Jensen v. Cnty. of Johnson

Decision Date13 February 2015
Docket NumberNo. 110752.,110752.
Citation344 P.3d 396 (Table)
PartiesMichael and Pamela JENSEN, Appellants, v. The COUNTY OF JOHNSON, Kansas, Appellees.
CourtKansas Court of Appeals

Constance L. Shidler, of Smithyman & Zakoura, Chartered, of Overland Park, for appellants.

Robert A. Ford, assistant county counsel, of Johnson County Legal Department, for appellee.

Before PIERRON, P.J., BRUNS and SCHROEDER, JJ.

MEMORANDUM OPINION

PER CURIAM.

Michael and Pamela Jensen purchased property in Johnson County adjacent to property that was owned by Johnson County (County). The County had leased its property to First Industrial Investment, Inc. The Jensens argue that after construction of a 450,000 square foot paper-product warehouse and distribution center by First Industrial, water runoff from the County's property rendered their property unusable. The Jensens sued the County for negligence, inverse condemnation, nuisance from water runoff, and nuisance from inadequate construction of a berm shield between the two properties. The district court granted summary judgment to the County on alternative theories.

First, the district court found the Jensens' notice of claim to the County did not comply with K.S.A. 12–105b of the Kansas Tort Claims Act and, therefore, summary judgment was appropriate on the Jensens' claims of negligence and both claims of nuisance. Alternatively, the district court rejected three of the Jensens' claims on the merits. The court found:

(1) The County had no liability in negligence because it was the landlord;
(2) Inverse condemnation failed because the First Industrial property was used for a private commercial use, not a public use; and
(3) The County was not responsible in nuisance for design of the water retention basin on its land because it was enforcing its rules, regulations, and codes.

The court also found the Jensens' berm claim survived summary judgment due to fact questions regarding the statute of limitations, but the claim was still dismissed based on the inadequate notice of claim.

Facts

On November 19, 1973, the United States Government gave a quitclaim deed to Johnson County for the Olathe Naval Air Station property. The Johnson County Airport Commission (JCAC) operated the New Century Air Center (New Century) on this property. In early 2007, the JCAC contracted with TranSystems, Inc. (TranSystems) in an owner-authorization agreement to act on behalf of the JCAC for the purpose of making application with the Johnson County planning office for what was termed “Project Rosemary.”

TranSystems later contracted with First Industrial Realty Trust to serve as the project's design professional. TranSystems described the proposed development property as grass covered gentle rolling hills. There were no streams and no evidence of flooding on the 40–acre site. TranSystems indicated that on-site and off-site water detention would be pursuant to the American Public Works Association (APWA) § 5600 “Storm Drainage Systems and Facilities” as required by the Johnson County Public Works Department (public works).

On March 29, 2007, the Board of County Commissioners of Johnson County (Board) approved the development plan submitted by TranSystems for construction of a 450,000 square foot paper-product warehouse and distribution center. The resolution provided that a stormwater management plan had to be approved by public works. The Jensens contend “Project Rosemary” was on County-owned land and it was a joint venture between the County and First Industrial.

In April 2007, the Board authorized the issuance of $20,000,000 in federally-taxable private activity bonds to finance the construction cost of the proposed warehouse to be located at New Century and occupied by the Kimberly–Clark corporation. In early May 2007, TranSystems communicated with the public works department concerning the development of the detention basin on the leased property and its specifications. In an email dated May 10, 2007, the public works department indicated that all its issues concerning the storm drainage on Project Rosemary had been addressed.

On May 30, 2007, the County, acting though the JCAC, entered into a long-term ground lease with First Industrial as the tenant, for the “purpose of constructing, owning, operating, and leasing improvements on the land” located at New Century. The term of the lease, with extensions, could run for 99 years. On July 16, 2007, the Board also entered into a development agreement with First Industrial including terms and conditions for infrastructure improvements concerning water/fireflow, sewers, existing roads, and new roads and stormwater. The development agreement stated: “WHEREAS TranSystems, Inc., made application to the County on behalf of the Developer requesting preliminary and final development approval to allow [construction of the warehouse].” The development agreement also stated that the ground lease and the sublease contemplated the construction of the improvements by the developer at the JCAC's ultimate cost and expense.

In November 2007, under statutory bond financing procedures, the County acquired legal title to the newly constructed on-site improvements and leased them back to First Industrial for the life of the bonds. In January 2008, First Industrial sent the County a notice of completion of the improvements. On February 5, 2008, email communications indicate the public works department stated: “The streets and detention basin have been approved.”

Prior to the construction of the First Industrial warehouse facility, the 39–acre leasehold site was unimproved. Under the ground lease, First Industrial was to construct the prop.osed buildings and other improvements upon the land, seek all necessary permits, and address all applicable regulatory ordinances, building codes, and environmental aspects of such construction. The “use section of the ground lease allowed First Industrial to construct, own, maintain, utilize, operate, lease and/or occupy a warehouse, distribution, and/or light industrial facility with office space. First Industrial owned the improvements and the County, as landlord, had no right, title, interest, or claim in any improvements or other improvements, fixtures, or buildings placed on the premises by or on behalf of the tenant.

The ground lease obligated First Industrial to keep the premises and any improvements existing on the premises in a good state of maintenance and repair. County staff, acting in their official capacities, reviewed the applicant's development plan submittals for the leasehold improvements, including plans for on-site stormwater detention prepared by TranSystems, and made suggestions regarding those plans. In response to the County staff comments, the emergency spillway location for the detention basin was changed to route detained stormwater into its natural drainage channel.

On October 9, 2007, the Jensens purchased 30 acres adjacent to the First Industrial leasehold. In his deposition, Michael Jensen testified it was their intent to build their retirement dream home on the property situated to overlook the property's man-made pond and a small island. The Jensens paid $289,000 for the land. The property was zoned RUR—Rural District. Construction of the warehouse was underway by that time. First Industrial took occupancy of the warehouse on November 5, 2007, just short of a month after the Jensens closed on the purchase of their land. The First Industrial leased property was zoned PEC–3—Planned Light Industrial Park District. The properties' zoning classifications were established in 1994.

The Jensens argue they undertook extensive due diligence procedures in connection with purchase of the land, including environmental site assessments, meetings with the planning office, review of plans involving the berm, lighting, detention basin, and water run-off. During argument on the summary judgment motion, the Jensens' counsel explained how the damages arose in 2009:

“Well, the County also knows full well that every time there was a rain event that was sufficient enough to cause the kind of flooding that they have out there now, Mr. and Mrs. Jensens' pond was drained. There was no dam. And all that water just ran right through. There is nothing to stop it.”

The County states the Jensens' pond was improper to even handle predevelopment stormwater flows. A preliminary wetland report indicated that on September 20, 2007, Kent Lage for the public works department inspected First Industrial's property and stated that the retention ponds were in place but not operating yet.

It appears the Jensens have three claims concerning the detention basin. First, they claim the County underestimated the detention storage volume of the stormwater runoff Second, they contend TranSystems removed the “small wet volume” as directed by the County so no water would pond and it caused a reduction in detention capacity and an increase in direct water downstream. Third, the Jensens claim the relocation of the emergency spillway caused all stormwater to be directed onto the Jensens' property and this was not a natural drainage channel for that amount and velocity of water.

In July 2009, the Jensens began communication with the Johnson County planning office about their concerns dealing with stormwater and sight lines. On July 30, 2009, the planning office sent the Jensens a letter summarizing the County's position that the pond outlet system on the Jensens' property was significantly undersized for the amount of drainage area flowing into the pond with or without the improvements made on First Industrial's leased property. The letter also stated:

“In May of 2007, Public Works staff directed the building owner's design consultant to modify the spillway and direct the flow in the appropriate westerly direction. This modification allowed all of the stormwater runoff to remain with the existing basin and to follow the natural grade of the area. In order to make this change, the
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