Schliem v. State, No. 27557.

• Court: Supreme Court of South Dakota
• Writing for the Court: GILBERTSON, Chief Justice.
• Citation: 888 N.W.2d 217
• Docket Number: No. 27557.
• Decision Date: 07 December 2016
• Parties: Carlyle SCHLIEM and Farmers State Bank of Canton, Plaintiffs and Appellants, v. STATE of South Dakota, by and through the DEPARTMENT OF TRANSPORTATION and the South Dakota Transportation Commission, Defendants and Appellees.

888 N.W.2d 217

Carlyle SCHLIEM and Farmers State Bank of Canton, Plaintiffs and Appellants,
v.
STATE of South Dakota, by and through the DEPARTMENT OF TRANSPORTATION and the South Dakota Transportation Commission, Defendants and Appellees.

No. 27557.

Supreme Court of South Dakota.

Argued April 26, 2016.
Decided Dec. 7, 2016.

888 N.W.2d 219

Mark V. Meierhenry, Clint Sargent, Christopher Healy of Meierhenry Sargent, LLP, Sioux Falls, South Dakota, and Larry A. Nelson of Frieberg, Nelson & Ask, LLP Canton, South Dakota, Attorneys for plaintiffs and appellants.

Karla L. Engle, Special Assistant Attorney General, Department of Transportation, Office of Legal Counsel, Pierre, South Dakota, Attorneys for defendants and appellees.

GILBERTSON, Chief Justice.

¶ 1.] Carlyle Schliem and Farmers State Bank of Canton (the Bank) brought an inverse-condemnation action against the State in connection with the State's reconstruction of the interchange between Interstate 90 and Cliff Avenue in Sioux Falls. Schliem argues the State's closure of a nearby intersection diminished the market value of his property. The circuit court granted summary judgment in favor of the State, and Schliem and the Bank appeal. We affirm.

Facts and Procedural History

[¶ 2.] Schliem owns, and the Bank holds a mortgage on, Lots 13 and 14 in the North Side Gardens Addition to the City of Sioux Falls (the Property). The Property is located on the south side of 63rd Street North, approximately 748 feet east of 63rd Street's intersection with Cliff Avenue (the Intersection). The Intersection was located approximately 66 feet south of Interstate 90's eastbound on-ramp. The Property abuts 63rd Street to the north and Wayland Avenue to the east.¹ Schliem, who has owned the Property for approximately 25 years, and the owners of several other properties in North Side Gardens intended to commercially develop the area around the anticipated site of a new hotel.

[888 N.W.2d 220

¶ 3.] In 2013 and 2014, the State reconstructed a portion of Interstate 90 and Cliff Avenue. As part of the project, the State closed the Intersection because it interfered with efficient traffic movements on Cliff Avenue and the on-ramp to Interstate 90. Before the State's project, 63rd Street terminated in a dead end approximately 1,282 feet east of Cliff Avenue. Approximately 300 feet east of this dead end, a separate segment of 63rd Street intersected with National Avenue and continued east toward Gulby Avenue. Prior to closing the Intersection, the State eliminated this 300–foot gap by installing an asphalt road connecting the two segments of 63rd Street. The result is that the driving distance between the Property and the nearest intersecting highway is approximately 86 feet more than before the State's project.²

[888 N.W.2d 221

¶ 4.] As part of the project, the State purchased Lots 2, 3, 4, 16, 17, and a portion of 18. The State condemned a small, triangular strip of land across the northern border of Lots 6, 7, and 8.³ It also took the right to directly access Cliff Avenue from abutting Lot 19.⁴ The State did not take or purchase any property interest belonging to Schliem.

[¶ 5.] Even so, Schliem brought an action against the State alleging inverse condemnation and a violation of due process. To support his claims, Schliem produced evidence that the market value of the Property decreased from $464,800 to $151,000 after the Intersection's closure. In response, the State asked the circuit court to dismiss Schliem's action for failure to state a claim. After a hearing, the court converted the State's motion to dismiss into a motion for summary judgment. Schliem then also asked for summary judgment, and the circuit court held a hearing to consider the competing motions. Concluding that Schliem had not identified a property interest that had been taken or damaged by the State, the court granted the State's motion.

[¶ 6.] On appeal, Schliem raises the following issue: Whether the circuit court erred in granting the State's motion for summary judgment.

Standard of Review

[¶ 7.] "In reviewing a grant or a denial of summary judgment under SDCL 15–6–56(c), we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law." Gades v. Meyer Modernizing Co., 2015 S.D. 42, ¶ 7, 865 N.W.2d 155, 157–58 (quoting Peters v. Great W. Bank, Inc., 2015 S.D. 4, ¶ 5, 859 N.W.2d 618, 621 ). "We view the evidence 'most favorably to the nonmoving party and resolve reasonable doubts against the moving party.' " Id. ¶ 7, 865 N.W.2d at 158 (quoting Peters, 2015 S.D. 4, ¶ 5, 859 N.W.2d at 621 ).

Analysis and Decision

[¶ 8.] Schliem argues that he has a property right in direct access to the Intersection and that by closing the Intersection, "the State's project destroyed 100% of the commercial accessibility" to the Property. According to Schliem, this loss of commercial accessibility diminished the market value of the Property by $313,800. Concluding that Schliem had failed to identify a property right that had been taken or damaged by the State, the circuit court noted: "It is perhaps true that the value of the Property has been diminished as the result of the Project, but I find that such diminishment in value, standing alone, is insufficient to qualify as 'damage' sufficient to allow compensation to be awarded from [the State]." Schliem claims that "[t]his statement by the trial court which finds the necessary elements proving the State liable for a constitutional damaging is simply an error of law." Schliem is incorrect.

[¶ 9.] Before addressing the legal question whether the State was entitled to judgment on the merits, we begin by examining whether there are any genuine issues of material fact in this case. According to Schliem, "[t]here are facts in dispute concerning the issue of the reasonableness of the replacement access." Specifically, Schliem contends he disputed items 17, 18, 19, and 20 from the State's statement of undisputed facts submitted in

[888 N.W.2d 222

support of the State's motion for summary judgment. Those facts and responses are as follows:

[State's Fact 17]: After the Project, drivers wishing to access properties along 63rd Street will likely come from 60th Street, travel north on National Avenue or Gulby Avenue, and then proceed west down 63rd Street to their destination.

[Schliem's Response]: Admit that is a legal alternative access constructed by [the State] following its closure of the intersection at 63rd and Cliff. After the closure of the intersection, drivers attempting to reach the properties also use routes across the Perkins Restaurant property (Lot 19) to reach E. 63rd St. or use Wayland Avenue from 60th or 61st. Neither these nor any alternative built by the State provides a reasonable replacement access.

[State's Fact 18]: After the Project, drivers coming from the east on 60th Street will likely travel about 1,500 feet less to reach the Property.

[State's Fact 19]: After the Project, drivers coming from the west on 60th Street or the south on Cliff Avenue will likely travel about 1,100 feet more to reach the Property.

[State's Fact 20]: After the Project, drivers coming from the north on Cliff Avenue will likely travel about 3,050 feet farther to reach the Property.

[Schliem's Response]:Admit but deny the alternative routes provide reasonable access which is why the fair market value of the properties has diminished significantly.

(Emphasis added.) According to Schliem, "[t]hese disputed facts prohibit summary judgment."

[¶ 10.] Although the foregoing certainly establishes a dispute between the parties, it does not establish a genuine issue of material fact. Schliem and the State disagree that the replacement access to the Property via National and Gulby Avenues is reasonable. However, the question whether replacement access is reasonable is synonymous with the question whether a landowner's right of access has been substantially impaired. See Hurley v. State, 82 S.D. 156, 163–64, 143 N.W.2d 722, 726 (1966). Although some jurisdictions have held that this question is one of fact, "[i]n most jurisdictions, the issue ... is a question of law." 4A Julius L. Sackman, Nichols on Eminent Domain § 14.02 [3] [c][ii] (3d ed., rel. 116–12/2014).⁵ South Dakota adheres to the majority rule. Rupert v. City of Rapid City, 2013 S.D. 13, ¶ 29, 827 N.W.2d 55, 67 ("[T]he ultimate determination of whether government conduct constitutes a taking or damaging is a

888 N.W.2d 223

question of law for the court."); Hall v. State ex rel. S.D. Dep't of Transp., 2006 S.D. 24, ¶ 8, 712 N.W.2d 22, 25 ("[W]hether a taking occurred is a question of constitutional law which we review de novo."); Hurley, 82 S.D. at 163–64, 143 N.W.2d at 726 (conducting de novo review of determination that landowner's access had been substantially impaired).⁶

¶ 11.] Additionally, Schliem's argument on appeal that the record needs to be more fully developed before judgment is appropriate stands in direct opposition to his argument before the circuit court. Schliem himself asked the circuit court to render summary judgment. In doing so, he necessarily represented to the court that the material facts of this case were undisputed. S...