Coutar Remainder I, LLC, Kooshtard Property I, LLC, Mac's Convenience Stores, LLC, f/k/a Bigfoot Food Stores, LLC, and Union Fidelity Life Insurance Company v. State of Indiana , 91 N.E.3d 610 ( 2017 )

FILED
Dec 28 2017, 6:34 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE
David A. Given Curtis T. Hill, Jr.
Brian J. Paul Attorney General of Indiana
Matthew C. Olsen
Faegre Baker Daniels LLP Andrea E. Rahman
Indianapolis, Indiana Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Coutar Remainder I, LLC, December 28, 2017
Kooshtard Property I, LLC, Court of Appeals Case No.
Mac’s Convenience Stores, LLC, 53A01-1704-PL-798
f/k/a Bigfoot Food Stores, LLC, Appeal from the Monroe Circuit
and Union Fidelity Life Court
Insurance Company, The Honorable Frances G. Hill,
Appellants-Defendants, Judge
Trial Court Cause No.
v. 53C06-1402-PL-251
State of Indiana,
Appellee-Plaintiff.
Najam, Judge.
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Statement of the Case
[1] Kooshtard Property I, LLC is the owner of the fee simple title to certain land in
Monroe County that abuts Indiana State Road 37 between Bloomington and
Martinsville (the “Kooshtard Property”). Coutar Remainder I, LLC holds a
remainder interest in the Kooshtard Property, and Mac’s Convenience Stores,
LLC, d/b/a Circle K, holds a leasehold interest.1 In 2014, the State initiated
condemnation proceedings to take a parcel from the Kooshtard Property in
connection with the State’s development of Interstate 69 over and along State
Road 37. During those proceedings, the property owners (hereinafter
collectively referred to as “Kooshtard”) asserted that the State’s development of
Interstate 69 would eliminate access to the Kooshtard Property. The trial court
disagreed and entered summary judgment for the State.
[2] We hold that Kooshtard is entitled to a trial on damages on the State’s
elimination of the Kooshtard Property’s access to State Road 37. In particular,
Kooshtard’s chain of title includes a deed from a previous owner to the State,
which is binding upon both Kooshtard and the State. The deed contains an
access control line restriction as a covenant running with the land, and the
restriction includes an exception or opening in the access control line, which
provides the Kooshtard Property with a right of access to State Road 37. The
State’s elimination of that opening constitutes the taking of a property right
1
Union Fidelity Life Insurance Company, a named defendant below, does not participate in this appeal.
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subject to compensation. As such, we reverse and remand for further
proceedings.
Facts and Procedural History2
[3] In 1971, Jane Ellis deeded to the State a portion of certain real property she
owned for the State’s construction of State Road 37 (“the first taking”). The
Ellis deed provided that “all rights and easements of ingress and egress to, from,
and across” State Road 37 “to and from the owner’s abutting lands” were
permanently extinguished. Appellants’ App. Vol. II at 184. However, the deed
also reserved to Ellis and her successors in title an opening of 77.59 feet in the
State’s access control line to State Road 37. Id. at 185. The deed states that the
access control line restriction, which includes an exception or opening, “shall be
a covenant running with the land.” Id.
[4] The deed “further” reserved to Ellis and her successors “access to a local service
road” located within the State Road 37 right of way between the Ellis property
line and the opening in the access control line. Id. From there, one could enter
onto, or exit from, State Road 37. In 2001, Kooshtard became the successor in
title, in relevant part, to the Ellis property as described in the 1971 Ellis deed.
[5] The western boundary of the Kooshtard Property is contiguous to the eastern
boundary of the State Road 37 right of way. At the southwest corner of the
2
We held oral argument on December 7, 2017, in the our courtroom in the State Capitol.
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Kooshtard Property, the property line turns and runs eastward for 57.88 feet
and then abruptly turns southward for 60.39 feet. See Appellants’ App. Vol. IV
at 221, 244. These courses are described in the affidavit of Kooshtard’s expert
Rory O’Bryan as the “common north boundary line” and the “common east
boundary line,” respectively. Id. at 244. There is no access control along these
common boundary lines.
[6] Sometime after the Ellis deed, the State conveyed control over the “local service
road” mentioned in the deed to Monroe County, which the County now
maintains as “Wayport Road.” Wayport Road abuts the Kooshtard property
along the common north boundary line and the common east boundary line.
At that location, Wayport Road lies adjacent and contiguous to the Kooshtard
Property and entirely within the State Road 37 right of way.
[7] Currently, whenever traffic travels east from State Road 37 to the Kooshtard
Property or west from the Kooshtard property to State Road 37, the traffic
utilizes both the State Road 37 right of way and the opening in the access
control line and passes over Wayport Road where it meets the common north
boundary line and the common east boundary line. Kooshtard’s right to utilize
the right of way is based upon its common law status as an abutting property
owner, and its right to utilize the opening in the access control line is based
upon the covenant that runs with the land in the Ellis deed.
[8] Between Bloomington and Martinsville, the State is converting State Road 37
into Interstate 69. The State plans to close the opening in the access control line
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at the Kooshtard Property created by the Ellis deed. In order to provide
another route of access to and from the Kooshtard Property, the State plans to
extend Wayport Road from its current location, where it abuts the common
north boundary line and the common east boundary line, around the southern
border of the Kooshtard Property and then to the north and east, where
Wayport Road will connect with Sample Road. Sample Road will then have
direct access to Interstate 69. The State’s new traffic plan will require drivers to
travel an additional one-half mile between the Kooshtard Property and
Interstate 69 when entering or leaving the entrance to the Kooshtard Property
along the common north boundary line and the common east boundary line.
[9] On February 11, 2014, the State filed a complaint to condemn a parcel to be
taken from the Kooshtard Property in order to proceed with the project (“the
second taking”). The State attached to its complaint a “right-of-way parcel
plat” that indicates both the fee simple parcel to be taken and the opening in the
access control line created by the Ellis deed “to be closed.” Appellants’ App.
Vol. II at 38. Kooshtard answered that, in addition to the fee simple parcel, the
closure of the access control line was a compensable taking. According to
Kooshtard, the closure of the access control line would, in itself, result in more
than $1.3 million in damages and the closure of a gas station and convenience
store located on the property. The report of three court-appointed appraisers
assessed the total amount of just compensation, including the fair market value
of the fee simple parcel taken and damages to the residue, at $420,000, but the
report did not consider closure of the opening.
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[10] The State moved for summary judgment only on the grounds that the closure of
the access control line was not, as a matter of law, a compensable taking given
the proposed extension and routing of Wayport Road to Sample Road and
Sample Road’s connection to Interstate 69. In response to the State’s motion,
Kooshtard argued that the closure of the access control line
goes to the ingress and egress. And so, it is a taking of that
element of our property entrance . . . . It is fundamental to the
property itself. And . . . when this property was first deeded
by . . . Ellis, this was the only way out and it is still the only way
out.
Tr. at 36. The trial court agreed with the State that the closure of the access
control line merely created a different route of travel to and from the Kooshtard
property and, as such, did not constitute a taking. The court entered summary
judgment and declared that its judgment was a final judgment. This appeal
ensued in due course.
Discussion and Decision
Standard of Review
[11] Kooshtard appeals the trial court’s entry of summary judgment for the State.
We review the trial court’s grant or denial of summary judgment de novo. Doe v.
Ind. Dep’t of Child Servs., 81 N.E.3d 199, 201 (Ind. 2017). We will affirm the
entry of summary judgment only when the designated evidence reveals no
genuine issue of material fact and entitles the moving party—here, the State—to
judgment as a matter of law. Id. We also note that the trial court entered
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detailed findings of fact and conclusions thereon in its summary judgment
order. While such findings and conclusions are not required in a summary
judgment and do not alter our standard of review, they are helpful on appeal for
us to understand the reasoning of the trial court. See Knighten v. E. Chicago Hous.
Auth., 45 N.E.3d 788, 791 (Ind. 2015).
[12] As our Supreme Court has stated, “‘[a]lthough 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.’” Biddle v. BAA
Indianapolis, LLC, 860 N.E.2d 570, 575 (Ind. 2007) (quoting Taylor-Chalmers,
Inc. v. Bd. of Comm’rs of LaPorte Cty., 474 N.E.2d 531, 536 (Ind. Ct. App. 1985)
(Hoffman, J., concurring)). Indeed, as this Court has explained:
As we have observed in the past, condemnation proceedings are
comprised of two stages: (1) an initial or summary phase, and (2)
the phase during which the fact finder 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. “During
the second stage of the condemnation proceedings the fact finder
must determine the amount of damages sustained by the
landowner.” Id.
State v. Dunn, 888 N.E.2d 858, 861 (Ind. Ct. App. 2008), trans. denied. The
initial phase is when the trial court must determine, as a matter of law, whether
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a taking occurred.3 See id. “Whether a taking has occurred is a question of law,
and we review questions of law de novo.” Id. (citing Biddle, 860 N.E.2d at 575;
Bradley v. City of New Castle, 764 N.E.2d 212, 216 (Ind. 2002)).
Kooshtard is Entitled to a Trial on Damages
[13] Article 1, Section 21 of the Indiana Constitution provides that “[n]o person’s
property shall be taken by law, without just compensation; nor, except in case
of the State, without such compensation first assessed and tendered.” The
threshold question in determining whether a taking has occurred is whether the
landowner has a “property interest in the property” that has been acquired by
the State. Dunn, 888 N.E.2d at 862. “‘Property’ in its legal sense means a
valuable right or interest in something rather than the thing itself, and is the
right to possess, use and dispose of that something in such a manner as is not
inconsistent with law.” Id. (citing State v. Ensley, 240 Ind. 472, 164 N.E.2d 342,
348-49 (1960)).
[14] The parties devote a substantial part of their briefs in disputing whether the facts
establish that this is an “ingress/egress” case or a “traffic flow” case. See id. at
863-64. We conclude, however, that this case is unique and unprecedented on
3
It is of no moment that Kooshtard’s allegation—that the closure of the access control line was a taking—
was made in response to the State’s complaint for condemnation rather than as a freestanding complaint for
inverse condemnation. Hammond, 733 N.E.2d at 966-67.
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its “established set of facts,” see Biddle, 860 N.E.2d at 575, in that, unlike any of
the cases relied on by the parties, here the property owner’s deed expressly
provides for the right of access that is now being taken. Specifically, the Ellis
deed states that “the access control line restriction shall be a covenant running
with the land,” and that restriction includes a 77.59-foot exception or opening
in the metes and bounds description of the access control line to State Road 37.
Appellants’ App. Vol. II at 184-85. A covenant running with the land
“constitutes a compensable interest in land.” Dible v. City of Lafayette, 713
N.E.2d 269, 273-74 (Ind. 1999). Thus, under the 1971 Ellis deed, the opening
is a property right that runs with the land for the use and benefit of Ellis and her
successors in title, and Kooshtard is entitled as a matter of law to a trial on
damages for the State’s elimination of the opening.
[15] The State is also estopped in equity from asserting that the elimination of the
opening is not compensable. The facts establish an estoppel by deed. A deed is
in the nature of a contract between the grantor and the grantee. See, e.g., Fischer-
Marsh v. Fischer, 822 N.E.2d 1055, 1062-63 (Ind. Ct. App. 2005). One who by
deed or conduct has induced another to act in a particular manner will not be
permitted to adopt an inconsistent position, attitude, or course of conduct that
causes injury to such other. Brown v. Branch, 758 N.E.2d 48, 52 (Ind. 2001)
(citing 31 C.J.S. Estoppel & Waiver § 2 (1996)). Here, the rights of ingress to and
egress from the Kooshtard Property were documented in the 1971 Ellis deed at
the time of the first taking and were a bargained-for exchange between Ellis and
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the State. The consideration included an exception or opening in the access
control line restriction, expressly designated as a covenant running with the
land, which is a property right.
[16] This is not the first encounter between the State and the owner of this property
concerning the owner’s rights of ingress and egress. The Ellis deed shows as a
matter of law that, in the first taking, the State agreed to a 77.59-foot opening in
the access control line facing the Ellis property and that Ellis agreed to
extinguish any and all other rights of ingress and egress along State Road 37.
And, again, the deed stated that the access control line restriction—which
included the opening in that line—“shall be a covenant running with the land.”
Appellants’ App. Vol. II at 184-85. As such, the State may not now repudiate
the Ellis deed and contend that the opening in the access control line is not a
property right held by the current owner.
[17] Nevertheless, the State contends that Kooshtard “only has a property right of
ingress and egress to Wayport Road, not State Road 37.” Appellee’s Br. at 10.
The State relies on the deed provision that states, “and further, the owner and
her successors in title shall have access to a local service road where the owner’s
remaining land [after the taking] abuts the above-described . . . courses.”
Appellants’ App. Vol. II at 184-85 (capitalization removed). The State’s
reliance on that provision is misplaced.
[18] First, the term “and further” indicates that the “access to a local service road” is
access in addition to something else, and the something else is the 77.59-foot
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opening in the access control line as described in the metes and bounds
description of that line. Second, and as previously noted, the local service road
that is now Wayport Road was located entirely within the State Road 37 right
of way adjacent and contiguous to the Ellis parcel. Thus, the provision that
“the owner shall have access to a local service road” merely reaffirmed that the
taking and restrictions documented in the deed did not restrict the owner’s
common law right of access to the State Road 37 right of way across the 57.88-
foot common north boundary line and the 60.39-foot common east boundary
line, which the Ellis property shared with the right of way. While this provision
underscores the owner’s right of immediate access to the right of way, which
leads directly to the opening in the access control line, it was legal surplusage
because Ellis had a common law right of access to the right of way at that
location as an abutting property owner. As our Supreme Court stated in Ensley:
“[A]n abutting property owner has an easement of ingress and egress in a public
highway and this constitutes a property right which cannot be substantially or
materially interfered with or taken away without due compensation.” 164
N.E.2d at 349. In other words, the Ellis deed reserves 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.
[19] We caution that our holding is simply that Kooshtard is entitled to a trial on
damages for the State’s taking of Kooshtard’s property right in the opening in
the access control line. We express no opinion on the amount of damages, if
any, a fact finder might assess against the State for this particular taking. There
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is a significant disparity between Kooshtard’s claim of damages and the report
of the court-appointed appraisers, but that disparity is not an issue on appeal.
The question presented here is only whether a taking occurred. As we recently
explained in AAA Federal Credit Union v. Indiana Department of Transportation, we
will not “conflate[] the measure of damages for a compensable taking with the
inquiry into whether such a taking happened at all.” 79 N.E.3d 401, 406 (Ind.
Ct. App. 2017), trans. denied.
[20] In sum, we agree with Kooshtard that the opening in the access control line is a
property right. The State has taken Kooshtard’s right to the use and benefit of
the opening in the access control line contained in the 1971 Ellis deed. In the
first taking, Ellis bargained for direct access to State Road 37 as a covenant
running with the land, and her successors in title are entitled to the benefit of
her bargain, which includes damages, if any, for the elimination of that property
right by the second taking. The fact that the State may provide an alternate
means of access to and from the Kooshtard Property does not obviate the fact
that the opening in the access control line is a covenant running with the land,
and the State’s elimination of the opening is a compensable taking. Thus, as a
matter of both law and equity, Kooshtard is entitled to a trial on damages for
the closure of the access control line. Accordingly, we reverse the trial court’s
entry of summary judgment for the State, and we remand for further
proceedings.
[21] Reversed and remanded.
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Kirsch, J., and Brown, J., concur.
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