FRANK GREGORY MOORE RHONDA MOORE APPELLANTS v. TRANSPORTATION CABINET DEPARTMENT OF HIGHWAYS APPELLEE

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Court of Appeals of Kentucky.

FRANK GREGORY MOORE and RHONDA MOORE APPELLANTS v. COMMONWEALTH OF KENTUCKY , TRANSPORTATION CABINET, DEPARTMENT OF HIGHWAYS APPELLEE

NO. 2011–CA–000261–MR and NO.2011–CA–000265–MR and NO.2011–CA–000266–MR

Decided: February 17, 2012

BEFORE:  NICKELL, JUDGE;  TAYLOR, CHIEF JUDGE;  SHAKE, Double SENIOR JUDGE. BRIEFS FOR APPELLANT:  Donald H. Combs Pikeville, Kentucky BRIEF FOR APPELLEE:  Lorraine Neeley Pikeville, Kentucky

NOT TO BE PUBLISHED

OPINIONAFFIRMING

Frank Gregory Moore and Rhonda Moore (collectively “Moores”) appeal from the three January 28, 2011, findings of fact, conclusions of law, and interlocutory orders of the Pike Circuit Court.   In short, those judgments condemned certain real property of the Moores and transferred possession to the Commonwealth of Kentucky, Transportation Cabinet (“Cabinet”).   We find no error with the trial court's judgments and therefore affirm all three.

These three appeals stem from three separate condemnation actions filed by the Cabinet against the Moores to acquire certain lands for use in a highway improvement project.   Each petition identified certain parcels owned by the Moores and then identified certain tracts within those parcels which the Cabinet sought to condemn by either fee simple or temporary easement.   For the purposes of this appeal, specific tract descriptions and identification is unnecessary.   Because the Moores' arguments of trial court error are identical in all three appeals, we will address all three in this single opinion.

Following the filing of the Cabinet's petitions, the trial court issued orders in each underlying action which appointed Dusty Lane, Judy Brooks, and James England as Commissioners.   The Commissioners were charged with the task of viewing the tracts of land which contained those portions facing potential condemnation and making findings of their fair market purchase and rental values.   The Commissioners subsequently filed reports in each action which described the properties to be taken and assigned the following values:  the fair market value (“FMV”) of each tract as a whole prior to the taking ($225,000.00 combined Double );  the FMV of each tract immediately after the taking ($175,000.00 combined);  the difference between the FMVs before and after the taking ($50,000 combined);  and the fair rental value of the temporary easements ($4,000.00 combined).   Dusty Lane and Judy Brooks signed all three reports, and J.B. Gilliam signed in place of James England.   The trial court next summoned the Moores to defend the condemnation action and show cause why the Cabinet should not be entitled to condemn the property.   Each summons indicated the award designated by the Commissioners for each respective tract.

Pursuant to CR 12 and KRS 416.610(4), the Moores filed, in each action, a motion to dismiss and objection to the right of the Cabinet to condemn their property.   In those motions, the Moores made the following arguments:  the property descriptions were inaccurate;  the awards were inadequate and not in conformity with the law;  the Cabinet's petitions failed to include a particular description of the land and its projected use and occupation;  and the Commissioners failed to properly view the land and improvements thereon or consider the adverse effects of condemnation upon the land.

The Cabinet filed motions for an interlocutory order and judgment, and all three actions were assigned for a combined evidentiary hearing.   On January 28, 2011, the trial court issued its findings of fact, conclusions of law and interlocutory order in each action.   In each judgment, the trial court found that the Moores failed to prove fraud, bad faith, or clear and gross abuse of discretion.   The trial court also concluded that the valuation of the property is a separate issue from the Cabinet's right to condemn and was better suited for a jury.   Ultimately, it was ordered that the property be condemned and that the Cabinet was authorized to take possession for the purposes set forth in the petitions.   The Moores then filed a statement of exceptions to the commissioners' award and a notice of appeal in each action.   Additional facts will be set forth as necessary.

Condemnation actions are controlled by the Eminent Domain Act of Kentucky, KRS  Double Chapter 416.540–680, which grants the authority to the Commonwealth to condemn property so long as the taking is for “public use” and the condemnee receive “just compensation.”   See Ky. Const. §§ 13, 242;  KRS 416.540–680. The right of condemnation may be defeated only by proof of fraud, bad faith, or abuse of discretion.   See, e.g., Commonwealth, Department of Highways v. Burchett, 367 S.W.2d 262, 264 (Ky.1963).   Furthermore, it is the burden of the party opposing the condemnation to show the existence of such fraud, bad faith, or abuse of discretion.  Id.

When examining the trial court's judgment, we review its factual findings under a clearly erroneous standard and the legal issues de novo.   See Carroll v. Meredith, 59 S.W.3d 484 (Ky.App.2001);  Commonwealth, Transportation Cabinet, Dept. of Highways v. Taub, 766 S.W.2d 49 (Ky.1988) (overruled on other grounds by Fischer v. Fischer, 348 S.W.3d 582 (Ky.2011) and CR  Double 52.01.   Factual findings are not clearly erroneous if they are supported by substantial evidence.  Id. Substantial evidence is that which, “when taken alone or in light of all the evidence, has sufficient probative value to induce conviction in the mind of a reasonable person.”  Bowling v. Natural Resources & Environmental Protection Cabinet, 891 S.W.2d 406, 409 (Ky.App.1994)(citing Kentucky State Racing Commission v. Fuller, 481 S.W.2d 298, 308 (Ky.1972).   As the fact-finder, the trial court is delegated the task of determining the credibility of the witnesses and the weight given to the evidence.   See Uninsured Employers' Fund v. Garland, 805 S.W.2d 116, 118 (Ky.1991).

The Moores' first three arguments on appeal pertain to the commissioners and their reports.   Those arguments are:  1) only two of three appointed commissioners filed reports, thereby violating KRS 416.580(1);  2) the commissioners failed to view the Moores' entire property, making their reports and valuations inaccurate and warranting dismissal of the cases;  and 3) the commissioners failed to file their reports in compliance with KRS 416.580(1), warranting dismissal of the cases.

We first address the assertion that KRS 416.580(1) was violated because only two of three appointed commissioners filed a report.   As previously stated, three commissioners were appointed by the trial court.   Two of them remained active on the underlying actions and the third, James England, was substituted by J.B. Gilliam.  KRS 416.580 mandates the appointment of three commissioners and further instructs:

In the event any person appointed to serve as commissioner fails, refuses or becomes incapable of acting, the court, or judge thereof, shall forthwith appoint a qualified person to fill the vacancy.

KRS 416.580(2).   The Moores argue that J.B. Gilliam was never appointed by the trial court and KRS 416.580 was therefore violated.   We do not agree.   This Court has previously held that when a record fails to contain an order appointing or reappointing commissioners but does contain the commissioners' report containing their signatures and indicating that each was sworn, that it must be assumed that the commissioners were properly appointed.  Price v. Commonwealth, Department of Highways, 385 S.W.2d 670, 670–71 (Ky.1964).   The reports of the commissioners in the actions before us all indicate that the commissioners were sworn.   Furthermore, the trial court held that the reports conformed to KRS 416.580.   See Id.

We next address the Moores' argument that the alleged inaccuracy of the commissioners' reports warrants dismissal of the action.   Specifically, the Moores argue that the reports were inadequate and provided an inadequate valuation, because the commissioners failed to view the Moores' entire property.   We disagree that this warrants dismissal of the actions.   The values assigned to the Moores' property in the commissioners' reports do not touch upon the ability of the Cabinet to condemn the property.   As we have already indicated, a condemnation action can only successfully be opposed by a showing of fraud, bad faith, or abuse of discretion.  Burchett, 367 S.W.2d at 264.   The appropriate manner in which to challenge the compensation offered for the condemnation is by filing a statement of exceptions and having the issue heard by a jury.  KRS 416.620.   The Moores have therefore failed to show that the substance of the commissioners' reports warrant dismissal of the condemnation action.   Furthermore, there has been no jury trial outcome presented to this Court, and the issue of valuation is therefore outside of our current review.

The Moores' final challenge to the commissioners' reports is that they were not filed within fifteen days of their appointment, pursuant to KRS 416.580(1).   We first note that the Moores have failed to show that this argument was ever presented to the trial court or otherwise preserved for appellate review and it therefore appears to be improperly before this Court.   Furthermore, even if the argument were properly preserved, it would fall under the governance of KRS 416.620, which requires that exceptions to the commissioners' reports be filed and heard by a jury.   The argument does not address the Cabinet's right to condemn and is not before the Court.

The Moores next argue that just compensation must be made to them before condemnation of their property can occur.   The Kentucky Constitution states:

Municipal and other corporations, and individuals invested with the privilege of taking private property for public use, shall make just compensation for property taken, injured or destroyed by them;  which compensation shall be paid before such taking, or paid or secured, at the election of such corporation or individual, before such injury or destruction.

Ky. Const. § 242 (emphasis added).   The Moores are correct that “just compensation” must be paid or secured prior to the taking of their property.   Our review of the trial court judgments reveals that the Cabinet is only authorized and permitted to take possession of the Moores' property upon payment of the compensation awarded by the commissioners.   Because the trial court judgment requires that the Cabinet pay the compensation prior to taking possession, we perceive no violation of the Kentucky Constitution's just compensation prerequisite.   The record contains no evidence that the Cabinet took possession of the property without first paying the compensation.   The Moores' argument is therefore insufficient to alter the grant of condemnation.

The Moores next argue that Kentucky's statutory scheme is flawed and KRS 416.610(4) has therefore denied the Moores due process of law.   Any challenge to the validity of a statute requires the notification of the Attorney General who may then intervene in the action.   See KRS 418.075;  CR 24.03.   The record does not indicate that the Moores notified the Attorney General of their challenge to KRS 416.610.   The argument is therefore unpreserved for our review.   See Withers v. University of Kentucky, 939 S.W.2d 340 (Ky.1997).

The Moores lastly argue that they have been denied due process and the judgment should be vacated because:  1) there is not a right to an immediate appeal, giving immediate possession to the condemnor;  2) they are denied the benefit of just compensation, as required by the Kentucky Constitution;  and 3) they will be denied the opportunity to seek bifurcation of the jury trial for their counterclaim alleging bad faith.   The Moores' argument that they are not entitled to an appeal of the trial court's judgment of condemnation is puzzling since they are not only entitled to an appeal but are currently in the midst of the process of exercising that right.   The Moores' argument relating to just compensation has been addressed;  they have failed to show that they have been denied just compensation prior to the Cabinet taking possession of their property.   Again, any arguments pertaining to the amount of compensation is to be heard by a jury in a separate proceeding.   Any counterclaims relating to bad faith could and should have been brought before the trial court and argued in response to the condemnation action.   If the Moores want to argue bad faith in the valuation of their property, they have failed to show how the trial court has denied any attempt to pursue such a claim.   Indeed, the statements of exceptions to the commissioners reports were filed only a day prior to the notices of appeal.   Any arguments pertaining to the valuation of their property had not yet been addressed by the trial court, making the Moores' argument premature to this Court.

In summation, the Moores have failed to show that the trial court erred by granting possession of their condemned property to the Cabinet.   Accordingly, the three January 28, 2011, findings of fact, conclusions of law, and interlocutory orders of the Pike Circuit Court are all affirmed.

ALL CONCUR.

SHAKE, SENIOR JUDGE: