One-Gateway Associates v. Division of Highways

28 Ct. Cl. 222
CourtWest Virginia Court of Claims
DecidedJanuary 21, 2011
DocketCC-09-0153
StatusPublished

This text of 28 Ct. Cl. 222 (One-Gateway Associates v. Division of Highways) is published on Counsel Stack Legal Research, covering West Virginia Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
One-Gateway Associates v. Division of Highways, 28 Ct. Cl. 222 (W. Va. Super. Ct. 2011).

Opinion

SAYRE, JUDGE:

Claimant, One-Gateway Associates, a Limited Liability Company (hereinafter “OGA”), entered into a contract (hereinafter “the Contract”) with Respondent, the West Virginia Department of Transportation, Division of Highways (hereinafter “DOH”), dated January 27,1998. OGA alleges that while it fulfilled all of its obligations under the Contract, DOH failed to perform its reciprocal obligations thereunder. OGA asserts that as a consequence it is entitled to damages in the amount of $3,705,000.00 from DOH for breach of contract. Conversely, DOH argues that it has fully performed all of its obligations under the Contract. The Court is of the opinion to make an award in this claim for the reasons more fully stated below.

U.S. Route 19 is a heavily traveled, four lane, limited access state highway running generally north and south through the middle of West Virginia.26 As it passes through Summersville in Nicholas County, U.S. Route 19 has made it possible for a considerable amount of commercial development to take place adjacent to both its east and west sides. While there are no interchanges, there are a number of at-grade intersections affording these commercially developed properties access to U.S. Route [223]*22319. Traffic lights control certain of these intersections, but not all of them.

Analysis of traffic data by DOH concerning traffic volumes and accident rates, both present and projected, indicates that the U. S. Route 19 intersections in the vicinity of Summersville (whether controlled with traffic lights or not) are inadequate to serve the traveling public without some modifications, such as frontage roads. To this end, DOH has caused environmental studies to be made and preliminary engineering work to be performed.27

OGA was formed in 1994 to participate in the opportunities for commercial development afforded by U.S. Route 19 as it passes through Summersville. Consequently, OGA acquired a 26 acre tract (hereinafter “the OGA Site”) suitable for development. The OGA Site abuts the west side of U.S. Route 19 and extends along U.S. Route 19 from an at-grade intersection, designated “Professional Park Drive,” north to a another at-grade intersection, designated “Industrial Drive”.

When OGA purchased its 26 acre Site, it lacked access to U.S. Route 19, either via Industrial Drive or via Professional Park Drive. Accordingly, extensive negotiations took place between OGA and DOH, resulting in apreliminary agreement which afforded the OGA site ingress and egress to and from U.S. Route 19 via Industrial Drive, the northern intersection. Nevertheless, with this single access to U.S. Route 19 a significant portion of the OGA Site was developed by the leasing and construction of several businesses, including a Wal-Mart store.

OGA continued to seek ingress and egress to and from U.S. Route 19 for its Site via Professional Park Drive, the southern intersection. These negotiations culminated in the Contract at issue. For its part, DOH agreed to use its “best efforts” to acquire a small tract of land (containing 5,000 square feet) from OGA’s neighbor to the south, Retain Designs, Inc. (hereinafter “the Retail Designs Tract”) by agreement if possible or, failing that, by instituting an eminent domain proceeding in the Circuit Court of Nicholas County. After DOH obtained title to the Retail Designs Tract (by either means), a five-lane entrance, controlled by the traffic light, would then be constructed across the Retail Designs Tract, providing access from the Professional Park Drive intersection to both the OGA Site and property belonging to Retail Designs, Inc., to the south of the OGA Site.

For its part, OGA agreed to construct a frontage road across the front of its Site, extending from Industrial Drive to Professional Park Drive, at its expense but according to plans and specifications provided by DOH; and to then transfer title of the new frontage road to DOH. Further, OGA agreed to also convey to DOH the 1.76 acres of its 26 acre Site upon which it had constructed the frontage road.

As it agreed to do, OGA constructed the frontage road according to DOH’s plans and specifications. The work was accepted by DOH. The 1.76 acre tract, including the frontage road, was then transferred by OGA to DOH and is now part of the State Road System. Thus, OGA has fiilly performed its part of the contract.

The parties have stipulated that the actual cost to OGA of the frontage road and improvements was $554,000.00, and that the fair market value of the 1.76 acres on the date of its transfer to DOH was $429,000.00.

DOH also agreed to transfer a parcel of “excess” DOH right-of-way (containing 0.815 of an acre) to OGA. There was no evidence presented by either party as to the fair market value of this excess right-of-way. However, DOH’s deed [224]*224to this excess right-of-way specifies that it is a deed of exchange for OGA’s 1.76 acre tract. The DOH deed was delivered to OGA, which accepted it and recorded it in the Nicholas County Clerk’s Office.

Retail Designs, Inc., the owner of the 5,000 square foot tract that was the subject of the Contract, refused to voluntarily convey its tract to DOH. Accordingly, as it had agreed to do in the Contract, DOH filed a suit in the Circuit Court of Nicholas County to obtain an Order of Entry for the Retail Designs Tract, by condemnation. This action too was resisted by Retail Designs, Inc., which argued that its property was being condemned for a private purpose, i.e., to provide ingress and egress to and from the Wal-Mart store site.

The case was heard in the Circuit Court by Judge Gary Johnson, who agreed with Retail Designs, Inc., and dismissed the condemnation proceeding on the ground that DOH had authority to take private property by eminent domain only for a public purpose.

This adverse ruling was not appealed by DOH. OGA argues that DOH’s failure to appeal constitutes a breach of the provision of the Contract wherein DOH promised to exert its “best efforts” to obtain the Retail Designs Tract. Further, OGA contends that DOH also failed to exert its “best efforts” by assigning a less experienced attorney to prosecute the eminent domain proceeding in the Circuit Court.

This Court, having considered the arguments of counsel for both of the parties to this claim, is of the opinion that there is no basis for the argument that DOH did not use its “best efforts” to obtain the Retail Designs Tract and to construct the contemplated five-lane entrance to the OGA Site via Professional Park Drive.

There are many factors that must be considered before appealing an adverse ruling from a lower court. For instance, West Virginia, unlike most states (and the federal court system), does not have “appeal as a matter of right.” One must first petition to be allowed to appeal. (More often than not, the West Virginia Supreme Court of Appeals does not grant petitions to be allowed to appeal).

It cannot be said that DOH agreed to appeal “no matter what.” No evidence was presented on the question of the amount of experience possessed by the DOH attorney who handled the condemnation proceeding. Further, to argue that a more experienced attorney should have been assigned to the case would require evidence either that the attorney assigned the case was without experience or that a more experienced attorney would have obtained a result favorable to DOH (and, by extension, to OGA). And no one suggests that the attorney assigned the case failed to use his best efforts.

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Cite This Page — Counsel Stack

Bluebook (online)
28 Ct. Cl. 222, Counsel Stack Legal Research, https://law.counselstack.com/opinion/one-gateway-associates-v-division-of-highways-wvctcl-2011.