Berger v. Department of Transp.
| Decision Date | 12 May 2004 |
| Docket Number | No. 02-2079.,02-2079. |
| Citation | 679 N.W.2d 636 |
| Parties | Allan L. BERGER and Jennifer L. Berger, Appellants, v. IOWA DEPARTMENT OF TRANSPORTATION, Appellee. |
| Court | Iowa Supreme Court |
James C. Larew of Larew Law Office, Iowa City, for appellants.
Thomas J. Miller, Attorney General, and David A. Ferree, Special Assistant Attorney General, for appellee.
Allan and Jennifer Berger (Bergers) owned property adjacent to Highway 1, near Iowa City, Iowa. In connection with a rebuilding and widening project of Highway 1, the Bergers and the Iowa Department of Transportation (IDOT) entered into early negotiations for the acquisition of the Bergers' property. In connection with the acquisition, the Bergers were given notice of relocation eligibility and an offer of relocation assistance. The IDOT refused to negotiate the relocation assistance with the Bergers. The Bergers filed an administrative appeal on the offer of relocation assistance. During the pendency of the appeal, the IDOT removed the rebuilding and widening project for Highway 1 from its five-year highway program. Even though the IDOT removed the Highway 1 project from its five-year highway program, the Bergers contended they were still entitled to compensation for relocation assistance. On administrative appeal, the agency decided the Bergers were not displaced persons entitled to compensation for relocation assistance for the reason that the IDOT removed the Highway 1 project from its five-year highway program, and the Bergers' property would not be acquired by the IDOT. The Bergers sought judicial review of the agency's decision in district court. The district court agreed with the agency that the Bergers were not entitled to compensation for relocation assistance. In district court, the Bergers also raised the issue of agency bias. The district court concluded given that the Bergers did not raise the issue of agency bias at the agency level, the Bergers waived this error on judicial review. The Bergers appealed the district court's decision. Because we agree the Bergers are not entitled to compensation for relocation assistance and they failed to preserve the issue of agency bias, we affirm the district court.
The Bergers, licensed veterinarians, purchased property along Highway 1, near Iowa City, Iowa. The Bergers made major revisions to the property to accommodate their home and a veterinarian clinic, which became Jennifer's full-time veterinary practice. While Allan also worked part-time at the clinic, he was employed full time as a research scientist at the University of Iowa.
In May and June 2000, the Bergers reviewed the IDOT's plans for a project to rebuild and widen Highway 1. The plans indicated the Bergers' house and clinic would have to be demolished.
In October of 2000, Allan received a job offer, which would require him to move to Champaign, Illinois. The Bergers contacted the IDOT to request an early acquisition of their property. The Bergers made this request because they contended they were unable to sell their property "for its highest and best use" as a result of the announced highway project. An IDOT representative responded to the Bergers' request in a letter dated October 9, 2000, informing the Bergers the IDOT will proceed to make an early purchase of their property, but cautioned them not to move, rent, or purchase any other replacement property until they have talked with a relocation agent.
On June 22, 2001, the IDOT made an offer to purchase the Bergers' property for $205,000. Additionally, the IDOT sent a notice of relocation eligibility and made an offer of relocation assistance for the purchase of replacement housing. The Bergers appealed the offer of relocation assistance to the agency on July 26, 2001. On August 7, 2001, during the pendency of the appeal, the IDOT informed the Bergers that the Highway 1 improvement project was no longer in the IDOT's five-year plan; therefore, the project was delayed. As a result, the Berger's property would no longer need to be acquired and they would not be entitled to relocation assistance.
On August 17, 2001, the Bergers replied to the August 7, 2001, letter and stated: "Your sudden announcement of an `indefinite delay' surely must be viewed as an abandonment of the present acquisition process." The Bergers also asked to be reimbursed for their expenses. In a January 7, 2002, letter to the Bergers, the IDOT reaffirmed its position that the Highway 1 project was not included in the five-year highway program and there would be no reason to acquire the Bergers' property. In a January 25, 2002, letter and a March 29, 2002, e-mail to the Bergers, the IDOT again stated that the Highway 1 project was not going forward and their property was not going to be acquired. In spite of these repeated notices, the Bergers demanded a hearing on their appeal contending they should be awarded compensation for relocation assistance.
An administrative hearing took place on April 30, 2002, before a three-member review committee. Richard Kautz, district 6 engineer for IDOT, chaired the review committee. By reason of his position with the IDOT, Kautz had personal knowledge of the Highway 1 project, independent from the evidence presented at the review committee hearing. At the review committee hearing, the Bergers requested $922,082 in relocation assistance. The review committee issued its decision on May 24, 2002, denying the Bergers' claim for relocation assistance on the grounds the Bergers were not displaced persons as defined by the administrative rules but awarded them $2,855.05 for expenses they had incurred in connection with the notice of relocation eligibility the Bergers received in June 2000. The district court affirmed the review committee's decision. The Bergers filed a motion to amend and enlarge the district court's findings of fact and conclusions of law, which was denied. The Bergers appeal.
The Fifth Amendment to the United States Constitution and article I, section 18 of the Iowa Constitution provide that private property cannot be taken for public purposes without just compensation. U.S. Const. amend. V; Iowa Const. art. I, § 18. In addition to the payment of just compensation for the value of the property taken in a condemnation proceeding, Iowa law also provides for relocation assistance to individuals who are displaced from their property. Iowa Code § 316.3(1) (2001). Relocation assistance compensation is not considered compensation for the value of any real property acquired through condemnation or damages to the remaining real property as a result of the condemnation. Id. § 316.2(3).
Chapter 316 of the Iowa Code contains Iowa's relocation assistance law. Id. § 316.1. The legislature delegated to the IDOT the authority to promulgate administrative rules necessary to effect the provisions of chapter 316. Id. § 316.9. The legislature also delegated to the IDOT the power to set up an appeals process to determine the eligibility of an aggrieved person for relocation assistance. Id. § 316.9(4). The decision rendered in the review process is the final agency action of the displacing agency. Id.
Pursuant to section 316.9, the IDOT promulgated the administrative rules for real property acquisition and relocation assistance in chapter 761-111 of the Iowa Administrative Code. The rules incorporated the October 1997 edition of section II of the manual entitled "Uniform Manual, Real Property Acquisition and Relocation Assistance" by reference. Iowa Admin. Code r. 761-111.1 (1997). The appeal regarding relocation assistance is made to the agency whose determination is being appealed. Iowa Admin. Code r. 761-111.1(2)(d ). Because the IDOT made the determination regarding the Bergers' relocation assistance, the appeal was heard by the IDOT. Pursuant to the uniform manual, the IDOT appointed a three-person review committee to decide the appeal. Iowa Admin. Code r. 761-111.6(6).1
The Iowa Administrative Procedure Act contains the standards under which we review the district court's decisions on judicial review of agency action. Locate.Plus.Com, Inc. v. Iowa Dep't of Transp., 650 N.W.2d 609, 612 (Iowa 2002). "The agency decision itself is reviewed under the standards set forth in section 17A.19(10)." Mosher v. Dep't of Inspections & Appeals, 671 N.W.2d 501, 508 (Iowa 2003). We determine whether our application of the standards set forth in section 17A.19(10) would produce the same result as reached by the district court in its application of the standards. Id. The Bergers argue that the IDOT's review committee misapplied the law to the facts in their appeal. Because the legislature clearly vested the IDOT with the authority to apply the law to the facts under Iowa Code section 316.9, the agency's decision can only be reversed based upon an irrational, illogical, or wholly unjustifiable application of the law to the facts. Iowa Code § 17A.19(10)(m ).
The review committee concluded the Bergers were not displaced persons, thus they were not entitled to compensation for relocation assistance. The Bergers argue otherwise. The Bergers contend they are displaced persons under the rules adopted by the IDOT pursuant to Iowa Code section 316.9. Rule 761-111.2(7) defines displaced person as follows:
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