Southern Indiana Gas and Elec. Co. v. Department of Highways, State of Ind.
| Decision Date | 16 February 1989 |
| Docket Number | No. 82A01-8803-CV-87,82A01-8803-CV-87 |
| Parties | SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, Plaintiff-Appellant, v. DEPARTMENT OF HIGHWAYS, STATE OF INDIANA, Gene K. Hallock, Director, Daniel A. Novreske, Deputy Director, Donald W. Lucas, Deputy Director, E. Wayne Walters, Deputy Director, Kenneth R. Hoover, Deputy Director, Defendants-Appellees. |
| Court | Indiana Appellate Court |
George A. Porch, Bamberger, Foreman, Oswald and Hahn, Evansville, for plaintiff-appellant.
Linley E. Pearson, Atty. Gen., Arthur Thaddeus Perry, Deputy Atty. Gen., Indianapolis, for defendants-appellees.
Plaintiff-appellant, Southern Indiana Gas and Electric Company (SIGECO), appeals from a decision of the Vanderburgh Circuit Court denying its complaint seeking compensation from the defendant-appellee, the Indiana Department of Highways (the State), for the expenses incurred in relocating its utility facilities from a public right-of-way upon the State's order.
We affirm.
Just prior to 1913, SIGECO entered into a franchise agreement with the City of Evansville to provide electricity and gas Prior to 1982, Division Street was a major east-west thoroughfare running through the heart of Evansville. As were most of the city's streets, Division Street was dedicated by plat with the adjacent landowners retaining fee ownership in the land to the center of the street. In 1982, the State commenced construction of an elevated, six lane, limited access highway referred to as the Russell Lloyd Expressway (the Expressway). The Expressway runs in an east-west direction through Evansville partially on and along the south side of Division Street. In order to construct the Expressway, the State purchased in fee a strip of land 50 to 300 feet wide adjacent and to the south of the length of Division Street. The actual traveled portion of the Expressway is largely located on this land, although it occasionally occupies a portion of the old Division Street right-of-way. Division Street continues to exist in part, serving as a one-way westerly frontage and access road and as on and off ramps where it has not been consumed by the Expressway itself.
service to Evansville citizens. In June of 1917, pursuant to statute, SIGECO surrendered its individual franchises to the State in exchange for an indeterminate permit issued by the Public Service Commission of Indiana. Pursuant to both the franchise agreement and the indeterminate permit, SIGECO occupied many of the public rights-of-way in Evansville with the gas and electric facilities it utilized to serve the public. Specifically, it maintained numerous utility facilities in, on, and under Division Street.
When construction on the Expressway began, many of SIGECO's original utility facilities as well as additional facilities subsequently installed were still functional and in use for the benefit of the public. SIGECO maintained its facilities in and on Division Street without disruption until 1982 at which time the State informed it that construction plans for the Expressway would substantially affect its facilities located there. By order of the State, SEIGECO was required to eliminate all of its facilities in or near the path of the Expressway which might interfere with construction or pose a safety hazard. This contemplated the removal and relocation of all of SIGECO's utility facilities from the Division Street right-of-way.
A dispute arose between the parties as to who should bear the cost of relocating the facilities. In order to allow construction to commence, however, the parties entered into a nonwaiver agreement whereby SIGECO agreed to relocate the facilities at its own expense while reserving the right to later litigate its claim for compensation. On May 1, 1984, SIGECO filed its complaint seeking compensation. After conducting limited discovery, the parties agreed to a bifurcated trial with the first portion addressed solely to the issue of liability while reserving the question of damages for further proceedings.
For purposes of clarification, the only question at issue at trial was whether SIGECO was entitled to compensation of expenses incurred in removing its utility facilities from a public right-of-way. Not at issue was whether SIGECO was entitled to compensation for the relocation of its facilities from real estate it owned or in which it had a private easement. To the extent SIGECO incurred expenses of the latter type, the State reimbursed it. With regard to the former, the trial court determined that SIGECO was not entitled to compensation for such and entered judgment in favor of the State. From this judgment SIGECO appeals.
SIGECO raises the following issue for our review:
Whether the trial court erred in determining SIGECO was not entitled to recover the expenses of relocating its utility facilities from a public right-of-way.
By reason of the franchise agreement and subsequent surrender of such in exchange for an indeterminate permit, SIGECO was granted the right to occupy the streets of Evansville to supply gas and electricity to the city's population. SIGECO contends that having obtained the right to occupy the streets, it acquired a property right. It argues that the State's conduct in ordering it to relocate its facilities from those streets impaired its contract rights and had the effect of taking its property without compensation in derogation of the rights secured by the Indiana and United States Constitutions. We disagree.
SIGECO's right to locate its utility facilities in the streets is subject to the exercise of the police power by the State in the interest of public health, safety, and convenience. This limitation was articulated by our supreme court in Grand Trunk Western Railway Co. v. City of South Bend (1909), 174 Ind. 203, 89 N.E. 885. In Grand Trunk the railroad, which operated through a portion of South Bend, contracted with the city to lay a second track on one of the city's streets. Subsequently, however, the city repealed that portion of the ordinance granting the franchise which permitted the railroad to lay a second track. The railroad brought suit seeking to enjoin the city from interfering with its attempt to lay the second track. In affirming a judgment in favor of the city, the supreme court held that the city's right to exercise the police power in the interest of public safety and convenience cannot be contracted away. Thus, whatever right the utility obtained by reason of the franchise agreement was subject to the exercise of the police power in the interest of public safety and convenience.
Furthermore, in New Orleans Gaslight Co. v. Drainage Commission of New Orleans (1904), 197 U.S. 453, 25 S.Ct. 471, 49 L.Ed. 831 the United States Supreme Court held that an individual required to comply with a regulation enacted for the public health and safety pursuant to the police power must do so at his own expense. The facts in New Orleans are remarkably similar to the situation in the case at bar. In New Orleans the gas company, pursuant to a franchise agreement, obtained the right to locate its utility facilities under the City's streets. Thereafter, in order to accomodate the construction of a drainage system for the city, the gas company was required to relocate many of its pipes from under the city's streets upon demand of the commission. The city refused to compensate the gas company for the costs of relocating the pipes and the gas company brought suit alleging that its property had been taken without compensation in violation of the 14th amendment of the United States Constitution. Affirming a judgment in favor of the commission, the Supreme Court stated that the gas company did not acquire any specific location in the streets for its pipes under the general grant of authority to use the streets. The Court noted further that the exercise of police power in the interest of public health and safety cannot be contracted away and whatever rights the gas company obtained were subject to any proper regulations as might be required in the execution of such. The Supreme Court held, therefore, that the uncompensated obedience to a regulation enacted for the public safety pursuant to the police power of the State did not amount to taking property without just compensation. In complying with such a regulation at its own expense, none of the gas company's property had been taken.
Likewise, in the case at bar whatever rights SIGECO acquired by reason of the franchise agreement were subject to any proper regulations as might be required in the interest of the public health and safety. The parties stipulated that the State's order required that SIGECO relocate only those utility facilities which interfered with the construction of the Expressway or imposed a safety hazard. Accordingly, therefore, SIGECO's compliance with an order imposed in the interest of the public safety at its own expense did not amount to taking its property without due compensation.
SIGECO also contends it is entitled to be compensated for its relocation expenses under the terms of the Indiana Relocation Assistance Act (the Relocation Act), IND.CODE 8-13-18.5-1 to -20. The stated purpose of the act is to provide "for the fair and equitable treatment of persons displaced from homes, businesses, or farms by reason of acquisition of real property for a public improvement of agencies of the State of Indiana ... in order that such persons shall not suffer disproportionate injuries as a result of programs designed for the benefit of the public as a whole." IND.CODE 8-13-18.5-1. An agency acquiring real property is required to provide two types of relocation assistance, including payments for moving and other expenses incurred by persons displaced from their homes or businesses. IND.CODE 8-13-18.5-3. As seen, relocation assistance is available only to displaced...
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