Enbridge Energy (Ill.), L.L.C. v. Kuerth

2016 IL App (4th) 150519

69 N.E.3d 287

ENBRIDGE ENERGY (ILLINOIS), L.L.C., n/k/a Illinois Extension Pipeline Company, Plaintiff-Appellee,

v.Debra S. KUERTH, as Trustee of the Debra S. Kuerth Trust, Under the Declaration of Trust Dated January 29, 2007; The Debra S. Kuerth Trust, Under Declaration of Trust Dated January 29, 2007; Non-Record Claimants; And Unknown Owners, Defendants-Appellants.

Enbridge Energy (Illinois), L.L.C., n/k/a Illinois Extension Pipeline Company, Plaintiff-Appellee,

v.Kenneth L. Kuerth; Dianne Kuerth; Non-record Claimants; and Unknown Owners, Defendants-Appellants.

NOS. 4-15-0519

4-15-0520 cons.

Appellate Court of Illinois, Fourth District.

December 13, 2016

Thomas J. Pliura (argued), of LeRoy, for appellants.

John Spesia (argued) and Jacob E. Gancarcyzk, of Spesia & Ayers, of Joliet, and Christopher J. Spanos, of Hinshaw & Culbertson LLP, of Peoria, and Gerald A. Ambrose, Steven J. Horowitz, Brian A. McAleenan, and Dale E. Thomas, of Sidley Austin LLP, of Chicago, for appellees.

OPINION

JUSTICE STEIGMANN delivered the judgment of the court, with opinion.

¶ 1 In April 2014, the Illinois Commerce Commission (Commission) granted plaintiff, Enbridge Energy (Illinois), L.L.C., now known as the Illinois Extension Pipeline Company (IEPC), eminent-domain authority to acquire easements over certain real estate for the planned construction of an approximately 170-mile liquid petroleum (oil) pipeline project known as the Southern Access Extension (SAX).

¶ 2 In July 2014, IEPC filed separate "complaints for condemnation of permanent and temporary easements for common carrier pipeline" against defendants (1) Debra S. Kuerth and the Debra S. Kuerth Trust (Debra Trust) (Livingston County case No. 14-ED-12; this court's case No. 4-15-0519) and (2) Kenneth L. Kuerth and Diane Kuerth (Kuerths) (Livingston County case No. 14-ED-13; this court's case No. 4-15-0520) (collectively, landowners) seeking to determine the just compensation for its easement interests in landowners' respective properties. Thereafter, landowners each filed a "traverse and motion to dismiss" (traverse motion), requesting dismissal of IEPC's complaints for condemnation. The trial court later denied landowners' traverse motion.

¶ 3 After IEPC presented evidence at a May 2015 jury trial and conducted a voir dire of landowners' damages valuation expert, the trial court granted IEPC's oral motion to exclude the expert's valuation testimony. IEPC then moved for directed verdicts on its condemnation suits and landowners' amended counterclaim for damages to the remainder. Following argument, the court (1) granted directed verdicts in IEPC's favor and (2) awarded compensation of $7000 in case No. 14-ED-12 and $6700 in case No. 14-ED-13 to landowners.

¶ 4 Landowners appeal, raising numerous claims that challenge the trial court's condemnation and traverse judgments. For the reasons that follow, we vacate the court's denial of landowners' traverse motion and remand with directions for further proceedings.

¶ 5 I. BACKGROUND

¶ 6 A. Procedural History

¶ 7 We provide the following brief synopsis of the pertinent litigation involving the SAX project to place landowners' appeals in context.

¶ 8 1. IEPC's Application for a Certificate in Good Standing and Eminent-Domain Authority

¶ 9 In August 2007, IEPC applied for a certificate in good standing and other relief pursuant to section 15-401 of the Common Carrier by Pipeline Law (Pipeline Law) (220 ILCS 5/15-401 (West 2006) ). (The Pipeline Law appears under article XV of the Public Utilities Act (220 ILCS 5/1-101 to 20-120 (West 2006)).) IEPC sought the Commission's authorization to (1) construct, operate, and maintain the SAX pipeline; and (2) acquire, when necessary, private property under eminent-domain authority to install and maintain the SAX pipeline as permitted by section 8-509 of the Public Utilities Act (220 ILCS 5/8-509 (West 2006) ). IEPC described the proposed SAX project as a 36-inch diameter underground oil pipeline originating from IEPC's Flanagan terminal located near Pontiac, Illinois, and terminating approximately 170 miles south, at IEPC's Patoka terminal located near Patoka, Illinois. The planned SAX project traversed 679 tracts of land located in the counties of Livingston, McLean, DeWitt, Macon, Shelby, Christian, Fayette, and Marion. IEPC sought (1) a 60-foot wide permanent easement right-of-way for the pipeline and (2) an additional 60-foot temporary easement to facilitate construction.

¶ 10 In July 2009, the Commission issued an order in docket No. 07-0446, granting IEPC a certificate in good standing but denying IEPC's request for eminent-domain authority. As to eminent domain, the Commission urged, instead, that IEPC continue negotiations with landowners who had declined the compensation IEPC had offered in exchange for the aforementioned easements on the landowners' respective properties. The Commission's order provided, however, that IEPC could renew its request for eminent-domain authority by "demonstrating that it has made reasonable attempts to obtain easements, through good-faith negotiations."

¶ 11 Some affected landowners (Intervenors) appealed the Commission's grant of a certificate in good standing, and this court affirmed. Pliura Intervenors v. Illinois Commerce Comm'n , 405 Ill.App.3d 199, 200, 347 Ill.Dec. 373, 942 N.E.2d 576, 578 (2010) (Intervenors I ). Specifically, we rejected Intervenors' argument that the Commission erred by determining that (1) IEPC was fit, willing, and able to construct, operate, and maintain an oil pipeline; and (2) a public need existed for the pipeline. Intervenors I , 405 Ill.App.3d at 208–09, 347 Ill.Dec. 373, 942 N.E.2d at 584–85. The Supreme Court of Illinois later denied Intervenors' petition for leave to appeal. Pliura Intervenors v. Illinois Commerce Comm'n , 239 Ill.2d 589, 348 Ill.Dec. 198, 943 N.E.2d 1108 (2011) (table).

¶ 12 2. IEPC's Renewed Petition for Eminent-Domain Authority

¶ 13 In July 2013, IEPC renewed its request for eminent-domain authority, seeking to condemn 148 of the 679 tracts of land traversed by the planned SAX project route because the owners of those respective properties had either (1) refused to negotiate with IEPC or (2) declined IEPC's compensation offers despite extensive negotiations. (IEPC's continued negotiations reduced the number of "holdout" landowners from 148 to 127, meaning approximately 81% of landowners reached an agreement with IEPC.)

¶ 14 In December 2013, an administrative law judge (ALJ) conducted a hearing on IEPC's request for eminent-domain authority. A senior engineer employed by the Commission testified, in pertinent part, that approval to exercise eminent-domain authority required IEPC to show that (1) reasonable attempts were made to acquire the outstanding land rights through good-faith negotiations and (2) additional attempts to acquire the land rights at issue would have been unsuccessful. In evaluating those metrics, the engineer stated that the Commission considers numerous factors which include—but are not limited to—the following: (1) the number and extent of the petitioner's contacts with the landowner, (2) whether the petitioner explained its compensation offer to the landowner, (3) whether the compensation the petitioner offered was comparable to offers made to similarly situated landowners, (4) petitioner's efforts to address landowner concerns, and (5) the likelihood that further negotiations would be successful. After testifying to IEPC's efforts as to each of these five factors, the engineer recommended that the Commission approve IEPC's petition for eminent-domain authority. In April 2014, the ALJ recommended that the Commission grant IEPC eminent-domain authority.

¶ 15 Later that month, the Commission issued its written order, in which it (1) accepted the ALJ's recommendation and (2) granted IEPC eminent-domain authority. In so doing, the Commission explained that the grant of a request for eminent-domain authority under section 8-509 of the Public Utilities Act requires "a utility [to] show that it made a reasonable attempt to acquire the property at issue." In this regard, the Commission noted that the aforementioned five factors "should be considered, among others, in determining whether the use of eminent domain is necessary." The Commission then recognized that as to the aforementioned five factors, sufficient evidence was presented to show that (1) the number, nature, and extent of [IEPC's] contacts with the landowners had been adequate; (2) IEPC adequately explained its offer of compensation to landowners; (3) IEPC's offers were comparable to offers made to similarly situated landowners, noting that IEPC's offers for the easements were 125% of fee value; (4) IEPC made an effort to address landowner concerns by making adjustments to the pipeline route to avoid certain structures, land features, or wooded areas; and (5) "given the large numbers of holdouts and the length of time that has elapsed during the negotiation phase, the situation is unlikely to change on a large scale absent the Commission granting [IEPC] the right to exercise eminent domain."

¶ 16 Some Intervenors affected by the Commission's grant of eminent-domain authority appealed, and this court affirmed. Pliura Intervenors v. Illinois Commerce Comm'n , 2015 IL App (4th) 140592–U, 2015 WL 2451757 (Intervenors II ). Specifically, we rejected Intervenors' argument that the Commission's grant of eminent-domain authority was not supported by substantial evidence that IEPC engaged in good-faith negotiations. Id .

¶ 17 3. IEPC's Motion To Reopen

¶ 18 In May 2014, IEPC filed a "Motion to Reopen and Amend Order Concerning Diameter of the [SAX] Pipeline," requesting an amendment to the July 2009 certificate in good standing the Commission issued in docket No. 07-0446. IEPC's amendment sought only to reduce the SAX pipeline diameter from 36 to 24 inches.

¶ 19 In support of its motion, IEPC alleged that uncertain economic...