Hall v. State ex rel. Dept. of Transp., 23465.

• Decision Date: 15 March 2006
• Docket Number: No. 23465.,23465.
• Citation: 2006 SD 24,712 N.W.2d 22
• Parties: Patrick R. HALL and Marlyn G. Erickson and Fuel Food Mart, Inc., a South Dakota Corporation, Plaintiffs and Appellants, v. STATE of South Dakota, by and through the SOUTH DAKOTA DEPARTMENT OF TRANSPORTATION and the South Dakota Department of Transportation Commission, Defendant and Appellee.
• Court: South Dakota Supreme Court

Page 22

712 N.W.2d 22

2006 SD 24

Patrick R. HALL and Marlyn G. Erickson and Fuel Food Mart, Inc., a South Dakota Corporation, Plaintiffs and Appellants, v. STATE of South Dakota, by and through the SOUTH DAKOTA DEPARTMENT OF TRANSPORTATION and the South Dakota Department of Transportation Commission, Defendant and Appellee.

No. 23465.

Supreme Court of South Dakota.

Argued on November 8, 2005.

Decided March 15, 2006.

Jeffrey G. Hurd of Bangs, McCullen, Butler Foye & Simmons, Rapid City, South Dakota, Brian W. Blaesser of Robinson & Cole, LLP, Boston, Massachusetts, Attorneys for plaintiffs and appellants.

Karla L. Engle, Department of Transportation, Pierre, South Dakota, Attorneys for defendant and appellee.

MEIERHENRY, Justice.

[¶ 1.] The owners of the Flying J Truck Stop (Flying J) claim that the closing of the Exit 66 interchange on Interstate 90 (I-90) by the South Dakota Department of Transportation (SDDOT) constitutes an inverse condemnation entitling them to compensation. The trial court granted summary judgment against the owners. We reverse and remand.

FACTUAL AND PROCEDURAL BACKGROUND

[¶ 2.] Patrick R. Hall, Marlyn G. Erickson, and Fuel Food Mart, Inc. (Owners) own land which abuts both I-90, an eastwest road, and Ellsworth Road, a northsouth road, near Box Elder, South Dakota. On that property, Owners operate the Flying J, a convenience store and filling station. Originally, Exit 66 served as the interchange between I-90 and Ellsworth Road. That exit connected I-90 to Ellsworth Road, the main north-south route between I-90 and the main entrance to Ellsworth Air Force Base (Ellsworth) and the city of Box Elder.

[¶ 3.] Originally, Pennington County, the governmental body with jurisdiction over the area, prohibited development around the Exit 66 interchange. Subsequently, the city of Box Elder added the area to its jurisdiction and allowed development. In the 1970's, however, the development around the Exit 66 interchange became a concern. That development encroached upon the "Accident Potential Zone" (APZ) off the main runway of Ellsworth. An APZ is an area at the end of a runway at an air force installation which is exposed to possible aircraft accidents. Encroachments into an APZ are generally referred to as "incompatible land uses."

[¶ 4.] Two separate studies were done to address the encroachment concerns. The first study, the Joint Land Use Study (JLUS), was commissioned by the communities surrounding Ellsworth in June 1995. Its purpose was "to identify, analyze, and to the extent possible, resolve encroachment issues associated with the development of [the area surrounding Ellsworth]." After considering several alternatives, the study recommended closing Exit 66 and constructing a new interchange one mile east of Exit 66 so that the incompatible land uses near the existing exit "would be relocated in the vicinity of the new interchange."

[¶ 5.] The second study was commissioned by the Rapid City Area Metropolitan Planning Organization and the SDDOT. It was entitled Exit 67/I-90 Interchange Justification Study (IJS) and sought to assess "the need for the new interchange, the best design for the interchange, and its effects on the surrounding roadway system and community." The IJS also provided several alternative recommendations and ultimately recommended closing Exit 66 and constructing a new interchange one mile to the east. Like the JLUS, all of the IJS alternatives considered the effect on incompatible development.

[¶ 6.] In light of these studies, SDDOT constructed Exit 67 one mile east of Exit 66. On October 1, 2003, Exit 66 was closed and all access to I-90 was removed at that location. As a result, Flying J suffered drastic drops in sales. On October 21, 2003, Owners closed Flying J indefinitely.

[¶ 7.] Owners then brought this inverse condemnation claim against the SDDOT and the Department of Transportation Commission (collectively State) alleging that the relocation of Exit 66 was a taking of private property requiring compensation. Upon cross-motions for summary judgment, the trial court found for the State. Owners now appeal and frame the issues as follows: (1) Should the State be obligated to pay just compensation for depriving Owners of their right of access to a public highway by closing the highway interchange abutting their property? (2) Was the State's action in closing the highway interchange abutting the Owners' property for the acknowledged purpose of shutting down Owners' business an abuse of the State's police power?

DECISION

[¶ 8.] We review the trial court's grant of summary judgment as follows:

Summary judgment is authorized "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." All reasonable inferences derived from the facts are viewed in the light most favorable to the nonmoving party. However, the nonmoving party must present facts showing that a genuine and material issue for trial exists. Once we determine that the material facts are undisputed, our review is limited to whether the law was correctly applied. We will affirm the trial court if there is any legal basis to support its ruling. Id.

Krier v. Dell Rapids Twp., 2006 SD 10, ¶ 12, 709 N.W.2d 841, 844-45 (citations omitted). If the material facts are undisputed, whether a taking occurred is a question of constitutional law which we review de novo. See State v. Stanga, 2000 SD 129, ¶ 8, 617 N.W.2d 486, 488.

[¶ 9.] Our first inquiry is whether the material facts are undisputed. Unfortunately, the parties did not indicate in the record what they considered as undisputed facts.¹ Nevertheless, the trial court gleaned certain facts from the record on which he based his ruling. In a written decision, the trial court identified the facts as follows: (1) an APZ existed off the end of runway of Ellsworth; (2) for a long time development was limited; (3) after the city of Box Elder annexed the property, development was permitted; (4) Owners of Flying J were among the businesses developed in the area; (5) the commercial development and high traffic use of the area was of concern to the Air Force because it invaded the APZ; (6) the Base Closure Commission identified development in the APZ as a matter of concern affecting Ellsworth's long-term viability as an Air Force base; (7) two land use studies led to development of a highway construction project designed to close Exit 66 and to build a new interchange at Exit 67; (8) as a result of closing Exit 66, direct access from Ellsworth Road to and from I-90 was lost; (9) Owners' access to Ellsworth Road remained unchanged. Additionally, at the summary judgment hearing, the trial court surmised that "probably the purpose of closing the exit [was] to eliminate or radically reduce the commercial value; and there the co-exploitation of those lands," with "the ultimate expectations [that] the businesses would diminish if not vacate entirely." The trial court further stated:

[A]t this stage it appears that that goal has been largely accomplished with the closure of the exit. Those businesses have no direct access to the interstate. They abut a road running north and south from Box Elder to the air base. And that road, the road which they abut has had access to the interstate at the interchange which was closed; that the closure of that interchange has a significant adverse impact on the traffic flow past those businesses.

The trial court asked the State, "If there was no threat of Ellsworth being closed or subject to closure, would anybody have addressed the public safety issue?" The State's lawyer answered, "I can't speak on behalf of all of the entities that made up the joint land use study that came up with the recommendations. I think I can safely say that the Department of Transportation would not have on its own acted to close exit 66 and build exit 67."

[¶ 10.] Based on the above facts, the trial court concluded as a matter of law "that since [Owners] did not have a property interest in the continued flow of traffic past [their] business, there has been no taking or damaging of [Owners'] property that is compensable." The trial court relied exclusively on Darnall v. State, 79 S.D. 59, 108 N.W.2d 201 (1961), in support of its ruling. The trial court noted that the maintenance of heavy traffic in the APZ posed a threat to the economic viability of Ellsworth. The court further stated, "In any event, where access is going to be allowed to the interstate system is within the proper exercise of the state's police power and does not give rise to a compensable taking."

[¶ 11.] On appeal, the State asserted and argued for the first time that Owners had no right of access to the interstate and interchange at Exit 66 because I-90 is a controlled-access highway. In support of its argument, the State pointed to SDCL 31-8-1 and SDCL 31-8-6.² This particular assertion, however, was not raised in the pleadings, in the record, or in the State's arguments to the trial court. Clearly, the trial court did not address this specific issue at the hearing or in its written decision. The trial court's ruling was based exclusively on an analysis of whether the businesses had a right to the continued flow of traffic and whether closing the exit was a proper exercise of police power.

[¶ 12.] We have repeatedly stated that we will not address for the first time on appeal issues not raised below. See, e.g., Action Mech., Inc. v. Deadwood Historic Pres. Comm'n, 2002 SD 121, ¶ 50, 652 N.W.2d 742, 755 ("An issue not raised at the trial court level cannot be raised for the first time on appeal."); Sedlacek v. S.D. Teener Baseball Program, 437 N.W.2d 866, 868 (S.D.1989) (stating that where a party "failed to develop the record" on an issue "we deem that issue abandoned"); Fortier v. City...