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Pener v. King

Supreme Court of Kansas

March 24, 2017

Adam Pener, as Personal Representative of the Estate of Alexander Gold, and as Trustee of the Alexander Gold Revocable Trust Dated 01/26/1994, Appellants,
v.
Michael S. King, Secretary of Transportation for the State of Kansas, Appellee.

         SYLLABUS

         1. Under the Eminent Domain Procedure Act, K.S.A. 26-501 et seq., in a partial taking case there are only two issues: (a) the value of the entire property or interest immediately before the taking; and (b) the value of that portion of the land or interest remaining immediately after the taking.

         2. In ascertaining the amount of compensation and damage in an eminent domain or condemnation proceeding, the cost of new fences or loss of fences and the cost of replacing them with fences of like quality are not to be considered as separate items of damages but are to be considered only as they affect the total compensation and damage.

         3. In a condemnation proceeding, the award will not be disturbed on appeal from the district court as long as it is supported by substantial evidence.

         4. The verdict in a condemnation proceeding must be within the range of the opinion testimony admitted at trial.

         5. In a condemnation proceeding, the landowner's attorney fees are statutorily provided for in two instances. One occurs when the condemning authority abandons the proceedings after a court-appointed appraiser award. The other occurs when the condemning authority appeals a court-appointed appraiser award to the district court and the jury renders a verdict for the landowner that is greater than the appraiser award.

         Appeal from Wyandotte District Court; R. Wayne Lampson, judge. Affirmed.

          Todd H. Bartels, of Polsinelli PC, of Kansas City, Missouri, argued the cause, and Amy E. Morgan, of the same firm, was with him on the briefs for appellants.

          Timothy P. Orrick, of Orrick & Erskine, L.L.P., of Overland Park, argued the cause, and Paul G. Schepers, of the same firm, was with him on the brief for appellee.

          OPINION

          BILES, J.

         This is an eminent domain proceeding initiated by the Kansas Department of Transportation for a highway improvement project. Adam Pener was the trustee and personal representative of the trust and estate that owned the condemned property at the time of the taking. He challenges the damages award entered by the district court after a bench trial, claiming the court gave insufficient weight to the replacement value for a fence and to a comparable sale when it calculated the property's value. Pener also argues the district court should have awarded him attorney fees and expenses. We affirm.

         Factual and Procedural Background

         The taking involved three tracts located in Wyandotte County that were owned by two entities for which Pener is the fiduciary-the Alexander Gold Revocable Trust dated 01/26/1994, and the estate of the late Alexander Gold. KDOT condemned permanent highway right of way easements covering 142, 858 of these tracts' approximately 338, 000 total square feet.

         Before KDOT commenced the condemnation, it offered to buy the right of way for $104, 930, but an agreement could not be reached. KDOT filed its petition under the Eminent Domain Procedure Act, K.S.A. 26-501 et seq. The district court appointed an appraisers' panel pursuant to the act, and the panel determined damages totaling $195, 500. Unsatisfied, Pener invoked the landowners' statutory rights to trial in the district court. See K.S.A. 2016 Supp. 26-508(a). The parties tried the case to the court, rather than a jury.

         Three witnesses testified about the property's value before and after the taking. The district court found the damages from the taking were $295, 702. The court also denied Pener's claim for attorney fees and expenses.

         Pener timely appealed. Jurisdiction is proper. K.S.A. 2016 Supp. 26-504 ("Appeals to the supreme court may be taken from any final order under the provisions of [the Eminent Domain Procedure Act].").

         The District Court's Damages Award

         Pener argues the district court erred in calculating the damages award because it failed to include the replacement cost for a security fence that was part of the taking and because it gave insufficient consideration to a comparable sale. We reject both claims.

         The district court properly considered the cost to replace fencing.

         Some additional facts put this question into better perspective. During the negotiations leading up to the filing of the eminent domain action, KDOT represented that a separate offer of "[c]ompensation to cure any damages caused by the project, including fencing replacement" had been made to Shostak Iron and Metal Co., Inc., which was leasing the tracts. After the appraisers' panel entered its award, Shostak asked for apportionment. The district court ultimately dismissed Shostak's claims based on lease language in which it agreed not to share in any condemnation award.

         At the bench trial, Pener testified new fencing was required on the tracts' new, post-taking property line. Based on an exhibit KDOT prepared for the appraisers' panel, in which KDOT represented its damage estimate included $65, 720 to replace fencing, Pener believed the district court's damage award should include that additional amount. He claimed KDOT "stipulat[ed] to" this figure. Pener also said he believed the Shostak lease would require the existing fence to be replaced and that security was important to the property's use before its eventual redevelopment. Pener's expert witness testified he valued the property after the taking by reducing his appraisal an additional $70, 000 to replace the fence, which he considered necessary.

         KDOT's expert testified the fence taking resulted in only an $11, 000 diminution in the value after the taking. Therefore, he believed it would be inappropriate to spend $70, 000 to replace the fence because that sum exceeded the contributory value of the fence section to the property as a whole, i.e., $11, 000. A KDOT staff attorney testified KDOT negotiated the "compensation for [the] cost to cure" with Shostak and had agreed to present the settled-upon $65, 720 amount to the court-appointed appraisers. He did not believe he discussed the issue with Pener at the time. He acknowledged KDOT agreed at the administrative hearing to pay the $65, 720 cost of replacing the fence by including the amount as an item in its appraisal.

         After hearing this testimony, the district court found the "fence [was] not going to add $70, 000 worth of value." Accordingly, it used KDOT's expert's approach and found the fence's taking resulted ...


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