Unger v. Indiana & Michigan Elec. Co.

Decision Date19 May 1981
Docket NumberNo. 1-380A63,1-380A63
Citation420 N.E.2d 1250
PartiesRuby M. UNGER, Howard Morris Unger, Wayne Lewellyn Unger, Defendants- Appellants, v. INDIANA & MICHIGAN ELECTRIC COMPANY, an Indiana Corporation, Plaintiff- Appellee.
CourtIndiana Appellate Court

Max E. Goodwin, Mann, Chaney, Johnson, Hicks & Goodwin, Terre Haute, Jesse H. Bedwell, Sullivan, for defendants-appellants.

Thomas W. Yoder, Livingston, Dildine, Haynie & Yoder, Fort Wayne, for plaintiff-appellee.

STATEMENT OF THE CASE

NEAL, Presiding Judge.

Ruby M. Unger, Howard Morris Unger, and Wayne Lewellyn Unger (the landowners) appeal an interlocutory order of the Sullivan Circuit Court overruling their objections to a complaint in condemnation filed by Indiana & Michigan Electric Company, an Indiana Corporation (I & M), and appointing appraisers.

We reverse.

STATEMENT OF THE FACTS

The undisputed evidence discloses that on October 19, 1978, in the course of securing rights of way for I & M's proposed Rockport-Breed 765 KV line, Loren Shaleen, an I & M agent, offered Ruby Unger $2,320 for an easement across the landowners' property. The amount of the offer was determined by reference to a standard schedule maintained by I & M. Shaleen testified on direct examination as follows:

"Q. Okay, what was the amount of the offer?

A. The offer was for approximately fourteen hundred and twenty feet at minimum, at a dollar a lineal foot as we crossed, which would have been fourteen hundred and twenty dollars. In addition to that there'd be one tower location on the south part of the property. That would be another additional nine hundred dollars payment.

Q. So what was the total amount that you offered?

A. Twenty three hundred and twenty dollars."

On cross examination Shaleen testified:

"Q. And was it you who determined the amount of the offer?

A. Ah, not directly it wasn't myself. It's on a scheduled payment.

Q. And that's your schedule of a dollar a foot and nine hundred dollars per tower.

A. Yes.

Q. And are you an appraiser?

A. Ah, I'm a right of way agent in the field qualified to recognize property.

Q. Your offer did not take into account anything about the property other than that it was some type of cultivated land, did it?

A. Our offer was for an easement, the one structure.

Q. Well, you didn't go out and make an appraisal of the Unger property yourself?

A. I viewed the property. 1

Q. Sir, could you answer the question? Did you go out and make an appraisal of the Unger property?

A. No, I didn't." (Footnote added.)

The following month Shaleen again offered Ruby Unger $2,320 for the easement. She refused the offer but indicated she would be willing to sell the property outright; she suggested the land was worth $4,000 per acre.

Richard Fohrer, a senior right of way agent for I & M testified that in December of 1978 he offered Ruby Unger $3,782 for an easement across the property. The amount of the offer was determined from a new standard schedule which was to take effect in the very near future. The schedule provided for the payment of $1.25 per lineal foot and $2,000 per tower. 2 Ruby rejected this offer. Fohrer than tendered the uniform offer in accordance with Ind.Code 32-11-1-2.1; I & M offered $5,000 for the easement. The figure was larger because approximately $1,200 was added for potential damages during the construction of the line. 3 The uniform offer was not accepted. 4

Fohrer testified he is not an appraiser and he did not obtain an appraisal of the Unger property. He stated he had done nothing to determine the value of the landowners' property, in particular; the offer was standard for cultivated land from Rockport to Breed. He further testified, however, he was aware land values in Sullivan and Knox counties had increased 300 per cent over the past ten years.

On direct examination Shaleen was asked what kind of acceptance offers based on the schedule had received in this community or area. The landowners objected on the ground of irrelevance, asserting the degree of acceptance of offers made under threat of condemnation would not indicate fair market value. The court sustained the objection. However, on cross-examination of senior agent Fohrer, the landowners posed the following questions:

"Q. On what did you base your opinion (strike that). Your offer states that in your opinion you have a fair market value.

A. Yes, sir.

Q. How did you go about determining the fair market value of the easement and any damage to the remains?

A. The value placed on this property was an accepted value by others along the route or the line.

Q. In other words what you thought you'd had in the past or would able A. Yes.

would be able to now buy it for under threat of condemnation, is that true?

Q. You made no comparisons of actual fair market sales between willing buyers and willing sellers without the threat of condemnation, did you?

A. No, we did not."

On redirect examination Fohrer was asked the degree of acceptance offers based on the schedule had received. The landowners again objected to the admission of such evidence as irrelevant. The court overruled the objection and Fohrer answered that in Sullivan county over ninety per cent of such offers had been accepted.

ISSUES

The landowners state the issues as follows:

I. "Whether the 1977 amendments to the 1905 Eminent Domain Act, I.C. 32-11-1-2.1, require a condemnor to make a pre-condemnation offer based on an opinion of fair market value;"

II. "Whether, under Indiana case law, a pre-condemnation offer was sufficient, where the condemnor made no effort to base its offer on the value or quality of the particular property involved;"

III. "Whether the trial court improperly admitted and considered, on the issue of whether I & M made a sufficient pre-condemnation offer, evidence of a high degree of acceptance of similar offers by other landowners in the area;"

IV. "Whether the complaint improperly sought, and the trial court improperly ordered condemned, a right of way which does not sufficiently specify the width of the strip of land which is subject to passage, use and control by I & M;"

V. "Whether the complaint improperly sought, and the trial court improperly ordered condemned, a virtually unlimited right of ingress and egress across Ungers' 80-acre parcel, where the proposed transmission line right of way across that property is readily accessible from a public road without going upon the remainder of the Unger property or the property of any other person;"

VI. "Whether adherence to the route across the Unger property while altering the route elsewhere in the vicinity so that it is no longer straight or direct, constitutes an abuse of I & M's discretion, where no meaningful study of or comparison with alternate routes through Sullivan County has been done."

Our disposition of the first three issues, involving the good faith effort to purchase, obviates a consideration of those remaining.

DISCUSSION AND DECISION

I & M exercises the power of eminent domain under Ind. Code 32-11-3-1:

"Any corporation organized under the law of the state of Indiana, authorized by its articles of incorporation to furnish, supply, transmit, transport or distribute electrical energy ... to the public or to any town or city ... is hereby authorized and empowered to take, acquire condemn and appropriate land, real estate or any interest therein, for carrying out such purposes and objects together with all accommodations, rights and privileges deemed necessary to accomplish the use for which the property is taken...."

Ind. Code 32-11-3-2 provides:

"The condemnor may take, acquire, condemn and appropriate a fee simple estate, title and interest in such quantity or amount of land as it deems necessary for its proper uses and purposes, except that for rights-of-way, the condemnor shall take, acquire, condemn and appropriate an easement."

Ind. Code 32-11-3-3 requires the appropriation and condemnation of lands and easements be accomplished pursuant to the terms and conditions of, and in accordance with the procedures set forth in, the 1905 eminent domain act and all amendatory acts thereof, that being Ind. Code 32-11-1-1 et seq.

As a condition precedent to the right to maintain an action in condemnation, Ind. Code 32-11-1-1, 5 Ind. Code 32-11-1-2, 6 and Ind. Code 32-11-1-2.1 7 require the condemnor to attempt to negotiate a purchase of the land or interest it deems necessary to the accomplishment of its public purpose. Morrison v. Indianapolis & W. Rwy. Co., (1906) 166 Ind. 511, 76 N.E. 961; Slider v. Indianapolis & L. Traction Co., (1908) 42 Ind.App. 304, 85 N.E. 372. A good faith effort to purchase entails an offer of a reasonable amount, i. e. a reasonable offer, and a reasonable effort to induce the owner to accept it, i. e. good faith negotiation. 8 Wampler v. Trustees of Indiana University, (1961) 241 Ind. 449, 172 N.E.2d 67.

The case at bar is an interlocutory appeal from the trial court's denial of objections to the action in condemnation. The critical issue is whether the trial court erred in concluding I & M made a good faith effort to purchase. On appeal the landowners argue:

"Prior to enactment of I.C. 32-11-1-2.1, the condemnor was required to make only a fair and reasonable offer 'based upon a reasonable value of the property albeit not necessarily the fair market value....' Chambers v. Public Service Company of Indiana, (1976) 265 Ind. 336, 341, 355 N.E.2d 781. By enacting I.C. 32-11-1-2.1 the legislature obviously intended to set uniform standard for pre-condemnation offers, and the required uniform offer language leaves no doubt that the legislature intended to require the condemnor to form an opinion of the fair market value of the easement sought, and to tender an offer based on that opinion before filing suit." (Emphasis added.) 9

The landowners assert the evidence in the record clearly and indisputably shows I & M...

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