensated Ozarks for its facilities. See Deines v. Vermeer Mfg., Co. , 969 F.2d

977, 979-80 (10th Cir. 1992) (if the evidentiary record is insufficient to permit

assessment of appellant’s claims of error, the court must affirm). Accordingly,

we find the district court did not err in approving the Commissioners’ Report as

it pertained to the issues of lost territory and going concern values.

CONCLUSION

For the foregoing reasons, we AFFIRM the district court’s confirmation of

the Commissioners’ Report.

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