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


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  •                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.
    AFFIRMED.