City of Carmel v. Barham Investments, LLC

• Court: Indiana Court of Appeals
• Decided: October 30, 2023
• Docket: 22A-PL-02399
• Status: Published

Opinion

FILED Oct 30 2023, 9:10 am

CLERK Indiana Supreme Court Court of Appeals and Tax Court

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEES Bryan H. Babb BARHAM INVESTMENTS, LLC & Jonathan W. Hughes COAST TO COAST CARMEL Bradley M. Dick CORP. Bose McKinney & Evans LLP Indianapolis, Indiana Alice M. Morical Riley H. Floyd Janet Lynn Thompson Hoover Hull Turner LLP Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

City of Carmel, October 30, 2023 Appellant-Defendant, Court of Appeals Case No. 22A-PL-2399 v. Appeal from the Marion Circuit Court Barham Investments, LLC, The Honorable Stephen R. Marion County Treasurer, and Creason, Magistrate Coast to Coast Carmel Trial Court Cause No. Corporation, 49C01-1712-PL-46760 Appellee-Plaintiff.

Opinion by Judge Bradford Judges May and Mathias concur.

Bradford, Judge.

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 1 of 12 Case Summary [1] The City of Carmel used its power of eminent domain to convert the

intersection of Keystone Avenue and 96th Street into a roundabout interchange

(“the Project”). Barham Investments, LLC (“Barham”), owns a car dealership,

whose main entrance was on Threel Road, near the intersection that Carmel

needed to acquire to complete the Project. In April of 2018, the trial court

entered an agreed order of appropriation and appointment of appraisers (“the

Agreed Order”). Barham considered the appraisers’ valuation of the Property

to be too low because the taking allegedly extinguished its easement in Threel

Road.

[2] In January of 2021, Carmel moved for partial summary judgment arguing that

Barham was not entitled to compensation for its loss of access to Threel Road,

which motion the trial court denied. In May of 2022, after a jury trial, the jury

awarded Barham $2.4 million in damages. Carmel moved to correct error, for

new trial, or for remittitur. The trial court denied Carmel’s motions and

Carmel appealed, raising multiple issues, including whether the trial court had

erred in denying its partial-summary-judgment motion. Because we find that

issue dispositive, and because Barham did not have a cognizable interest in

Threel Road at the time, we reverse and remand with instructions to grant

Carmel partial summary judgment on this issue.1

1 Due to our disposition of partial-summary-judgment issue, we need not reach the remaining issues.

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 2 of 12 Facts and Procedural History [3] In December of 2017, Carmel exercised its eminent-domain power to construct

the Project. In doing so, Carmel filed a condemnation complaint in which it

claimed that it needed to acquire three separate property interests from Barham,

including 0.017 acres in fee simple, an access-control line, and 0.0111 acres in a

temporary right-of-way for construction (“the Property”). Barham objected to

Carmel’s complaint, claiming that Carmel had “failed to properly identify all of

the ownership interests being extinguished by the taking. Namely, the

easement rights of the landowner to access and use Threel Road.” Appellant’s

App. Vol. II p. 97. Barham’s car dealership consisted of a four-story, glass-

enclosed car showcase and a guest-entry area positioned towards the

dealership’s main entrance on Threel Road, which had run alongside Keystone

Avenue. However, Carmel had already condemned Threel Road in a separate

cause: Carmel v. County Line Owners Association, Inc., Case No. 49D02-1801-PL-

003953 (“the County Line Action”). So, Carmel did not name Threel Road in its

condemnation complaint or seek to acquire it.

[4] In April of 2018, the trial court denied Barham’s objection and the parties

entered into the Agreed Order, which authorized Carmel’s acquisition of the

Property. Barham consented to the “Appropriation of Real Estate as sought in

the Complaint.” Appellant’s App. Vol. II p. 104. In the Agreed Order, the trial

court ordered that the taking consisted of “frontage along Threel Road” and

that the access-control line “will be the new west property line of the subject,

and the intent is to limit any access to the west of this line towards Keystone.”

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 3 of 12 Appellant’s App. Vol. II pp. 104–05. The Agreed Order did not include any

acquisition of Threel Road.

[5] Later that month, the trial court instructed the three court-appointed appraisers

to appraise the Property described in Carmel’s complaint. In June of 2018, the

appraisers assessed the total just compensation due to Barham to be

$163,000.00. Barham disputed the appraisers’ valuation, alleging that the “total

damages assessed to [Barham] are too low[,]” and requested a jury trial.

Appellant’s App. Vol. II p. 124.

[6] In January of 2021, Carmel moved for partial summary judgment, arguing that

Barham was not entitled to compensation for its loss of access to Threel Road.

In its motion, Carmel relied on the County Line Action, which, in part, had

granted Carmel “the total acquisition of Threel Road” in April of 2018.

Appellant’s App. Vol. IV p. 16. In March of 2022, the trial court denied

Carmel’s motion for partial summary judgment, finding that “there are genuine

issues of material facts that remain unresolved.” Appellant’s App. Vol. IV p.

108. In doing so, trial court explained that Carmel “cite[d] no law that

definitively foreclose[d] [Barham]’s arguments for compensation for the

elimination of the ingress and egress easements or the diminution of value that

the loss ha[d] caused to the value of their properties.” Appellant’s App. Vol. IV

p. 110.

[7] The trial court conducted a jury trial from May 24 to May 26, 2022, at the

conclusion of which the jury awarded Barham $2.4 million in damages.

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 4 of 12 Carmel moved to correct error, for new trial, or for remittitur, and moved to

strike and correct the judgment concerning interest. The trial court agreed with

Carmel’s position on interest; however, it denied Carmel’s motions to correct

error and for new trial or remittitur.

Discussion and Decision A. Standard of Review [8] Carmel sought partial summary judgment claiming that Barham was not

entitled to compensation “as a result of the loss of access to Threel Road.”

Appellant’s App. Vol. II p. 142. “The standard of review of a summary

judgment ruling is the same as that used in the trial court: summary judgment

is appropriate only where the evidence shows there is no genuine issue of

material fact and the moving party is entitled to a judgment as a matter of

law.” Row v. Holt, 864 N.E.2d 1011, 1013 (Ind. 2007). All inferences should be

drawn in favor of the non-moving party. Id.

[9] In denying Carmel’s motion, the trial court concluded that Carmel had “cite[d]

no law that definitively foreclose[d] [Barham]’s arguments for compensation for

the elimination of the ingress and egress easements or the diminution of value

that the loss has caused to their properties.” Appellant’s App. Vol. II p. 110.

“We review the trial court’s grant or denial of summary judgment de novo.”

Coutar Remainder I, LLC v. State, 91 N.E.3d 610, 614 (Ind. Ct. App. 2017), trans.

denied.

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 5 of 12 B. Whether the Closing of Access to Threel Road Constitutes a Compensable Taking [10] Whether a taking has occurred is a question of law, Biddle v. BAA Indianapolis,

LLC, 860 N.E.2d 570, 575 (Ind. 2007), which we review de novo. Bradley v. City

of New Castle, 764 N.E.2d 212, 216 (Ind. 2002). When considering whether a

taking has occurred, the threshold question is “whether the plaintiff landowner

has a property interest in the property that has been acquired by the State.”

State v. Dunn, 888 N.E.2d 858, 862 (Ind. Ct. App. 2008), trans. denied; see

also Ind. Code § 32-24-1-16 (allowing inverse condemnation suits where a

“person ha[s] an interest in property”). In the context of property owners

abutting public roads, two principles are well-settled: “First, the right of an

abutting landowner to ingress and egress over the public roads is a cognizable

property right, and substantial or material interference with this right by the

[S]tate is a compensable taking (‘the ingress-egress rule’). […] Second, by

contrast, an abutting landowner has no cognizable property right in the free

flow of traffic past his property (‘the traffic-flow rule’).” AAA Fed. Credit Union

v. Ind. Dep’t of Transp., 79 N.E.3d 401, 405 (Ind. Ct. App. 2017), trans. denied.

[11] Carmel argues that it “did not in this case acquire Threel Road or an easement

in Threel Road”; consequently, this case should be controlled by the traffic-flow

rule and the trial court erred in leaving the question of whether there had been

the loss of an easement for the jury. Appellant’s Br. p. 26. For its part, Barham

argues that the trial court properly denied Carmel’s motion for summary

judgment because this case involves an easement and a substantial change in

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 6 of 12 how the Property is used. We agree with Carmel that it did not acquire

Barham’s easement in this case and, even if it had, Barham’s easement granted

it only a right to ingress and egress over Threel Road—not to a curb cut on

Threel Road—and the interference is neither substantial nor material.

[12] Barham claims that Carmel owed it compensation for the taking of its ingress

and egress easement in Threel Road. At some point, Barham acquired a

common Non-Exclusive Easement over, across and under the Easement Property [(i.e., Threel Road)] for pedestrian and vehicular traffic, sewer lines, water lines, fire protection lines and other utilities. The purpose of such easement is to provide the owners, lessees and occupants of such property within County Line Commercial Park ingress and egress to such property, and to provide the means for the owners of property within County Line Commercial Park to service their property with water mains, sanitary sewer mains, and fire protection water lines.

Appellant’s App. Vol. V p. 67 (emphasis added). The Agreed Order

appropriated a “fee simple area that is a triangular strip of land off of the

northwest side of the lot, adjacent to Threel Road” and a “temporary right of

way of 0.111 acres at the southwest corner of the site to remove the drive

entrance and complete drainage work.” Appellant’s App. Vol. II pp. 104–05

(emphasis added). Noticeably absent from that acquisition is Barham’s alleged

interest in Threel Road itself, in which Barham claimed to have maintained its

ingress and egress easement.

[13] In general, “[e]asements are limited to the purpose for which they are

created[,]” Whitt v. Ferris, 596 N.E.2d 230, 233 (Ind. Ct. App. 1992), and

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 7 of 12 convey no other rights beyond those necessary for the enjoyment of the

easement. Wendy’s of Ft. Wayne, Inc. v. Fagan, 644 N.E.2d 159, 162 (Ind. Ct.

App. 1994). Based on the language of Barham’s deeded easement, at some

point, Barham had ingress and egress rights in Threel Road, not to any specific

curb-cut onto Threel Road or in the Property that Carmel sought to acquire.

[14] In Coutar, the property owner had deeded to the State a portion of real estate

that specifically reserved to the property owner “an opening of 77.59 feet in the

State’s access control line to State Road 37[,]” a covenant which ran with the

land. 91 N.E.3d at 612. The parties devoted much briefing to whether this was

an ingress-and-egress case or a traffic-flow case; however, we concluded that the

case was “unique and unprecedented on its established set of facts […] in that,

unlike any of the cases relied on by the parties, here the property owner’s deed

expressly provide[d] for the right of access that [was] being taken.” Id. at 615

(internal citations and quotations omitted). The State attempted to close that

opening in its condemnation action, but we concluded that “the opening in the

access control line [was] a property right” because the “deed reserve[d] 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.” Id. at 616.

[15] Here, unlike in Coutar, the deeded easement does not expressly reserve a curb-

cut right from the Property to Threel Road. The deed simply reserved an

easement “over, across and under [Threel Road] for pedestrian and vehicular

traffic, sewer lines, water lines, fire protection lines and other utilities.”

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 8 of 12 Appellant’s App. Vol. V p. 67. Additionally, the Agreed Order gave Carmel the

right to acquire only “a portion of the frontage along Threel Road[,]” including a

0.017-acre triangular-shaped strip of land in fee simply and a 0.111-acre

temporary right-of-way—not Threel Road itself, which is the property that

Barham’s easement burdened. Appellant’s App. Vol. II p. 104 (emphasis

added). We cannot expand the deeded easement’s language to include a right

to curb-cut access to Threel Road from the Property when the easement

reserved no such right. See Wendy’s of Ft. Wayne, 644 N.E.2d at 162.

[16] In any event, however, Carmel appropriated Threel Road—the servient

estate—in the County Line Action. In the County Line Action, the trial court

granted Carmel, among other things, “the total acquisition of Threel Road[,]”

causing “Threel Road [to] be permanently closed as a result of the Project.”

Appellant’s App. Vol. VIII pp. 85–86. With its total acquisition of Threel

Road, Carmel acquired all the interests in Threel Road, including Barham’s

easement that it had received from the County Line Realty Company.2

[17] While Indiana case law appears silent on the issue, other authorities have held

that the taking of real property by eminent domain extinguishes any easements

burdening the property. See Matter of Ossining Urb. Renewal Agency v. Lord, 350

2 Presumably, Barham knew, or should have known, about the County Line Action by virtue of its membership in the County Line Owners Association and could have sought an inverse condemnation claim to protect its interest. See Murray v. Lawrenceburg, 925 N.E.2d 728, 733 (Ind. 2010) (concluding “that inverse condemnation is the only remedy” when a landowner believes the government has taken an interest in its property without adhering to the eminent-domain proceedings in Indiana Code section 32-24-1).

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 9 of 12 N.E.2d 405, 406 (N.Y. 1976) (“Under the ‘in rem’ theory of the nature of title

acquired by eminent domain, the condemnor takes title to land free of all

encumbrances and inconsistent proprietary rights and extinguishes all interests

and estates in the property.”); see also New England Cont’l Media, Inc. v. Town of

Milton, 588 N.E.2d 1382, 1384 (Mass. Ct. App. 1992) (“Generally, an eminent

domain taking in fee simple extinguishes all other interests in the subject

property. In particular, where an easement exists the taking of the servient

estate will destroy the easement rights of the dominant estate.”) (internal

citations omitted). Likewise, the default rule in federal eminent-domain cases

“is that a taking in fee simple establishes new title and extinguishes all existing

possessory and ownership interests not specifically excepted.” U.S. v. 194.08

Acres of Land, More or Less, Situated in St. Martin Parish, State of La., 135 F.3d

1025, 1029 (5th Cir. 1998).

[18] In a similar vein, we have previously held that the exercise of eminent domain

extinguished the reversionary interest in a deed, because such a “restriction

cannot be enforced against the condemning authority as long as that entity’s use

is for a public purpose; the only remedy for a violation of that restriction is

monetary compensation.” Jensen v. City of New Albany, 868 N.E.2d 525, 529

(Ind. Ct. App. 2007). We conclude that Carmel extinguished Barham’s

easement in Threel Road when it acquired Threel Road in its entirety in the

County Line Action; therefore, there was no easement to take in the current case.

Having established that there was no easement at the time of Carmel’s

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 10 of 12 acquisition in this case, we now turn our attention to the ingress-egress and

traffic-flow rules.

C. Ingress-Egress and Traffic-Flow Rules [19] To the extent the parties argue over whether a compensable taking occurred in

this case, they attempt to characterize this case as either one of traffic flow or

the taking of ingress and egress rights. Either way, our conclusion is the same:

Barham was not entitled to compensation for the closure of access to Threel

Road in this case. Carmel had already acquired Threel Road in the County Line

Action, thereby extinguishing whatever rights Barham had had in Threel Road,

and the closing of Barham’s access by the taking in this case is non-

compensable under the ingress-egress and traffic-flow rules. Under the ingress-

egress rule, an interference with those rights is compensable only if it “is

substantial or material.” State v. Dunn, 888 N.E.2d 858, 864 (Ind. Ct. App.

2008), trans. denied. The interference here is neither of those because Barham

maintains sufficient access to run its business via Aronson Road. See State v.

Tolliver, 246 Ind. 319, 205 N.E.2d 672 (1965) (concluding that the interference

with ingress and egress rights was substantial and material when it left only one

access point, which was insufficient for the landowner to run its business at all).

Similarly, under the traffic-flow rule, “the mere reduction in or redirection of

traffic flow to a commercial property is not a compensable property right[,]”

which would make Barham’s loss of access non-compensable as two access

points remain untouched. State v. Kimco of Evansville, Inc., 902 N.E.2d 206, 214

(Ind. 2009); see also AAA Federal Credit Union, 79 N.E.3d at 406 (holding that the

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 11 of 12 closure of a landowner’s access to U.S. 31 was not compensable because, while

the new route was more circuitous and inconvenient, other access points

remained untouched). In short, the trial court erred when it denied Carmel’s

motion for partial summary judgment on the issue of whether Barham was

entitled to compensation specifically for the loss of access to Threel Road.

[20] The judgment of the trial court is reversed, and we remand with instructions for

to grant Carmel partial summary judgment on this issue.

May, J., and Mathias, J., concur.

Court of Appeals of Indiana | Opinion 22A-PL-2399 | October 30, 2023 Page 12 of 12