Archive for the ‘Eminent domain’ Category

Decision: McAlister v. Fairway

August 11, 2009

July 24th. The Kansas Supreme Court has issued its decision in the case of McAlister v. City of Fairway (No.s 99,808 and 99,809 consolidated). In a unanimous opinion, written by Justice Dan Biles, the Court squashed an attempt to hold a vote on a citizen’s initiative restricting some of that City’s eminent domain powers. The Court also clarified its jurisprudence on what was permitted in an initiative.

The City of Fairway considered moving its City Hall to a location which contained some historic sites as well as adjoining residential property. This move was unpopular and a petition drive was held leading to two questions being submitted for the ballot. These question would have put to a vote rules forbidding:

1. The move of the City Hall to a number of stated locations, or residentially zoned properties as of January 2005.

2. The rezoning of specific sites and residentially zoned properties as of January 2005, into commercial zoning.

The City Clerk decided that the proposed petitions were invalid as they intruded into the City’s executive functions and did not put them up for a vote. The petitioners filed a lawsuit and the district court ruled summarily for the City. This appeal was then filed.

In making its ruling the Court reformulated its past rulings on how to determine whether a proposed petition impacting on a city was legislative (allowed) or executive (not allowed) in function. Previous cases did not quite synch up on this question and the court drew them together to create a new test. The new test may plainly be stated as asking a series of questions:

1. Whether the petition would create a new law or policy
2. Whether the petition declares and acts towards a public purpose
3. Whether the petition intrudes into areas of government requiring specialized training and expertise
4. Whether the petition addresses issues of statewide concern which the State has delegated to the City

In addition, the results of these four questions are to be viewed in the context of the petition subject matter and in the context of Kansas’ established policy on referenda that they only be permitted where they are legislative and not administrative or executive. On this latter point the Court observed that this is a long-standing tradition in Kansas law, on which other states differ and allow more latitude in petitions. The Court also stated that no rigid weighting of the four questions in the test will be used, rather they will be looked at in the context of the individual case.

The Court then examined the two petitions. It found that the first petition was legislative in character in all but one of the questions. It found it executive/administrative in that in itemizing specific sites as off-limits for the siting of City Hall it intruded into areas of government requiring specialized training. As a result of this it ruled that the petition was invalid. In making that decision the fact that the elimination of the use of eminent domain on Residential Properties would rule 80% of Fairway off-limits was a factor. Thus a similarly worded petition in a more diversely zoned city might pass muster.

The second petition was ruled administrative/executive in all its parts, save that its public purpose test was  a mixture and did not lean either way. As such it was ruled invalid.

The Court therefore upheld the summary judgement that the petitions did not need to be presented to the voters. This is an important ruling since it recrafts the landscape for lower courts dealing with petition drives in the context of city politics. On the plus side, it plainly states the test to be employed. On the negative side, critics will note that the test provides the opportunity for opponents of given petitions to use the broad exclusion of matters requiring ‘specialized training’ to get those petitions blocked.

Decision: Frick v. City of Salina

June 11, 2009

June 5th. The Kansas Supreme Court has issued its opinion in Frick v. City of Salina (No. 99,791) a case concerning relocation benefits to businesses following a taking under eminent domain. In a nearly unanimous decision, written by Justice Marla Luckert, the Court held that Ben and Lavelle Frick were entitled to a new review in District Court of the record of the administrative proceeding that had awarded them a certain amount of benefits. The District Court had previously held that its review would only be based on whether the administrative procedure’s decisions could be upheld as a matter of law. Justice Johnson concurred in the result, but criticized the Court for not holding that the new trial would simply be a completely new review, with the Fricks able to bring new witnesses and introduce new evidence. No Justices dissented from the decision. Note: Former Chief Justice Kay McFarland and Justice Lawton Nuss took no part in the decision. Their places were filled by Judge Stephen Hill of the Court of Appeals and Senior Judge Edward Larson.

The background to the case was a public works project involving the City of Salina and KDOT with the City as the principal on the project. In order to complete the project it was necessary to take some retail property from the Fricks. There was a separate eminent domain dispute concerning the compensation for this which has been mutually settled. Under the terms of Kansas Law (in turn implementing a Federal requirement) in cases such as this, businesses which are forced to relocate are required to receive compensations for relocation costs. These costs were assessed by an independent examiner who awarded some money to the Fricks. The Fricks sought to appeal to the District Court where the statute governing such decisions stated they were entitled to trial de novo of the issue. The Court held that it was able to review the record of the examiner but not make new findings, and upheld the awards as supported in law.

The Kansas Supreme Court reversed the District Court and ordered a new hearing. In reaching that decision, it made two principal rulings. The first was that the terms of the Kansas Act for Judicial Review and the Civil Enforcement of Agency Actions and related Federal acts did not apply to this case, since the City of Salina was taking the title to the property and municipalities are excluded from that act. As a result, the rules laid down there governing administrative appeals did not apply.

The second decision made by the Court held that since the function of the examiner in this case was a largely judicial one (weighing claims and deciding upon damages) the District Court could perform a new trial without offending the separation of powers doctrine. However, because a record would have already been created and the statute framed the new trial as an appeal the new trial would only be based on evidence submitted to the examiner and would not allow the Fricks to bring new witnesses or information. The District Court had therefore erred in using too strict a standard and the case was remanded there to be reconsidered with the District Court forming new fact findings and interpretations of the evidence collected by the examiner.

Justice Lee Johnson issued a forceful concurrence. He felt that the Court was creating ambiguity by not construing de novo to plainly mean a new trial, with all the attributes (witnesses, evidence etc) one would expect of one. He accepted that where there could be separation of powers issues involved (e.g. the Legislature ordering a Judical body to carry out an Executive duty) the Court could not follow the words of the statute, but since in this scenario this was not the case he thought that the Legislature should be able to specify where a new trial was required and where an appeal process was required. His concurrence cites Justice Luckert’s decision in State v. Marsh for support. [Note: State v. Marsh was a capital case in which the Kansas Supreme Court’s ultimate decision striking down the death penalty was overturned by the United States Supreme Court. However the reasoning Johnson cites was not part of the decision that the U.S. Supreme Court took issue with, and therefore remains valid].

Decision: U.S.D. 232 vs CWD Investments

April 22, 2009

Note: An earlier version of this article erroneously referred to the school district as “Shawnee Mission School District”. In fact USD 232 is the DeSoto school district, which also encompasses some of the outer parts of Shawnee and Lenexa. The article has been corrected.

April 17th. The Kansas Supreme Court has issued its opinion in Unified School District No. 232 vs. CWD Investments, an eminent domain valuation appeal. In a unanimous decision, written by Justice Nuss, the Court determined that the District Court had not abused its discretion in summarily ruling against some of a Johnson County property developer’s damage claims, and had not abused its discretion in barring the developer from raising some others at trial. The case arose over the condemnation of 17 acres of a subdivision in western Shawnee for the purpose of building an Elementary School. The property developer argued that this cost them around two million dollars in total losses compared to the Unified School District’s valuation of $700,000. A jury awarded the developer $8000 more than the school district appraisal.

CWD Investments and Duggan Homes planned to develop a residential subdivision near 55th Street and K-7. The property was intended to be developed into 307 lots. Prior to any ground being broken, the Unified School District condemned 17 acres to build a school. The developers say this led to the loss of 57 fewer units. The land was appraised, but the developers brought an appeal of the condemnation to the Johnson County District Court. During the discovery phase of the trial, John Duggan (President of Duggan Homes and one of the owners of CWD Investments) was deposed as an expert witness to testify about the claims he was making about the true losses his companies were experiencing as a result of the condemnation.

A key point of law regarding eminent domain in Kansas is that it is well established that future profits cannot be a factor in the damages awarded to those losing their property. The Kansas Supreme Court held this in the 1970s. The District Court did however make an evidentiary ruling that information about the way this aspect of the development might affect the fair market value of the land was admissible.

Duggan Homes (the builder for the project) and CWD Investments (the property developer) sought losses for a range of things over and above the appraiser’s value of the land. These included the cost of an extension to Clear Creek Parkway, the impact of having to spread development costs for the subdivision across fewer units on the competitiveness of the homes on the market, the costs of redesigning some of the subdivision, the impact on home values of the school and sewer costs. John Duggan described these and other damages in his deposition.

During the trial phase the District Court ruled that only the items discussed by Duggan in his deposition could be brought up. Yet, Duggan’s counsel took a broader view of that ruling and introduced evidence about items which Duggan had mentioned but not quantified. This ultimately resulted in a mistrial.

Prior to the next trial, the School District sought a summary judgment to rule against some of the developer’s claims since these constituted lost profits disguised as other items. The District Court granted the summary judgment, finding that the developer had failed to establish that it had any facts to support its argument that these costs did impact fair market value. The developer on appeal argued that the ruling was premature since the evidence it intended to present at trial would show the link. The Kansas Supreme Court rejected this argument, finding that the onus was on the developer to have shown this evidence during the summary judgment motion and that since it did not the District Court acted properly in granting summary judgment to the School District.

After this, but before the new trial, the developer altered their argument and included some costs which had not been detailed in the original depositions, such as the costs of the intersection of Clear Creek Parkway and K-7. This represented approximately 1.5 million dollars of additional damages. The School District sought to have evidence supporting this argument barred since it had not been included in the depositions and thus breached the District Court’s evidentiary ruling before the mistrial. The District Court agreed with the School District and barred evidence from being presented on these matters. The Kansas Supreme Court ruled that the District Court did not abuse its discretion in doing so, citing the latitude granted District Courts to determine admissibility of evidence and the fact that Duggan, who is also a lawyer, had signed a statement that his depositions were a complete account of the damages being sought. Just because the developer now had a new theory of its case did not entitle it to alter the evidence it was to present right before a trial.

As a result, the jury’s award of $718,100 damages was affirmed.

Decision: Winkel v. Miller

April 10, 2009

March 27th. The Kansas Supreme Court has issued its opinion in Winkel v. Miller (No. 99,768), an eminent domain case between Karl and Karen Winkel, Trustees of the Winkel Trust and the Kansas Department of Transportation (KDOT). In a unanimous opinion, written by Justice Johnson the court rejected the Winkel’s attempt to block KDOT’s condemnation of part of their land and thus end the operation of an asphalt mixing strip adjacent to their land. Note: This case was argued in the January sitting of the Court, after former Chief Justice Kay McFarland’s retirement. District Judge Edward Bouker served as the seventh member of the court hearing the case.

Winkel owns an 80 acre farm in Mitchell County, bounded on the east side by the north/south county highway.  In 1952, the highway was reworked and run across the north-east corner of the property belonging to Winkel so that a 2 acre triangle was separated from the rest of the land. At that time KDOT acquired an easement to use part of the triangle. In the early 1990s, KDOT acquired a plot of land on the far side of where the old highway ran which it uses as an asphalt mixing strip. The old highway that ran up the east side of the triangle was used as an access road by KDOT.

In 1994 Winkel brought an unsuccessful suit to block the operation of the mixing strip citing claims that the rest of the property was adversely affected by pollution and nuisance. This case was rejected in a summary judgement in District Court. In 2003, Winkel brought another suit which sought to show that KDOT exceeded the terms of its original 1952 easement on the triangular piece of land and that it had abandoned its claim through not using it for 42 years. This case was dismissed but during its proceedings it was discovered that Mitchell County had abandoned its ownership of the old highway which had been used as an access road and that therefore Winkel owned half of it. As a result of this the Court of Appeals found partly for Winkel but declined to block KDOT’s use of the land, since Winkel could pursue appropriate compensation legally. This latter point is a major part of eminent domain law in Kansas: as a general rule Courts will not block eminent domain actions through an injunction, but will enforce appropriate compensation (which was affirmed again in this decision). After being unable to resolve their differences with Winkel, KDOT filed an eminent domain action to condemn the whole triangular piece of land and pay compensation for it, giving rise to this case. This case resulted in a summary judgement in KDOT’s favor in the District Court, giving rise to this appeal.

Winkel challenges the eminent domain action on two grounds, as well as reopening the claim of nuisance from 1994. The court found against Winkel on all three issues.

First, Winkel argued that KDOT did not properly exercise its power of eminent domain here because it could not show that it needed the triangle of land over and above some other locations in Mitchell County. The Court rejected this argument since the purpose of taking the piece of land is to store gravel and park vehicles, and nowhere else in Mitchell County does KDOT already own a mixing strip. Therefore this piece of land clearly met that part of the necessity test. Winkel also argued that the statute authorizing eminent domain required KDOT to take a fee simple interest in the property, rather than merely an easement. This was rejected by the court based on the wording of the statute which gives KDOT flexibility in the type of ownership it can take. Furthermore the Court noted that the appraisers awarded Winkel the full value of the plot of land, even though it was only condemned for an easement.

Winkel’s second argument was that the appraisal did not take into account the decline in the value of the remaining portion of land (the 78 acre farmstead). The Court noted that this dispute over the valuation model is able to be litigated in a separate case which is pending over the assigned valuations.

Finally, the Court upheld the decision in the District Court that Winkel was attempting to re-litigate the 1994 claim of nuisance and that this was blocked under res judicata. The Court found that the parties and issue being disputed were the same, that the evidence supporting Winkel’s claim was the same. It therefore blocked the attempt to re-open this.

Decision: Harsch v. Miller

February 13, 2009

February 13th. The Kansas Supreme Court has issued its opinion in Harsch v. Miller (No. 100,149) a procedural appeal arising out of an eminent domain proceeding. In a unanimous opinion, written by Justice Nuss, the Court affirmed a Coffey County District Court ruling, dismissing Doyle Harsch’s appeal against the  appraiser’s valuation of his land on the grounds that Harsch and his attorney did not appear on the date set for the civil trial. A ruling of the District Court sanctioning Harsch’s attorney and imposing costs upon him based on a finding of contempt of court in the case was overturned. Note: The “Miller” of the case title is Debra Miller, Kansas Secretary of Transportation. Note: this case was argued while Chief Justice McFarland was still a member of the court. She was recused from the case and her place taken by Judge Stephen Hill of the Court of Appeals.

In 2007, KDOT instituted eminent domain proceedings to acquire part of Doyle and Lea Harsch’s land. The Harsches began several legal proceedings to fight this. They appealed the appraiser’s valuation to District Court, began a constitutional claim in District Court and filed another constitutional claim in Federal District Court. They withdrew the State constitutional case. In the midst of this, they filed a motion with the District Court hearing their valuation appeal to stay the case, pending the outcome of their constitutional appeals. The District Court denied their motion. As the date of the jury trial on their appraisal appeal approached the Harsches filed an appeal of the denial of stay with the Court of Appeals. While the Court of Appeals asked them to show why the appeal should not be dismissed as interlocutory (i.e. filed before the lower Court had concluded the case, something there are specific procedures to follow if desired and which is rarely granted), it set a date on which it would rule on their appeal after the date on which the jury trial was to take place.

The District Court proceeded towards the jury trial, while the Harsches and their attorney argued that it could not do this while the Court of Appeals was considering their appeal of the denial of stay. The District Court ruled that it retained jurisdiction in the case, and the Harsches and their attorney announced they would not attend the trial since they argued that the District Court did not and the trial would therefore be a nullity. They carried out their threat, and on the day of the trial the District Court dismissed their appeal and confirmed the appraiser’s valuation. It also sanctioned their attorney, Mark Rockwell, for several thousand dollars in costs of the abandoned trial. A few days later the Court of Appeals dismissed the Harsch’s appeal of the denial of stay. Their Federal case is scheduled for trial in June of this year.

In their appeal the Harsches repeat their argument that the District Court lacked jurisdiction at the scheduled time of the jury trial to hear the case. Some background on rules of appeal in civil cases is necessary to the Supreme Court’s rejection of their argument. Appeals are governed by statute. In civil cases, such as this one, they may only be brought at the conclusion of a lower court proceeding, or as an interlocutory appeal through a particular procedural process. Interlocutory appeals are rarely granted and those that are not filed through the defined process are always dismissed. One exception to this rule is a narrow group of appeals under the collateral order doctrine, which allows interlocutory appeals of District Court rulings that have a degree of finality to them, cover significant legal issues and which would not be possible to preserve for the regular appeals process if the appellant waited. The Harsch’s argued that their appeal fell into this category. The Court rejected this argument, and emphasizing the Legislature’s goal that cases not be tried piecemeal and be concluded as speedily as possible noted several alternative approaches the Harsch’s had opted not to use (such as following the procedure for filing an interlocutory appeal in the prescribed manner). The Court found no grounds that the filing of the Harsch’s appeal of the denial of stay would have removed the District Court’s jurisdiction (in effect getting them the stay they had been denied by simply filing a motion in the higher court), and therefore found that the District Court acted within its discretion in proceeding with the jury trial.

The Kansas Supreme Court overturned the finding that the Harsches and their attorney were in contempt of court by not showing up for trial. It did so on a technicality. Under the Statute cited by the District Court in its contempt ruling, the Court journal is required to include a statement of why they were found in contempt, the sanctions applied and a description of the defendants reason or excuse for the behavior found in contempt. Despite Rockwell’s having made his jurisdictional argument to the District Court when he said the Harsches would not be attending the trial, this information was not included in the journal. Therefore the contempt citation is invalid and was vacated by the Supreme Court along with the fees Rockwell had been ordered to pay.