State ex rel. Department of Transportation v. Mehta , 2008 Okla. Civ. App. LEXIS 10 ( 2008 )

JERRY L. GOODMAN, Presiding Judge.

1 1 The State of Oklahoma, ex rel. Department of Transportation (ODOT or Department) appeals the trial court's August 25, 2004, order denying its exceptions to the Commissioners' Second & Corrected Report. Based on our review of the record on appeal and applicable law, we reverse in part and remand for further proceedings consistent with this opinion.

FACTS

T2 On September 28, 2001, ODOT filed a petition pursuant to 69 0.8.2001, § 1208 seeking to acquire real property in Tulsa County, Oklahoma, for the purpose of constructing and maintaining the state transportation system. The petition alleged ODOT and the Defendants Kishor and Jyotsna Mch-ta (the Mehtas) and Eller Media Company (Eller) had failed to reach an agreement regarding the Department's acquisition of the property. ODOT's petition identified two (2) tracts of land to be condemned, a taking of 8.69 acres in fee simple with an additional .31 acres for a temporary easement. The petition further identified a billboard located on the property. The petition asserted the Defendants owned or claimed some interest in the property.¹

{3 On October 28, 2001, the trial court entered an order appointing three (8) commissioners, instructing them to inspect the property and determine just compensation for the legally described property set forth in ODOT's petition. On February 6, 2002, the Commissioners filed their Report finding just compensation for the taken property to be $710,000.00.

T 4 On February 15, 2002, the Mehtas filed an exception to the Report asserting the Commissioners had failed to separately identify the amount of compensation awarded to each Defendant for their property interest. The Mehtas' requested the court order the Commissioners to file an amended report separately identifying the sums awarded. Eller filed an exception on March 6, 2002, also requesting the court order the Commissioners to separately identify the compensation awarded.

1 5 On April 23, 2002, ODOT filed a motion for partial summary judgment against the Mehtas and Eller, asserting that in 1962 the State of Oklahoma had been granted a perpetual highway easement on the property the billboard was located on. ODOT stated it named Eller as a defendant in the condemnation action because it mistakenly believed the billboard was located on the Mehtas' property and that the billboard would have some value in the condemnation proceeding. Having realized its mistake, ODOT asserted El-ler was not entitled to compensation for the unlawfully placed sign. In response, Eller asserted, inter alia, that a motion for summary judgment was not authorized in condemnation proceedings, issues of fact existed regarding whether ODOT had abandoned the property, and ODOT should have filed an exception to the Commissioners' Report.

T6 The Mehtas also objected to the motion, as well as filing their own cross-motion for partial summary judgment. Although the Mehtas acknowledged ODOT was granted the easement in 1962, they asserted ODOT had abandoned the easement or, in the alternative, that they owned the land through adverse possession. The Mehtas further alleged ODOT waived its right to object by failing to timely file an exception to the Commissioners' Report. The trial court denied the motions. ODOT and Eller subsequently settled and filed a joint dismissal with prejudice and release of claims on February 26, 2003.

T7 Thereafter, the trial court granted the Mehtas' exception, and issued new instructions to the Commissioners over ODOT's objections. The new instructions directed the Commissioners to value four (4) properties described, in part as: 1) Property A: 3.69 acres, "... all as stated in the condemnation petition filed herein."; 2) Property B: .81 acres for a temporary easement, "... all as stated in the condemnation petition filed herein."; 3) Property C: a triangular-shaped parcel of land adjacent to Property A; and 4) Property D: a billboard located on Property C. Neither Property C nor Property D referenced the condemnation petition. ODOT objected to the inclusion of Property C and Property D in the instructions, again asserting the Department owned Property C, upon which the billboard was located.

T8 On April 8, 2004, the Commissioners filed their Second Report, corrected on May 4, 2004, ("Second and Corrected Report") finding the total compensation due was $710,000.00, apportioned among the property as follows: Property A: 3.69 acres ($587,-000.00); Property B: .31 acres taken for a temporary easement ($8,000.00); Property C: triangular lot adjacent to Property A ($80,-000.00); Property D: billboard located on Property C ($35,000.00).

T9 On May 10, 2004, ODOT filed exceptions to the Second and Corrected Report, asserting the instructions were unlawful because there was no authority for separate valuations. ODOT further asserted the Report was erroneous because it awarded compensation for property the Department owned and for property unlawfully located thereon.

10 On May 14, 2004, the Mehtas filed a demand for jury trial. ODOT filed a demand for jury trial on May 26, 2004. On August 25, 2004, the trial court denied ODOT's exceptions to the Commissioners' Second and Corrected Report. ODOT appeals.

STANDARD OF REVIEW

{11 As there are no material facts in dispute, this appeal presents only a question of law.² See Baptist Bldg. Corp. v. Barnes, 1994 OK CIV APP 71, ¶ 5, 874 P.2d 68, 69-70. Contested issues of law are reviewable in all actions by a de novo standard. Weeks v. Cessna Aircraft Co., 1994 OK CIV APP 171, ¶ 5, 895 P.2d 731, 733 (approved for publication by the Oklahoma Supreme Court). An appellate court claims for itself plenary, independent, and non-deferential authority to re-examine legal rulings. Id.

ANALYSIS

112 On appeal, ODOT contends the trial court erred in denying its exceptions to the Commissioners' Second and Corrected Report. First, ODOT asserts the trial court erroneously instructed the Commissioners to assess, value, and award compensation for Property C and Property D even though Property C was not included in the petition to condemn and is owned by the Department and Property D is unlawfully located thereon. For their second assertion of error, ODOT maintains the Commissioners' award was unlawful because there is no authority for separate valuations of various property interests.

113 Prior to addressing the merits of ODOT'"s appeal, we must initially determine whether the appeal is properly before this Courts.³ ODOT filed this appeal upon the denial of its exceptions to the Commissioners' Second and Corrected Report, citing 69 0.8. 2001, § 1208(f) as authority. Section 1203(f) provides:

(f) Either party aggrieved may appeal to the Supreme Court from the decision of the district court on exceptions to the report of commissioners, or jury trial;

14 On October 31, 2006, this Court issued a show cause order directing the parties to address the appealability of the trial court's August 25, 2004, order denying ODOT's exceptions. The parties complied. The Meh-tas assert ODOT's exceptions ask for summary adjudication of issues of fact that are the subject of ODOT's demand for jury trial and that once a demand for jury trial has been made, the issues are waived and the action must proceed to jury trial. Thus, the appeal is improper. ODOT disagrees and contends the statutory language of § 1208(f) is clear and unambiguous, and that the legislature intended for either party aggrieved by the decision on the exceptions to have the right of immediate appeal.

[ 15 Despite the general statement of authority to appeal set out in § 12083(F), this Court has jurisdiction to decide only those appeals from the trial court's judgments, final orders, and certain interlocutory orders. See 12 0.$.2001, § 952.

1 16 In the present case, the order appealed is not an interlocutory order or a final judgment, but a determination of certain issues presented to the trial court. Because the parties have filed a demand for jury trial, the issue of just compensation for the property taken and damages to the remainder, if any, has been reserved for the jury's determination. Accordingly, the issue before this Court is whether the order denying ODOT's exceptions is a final order over which we have jurisdiction.

117 Condemnation, also known as eminent domain, is the power to take private property for the public good. Williams v. State ex rel. Dept. of Transp., 2000 OK CIV APP 19, ¶ 13, 998 P.2d 1245, 1248 (citing Harn v. State ex rel. Williamson, 1939 OK 40, 184 Okla. 306, 87 P.2d 127). The right of condemnation is a fundamental attribute of the sovereign state. City of Tahlequah v. Lake Region Elec., Co-op., Inc., 2002 OK 2, ¶ 7, 47 P.8d 467, 471. This right is restricted by the provisions of Oklahoma's Constitution, art. 2, § 24, which provides in part that "[plrivate property shall not be taken or damaged for public use without just compensation."

T18 A condemnation action brought to obtain private property for public use is a special proceeding strictly controlled by the Constitution and statutes prescribed by the Legislature. See Public Serv. Co. of Okla. v. B. Willis, C.P.A., Inc., 1997 OK 78, 116, 941 P.2d 995, 999. The action must be carried out in accordance with Constitutional mandates and legislatively prescribed procedure. Id. (citing Carter v. City of Oklahoma City, 1993 OK 134, 862 P.2d 77).

119 The procedure for ODOT to condemn private land for public use is found at 69 0.S.2001, § 1208 ef seq. There are only three (8) pleadings authorized to be filed in a condemnation proceeding: (1) the petition, (2) an exception to the commissioners' report, and (3) a demand for jury trial. Board of Cty. Comm'rs of Creek County v. Casteel, 1974 OK 31, ¶ 15, 522 P.2d 608, 611. Whether additional pleadings may be filed rests in the discretion of the trial court. Rummage v. State ex rel. Dept. of Transp., 1993 OK CIV APP 39, T18, 849 P.2d 1109, 1112 (citing Incorporated Town of Pittsburg v. Cochrane, 1948 OK 121, 200 Okla. 497, 197 P.2d 287).

120 After a petition for condemnation has been filed, the commissioners appointed, and the commissioners' report filed, "Art. 2, § 24, Okl. Const., allows a judicial determination of the necessity of taking and of the nature of the estate taken ...." through the filing of an exception. Elliott v. City of Guthrie, 1986 OK 59, ¶ 6 fn. 6, 725 P.2d 861, 862 fu. 6 (citing Harn v. State, 1939 OK 40, 184 Okla. 306, 87 P.2d 127; Fischer v. Oklahoma City, 1946 OK 235, 198 Okla. 22, 174 P.2d 244) (addressing the analogous procedure under 66 O.S.1981, § 55); Blankenship v. Bone, 1974 OK CIV APP 54, 530 P.2d 578. Disputes regarding the propriety or legality of the taking, including the right to condemn, the necessity of the taking, the reasonableness of the taking, the scope or the nature of the taking, can only be brought to issue by filing an exception to the commissioners' report in accordance with § 1208(e).

121 Pursuant to 12 0.98.2001, § 952(b)(1), an order adjudicating an exception challenging the right to condemn, ie, an issue regarding the taking of a property owner's interest, is appealable as a final order. See McMillian v. Holcomb, 1995 OK 117, ¶ 3, 907 P.2d 1034, 1035-86 (citing Jerry Scott Drilling Co., Inc. v. Seott, 1989 OK 131, 781 P.2d 826); Oklahoma Gas & Elect. Co. v. Chez, 1974 OK 99, 527 P.2d 165 (trial court's decision in a condemnation proceeding adjudicating the question of the right to condemn is a final order from which an appeal will lie); Watchorn Basin Assn. v. Oklahoma Gas & Elect. Co., 1974 OK 27, 525 P.2d 1357 (The decision of the trial tribunal in the condemnation proceedings adjudicating the question of the right to condemn the property taken is a final order from which an appeal to this Court will lie) Delhi Gas Pipeline Corp. v. Swanson, 1974 OK 26, 520 P.2d 670 (Questions concerning the right to condemn should be brought to the attention of the trial court by objecting to the report of the commissioners and the trial court's ruling upon such objections is an appealable order); Town of Ames v. Wybrant, 1950 OK 197, 208 Okla. 307, 220 P.2d 698 (The decision of the district court in condemnation proceedings adjudicating the question of the right to condemn is a final order from which an appeal to this court will lie); Wrightsman v. Southwestern Nat. Gas Co., 1935 OK 724, 173 Okla. 75, 46 P.2d 925 (The decision of the district court in condemnation proceedings on question relating to the right to condemn may be brought to this court for review on appeal) (all citations omitted). Accordingly, "where the right to condemn itself or the necessity of the taking has been properly challenged by exceptions to the report of commissioners would a trial court ruling on those exceptions be subject to immediate appeal to this Court." Scott, 1989 OK 131, 1 at 9, 781 P.2d at 828; see also Casteel, 1974 OK 31, at 1 18, 522 P.2d at 611 (citing Town of Ames v. Wybrant, 1950 OK 197, 203 Okla. 307, 220 P.2d 693) ("[Wlhen any question concerning the right to take by condemnation is raised [by exception}, it must be finally determined judicially, prior to a final determination of any question concerning the amount of damages.") (emphasis added). This reinforces the principle that all issues, except just compensation and damages to the remainder, should be resolved prior to the jury trial

122 Ordinarily, it is the property owner who challenges the taking in a condemnation proceeding. Under the peculiar facts presented in this case, ODOT, the condemning authority, has objected to the taking. More specifically and most importantly, ODOT has challenged the seope of the taking as expanded by the trial court in the amended instructions to the Commissioners. Accordingly, that portion of ODOT's exception which challenged the scope of the taking is immediately appealable before this Court as a final order.

$23 Conversely, the trial court's denial of ODOT's exception challenging the Commissioners' Report which apportioned the compensation award in contravention to the "unit rule" is not immediately appealable as a final order⁴ After the Commissioners filed their Second and Corrected Report, both the Mehtas and ODOT demanded a jury trial, thereby bringing to issue just compensation and damages. When a timely demand for jury trial has been filed, the Commissioners' Report does not end the proceedings. See Jerry Scott, 1989 OK 181, 1 at 8, 781 P.2d at 828. "The appropriate amount of damages must still be fixed by a jury as allowed in the statutory scheme. Thus, in the normal situation where a jury assessment has been demanded, only where the jury has finally determined the amount of compensation will the case be in a posture for appeal to this Court." Id.

1 24 Furthermore, ODOT's exception challenging the apportioning of the award became immaterial and moot upon the parties' demands for jury trial. The Commissioners' award will no longer be relevant when superseded by the jury's verdict. See Owens v. Oklahoma Turnpike Auth., 1954 OK 345, ¶ 10, 283 P.2d 827, 831; City of Oklahoma City v. Garnett, 1956 OK 187, ¶ 5-7, 296 P.2d 766, 767. The duty to apportion the award among the different parties according to their respective rights is in the trial court. The condemning authority has no interest in the apportionment of damages. Grand River Dam Auth. v. Gray, 1943 OK 219, at ¶ 9, 138 P.2d at 103 (citing State ex rel. McCaskill v. Hall, 325 Mo. 165, 28 SW.2d 80 (1980). Furthermore, the Commissioners' Report is not competent or admissible evidence at the jury trial. Richardson, 1991 OK CIV APP 100, at 16, 818 P.2d at 1258 (citing Oklahoma Turnpike Auth. v. Daniel, 1965 OK 7, 398 P.2d 515); Wichita Falls & N.W. Ry. Co. v. Munsell, 1913 OK 373, 38 Okla. 253, 132 P. 906." Accordingly, the trial court's order denying ODOT's exception challenging the apportionment of the award is not subject to immediate appellate review. Therefore, the issue is not properly before this Court.

a. Property to be Condemmed

125 In the typical condemnation proceeding, there is no controversy between the condemnor and condemnee over ownership of the property to be condemned. One cannot condemn a property that he owns.

[TThe institution of the proceeding admits the ownership. The condemnor cannot claim the beneficial ownership of land and at the same time assert that the con-demnee claims all or some part of that interest; the proceeding in condemnation cannot be employed as a means to quiet title; and the right to exercise the power of eminent domain is dependent entirely upon the ownership being in some one other than the condemmor; the power to condemn negatives ownership in the condemnor. Colorado M. Ry. Co. v. Croman, 16 Colo. 381, 27 P. 256, Houston North Shore R. Co. v. Tyrrell, 128 Tex. 248, 98 S.W.2d 786, 108 A.L.R. 1508; 29 C.J.S. Eminent Domain § 260, p. 1232; 18 Am. Jur. 716.

Grand River Dam Auth. v. Simpson, 1948 OK 149, ¶ 18, 192 Okla. 338, 136 P.2d 879, 881 (emphasis added). If a controversy over title arises, it is typically among competing con-demnees.

$26 In a condemnation petition, the condemmnor, inter alia, describes the specific property to be condemned and identifies the owner(s) and all others persons or entities that may have an interest in the property. Public Serv. Co. of Oklahoma v. Willis, 1997 OK 78, ¶ 11, 941 P.2d 995, 999 (citing McC'ra-dy v. Western Farmers Electric Cooperative, 1958 OK 43, 323 P.2d 356). Ordinarily, absent an amendment to the petition, the only property a condemnor may condemn is that described in the petition. 29A C.J.S. Eminent Domain § 865. Neither a landowner nor a trial judge may expand the taking beyond that specified in the condemnation petition. Id. It is the condemnor who determines, and thereafter petitions to condemn, the land they deem necessary for the purpose of the public use at issue. See Duke Power Co. v. Herndon, 26 N.C.App. 724, 217 S.E.2d 82 (1975); Carolina Power & Light Co. v. Creasman, 262 N.C. 390, 137 S.E.2d 497 (1964); State, by State Road Comm'n. v. Bouchelle, 137 W.Va. 572, 73 S.E.2d 482 (1952). The trial court has no power to require a condemmor to amend the petition to include property not previously identified and described in the petition. 29A C.J.S. Eminent Domain § 865. The taking, as described in the petition, may be properly challenged by the condemmnee(s) by excepting to the commissioners' report.

127 However, a property owner is entitled to just compensation not only for the property taken, but also for damages to the owner's remaining property not taken, ie., "damages to the remainder." State ex rel. Dept. of Transp. v. Kelly, 2007 OK CIV APP 25, ¶ 8, 156 P.3d 734, 736 (citing Williams Nat. Gas Co. v. Perkins, 1997 OK 72, 952 P.2d 488). Just compensation means "the value of the property taken, and in addition, any injury to any part of the property not taken." Id. at 17, 156 P.8d at 7837.

28 In the present case, ODOT's petition for condemnation provided a specific description of two (2) properties it sought to condemn: 3.69 acres in fee simple and an additional .81 acres for a temporary easement, what had been termed Property A and Property B by the trial court. The petition listed the Mehtas and Eller as defendants who "own or claim some interest in said property." When ODOT realized Eller's billboard was located on Department-owned property and not on property to be condemned, ODOT sought summary adjudication against Eller.⁵ The trial court denied the motion.⁶ ODOT and Eller subsequently settled and Eller was dismissed with prejudice.

129 However, to determine and properly challenge the nature of the estate taken, ODOT should have filed an exception to the original Commissioners' Report pursuant to § 1203(e), objecting to the taking of Property C and Property D and the resulting awards of compensation. See Ellioit, 1986 OK 59, at T6 fo. 6, 725 P.2d at 868 fn. 6 (citing article 2, § 24, Ok. Const., allows a judicial determination of the necessity of the taking and of the nature of the estate taken when private property is condemned for public use) (citations omitted). The failure to follow § 1208(e) resulted in ODOT waiving its right to a hearing on the estate taken. Id. (addressing the analogous procedure under 66 ©.8.1981, § 55).

T30 Notwithstanding ODOT's failure to file an exception to the original Report, ODOT did not waive its right to except upon the filing of the Commissioners' Second and Corrected Report. ODOT properly filed an exception within thirty (30) days of the filing, objecting to the expanded scope of the taking, i.e., the trial court's inclusion of Property C and Property D in the description of the property taken. ODOT further objected to the resulting appraisal and award of compensation to the Mehtas and Eller for Property C and Property D, respectively. As previously discussed, upon the trial court's denial of the exception, the order is a final order subject to immediate appellate review.

131 We reject the Mehtas' assertion ODOT waived its exception when it filed a demand for jury trial. A demand for jury trial reserves only the issue of compensation and damages to the remainder. When a question concerning the taking is raised, "it must be finally determined judicially, prior to a final determination of any question concerning the amount of damages." See Casteel, 1974 OK 81, at 118, 522 P.2d at 611 (citing Town of Ames v. Wybrant, 1950 OK 197, 220 P.24 693). Thus, ODOT's exception challenging the taking of Property C and Property D was not waived by its May 26, 2004, demand for jury trial, and the appeal remains proper before this Court for review.

1832 Upon reviewing the record on appeal, we agree with ODOT that the trial court erred in denying its exception challenging the taking of Property C and the resulting awards of compensation to the Mehtas and Eller for Property C and Property D, respectively. The record provides ODOT owns Property C. The record further provides the condemnation petition did not include a description of or otherwise seek to condemn Property C. Property D is located unlawfully on Property C. In addition, ODOT and Eller have resolved their dispute over Property D and Eller has been dismissed from the present proceedings. The trial court's inclusion of property not described in the condemnation petition improperly expanded the scope of the taking beyond that contemplated and sought by ODOT. This was error.

133 It is the condemning authority who determines what property it deems necessary for the purpose of the public use at issue, subject to exceptions by the property owner challenging the necessity or legality of the taking. In addition, as discussed below, the Mehtas' claims of ownership of Property C are improper in a condemnation proceeding and cannot be used to expand the scope of a taking sought by a condemning authority. The trial court's attempt to expand the seope of the taking beyond that described and sought in the petition for condemnation was improper. Accordingly, the trial court erred in denying ODOT's May 10, 2004, exception objecting to the taking of Property C and the resulting awards of compensation. Neither the Mehtas nor Eller is entitled to just compensation or damages for Property C or Property D.

b. Inverse Condemnation

34 We acknowledge a dispute over the ownership of Property C has arisen between ODOT and the Mehtas. Although the Meh-tas concede ODOT was granted a highway easement in 1962 covering Property C, they assert ODOT has abandoned the easement or, in the alternative, that they own the property through adverse possession.

185 To challenge ODOT's ownership of Property C, the Mehtas must file an inverse condemnation action. "In an action for inverse condemnation, where one claiming to be the owner of property seeks to recover damages ... for the taking of his property, his ownership or interest in the property must necessarily be established in order to enable him to recover." Incorporated Town of Pittsburg v. Cochrane, 1948 OK 121, ¶ 8, 200 Okla. 497, 197 P.2d 287, 289-90. Thus, in inverse condemnation proceedings, whether there is a taking of a property owner's property is a critical issue and, unless confessed, is a fact question which must be tried to a jury. Carter v. City of Oklahoma City, 1993 OK 134, ¶ 15, 862 P.2d 77, 81; Henthorn v. City of Oklahoma City, 1969 OK 76, ¶ 14, 453 P.2d 1013, 1016. The amount of damages if a taking occurred is also a fact question for the jury. Calhoun v. City of Durant, 1998 OK CIV APP 152, ¶ 5, 970 P.2d 608, 611.

1 36 Upon the filing of a separate inverse condemnation proceeding, the Mehtas may assert their claim of ownership. However, such claim is improper in a condemnation proceeding. We express no opinion on the merits of the Mehtas' claim of ownership.

137 REVERSED IN PART AND REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.

WISEMAN, J., concurs, and FISCHER, J., dissents.

1 . Magic Circle Properties, LLC, subsequently acquired the Mehtas' interest in the property. In January of 2003, Magic Circle was joined as a party defendant. We will refer to these parties as the Mehtas, unless otherwise noted.

2 . We recognize the Mehtas dispute ODOT's ownership of Property C. This issue will be addressed infra.

3 . The issue of jurisdiction is fundamental and can be raised at any time sua sponte. See Collins v. Mid-Continent Pipeline Co., 1999 OK 56, T1 fn. 2, 6 P.3d 1050, 1051 fn. 2.

4 . We agree with ODOT that Oklahoma follows the "unit rule." See Grand River Dam Auth. v. Gray, 1943 OK 219, 192 Okla. 547, 138 P.2d 100 (Where there are multiple interest owners, the property to be condemned should first be appraised as a single unit "as though the property belonged to one person," with the total award apportioned to the various interests at a later time. This is frequently referred to as the "unit rule.").

5 . Again, we recognize the Mehtas dispute ODOT's ownership of Property C. This issue will be addressed infra.

6 . A motion to dismiss Eller as a party or an amended petition excluding Eller could have been a more efficient way to resolve the dispute.