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Moore v. Lexington-Fayette Urban County Government

Court of Appeals of Kentucky

September 15, 2017

JUSTIN T. MOORE APPELLANT
v.
LEXINGTON-FAYETTE URBAN COUNTY GOVERNMENT; COMMUNITY TRUST BANK, F/K/A HERITAGE COMMUNITY BANK; CENTRAL BANK & TRUST CO.; AND FIRST SECURITY BANK, INC. APPELLEES

         APPEAL FROM FAYETTE CIRCUIT COURT HONORABLE JAMES D. ISHMAEL JR., JUDGE ACTION NO. 15-CI-03477

          BRIEF FOR APPELLANT: Jon A. Woodall Brendan R. Yates

          BRIEF FOR APPELLEE, LEXINGTON-FAYETTE URBAN COUNTY GOVERNMENT: Michael Keith Horn Charles Eugene Edwards III

          BEFORE: COMBS, DIXON, AND NICKELL, JUDGES.

          OPINION

          DIXON, JUDGE

          Appellant, Justin T. Moore, appeals from an interlocutory judgment of the Fayette Circuit Court ruling that Appellee, the Lexington-Fayette Urban County Government ("LFUCG"), has the right to condemn a portion of his property, creating a permanent easement for the construction of a large box culvert and drainage system. For the reasons set forth herein, we reverse the trial court's judgment and remand for further proceedings.

         Moore owns property located at 1250 Deer Haven Lane in Fayette County, Kentucky. Running along the western boundary of his property is a section of Polo Club Boulevard that terminates before it reaches Deer Haven Lane, which is located on the northern boundary of Moore's property. LFUCG's public improvement project ("Project") will extend Polo Club Boulevard to connect to another portion of the Boulevard so that it will run all the way from Winchester Road to Todds Road. As planned by LFUCG, the Project requires construction under the new portion of Polo Club Boulevard of a 16-foot by 4-foot box culvert, which will extend 60 lineal feet on to Moore's property. The mouth of the proposed culvert will open into a widening concrete apron and a rock-filled channel will flow away from the apron northwestward along the margin of what is currently a pond located on the property. The project will ultimately change Moore's property boundary along its entire western edge and about half of its northern edge, reshaping the land into a shoulder for Polo Club Boulevard and sidewalk, and then dropping steeply down to the edge of the pond.

         In May 2015, an appraisal report was prepared for LFUCG concerning the taking of a permanent and temporary construction easement on Moore's property. The "Narrative Description of Acquisition" estimated that the after-taking utility of the 4, 518-square foot permanent easement would be 5%. Similarly, the "Discussion of Anticipated Damage and/or Special Benefits" indicates "loss of utility . . . due to the proposed permanent easement . . . as such utility is estimated at 5%." Further, no benefit to the property from the easement was listed. Based upon the appraisal, LFUCG made an offer to Moore of $45, 600 for the permanent easement on 4, 518.6 square feet and the temporary construction easement on 26, 504.18 square feet.

         In response to the offer, Moore inquired as to why LFUCG wanted to take a permanent easement rather than purchasing the property in fee simple, considering its after-taking utility would only be 5%. LFUCG Acquisition Agent Paul Willard responded that the permanent easement was "to provide the government access to maintain the culvert for maintenance purposes" and that such was "the same treatment . . . generally on any building project using state or federal funds." Apparently, negotiations continued between the parties with Moore desiring to have the property taken in fee simple and LFUCG insisting that it could only take a permanent easement per state and federal guidelines.

         On July 27, 2015, Moore's attorney sent a letter to Willard stating that taking an easement on the property would leave Moore with possible liability for injury or accidents on or because of the culvert and drainage system. Willard responded on August 7, 2015, that "the box culvert will be owned and maintained by LFUCG, " and that a "condemnation action has been initiated." There were no further pre-litigation negotiations.

         On September 21, 2015, LFUCG filed a petition for condemnation in the Fayette Circuit Court seeking to take "temporary construction and permanent drainage easements on the property located at 1250 Deer Haven Lane in Lexington, Kentucky for the Polo Club Boulevard Improvement Project." The appointed commissioners found that the requested permanent easement would cause a $1, 287 decrease in the fair market value of the property and that a fair rental value for the temporary construction easement was $8, 000. Moore thereafter filed an answer to the petition specifically contesting LFUCG's right to take the subject property and arguing that LFUCG was acting in bad faith or abusing its discretion by seeking to take a permanent easement rather than a fee simple interest.

         On November 20, 2015, LFUCG filed a motion for interlocutory judgment pursuant to KRS 416.610 requesting that the government be allowed to take the subject property. Moore responded that, in accordance with KRS 416.610(4), he was entitled to an evidentiary hearing. The trial court agreed and scheduled a hearing.

         During the January 12, 2016 hearing, Moore did not dispute that the proposed taking was for a public purpose, but identified the issue as whether LFUCG had the right to take a permanent easement rather than a fee simple interest. Moore further acknowledged that he had the burden of proof on the right to take. Thereafter, Willard testified, acknowledging that the remaining utility of the property with the permanent easement would only be 5%, and that it would not be useable because the box culvert would be located on it. Willard further testified that he was not aware of a similar-sized culvert for which LFUCG had taken an easement rather than fee simple interest. Willard stated that LFUCG follows what he referred to as the Kentucky Transportation Cabinet ("KTC") "standard practice, " and that LFUCG must comply with federal and state guidelines because of funding. However, Willard conceded that he was unaware of any written KTC policy or guideline requiring the acquisition of a permanent easement rather than fee simple. Further, when asked whether it would jeopardize state funding if LFUCG acquired Moore's property in fee simple, he replied, "I have no idea whether it would or not." When Willard was asked about why LFUCG would not want to take the property in fee simple given the magnitude of the planned structure, he responded,

Basically, the practice is, leave the property in their [land owner's] name. If, for instance - let's go theoretical - that pipe gets removed at some point in time, there's no need for it. The City doesn't need to own that property ...

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