972 S.W.2d 416 (Mo.App. W.D. 1998), WD 53765, City of Smithville v. St. Luke's Northland Hosp. Corp.

Docket NºWD 53765.
Citation972 S.W.2d 416
Party NameCITY OF SMITHVILLE, Missouri, Appellant, v. ST. LUKE'S NORTHLAND HOSPITAL CORP. f/k/a, Spelman Memorial Hospital, Respondent, Western Resources, Inc., Defendant, Southern Union Company f/k/a Missouri Gas Energy, Respondent, Southwestern Bell Telephone Company, Respondent, Dennis Collins, d/b/a Executive Travel Center, Respondent, Smithville Pharmac
Case DateApril 21, 1998
CourtCourt of Appeals of Missouri

Page 416

972 S.W.2d 416 (Mo.App. W.D. 1998)

CITY OF SMITHVILLE, Missouri, Appellant,

v.

ST. LUKE'S NORTHLAND HOSPITAL CORP. f/k/a, Spelman Memorial

Hospital, Respondent,

Western Resources, Inc., Defendant,

Southern Union Company f/k/a Missouri Gas Energy, Respondent,

Southwestern Bell Telephone Company, Respondent,

Dennis Collins, d/b/a Executive Travel Center, Respondent,

Smithville Pharmacy, Inc., Defendant,

Paul D Stevens, D.D.S. d/b/a Smithville Dental Care, Respondent,

Northland Regional Ambulance District, Respondent,

Vha, Inc., Amicus Curiae.

No. WD 53765.

Court of Appeals of Missouri, Western District.

April 21, 1998

Motion for Rehearing and/or Transfer to Supreme Court Denied June 2, 1998. Application for Transfer Denied Aug. 25, 1998.

Page 417

Randal J. Leimer, Rose, Brouillette & Shapiro, Kansas City, for appellant.

Thomas W. Wagstaff, Kansas City, Blackwell Sanders Matheny Weary & Lombardi, Jerome E. Brant, amicus curiae, Liberty, for respondent.

Before LOWENSTEIN, P.J., and BRECKENRIDGE and HANNA, JJ.

BRECKENRIDGE, Judge.

The City of Smithville appeals from the trial court's order entering summary judgment in favor of St. Luke's Northland Hospital Corp., Western Resources, Inc., Southern Union Company d/b/a Missouri Gas Energy, Southwestern Bell Telephone Company, Dennis Collins d/b/a Executive Travel Center, Smithville Pharmacy, Inc., Paul D. Stevens, d/b/a Smithville Dental Care and Northland Regional Ambulance District (hereinafter collectively referred to as St. Luke's). On appeal, Smithville contends that the trial court erred in finding that it had no jurisdiction to hear the case and in entering summary judgment in favor of St. Luke's. First, Smithville alleges that the trial court erred in ruling that it needs specific statutory authority to condemn St. Luke's because St. Luke's is not a protected prior public use under Missouri condemnation law. Second, Smithville contends that, assuming St. Luke's is a prior public use, the trial court erred in ruling that Smithville needs specific statutory authority to condemn it because Smithville's contemplated

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use of the hospital would not materially interfere with or totally destroy the prior public use. Finally, Smithville argues that, assuming specific statutory authority is necessary to condemn, it has such authority in § 79.380, RSMo 1994. 1

Because St. Luke's operation of the hospital constitutes a prior public use and Smithville's proposed operation of the hospital is for the same use and would materially impair or interfere with the former use, Smithville was required to have specific statutory authority to condemn the existing hospital. It did not have such authority. Therefore, the judgment of the trial court granting St. Luke's motion for summary judgment is affirmed.

I. Factual and Procedural Background

Since 1993, St. Luke's has owned, operated and managed St. Luke's Northland Hospital--Smithville Campus, located at 601 South 169 Highway in Smithville, Missouri. St. Luke's Northland Hospital--Smithville Campus is a state licensed hospital facility. The hospital preceding St. Luke's was founded in 1938 and renamed Spelman Memorial Hospital in 1970 to honor its founder, Dr. Art Spelman. Prior to St. Luke's acquisition of the hospital in 1993, Spelman Memorial Hospital operated as a full service acute care hospital. Among the services provided were a 24-hour emergency room with physician staff, an operating room, inpatient and outpatient surgical services, laboratory services, full radiology services and an intensive care unit. The hospital was rated as a level II trauma center because of its extensive offering of services.

When St. Luke's acquired Spelman Memorial Hospital in 1993, it renamed the hospital St. Luke's Northland Hospital--Smithville Campus and reduced the number of services offered by the hospital. St. Luke's discontinued the 24-hour physician-staffed emergency room, inpatient and outpatient surgical services, the intensive care unit, the operating room and most radiological services. St. Luke's continued to provide a skilled nursing unit, basic emergency services, inpatient rehabilitation, mental health services and home health care services.

As a result of St. Luke's reduction of the medical and emergency services offered by the hospital, the Smithville City Council passed Ordinance 1687 authorizing the city to enter into negotiations to purchase St. Luke's Hospital. The ordinance authorized the city to exercise the power of eminent domain and condemn St. Luke's property if negotiations to purchase it proved unsuccessful. The ordinance also authorized the city to lease the facility to North Kansas City Hospital if the city acquired the property by purchase or condemnation in order to put the private property to "a vital and necessary public use and purpose." The terms of the lease authorized North Kansas City Hospital to lease the hospital from Smithville and provide full hospital services for Smithville and its residents. The terms of the lease also permitted Smithville to terminate the arrangement with North Kansas City Hospital if it failed to provide full acute care services at the hospital.

After negotiations to purchase St. Luke's failed, Smithville commenced condemnation proceedings. Smithville filed a petition in the circuit court of Clay County to condemn St. Luke's Hospital pursuant to the city ordinance. In this petition, Smithville contended that it had the statutory authority of eminent domain under §§ 79.380 and 88.667 to condemn St. Luke's Hospital and was authorized by Ordinance 1687 to pursue this course of action. Smithville also cited its desire to "have within its municipal boundaries a full service hospital that provides acute care services, including but not limited to, a 24-hour physician staffed emergency room." Smithville indicated that obtaining such a full service hospital was necessary to promote the health, safety and welfare of the city and its inhabitants.

In response, St. Luke's filed a motion to dismiss, or alternatively, for summary judgment against Smithville. St. Luke's alleged that there was no genuine issue of material

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fact and it had a right to judgment as a matter of law in that Smithville had no statutory authority to condemn an existing hospital and that its proposed condemnation was "an extraordinary and unprecedented exercise of the power of eminent domain" unauthorized by Missouri law. St. Luke's also alleged that Ordinance 1687, authorizing the condemnation and subsequent lease to North Kansas City Hospital, was invalid because it was enacted before North Kansas City Hospital had the power to operate outside the city limits of North Kansas City. Due to the alleged invalidity of the lease, St. Luke's argued that the purpose of the condemnation was impossible because Smithville would be unable to operate the hospital without North Kansas City Hospital's participation.

The trial court held an evidentiary hearing and subsequently sustained St. Luke's motion for summary judgment. In its order sustaining the motion, the trial court ruled that it did not have jurisdiction to enter an order of condemnation because Smithville did not have the required statutory authority to condemn the hospital. The trial court reasoned that the operation of the hospital constituted a public use and that Smithville's proposed condemnation of the facility would totally destroy St. Luke's use of...

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