Creegan v. State
| Decision Date | 23 January 2015 |
| Docket Number | 111,082. |
| Citation | 342 P.3d 2 (Table) |
| Parties | James M. CREEGAN, et al., Appellants, v. The STATE of Kansas, et al., Appellees. |
| Court | Kansas Court of Appeals |
Douglas J. Patterson and Kellie K. Warren, of Property Law Firm, LLC, of Leawood, for appellants.
Timothy P. Orrick and Paul G. Schepers, of Orrick & Erskine, LLP, of Overland Park, and Barbara W. Rankin, chief counsel, of Kansas Department of Transportation, for appellees.
Before STANDRIDGE, P.J., ATCHESON, J., and BURGESS, S.J.
James M. Creegan and 11 other property owners (Plaintiffs) initiated an inverse condemnation action against the State of Kansas and the Secretary of the Kansas Department of Transportation (KDOT) (collectively Defendants). Plaintiffs claim they have a compensable property interest in the restrictive covenant limiting use of property in the Grande Oaks subdivision to single-family residences and KDOT's violation of the restrictive covenant amounts to a taking without just compensation. Although readily acknowledging that KDOT violated the subdivision's restrictive covenant, the district court granted summary judgment to Defendants on grounds that KDOT's violation of the restrictive covenant was not a compensable taking subject to an eminent domain action under Kansas law. Contrary to the decision reached by the district court, we conclude that restrictive covenants are compensable property interests entitled to eminent domain protection under the Takings Clause of the Fifth Amendment to the United States Constitution and the Kansas Eminent Domain Procedure Act (EDPA), K.S.A. 26–501 et seq. For this reason, we reverse and remand for further proceedings on the amount of compensation due to Plaintiffs, if any, as a result of the taking, which is an issue of fact.
Grande Oaks is a subdivision in Johnson County, Kansas. The plots within Grande Oaks were made subject to a Declaration of Restrictions filed in the Register of Deeds Office of Johnson County, Kansas, on June 22, 1978. In relevant part, the Declaration of Restrictions stated that the property within Grande Oaks should be occupied and used for single-family residence purposes only.
In 1999, KDOT purchased a sizeable section of real property from Christ Evangelical Lutheran Church of Lenexa, Kansas, Inc., which included land platted as lots 55 through 75 in Grande Oaks. In 2005, KDOT placed trailers on these lots and, in subsequent years, used the lots for various construction activities. Eventually, KDOT constructed permanent bridges and pavements on a number of the lots. The existing traffic pattern currently utilizes these newly constructed facilities.
In March 2012, Plaintiffs, who all owned real property in Grande Oaks, initiated this lawsuit claiming inverse condemnation by Defendants. After some limited discovery, Defendants filed a motion for summary judgment arguing that violation of the restrictive covenant in this case was not a compensable taking under Kansas law. A transcript from the hearing on summary judgment was not included in the appellate record, but the district court issued a memorandum decision ruling on the motion. Although acknowledging KDOT violated the subdivision restrictive covenant, the district court held the violation was not tantamount to a taking of real property owned by Plaintiffs. As such, the court granted Defendants' motion for summary judgment.
In this appeal, we must decide whether restrictive covenants such as those governing the real property in the Grande Oaks subdivision constitute compensable interests in real property entitled to eminent domain protection.
The Fifth Amendment prohibits the government from taking private property for public use without paying the owner just compensation. The Fifth Amendment prohibition applies to the states through the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Estate of Kirkpatrick v. City of Olathe, 289 Kan. 554, 558, 215 P.3d 561 (2009). In Kansas, the exercise of eminent domain is governed by the EDPA. The EDPA codifies the prohibition in the Fifth Amendment by stating, in part, that “[p]rivate property shall not be taken or damaged for public use without just compensation.” K.S.A. 26–513(a).
Typically, the government initiates eminent domain proceedings to determine the compensation due as the result of a taking. When the government interferes with the private property rights of a landowner without initiating eminent domain proceedings, the landowner may file a claim for inverse condemnation. See Estate of Kirkpatrick, 289 Kan. at 558–59, 215 P.3d 561. In order to prevail on an inverse condemnation claim, a landowner must prove he or she owns an interest in real property affected by a public improvement project and a compensable taking. The question of whether there has been a compensable taking is a legal one subject to unlimited review. 289 Kan. at 559, 215 P.3d 561. Applying these legal principles, the question presented for decision here is whether the landowners who are parties to the Grande Oaks restrictive covenant possess an interest in real property and, if so, whether KDOT's violation of the restrictive covenant constitutes a compensable taking.
Real property interest
Defendants argued to the district court that summary judgment was appropriate because the restrictive covenant at issue here did not rise to the level of an interest in real property entitled to eminent domain protection. In opposing summary judgment, Plaintiffs claimed Defendants' position was not supported by this court's holding in Board of Reno County Comm'rs v. Asset Mgmt. & Marketing L.L.C., 28 Kan.App.2d 501, 18 P.3d 286 (2001). In that case, Reno County purchased land in a subdivision that was burdened by a restrictive covenant limiting it to single-family residential use. After purchasing the land, Reno County adopted a resolution authorizing it to build a water tower on the land. After the resolution passed, the subdivision landowners conveyed their intention to seek an injunction to prevent the county from building the water tower. In anticipation of the landowners' request for an injunction, Reno County filed a petition for a declaratory judgment seeking a declaration from the court that construction of the water tower did not violate the restrictive covenants and that an injunction would cause economic loss. In their answer to the petition, the landowners generally denied the allegations and, as Reno County anticipated, filed a counterclaim seeking an injunction to prevent construction.
After an evidentiary hearing, the trial court determined that building the water tower violated the restrictive covenant. But because Reno County's petition sought a declaration from the court on the landowner's request for an injunction to prevent construction of the water tower, the trial court analyzed the issue using principles of equity. See Smith v. State, 264 Kan. 348, 355, 955 P.2d 1293 (1998) (). In weighing the equities, the trial court found the existing water system was insufficient for peak usage periods and questionable for purposes of fire protection. In support of its decision to grant judgment in favor of Reno County and deny the landowners' request for an injunction, the trial court concluded that “ “ Asset Mgrnt. & Marketing L.L.C., 28 Kan.App.2d at 503, 18 P.3d 286.
A panel of this court affirmed the decision, finding the landowners failed to provide evidence that they would face irreparable injury if the water tower were built, a necessary element of an injunction request. Relevant to the issue before us in this case, the court further found injunctive relief inappropriate because a full, complete, and adequate remedy at law was available to the landowners:
28 Kan.App.2d at 507, 18 P.3d 286.
Of course, implicit within the court's finding that there was nothing to prevent the landowners from filing an inverse condemnation proceeding is the legal conclusion that a subdivision restrictive covenant represents an interest in real property entitled to eminent domain protection.
The conclusion that Kansas recognizes restrictive covenants as real property interests is further supported by Persimmon Hill First Homes Ass'n v. Lonsdale, 31 Kan.App.2d 889, 895, 75 P.3d 278 (2003). There, this court cited with approval the following language from a Georgia case: “ ‘[T]he violation of a restrictive covenant that is part of the development scheme affects the grantor and all other grantees, causing irreparable harm to the value of their respective property interests, because such restrictive covenant was part of the valuable contract consideration given and relied upon in the conveyance of land.’ “ Lonsdale, 31 Kan.App.2d at 895, 75 P.3d 278 (quoting Focus Entertainment v. Partridge Greene, 253 Ga.App. 121,127–28, 558 S.E.2d 440 [2001] ). Plaintiffs persuasively argue that because a restrictive covenant is part of the valuable consideration given and relied upon in a conveyance of land, a restrictive covenant constitutes a property interest. Although the State urges us to distinguish Lonsdale because it involved a dispute between two private parties, the identity of the parties is irrelevant to whether a property interest exists. Further, Plaintiffs' interpretation of the case is...
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