Factual issues need resolution in Hamilton County billboard dispute, COA rules in reversal

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A factfinding hearing must be held regarding the state’s removal of a billboard sign along U.S. 31 before a trial court can decide if a taking occurred or enter an order of appropriation, the Court of Appeals of Indiana ruled Wednesday.

In September 2022, John and Eileen Laughlin filed a complaint against the state alleging inverse condemnation. The Laughlins alleged they were the owners and lessees of a billboard sign at U.S. 31 and 226th in Hamilton County, but the state removed the sign as part of an improvement project without offering compensation.

The state filed a motion to dismiss and alleged, in part, that the Laughlins’ complaint failed to adequately describe their real estate interest and failed to describe their property interest by omitting their outdoor advertising permit.

The Hamilton Superior Court denied the state’s motion to dismiss. The state moved to reconsider, which the trial court also denied.

About a month later, the trial court entered an Order of Appropriation and Appointment of Appraisers, finding that the state had appropriated the Laughlins’ real estate. The court then appointed three appraisers.

The state filed a motion for clarification, which the trial court denied.

The state then appealed, arguing that the trial court failed to resolve factual issues as to whether a taking occurred before entering an order of appropriation.

The Court of Appeals agreed and reversed, with Judge Elizabeth Tavitas writing.

“In general, after the State files an eminent domain action, the landowners must file ‘objections’ to the proceedings, which the trial court will sustain or overrule. See Ind. Code § 32-24-1-8,” Tavitas wrote. “The objections statute also provides: ‘The court may not allow pleadings in the cause other than the complaint, any objections, and the written exceptions provided for in section 11 of this chapter. However, the court may permit amendments to the pleadings.’ I.C. § 32-24-1- 8(c). It is clear, however, that the statutes also require the trial court to hold a hearing on the matter.

“… Here, after the State filed its objections to the Laughlins’ inverse condemnation action, the trial court was required to make a factual determination as to whether a taking occurred,” she continued. “The nature of the Laughlins’ property interest is not entirely clear from their complaint as they claim to be ‘owners/lessess’ of the sign and sign lease, and the State claimed in part that the Laughlins did not have a required permit for the sign. The State filed a motion to dismiss, which the trial court denied.

“Accordingly, factual issues remained, and the trial court should have set the matter for a hearing or allowed other dispositive motions to be filed,” Tavitas concluded. “… The trial court resolved the issue of whether a taking occurred based upon only the Laughlins’ complaint and the State’s objections and affirmative defenses, which was improper under these circumstances.”

The case was remanded for an evidentiary hearing.

Judges Rudolph Pyle and Peter Foley concurred in State of Indiana and Indiana Department of Transportation v. John Laughlin and Eileen Laughlin, 23A-PL-937.

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