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

• Court: Supreme Court of Iowa
• Decided: March 3, 2017
• Docket: 16–0906
• Status: Published

Opinion

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. 2

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. 3

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 4

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 5

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). 6

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 7

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. 8

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 9

with an uneconomical remnant was untimely under Iowa Code section

6A.24(1) and dismissing the action.