Amended May 12, 2017 Johnson Propane, Heating & Cooling, Inc. v. The Iowa Department of Transportation ( 2017 )

IN THE SUPREME COURT OF IOWA
No. 16–0906
Filed March 3, 2017
Amended May 12, 2017
JOHNSON PROPANE, HEATING & COOLING, INC.,
Appellant,
vs.
THE IOWA DEPARTMENT OF TRANSPORTATION,
Appellee.
Appeal from the Iowa District Court for Woodbury County,
Patrick H. Tott, Judge.
A landowner appeals a district court judgment finding the district
court was without authority to decide whether a condemnation
proceeding left the landowner with an uneconomical remnant.
AFFIRMED.
Jacob B. Natwick and John C. Gray of Heidman Law Firm, L.L.P.,
Sioux City, for appellant.
Thomas J. Miller, Attorney General, and Robin G. Formaker,
Assistant Attorney General, for appellee.
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WIGGINS, Justice.
The Iowa Department of Transportation (IDOT) condemned a
portion of a landowner’s property to complete the construction of a
highway. The landowner waited until after the compensation
commission decided damages to appeal its claim to the district court that
the taking left it with an uneconomical remnant. The district court
dismissed the petition on summary judgment finding the landowner’s
petition making its uneconomical remnant claim was untimely. On
appeal, we affirm the district court judgment. We hold the district court
was without authority to hear the case because the landowner failed to
file an action within thirty days from the notice of assessment as
required by Iowa Code section 6A.24(1) (2014) contesting the IDOT’s
exercise of eminent domain when the IDOT did not determine its
acquisition left the landowner with an uneconomical remnant.
I. Background Facts and Proceedings.
Johnson Propane, Heating & Cooling, Inc. (Johnson Propane) owns
property in the city of Correctionville, located in Woodbury County. The
IDOT engaged in a highway improvement project along U.S. Highway 20
in Correctionville, and in order to complete the project, the IDOT
exercised its right of eminent domain to acquire a portion of the property
owned by Johnson Propane. On August 4, 2014, the IDOT initiated
condemnation proceedings by filing an application with the chief judge of
Woodbury County seeking to condemn a .16-acre tract of Johnson
Propane’s .76-acre parcel. The IDOT determined it did not need the
entire plot of land for the highway improvement project and that the
remaining .60-acre tract left after the condemnation was not an
uneconomical remnant.
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Thereafter on August 21, the chief judge appointed a compensation
commission, whose purpose was to assess and appraise the damages
sustained because of the condemnation of the .16-acre parcel. The IDOT
served a notice of assessment upon Johnson Propane on August 29. The
notice informed Johnson Propane of the condemnation sought by the
IDOT, that the chief judge appointed a commission to appraise and
award damages for the condemnation, and on October 28, the
commission would view the property and meet to appraise damages.
The compensation commission held a hearing on the scheduled
day. Johnson Propane operates a propane business on the property
affected by the condemnation, and argued that as a result of the .16-acre
condemnation, the remaining .60-acre tract had little or no value or
utility to the business. Johnson Propane presented evidence of an
appraisal declaring the fair market value of the entire .76-acre parcel
before the IDOT’s condemnation was $200,000. Johnson Propane
explained that due to the partial taking of the property, it was “virtually
impossible for propane trucks to safely enter and exit the property,” and
“[w]ithout the ability to operate trucks on its property to collect and haul
propane, Johnson Propane will no longer be able to use the remaining
property in its business.” Thus, Johnson Propane contended that the
remaining .60-acre parcel had little or no value or utility to the property
owner and was an uneconomical remnant for which it should receive
compensation.
The IDOT presented evidence of an appraisal concluding the
market value of the entire .76-acre parcel before the taking was $78,400,
and the value of the remaining .60-acre tract after the .16-acre taking
was $66,900. Thus, the IDOT’s appraisal estimated the just
compensation for the .16-acre taking was $11,500. The appraisal noted
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that the condemnation would remove two access drives to Johnson
Propane’s property along U.S. Highway 20, but determined the property
would still have adequate access, and thus, there was no “diminution in
value.”
At the conclusion of the hearing, the compensation commission
awarded Johnson Propane with $11,100 for the .16-acre taking.
Johnson Propane filed a notice of appeal to the district court on
November 21 and a petition on appeal on November 25. In its petition on
appeal, Johnson Propane claimed that as a result of the .16-acre taking,
it could no longer use the remaining property for its propane business. It
also claimed that it was “virtually impossible for trucks to enter and exit
the property.” Johnson Propane further claimed that the IDOT’s taking
amounted to a complete taking because the remaining parcel has little or
no value or utility to the owner. Because the remaining parcel has little
or no value or utility to the owner, Johnson Propane claimed the IDOT
left it with an uneconomical remnant. Johnson Propane also claimed the
fair market value of the entire property before the condemnation by the
IDOT was $200,000. Johnson Propane requested the district court find
the condemnation of the .16 acre left it with an uneconomical remnant,
the IDOT should have condemned the entire property, and the damage
for the taking was $200,000.
On December 22, the IDOT filed an answer and jury demand. In
its answer, the IDOT asserted four affirmative defenses, including one
that alleged “[t]he claims made in the plaintiff’s petition are untimely.”
On March 2, 2016, the IDOT filed a motion for summary judgment,
claiming there were no genuine issues of material fact and that Johnson
Propane’s petition failed “to state a claim upon which any relief may be
granted” because (1) plaintiff’s challenge to the taking was untimely
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under Iowa Code section 6A.24(1), and (2) even if plaintiff’s challenge to
the IDOT’s taking was timely, Iowa Code section 6B.54(8), which plaintiff
relies upon as the basis for its claim, does not apply to this action.
Johnson Propane resisted the motion for summary judgment and
filed a statement of disputed material facts and additional undisputed
material facts. The IDOT replied to Johnson Propane’s resistance,
including a motion to strike Johnson Propane’s appraisal. Johnson
Propane resisted the motion to strike, and the IDOT replied.
The district court heard arguments on the IDOT’s motion for
summary judgment and entered an order granting the motion for
summary judgment. The district court found Johnson Propane had to
challenge the IDOT’s determination of whether there is an uneconomical
remnant by bringing an action challenging the IDOT’s eminent domain
authority or the condemnation proceedings within thirty days after the
sheriff served the notice of assessment pursuant to Iowa Code section
6A.24(1). The court found Johnson Propane’s notice of appeal filed on
November 21, 2014, did not comply with the requirements of section
6A.24(1) and granted the IDOT’s motion for summary judgment. The
court did not rule on the IDOT’s motion to strike Johnson Propane’s
appraisal, finding the motion moot because of its summary judgment
ruling. Johnson Propane appealed.
II. Issue.
We must decide if the district court was correct that Johnson
Propane’s petition claiming the IDOT’s taking of its property left an
uneconomical remnant was untimely.
III. Standard of Review.
We review summary judgment rulings for correction of errors at
law. Sanon v. City of Pella, 865 N.W.2d 506, 510 (Iowa 2015).
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Additionally, this appeal requires us to interpret various statutory
provisions concerning condemnation proceedings. We also review issues
involving statutory construction for corrections of errors at law. Id. at
511.
IV. Condemnation Proceedings Under Iowa Law.
Generally, a condemnation proceeding is initiated by the acquiring
agency filing an application with the chief judge of the judicial district in
which the property sought to be condemned is located. Iowa Code
§ 6B.3(1). In making its application, the acquiring agency shall, at a
minimum, satisfy the acquisition policies as set forth by the legislature.
Id. § 6B.54. One such policy is that
[i]f the acquisition of only a portion of property would leave
the owner with an uneconomical remnant, the acquiring
agency shall offer to acquire that remnant. For the purposes
of this chapter, an “uneconomical remnant” is a parcel of
real property in which the owner is left with an interest after
the partial acquisition of the owner’s property, where the
acquiring agency determines that the parcel has little or no
value or utility to the owner.
Id. § 6B.54(8) (emphasis omitted).
After the acquiring agency files it application with the chief judge,
the chief judge appoints a compensation commission to assess the
damages to all property taken by the applicant. Id. § 6B.4(2). The
applicant then is required to give a thirty-day notice of assessment of the
time the commission will meet to assess the damages. Id. at 6B.8.
Within thirty days after the notice of assessment, “[a]n owner of property
described in an application for condemnation may bring an action
challenging the exercise of eminent domain authority or the
condemnation proceedings.” Id. § 6A.24(1). 1
1The Code does not state whether the compensation commission should still
meet if an owner of property files an action under section 6A.24(1). However, because
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When the commission meets, its sole task is to assess any
damages the landowner will suffer due to the acquisition. Id. § 6B.14(1).
The compensation commission calculates the measure of damages by
first determining the fair market value of the property before the taking.
Townsend v. Mid-Am. Pipeline Co., 168 N.W.2d 30, 33 (Iowa 1969). If the
acquiring agency takes the whole property, this is the measure of
damages. Id. If the acquiring agency takes only part of the property, the
compensation commission must calculate the difference between the fair
market value of the whole property before acquisition and the fair market
value of the property remaining after the acquisition. Id. This difference
is the landowner’s measure of damages. Id.
If the landowner is dissatisfied with the compensation
commission’s assessment of damages, the landowner can appeal the
compensation commission’s appraisement of damages to the district
court. Iowa Code §§ 6B.18(1), .22(1). The only issue to be determined on
the appeal is the amount of damages owed by the acquiring agency to the
landholder due to the taking. Id. § 6B.23; State ex rel. Iowa State
Highway Comm’n v. Read, 228 N.W.2d 199, 203 (Iowa 1975).
V. Analysis.
Johnson Propane has maintained throughout this proceeding that
the only issue it seeks to be determined by the court is whether this
taking created an uneconomical remnant requiring the IDOT to condemn
the property in its entirety and award damages to it based upon the fair
market value of the entire property it owned. It is seeking this remedy by
appealing the determination of damages made by the compensation
commission.
_____________________
the landowner did not file an action under section 6A.24(1), that question will be left for
another day.
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The sole issue on an appeal from the compensation commission
determination is the amount of damages owed by the acquiring agency to
the landholder due to the taking. State ex rel. Iowa State Highway
Comm’n, 228 N.W.2d at 203. A determination of whether a taking leaves
an uneconomical remnant is a determination the legislature gave to the
acquiring agency, not the compensation commission. Iowa Code
§ 6B.54(8). The issue as to whether a taking leaves an uneconomical
remnant is a challenge to the acquiring agency’s authority to exercise its
power of eminent domain. Section 6A.24(1) requires that a challenge to
the acquiring authority’s exercise of eminent domain must be brought by
a separate action by filing an action in district court.
An appeal from a damage award by the compensation commission
under sections 6B.18(1) and 6B.22(1) is not the proper method to
challenge whether the taking left an uneconomical remnant.
Consequently, Johnson Propane was required to challenge the IDOT’s
determination that the property remaining after the taking was not an
uneconomical remnant by bringing a separate action under section
6A.24(1). Section 6A.24(1) requires a party to file an action within thirty
days from the notice of assessment. Johnson Propane failed to file such
an action. Failure to file an action in a timely manner deprives a court of
authority to hear a particular case. In re Prop. Seized for Forfeiture from
Williams, 676 N.W.2d 607, 613 (Iowa 2004). Therefore, we conclude
Johnson Propane’s uneconomical remnant challenge was untimely, and
thus, the district court did not have the authority to consider that claim.
VI. Disposition.
The district court was without authority to hear Johnson Propane’s
uneconomical remnant challenge. Therefore, we affirm the judgment of
the district court finding Johnson Propane’s petition claiming it was left
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with an uneconomical remnant was untimely under Iowa Code section
6A.24(1) and dismissing the action.
AFFIRMED.