Court Opinion

ID: 9684419
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:56:14.017313+00
Date Added: 2024-06-11T09:01:01.389901
License: Public Domain

Justice WINTERSHEIMER,
dissenting.
I must respectfully dissent from the majority opinion because the railroad company is entitled to just compensation for the establishment of a highway or street over its line or right of way whether the company is owner of the fee simple or merely holds an easement for the right of way. Moreover, the railroad is entitled to just compensation for an easement taken for the construction of a grade level railroad crossing. The railroad property is entitled to the same constitutional protection as individual property.
Section 242 of the Kentucky Constitution provides that in condemnation proceedings, the amount of damages shall “in all cases, be determined by a jury, according to the course of the common law.” I accept the fact that not every acquisition of an easement over a railroad crossing amounts to a compensable taking. There must be competent evidence of a diminution as a result of the acquisition in order for it to constitute a compensable taking. Unless there is such competent evidence there is no issue for a jury to decide. The only damage is the difference in market value before and after the taking and that is the only issue to be submitted to a jury. Commonwealth, Dept. of Highways v. Sherrod, Ky., 367 S.W.2d 844 (1963), is the *499seminal case in this area. See also KRS 416.660.
The problem in this case arises from the application of the statutory and prece-dential principles. Here, Corman produced only one valuation witness who intended to testify at trial regarding the before and after values of the property that would result from a reduction in the value of the railroad as a result of the crossings imposed. The witness intended to project the expenses based on a number of accidents anticipated over twenty years and then reduce to annual added expense in order to arrive at the proposed reduction in value. The question then becomes whether the analysis was based on a legally compensable element of value.
This case was decided as a summary judgment, and it has long been held that in such a case there is an obligation to present at least some affirmative evidence showing that there is a genuine issue of material fact for trial. CR 66.03. Summary judgment should be cautiously applied and should not be a substitute for trial. Steelvest, Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476 (1991). The Transportation Cabinet presented a witness who determined that there was no decrease in value of the property as a result of the grade level crossings. The circuit judge accepted the argument of the defendant and granted summary judgment.
I note that the capitalization of net income approach to determining the before and after fair-market value of a parcel of commercial property in a condemnation action has been approved in Kentucky. Commonwealth, Dept. of Highways v. Tanner, Ky., 424 S.W.2d 384 (1968). I agree with Corman, that the capitalization of net income approach does not violate the prohibition of “price-tagging” denounced in Sherrod, supra. Although there will always be clearly identifiable factors affecting the net income to be capitalized, such factors do not amount to separate items of damage.
As noted in Sherrod at page 849, the landowner is not entitled to loss of profits, but he is limited to a loss of market value. Sherrod also indicated that the proper construction of the constitution, Sections 13 and 242, requires that benefits be taken into consideration in determining the total loss of value the owner has sustained. The Sherrod court was considering the question of offsetting benefits.
Condemnation evaluations are truly a battle of experts. Such individuals should be allowed to consider the various factors related to the railroad crossing both before and after condemnation. The real issue in this case is the fair market value of the railroad after easements for the six grade crossings. A factor to be considered is any increases in operating expenses that would decrease the market value. The jury should be permitted to decide, and the capitalization of net income, an accepted valuation measure, should be valid testimony as presented by a qualified expert. Summary judgment was inappropriate and the matter should be permitted to go to the jury on the issue of damages.
KELLER and STUMBO, JJ., join this dissenting opinion.