Court Opinion

ID: 9897244
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:09:10.443749+00
Date Added: 2024-06-11T09:15:41.553932
License: Public Domain

FILED
                                                                              Oct 30 2023, 9:10 am

                                                                                  CLERK
                                                                              Indiana Supreme Court
                                                                                 Court of Appeals
                                                                                   and Tax Court

ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEES
Bryan H. Babb                                              BARHAM INVESTMENTS, LLC &
Jonathan W. Hughes                                         COAST TO COAST CARMEL
Bradley M. Dick                                            CORP.
Bose McKinney & Evans LLP
Indianapolis, Indiana                                      Alice M. Morical
                                                           Riley H. Floyd
                                                           Janet Lynn Thompson
                                                           Hoover Hull Turner LLP
                                                           Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

City of Carmel,                                            October 30, 2023
Appellant-Defendant,                                       Court of Appeals Case No.
                                                           22A-PL-2399
        v.                                                 Appeal from the Marion Circuit
                                                           Court
Barham Investments, LLC,                                   The Honorable Stephen R.
Marion County Treasurer, and                               Creason, Magistrate
Coast to Coast Carmel                                      Trial Court Cause No.
Corporation,                                               49C01-1712-PL-46760
Appellee-Plaintiff.

                                 Opinion by Judge Bradford
                               Judges May and Mathias concur.

Bradford, Judge.

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023                            Page 1 of 12
      Case Summary
[1]   The City of Carmel used its power of eminent domain to convert the

      intersection of Keystone Avenue and 96th Street into a roundabout interchange

      (“the Project”). Barham Investments, LLC (“Barham”), owns a car dealership,

      whose main entrance was on Threel Road, near the intersection that Carmel

      needed to acquire to complete the Project. In April of 2018, the trial court

      entered an agreed order of appropriation and appointment of appraisers (“the

      Agreed Order”). Barham considered the appraisers’ valuation of the Property

      to be too low because the taking allegedly extinguished its easement in Threel

      Road.

[2]   In January of 2021, Carmel moved for partial summary judgment arguing that

      Barham was not entitled to compensation for its loss of access to Threel Road,

      which motion the trial court denied. In May of 2022, after a jury trial, the jury

      awarded Barham $2.4 million in damages. Carmel moved to correct error, for

      new trial, or for remittitur. The trial court denied Carmel’s motions and

      Carmel appealed, raising multiple issues, including whether the trial court had

      erred in denying its partial-summary-judgment motion. Because we find that

      issue dispositive, and because Barham did not have a cognizable interest in

      Threel Road at the time, we reverse and remand with instructions to grant

      Carmel partial summary judgment on this issue.1

      1
          Due to our disposition of partial-summary-judgment issue, we need not reach the remaining issues.

      Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023                             Page 2 of 12
      Facts and Procedural History
[3]   In December of 2017, Carmel exercised its eminent-domain power to construct

      the Project. In doing so, Carmel filed a condemnation complaint in which it

      claimed that it needed to acquire three separate property interests from Barham,

      including 0.017 acres in fee simple, an access-control line, and 0.0111 acres in a

      temporary right-of-way for construction (“the Property”). Barham objected to

      Carmel’s complaint, claiming that Carmel had “failed to properly identify all of

      the ownership interests being extinguished by the taking. Namely, the

      easement rights of the landowner to access and use Threel Road.” Appellant’s

      App. Vol. II p. 97. Barham’s car dealership consisted of a four-story, glass-

      enclosed car showcase and a guest-entry area positioned towards the

      dealership’s main entrance on Threel Road, which had run alongside Keystone

      Avenue. However, Carmel had already condemned Threel Road in a separate

      cause: Carmel v. County Line Owners Association, Inc., Case No. 49D02-1801-PL-

      003953 (“the County Line Action”). So, Carmel did not name Threel Road in its

      condemnation complaint or seek to acquire it.

[4]   In April of 2018, the trial court denied Barham’s objection and the parties

      entered into the Agreed Order, which authorized Carmel’s acquisition of the

      Property. Barham consented to the “Appropriation of Real Estate as sought in

      the Complaint.” Appellant’s App. Vol. II p. 104. In the Agreed Order, the trial

      court ordered that the taking consisted of “frontage along Threel Road” and

      that the access-control line “will be the new west property line of the subject,

      and the intent is to limit any access to the west of this line towards Keystone.”

      Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023      Page 3 of 12
      Appellant’s App. Vol. II pp. 104–05. The Agreed Order did not include any

      acquisition of Threel Road.

[5]   Later that month, the trial court instructed the three court-appointed appraisers

      to appraise the Property described in Carmel’s complaint. In June of 2018, the

      appraisers assessed the total just compensation due to Barham to be

      $163,000.00. Barham disputed the appraisers’ valuation, alleging that the “total

      damages assessed to [Barham] are too low[,]” and requested a jury trial.

      Appellant’s App. Vol. II p. 124.

[6]   In January of 2021, Carmel moved for partial summary judgment, arguing that

      Barham was not entitled to compensation for its loss of access to Threel Road.

      In its motion, Carmel relied on the County Line Action, which, in part, had

      granted Carmel “the total acquisition of Threel Road” in April of 2018.

      Appellant’s App. Vol. IV p. 16. In March of 2022, the trial court denied

      Carmel’s motion for partial summary judgment, finding that “there are genuine

      issues of material facts that remain unresolved.” Appellant’s App. Vol. IV p.

      108. In doing so, trial court explained that Carmel “cite[d] no law that

      definitively foreclose[d] [Barham]’s arguments for compensation for the

      elimination of the ingress and egress easements or the diminution of value that

      the loss ha[d] caused to the value of their properties.” Appellant’s App. Vol. IV

      p. 110.

[7]   The trial court conducted a jury trial from May 24 to May 26, 2022, at the

      conclusion of which the jury awarded Barham $2.4 million in damages.

      Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023       Page 4 of 12
      Carmel moved to correct error, for new trial, or for remittitur, and moved to

      strike and correct the judgment concerning interest. The trial court agreed with

      Carmel’s position on interest; however, it denied Carmel’s motions to correct

      error and for new trial or remittitur.

      Discussion and Decision
      A.        Standard of Review
[8]   Carmel sought partial summary judgment claiming that Barham was not

      entitled to compensation “as a result of the loss of access to Threel Road.”

      Appellant’s App. Vol. II p. 142. “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). All inferences should be

      drawn in favor of the non-moving party. Id.

[9]   In denying Carmel’s motion, the trial court concluded that Carmel had “cite[d]

      no law that definitively foreclose[d] [Barham]’s arguments for compensation for

      the elimination of the ingress and egress easements or the diminution of value

      that the loss has caused to their properties.” Appellant’s App. Vol. II p. 110.

      “We review the trial court’s grant or denial of summary judgment de novo.”

      Coutar Remainder I, LLC v. State, 91 N.E.3d 610, 614 (Ind. Ct. App. 2017), trans.

      denied.

      Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023     Page 5 of 12
       B. Whether the Closing of Access to Threel Road
       Constitutes a Compensable Taking
[10]   Whether a taking has occurred is a question of law, Biddle v. BAA Indianapolis,

       LLC, 860 N.E.2d 570, 575 (Ind. 2007), which we review de novo. Bradley v. City

       of New Castle, 764 N.E.2d 212, 216 (Ind. 2002). When considering whether a

       taking has occurred, the threshold question is “whether the plaintiff landowner

       has a property interest in the property that has been acquired by the State.”

       State v. Dunn, 888 N.E.2d 858, 862 (Ind. Ct. App. 2008), trans. denied; see

       also Ind. Code § 32-24-1-16 (allowing inverse condemnation suits where a

       “person ha[s] an interest in property”). In the context of property owners

       abutting public roads, two principles are well-settled: “First, the right of an

       abutting landowner to ingress and egress over the public roads is a cognizable

       property right, and substantial or material interference with this right by the

       [S]tate is a compensable taking (‘the ingress-egress rule’). […] Second, by

       contrast, an abutting landowner has no cognizable property right in the free

       flow of traffic past his property (‘the traffic-flow rule’).” AAA Fed. Credit Union

       v. Ind. Dep’t of Transp., 79 N.E.3d 401, 405 (Ind. Ct. App. 2017), trans. denied.

[11]   Carmel argues that it “did not in this case acquire Threel Road or an easement

       in Threel Road”; consequently, this case should be controlled by the traffic-flow

       rule and the trial court erred in leaving the question of whether there had been

       the loss of an easement for the jury. Appellant’s Br. p. 26. For its part, Barham

       argues that the trial court properly denied Carmel’s motion for summary

       judgment because this case involves an easement and a substantial change in

       Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023       Page 6 of 12
       how the Property is used. We agree with Carmel that it did not acquire

       Barham’s easement in this case and, even if it had, Barham’s easement granted

       it only a right to ingress and egress over Threel Road—not to a curb cut on

       Threel Road—and the interference is neither substantial nor material.

[12]   Barham claims that Carmel owed it compensation for the taking of its ingress

       and egress easement in Threel Road. At some point, Barham acquired a

               common Non-Exclusive Easement over, across and under the
               Easement Property [(i.e., Threel Road)] for pedestrian and
               vehicular traffic, sewer lines, water lines, fire protection lines and
               other utilities. The purpose of such easement is to provide the
               owners, lessees and occupants of such property within County
               Line Commercial Park ingress and egress to such property, and
               to provide the means for the owners of property within County
               Line Commercial Park to service their property with water
               mains, sanitary sewer mains, and fire protection water lines.

       Appellant’s App. Vol. V p. 67 (emphasis added). The Agreed Order

       appropriated a “fee simple area that is a triangular strip of land off of the

       northwest side of the lot, adjacent to Threel Road” and a “temporary right of

       way of 0.111 acres at the southwest corner of the site to remove the drive

       entrance and complete drainage work.” Appellant’s App. Vol. II pp. 104–05

       (emphasis added). Noticeably absent from that acquisition is Barham’s alleged

       interest in Threel Road itself, in which Barham claimed to have maintained its

       ingress and egress easement.

[13]   In general, “[e]asements are limited to the purpose for which they are

       created[,]” Whitt v. Ferris, 596 N.E.2d 230, 233 (Ind. Ct. App. 1992), and

       Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023         Page 7 of 12
       convey no other rights beyond those necessary for the enjoyment of the

       easement. Wendy’s of Ft. Wayne, Inc. v. Fagan, 644 N.E.2d 159, 162 (Ind. Ct.

       App. 1994). Based on the language of Barham’s deeded easement, at some

       point, Barham had ingress and egress rights in Threel Road, not to any specific

       curb-cut onto Threel Road or in the Property that Carmel sought to acquire.

[14]   In Coutar, the property owner had deeded to the State a portion of real estate

       that specifically reserved to the property owner “an opening of 77.59 feet in the

       State’s access control line to State Road 37[,]” a covenant which ran with the

       land. 91 N.E.3d at 612. The parties devoted much briefing to whether this was

       an ingress-and-egress case or a traffic-flow case; however, we concluded that the

       case was “unique and unprecedented on its established set of facts […] in that,

       unlike any of the cases relied on by the parties, here the property owner’s deed

       expressly provide[d] for the right of access that [was] being taken.” Id. at 615

       (internal citations and quotations omitted). The State attempted to close that

       opening in its condemnation action, but we concluded that “the opening in the

       access control line [was] a property right” because the “deed reserve[d] to the

       property owner a complete means of direct access over and across the State

       Road 37 right of way through the opening in the access control line to State

       Road 37 itself.” Id. at 616.

[15]   Here, unlike in Coutar, the deeded easement does not expressly reserve a curb-

       cut right from the Property to Threel Road. The deed simply reserved an

       easement “over, across and under [Threel Road] for pedestrian and vehicular

       traffic, sewer lines, water lines, fire protection lines and other utilities.”

       Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023             Page 8 of 12
       Appellant’s App. Vol. V p. 67. Additionally, the Agreed Order gave Carmel the

       right to acquire only “a portion of the frontage along Threel Road[,]” including a

       0.017-acre triangular-shaped strip of land in fee simply and a 0.111-acre

       temporary right-of-way—not Threel Road itself, which is the property that

       Barham’s easement burdened. Appellant’s App. Vol. II p. 104 (emphasis

       added). We cannot expand the deeded easement’s language to include a right

       to curb-cut access to Threel Road from the Property when the easement

       reserved no such right. See Wendy’s of Ft. Wayne, 644 N.E.2d at 162.

[16]   In any event, however, Carmel appropriated Threel Road—the servient

       estate—in the County Line Action. In the County Line Action, the trial court

       granted Carmel, among other things, “the total acquisition of Threel Road[,]”

       causing “Threel Road [to] be permanently closed as a result of the Project.”

       Appellant’s App. Vol. VIII pp. 85–86. With its total acquisition of Threel

       Road, Carmel acquired all the interests in Threel Road, including Barham’s

       easement that it had received from the County Line Realty Company.2

[17]   While Indiana case law appears silent on the issue, other authorities have held

       that the taking of real property by eminent domain extinguishes any easements

       burdening the property. See Matter of Ossining Urb. Renewal Agency v. Lord, 350

       2
         Presumably, Barham knew, or should have known, about the County Line Action by virtue of its
       membership in the County Line Owners Association and could have sought an inverse condemnation claim
       to protect its interest. See Murray v. Lawrenceburg, 925 N.E.2d 728, 733 (Ind. 2010) (concluding “that inverse
       condemnation is the only remedy” when a landowner believes the government has taken an interest in its
       property without adhering to the eminent-domain proceedings in Indiana Code section 32-24-1).

       Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023                               Page 9 of 12
       N.E.2d 405, 406 (N.Y. 1976) (“Under the ‘in rem’ theory of the nature of title

       acquired by eminent domain, the condemnor takes title to land free of all

       encumbrances and inconsistent proprietary rights and extinguishes all interests

       and estates in the property.”); see also New England Cont’l Media, Inc. v. Town of

       Milton, 588 N.E.2d 1382, 1384 (Mass. Ct. App. 1992) (“Generally, an eminent

       domain taking in fee simple extinguishes all other interests in the subject

       property. In particular, where an easement exists the taking of the servient

       estate will destroy the easement rights of the dominant estate.”) (internal

       citations omitted). Likewise, the default rule in federal eminent-domain cases

       “is that a taking in fee simple establishes new title and extinguishes all existing

       possessory and ownership interests not specifically excepted.” U.S. v. 194.08

       Acres of Land, More or Less, Situated in St. Martin Parish, State of La., 135 F.3d

       1025, 1029 (5th Cir. 1998).

[18]   In a similar vein, we have previously held that the exercise of eminent domain

       extinguished the reversionary interest in a deed, because such a “restriction

       cannot be enforced against the condemning authority as long as that entity’s use

       is for a public purpose; the only remedy for a violation of that restriction is

       monetary compensation.” Jensen v. City of New Albany, 868 N.E.2d 525, 529

       (Ind. Ct. App. 2007). We conclude that Carmel extinguished Barham’s

       easement in Threel Road when it acquired Threel Road in its entirety in the

       County Line Action; therefore, there was no easement to take in the current case.

       Having established that there was no easement at the time of Carmel’s

       Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023         Page 10 of 12
       acquisition in this case, we now turn our attention to the ingress-egress and

       traffic-flow rules.

       C.      Ingress-Egress and Traffic-Flow Rules
[19]   To the extent the parties argue over whether a compensable taking occurred in

       this case, they attempt to characterize this case as either one of traffic flow or

       the taking of ingress and egress rights. Either way, our conclusion is the same:

       Barham was not entitled to compensation for the closure of access to Threel

       Road in this case. Carmel had already acquired Threel Road in the County Line

       Action, thereby extinguishing whatever rights Barham had had in Threel Road,

       and the closing of Barham’s access by the taking in this case is non-

       compensable under the ingress-egress and traffic-flow rules. Under the ingress-

       egress rule, an interference with those rights is compensable only if it “is

       substantial or material.” State v. Dunn, 888 N.E.2d 858, 864 (Ind. Ct. App.

       2008), trans. denied. The interference here is neither of those because Barham

       maintains sufficient access to run its business via Aronson Road. See State v.

       Tolliver, 246 Ind. 319, 205 N.E.2d 672 (1965) (concluding that the interference

       with ingress and egress rights was substantial and material when it left only one

       access point, which was insufficient for the landowner to run its business at all).

       Similarly, under the traffic-flow rule, “the mere reduction in or redirection of

       traffic flow to a commercial property is not a compensable property right[,]”

       which would make Barham’s loss of access non-compensable as two access

       points remain untouched. State v. Kimco of Evansville, Inc., 902 N.E.2d 206, 214

       (Ind. 2009); see also AAA Federal Credit Union, 79 N.E.3d at 406 (holding that the

       Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023       Page 11 of 12
       closure of a landowner’s access to U.S. 31 was not compensable because, while

       the new route was more circuitous and inconvenient, other access points

       remained untouched). In short, the trial court erred when it denied Carmel’s

       motion for partial summary judgment on the issue of whether Barham was

       entitled to compensation specifically for the loss of access to Threel Road.

[20]   The judgment of the trial court is reversed, and we remand with instructions for

       to grant Carmel partial summary judgment on this issue.

       May, J., and Mathias, J., concur.

       Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023    Page 12 of 12