Com. Transp. Cabinet Dept. of Highways v. Taub, 88-SC-141-DG

• Decision Date: 15 December 1988
• Docket Number: No. 88-SC-141-DG,88-SC-141-DG
• Citation: 766 S.W.2d 49
• Parties: COMMONWEALTH of Kentucky TRANSPORTATION CABINET DEPARTMENT OF HIGHWAYS, Appellant, v. Gordon TAUB, Appellee.
• Court: United States State Supreme Court — District of Kentucky

Page 49

766 S.W.2d 49

COMMONWEALTH of Kentucky TRANSPORTATION CABINET DEPARTMENT OF HIGHWAYS, Appellant, v. Gordon TAUB, Appellee.

No. 88-SC-141-DG.

Supreme Court of Kentucky.

Dec. 15, 1988.

Rehearing Denied April 6, 1989.

C. Kilmer Combs, Bert T. Combs, Wyatt, Tarrant & Combs, Lexington, for appellant.

Kent Masterson Brown, Joseph L. Arnold, Nunn Odear & Arnold, Lexington, for appellee.

LAMBERT, Justice.

At issue in this case is the legality of certain condemnation proceedings instituted by the Transportation Cabinet to acquire property for construction of the Toyota Access Road. After hearing the evidence and rendering detailed findings of fact and conclusions of law, the trial court held that the Commonwealth properly exercised its right of eminent domain and judgment was entered accordingly. On appeal, a divided panel of the Court of Appeals reversed. The primary basis for the decision of the court below was its view that the Transportation Cabinet failed to exercise the discretion entrusted to it by the General Assembly; that it merely acted as a "rubber stamp" for an agreement between the Commerce Cabinet and Toyota. The majority concluded that such constituted an abuse of discretion, bad faith or fraud. In view of the significance of the legislative delegation of authority to the Transportation Cabinet for the condemnation of private land for the purpose of building highways, KRS 177.081(1) ^*, this Court granted discretionary review and now reverses the Court of Appeals.

In the summer of 1985, the Governor of Kentucky was informed by the Toyota Motor Corporation of its intention to build an automobile manufacturing plant somewhere in the United States. The Commonwealth was invited to solicit location of the plant in Kentucky and invited to provide information as to what incentives, if any, would be granted Toyota in the event it elected to build its plant here. In response, on September 9, 1985, Theodore M. Sauer, Jr., on behalf of the Commerce Cabinet, wrote Toyota and outlined certain incentives which would be made available at whatever site chosen if Toyota came to Kentucky. Among other things, Sauer's letter to Toyota said:

The State will provide a four-lane access road to any of the properties recommended and is willing to consider any other highway improvements, including construction of an interstate highway exchange, of interest to your company.

About two months later, November 12, 1985, in response to a request from Sauer, Transportation Secretary C. Leslie Dawson wrote a letter in which he provided the Commerce Cabinet with a cost estimate for the relocation of U.S. 62 to serve a proposed industrial park in Scott County. Within the next few weeks, and in an effort to make a preliminary analysis as to needed highway improvements in the event Toyota located its facility at the Scott County site, Secretary Dawson and State Highway Engineer R.K. Capito, visited the site and reviewed maps of the area. Thereafter, on December 4, 1985, Secretary Dawson wrote Toyota in part as follows:

Should Toyota Motor Corporation decide that the location of its proposed automobile manufacturing facility (the "Facility") shall be the proposed site near Georgetown, in Scott County, Kentucky as outlined in yellow on the map attached to this letter (the "Georgetown Site"), the Commonwealth of Kentucky ("Commonwealth") shall promptly cause the following highway improvement projects to occur:

1. U.S. Highway 62 ("U.S. 62") shall be reconstructed as a minimum four-lane divided highway from the I-75 and U.S. 62 interchange to at least five hundred (500) feet past that point on the map attached hereto (the "Map") indicating the intersection between U.S. 62 and a new section of Barkley Pike along the frontage of Parcel 70-1. This reconstructed portion of U.S. 62 between I-75 and relocated Barkley Pike shall contain at least one access point to the Georgetown Site at a location designated by Toyota.

2. From the new intersection of U.S. 62 and relocated Barkley Pike, the Commonwealth shall construct a new minimum four-lane divided highway running in a northerly direction first along the eastern boundary of the Georgetown Site and finally across the Georgetown Site (along the corridor as indicated by the "dashes" on the Map) to a new intersection with Kentucky Highway 620 ("Ky. 620") at the point as shown on the map. This new highway shall contain at least two access points to the Georgetown Site.

On December 11, 1985, an official announcement was made that Toyota Motor Corporation had decided to locate its facility in Scott County.

The next event of significance occurred on December 23, 1985. On that day, Secretary Dawson signed official order no. 89501 which authorized the Transportation Cabinet to acquire the right of way needed to construct "... highway improvements related to the Toyota facility and acquisition on U.S. 62." This order stated, inter alia, that plans and specifications had been completed and were on file in the office of the Transportation Cabinet, a statement which later proved to be false. As of December 23, 1985, no plans had been prepared and certainly no plans were on file with the Transportation Cabinet. At this time, in fact, the plans were only in preparation and were not delivered to the Transportation Cabinet until January, 1986. Official order no. 89501 also made a determination that acquisition of all right of way and construction of the project was for public use and was necessary for an adequate system of highways. Thereafter, on February 3, 1986, Secretary Dawson signed official order no. 89554. By this order, an additional state project number was added to the original official order no. 89501. It also stated that "all other items in Official Order No. 89501 will remain the same."

On February 5, 1986, a petition was filed in the Scott Circuit Court against appellee, Taub, et al, whereby the Commonwealth sought condemnation of certain particularly described real property owned by Taub and others. At the trial which followed, Secretary Dawson testified that the decision as to necessity was made by him after visiting the site and consulting with his engineering staff. He positively testified that his decision was not dictated to him by anyone. Finally, on June 19, 1986, and prior to entry of the final judgment, official order no. 89818 was signed. This order amended the previous official orders and by reference to plans on file expressly determined necessity to acquire the Taub property.

In support of its contention that the Court of Appeals erred in reversing the trial court, the Commonwealth directs our attention to KRS 177.081, an act by which the Legislature delegated broad authority to the bureau of highways (Department of Transportation) to determine necessity and condemn land for an adequate system of highways. The Commonwealth contends that the Secretary exercised his discretion under the statute in an informed manner in making such determination, and absent a showing of fraud, bad faith, or abuse of discretion, the decision of the Secretary is final. The Commonwealth relies upon this Court's decisions in Commonwealth, Dept. of Highways v. Burchett, Ky., 367 S.W.2d 262 (1963) and Commonwealth, Dept. of Highways v. Vandertoll, Ky., 388 S.W.2d 358 (1965).

Taking a contrary position, Taub maintains that the decision to build the Toyota Access Road was made by the Governor and Commerce Cabinet and the action of the Secretary merely amounted to a ratification of their decision. He further contends that official order no. 89501 signed on December 23, 1985, is a nullity due to the inaccuracies it contains and is thus insufficient to support the condemnation action.

Upon our grant of the Commonwealth's motion for discretionary review, this Court undertook review of the decision of the Court of Appeals. We will not address issues raised but not decided by the Court below. It is the rule in this jurisdiction that issues raised on appeal but not decided will be treated as settled against the appellant in that court upon subsequent appeals unless the issue is preserved by cross-motion for discretionary review. CR 76.21(1); Nashville, C. & St.L. Ry.Co. v. Banks, 168 Ky. 579, 182 S.W. 660 (1916); and Eagle Fluorspar Co. v. Larue, 237 Ky. 263, 35 S.W.2d 303 (1931). In this case, counsel for Taub argued that the Secretary of Transportation is without power to certify a road for condemnation which is not in the six-year plan or expressly authorized by the General Assembly. This issue was touched upon by Taub in the Court of Appeals but not commented upon by the Court in its opinion. As such, the issue is deemed to have been decided adversely to Taub and his failure to file a cross-motion for discretionary review precludes further review in this Court.

The principal issue before us is whether the Court of Appeals properly fulfilled its role as a reviewing court or whether it exceeded the scope of its review and invaded the province of the trial court. Specifically, we consider whether the Court of Appeals observed proper deference to the role of the trial court as fact-finder. CR 52.01.

In its findings of fact, the trial court discussed at length the evidence presented. It noted the negotiations between the Commerce Cabinet, the Governor, Toyota, and the Department of Transportation, and acknowledged that such negotiations no doubt influenced the decision as to the nature and extent of highway improvements. There was extensive discussion of the documentary evidence and the testimony by various witnesses. Based on the foregoing, the trial court said:

This court does not believe that it necessarily follows that the evidence demonstrates that Secretary Dawson did not make his own determination of necessity. He visited the site and consulted with his engineers. He studied maps of the area and considered information that related to employment estimates and various other information...