James M. Creegan, et al., Appellants,
The State of Kansas, et al., Appellees.
Fifth Amendment taking occurs when a party with the power of
eminent domain deprives the owner of a property right. In
order for the taking of an intangible property right to be
compensable in Kansas, it is not necessary that the property
be physically taken or for the property to be damaged within
the meaning of K.S.A. 26-513(a).
violation of a restrictive covenant running with subdivision
land by a party with the power of eminent domain is a
compensable taking of a private property interest in real
estate possessed by an owner of a dominant subdivision
parcel, and that owner may sue in inverse condemnation.
of the judgment of the Court of Appeals in an unpublished
opinion filed January 23, 2015.
from Johnson District Court; James F. Vano, judge. Judgment
of the Court of Appeals reversing and remanding to the
district court is affirmed. Judgment of the district court is
reversed and remanded with directions.
Douglas J. Patterson, of Property Law Firm, LLC, of Leawood,
argued the cause, and Michelle W. Burns and Kellie K. Warren,
of the same firm, were with him on the brief for appellants.
Charles E. Millsap, of Fleeson, Gooing, Coulson & Kitch,
L.L.C., of Wichita, argued the cause, and Lyndon W. Vix, of
the same firm, and Timothy P. Orrick and Paul Schepers, of
Orrick & Erskine, L.L.P., of Overland Park, and Barbara
W. Rankin, chief counsel, of Kansas Department of
Transportation, were with him on the briefs for appellees.
Timothy P. Orrick, of Orrick & Erskine, L.L.P., of
Overland Park, was on the brief for amici curiae League of
Kansas Municipalities, City Attorneys Association of Kansas,
Kansas Association of Counties, and Kansas Rural Water
Christopher F. Burger, of Stevens & Brand, L.L.P., of
Lawrence, was on the brief for amicus curiae Westar Energy,
an inverse condemnation action brought by property owners in
the Grande Oaks subdivision in Overland Park to seek
compensation from the State of Kansas and the Kansas
Department of Transportation (collectively KDOT) for
violation of restrictive covenants burdening subdivision
property. KDOT obtained summary judgment in defendants'
favor in the district court, but a panel of the Court of
Appeals reversed. Creegan v. State, No. 111, 082,
2015 WL 423835 (Kan. App. 2015) (unpublished opinion).
on KDOT's petition for review, we depart from the
rationale of the Court of Appeals but affirm its result.
Violation of restrictive covenants can support the taking of
a compensable real property interest in an inverse
condemnation action. And this case must be remanded to
district court to determine the amount, if any, of the just
compensation due to the plaintiffs.
and Procedural Background
underlying facts of this case and its procedural history in
the district court are not in dispute. As the Court of
Appeals set out those facts and history:
"Grande Oaks is a subdivision in Johnson County, Kansas.
The plots within Grande Oaks were made subject to a
Declaration of Restrictions filed in the Register of Deeds
Office of Johnson County, Kansas, on June 22, 1978. In
relevant part, the Declaration of Restrictions stated that
the property within Grande Oaks should be occupied and used
for single-family residence purposes only.
"In 1999, KDOT purchased a sizeable section of real
property from Christ Evangelical Lutheran Church of Lenexa,
Kansas, Inc., which included land platted as lots 55 through
75 in Grande Oaks. In 2005, KDOT placed trailers on these
lots and, in subsequent years, used the lots for various
construction activities. Eventually, KDOT constructed
permanent bridges and pavements on a number of the lots. The
existing traffic pattern currently utilizes these newly
"In March 2012, Plaintiffs, who all owned real property
in Grande Oaks, initiated this lawsuit claiming inverse
condemnation by Defendants. After some limited discovery,
Defendants filed a motion for summary judgment[, ] arguing
that violation of the restrictive covenant in this case was
not a compensable taking under Kansas law."
Creegan, 2015 WL 423835, at *1.
Court of Appeals noted, no transcript of the district court
hearing on summary judgment is included in the appellate
record, but the record does contain a memorandum decision
issued by the district judge. It reads in pertinent part:
"In this case, Plaintiffs do not allege an actual,
physical taking. Instead, they allege that Defendant damaged
their property by using its own property in violation of its
deed restrictions. . . .
"The watershed issue in this case, the claim from which
all of the Plaintiffs' theories of damages flow
entirely[, ] is the State's violation of the restrictive
covenants running with the land. Restrictive covenant
compliance may be a contractual expectation, an intangible
property right of the Plaintiffs and every other property
owner in the subdivision. There is no dispute that the State
has violated the restrictive covenants with respect to the
lots it owns through purchase. However, violation of the
restrictive covenants is not a physical taking. Some physical
taking or substantial inevitable damage resulting in a taking
must be alleged and produced in evidence to support a claim
for inverse condemnation. The 'taking' alleged in
this case is not a compensable taking at all. . . .
. . . .
". . . This trial court . . . will not create or expand
the cause of action not otherwise recognized under Kansas
. . . .
". . . The Plaintiffs' case at bar pivots entirely
upon the violation of restrictive covenants burdening
property owned by the State. In Plaintiffs' theory,
damages flow from the violation of the restrictive covenants.
There is no evidence in this case of any actual physical
taking of the real property, or substantial or sustained and
inevitable physical damages to the real property amounting to
a 'taking' of the real property owned by the
"Defendant argues that Plaintiffs' only claim of
damages is the alleged diminution in the values of their
respective properties, which are not compensable in an
inverse condemnation case. On the other hand, Plaintiffs
argue that they have alleged compensable damages. Plaintiffs
alleged damages do not rise to the level of the taking
required for inverse condemnation. They are incidental to the
primary claim upon which the Plaintiffs rest, i.e.,
violation of the restrictive covenants. They are not
compensable in inverse condemnation.
"In response to Defendant's Motion for Summary
Judgment, Plaintiffs have only provided evidence of a
diminution in value of their properties."
close of this discussion, the district judge granted summary
judgment to the defendants.
appeal, a majority of the Court of Appeals panel ruled that
restrictive covenants are real property interests and that
the damage done to those property interests by KDOT's
violation of the covenants required just compensation. 2015
WL 423835, at *6. Judge G. Gordon Atcheson concurred in the
majority's result, but he would have treated restrictive
covenants as a hybrid of real property interests and contract
interests Under his design, compensation would be due only
for violation of restrictive covenants exhibiting the
attributes of a real property interest 2015 WL 423835, at *6
(Atcheson, J., concurring). Whether these attributes exist
would have to be determined on a case-by-case basis.
According to Judge Atcheson, "[a] government entity
takes the property interests embodied in a restrictive
covenant to the extent ...