Kennedy v. Yates Petroleum Corp.

681 P.2d 53, 101 N.M. 268
CourtNew Mexico Supreme Court
DecidedMarch 21, 1984
Docket14986
StatusPublished
Cited by6 cases

This text of 681 P.2d 53 (Kennedy v. Yates Petroleum Corp.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kennedy v. Yates Petroleum Corp., 681 P.2d 53, 101 N.M. 268 (N.M. 1984).

Opinions

OPINION

SOSA, Senior Justice.

Plaintiffs W.G. and Betty L. Kennedy (Kennedys) brought a trespass action in the District Court of Eddy County seeking injunctive relief, compensatory and punitive damages against Yates Petroleum Corporation (Yates) arising out of the discovery of a Yates natural gas pipeline crossing Kennedys’ ranch property. The Kennedys alternatively stated a claim seeking damages for unjust enrichment and sought to quiet title. Yates, a private, independent corporation producing petroleum and natural gas, opposed the injunction on two grounds. It first asserted a right-of-way agreement for the pipeline had been executed between Yates and the Kennedys’ predecessors in title, although the agreement was not properly recorded at the time the Kennedys purchased their ranch. Secondly, Yates asserted authority to condemn the pipeline right-of-way pursuant to the eminent domain provisions set forth at NMSA 1978, Section 70-3-5 (Cum.Supp. 1983) and Section 42A-1-22 (Repl.Pamp. 1981).

Although finding sufficient evidence of continuing trespass to warrant issuance of a preliminary injunction, the district court stayed issuance on the condition that Yates initiate condemnation proceedings. Yates filed a petition for condemnation in a separate action and a hearing was subsequently held on Yates’ request for immediate possession of the right-of-way. The record indicates that at this hearing the district court ruled that the use for which the property was sought to be condemned was a public use as a matter of law by virtue of the fact that the Legislature had declared it to be such by enactment of Section 70-3-5. The court therefore concluded that Yates had an immediate right to possess the right-of-way.

On the basis of this determination in the condemnation action, the district court subsequently concluded in the trespass action that the statutory remedy of inverse condemnation was the exclusive remedy to which the Kennedys were entitled. The court therefore dismissed the Kennedys’ trespass complaint with prejudice for failure to state a claim upon which relief could be granted under NMSA 1978, Civ.P. Rule 12(b)(6) (Repl.Pamp.1980). The Kennedys appeal, claiming error in the dismissal since there was an improper finding of public use in the condemnation action. The Kennedys have not filed an appeal from the order of immediate possession since the trial court held further condemnation proceedings in abeyance pending resolution of the instant appeal in the trespass action.

We are asked to determine the effect the courts must give to the implied legislative declaration of public use in Section 70-3-5 where eminent domain proceedings are instituted by a private corporation pursuant to this section.

Section 70-3-5 provides in relevant part:

Any person, firm, association or corporation may exercise the right of eminent domain to take and acquire the necessary right-of-way for the construction, maintenance and operation of pipelines and other necessary facilities * * * for the purpose of conveyance of petroleum, natural gas, carbon dioxide gas and the products derived therefrom * * * * Such land and right-of-way shall be acquired in the manner provided by the Eminent Domain Code [42A-1-1 to 42A-1-33 NMSA 1978],

The Eminent Domain Code provides that a condemnor may petition the court for an order of immediate possession. NMSA 1978, § 42A-1-22 (Repl.Pamp.1981). Section 42A-1-22 further provides that at the hearing on such a petition “the court shall make an order authorizing the condemnor to take immediate possession of the property if it finds that the use for which the property sought to be condemned is a public use and that immediate possession is necessary.” (Emphasis added.) These statutory provisions are grounded in the constitutional prohibition against taking or damaging private property for public use without just compensation. N.M. Const, art. II, § 20. It is axiomatic that this provision prohibits utilization of eminent domain for any private uses. Threlkeld v. Third Judicial District Court, 36 N.M. 350, 15 P.2d 671 (1932). Thus Yates, as condemn- or, has no right to an order of immediate possession without a proper finding of public use by the district court.

There is insufficient evidence in the condemnation action at this point which would support a finding that the use to which the pipeline is being put is indeed a public use. The district court in this action has taken no evidence relevant to the particular uses, purposes or operations of the pipeline. The district court has simply determined, based on a stipulation of the parties, that a Yates natural gas pipeline crossed the Kennedys’ land. The court then ruled that Yates’ pipeline use was a public use on the basis that the enactment of Section 70-3-5 represented a conclusive legislative determination that Yates’ pipeline use was a per se public use.

The Kennedys maintain that in ruling as it did, the district court wrongly elevated the legislative declaration of public use in Section 70-3-5 to the status of an irrebuttable presumption. They essentially argue that the question of public use is one for the courts and the district court in this case gave complete deference to the implied legislative declaration of public use in Section 70-3-5.

As early as 1932, this Court was faced with the question whether a proposed use of land by a private company was indeed a public use which would support the power to condemn. In Threlkeld, the issue was whether a lumber company could condemn a railroad line across private land for the ultimate purposes of logging and transporting timber. This Court concluded that the Legislature had made no positive declarations of public use in the controlling eminent domain statutes and that the ultimate issue of public use was subject to judicial determination.

In Gallup American Coal Co. v. Gallup Southwestern Coal Co., 39 N.M. 344, 47 P.2d 414 (1935) a condemnation judgment was obtained under a statute which granted coal mine owners eminent domain authority for rights of way over private lands. The question was whether it was within legislative competence to declare a public use in the coal mining industry thereby allowing condemnation of private land to aid the industry. This Court squarely held the challenged statute unconstitutional insofar as it declared by implication a legislative determination of public use in coal mining. The coal mining industry, like the lumbering industry in Threlkeld, was determined not to be a public use which would justify exercise of eminent domain power.

Implicit in this Courts’ approach in Gallup was the power of the judiciary to determine issues of public use. Later decisions uniformly reaffirm that the question of public use, in the context of a legislative authorization of eminent domain power, is ultimately one for judicial determination. State ex rel. Red River Valley Co. v. District Court of Fourth Judicial District, 39 N.M. 523, 51 P.2d 239 (1935); Kaiser Steel Corp. v. W.S. Ranch Co., 81 N.M. 414, 467 P.2d 986

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Bluebook (online)
681 P.2d 53, 101 N.M. 268, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kennedy-v-yates-petroleum-corp-nm-1984.