Ehrhart v. Agency of Transp., 05-243.

• Decision Date: 14 July 2006
• Docket Number: No. 05-306.,No. 05-243.,No. 05-263.,No. 05-244.,No. 05-262.,05-243.,05-244.,05-262.,05-263.,05-306.
• Citation: 2006 VT 68,904 A.2d 1200
• Parties: William E. and Laura J. EHRHART v. AGENCY OF TRANSPORTATION. The Christmas Loft, Inc. v. Agency of Transportation. Kurt V. Reichelt and Laura M. Reichelt, Trustees of The Kurt V. Reichelt Revocable Trust v. Agency of Transportation. Stephen B. Metz and Shelburne Veterinary Hospital, Inc. v. Agency of Transportation. Douglas W. Hoar, Cheryl A. Hoar and Goss Dodge, Inc. v. Agency of Transportation.
• Court: Vermont Supreme Court

Page 1200

904 A.2d 1200

2006 VT 68

William E. and Laura J. EHRHART v. AGENCY OF TRANSPORTATION.

The Christmas Loft, Inc. v. Agency of Transportation.

Kurt V. Reichelt and Laura M. Reichelt, Trustees of The Kurt V. Reichelt Revocable Trust v. Agency of Transportation.

Stephen B. Metz and Shelburne Veterinary Hospital, Inc. v. Agency of Transportation.

Douglas W. Hoar, Cheryl A. Hoar and Goss Dodge, Inc. v. Agency of Transportation.

No. 05-243.

No. 05-244.

No. 05-262.

No. 05-263.

No. 05-306.

Supreme Court of Vermont.

July 14, 2006.

Thomas Z. Carlson and Clara F. Gimenez of Langrock Sperry & Wool, L.L.P., Burlington, for Plaintiffs-Appellants (05-243/244).

Liam L. Murphy and Pamela A. Moreau of Murphy Sullivan Kronk, Burlington, for Plaintiffs-Appellants (05-262/263).

Robert C. Roesler of Roesler, Whittlesey, Meekins & Amidon, and Thomas Z. Carlson and Clara F. Gimenez of Langrock Sperry & Wool, L.L.P., Burlington, for Plaintiffs-Appellants (05-306).

William H. Sorrell, Attorney General, and Judith L. Dillon, Trevor R. Lewis, and Thomas A. McCormick, Assistant Attorneys General, Montpelier, for Defendants-Appellees (05-243/244/262/263).

William H. Sorrell, Attorney General, and Judith L. Dillon, Assistant Attorney General, Montpelier, for Defendant-Appellee (05-306).

Present: REIBER, C.J., JOHNSON, SKOGLUND and BURGESS, JJ., and WESLEY, Supr. J., Specially Assigned.

¶ 1. JOHNSON, J.

These appeals arise from a project to reconstruct a portion of U.S. Route 7 in Shelburne and South Burlington. Four of the five appeals were consolidated for argument, and we have consolidated all five for decision because they share questions of law and fact. Landowners appeal from superior court rulings that the State of Vermont does not owe compensation for decreased traffic flow resulting from a median strip constructed as part of the highway project. We affirm.

¶ 2. Landowners William and Laura Ehrhart, The Christmas Loft, Inc., The Kurt V. Reichelt Revocable Trust, and Stephen Metz and the Shelburne Veterinary Hospital, Inc., own property and operate businesses on the eastern side of Route 7. Landowners Douglas and Cheryl Hoar and Goss Dodge, Inc. own property on the western side of Route 7. The highway project, as it affects these appeals, widened Route 7 from two to four lanes along a stretch of road just over three miles long. In connection with the widening of the road, the State, through the Agency of Transportation, acquired by eminent domain a portion of each landowner's property immediately adjacent to Route 7.

¶ 3. The project also included the placement of a raised median strip along Route 7. Prior to the placement of the median, both northbound and southbound traffic could turn left at essentially any point to reach businesses on the opposite sides of the road. With the median in place, left turns can be made only at sixteen specific "breaks" in the median. To reach a business on the eastern side of the road, southbound drivers must drive past the business, turn around, and access it from the northbound lanes. Northbound traffic can reach businesses on the western side of the road in a similar fashion. Southbound access to the western side and northbound access to the eastern side are unaffected.

¶ 4. Pursuant to 19 V.S.A. § 507, the Agency received an order of necessity for the highway project, which we affirmed. In re South Burlington-Shelburne Highway Project, 174 Vt. 604, 817 A.2d 49 (2002) (mem.). The Transportation Board then awarded landowners compensation for the property adjacent to Route 7 that was taken to allow widening of the road. Landowners Ehrhart, Reichelt, Christmas Tree Loft, and Metz filed separate appeals of their compensation awards with the superior court pursuant to 19 V.S.A. § 513. The Ehrharts filed a motion in limine seeking admission of evidence that the median strip had reduced access to their property, resulting in loss of business. The Agency opposed the motion and moved for partial summary judgment. The court denied the Ehrharts' motion and granted partial summary judgment to the Agency. Based on the denial of their motion in limine, the Ehrharts moved for entry of final judgment, which the court granted. The other three landowners stipulated to an entry of judgment based on the decision in the Ehrharts' case, and the four appeals were consolidated for our review.

¶ 5. The appeal concerning the Hoars and Goss Dodge contains additional issues and has been treated separately until this point. Landowners in that case, who own an automobile sales business on the western side of Route 7, also received compensation for only the loss of property taken by eminent domain in connection with the widening of the road, and also appealed based on the loss of access resulting from the median. In their case, however, the Agency agreed to pay for the construction of a new driveway corresponding to one of the breaks in the median, allowing direct access to the property by northbound traffic. The Hoars agree that thanks to the new driveway, the flow of traffic to their business has not been affected by the median strip. Instead, they contend that the construction of the new driveway resulted in the loss of prime spots for displaying automobiles to attract new business. Thus, they argue that the driveway only mitigated the loss resulting from the median strip, without compensating them fully. The Transportation Board refused to compensate them for any business loss resulting from the median strip, and they appealed to the superior court. The court granted partial judgment to the Agency, relying primarily on the decision in the Ehrharts' case. The parties stipulated to an entry of final judgment, and the Hoars appealed to this Court. We chose not to consolidate their appeal with the other four appeals for briefing or argument because of its different factual context, but the issues of law shared by all five appeals are similar enough to allow them to be consolidated for decision.

¶ 6. Landowners do not challenge their compensation awards for the physical taking of their property adjacent to the existing highway. Instead, they contend that in addition to compensation for those losses, 19 V.S.A. § 501(2) entitles them to compensation for the loss of business resulting from the placement of the median strip. Landowners are correct that the statute requires compensation not only for the value of the land taken through eminent domain, but also for any business loss to the remaining property resulting from the taking. See In re 89-2 Realty, 152 Vt. 426, 429, 566 A.2d 979, 980 (1989) ("Compensation for business losses is statutory in Vermont, one of the few states to recognize loss to the individual over and above the value of the land."). We agree with the Agency, however, that landowners cannot be compensated for the loss of traffic flow that results from the placement of a traffic control device, such as a median strip. This reasoning applies not only to the four consolidated appeals, but also to the Hoars' related argument that they should be compensated for the indirect effects of the median strip on their display spaces. We thus affirm the superior court's entry of judgment with respect to all five claims.

¶ 7. Just compensation for takings that result from highway construction is governed by 19 V.S.A. § 501, which provides, in relevant part:

Damages resulting from the taking or use of property under the provisions of this chapter shall be the value for the most reasonable use of the property or right in the property, and of the business on the property, and the direct and proximate decrease in the value of the remaining property or right in the property and the business on the property.

19 V.S.A. § 501(2) (emphasis added). Although business losses are compensable, Vermont's statutory scheme significantly limits their recovery by compensating for only those losses directly and proximately caused by the physical loss of property. For this reason, in Fiske v. State Highway Board, 124 Vt. 87, 92, 197 A.2d 790, 793 (1964), we allowed the owner of a tourist cabin business to recover business losses that resulted when the State took part of the frontage of the property to construct a cloverleaf, as "the restriction in frontage. . . rendered the cabins substantially less accessible and unsatisfactory as a commercial operation." See also Gibson Estate v. State Highway Bd., 128 Vt. 47, 54, 258 A.2d 810, 814 (1969) (allowing consideration of reduced access when the State's physical taking of land forced the relocation of a sawmill to a less accessible location).

¶ 8. In contrast, we have not allowed compensation for losses that occur when traffic is only routed away from a business, as the owner of a business does not have a property right in the flow of traffic to the business. See Howe v. State Highway Bd., 123 Vt. 278, 283, 187 A.2d 342, 345 (1963) ("Benefits attached to the currents of public travel are not vested rights and so diversion of traffic does not furnish a ground for compensation."); see also Spear v. State Highway Bd., 122 Vt. 406, 408, 175 A.2d 511, 513 (1961) (stating that when a highway relocation project has resulted in the loss of business, "the legislature has never attempted to provide compensation. . . . Our statute relates business loss to property taken, not to highway relocation."). This is true even when the rerouting may require the taking of a portion of the business owner's property at the same time. See Sand Bar Corp. v. Vt. State Transp. Bd., 145 Vt. 362, 363-64, 488 A.2d 442, 442-43 (1985) (denying compensation for business loss resulting from highway project despite the State's taking of a portion of land behind the property owner's business); Spear, 122 Vt. at 408, 175 A.2d at 513 (denying compensation for business loss resulting from relocation of highway despite the taking of a piece of land across the road from the property owner's business). The rule...