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GFTLenexa, LLC v. City of Lenexa

Supreme Court of Kansas

December 6, 2019

GFTLENEXA, LLC, Appellant,
v.
CITY OF LENEXA, Appellee.

         SYLLABUS BY THE COURT

         1. Under the Kansas Constitution, the Supreme Court shall have such appellate jurisdiction as provided by law.

         2. K.S.A. 2018 Supp. 26-504 governs appeals in eminent domain cases and allows appeals directly to the Supreme Court when the plaintiff has power of eminent domain.

         3. Jurisdiction over appeals from final dispositions in inverse condemnation actions lies with the Court of Appeals.

         4. Failure to docket an appeal in the proper appellate court is not, on its own, grounds for dismissing an appeal.

         5. Competent adults may make contracts on their own terms, provided they are neither illegal nor contrary to public policy and, in the absence of fraud, mistake, or duress, a party that has fairly and voluntarily entered into such a contract is bound thereby, even if it was unwise or disadvantageous to that party.

         6. In an eminent domain proceeding, the duty of the condemning authority is to make payment for the property that it has taken, not to account for the diversity of interests in the property.

         7. Under the undivided fee rule, the condemning authority treats all the various interest holders in a unit of property as a single, undivided interest when the compensatory value is appraised.

         8. Privity of contract is that connection or relationship existing between two or more contracting parties. Privity between the plaintiff and the defendant with respect to the subject of the lawsuit is essential to the maintenance of any action on a contract.

          Appeal from Johnson District Court; James F. Vano, judge.

          Lumen N. Mulligan, of DRZ Law, LLC, of Leawood, argued the cause, and Daniel R. Zmijewski and Christopher Dove, of the same firm, were with him on the brief for appellant.

          Timothy P. Orrick, of Orrick & Erskine, LLP, of Overland Park, argued the cause and was on the brief for appellee.

          OPINION

          ROSEN, J.

         GFTLenexa, LLC, appeals directly to this court from a district court judgment denying it relief in an action based on contractual relationships but styled as an inverse condemnation proceeding. GFTLenexa alleges that a condemnation through an eminent domain action eventually resulted in GFTLenexa losing a constitutionally protected property interest without fair compensation. We find the district court's reasoning persuasive and affirm its judgment. We also clarify procedural rules for taking appeals in inverse condemnation actions.

         Facts

         The facts giving rise to this appeal are complicated but do not require a lengthy recitation. Oak Park Commons, L.P., (which is not a party to the litigation) owns commercial property in Lenexa, Kansas. In 2007, Oak Park Commons entered into a ground lease agreement with Centres Midwest BFS, LLC (which is also not a party to this litigation). Under the agreement, Oak Park agreed to lease the property to Centres Midwest for a 20-year term.

         In 2008, Centres Midwest entered into a sublease agreement with Bridgestone Retail Operations, LLC (also not a party to this litigation). The sublease authorized Bridgestone to build and operate an 8, 000 square foot tire sales center on the property. On January 20, 2010, Centres Midwest assigned its rights and obligations under the lease and sublease agreements to plaintiff GFTLenexa, with the consequence that GFTLenexa became Bridgestone's landlord. The assignment was filed with the Johnson County Register of Deeds on January 28, 2010.

         On October 31, 2013, the City of Lenexa filed a condemnation action naming Oak Park, Firestone Auto Care (a part of Bridgestone Retail Operations, LLC), and numerous other parties as defendants, but neglecting to include GFTLenexa as a defendant. The City sought partial condemnation authority to make improvements to 95th Street Parkway. The City sought rights for a permanent public utility easement and a temporary construction easement adjacent to Oak Park's property. On November 21, 2013, Centres Midwest sent GFTLenexa by certified mail a notice of the condemnation action.

         The district court granted the City's request on November 27, 2013. An appraisal was performed, and, in accordance with the appraisal report, on April 1, 2014, the district court ordered the City to pay Oak Park Commons $285, 925 in just compensation for the City's exercise of eminent domain power. Neither GFTLenexa nor Bridgestone sought to intervene to assert an interest in the award, and neither was awarded any compensation.

         On May 12, 2014, Bridgestone filed a declaratory judgment action against GFTLenexa, claiming it was entitled to a reduced rent because the property had been partially condemned. The district court granted GFTLenexa summary judgment under the theory that GFTLenexa did not receive any proceeds from the condemnation. The Court of Appeals reversed, holding that the plain language of the sublease agreement (which GFTLenexa had assumed in the transfer of rights) required GFTLenexa to proportionally reduce the tenant's rent. Bridgestone Retail Operations, LLC v. GFTLenexa, No. 114, 113, 2016 WL 758730 (Kan. App. 2016) (unpublished opinion). GFTLenexa did not seek review by this court of that decision. On ...


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