Full opinion text
OPINION BENNETT, Judge: This case comes before the court on plaintiffs’ exceptions to the recommended decision of Trial Judge Thomas J. Lydon, filed May 30, 1979, pursuant to Rule 134(h). Plaintiffs’ claim arises from the taking of some 2,646.22 acres from an area known as the Mill Creek tract, owned by the individual plaintiffs, for inclusion in Redwood National Park in Del Norte and Humboldt Counties, California. This was a legislative taking pursuant to Pub.L. No. 90-545, approved October 2, 1968, 82 Stat. 931, 16 U.S.C. § 79a et seq. (1976). Defendant has already paid plaintiffs $11,687,955, plus simple interest thereon at the rate of 6 percent per annum, to compensate them for the taking of their entire property and to stop the running of interest on the amount paid. At trial plaintiffs maintained that the amount paid was not adequate compensation for the taking. The principal valuation disputes between the parties involved the value of the old-growth redwood timber and whether any severance damages were incurred by plaintiffs. The parties stipulated at trial that the fair market value of all land, improvements, and timber other than old-growth redwood timber taken from plaintiffs was $2,981,881.80. With respect to the unresolved issues, the trial judge found that: (1) the fair market value of the old-growth redwood timber taken from the individual plaintiffs was $10,918,376; (2) no severance damages were incurred as a result of the taking; (3) the 6-percent interest rate fixed by Pub.L. No. 90-545 for the delay in payment of just compensation was an appropriate rate of interest; and (4) plaintiffs were not entitled to recover litigation expenses under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, Pub.L. No. 91-646, 91st Cong., 2d Sess., approved January 2, 1971, 84 Stat. 1894, 42 U.S.C. § 4651 (hereinafter Uniform Relocation Act). Upon consideration of the exceptions, briefs, and oral argument of counsel, and after review of all the evidence, we find that the trial judge was correct in his conclusions with respect to the fair market value of the old-growth redwood timber taken, and in the denial of severance damages and litigation expenses. With respect to the appropriate rate of interest due as just compensation for delay in payment, we have determined that the 6-percent rate per annum set as a minimum by Pub.L. No. 90-545 would not be appropriate in this case. I The families of both Harold A. Miller, the patriarch plaintiff, and his wife, plaintiff Jane S. Miller, were in the timber business, principally in the State of Oregon, prior to their marriage in 1929. Jane S. Miller was the daughter of the founder of the Stimson Lumber Company (Stimson), also a plaintiff herein. In the 1930’s the families decided to purchase timberlands in northern California in an effort to establish an independent timber source for lumber operations. Timberland purchases in Del Norte County, California, began in 1942 and continued into the mid-1960’s. As of October 2, 1968, the individual plaintiffs, see note 1 supra, owned some 19,390 acres, known as the Mill Creek tract, as tenants-in-common with individual interests of each specified by percentages, e. g., Harold A. Miller had, as a tenant-in-common, an undivided interest of 48 percent in the Mill Creek tract. Harold A. Miller and others owned additional tracts of timberland in Del Norte County as of October 2, 1968. Rellim Redwood Company (Rellim), a California corporation and a plaintiff herein, was established in 1955 to manage, harvest, and sell the timber from the timberlands in Del Norte County owned by the individual plaintiffs under contractual arrangements, amended from time to time, which spelled out the rights, liabilities, and obligations of the individual and corporate parties. As of October 2, 1968, almost all of the timber harvested by Rellim was sold as logs to Miller Redwood Company (Miller Redwood). The individual plaintiffs were paid by Rel-lim when timber was harvested from the Mill Creek tract. Harold A. Miller has been president of Rellim at all times material herein. Miller Redwood, a California corporation and a plaintiff herein, was established sometime in the early 1960’s. In that time period, the individual plaintiffs transferred some 102.33 acres of land, located in the midst of the Mill Creek tract, to Miller Redwood for the purpose of constructing a sawmill and other lumber manufacturing facilities. A sawmill was constructed in 1964 and a veneer plant was constructed in 1967, although the necessary steam vats for the plant were not completed until mid-1968. As of October 2, 1968, Miller Redwood obtained its entire supply of logs from the timberlands of the individual plaintiffs through Rellim and manufactured those logs into lumber, veneer, or other forest products. Harold A. Miller has been president of Miller Redwood at all times material herein. Stimson, an Oregon corporation, was established in 1930. As indicated earlier, Stimson owned all of the outstanding stock of both Rellim and Miller Redwood and the individual plaintiffs owned and/or controlled some 97 percent of Stimson outstanding stock as of October 2, 1968. The profits of both Rellim and Miller Redwood inured to the benefit of Stimson. The profits of Stimson were paid to its shareholders who were predominantly the individual plaintiffs herein. Harold A. Miller was, at all times material herein, president and chairman of the board of directors of Stimson. Immediately prior to October 2, 1968, the individual plaintiffs owned some 21,305.15 acres of timberlands in Del Norte County, California, of which some 8,248.87 acres contained old-growth redwood timber. Timber more than 100 years old is classified as old-growth timber. Pub.L. No. 90-545 took 2,646.62 acres of forest lands from the individual plaintiffs, of which 876.57 acres contained old-growth redwood timber. The taken acreage was located on the northern portion of the Mill Creek tract. The taken lands were located southeast of, and in close proximity to, Crescent City, California, and U.S. Highway 101. These lands contained both high quality paved roads and poorly maintained dirt roads. The topography of the land ranged from 200 feet above sea level along Mill Creek, a body of water running through the area, to over 1,500 feet above sea level in the northeast area. The taken lands contained a variety of timber species, the most important of which was coastal old-growth redwood (known as sequoia sempervirens). These lands contained virgin timbered areas, cutover areas, second-growth areas, and residual timbered areas. Roughly 500 acres of the timbered area taken support stands of large old-growth redwood timber. Nearly 100 of these 500 acres contain stands of extra large-sized, old-growth redwood trees. Generally these large-sized trees are located on the flats bordering Mill Creek, about 1 mile north of the Miller Redwood sawmill, veneer plant, and manufacturing facilities. This 100-acre area was approximately 3 miles from U. S. Highway 101 and was accessible by means of a main access road. Large numbers of old-growth redwood trees in this 100-acre area are over 100 inches in diameter and some of these trees are over 300 feet in height. The largest old-growth redwood tree measured 202 inches in diameter, and the tallest tree was over 330 feet in height. In terms of timber volume, i. e., thousand board feet (MBF) per acre, the stands in this 100-acre area averaged higher than any other old-growth redwood timber stand included within Redwood National Park. Defendant’s timber experts readily admitted that this 100-acre area contained some of the best old-growth redwood timber in existence. The old-growth redwood timber on the remaining areas of the taken lands generally was smaller in size, but some good-sized trees were in those areas as well. On the whole, the old-growth redwood timber taken from the individual plaintiffs was of very high quality. As of October 2, 1968, it is conceded that the highest and best use of the lands taken from the individual plaintiffs was timber crop production. There is also no dispute about the fact that the fair market value of the taken timber must be determined as of October 2, 1968. United States v. Miller, 317 U.S. 369, 374, 63 S.Ct. 276, 280, 87 L.Ed. 336 (1943). The parties engaged private consulting firms to determine the volume and the fair market value of the old-growth redwood timber taken from the individual plaintiffs and to determine whether plaintiffs, individual and corporate, incurred severance damages as a result of this taking. Plaintiffs engaged the firm of Mason, Bruce & Girard (MBG), Consulting Foresters, whose principal office was located in Portland, Oregon. Defendant engaged the firm of Hammon, Jensen, Wallen, & Associates (HJW), whose principal office was located in Oakland, California. Both of these firms were well known in the forest industry and both were well qualified to offer opinions on forestry matters, including, but not limited to, the determination of timber volume and fair market value. MBG had its beginning in 1923 as a partnership. It has remained a partnership to this day. In the 1940’s the firm name of MBG was established. The firm had extensive experience in all facets of forestry matters. Over the years, the MBG firm was innovative in the forest mensuration area, in the area of cruising forest lands, and in the area of sustained yield production programs. While the MBG firm had been involved in some transactions involving redwood timberlands in California, the record indicates that the greater portion of the firm’s interest and activities was involved with timberlands and tree species other than redwood. HJW was established as a partnership in 1949, but at the time of trial it had been incorporated. For over 25 years this firm offered a broad range of consulting services dealing with forest lands and the forest industry. The firm had extensive experience in the redwood region and with the redwood industry. It has managed, and continues to do so, redwood timberland properties on behalf of clients. The firm prepared a resource study in 1966-67 on redwood timberlands in California for the Federal Government for use by Congress in its consideration of the establishment of a Redwood National Park. HJW cruised all the timberlands included in the park as established. The MBG appraisal report directed at the taking here in question was prepared and signed by Lucien B. Alexander (Alexander), a partner in the MBG firm. Alexander obtained a bachelor’s degree in forest management in 1940 from Oregon State University. Prior to and subsequent to World War II, he worked for the United States Bureau of Land Management (BLM) in various capacities, e. g., cruising, land appraisals, forester. In 1948, he became Regional Forester (Oregon, Washington, Idaho) in charge of timber management for BLM. He left BLM in 1953 to accept a job with MBG, and became a partner in that firm in 1955. The list of forestry-related transactions and projects in which Alexander has been involved since joining MBG is extensive, and embraces both large and small transactions. He has also had responsibility for managing tracts of timberlands, predominantly fir and hemlock. Alexander has also written articles on various forestry topics. He is considered by some to be the eminent authority in the field of variable plot cruising. Alexander is a member of the Society of American Foresters and a licensed real estate broker in the State of Oregon. Alexander had considerable experience in forestry consulting work. He is certainly qualified to express opinions relating to timber volume predictions and timber valuation. However, his experience in the redwood region, and with redwood timber in particular, was not extensive. Of some 200 forest cruise and/or estimating transactions and projects he was involved in since joining MBG, only three involved redwood timberlands. In 1955, he cruised a second-growth redwood stand, and again in 1955 he provided a quick volume estimate, or prediction, of residual old-growth redwood timber relative to a proposed sale. In 1961, he was involved in a second-growth redwood cruise.' In 1974, Alexander became involved in the appraisal of plaintiffs’ taken redwood timberlands. Other members of the MBG firm, such as Robert J. Knepper (Knepper), a firm partner since 1967, and Harold Whitehead, head cruiser, had input relative to Alexander’s appraisal report effort. The HJW appraisal report was prepared by Paul R. Kevin, Jr. (Kevin), although signed by Arnold F. Wallen (Wallen) on behalf of HJW. While Kevin had primary responsibility for the appraisal report, other members of the firm, principally Wallen, Herbert Jensen (Jensen), a founding partner and firm principal, and Reed Pratt (Pratt), a timber cruising and inventory-specialist with the firm, had input relative to the appraisal report. Kevin obtained a bachelor’s degree in forestry from the University of California in 1955, and thereafter went to work for HJW. He was still with HJW at the time of trial. Kevin has worked in the redwood region since 1955 in all facets of forest activities, e. g., cruising, scaling, appraisal of land and/or timber, aerial photo interpretation, etc. He had extensive redwood cruising experience and was involved in a number of appraisals of redwood lands and timber. At the time of trial, Kevin had applied for membership in the American Institute of Real Estate Appraisers (MAI). Kevin is considered qualified to offer opinions on old-growth redwood timber volume and value. Wallen went to work for the United States Forest Service in 1938 in northeastern California as a timber cruiser and scaler. Several years later, he went to work for the State of California as an assistant game warden. In 1944, he transferred to the state’s Division of Forestry where he worked initially as a forest ranger and later as a forest technician in the redwood region. Wallen was appointed the first secretary of the Redwood Forest Practices Committee. This committee was charged with establishing forest practice rules regulating timber operations in the redwood forests in California. Such rules were adopted by the State of California in 1945. In 1949, Wal-len, together with Jensen and Lonnie Ham-mon, formed the HJW partnership. Thereafter, HJW cruised, at one time, or another, most of the major redwood timberland ownerships in the redwood region. Wallen was experienced in all facets of redwood timber operations from cruising and appraising timberlands to management of said lands on behalf of clients. Wallen had much more experience and knowledge about the redwood region and about redwood timber than any of the experts or other witnesses who testified in this case. He is licensed as a professional forester by the State of California, and is a member of the Society of American Foresters, the American Forestry Association, and the Consulting Foresters Association. He was eminently qualified to express opinions as to redwood timber volume predictions and valuation and redwood timber matters in general. While both the MBG and HJW firms were competent and qualified to render opinions on forestry matters, including but not limited to timber volume and valuation, the extensive and continuous experience and expertise in the redwood region and with redwood timber of the HJW personnel who testified in this case overshadowed the redwood experience of the MBG personnel who testified. This fact was a persuasive element in the conclusions reached by the trial judge on timber matters upon which the experts, who have spent their entire professional lives in forestry activities, could not agree. II The initial issues to be resolved are the determinations of the volume and the value of the old-growth redwood timber taken from the individual plaintiffs. These are basically factual questions centering on the opinions of the forestry experts engaged by the parties. See in this regard Seminole Indians of Florida v. United States, 197 Ct.Cl. 350, 361, 455 F.2d 539, 545 (1972). A. Volume of Old-Growth Redwood Timber. Plaintiffs contend that the volume of old-growth redwood timber taken from them was 138,223 MBF net Scribner log rule or scale. Defendant maintains that the volume of taken old-growth timber was 112,-936 MBF Humboldt log rule or scale. Both parties used short log measurements. In determining the volume of lumber present in standing trees, it is necessary to conduct a cruise of the timberlands in question. A cruise is a field investigation of forest lands to obtain tree data sufficient to enable one, with the help of a volume table, to predict the volume, in board feet, of the lumber that would be produced as a result of logging and sawing the timber on said lands. Plaintiffs and defendant conducted independent cruises of the taken lands. Their cruise procedures and techniques varied. For example, MBG utilized the variable-radius plot or prism cruising method whereas HJW used the fixed-radius plot cruising method. Each side criticizes the cruise efforts of the other. Plaintiffs suggest that their cruise was conducted by MBG’s most experienced cruiser whereas defendant’s cruise was carried out by inexperienced cruisers. The record establishes that cruising forest lands is not an exact science. Two different cruises of the same forest land often produce different volume results. Yet, each cruise result may in and of itself be acceptable for a given purpose. (1) Gross Merchantable Volume In this case the gross (not net) volume determination of each cruise was relatively close. In calculating the gross volume of merchantable logs, however, the two cruises reached different conclusions. HJW calculated the gross Spaulding volume of merchantable logs to be 159,758 MBF. MBG’s estimate of the gross volume of merchantable logs was 164,713 MBF Scribner scale. The trial judge was persuaded by the more extensive redwood experience and better testimonial presentation of the HJW personnel that the HJW volume figure was the more appropriate starting point. Plaintiffs argue that the volume determinations of both HJW and MBG depend on the expertise of their cruises rather than other personnel and that MBG’s cruiser was clearly more experienced than the college forestry majors used by HJW. There was evidence in the record bringing into question the familiarity of MBG’s cruiser with the cruising method which he used on this occasion. See note 5 supra. In addition, the HJW cruisers were closely checked and supervised by experienced personnel. See note 6 supra. There was no comparable check of the accuracy of MBG’s cruiser. We therefore conclude that there was an adequate basis in the record for the greater weight placed by the trial judge on the reliability of HJW’s cruise. Plaintiffs also raise a possible technical inconsistency in the method used by HJW to calculate top utilization. In order to determine the volume of timber obtainable from a standing tree, it is necessary to estimate the point on the tree above which, on the average, the timber industry will not utilize the tree log content when the tree is felled. The top of a redwood tree is very knotty and limby and is generally not usable at the mill. In addition, when a large redwood tree is felled, breakage or shatter destroys the usability of some portion of the bole of the tree. In order to remove judgmental errors with respect to top utilization, HJW instructed its cruisers to measure each tree in numbers of 20-foot logs to a 12-inch diameter inside bark (DIB) top. From this data gathered in the field, HJW would later determine the point of top utilization based on statistics showing the timber industry’s average top utilization. Volume above the average utilized top which was considered merchantable in the cruiser’s opinion would be excluded to maintain the integrity and consistency of average industry practice. Plaintiffs allege, based on the testimony of one of HJW’s cruisers, that timber below the average utilized top which was considered unmerchantable by the cruiser was also excluded. Plaintiffs argue that average industry practices should be consistently applied and that therefore this unmer-chantable timber below the average utilized top should be changed to merchantable. Testimony of MBG personnel suggested that some 4,454 MBF gross Spaulding scale should have been changed to merchantable in this manner. This same argument was made to the trial judge and was rejected by him but without any clear explanation therefor. Plaintiff’s have gone to great lengths to recalculate the alleged error in HJW’s approach to top utilization without first firmly establishing that an error was made. The record indicates that with a very few possible exceptions, only “normal” trees were included in the sample obtained by HJW from various timber companies. HJW’s top utilization averages were based on data for “trees without any substantial amount of visible mid or upper bole defects or deformities that usually contribute to a high loss from breakage when felled.” It was therefore appropriate for HJW cruisers to report and exclude from volume unmer-chantable timber caused by unusual and visible top defects. The testimony relied upon by plaintiffs does not establish that unmerchantable timber was excluded by cruisers because of the type of defects found in “normal” trees, which should have been accounted for solely by the application of industrywide averages. (2) Net Merchantable Volume In calculating net merchantable volume, the trial judge began at that point in the HJW volume calculations where the gross Spaulding volume of merchantable logs is 159,758 MBF. To account for the internal defect in old-growth redwood timber, HJW utilized the standard Humboldt log rule, i. e., a 30-percent reduction in the gross Spaulding timber volume figure. This exercise produced a volume figure of 111,831 MBF Humboldt scale (159,758 X 0.70). HJW then calculated a 3-percent deduction for breakage, which occurs when redwood trees are felled, to arrive at a volume figure of 108,476 MBF Humboldt scale (111,831 X 0.97). Dead and down timber (4,455 MBF) was added to this result to produce HJW’s old-growth redwood timber volume of 112,-931 MBF Humboldt scale. The trial judge found that the standard Humboldt log rule was not an appropriate scale to use in this case. Although the Humboldt log rule was the standard scale utilized in the redwood region in 1968, the record indicated that in situations where data, empirical studies, or experience showed that the internal defects in old-growth redwood stands were less than 30 percent, buyers and sellers of old-growth redwood would utilize such information in negotiating timber sales. HJW used the Humboldt log rule in its volume computations because it was required by the contract it had with defendant (Bureau of Outdoor Recreation (BOR), Department of the Interior) relative to appraisal of plaintiffs’ taken lands. The trial judge noted that the testimony of Wallen and Kevin strongly suggested that but for the BOR contract requirement to report volume using the standard Humboldt log rule, HJW would have reported timber volume in this case on a net Spaulding log rule or scale. Moreover, both Wallen and Kevin conceded that the percent of internal defect in plaintiffs’ taken timber was undoubtedly less than 30 percent. Kevin testified that, in his opinion, the percent of internal defects in plaintiffs’ taken old-growth redwood timber was probably in the neighborhood of 26 to 28 percent. There was in evidence the results of a study of actual logging operations on plaintiffs’ timberlands, conducted during the period 1964^66, in an area that was subsequently included in Redwood National Park. The logging results during this period were scaled in both Scribner and Humboldt log rules. While the specific purpose of this study was not directed solely at establishing internal defect percentages, the computed data was such that a reasonable conclusion relative thereto could be drawn therefrom. This study data indicated, according to Alexander, roughly a 27-percent internal defect rate in the redwood timber logged on plaintiffs’ timber-lands during the 1964-66 period. The trial judge concluded that the timberlands involved in the 1964-66 logging operations were generally representative of plaintiffs’ Del Norte County timberlands and that these study results would have been available to reasonable and knowledgeable buyers of plaintiffs’ old-growth redwood timber. The trial judge therefore concluded that a reasonable estimate of the percentage of defect in the old-growth redwood trees taken from plaintiffs would be 27 percent. Defendant has accepted the trial judge’s finding on this point, but plaintiffs maintain that the defect rate found by the trial judge was too high. Specifically, plaintiffs dispute the trial judge’s conclusion that the timberlands involved in the 1964-66 logging operations were generally representative of plaintiffs’ Del Norte County timberlands. Alexander testified that only 40 percent of plaintiffs’ taken timber was similar to that logged in 1964-66. Alexander estimated the defects in the taken timber to be 18.65 percent. This percentage was developed by applying the defect rate for each log grade to the mix of log grades in the taken timber as determined by the MBG cruise. The mix of log grades was estimated by MBG’s cruiser, Whitehead, from his observations of the standing trees during his cruise. The defect rate for each log grade was derived from a 5-year study (1969-74) of the defect rate in plaintiffs’ Del Norte County timber-lands as shown by actual old-growth redwood logging operations. This study also showed an overall average defect rate of 25.35 percent. Conceding the accuracy of the empirical data from the 1969-74 study applied by Alexander, the accuracy of Alexander’s estimate of 18.65 percent still depended entirely on the estimate by Whitehead of the mix of log grades in plaintiffs’ taken timber. Plaintiffs agree with the trial judge’s finding that “[gjrading logs on standing trees, especially peeler grade logs, is deemed a most difficult undertaking, requiring great skill, experience and knowledge of redwood timber.” Plaintiffs maintain that Whitehead had the skill and experience to do this task accurately. Plaintiffs object to the trial judge’s further findings that “[ejven with such skills, the presence of hidden, internal defects in large old-growth redwood is more often than not beyond human perception in the forest” and that “[sjince large old-growth redwood has few external indicators of internal defect, one can reasonably wonder how it would be possible to estimate with any degree of reasonable certainty the percentage of internal defect present in a large standing old-growth redwood tree.” Defendant’s own expert, Wallen, indicated that approximately one-half of all cruises were performed based on the cruiser’s estimate of defect and breakage and that he himself had cruised in this manner in the past. While the trial judge may have overstated the difficulty of estimating the defect rate or log grade of standing old-growth redwood timber, his hesitation in deciding this issue based entirely on the expertise of one man is understandable. Wallen’s testimony indicates that cruises are often done in the same manner as MBG’s cruise, but his testimony certainly does not indicate that it is the best or most reliable method. Deference should properly be shown to the trial judge in assessing the credibility of the cruising method employed by Whitehead, who was a witness and explained his method to the trial judge at length. The trial judge found inconsistencies and judgmental errors in the cruise as explained by Whitehead and concluded that his estimate of the quality of the timber taken from plaintiffs was overly optimistic. It must also be remembered that the 18.65-percent defect rate developed by Alexander from Whitehead’s estimate of log grades differed substantially from the rates shown by actual experience. An average defect rate of 25-35 percent was shown by the 1969-74 study of plaintiffs’ logging operations, and the records of the 1964-66 cut, which was made on 209 acres of plaintiffs’ land taken in 1968, indicated an average defect rate of approximately 27 percent. We therefore conclude that the trial judge acted within his proper discretion in not relying on Whitehead’s estimate of the log grades in the taken timber, and we affirm his finding of a 27-percent defect rate in the old-growth redwood trees taken from plaintiffs. (3) Breakage After finding that the proper rate for allowance of internal defects was 27 percent, the trial judge applied the 3-percent deduction for breakage used by HJW in its calculation of the Humboldt scale volume of plaintiffs’ taken timber. The trial judge considered and rejected arguments by plaintiffs that according to general usage the 30-percent reduction required by the use of the Humboldt log rule already included a factor for breakage as well as internal defects. Because of the trial judge’s reliance on the results of the 1964-66 cut in determining the internal defect rate of plaintiffs’ taken timber, plaintiffs again argue that an additional reduction of volume for breakage was improper, but their argument has a different basis. Plaintiffs argue that the 27-percent rate accounts for all defects, including breakage found in the timber cut in 1964-66. Plaintiffs contend that 27 percent is the total difference between the gross and net Scribner scale volume of merchantable logs determined during the cut. The net Scribner volume seems clearly to apply to the net volume of the cut timber brought to the mill. The problem in resolving this issue is tied to the uncertainty as to exactly what was measured by the gross Scribner volume in the records of plaintiffs’ 1964-66 cut. Ordinarily, broken pieces which are badly shattered when a tree is felled will not be delivered to the mill. The broken material will be left in the forest where it fell. Thus, if the gross Scribner volume as shown in plaintiffs’ 1964-66 cut measures only the gross volume delivered to the mill, an additional percentage must be deducted to account for broken pieces left in the forest when calculating the net volume of standing trees. While the records of the 1964-66 cut before the court do not clearly indicate whether the gross Scribner volume figures reflect gross volume measured in the forest or as delivered to the mill, it seems unlikely that plaintiffs would go to the trouble of measuring the volume of broken pieces. Significantly, plaintiffs have made no showing that the gross Scribner volume of the 1964-66 cut represented any figure other than the volume delivered to the mill. Thus, the additional 3-percent reduction of volume to account for breakage was proper based on the record before the trial judge. (4) Chunks or Split Products The parties disagreed before the trial judge as to whether the timber volume to be ascribed to the taking of plaintiffs’ land should include volume in timber remnants remaining on the ground after a tree has been felled and logged. The remnants in question contain some merchantable lumber and do have a value. Plaintiffs refer to these timber remnants as “chunks” while defendant refers to them as “split products.” MGB included “chunks” in its timber volume determinations, whereas HJW did not. Kevin and Wallen agreed that chunks or split products were utilized in the redwood industry as of October 2, 1968. HJW felt that such materials would have been left behind on the forest floor after logging operations were concluded and thus would be included in the value assigned to the land and would not be included in the value assigned to the standing timber. The trial judge was not persuaded that the HJW estimate of fair market value of plaintiffs’ taken land included a factor for the value of merchantable volume of split products. The trial judge therefore increased the HJW volume determination by the amount of merchantable volume in the standing redwood trees which would be attributable to chunks or split products. The trial judge accepted an estimate by Kevin as to the volume of projected chunks to be left if the standing trees were cut. Kevin estimated that split products, relative to plaintiffs’ taken timber would constitute about 1,100 MBF net Spaulding scale of merchantable timber out of the 15,431 MBF of gross Spaulding scale which the HJW cruise designated as cull volume and thus was not included as merchantable timber volume in the HJW net timber volume determination. Kevin’s estimate was based on Wallen’s determination, supported by his long redwood experience, that 20 percent of redwood cull volume in logs which were 60 inches diameter inside bark (DIB) and larger would provide suitable merchantable timber volume. Kevin applied this 20-percent determination to the cruise data reflecting trees with logs of 60-inch DIB or larger to arrive at his split products estimate of 1,100 MBF. Defendant now agrees with the finding of the trial judge that volume should be increased by the amount attributable to chunks, but plaintiffs except and maintain that the volume of chunks found by the trial judge was too low. Plaintiffs argue that MBG’s estimate of volume attributable to chunks, 4,146 MBF, should have been accepted by the trial judge because MBG’s cruise included the volume of chunks which would be recovered from plaintiffs’ taken lands after a cutting whereas HJW’s cruise did not. Plaintiffs have not effectively rebutted the trial judge’s conclusion that, because of the manner in which MBG cruised plaintiffs’ lands, the volume attributable to chunks in MBG’s cruise could not be adequately segregated from its estimate of total merchantable volume. Therefore, plaintiffs’ figure of 4,146 MBF cannot be considered reliable. In addition, plaintiffs’ argument that HJW’s volume determination did not include the volume attributable to chunks is not wholly accurate. While HJW’s final determination of merchantable volume did not include volume attributable to chunks, this figure was included in HJW’s estimate of cull volume. The trial judge approved the approach by which Kevin segregated the volume attributable to chunks and split products out of total cull volume and then added it back into merchantable volume. We believe that this choice by the trial judge between two estimates, neither of which was wholly satisfactory, was reasonable and should not be disturbed. (5) Summary Resolution of the volume issue in this case has been a very difficult task. The record on the volume matter was conflicting. The different approaches taken by the parties and the use of different log rules or scales served to compound the difficulty. It was conceded by all the experts and timber operators who testified in this case that the percent of internal defect in the standing old-growth redwood timber taken from plaintiffs would be less than the 30 percent required by application of the standard Humboldt log rule or scale. As indicated previously, a reasonable estimate of the percent of defect in said timber would be 27 percent. Substituting 0.73 for the 0.70 figure in the HJW volume computation set forth above, with other computation figures remaining the same, including the 3-percent reduction for breakage, produces a net volume figure of 117,578 MBF. This figure, however, can no longer be considered to reflect Humboldt log rule or scale. Since it attempts to reflect the actual internal defect in the redwood timber, it more properly should be described as reflecting a net Spaulding or net Scribner log rule or scale. To this 117,578 MBF figure must be added the volume of 1,100 MBF representing chunks or split products, heretofore determined to have been improperly excluded from the HJW volume determination. On the basis of the totality of the record, it is found that a reasonable estimate of the volume of old-growth redwood timber taken from the individual plaintiffs on October 2, 1968, is 118,678 MBF net Spaulding or net Scribner scale (117,578 MBF plus 1,100 MBF). B. Value of Old-Growth Redwood Timber. It is conceded that plaintiffs are to be paid just compensation for the value of the old-growth redwood timber taken by defendant. Fair market value is a concept that has been associated with just compensation determinations but that term is not considered to be an absolute standard nor an exclusive method of valuation. In United States v. Fuller, 409 U.S. 488, 490, 93 S.Ct. 801, 803, 35 L.Ed.2d 16 (1973), the Supreme Court observed that “[t]he constitutional requirement of just compensation derives as much content from the basic equitable principles of fairness * * * as it does from technical concepts of property law.” As a result, courts have had to adopt working rules in order to do substantial justice in just compensation cases. United States v. Miller, 317 U.S. 369, 375, 63 S.Ct. 276, 280, 87 L.Ed. 336 (1943). Courts are favorably inclined toward market value as a fair indicia of just compensation, but the concept of just compensation cannot be reduced to a formula, United States v. Cors, 337 U.S. 325, 332, 69 S.Ct. 1086, 1090, 93 L.Ed. 1392 (1949), nor can it be reduced to inexorable rules, United States v. Toronto, Hamilton & Buffalo Navigation Co., 338 U.S. 396, 402, 70 S.Ct. 217, 221, 94 L.Ed. 195 (1949). Under the circumstances of this case, determination of the fair market value of plaintiffs’ taken timber is an appropriate and practical approach to a just compensation conclusion, keeping in mind the observations noted above. Fair market value has been defined in various ways. In Jack Daniel Distillery v. United States, 180 Ct.Cl. 308, 315-16, 379 F.2d 569, 574 (1967), the court stated, “The legal definition of fair market value is the price at which property would change hands in a transaction between a willing buyer and a willing seller, neither being under compulsion to buy or sell, and both being reasonably informed as to all relevant facts.” See also Almota Farmers Elevator & Whse. Co. v. United States, 409 U.S. 470, 473, 93 S.Ct. 791, 794, 35 L.Ed.2d 1 (1973). As is obvious from decisions in valuation cases, the term “value” is not a single purpose word. Andrews v. Commissioner, 135 F.2d 314, 317 (2d Cir. 1943), cert. denied, 320 U.S. 748, 64 S.Ct. 51, 88 L.Ed. 444 (1943); see also 1 Orgel, Valuation Under Law of Eminent Domain § 20, at 93 (2d ed.). In this case, the parties utilized two very different methods of calculating the fair market value of the old-growth redwood timber taken from the individual plaintiffs. Alexander utilized a conversion return analysis in arriving at his opinion. Alexander determined this value to be $14,576,928. Using MBG’s net Scribner scale volume determination of 138,223 MBF, the above value figure works out arithmetically to around $105.46 per MBF. Using MBG’s Humboldt-by-conversion figure of 119,445 MBF, this works out arithmetically to $122.04 per MBF. The conversion return method of arriving at a market value figure for timber, properly formulated, is an acceptable valuation technique. See United States v. Cornish, 348 F.2d 175, 182-83 (9th Cir. 1965). In simple terms, a conversion return appraisal of timber, as utilized by Alexander, starts with the gross income to be derived from selling the lumber which would be manufactured from the timber to be evaluated. From this gross income figure, the related costs involved, i. e., logging and manufacturing, would be subtracted to obtain what is described as a conversion return figure. This conversion return figure is then allocated between profit and stump-age. Stumpage is the standing timber to be evaluated. See United States v. Cornish, supra, 348 F.2d at 183. A considerable amount of detailed information is required for the conversion return method of appraisal. Alexander relied on data in the Miller Redwood Company’s annual report for the year ending February 28, 1969, for lumber sale prices and manufacturing costs. He relied on the Rellim Redwood Company’s annual report covering the same period for logging and related costs. Alexander made adjustments in his use of his data to reflect his opinion as to the superior quality of the taken timber and his view that a prospective buyer would utilize the timber for peeler log purposes (as veneer) to the largest extent possible rather than for sawlog purposes since peeler logs produced greater revenue than sawlogs. The trial judge rejected Alexander’s conversion return appraisal as an appropriate indicator of the fair market value of plaintiffs’ taken timber and stressed two reasons for his rejection. First, the trial judge noted that the exclusive use of cost data derived from the Miller family complex (rather than average industry costs) could make the appraisal reflect only the special value to the owner of the property rather than fair market value. The special value of taken property to an owner is not compen-sable. United States v. 564.54 Acres of Land, 441 U.S. 506, 511, 99 S.Ct. 1854,1857, 60 L.Ed.2d 435 (1979); United States v. Cors, supra, 337 U.S. at 332, 69 S.Ct. at 1090; United States v. Cornish, supra, 348 F.2d at 182-83. Second, the trial judge questioned Alexander’s allocation of the remaining value (after deduction for costs) 15 percent to sawmill profit and 85 percent to stumpage value. In the trial judge’s opinion, the sales used by Alexander for the basis of the allocation showed no comparability with the taken timber, and Alexander did not give sufficient attention in making his appraisal to the actual transfer prices of timber between the individual plaintiffs and Rellim or to the actual 27-percent profit derived by Miller Redwood on its sawmill operation. The trial judge gave greater weight to the comparable sales approach used by Kevin as an indicator of value. Kevin relied on four sales as providing reasonable indicators of redwood timber value on October 2; 1968. Kevin, in his investigation of sales data, discovered there were only a few old-growth redwood timber sales close to the taking date set forth above. Moreover, there were no timber sales in terms of timber volume truly comparable with the volume of timber on the taken lands. There were other variations between the comparable sales timber and the taken timber. Because there were these other variations, adjustments to the base prices of the indicator sales were made by Kevin in order to equate, to the extent possible, factors such as time of sale in relation to the taking date, quality of timber, method of scale, and logging and haul costs. The mathematical average price of the four sales utilized by Kevin as indicators of value was $89.25 per MBF Humboldt scale. Kevin offered $90 per MBF as his opinion of the value of the old-growth redwood timber taken from plaintiffs. The trial judge found that one of these four sales, involving the Pacific Lumber Company (seller) and the State of California (buyer), may have been tainted by the threat or specter of condemnation. For this reason, this sale was given no weight. The mathematical average price of Kevin’s three remaining indicator sales was approximately $92 per MBF Humboldt scale, which the trial judge found to be a reasonable indicator of value. Finally, the trial judge noted that Kevin’s value figure was based on the old-growth redwood timber being scaled on the Humboldt log rule, while the net timber volume result reached by the trial judge (and adopted by the court) was scaled in net Scribner or Spaulding. Generally, use of the Humboldt scale in timber volume determinations produces a higher price per MBF than does use of the Scribner or Spaulding scale. Analysis of the Miller Redwood and Rellim annual reports indicates that the price differential relative to these log scales ranges from $1.164 per MBF to $1.962 per MBF. The record suggests that Kevin’s opinion value price per MBF probably would be lower if he had scaled the taken timber in net Scribner or Spaulding. However, the trial judge concluded, under the unusual and complicated circumstances of this case, that no reduction in Kevin’s opinion value per MBF figure would be appropriate because some consideration should be given to the redwood peeler aspects of the taken timber, a value aspect which was not considered by Kevin in his evaluation analysis. Plaintiffs object to the trial judge’s rejection of Alexander’s conversion return appraisal and argue that both grounds offered by the trial judge in support of his rejection of Alexander’s appraisal were erroneous. Plaintiffs further contend that Alexander’s appraisal was the only evidence before the trial judge on the value of peelers. In their view, Kevin’s appraisal should not have been given much weight because of the absence of any significant quantity of peelers in the sales cited by Kevin as comparable. First, plaintiffs argue that it was erroneous for the trial judge to consider the actual transfer price of the timber between the individual plaintiffs and Rellim. Rellim, which harvested the timber, and Miller Redwood, which manufactured the timber into lumber, veneer, or other wood products, were both wholly owned by Stimson, which was in turn controlled by the individual plaintiffs. The timber sales were not at arm’s length, and the prices at which the family sold logs to Rellim were set by a formula established by a compromise agreement with the Internal Revenue Service in 1959. This formula was kept current by relating it constantly to the Wholesale Price Commodity Index. Plaintiffs argue that the prices set by the formula were too low and did not reflect the full value of the stumpage. The transfer price was clearly not negotiated in an arm’s-length transaction, and plaintiffs therefore argue that it should have been given no weight. The transfer price fixed by an agreement with the Internal Revenue Service is also analogized by plaintiffs to assessed valuations for property taxes. Such assessments are not admissible as evidence of fair market value in a condemnation proceeding as they merely represent the opinion of the tax assessor who was not called as a witness. United States v. Certain Parcel of Land, 261 F.2d 287, 290 (4th Cir. 1958). Evidence of the transfer price was properly admissible in this case. It was an operative fact as the actual price at which the timber changed hands and not merely someone’s opinion of fair market value. Plaintiffs as well as the Internal Revenue Service were parties to the agreement by which the price was set. While the transfer price could not be given as much weight as an arm’s-length transaction, the trial judge could properly consider it for what it was worth. District of Columbia Redevelopment Land Agency v. 61 Parcels of Land, 235 F.2d 864 (D.C.Cir. 1956). Second, plaintiffs argue that Alexander’s appraisal was conservative and did not reflect any special value to plaintiffs. The costs experienced by Rellim and Miller Redwood and utilized by Alexander in his appraisal were higher than average industry costs. The use of higher costs in a conversion return appraisal will produce a lower stumpage value. While there is some merit to plaintiffs’ arguments, they fail to take into account the adjustments made by Alexander based on his assumptions that the taken timber was superior in quality to the timber harvested, manufactured, and sold by Rellim and Miller Redwood during the period from which Alexander drew his data. Superior timber has fewer defects and therefore costs less to manufacture. The costs actually experienced were adjusted downwards by Alexander, and these costs as adjusted were found to be higher than the low average industry cost of manufacturing superior quality timber comparable to that assumed by Alexander. The trial judge has disagreed with Alexander’s assumptions as to the superior quality of the taken timber, and this court has affirmed that portion of the trial judge’s opinion. Because Alexander’s basic assumptions in his conversion return analysis were in error, it would have been very difficult for the trial judge to remove these errors and to correct the end result of Alexander’s analysis. This court will not attempt to second-guess the trial judge in this very complex case. The approaches employed by both parties contained errors of differing degrees. The trial judge concluded that he could reach the best result by starting with Kevin’s comparable' sales analysis despite the absence of any consideration of peeler value. The trial judge made the best possible estimate of the extra value attributable to peelers that could be made on the evidence available. The award to plaintiffs was adjusted to reflect the trial judge’s estimate. Evaluation generally is a matter of judgment and sometimes is no more than a “guess by informed persons.” United States v. Miller, supra, 317 U.S. at 375, 63 S.Ct. at 280. If it were possible to correct all of the errors in Alexander’s conversion return appraisal, that appraisal might indeed have provided the best and most exact evidence of peeler value. Plaintiffs have not convinced us that such a correction was feasible on the record before the trial judge. We therefore affirm the findings of the trial judge as to the volume and price per MBF and his ultimate determination that the fair market value of the old-growth redwood timber taken from the individual plaintiffs is $10,918,376 (118,678 MBF X $92 per MBF). III Plaintiffs, both individual and corporate, seek to recover severance damages, in the total amount of $588,713, as a result of the taking of a portion of the timberlands of the individual plaintiffs. As observed in United States v. Miller, supra, 317 U.S. at 376, 63 S.Ct. at 281, “[i]f only a portion of a single tract is taken, the owner’s compensation for that taking includes any element of value arising out of the relation of the part taken to the entire tract [footnote omitted]. Such damage is often, though somewhat loosely, spoken of as severance damage.” See 4A Nichols, The Law of Eminent Domain § 14.1[3] (3d rev. ed. 1969). Severance damage, by its very nature, arises only on the taking of a portion of the owners’ property and is directed at the diminution in value of the remaining portion not taken. The burden of proof is upon the plaintiffs to show entitlement to severance damages. United States v. 72.35 Acres of Land, 150 F.Supp. 271, 274 (E.D.N.Y.1957). Indeed, in situations similar to that faced by the corporate plaintiffs herein strict proof of loss in market value of the remainder property is obligatory. United States v. Honolulu Plantation Co., 182 F.2d 172, 179 (9th Cir.), cert. denied, 340 U.S. 820, 71 S.Ct. 51, 95 L.Ed. 602 (1950). It is to be noted that none of the lands or property of the corporate plaintiffs, Stimson and Miller Redwood, were taken. There is a dispute between the parties as to whether any land owned by the other corporate plaintiff, Rellim, was taken. Defendant argues that the corporate plaintiffs have no standing to sue for severance damages since they did not possess legal title to the taken lands. This lack of unity of title, defendant maintains, precludes consideration of the severance damage claims of the corporate plaintiffs. Since it is concluded, infra, that the corporate plaintiffs are not entitled to any severance damages, it is not necessary to reach this issue. In their severance damage presentations, plaintiffs did not use a before-and-after appraisal value approach. Instead, plaintiffs sought to establish depreciation in value in specified and localized areas of the integrated enterprise operated by the plaintiffs which they allege was directly attributable to the taking. Defendant advised it would offer no technical objection to the absence of evidence of a before-and-after appraisal, citing United States v. Wateree Power Co., 220 F.2d 226, 231-32 (4th Cir. 1955). As indicated earlier, the concept of just compensation cannot, and should not, be reduced to a set formula or inexorable rules. Under the circumstances, it cannot be said that plaintiffs’ severance damage value approach should be rejected merely because it did not follow the generally recognized before-and-after approach. See Aaron v. United States, 167 Ct.Cl. 818, 825, 340 F.2d 655, 659 (1964). Plaintiffs’ severance damage claims may be categorized as follows: (1) standing cold deck (timber inventory); (2) depreciation of sawmill facilities; (3) roads; (4) incompatible neighbor; (5) water supply source; and (6) gravel bar deposits. Only categories (1) and (2) represent direct severance damage claims by a corporate plaintiff, i. e., Miller Redwood. The remaining categories represent severance damage claims by the individual plaintiffs. (1) Standing Cold Deck As of October 2, 1968, the plaintiffs viewed the taken old-growth redwood timber standing along Mill Creek, which was within reasonable distance of the Miller Redwood sawmill facilities, as a “standing cold deck,” or an inventory of standing trees, which could readily provide a nearby available supply of logs for mill operations in an emergency. Because of this nearby available timber supply, Miller Redwood maintained a log inventory for winter operations of some 2.5 million board feet. Generally, logging operations would be limited by winter weather. Accordingly, the log inventory figure, supra, was geared to getting the sawmill operations through the winter months. However, in an emergency (i. e., exhaustion of the log inventory) these nearby trees could easily be logged and thus could supply logs for sawmill operations until logging operations in other areas opened up. As a result of the taking of the timber which constituted Miller Redwood’s standing cold deck, Miller Redwood maintains it had to change its inventory practice by increasing its log inventory to some 4.5 million board feet in order to insure that mill facilities would remain operational throughout the winter. This change in log inventory practices is the basis for Miller Redwood’s standing cold deck severance claim. The trial judge determined that his standing cold deck claim, as presented by plaintiffs, represented consequential damages and not direct damages flowing from the taking of the timber in issue. Plaintiffs argue that the trial judge erred in categorizing their claims as being noncompensable “consequential” damages. There was testimony that a prospective buyer would have paid less for plaintiffs’ remaining land because of the loss of their standing cold deck. Plaintiffs distinguished between noncom-pensable damages for the frustration of business plans and compensable damages for the loss of value to the remaining property. We agree that the law does draw the distinction urged by plaintiffs. See R. J. Widen Co. v. United States, 174 Ct.Cl. 1020, 1029 n. 10, 357 F.2d 988, 994 n. 10 (1966); Baetjer v. United States, 143 F.2d 391, 395-96 (1st Cir. 1944). “There are numerous business losses which result from condemnation of properties but which are not compensable under the Fifth Amendment.” United States ex rel. T. V. A. v. Powelson, 319 U.S. 266, 281, 63 S.Ct. 1047, 1055, 87 L.Ed. 1390 (1943); see also United States v. General Motors Corp., 323 U.S. 373, 379, 382, 65 S.Ct. 357, 360, 361, 89 L.Ed. 311 (1945); Mitchell v. United States, 267 U.S. 341, 45 S.Ct. 293, 69 L.Ed. 644 (1925). If, however, only a portion of a single tract is taken, the owner’s compensation for that taking includes any element of value arising out of the relationship of the part taken to the entire tract. United States v. Miller, supra, 317 U.S. at 375-76, 63 S.Ct. at 280-81; see also Campbell v. United States, 266 U.S. 368, 371, 45 S.Ct. 115, 116, 69 L.Ed. 328 (1924); United States v. Grizzard, 219 U.S. 180, 31 S.Ct. 162, 55 L.Ed. 165 (1911). Assuming that sufficient unity of ownership existed, plaintiffs would be entitled to recover any diminution in the value of their remaining property. Although the distinction drawn by plaintiffs is correct, a close reading of the trial judge’s opinion indicates that he did not misapply the law. In addition to his conclusion that consequential business damages were not recoverable, the trial judge was not persuaded that a reasonable and knowledgeable buyer and seller would have agreed to a reduction in the value of the remainder property by some $110,565 on the strength of plaintiffs’ standing cold deck claim. ■ The purpose behind Miller Redwood’s standing cold deck was to insure the availability of logs for mill operation in the event an emergency required that trees from the standing cold deck be cut. Ostensibly, this standing cold deck was to be cut only in emergency situations. There was no evidence in the record that any such emergency arose, either before or after October 2, 1968. The trial judge speculated that Miller Redwood’s management decision to increase log inventories after October 2, 1968, may well have been required by increased production demands. The veneer plant became operational in June 1968 and this may have required an increase in log inventories. Further, the record indicated that other stands of old-growth redwood on timberlands of the individual plaintiffs were reasonably available to the mill site and could serve as an emergency standing cold deck. There was evidence in the record that some of this close-to-the-mill timber was cut subsequent to 1970, but there was no evidence such cutting was due to any emergency. Plaintiffs argue that no one supported the trial judge’s speculation that the increase in inventory may have been required by Miller Redwood’s increased production capabilities. The trial judge’s speculation on this point was gratuitous and did not constitute the real basis for his holding, which was that plaintiffs failed to substantiate that the increase in inventory was due to the reasons which they alleged, i. e., the loss of the standing cold deck. Plaintiffs contend that the increase in inventory was predictable based on the testimony of Alexander, plaintiffs’ general manager, and an independent mill operator. The testimony of parties employed by plaintiffs could properly be weighed with some degree of skepticism by the trial judge. Although the testimony of an employee of a party cannot be be disregarded simply because of such employment, Chesapeake & Ohio Ry. v. Martin, 283 U.S. 209, 216-20, 51 S.Ct. 453, 456-457, 75 L.Ed. 983 (1931), the absence of any emergency use of timber as a standing cold deck, either before or after the taking, also casts doubt on the large loss claimed to be occasioned by the taking of plaintiffs’ “standing cold deck.” As for the testimony of the independent mill operator, he merely agreed that the price of a mill would be less if there were no stand of high quality timber nearby. Since plaintiffs have failed to rebut the trial judge’s conclusion that nearby timber which was not taken could also be used as an emergency source of timber in the winter, the opinion of the independent mill operator lacks any application to the facts as established by the record. Therefore, the trial judge’s resolution of this close factual question should not be disturbed. He is presumed, under the rules, to be correct and has not been shown to be clearly erroneous. (2) Depreciation of Manufacturing Facilities Plaintiffs contend that a purchaser of the Miller Redwood manufacturing facilities after the taking of the timber in question would have paid $399,648 less than would have been the case before the taking. The basis for this severance damage claim is the view that the taking removed old-growth timber which, if not taken, would have borne