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COA sends I-69 property-taking dispute to damages trial

December 28, 2017

A property rights dispute between the state and a Monroe County property owner must proceed to a trial on damages after the Indiana Court of Appeals determined the state’s condemnation action against the Monroe County property constituted a compensable taking.

More than 45 years ago, Jane Ellis deeded the state a portion of her property for the construction of State Road 37, but reserved in title an opening of nearly 80 feet in the state’s access control line to SR 37 to her and her successors. The deed also reserved to Ellis and her successors access to a local service road located in the right of way between Ellis’ property line and the opening in the access control line.

In 2001, Kooshtard Property I, LLC became the successor in title to the property. Meanwhile, the state conveyed control over the local service road, now known as Wayport Road, to Monroe County.

As part of its plans to convert State Road 37 into Interstate 69, the state plans to close the opening in the access line and extend Wayport Road. The state filed a condemnation action against a parcel to be taken from the Kooshtard property as part of its project, but Kooshtard responded by asserting the closing of the access control line constituted a compensable taking. Additionally, Kooshtard alleged the closure of the line would result in $1.3 million in damages, as well as the closure of a gas station and convenience store located on its property.

The Monroe Circuit Court eventually granted summary judgment to the state on the grounds that the closure of the line merely created a different route of travel to the Kooshtard property and did not constitute a taking. But the Indiana Court of Appeals reversed that judgment Thursday, with Judge Edward Najam writing Kooshtard was entitled to a trial on damages.

“Specifically, the Ellis deed states that ‘the access control line restriction shall be a covenant running with the land’…,” Najam wrote. “A covenant running with the land ‘constitutes a compensable interest in land.’”

While the state argued Kooshtard only had a right of ingress and egress to Wayport Road, not SR 37, the appellate court pointed to language in the deed that stated, “and further, the owner and her successors in title shall have access to a local service road … .”

The use of the phrase “and further” indicates that access to the service road, now Wayport Road was in addition to access to the control line opening, Najam said, further noting that Wayport Road is located entirely within the SR 37 right of way adjacent to the Ellis parcel.

“In other words, the Ellis deed reserves to the property owner a complete means of direct access over and across the State Road 37 right of way through the opening in the access control line to State Road 37 itself,” he said.

Thus, Coutar Remainder I, LLC, et al. v. State of Indiana, 53A01-1704-PL-798, was remanded for further proceedings, though Najam noted the court was not expressing an opinion on the proper amount of damages, if any, to be assessed against the state.

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