State v. Kimco of Evansville, Inc.

• Decision Date: 31 October 2007
• Docket Number: No. 82A01-0607-CV-301.,82A01-0607-CV-301.
• Citation: 881 N.E.2d 987
• Parties: STATE of Indiana, Appellant-Plaintiff, v. KIMCO OF EVANSVILLE, INC., n/k/a KCH Acquisition, Inc., The Franklin Life Insurance Company, and Vanderburgh County, Indiana, Appellees-Defendants.
• Court: Indiana Appellate Court

881 N.E.2d 987

STATE of Indiana, Appellant-Plaintiff, v. KIMCO OF EVANSVILLE, INC., n/k/a KCH Acquisition, Inc., The Franklin Life Insurance Company, and Vanderburgh County, Indiana, Appellees-Defendants.

No. 82A01-0607-CV-301.

Court of Appeals of Indiana.

October 31, 2007.

Rehearing Denied January 14, 2008.

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

Gerard T. Carmody, Kelley F. Farrell, Carmody MacDonald, P.C., St. Louis, MO, R. Thomas Bodkin, Bamberger Forman Oswald & Hahn, Evansville, IN, Attorneys for Appellee, Kimco of Evansville, Inc., n/k/a KCH Acquisition, Inc.

OPINION

BARNES, Judge.

Case Summary

The State appeals the jury's verdict in favor of Kimco, et al., in the amount of $2,300,000.00 for an appropriation of Kimco's real estate in 2000. We affirm.

Issue

The State raises two issues, which we consolidate and restate as whether Kimco is entitled to damages for its loss of access to a public thoroughfare.

Facts

Kimco owns Plaza East Shopping Center ("Plaza East") in Evansville located at the intersection of State Route 66, also known as the Lloyd Expressway, and Green River Road. Green River Road runs north and south, and the Lloyd Expressway runs east and west. Plaza East had no ingress or egress along the Lloyd Expressway.¹

Plaza East's primary entrance was the southern entrance on Green River Road ("Southern Entrance"). The Southern Entrance allowed access to the center of Plaza East's parking lot. The Southern Entrance also allowed shoppers to enter from and exit to both directions on Green River Road.

Plaza East's secondary entrance was the northern entrance on Green River Road ("Northern Entrance"). The Northern Entrance was immediately next to the sidewalk in front of the stores and was narrower than the Southern Entrance. The Northern Entrance allowed "right-in-right out" access for northbound travelers on Green River Road.² Exhibit Y-1.

On June 23, 2000, the State filed a complaint to appropriate .154 acres of Plaza East along Green River Road as part of a construction project aimed at improving access to and from the Lloyd Expressway. To facilitate construction, the State also sought a temporary appropriation of .048 acres, encompassing the Southern Entrance and the Northern Entrance of Plaza East. The complaint also requested to permanently limit the ingress and egress associated with Plaza East. The trial court allowed the State to take the property described in the complaint, but the issue of damages remained unresolved.

When construction was completed in, 2004, shoppers traveling southbound on Green River Road could only enter Plaza East through the Northern Entrance because the State had constructed a concrete median blocking southbound access to the Southern Entrance. Shoppers traveling northbound on Green River Road could access Plaza East via the Southern Entrance only after crossing a solid white line, or they could access Plaza East via the Northern Entrance.

Shoppers exiting Plaza East could only use the Southern Entrance to turn right (or north) onto Green River Road because they could not cross the newly constructed concrete median to turn left (or south). Shoppers could exit Plaza East in either direction from the Northern Entrance. Because of the amount of traffic on Green River Road, however, the Northern Entrance was congested and cars became "stacked" immediately in front of the stores, making it more difficult for pedestrians to navigate the parking lot. For purposes of clarity, we include these depictions of Plaza East and Green River Road before and after the construction. BEFORE:

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Exhibit V.

During and after the construction process the stores located in Plaza East experienced declining sales. Plaza East went from 94% occupied in 2004 to 56% occupied at the time of trial in 2006. In an effort to keep one of the remaining tenants, Kimco renegotiated a lease for approximately $90,000.00 per year less that the previous $150,000.00 per year lease.

Prior to the appropriation, Plaza East was in average condition and functional, and it was considered a Class B community shopping center by one real estate appraiser. After the appropriation, Plaza East was less convenient to shoppers and was considered less desirable in the real estate market. Plaza East was reduced to a Class C community shopping center.

On February 9, 2006, after a four-day trial was held, a jury returned a verdict in favor of Kimco in the amount of $2,300,000.00. The trial court entered judgment on this verdict and awarded Kimco costs and interest, for a total judgment against the State in the amount of $3,196,859.82. On March 13, 2006, the State filed a motion to correct error. After a hearing, the trial court denied the motion to correct error. The State now appeals.

Analysis

This case comes to us after the damages phase of the condemnation proceedings. Condemnation proceedings involve two stages: 1) the initial or summary phase, and 2) the phase in which the finder of fact 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. After a consideration of the legality of the action and any objections that may have been filed, the trial court concludes this phase of the proceedings by entering an order of appropriation and appointing appraisers to assess the damages. Id. During the second stage of the condemnation proceedings the fact finder must determine the amount of damages sustained by the landowner. Id.

It is undisputed that the State took, and Kimco is entitled to damages for, the .154-acre parcel and the temporary construction right of way. The essence of the State's argument, however, is that Kimco cannot be compensated for its loss of access to Green River Road as a matter of law. Accordingly, the State asserts that the trial court improperly admitted evidence of damages associated with the loss of access and improperly instructed the jury regarding loss of access and that the jury's verdict is excessive because it is based on the loss of access.

As an initial matter we must consider the parties' arguments regarding whether a loss of access amounts to a taking is a question of law or a question of fact. For example, Kimco argues, "The determination of the impairment of access issue belongs to the jury, where it was placed by the trial court." Appellees' Br. p. 30. The State responds, "Kimco has presented no authority establishing that access issues are always jury questions merely because there is a pattern jury instruction³ in Indiana relating to access issues.... Whether loss of access is compensable has been treated as a legal question in a number of relevant cases." Appellant's Reply Br. p. 2.

Indeed, Indiana courts have been inconsistent, at best, in considering whether loss of access is a factual or legal question.⁴ Compare State v. Diamond Lanes, Inc., 251 Ind. 520, 524, 242 N.E.2d 632, 634 (1968) ("There was substantial evidence for the jury to find that appellee's access was substantially and materially impaired and to award damages on the basis that the value of appellee's property had been reduced by the new construction."); State v. Stefaniak, 250 Ind. 631, 638, 238 N.E.2d 451, 455 (1968) ("[I]t is our opinion that the question of a compensable taking is a matter for the jury's determination. Each case of this nature must be grounded upon its own particular set of facts."); and Jenkins v. Board of County Comm'rs of Madison County, 698 N.E.2d 1268, 1270 (Ind. Ct.App.1998) ("Whether the interference is substantial is a factual question which must be resolved in each case by the trier of fact."), trans. denied; with State v. Ensley, 240 Ind. 472, 491, 164 N.E.2d 342, 351 (1960) ("Since the verdict of the jury included compensation of the alleged partial impairment of appellees' right of access resulting from the construction of the divider strip and since this was not a proper element of damages, the verdict was contrary to law."). However, our supreme court has recently clarified that whether a taking has occurred is a question of law. Biddle v. BAA Indianapolis, LLC, 860 N.E.2d 570, 575 (Ind.2007).

Biddle addressed whether aircraft noise amounted to a taking of property near the Indianapolis airport. Biddle was framed as an inverse condemnation case in which the landowners appealed the granting of BAA's motion for summary judgment. Our supreme court observed, "Although takings cases may be extremely fact sensitive, the ultimate application of constitutional provisions to an established set of facts involves a pure question of law." Id. at 575. "Once a taking is found, the question of how much compensation to award is then appropriate for a trier of fact." Id.

Based on Biddle's clarification of this issue, we conclude that whether the State took Kimco's access rights is a question of law. The broad language of the State's complaint and the trial court's order of appropriation,⁵ the trial court's ruling on the admissibility of evidence, the trial court's denial of the State's motion for judgment on evidence during trial, and the trial court's instruction of the jury might each be considered a legal conclusion that a taking of Kimco's access rights occurred. Regardless of the procedure, our review is the same because we review questions of law de novo. See Chamberlain v. Walpole, 822 N.E.2d 959, 961 (Ind.2005) ("This presents a question of law that we review de novo."). If a taking was established as a matter of law, it was then for the jury to decide what, if any, damages were compensable.

The central case relied on by both parties is State v. Ensley, 240 Ind. 472, 164 N.E.2d 342 (1960). In that case, the...