DD 11/12/08 Rerouting traffic may have the same effect on landowner as restricting access, but it's not inverse condemnation.

Daily Development for Wednesday, November 12, 2008 by: Patrick A. Randolph, Jr. Elmer F. Pierson Professor of Law UMKC School of Law Of Counsel: Husch Blackwell Sanders Kansas City, Missouri dirt@umkc.edu EMINENT DOMAIN; INVERSE CONDEMNATION; ACCESS: Although an inverse condemnation may lie for partial but material obstruction of access to a public highway, no damages will lie for alteration of traffic patterns on the highway, even though the net effect of access to landowner’s premises is effectively the same. State v. Dunn, 888 N.E.2d 858 (Ind.App. 2008). Dunn owned a hotel property that had access, via a service road, to and from the northbound and southbound lanes of Green River Road. The State elected to restrict access to Green River Road and erected a concrete median in its center, thereby preventing southbound traffic from making left turns into the service road entrance to the property. Without the median, southbound traffic would cross over five lanes of northbound traffic to turn onto the service road. Following the change, southbound traffic had to follow a circuitous route to reach the service road. Dunn filed an inverse condemnation action against the State, claiming that installation of the median completely eliminated access to the property from the southbound lane of Green River Road, thereby substantially and materially impairing vehicular access to the property so as to constitute a taking of property without just compensation. The State contended that Dunn was not entitled to compensation as a matter of law because the State installed the median under its police powers and it does not constitute a compensable taking. Both parties filed motions for summary judgments. The trial court held for Dunn, finding that a taking had occurred. A jury awarded damages in the amount of $3,650,000, and the trial court awarded an additional $1,049,600 in prejudgment interest, $109 in costs, and $25,000 in attorneys' fees. On appeal, the Court of Appeals of Indiana reversed, holding that the median affected traffic flow, rather than ingress and egress, and therefore did not constitute a compensable taking. The case was decided under the Indiana Code provision that allows an inverse condemnation claim where a person's property has been requisitioned for public use without the procedures of eminent domain. The threshold question in such a claim is whether the plaintiff landowner has a property interest in the property that has been acquired by the State. As defined in State v. Ensley, 164 N.E.2d, 348-49 (1960), the leading case on the issue, "Property in its legal sense means a valuable right or interest in something rather than the thing itself, and is the right to possess, use and dispose of that something in such a manner as is not inconsistent with the law." This right includes a right of ingress and egress. Although a property owner has an easement of ingress and egress in an abutting public highway that cannot be taken without compensation, the Indiana Supreme Court held that a taking does "occur where ingress and egress is made more circuitous and difficult" because there is no property right to the free flow of traffic past a property. Town Council of New Hampshire v. Parker, 726 N.E.2d 1217 (Ind.2000). Where there has been an interference with the right of ingress and egress itself, a claim is compensable if that right has been "substantially or materially interfered with or taken away." It is insufficient that state action created a partial limitation or obstruction. Based on this holding, claims are distinguished into two types: those alleging damages resulting from an alteration in traffic flow do not result in a cognizable claim, while those alleging interference with the right to ingress and egress may result in a compensable claim if such interference is substantial or material. Here, Dunn's claim fell within the first line of cases. The court expressly rejected Dunn's claim that the degree of damages suffered by the business is relevant to determination of which type of claim he is making. In essence, it concluded, Dunn was claiming a right to the free flow of traffic to his property. This, as noted, was not a protected right. Comment: This is the first time the editor has encountered the stated distinction between traffic flow and actual access to property. Thus, the editor has not thought before about the question of whether the obstruction of traffic flow ought to be compensable as a taking of access if the net effect is to render the business operations on plaintiff’s property significantly less valuable. The editor is symphathetic with the notion that “the line must be drawn somewhere” and that it is quite difficult to judge the net effect of traffic flow modifications on access, and consequently on value. For some purposes, elimination of cars crossing five lanes of traffic to reach one’s premises might render the premises more valuable. In any event, compensation for partial interference with access already is an uphill argument, and the editor isn’t surprised that parallel arguments are blocked completely. Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. The same is true of all commentary provided by contributors to the DIRT list. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA. Parties posting messages to DIRT are posting to a source that is readily accessible by members of the general public, and should take that fact into account in evaluating confidentiality issues. ABOUT DIRT: DIRT is an internet discussion group for serious real estate professionals. Message volume varies, but commonly runs 5 to 15 messages per work day. Daily Developments are posted every work day. To subscribe, send the message subscribe Dirt [your name] to listserv@listserv.umkc.edu To cancel your subscription, send the message signoff DIRT to the address: listserv@listserv.umkc.edu for information on other commands, send the message Help to the listserv address. DIRT has an alternate, more extensive coverage that includes not only commercial and general real estate matters but also focuses specifically upon residential real estate matters. Because real estate brokers generally find this service more valuable, it is named “BrokerDIRT.” But residential specialist attorneys, title insurers, lenders and others interested in the residential market will want to subscribe to this alternative list. If you subscribe to BrokerDIRT, it is not necessary also to subscribe to DIRT, as BrokerDIRT carries all DIRT traffic in addition to the residential discussions. To subscribe to BrokerDIRT, send the message subscribe BrokerDIRT [your name] to listserv@listserv.umkc.edu To cancel your subscription to BrokerDIRT, send the message signoff BrokerDIRT to the address: listserv@listserv.umkc.edu DIRT is a service of the American Bar Association Section on Real Property, Probate & Trust Law and the University of Missouri, Kansas City, School of Law. Daily Developments are copyrighted by Patrick A. Randolph, Jr., Professor of Law, UMKC School of Law, but Professor Randolph grants permission for copying or distribution of Daily Developments for educational purposes, including professional continuing education, provided that no charge is imposed for such distribution and that appropriate credit is given to Professor Randolph, DIRT, and its sponsors. DIRT has a WebPage at: https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=http://cctr.umkc.edu/dept/dirt/