Commonwealth v. Louisville Gas & Elec. Co.

648 S.W.3d 76

Commonwealth of Kentucky, KENTUCKY HERITAGE LAND CONSERVATION FUND BOARD, Appellant

v.LOUISVILLE GAS AND ELECTRIC COMPANY; Isaac W. Bernheim Foundation ; and East Kentucky Power Cooperative, Inc., Appellees

NO. 2020-CA-0882-MR

Court of Appeals of Kentucky.

APRIL 22, 2022; 10:00 A.M. Discretionary Review Denied by Supreme Court August 10, 2022

BRIEFS FOR APPELLANT: Timothy J. Mayer, Kathleen Saunier, Frankfort, Kentucky.

ORAL ARGUMENT FOR APPELLANT: Timothy J. Mayer, Frankfort, Kentucky.

BRIEF AND ORAL ARGUMENT FOR APPELLEE LOUISVILLE GAS AND ELECTRIC COMPANY: Monica H. Braun, Steven B. Loy, Mary Ellen Wimberly, Lexington, Kentucky.

BRIEF FOR APPELLEE ISAAC W. BERNHEIM FOUNDATION: Tom FitzGerald, Frankfort, Kentucky, Randal A. Strobo, Clay A. Barkley, Louisville, Kentucky.

ORAL ARGUMENT FOR APPELLEE ISAAC W. BERNHEIM FOUNDATION: Tom FitzGerald, Frankfort, Kentucky.

BEFORE: ACREE, CETRULO, AND MAZE, JUDGES.

OPINION

MAZE, JUDGE:

We commence our discussion of this interlocutory appeal by emphasizing what this case is not about. It is not about whether Louisville Gas and Electric Company (LG&E) has the right to take a portion of property owned by the Isaac W. Bernheim Foundation (Bernheim) for the construction of an underground natural gas pipeline. Rather, our review is limited solely to consideration of whether the doctrine of sovereign immunity precludes the Bullitt Circuit Court from proceeding to determine whether LG&E is entitled to exercise the right of eminent domain with respect to property upon which the Commonwealth of Kentucky owns a conservation easement. The appellant, Kentucky Heritage Land Conservation Fund Board (Board) insists that the trial court erred in refusing to dismiss the underlying condemnation action because: (1) the Board is immune from suit under the doctrine of sovereign immunity; (2) the General Assembly has not waived sovereign immunity by express language or overwhelming implication; (3) LG&E otherwise lacks the authority to condemn public property by statute; and (4) the doctrine of prior public use prohibits the condemnation of the property at issue. Having considered oral argument, the briefs of the parties, and the record, we affirm the decision of the Bullitt Circuit Court and hold that sovereign immunity does not bar the commencement of condemnation proceedings against the holder of a conservation easement.

Before addressing the merits of the Board's appeal, the Court must address three preliminary matters. First, the Court notes that Appellee, Isaac W. Bernheim Foundation, Inc., supports the arguments of the Board in its brief and has otherwise asserted its own arguments that the trial court erred by denying the Board's motion to dismiss. In its brief, Bernheim further requested "that the decision of the Bullitt Circuit Court be reversed with directions to enter an Order dismissing with prejudice the action as against Bernheim ...." While the Court has considered the arguments of Bernheim, we need not address its arguments separately in this Opinion to the extent that Bernheim seeks affirmative relief.

While Bernheim filed a motion to dismiss in the trial court below, this appeal only concerns the denial of the Board ’s motion to dismiss on the issue of sovereign immunity. The June 12, 2020, order of Bullitt Circuit Court clearly stated its scope:

This matter comes before the Court on Defendants’ Motions to Dismiss. This order shall address the Kentucky Heritage Land Conservation Fund Board's Motion to Dismiss.

Bernheim lacks standing to assert the sovereign immunity of the Commonwealth. Further, it is important to emphasize that there is no indication Bernheim's own rights were otherwise directly impacted by the June 12, 2020, order.

Second, Bernheim filed a motion to strike the appellee brief filed by LG&E. This Court has denied the motion to strike by separately entered order.

Third, although not addressed by the parties in briefing or at oral argument, the Court questions whether the abbreviated procedure contemplated by the Kentucky Eminent Domain Act precludes, by implication, the availability of motions to dismiss to test the legal sufficiency of a condemnation petition. In Ratliff v. Fiscal Court of Caldwell County, Kentucky , 617 S.W.2d 36, 38 (Ky. 1981), the Supreme Court of Kentucky has explained the step-by-step procedure for condemnation proceedings under the Eminent Domain Act as follows:

A petition seeking condemnation is required to contain those allegations necessary to show that the petitioner is entitled to exercise the right of eminent domain. KRS^{[1 ]} 416.570(1). The condemnee's answer is "confined solely to the question of the right of the petitioner to condemn the property ...." KRS 416.600 [.] The statute directs the condemnee to raise immediately (if at all) the issues of the right to take .

(Emphasis added.) While the Eminent Domain Act does not explicitly authorize a condemnee to appeal a trial court's interlocutory judgment concerning the condemnor's right to take, the Ratliff Court held that constitutional considerations mandate the availability of an immediate appeal to a losing condemnee. Id.

This Court has recently stated that when a defendant raises the issue of the condemnor's right to take, "[t]here [is] no need for, nor right to, another hearing" beyond the hearing provided by KRS 416.610(4). Allard v. Big Rivers Electric Corp. , 602 S.W.3d 800, 808 (Ky. App. 2020).

As cited above, the Supreme Court of Kentucky has recognized that KRS 416.600 "directs the condemnee to raise immediately (if at all ) the issues of the right to take." Ratliff , 617 S.W.2d at 38 (emphasis added). This Court has also held that any exceptions to a condemnor's right to take must be raised in the answer under KRS 416.600. Commonwealth, Transportation Cabinet, Dep't of Highways v. Wireman , 714 S.W.2d 159, 162 (Ky. App. 1986). KRS 416.610(4) further provides that the issue of a condemnor's right to take shall be tried on the pleadings:

If the owner has filed answer or pleading putting in issue the right of the petitioner to condemn the property or use and occupation thereof sought to be condemned, the court shall, without intervention of jury, proceed forthwith to hear and determine whether or not the petitioner has such right.

(Emphasis added.) Under Kentucky law, a motion to dismiss is not a pleading. See Vincent v. City of Bowling Green , 349 S.W.2d 694, 696 (Ky. 1961) ; CR ² 7.01. It is the trial court's determination of a condemnor's right to take, based on the pleadings, that triggers the right to take an immediate appeal. Ratliff , 617 S.W.2d at 39.

The requirement that all issues concerning a condemnor's right to take be raised in the answer under KRS 416.600 is consistent with federal eminent domain law. A motion to dismiss is not authorized in any eminent domain proceeding under federal law. Federal Rules of Civil Procedure (FRCP) 71.1(e)(3). The Supreme Court of Kentucky has generally interpreted the Kentucky Eminent Domain Act consistently with the federal eminent domain law. See Foster v. Sanders , 557 S.W.2d 205, 211 (Ky. App. 1977). In federal court, a motion to dismiss is specifically not permitted in a condemnation proceeding because the rule governing condemnation proceedings instructs that a defendant's answer "state all the defendant's objections and defenses to the taking." FRCP 71.1(e)(3) further specifically provides:

[a] defendant waives all objections and defenses not stated in its answer. No other pleading or motion asserting an additional objection or defense is allowed .

(Emphasis added.) In Atlantic Seaboard Corporation v. Van Sterkenburg , 318 F.2d 455, 458 (4th Cir. 1963), the Court stated, "[w]e need not consider the dubious merits of the motion for a more definite statement or of the motion to dismiss, for they were not allowable pleadings." The Court explained:

Whatever defenses and objections are available may be raised by answer. The prohibition of other pleadings clearly had, as its purpose, an early joinder of issue and the elimination of the possibility of extended delay through the presentation of preliminary pleadings with resultant hearings and orders . One pleading to raise all objections and defenses to the taking and one hearing to dispose of them are contemplated, not successive pleadings and successive hearings spanning a much longer period of time. The Rule's prohibition of any pleading other than an answer is clear and unequivocal. The preliminary motions tendered here were unallowable.

Id. (emphasis added) (footnote omitted). Similarly, this Court has described the procedures under KRS 416.540 to be "summary." Mother of God Cemetery Ass'n, Inc. v. Commonwealth, Transportation Cabinet, Dep't of Highways , 759 S.W.2d 69, 71 (Ky. App. 1988). The federal authority cited above appears to be persuasive and consistent with the precedent of the Kentucky Supreme Court in Ratliff that any objections to the right to take must be made immediately in the answer, if at all.

In sum, the statutory framework for condemnation proceedings and the caselaw interpreting those statutes clearly envision that there be an expedited proceeding resulting in but one interlocutory appeal . We therefore hold that the sovereign immunity defense must be raised, if at all, in the answer or other pleading as required by KRS 416.600.

Although this procedural defect would allow us to affirm the decision of the trial court on the basis that a motion to dismiss is not an allowable pleading and that a single interlocutory appeal is available, we nevertheless turn to an analysis of the Board's sovereign immunity arguments. We commence with a recitation of the facts.

The Kentucky General Assembly has articulated a public policy of acquiring, maintaining, promoting, and funding the conservation of certain lands "for use as state parks, recreation areas, state forests, nature preserves, wildlife management areas, and wetlands." KRS 146.555. KRS 146.555 states that...