Bonanza, Inc. v. Carlson

• Decision Date: 14 July 2000
• Docket Number: No. 83,175.,83,175.
• Citation: 9 P.3d 541,269 Kan. 705
• Parties: BONANZA, INC., and MOBILE HOMES RESORT, INC., Appellants, v. E. DEAN CARLSON, Secretary of Kansas Department of Transportation, Appellee.
• Court: Kansas Supreme Court

269 Kan. 705

9 P.3d 541

BONANZA, INC., and MOBILE HOMES RESORT, INC., Appellants, v. E. DEAN CARLSON, Secretary of Kansas Department of Transportation, Appellee.

No. 83,175.

Supreme Court of Kansas.

Opinion filed July 14, 2000.

John R. Hamilton, of Hamilton, Gregg, Barker & Johnson, of Topeka, argued the cause, and Larry E. Gregg, of the same firm, was with him on the briefs for appellants.

Lee Thompson, of Triplett, Woolf & Garretson, LLC, of Wichita, argued the cause, and Bradley A. Stout, of the same firm, was with him on the brief for appellee.

The opinion of the court was delivered by

LOCKETT, J.:

Landowners in an inverse condemnation proceeding appeal the district court's order denying landowners their attorney fees and litigation expenses.

On September 10, 1996, Bonanza, Inc., and Mobile Homes Resort, Inc., (landowners) entered into a right-of-entry agreement with the Secretary of the Kansas Department of Transportation (KDOT) granting KDOT the right to enter the landowners' land for the purpose of constructing a highway interchange. KDOT agreed in the contract that it would, "as expeditiously as possible, acquire the property ... through negotiation or eminent domain action."

On December 18, 1996, the City of Wichita, on behalf of KDOT, filed a petition for proceedings in eminent domain, seeking to condemn Tract I. and Tract III, parcels of real estate owned by landowners. The court appointed appraisers and set a time for the filing of the appraisers' reports. On December 3, 1997, the appraisers filed their report, valuing the interest taken in Tract I. as $14,600 and in Tract III as $85,000. KDOT failed to pay the award of the appraisers within the prescribed statutory time for payment. On February 23, 1998, the landowners filed a petition in district court, alleging inverse condemnation had occurred because the condemnation proceeding had been abandoned as a result of KDOT's failure to pay the appraisers' award within 30 days after the report of the appraisers was filed, as required by K.S.A. 26-507. The petition was amended on August 26, 1998, to include a prayer for damages as a result of KDOT's unlawful and willful occupation of the landowners' property; interest from the date of the taking; and reasonable costs, disbursements, and expenses, including reasonable attorney, appraisal, and engineering fees.

KDOT moved for partial summary judgment, claiming there was no Kansas statute allowing an award of attorney fees and expenses to the landowners. The district court took the question of attorney fees and expenses under advisement. After trial, the district court sustained KDOT's motion for partial summary judgment, finding there was no statutory authority for the landowners to be awarded fees and expenses. The landowners again raised the issue of attorney fees and expenses in a post-trial motion. The court treated the post-trial motion as a motion to alter or amend judgment and reaffirmed the earlier ruling that the landowners were not entitled to an award of attorney fees and expenses. The landowners appealed.

Landowners contend that the trial court erred in finding that there is no statutory authority in Kansas for payment of attorney fees in inverse condemnation cases where the land was acquired for a federally assisted state project. There are no material facts in dispute in this case. The parties stipulated that federal assistance funds were used to pay for a part of the cost of the project which resulted in the filing of the inverse condemnation lawsuit. The landowners were not displaced by the federally subsidized KDOT highway construction project.

Resolution of the issue on appeal requires the interpretation of statutes. Interpretation of a statute is a question of law, and the Supreme Court's review is unlimited. Hamilton v. State Farm Fire & Cos. Co., 263 Kan. 875, 879, 953 P.2d 1027 (1998).

Federal and State Statutes and Regulations

In 1973, the Kansas Legislature enacted the Relocation Assistance For Persons Displaced by Acquisition of Real Property Act (Kansas Act), K.S.A. 58-3501 et seq., requiring Kansas agencies and departments to comply with the provisions of the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Federal Act), Pub. L. No. 91-646, 42 U.S.C. § 4601 (1994) et seq. See K.S.A. 58-3501.

The Federal Act prohibits a federal agency from approving any federally funded or assisted project in which a political subdivision of a state acquires real property without receiving assurances of the state that the acquiring political subdivision will (1) follow the land acquisition policies of the Federal Act to the extent possible under state law and (2) reimburse property owners for title transfer costs and litigation expenses under certain statutorily defined circumstances, including inverse condemnation proceedings. 42 U.S.C. § 4655 (1994).

K.S.A. 58-3502 provides, in part:

"Whenever any program or project is undertaken by the state of Kansas, any agency or political subdivision thereof, under which federal financial assistance will be available to pay all or part of the cost of such program by reason of a grant from or contract or agreement with the federal government, and which program or project will result in the displacement of any person by acquisition of real property, or by the direct result of building code enforcement activities, rehabilitation or demolition programs, the state, agency, or political subdivision may:

"(1) Provide fair and reasonable relocation payments and assistance to or for displaced persons as are required under sections 202, 203 and 204 of the federal act;

"(2) Provide relocation assistance programs offering to displaced persons and others occupying property immediately adjacent to the real property acquired, the services described in section 205 of the federal act on the conditions prescribed therein;

"(3) In acquiring the real property be guided to the greatest extent practicable under state law by the land acquisition policies in section 301 and the provisions of section 302 of the federal act; [and]

"(4) Pay or reimburse property owners for necessary expenses as specified in sections 303 and 304 of the federal act." (Emphasis added.)

K.S.A. 58-3506 provides that state agencies and political subdivisions administering the Kansas Act may adopt such rules and regulations as may be necessary to carry out of the provisions of the Act.

To implement the Kansas Act, KDOT adopted by reference the federal regulations associated with the Federal Act. K.A.R. 36-16-1 provides:

"(a) 49 C.F.R. Part 24, as of March 2, 1989, and all amendments thereto, is adopted by reference.

"(b) The provisions of 49 C.F.R. Part 24, as of March 2, 1989, and all amendments thereto, shall be applicable to all acquisitions of real property by the department of transportation for the state highway system including those acquisitions in which federal funds are not available for or used in payment of acquisitions." (Emphasis added.)

The federal regulations implementing the Federal Act and adopted by reference in K.A.R. 36-16-1 provide:

"The owner of the real property shall be reimbursed for any reasonable expenses, including reasonable attorney, appraisal, and engineering fees, which the owner actually incurred because of a condemnation proceeding, if:

"(a) The final judgment of the court is that the Agency cannot acquire the real property by condemnation; or

"(b) The condemnation proceeding is abandoned by the Agency other than under an agreed-upon settlement; or

"(c) The court having jurisdiction renders a judgment in favor of the owner in an inverse condemnation proceeding or the Agency effects a settlement of such proceeding." 49 C.F.R. § 24.107 (1999).

As previously noted, the Kansas Act and the corresponding regulations were enacted to bring Kansas into compliance with the Federal Act. See K.S.A. 58-3501; K.S.A. 58-3506. The Federal Act is divided into three titles. Title I. contains the general provisions, including definitions and the provision that section 301 of Title III creates no rights or liabilities and does not affect the validity of any property acquisitions by purchase or condemnation. Pub. L. No. 91-646 §§ 101, 102, 42 U.S.C. § 4602(a) (1994).

Title II of the Federal Act is concerned principally with aid to persons displaced by federal or federally assisted state projects. The purpose of Title II is to establish a uniform policy for the fair and equitable treatment of persons displaced as a result of federal and federally assisted programs in order that such persons shall not suffer disproportionate injuries as a result of programs designed for the benefit of the public as a whole. Section 202 provides for payment of moving and related expenses; section 203, for replacement housing; section 204, for replacement housing for tenants; section 205, for relocation assistance advisory services; section 210, for applicability of sections 202-205 to federally assisted state projects by written assurances of state agencies.

Title III of the Federal Act is concerned primarily with the acquisition of real property for federal and federally assisted state projects. Section 301 delineates nine real property acquisition practices "[i]n order to encourage and expedite the acquisition of real property by agreements with owners, to avoid litigation and relieve congestion in the courts, to assure consistent treatment for owners in the many Federal programs, and to promote public confidence in Federal land acquisition practices." Section 302 establishes policies for the acquisition of buildings, structures, and improvements; section 303, for payment of title transfer expenses to property owners; section 304, for payment of litigation expenses to property owners in condemnation actions; and section 305, for the applicability of sections 301-04 to federally assisted state projects by written assurances of state...