State Highway Com'n of Mississippi v. McDonald's Corp.

• Decision Date: 08 April 1987
• Docket Number: No. 55635,55635
• Citation: 509 So.2d 856
• Parties: STATE HIGHWAY COMMISSION OF MISSISSIPPI v. McDONALD'S CORPORATION, et al.
• Court: Mississippi Supreme Court

Page 856

509 So.2d 856

STATE HIGHWAY COMMISSION OF MISSISSIPPI v. McDONALD'S CORPORATION, et al.

No. 55635.

Supreme Court of Mississippi.

April 8, 1987.

Rehearing Denied July 29, 1987.

Edwin Lloyd Pittman, Atty. Gen. by P.O. Gibson, Jr., Asst. Atty. Gen., John H. Price, Jr., Susan L. Runnels, Thomas, Price, Alston, Jones, & Davis, Jackson, for appellant.

Robert H. Weaver, James L. Jones, Shane F. Langston, Watkins, Ludlam & Stennis, Stephen W. Rimmer, Stephen E. Gardner, Young, Scanlon & Sessums, Jackson, for appellees.

En Banc.

HAWKINS, Presiding Justice, for the Court:

The State Highway Commission of Mississippi (Highway Department) has appealed a judgment rendered by a special court of eminent domain of the First Judicial District of Hinds County in favor of McDonald's Corporation, a Delaware corporation (McDonald's), and Robinson Industries, Inc., a Mississippi corporation (Robinson), fixing compensation for their property taken at $500,000, with $225,000 allocated to McDonald's and $275,000 allocated to Robinson.

Because the trial of this cause was premised on the assumption that these parties had an easement giving them access to a frontage road of Interstate Highway 55, when all the landowner McDonald's had was a revocable permit, we notice plain error under our Rule 6(b), and affirm an award of $1,000 if McDonald's and Robinson enter a remittitur of $499,000 of said judgment; otherwise we remand for a new trial with proceedings consistent with this opinion.

FACTS

In 1976 Franchise Realty Interstate Corporation, with principal offices in Oakbrook, Illinois, was a subsidiary of McDonald's Corporation, a Delaware corporation operating nationwide in the fast food restaurant business.

Kenneth Mack Robinson, a resident of Jackson, was interested at the time in owning and operating a franchise McDonald's restaurant on the west side of the frontage road off Interstate Highway 55 (I-55). In October, 1976, when investigating the purchase of a lot on which the restaurant could be located, Robinson learned the Mississippi Highway Department (Highway Department) contemplated a reconstruction project of I-55 and the frontage road, and that such project would terminate any access to the frontage road at the proposed location.

Robinson first learned that the project was being planned through a telephone conversation with Les Johnson, a Highway Department official. Johnson mentioned several points to Robinson, including the location of the new access. As a result of this conversation, Robinson jotted down notes dated October 18, 1976, pertaining to what he had learned. A copy of these notes, in pertinent part, reveal the following:

* * *

(2) No access beyond K-Mart to the West ... Steak 'N' Ale--Us--Texaco

* * *

(4) Entrance to I-55 South will be in front of K-Mart

(5) 1/2 interchange at Briarwood

Robinson testified that "us" meant McDonald's.

Shortly thereafter, Robinson orally told Don Pope, the real estate representative of McDonald's Corporation (Franchise Realty) that there was a proposed non-accessing on the East side of the lot. Robinson testified that at the time he communicated with Don Pope, he was satisfied that there were some plans in the making. It is therefore clear that all parties knew in October, 1976, that the property involved in this suit (between McDonald's property and the frontage road) had been proposed for non-accessing by the Highway Department.

On December 2, 1976, Franchise Realty made an application on a Highway Department form for a permit to construct a driveway to connect with the frontage road on the East side of the lot. Pertinent parts of the application read:

MISSISSIPPI STATE HIGHWAY DEPARTMENT

APPLICATION FOR PERMIT TO CONSTRUCT DRIVEWAY WITH

CONNECTION TO STATE HIGHWAY AND AGREEMENT OF

APPLICANT GIVEN IN CONSIDERATION OF SUCH

PERMIT

Franchise Realty Interstate Corp. of Oakbrook, Illinois 60521 hereinafter called applicant, who at the present time proposes to construct a drive way connecting thier [sic] property with Highway No. I-55 Fr Rd between Briarwood and Northside Drive in Hinds County, Mississippi, does hereby make application to the State Highway Department of Mississippi for permission to construct the said driveway mentioned above and shown herein below and in consideration of a permit being granted to me for such construction, do hereby agree to construct such facility in accordance with the plan shown herein below and do also further agree, with full understanding of the terms thereof, to all of the following:

(a) That the Mississippi Highway Department does not purport to grant to said applicant any right, title, claim or easement in or upon said highway or right of way appurtenant thereto.

(b) That the said State Highway Department may at any time require and compel the removal or reconstruction of said driveway or other facility therein described or referred to, as and when said State Highway Department deems it necessary. All expense of said removal or reconstruction is to be borne exclusively by the applicant and the State Highway Department is to be in no way liable.

(c) Said applicant hereby expressly agrees for himself, heirs, assigns and legal representatives, that upon request of said State Highway Department, he will without delay either reconstruct, remove or move to another location the facility herein described all in accordance with the terms of the request so made by the said State Highway Department. It being distinctly understood that any other location for said facility or driveway shall be primarily the choice of said State Highway Department, but said new location will be made or designated by said State Highway Department after agreement with said applicant or his successors, if possible. It is understood and agreed that the State Highway Department, if this permit is granted and acted upon by the said applicant, will use all reasonable efforts to avoid the necessity of requesting that the herein mentioned facility be removed, altered or reconstructed. [Emphasis added]

On December 6, 1976, the Highway Department approved the application and issued a permit to Franchise Realty. The approved permit stated:

This permit is issued for stage construction which allows for building of the permit as specified ...

There was also stamped on the approval the following statement:

NOTE: SINCE THIS PROJECT IS SCHEDULED FOR RECONSTRUCTION THE EXISTING ROADWAY AND R.O.W. ARE SUBJECT TO CHANGE.

Taking Robinson's prior knowledge into account, it is readily apparent that he was cognizant that the "change" would be removal of any access to frontage road.

On December 17, 1976, Franchise Realty purchased the property from Theo P. Costas, et al. The lot has a frontage of 150 feet North and South on the frontage road, and is approximately 218 feet deep East and West, and in addition has a strip of land 50 feet wide North and South, and 172 feet long East and West on its West side which connects with a 50-foot wide private driveway West of the lot, on which Franchise Realty obtained a perpetual non-exclusive easement, furnishing vehicular access to the property from the West.

Interstate Highway 55 is a controlled access highway. As in other states, this State has special statutes dealing with controlled access highways and appertaining frontage, or service roads.

Miss.Code Ann. Sec. 65-5-7 (1972) provides in pertinent part:

Sec. 65-5-7. Design.

The highway authorities of the state, ... are authorized to so design any controlled-access facility and to so regulate, restrict, or prohibit access as to best serve the traffic for which such facility is intended.... No person shall have any right of ingress or egress to, from, or across controlled-access facilities to or from abutting lands except at such designated points at which access may be permitted, upon such terms and conditions as may be specified from time to time. [Emphasis added]

Miss.Code Ann. Sec. 65-5-17 (1972) deals with local service roads, and states in pertinent part:

Sec. 65-5-17. Local service roads.

In connection with the development of any controlled-access facility, the state, ... highway authorities are authorized to plan, designate, establish, use, regulate, alter, improve, maintain, and vacate local service roads and streets ... and to exercise jurisdiction over service roads in the same manner as is authorized over controlled-access facilities under the terms of this chapter if, in their opinion, such local service roads and streets are necessary or desirable. [Emphasis added]

On April 8, 1977, Franchise Realty and Robinson and wife Betty S. Robinson entered into a 20-year lease. This lease contains no provision to release the lessees in event of condemnation proceedings, or for rent abatement in such event. On the same date McDonald's Systems, Inc., another McDonald's subsidiary, entered into a licensing agreement with the Robinsons to operate a McDonald's restaurant on the lot. Thereafter, Robinson formed Robinson Industries, Inc., a corporation in which he was the sole shareholder, and on April 25, 1977, he and his wife assigned their lease and license to the corporation. At some later date Franchise Realty merged into its parent, McDonald's Corporation.

Thus, when eminent domain proceedings were instituted by the Highway Department on September 22, 1982, the parties in interest to this realty were McDonald's Corporation and Robinson Industries, Inc.

The land actually being taken in the proceedings was minimal. The State was permanently taking a triangular-shaped parcel 3.2 feet wide at its base with a hypotenuse 47.4 feet long, totalling 75.65 square feet. Also, the State was acquiring a ten-year construction easement on an adjacent strip just West, triangular in shape, 5 feet wide at its base, with a hypotenuse 58 feet long. The total triangular shaped parcels are 8.2 feet at the base, with a hypotenuse 58 feet long, and 47.2 feet along the highway,...