State v. Dunn, No. 82A01-0705-CV-223.

• Decision Date: 25 June 2008
• Docket Number: No. 82A01-0705-CV-223.
• Citation: 888 N.E.2d 858
• Parties: STATE of Indiana, Appellant-Defendant, v. John M. DUNN, Appellee-Plaintiff.
• Court: Indiana Appellate Court

888 N.E.2d 858

STATE of Indiana, Appellant-Defendant, v. John M. DUNN, Appellee-Plaintiff.

No. 82A01-0705-CV-223.

Court of Appeals of Indiana.

June 25, 2008.

Steve Carter, Attorney General of Indiana, David Steiner, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellant.

David V. Miller, Robert L. Burkhart, Ziemer Stayman Weitzel & Shoulders, LLP, Evansville, IN, Attorneys for Appellee.

OPINION

VAIDIK, Judge.

Case Summary

The State's construction of a median strip that makes the route of travel to a business property more circuitous is not a compensable taking. We therefore reverse the trial court's partial summary judgment in favor of business owner John M. Dunn against the State and the subsequent damages awarded to Dunn by a jury.

Facts and Procedural History¹

Dunn entered the hotel business in 1978. Since that time, he has developed, owned, and operated more than twenty hotel properties. Appellant's App. p. 114. One of these properties is located at 100 South Green River Road in Evansville, Indiana ("Subject Property"). Id.

In the late 1980s, the State decided to construct the Lloyd Expressway near the Subject Property. When the Lloyd Expressway was initially constructed, all entrances connecting the Subject Property to Green River Road were eliminated. Id. at 129. However, the State then initiated condemnation proceedings to acquire a nearby strip of land belonging to Dunn in order to build a service road connecting the western boundary of the Subject Property to Green River Road. Id. at 130. The State successfully acquired the land and constructed the service road, and Dunn received compensation for the taking. See State v. Dunn, 837 N.E.2d 206 (Ind.Ct. App.2005).²

Thereafter, the Subject Property had access, via the service road, to and from the northbound and southbound lanes of Green River Road. Appellant's App. p. 130. This changed in July 2004, when the State, acting through the Indiana Department of Transportation, installed a concrete median in the center of Green River Road, id. at 116, 118, near that road's interchange with State Road 66, id. at 165. This median prevents southbound traffic from Green River Road from making left turns into the service road entrance to the Subject Property. Id. at 116, 131. The elimination of left-hand turns onto the service road "was designed as a safety measure," as a southbound driver making such a turn would have to cross five lanes of oncoming northbound traffic. Id. at 166. The service road remains accessible to the public, although southbound drivers on Green River Road must follow a circuitous route to reach the service road and, hence, the Subject Property. The State undertook this project pursuant to its authority under Indiana Code § 8-23-8-1 to build and improve limited access facilities.³ Appellant's App. p. 48.

After the State released its plan for the construction of the median but before its actual construction, Dunn, anticipating a loss in clientele because of the reduced convenience of the hotel's entrance, began remodeling the hotel in November 2003 to increase its customer base. Id. at 117. While the hotel had apparently operated successfully from approximately 1978 until 2004, id. at 129, Dunn characterizes the hotel's occupancy rates between November 2003 until the end of 2004 as "disappointing," id. at 118.⁴

Dunn filed an inverse condemnation action against the State, alleging that the erection of the median "has completely eliminated all access to the Hotel and Subject Property from the southbound lane of Green River Road," as it "prevents all left-hand turns from the southbound lanes of Green River Road into the Hotel's vehicular entrance." Id. at 32. Therefore, according to Dunn, the median "substantially and materially limited and impaired vehicular access to the Subject Property and vehicular egress from the Subject Property," and this constitutes "a taking of [his] property without just compensation." Id. at 33. He sought monetary compensation for the taking. The State answered and acknowledged that the median "prohibit[ed] left hand turns to and from Green River Road and the public service road." Id. at 46. However, the State contended that Dunn is not entitled to compensation as a matter of law because the erection of medians resulting in circuitous travel to a business is conducted according to the State's police powers and does not effect a compensable taking. Id. at 48. Both parties subsequently filed motions for summary judgment, and the trial court granted Dunn's motion for partial summary judgment, concluding that "a taking of Plaintiff's property rights by the Defendant, State of Indiana, has occurred." Id. at 219. The suit thereafter proceeded to jury trial on the issue of damages. The jury returned a verdict in favor of Dunn in the amount of $3,650,000, and the trial court entered judgment accordingly. Id. at 27. Upon Dunn's later motion, the trial court awarded him an additional $1,049,600 in prejudgment interest, $109 in costs, and $25,000 in attorneys' fees. Id. at 29. The State now appeals.

Discussion and Decision

Article I, § 21 of the Indiana Constitution provides that "[n]o person's property shall be taken by law, without just compensation; nor, except in case of the State, without such compensation first assessed and tendered." Indiana Code § 32-24-1-16 further provides that "[a] person having an interest in property that has been or may be required for a public use without the procedures of [the eminent domain] article or any prior law followed is entitled to have the person's damages assessed" under Indiana's statutory eminent domain procedure, found at Indiana Code chapter 32-24-1. Cases brought pursuant to Indiana Code § 32-24-1-16 are known as inverse condemnation actions. As we have observed in the past, condemnation proceedings are comprised of two stages: (1) an initial or summary phase, and (2) the phase during which the fact finder determines damages. City of Hammond v. Marina Entm't Complex, Inc., 733 N.E.2d 958, 966 (Ind.Ct.App.2000), trans. denied. "During the initial or summary phase of the proceedings, the action consists solely of legal issues which are decided by the trial court." Id. "During the second stage of the condemnation proceedings the fact finder must determine the amount of damages sustained by the landowner." Id.

The State raises four issues on appeal, pertaining to both the initial phase and the damages phase of the adjudication of Dunn's inverse condemnation complaint. We find one issue dispositive: whether the trial court erred as a matter of law in granting partial summary judgment in favor of Dunn and against the State when the State built a median that forces traffic moving in certain directions to travel a more circuitous route to and from Dunn's business property. We therefore will not reach the remaining issues.

"The standard of review of a summary judgment ruling is the same as that used in the trial court: summary judgment is appropriate only where the evidence shows there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law." Row v. Holt, 864 N.E.2d 1011, 1013 (Ind.2007) (quoting Gunkel v. Renovations, Inc., 822 N.E.2d 150, 152 (Ind.2005)). All inferences are to be drawn in favor of the non-moving party. Id. "The party appealing from the grant of summary judgment has the burden of persuading the appellate tribunal that the trial court erroneously determined that there is no material issue of fact and that the movant was entitled to summary judgment as a matter of law." Ind. State Bd. of Pub. Welfare v. Tioga Pines Living Ctr., Inc., 622 N.E.2d 935, 940 (Ind.1993).

Here, the parties do not quibble about whether material issues of fact were shown by the evidence designated in support of the parties' summary judgment motions. Instead, they disagree about whether Dunn was entitled to summary judgment as a matter of law.⁵ Whether a taking has occurred is a question of law, Biddle v. BAA Indianapolis, LLC, 860 N.E.2d 570, 575 (Ind.2007), and we review questions of law de novo, Bradley v. City of New Castle, 764 N.E.2d 212, 216 (Ind. 2002).

The State contends that Dunn was not entitled to summary judgment as a matter of law because the construction of a median, resulting in a circuitous route of ingress and egress for a property, does not constitute a compensable taking under Indiana eminent domain law. Dunn counters that he is entitled to compensation under Indiana Code § 8-23-8-1⁶ and that Indiana case law "holds that a determination of a `taking' relative to a business owner's loss of access requires a fact-sensitive inquiry to consider whether the State action interferes with the distinct investment-backed expectations of the owner and whether the State action interfered with the present use of the property so as to substantially diminish the value of the property." Appellee's Br. p. 13.

In order to determine whether a taking of property has occurred, we look at whether the plaintiff landowner has shown that he or she "has an interest in land which has been taken for a public use without having been appropriated under eminent domain laws." Jenkins v. Bd. of County Comm'rs of Madison County, 698 N.E.2d 1268, 1270 (Ind.Ct.App.1998) (citing City of Hammond, Lake County v. Drangmeister, 173 Ind.App. 476, 364 N.E.2d 157, 159 (1977)), reh'g denied, trans. denied. The threshold question in determining whether a taking has occurred is whether the plaintiff landowner has a property interest in the property that has been acquired by the State. See Ind.Code § 32-24-1-16 (allowing inverse condemnation suits where a "person ha[s] an interest in property").

"`Property' in its legal sense means a valuable right or interest in something rather than the thing itself, and is the right to possess, use and dispose of that something in such a manner as is not inconsistent with law." State v. Ensley, 240 Ind. 472, ...