Opinion ID: 2633901
Heading Depth: 1
Heading Rank: 3

Heading: analysis

Text: The State of Kansas has an inherent power of eminent domain which the legislature may delegate to any public authority to exercise as directed. Young Partners v. U.S.D. No. 214, 284 Kan. 397, 404-05, 160 P.3d 830 (2007). The legislature has delegated the power of eminent domain to Rural Telephone as a telephone corporation by virtue of K.S.A. 17-618. K.S.A.2007 Supp. 26-504 provides the procedure for an eminent domain action: If the judge to whom the proceeding has been assigned finds from the petition: (1) The plaintiff has the power of eminent domain; and (2) the taking is necessary to the lawful corporate purposes of the plaintiff, the judge shall . . . enter an order appointing three disinterested residents of the county . . . to view and appraise the value of the lots and parcels of land found to be necessary, and to determine the damages and compensation to the interested parties resulting from the taking. The granting of an order determining that the plaintiff has the power of eminent domain and that the taking is necessary to the lawful corporate purposes of the plaintiff is not a final, appealable order. K.S.A. 2007 Supp. 26-504. The condemnee has no right to litigate outside issues in eminent domain proceedings. Miller v. Bartle, 283 Kan. 108, 116-17, 150 P.3d 1282 (2007). The right to exercise the power of eminent domain and to determine other issues such as the necessity and the extent of the taking may only be litigated in a separate civil action, usually in an action for injunction. 283 Kan. at 117, 150 P.3d 1282. Schuck properly filed an independent injunction action challenging the necessity of Rural Telephone's taking. He initially argues on appeal that the taking approved by the district court is unnecessary. He maintains that the proposed taking is merely a convenience as opposed to a necessity, because Rural Telephone admits the negotiated easement would have met its needs. He further contends the trial court erred in finding that he failed to meet his burden of proof that Rural Telephone acted fraudulently, in bad faith, or abused its discretion. Schuck asserts that the district court's negative finding is a product of arbitrary disregard of undisputed evidence. In Concerned Citizens, United, Inc. v. Kansas Power & Light Co., 215 Kan. 218, 229, 523 P.2d 755 (1974), this court held that a Kansas public utility possessing the power of eminent domain is vested with reasonable discretion to determine the necessity for the taking of land for its lawful corporate purposes. The public utility's discretion will not be disturbed on judicial review unless fraud, bad faith, or an abuse of discretion is shown. 215 Kan. at 229, 523 P.2d 755; see also Steele v. Missouri Pacific R.R. Co., 232 Kan. 855, 861, 659 P.2d 217 (1983) (party seeking injunction has burden of proving fraud, bad faith, or abuse of discretion when challenging railroad's determination that taking of land was necessary). Schuck contends Rural Telephone's action of burying the cable outside the easement amounted to constructive fraud. He argues that, as a farmer, he could not reasonably monitor Rural Telephone's placement of the cable and he had a right to trust Rural Telephone and to rely upon its honesty and integrity to place the cable within the easement it negotiated with him. He further asserts that the fact that Rural Telephone did not lay the cable within the easement and then filed a petition for eminent domain is prima facie evidence of bad faith. Schuck then asserts Rural Telephone had no discretion that it could legitimately exercisethe cable was to be buried within the easement and the fact that Rural Telephone buried the cable outside the easement must constitute an abuse of discretion, whether the cable's location resulted from a mistake or a decision to ignore the negotiated easement. Constructive fraud is `a breach of a legal or equitable duty which, irrespective of moral guilt, the law declares fraudulent because of its tendency to deceive others or violate a confidence, and neither actual dishonesty [n]or purpose or intent to deceive is necessary.' Garrett v. Read, 278 Kan. 662, 674, 102 P.3d 436 (2004). Two additional elements must also be proven in order to establish constructive fraud: (1) a confidential relationship, and (2) a betrayal of this confidence or a breach of a duty imposed by the relationship. 278 Kan. at 674, 102 P.3d 436. The party must also conceal facts that the party has a legal or equitable duty to communicate, with respect to which the party could not be innocently silent. Moore v. State Bank of Burden, 240 Kan. 382, 389, 729 P.2d 1205 (1986), cert. denied 482 U.S. 906, 107 S.Ct. 2484, 96 L.Ed.2d 376 (1987). Schuck has offered no evidence that Rural Telephone concealed facts. He acknowledged that the location of the cable was visible to the unaided eye. Ron Ellis testified that Rural Telephone's engineering department and construction crew buried the cable without knowledge of Schuck's easement. Ellis further testified that Rural Telephone was not aware of its mistake until Schuck contacted the company in early 2006. Shuck has likewise failed to show that Rural Telephone acted in bad faith or that its actions amounted to an abuse of discretion. Filing a petition for eminent domain does not demonstrate bad faith; rather, it demonstrates an attempt to resolve the problem through the courts after settlement negotiations failed. Having made what appears to have been a good-faith mistake, Rural Telephone then had to make a choice as to how it would cure that mistake. Rural Telephone's evidence that the taking was necessary to fulfill its public purpose of providing quality telecommunication service to its customers sufficed to show that it did not abuse its discretion. The legislature has vested Rural Telephone with the discretion to determine the necessity for the taking of land for its public purposes. Upon receiving notification 3 years after the fact that it did not bury the cable within the negotiated easement, Rural Telephone determined it was necessary for its lawful corporate purpose of providing telecommunication service to the public to take an easement on Schuck's property in order to keep its cable in place. Although it may not originally have been necessary for the cable to be placed at its present location, Rural Telephone provided sufficient evidence to support its claim that it is now necessary for the cable to stay in its present location. Schuck has failed to prove that this exercise of discretion amounted to fraud, bad faith, or an abuse of discretion on Rural Telephone's part. Schuck has also failed to establish the prerequisites for injunctive relief. See Steffes v. City of Lawrence, 284 Kan. at 394-95, 160 P.3d 843. He did not establish a reasonable probability of irreparable injury or a substantial likelihood that he would prevail on the merits. He testified at trial that he no longer knows where he can dig on his land and he has to engage a specialized cable locator before he can dig. He also testified, however, that the location of the cable was visible to the unaided eye. It further appears that Schuck has the staking sheets and can easily ascertain the cable's location. His argument that he will suffer irreparable harm without the injunction because he and all other landowners will lose their bargaining power with utility companies and be deprived of due process overlooks the fact-specific analysis in eminent domain cases. Schuck fails to demonstrate the other factors necessary for injunctive relief. His testimony that $40,000 in damages, although not related to any specific economic loss, would have adequately compensated him constituted an admission an adequate remedy was available at law. He has not established that his injury putatively arising from not knowing where he can dig on his land outweighs the damages Rural Telephone will suffer by moving its cable. He likewise has not contradicted Rural Telephone's evidence that moving the cable will be detrimental to the public. In light of Ellis' testimony regarding the degradation to the equipment and service and the disruption of service to 11 communities that would result from moving the cable, we find the district court did not abuse its discretion in finding Rural Telephone's taking of the easement was necessary to Rural Telephone's lawful public purpose. Schuck has not shown that the district court arbitrarily disregarded undisputed evidence or that its decision was based on bias, passion, or prejudice. Our holding here is limited to the facts of this case; we do not condone Rural Telephone's failure to conform with the easement which it freely negotiated. Under the facts presented here, however, the district court's determination that Rural Telephone has the power of eminent domain and that the taking was necessary to its lawful corporate purposes is sound. Schuck also argues Rural Telephone has essentially filed an impermissible inverse condemnation action and that Rural Telephone failed to comply with K.S.A.2007 Supp. 26-501 through K.S.A. 26-516. An inverse condemnation proceeding is initiated by the party having a property interest and is available when private property has been taken for public use without the initiation of formal condemnation proceedings by the governmental taker. See Kau Kau Take Home No. 1 v. City of Wichita, 281 Kan. 1185, 1189, 135 P.3d 1221 (2006), cert. denied ___ U.S. ___, 127 S.Ct. 1495, 167 L.Ed.2d 229, (2007). Rural Telephone could not initiate an inverse condemnation action, because it was not the interest-holder in the property. Rural Telephone laid its cable on Schuck's land outside the negotiated easement. The undisputed evidence presented at trial showed that the location of the cable was not intended as a taking but was a good-faith mistake. See Sester v. Belvue Drainage District, 162 Kan. 1, 6, 173 P.2d 619 (1946) (intentional taking of land in exercise of government power is an element of eminent domain). After Schuck pointed the mistake out to Rural Telephone, it initiated a proceeding to take an easement where it had laid the cable. The taking then became intentional, and Rural Telephone followed proper statutory procedures for exercising eminent domain. As required by K.S.A.2007 Supp. 26-501(b), Rural Telephone brought the eminent domain action by filing a verified petition in the district court of the county in which Schuck's land is located. The petition contains the elements required by K.S.A. 26-502. Schuck has not shown that Rural Telephone did not comply with the notice requirements contained in K.S.A. 26-503. As required by K.S.A.2007 Supp. 26-504, the district court found that (1) Rural Telephone had the power of eminent domain, and (2) the taking was necessary to the lawful corporate purposes of Rural Telephone. The court therefore appropriately ordered that three disinterested appraisers be appointed to appraise the subject property and determine the damages for the taking. K.S.A. 2007 Supp. 26-504. The district court complied with the requirements of the Eminent Domain Procedure Act. We hold the district court did not abuse its discretion and did not misstate the law in denying Schuck's request for injunctive relief. Affirmed.