Muerdter v. Louisville Gas & Elec. Co.

1

MARILYN RUMMAGE MUERDTER; ANTHONY TANNER STIVERS; DAVID RUMMAGE; JESSIE STIVERS; KIMBERLY RUMMAGE; MARY F. RUMMAGE; PEGGY A. RUMMAGE; AND TERRY J. RUMMAGE APPELLANTS v. LOUISVILLE GAS AND ELECTRIC COMPANY APPELLEE AND MARILYN RUMMAGE MUERDTER; ANTHONY TANNER STIVERS; DAVID RUMMAGE; JESSIE STIVERS; KIMBERLY RUMMAGE; MARY F. RUMMAGE; PEGGY A. RUMMAGE; AND TERRY J. RUMMAGE APPELLANTS v. LOUISVILLE GAS AND ELECTRIC COMPANY APPELLEE AND MARILYN RUMMAGE MUERDTER; ANTHONY TANNER STIVERS; DAVID RUMMAGE; JESSIE STIVERS; KIMBERLY RUMMAGE; MARY F. RUMMAGE; PEGGY A. RUMMAGE; AND TERRY J. RUMMAGE APPELLANTS v. LOUISVILLE GAS AND ELECTRIC COMPANY APPELLEE AND IOLA CAPITAL, LLC; MARK E. CARTER; MONICA LYNNE CARTER; AND PAMELA QUARTERLY APPELLANTS v. LOUISVILLE GAS AND ELECTRIC COMPANY; ANTHONY TANNER STIVERS; DAVID RUMMAGE; EAST KENTUCKY POWER COOPERATIVE, INC.; ENERGY TRANSFER PARTNERS, LLC; JESSIE STIVERS; KIMBERLY RUMMAGE; MARILYN RUMMAGE MUERDTER; MARY RUMMAGE; PAUL MITCHELL WHITWORTH; PEGGY A. RUMMAGE; PNC FINANCIAL SERVICES GROUP; SALT RIVER ELECTRIC COOPERATIVE CORPORATION; TERRY J. RUMMAGE; AND WEST POINT BANK APPELLEES AND IOLA CAPITAL, LLC; MARK E. CARTER; MONICA LYNNE CARTER; AND PAMELA QUARTERLY APPELLANTS v. LOUISVILLE GAS AND ELECTRIC COMPANY; ANTHONY TANNER STIVERS; DAVID RUMMAGE; EAST KENTUCKY POWER COOPERATIVE, INC.; ENERGY TRANSFER PARTNERS, LLC; JESSIE STIVERS; KIMBERLY RUMMAGE; MARILYN RUMMAGE MUERDTER; MARY RUMMAGE; PAUL MITCHELL WHITWORTH; PEGGY A. RUMMAGE; PNC FINANCIAL SERVICES GROUP; SALT RIVER ELECTRIC COOPERATIVE CORPORATION; TERRY J. RUMMAGE; AND WEST POINT BANK APPELLEES AND MARILYN RUMMAGE MUERDTER; ANTHONY TANNER STIVERS; DAVID RUMMAGE; JESSIE STIVERS; KIMBERLY RUMMAGE; MARY F. RUMMAGE; PEGGY A. RUMMAGE; AND TERRY J. RUMMAGE APPELLANTS v. LOUISVILLE GAS AND ELECTRIC COMPANY APPELLEE

Nos. 2021-CA-1280-MR, 2021-CA-1282-MR, 2021-CA-1283-MR, 2021-CA-1286-MR, 2021-CA-1288-MR, 2021-CA-1289-MR

Court of Appeals of Kentucky

April 28, 2023

NOT TO BE PUBLISHED

APPEAL FROM BULLITT CIRCUIT COURT HONORABLE RODNEY DARREL BURRESS JUDGE ACTION NOS. 19-CI-00752, 19-CI-00754, 19-CI-00758 19-CI-00755, 19-CI-00750, 19-CI-00753

BRIEF FOR APPELLANTS MARILYN RUMMAGE MUERDTER; ANTHONY TANNER STIVERS; DAVID RUMMAGE; JESSIE STIVERS; KIMBERLY RUMMAGE MARY F. RUMMAGE; PEGGY A. RUMMAGE; AND TERRY J. RUMMAGE:

Thomas E. Clay Louisville, Kentucky

BRIEFS FOR APPELLANTS IOLA CAPITAL, LLC; MARK E. CARTER; MONICA LYNNE CARTER; AND PAMELA QUARTERLY: John D.

Cox Petersen S. Thomas Louisville, Kentucky

BRIEFS FOR APPELLEE LOUISVILLE GAS AND ELECTRIC COMPANY:

Monica H. Braun Steven B. Loy Mary Ellen Wimberly Lexington Kentucky

BEFORE: GOODWINE, LAMBERT, AND MCNEILL, JUDGES.

OPINION

GOODWINE, JUDGE

Appellants, Marilyn Rummage Muerdter; Anthony Tanner Stivers; David Rummage; Jessie Stivers; Kimberly Rummage; Mary F. Rummage; Peggy A. Rummage; and Terry J. Rummage (collectively "the Rummage family") and Iola Capital, LLC; Mark E. Carter; Monica Lynne Carter; and Pamela Quarterly (collectively "Iola") appeal from the Bullitt Circuit Court's interlocutory judgment allowing Appellee, Louisville Gas and Electric Company ("LG&E"), to condemn portions of their property to obtain easements to construct a natural gas pipeline. After careful review, finding no error, we affirm.

LG&E is a public utility that provides natural gas service to the people of the Commonwealth, including Bullitt County. In May 2018, LG&E began negotiating the purchase of easements from the Rummage family and Iola for the construction of a new natural gas pipeline. Negotiations were unsuccessful. On July 30, 2019, LG&E filed complaints against the Rummage family and Iola to condemn their property to obtain easements for its natural gas pipeline project under the Eminent Domain Act of Kentucky (KRS^[1] 278.502).

On May 18, 2021, the Bullitt Circuit Court entered a judgment in favor of LG&E ordering the Rummage family and Iola to convey the rights and easements sought to LG&E. The circuit court found LG&E negotiated in good faith, and the pipeline is for public use. Thus, LG&E did not abuse its discretion in condemning the properties for easements.

The Rummage family moved to alter, amend, or vacate and for clarification of factual issues. The Rummage family argued that the circuit court must make additional findings to determine the "primary purpose in seeking condemnation." Record ("R.") at 857 (19-CI-00753). On September 29, 2021, the circuit court entered an order denying the motion. The court found that the Rummage family failed to produce evidence "to counter the fact that the new pipeline is necessary for additional dependable service and capacity" in Bullitt County. R. at 859. The court found LG&E's witnesses credible regarding the proposed pipeline and its public use. The court found that a primary purpose standard was not the law; instead, the utility must show a public purpose.

The circuit court also denied the Rummage family's motion to alter, amend, or vacate to obtain relief from their failure to respond to LG&E's interrogatories and requests for the production of documents and to introduce new "smoking gun" evidence. The court found none of the materials or arguments tendered address whether the LG&E "is a public utility and has a public use behind the proposed pipeline." R. at 862.

Iola also moved to alter, amend, or vacate and for clarification of factual findings on the same basis as the Rummage family. The circuit court entered an order on September 29, 2021, denying the motion. The court reiterated that the focus of its analysis was on public use. LG&E presented undisputed testimony that the pipeline was for public use. This appeal followed.

Before proceeding with our review, we note two other Kentucky Court of Appeals opinions concerning LG&E's natural gas pipeline project in Bullitt County. First, in Kentucky Heritage Land Conservation Fund Board v. Louisville Gas and Electric Company, 648 S.W.3d 76 (Ky. App. 2022), this Court addressed the sole issue 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." Id. at 78. This Court held:

the plain language of KRS 382.850(2) authorizes a statutory right of eminent domain to prevail over a conservation easement because a conservation easement is assumed not to exist upon the exercise of a statutory right of eminent domain. If it is assumed that the Board's conservation easement does not exist, then there is no prior public use to impede the exercise of LG&E's right of eminent domain.

Id. at 89.

Additionally, in Iola Capital v. Public Service Commission of Kentucky, 659 S.W.3d 563 (Ky. App. 2022), Iola challenged LG&E's certificate of public convenience and necessity ("CPCN"). This Court affirmed "the Franklin Circuit Court's order dismissing Iola's and Bernheim's claims for redress of the Commission's action in approving the CPCN and not allowing them relief through the complaint process." Id. at 579. There, this Court noted the condemnation case, which is currently before us, was the appropriate case to address the eminent domain issues:

We note that denying the appellants' claims for redress in this appeal does not mean that the pipeline will necessarily be constructed through their properties. Instead, the appellants' interests are specifically addressed and preserved by the Eminent Domain Act of Kentucky (KRS 416.540 to 416.670) in the ongoing condemnation proceedings before the Bullitt Circuit Court.

Id. at 578.

On appeal, the Rummage family argues: (1) the circuit court erred in failing to determine the primary purpose of the condemnation; (2) LG&E abused its discretion in determining the route of the pipeline and fraudulently concealed information from the public in selecting the proposed route; and (3) LG&E failed to act in good faith. Iola argues that the circuit court erred in refusing to determine whether the asserted public benefit of the pipeline was a pretext, which is substantially similar to the Rummage family's first argument.

"[T]he provisions of KRS 416.610(4) referring to an interlocutory judgment . . ., allows an immediate, expedited appeal, by the condemnee of the question of the condemnor's right to take." Ratliff v. Fiscal Court of Caldwell Cnty., Kentucky, 617 S.W.2d 36, 39 (Ky. 1981). "Although the factors of necessity and public use associated with condemnation are ultimately legal issues, resolution of those issues encompasses factual matters subject to deferential review on appeal." God's Center Foundation, Inc. v. Lexington Fayette Urban Cnty. Government, 125 S.W.3d 295, 300 (Ky. App. 2002). Thus, "we review the trial court's factual findings under a clearly erroneous standard and the legal issues de novo. Factual findings are not clearly erroneous if they are supported by substantial evidence." Id. (footnote omitted).

First, the Rummage family argues that the circuit court was required to determine the "primary purpose" of the condemnation. Similarly, Iola argues that the circuit court erred in refusing to determine whether the asserted public benefit of the pipeline was a pretext and also argues that we should apply a "primary purpose" standard. Both the Rummage family and Iola argue that God's Center Foundation supports their positions.

However our review shows that God's Center does not mention a "primary purpose" or "pretext" standard. God's Center addresses eminent domain in the context of a city government exercising eminent domain over a building "for use as an African-American cultural center[.]" Id. at 298. There, although God's Center...