State v. JB Enters., Inc., s. 27176

• Decision Date: 07 December 2016
• Docket Number: 27181.,Nos. 27176,s. 27176
• Citation: 889 N.W.2d 131
• Parties: STATE of South Dakota, by and through the DEPARTMENT OF TRANSPORTATION and the South Dakota Transportation Commission, Plaintiffs and Appellees, v. JB ENTERPRISES, INC., Defendant and Appellant.
• Court: South Dakota Supreme Court

889 N.W.2d 131

STATE of South Dakota, by and through the DEPARTMENT OF TRANSPORTATION and the South Dakota Transportation Commission, Plaintiffs and Appellees,

v.JB ENTERPRISES, INC., Defendant and Appellant.

Nos. 27176

27181.

Supreme Court of South Dakota.

Dec. 7, 2016.

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

Mark V. Meierhenry, Clint Sargent, Christopher Healy of Meierhenry Sargent, LLP, Sioux Falls, South Dakota, Attorneys for defendant and appellant.

KERN, Justice, and GILBERTSON, Chief Justice

[¶ 1.] Justice Kern delivers the opinion of the Court on Issue One (raised by the State on notice of review) and Issue Two. Chief Justice Gilbertson delivers the opinion of the Court on Issue Three.

[¶ 2.] KERN, Justice, writing for the Court on Issue One and Issue Two.

[¶ 3.] The State reconstructed the interchange at Interstate 90 and Highway 115 (Cliff Avenue) in Sioux Falls. Prior to initiating the public improvement, the State instituted a quick-take condemnation action under SDCL chapter 31–19 against the landowner, JB Enterprises, Inc. (JBE), contesting JBE's "control of access" to its property. JBE's property is located on a corner lot abutting Cliff Avenue and 63rd Street. The State ultimately changed the public improvement and left intact JBE's curb cut along Cliff Avenue. The State closed the intersection of 63rd Street and Cliff Avenue and constructed a median in Cliff Avenue and a right-turn lane in an existing right of way. JBE requested a jury trial on damages. The State moved for summary judgment, asserting that no compensable taking occurred because the State did not physically take any of JBE's property and did not eliminate JBE's direct access to Cliff Avenue. After a hearing, the circuit court granted the State summary judgment. It found no material fact in dispute and ruled that the State's public improvement did not result in a compensable taking or damaging of JBE's private property. JBE appeals. We reverse and remand for a trial on damages.

BACKGROUND

[¶ 4.] In 2012, the State planned to reconstruct part of the South Dakota state trunk highway system pursuant to a federal aid project. Particular to this appeal is the State's reconstruction of the interchange between Interstate 90 and Cliff Avenue in Sioux Falls, South Dakota. Near this interchange is a Perkins Restaurant, located on Lot 19, owned and operated by JBE. JBE also owns the western 115.5 feet of Lot 18. Kelly Inns Ltd. previously owned the remaining land in Lot 18. The State purchased this land from Kelly Inns for this public improvement. Lot 19 is located on a corner lot. The western border of Lot 19 abuts a highway—Cliff Avenue. The northern border of Lot 19 abuts a gravel road—63rd Street. Lot 18 abuts 63rd Street. Cliff Avenue and 63rd Street intersect at the corner of Lot 19 (the Intersection). Ingress to and egress from Lots 19 and 18 (the Property) existed via a curb cut along Cliff Avenue to the Property's frontage and an entrance along 63rd Street to the Property's rear parking lot.

[¶ 5.] To accomplish its public improvement, the South Dakota Transportation Commission adopted resolutions on April 10 and 26, 2012. The first resolution declared it necessary for the Department of Transportation (DOT) to condemn:

Description of the control of access of that portion of Project No. IM 0909(80)397 which lies within Lot 19, except the West 42 feet of said Lot 19, of North Side Gardens, in the SW1/4 of Section 27, Township 102 North, Range 49 West of the 5th P.M., Minnehaha County, South Dakota.

The resolution also declared it necessary to "obtain said slope easement by condemnation, which said slope easement shall be a temporary construction easement." An amended resolution added that the State deemed it necessary to take:

Description of the control of access of that portion of Project No. IM 0909(80)397 which lies within the West 115.5 feet of Lot 18 and all of Lot 19, except the West 42 feet of said Lot 19, of North Side Gardens in the SW1/2 SW1/4 of Section 27, Township 102 North, Range 49 West of the 5th P.M., Minnehaha County, South Dakota.

[¶ 6.] After adopting the resolutions, the State instituted a quick-take condemnation action against JBE under SDCL chapter 31–19. On May 2, 2012, the State filed a summons, petition, and declaration of taking pursuant to SDCL 31–19–3 and SDCL 31–19–23. The petition indicated that the Transportation Commission, by resolution, deemed it necessary to acquire all land needed "as is more fully shown by the Resolution of said Commission" adopted on April 10, 2012, and the Resolution adopted on April 26, 2012. The petition further requested that a "judgment be rendered against [JBE] condemning the land described in this said Petition for right of way, control of access, and temporary easement" and "[t]hat a jury be called and impaneled to try the issue and determine the amount of just compensation and damages that [JBE is] entitled to receive by reason of such taking and damaging."

[¶ 7.] In accordance with SDCL 31–19–23, the declaration of taking included: (1) the DOT's authority to take the Property, (2) the description of the lands taken, (3) a statement of the interest in the lands taken and the name of the owner, (4) a statement of the sum of money the State estimated would be just compensation for the land taken and damaged, (5) a statement that there existed no prior written memoranda or agreements and that the right of way plans were contained in an exhibit, and (6) a detailed appraisal. Based on an appraisal assessing JBE's loss caused by the public improvement, the State deposited $1,120,580 cash with the Minnehaha County Clerk of Courts.

[¶ 8.] On May 15, 2012, JBE moved the circuit court to release the court deposit and requested that the court set a hearing on the motion for May 30, 2012. The court did not hold a hearing because counsel for JBE informed the court that the State and the federal highway authorities were "discussing changes that may affect the scope of the taking in this case." On June 12, 2012, JBE filed a "Waiver of Right to Contest Taking" under SDCL 21–35–10.1. Although JBE did not contest the taking, it continued to negotiate with the State in an effort to change the public improvement plan so that JBE would retain the ability to access the Property via Cliff Avenue. The State informed counsel that federal authorities "seemed willing to consider forgoing the need to acquire control of access across the Perkins property and allow the current entrance to remain in place. There is a very real chance that we won't need any easements or access rights at all from your clients." In response, counsel for JBE wrote, "It will reduce the damage to the property but by how much remains to be seen. We will wait another week and then expect to waive the hearing and begin the case." On June 19, 2012, the State informed counsel that federal authorities approved the proposed plan changes. Counsel for JBE acknowledged that the taking of the Property would be reduced, but stated, "I doubt that the damage to my client's property is eliminated[;] perhaps in gravity but not entirely."

[¶ 9.] On July 17, 2012, the State sent JBE the revised plans and noted that the State would not take "any easement or access rights across the Property's frontage" along Cliff Avenue. The State also drafted a stipulation and order of dismissal of the condemnation action. The State alleged that the "DOT is no longer affecting the access point or taking a temporary easement." In regard to the closing of the Intersection, the State remarked, "[Y]ou appear to be making that claim in the separate case involving the vacant Miller and Walsh parcels that abut the I–90 ramp. Continuing the separate Perkins case appears to be a redundancy." JBE declined to stipulate for a dismissal. It proceeded with discovery related to the loss JBE believed it suffered by the State's taking.

[¶ 10.] On November 30, 2012, the State moved to amend its petition to include the revised construction plans. The State requested a ruling on "whether construction of the project in accordance with the revised plans will affect a compensable taking or damaging of [JBE's] property." In December 2012, the State again revised the construction plans. It submitted an amended motion for leave to file an amended petition. At a hearing on the State's motion in February 2013, JBE did not object to the State's amended petition. The court entered an order allowing the State to amend its condemnation petition.

[¶ 11.] During the 2013 construction season, the State substantially completed the public improvement. The State did not use a temporary easement on the Property and did not extinguish the Property's access to Lot 19 via Cliff Avenue or Lot 18 via 63rd Street. The State did, however, close the Intersection. The State also constructed a median in Cliff Avenue (which prevents left turns along Cliff Avenue into the Property) and expanded a right-turn lane in the State's existing right of way abutting the Property's frontage.

[¶ 12.] In February 2014, JBE filed a motion with the circuit court to declare the date of taking relating to the State's "taking of all access" to the Property. JBE alleged that because of the quick-take procedure, the State owns JBE's right to "control of access" to the Property. In response, the State moved for summary judgment, explaining its view of the impact of the public improvement upon JBE. Specifically, the State noted that before and after the public improvement, JBE had one curb cut along the Cliff Avenue frontage and an access approach along 63rd Street. It also noted that the construction of the median in Cliff Avenue prevents left turns into or out of JBE's property at its curb cut. The State further indicated that it "constructed a right turn lane in an existing 42–foot–wide right-of-way abutting the...