Enbridge Pipeline (Illinois), LLC v. Hoke

• Decision Date: 06 July 2017
• Docket Number: 4-15-0545 cons.,NOS. 4-15-0544,S. 4-15-0544
• Citation: 80 N.E.3d 807,2017 IL App (4th) 150544
• Parties: ENBRIDGE PIPELINE (ILLINOIS), LLC, n/k/a Illinois Extension Pipeline Company, LLC, Plaintiff–Appellee, v. Edward HOKE, Sonna H. Hoke, non-record claimants, and unknown owners, Defendants–Appellants. Enbridge Pipeline (Illinois), LLC, n/k/a Illinois Extension Pipeline Company, LLC, Plaintiff–Appellee, v. PMC Farms, LLC; Charles Murphy, Tenant; non-record claimants; and unknown owners, Defendants–Appellants.
• Court: United States Appellate Court of Illinois

2017 IL App (4th) 150544

80 N.E.3d 807

ENBRIDGE PIPELINE (ILLINOIS), LLC, n/k/a Illinois Extension Pipeline Company, LLC, Plaintiff–Appellee,

v.Edward HOKE, Sonna H. Hoke, non-record claimants, and unknown owners, Defendants–Appellants.

Enbridge Pipeline (Illinois), LLC, n/k/a Illinois Extension Pipeline Company, LLC, Plaintiff–Appellee,

v.PMC Farms, LLC; Charles Murphy, Tenant; non-record claimants; and unknown owners, Defendants–Appellants.

NOS. 4-15-0544

4-15-0545 cons.

Appellate Court of Illinois, Fourth District.

July 6, 2017

Thomas J. Pliura, of LeRoy, for appellants.

Gerald A. Ambrose, Steven J. Horowitz, Dale E. Thomas, and Brian A. McAleenan, of Sidley Austin LLP, of Chicago, and Jacob E. Gancarczyk and John M. Spesia, of Spesia & Ayers, of Joliet, for appellee.

OPINION

JUSTICE STEIGMANN delivered the judgment of the court, with opinion.

¶ 1 In April 2014, the Illinois Commerce Commission (Commission) granted plaintiff, Enbridge Pipeline (Illinois), LLC, now known as the Illinois Extension Pipeline Company (IEPC), eminent-domain authority to acquire easements over certain real estate for the planned construction of an approximately 170-mile liquid petroleum (oil) pipeline known as the Southern Access Extension (SAX project).

¶ 2 In July and August 2014, IEPC filed separate complaints for "condemnation of permanent and temporary easements for common-carrier pipeline" against defendants (1) Edward Hoke and Sonna H. Hoke (Hokes) (DeWitt County case No. 14–ED–3; this court's case No. 4–15–0544) and (2) PMC Farms, LLC, and its tenant, Charles Murphy, (PMC) (DeWitt County case No. 14–ED–4 and this court's case No. 4–15–0545) (collectively, landowners). Through its condemnation filing, IEPC sought to obtain right-of-way and easement interests in landowners' respective properties and determine just compensation for both interests. Thereafter, landowners each filed a "traverse and motion to dismiss" (traverse motions), requesting dismissal of IEPC's condemnation complaints. In December 2014, the trial court denied both traverse motions.

¶ 3 At a jury trial that began in May 2015, IEPC presented its case-in-chief. Thereafter, the trial court permitted IEPC to conduct a voir dire inquiry of Edward and Charles out of the jury's presence. Immediately following IEPC's inquiry, the court granted IEPC's motion to bar the testimony of Edward and Charles regarding the (1) fair-market value of their properties before and after installation of the SAX project and (2) damages incurred to the value of their remaining property after completion of the SAX project. The court also granted IEPC's oral motion to exclude landowners' expert's valuation testimony pursuant to Illinois Supreme Court Rule 213(g) (eff. Jan. 1, 2007) because the expert failed to disclose the basis for his valuation opinions as required by Illinois Supreme Court Rule 213(f)(3) (eff. Jan. 1, 2007). IEPC then moved for directed verdicts on its condemnation suits. Following argument, the court (1) granted directed verdicts in IEPC's favor and (2) awarded landowners compensation of $8500 in case No. 14–ED–3 and $2000 in case No. 14–ED–4.

¶ 4 Landowners appeal, raising numerous claims that challenge the trial court's rulings. For the reasons that follow, we vacate the trial court's denial of landowners' traverse motions and remand with directions for further proceedings.

¶ 5 I. BACKGROUND

¶ 6 A. Procedural History

¶ 7 We provide the following synopsis of the pertinent litigation involving the SAX project to place landowners' appeal in context.

¶ 8 1. IEPC's Application for a Certificate in Good Standing and Eminent–Domain Authority

¶ 9 In August 2007, IEPC applied for a certificate in good standing and other relief pursuant to section 15–401 of the Common Carrier by Pipeline Law (Pipeline Law) ( 220 ILCS 5/15–401 (West 2006) ). (The Pipeline Law appears under article XV of the Public Utilities Act ( 220 ILCS 5/1–101 to 20–120 (West 2006)).) IEPC sought the Commission's authorization to (1) construct, operate, and maintain the SAX project and (2) acquire, when necessary, private property under eminent-domain authority to install and maintain the SAX project as permitted by section 8–509 of the Public Utilities Act ( 220 ILCS 5/8–509 (West 2006) ). IEPC described the proposed SAX project as a 36-inch diameter underground oil pipeline, originating from IEPC's Flanagan terminal located near Pontiac, Illinois, and terminating approximately 170 miles south, at IEPC's Patoka terminal located near Patoka, Illinois. The planned SAX project traversed 679 tracts of land located in the counties of Livingston, McLean, DeWitt, Macon, Shelby, Christian, Fayette, and Marion. Specifically, IEPC sought (1) a 60-foot wide permanent easement right-of-way for the pipeline and (2) an additional 60-foot temporary easement to facilitate construction.

¶ 10 In July 2009, the Commission issued an order in docket No. 07–0446, granting IEPC a certificate in good standing but denying IEPC's request for eminent-domain authority. As to eminent domain, the Commission instead urged that IEPC continue negotiations with landowners who had declined the compensation IEPC had offered in exchange for the aforementioned easements on the landowners' respective properties. The Commission's order provided, however, that IEPC could renew its request for eminent-domain authority by "demonstrating that it has made reasonable attempts to obtain easements, through good-faith negotiations."

¶ 11 Some affected landowners (intervenors) appealed the Commission's grant of the certificate in good standing, and this court affirmed. Pliura Intervenors v. Illinois Commerce Comm'n , 405 Ill. App. 3d 199, 200, 347 Ill.Dec. 373, 942 N.E.2d 576, 578 (2010) ( Intervenors I ). Specifically, we rejected intervenors' argument that the Commission erred by determining that (1) IEPC was fit, willing, and able to construct, operate, and maintain an oil pipeline and (2) a public need existed for the pipeline. Id. at 208–09, 347 Ill.Dec. 373, 942 N.E.2d at 584–85. The Supreme Court of Illinois later denied intervenors' petition for leave to appeal. Pliura Intervenors v. Illinois Commerce Comm'n , 239 Ill. 2d 589, 348 Ill.Dec. 198, 943 N.E.2d 1108 (2011) (table).

¶ 12 2. IEPC's Renewed Petition for Eminent–Domain Authority

¶ 13 In July 2013, IEPC renewed its request for eminent-domain authority, seeking to condemn 148 of the 679 tracts of land traversed by the planned SAX project route because the owners of those respective properties had either (1) refused to negotiate with IEPC or (2) declined IEPC's compensation offers despite extensive negotiations. (IEPC's continued negotiations reduced the number of "holdout" landowners from 148 to 127, meaning approximately 81% of landowners had reached an agreement with IEPC.)

¶ 14 In December 2013, an administrative law judge (ALJ) conducted a hearing on IEPC's request for eminent-domain authority. A senior engineer employed by the Commission testified, in pertinent part, that approval to exercise eminent-domain authority required IEPC to show that (1) reasonable attempts were made to acquire the outstanding land rights through good-faith negotiations and (2) additional attempts to acquire the land rights at issue would have been unsuccessful. In evaluating those two metrics, the engineer stated that the Commission considers numerous factors, which include—but are not limited to—the following: (1) the number and extent of the petitioner's contacts with the landowner, (2) whether the petitioner explained its compensation offer to the landowner, (3) whether the compensation the petitioner offered was comparable to offers made to similarly situated landowners, (4) petitioner's efforts to address landowner concerns, and (5) the likelihood that further negotiations would be successful. After testifying about IEPC's efforts as to each of these five factors, the engineer recommended that the Commission approve IEPC's petition for eminent-domain authority. In April 2014, the ALJ recommended that the Commission grant IEPC eminent-domain authority.

¶ 15 Later that month, the Commission issued its written order, in which it accepted the ALJ's recommendation and granted IEPC eminent-domain authority. In so doing, the Commission explained that the grant of a request for eminent-domain authority under section 8–509 of the Public Utilities Act requires "a utility [to] show that it made a reasonable attempt to acquire the property at issue." The Commission then recognized that as to the aforementioned five factors, sufficient evidence was presented to show that (1) the number, nature, and extent of [IEPC's] contacts with the landowners had been adequate; (2) IEPC adequately explained its offer of compensation to landowners; (3) IEPC's offers were comparable to offers made to similarly situated landowners, noting that IEPC's offers for the easements were 125% of fee value; (4) IEPC made an effort to address landowner concerns by making adjustments to the SAX route to avoid certain structures, land features, or wooded areas; and (5) "given the large numbers of holdouts and the length of time that has elapsed during the negotiation phase, the situation is unlikely to change on a large scale absent the Commission granting [IEPC] the right to exercise eminent domain."

¶ 16 Intervenors affected by the Commission's grant of eminent-domain authority appealed, and this court affirmed.

Pliura Intervenors v. Illinois Commerce Comm'n , 2015 IL App (4th) 140592-U, 2015 WL 2451757 ( Intervenors II ). Pertinent to this appeal, we rejected intervenors' argument that the Commission's grant of eminent-domain authority was not supported by substantial evidence that IEPC had engaged in good-faith negotiations. Id.

¶ 17 3. IEPC's Motion To Reopen

¶ 18 In May 2014, IEPC filed a "Motion to Reopen and Amend Order Concerning Diameter of the [SAX]," requesting an amendment to the July 2009 certificate in good standing that the Commission issued in ...