Morgan County Rural Elec. Membership Corp. v. Indianapolis Power & Light Co.

Decision Date02 November 1973
Docket NumberNo. 1173S220,1173S220
Citation260 Ind. 164,302 N.E.2d 776
Parties, 261 Ind. 323 MORGAN COUNTY RURAL ELECTRIC MEMBERSHIP CORPORATION, Appellant (Defendant Below), v. INDIANAPOLIS POWER & LIGHT COMPANY, Appellee (Plaintiff Below).
CourtIndiana Supreme Court

H. Richard Miles, Martinsville, Parr, Richey, Obremskey, Pedersen & Morton, Lebanon, for appellant.

Marcus E. Woods, Paul L. Butt, Charles M. Wells, Jon D. Noland, Barnes, Hickam, Pantzer & Boyd, Indianapolis, for appellee.

OPINION ON PETITION TO TRANSFER

HUNTER, Justice.

This case arises from a proceeding brought by a municipally franchised utility (plaintiff-appellee, Indianapolis Power and Light Company, hereinafter IPALCO), seeking to condemn property of another utility (defendant-appellant, Morgan County Rural Electric Membership Corporation, hereinafter REMC). IPALCO is a municipally franchised utility serving the town of Mooresville; REMC serves the outlying community of that area. The town of Mooresville recently annexed a non-contiguous parcel of land which is the site of the Kendrick Memorial Hospital. This annexation was made pursuant to IC 1971, 18--5--10--30.1, Ind.Ann.Stat. § 48--727a (Burns' 1972 Cum.Supp.), which provides as follows:

'Annexation of certain noncontiguous areas by towns.--Notwithstanding any other provision in this chapter, the town board of any town may, by ordinance, annex territory which is not contiguous to the boundaries of such town where such territory is declared to be occupied by a municipally owned or regulated sanitary landfill, golf course, hospital or hospital as defined in IC 1971, 16--10 ( §§ 42--1448--42--1465. 42--1601--42--1620): Provided, however, That should the territory so annexed cease to be used or occupied for the purpose of operating a municipally owned or regulated sanitary landfill, golf course, hospital or hospital as defined in IC 1971, 16--10, the area shall cease to be considered annexed to the town and shall revert to the jurisdiction of the unit of government having such jurisdiction prior to annexation. (IC 1971, 18--5--10--30.1, as added by Acts 1971, P.L. 263, § 2, p. 1051.)'

The territory which was annexed had previously been rendered electric utility service by REMC. Because the territory was now annexed by the town and was thereby made a part of the municipality, IPALCO (the utility franchised by the municipality) sought to condemn certain electric utility property located within the annexed territory. This condemnation was sought pursuant to IC 1971, 8--1--13--19, Ind.Ann.Stat. § 55--4418a (Burns' 1972 Cum.Supp.), which provides in pertinent part as follows:

'Municipality annexing territory served by electric utility--Purchase of property--Condemnation.--Whenever a municipality in which a public utility * * * is rendering electric utility service under a franchise, license or indeterminate permit * * *, annexes additional territory and such annexed territory includes any territory in which the franchised utility was not authorized to render electric utility service immediately prior to such annexation but in which some other public utility * * * was lawfully rendering electric utility service at such time, then the franchised utility and the other utility shall promptly negotiate for the purchase by the franchised utility of the property owned by the other utility within the annexed territory and used and useful by the other utility in or in connection with the rendering of electric utility service therein. In the event that such property has not been purchased by the franchised utility within 90 days after such annexation takes place, then the franchised utility may bring an action in the circuit or superior court of the county where such municipality * * * is located against the other utility, as defendant, for the condemnation of such property of the other utility. Until and unless such purchase or condemnation is effected, the other utility shall have authority to operate within the portion of the annexed territory in which it was lawfully rendering electric utility service immediately prior to such annexation.'

This statute (Section 55--4418a) quite clearly provides for condemnation by the municipally franchised utility (IPALCO) of territory served by another utility (REMC) when the municipality annexes that territory. However, REMC argues that legislative intent and public policy require that such condemnation not be permitted when the territory is annexed pursuant to Section 48--727a, supra. That is, REMC contends that such condemnation should not occur where the area annexed by the municipality is non-contiguous.

The trial court overruled the objections of REMC and appointed appraisers to proceed with the condemnation appropriation. REMC took an appeal to the Court of Appeals for the Third District. The Court of Appeals reversed, holding that the Legislature did not intend the term 'annexes' in section 55--4418a, supra, to apply to an annexation conducted pursuant to section 48--727a, supra. 293 N.E.2d 237.

IPALCO has filed a petition to transfer with this Court. In its petition to transfer, IPALCO makes the following contention:

'The decision of the Court of Appeals is in error in that such decision erroneously decides a new question of law in holding that . . . § 55--4418a . . ., which authorizes an electric utility serving a municipality to purchase or condemn the property of another electric utility rendering service in (the) annexed . . . territory, does not confer such a right of condemnation as to non-contiguous territory annexed to a municipality pursuant to . . . § 48--727a . . ..'

The holding of the Court of Appeals is contrary to a literal reading of the statutes involved. Section 55--4418a (supra) refers simply to annexation of 'additional territory' and makes no distinction between contiguous and non-contiguous territory. The Court of Appeals took the position...

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