JENT (JAMES L.) VS. KENTUCKY UTILITIES COMPANY, ET AL
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RENDERED: APRIL 23, 2010; 10:00 A.M.
TO BE PUBLISHED
MODIFIED: APRIL 30, 2010; 10:00 A.M.
Commonwealth of Kentucky
Court of Appeals
NO. 2008-CA-001565-MR
JAMES L. JENT AND
MARY K. JENT
v.
APPELLANTS
APPEAL FROM HARDIN CIRCUIT COURT
HONORABLE KEN M. HOWARD, JUDGE
ACTION NO. 07-CI-01686
KENTUCKY UTILITIES COMPANY
APPELLEE
AND
NO. 2008-CA-001566-MR
CDH PRESERVE, LLC
v.
APPELLANT
APPEAL FROM HARDIN CIRCUIT COURT
HONORABLE KEN M. HOWARD, JUDGE
ACTION NO. 07-CI-01875
KENTUCKY UTILITIES COMPANY
APPELLEE
AND
NO. 2008-CA-001567-MR
VIOLET MONROE
v.
APPELLANT
APPEAL FROM HARDIN CIRCUIT COURT
HONORABLE KEN M. HOWARD, JUDGE
ACTION NO. 07-CI-02276
KENTUCKY UTILITIES COMPANY
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: ACREE AND MOORE, JUDGES; BUCKINGHAM,1 SENIOR
JUDGE.
BUCKINGHAM, SENIOR JUDGE: Appellants, James L. Jent and Mary K. Jent,
CDH Preserve, LLC, and Violet Monroe, appeal from an interlocutory judgment of
the Hardin Circuit Court in favor of Kentucky Utilities Company on its petition to
condemn the Appellants’ properties. Appellants argue that: (1) Kentucky Utilities
was required to obtain a final non-appealable certificate of public convenience and
necessity before initiating condemnation proceedings, but it failed to do so; (2) the
facts of this case do not support a public need for the construction of transmission
1
Senior Judge David C. Buckingham sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
(KRS) 21.580.
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lines; (3) the circuit court incorrectly applied the “reasonable assurance” test; and
(4) the circuit court erred by failing to find that Kentucky Utilities acted arbitrarily
or in bad faith in the condemnation of Appellants’ properties. We affirm.
Kentucky Utilities sought to construct an electric transmission line to
support the operation of its new generating unit located in Trimble County. It
applied for a certificate of public convenience and necessity from the Kentucky
Public Service Commission. In an order dated September 8, 2005, the commission
stated that the need for the transmission line had been established, but it denied the
application and required Kentucky Utilities to perform a more thorough analysis of
alternative routes. After conducting an analysis of alternative routes, Kentucky
Utilities reapplied for the certificate. The commission granted Kentucky Utilities
the required certificate for the proposed transmission lines. Appellants fully
participated as parties in the proceedings before the commission.
Appellants filed a statutory appeal in the Franklin Circuit Court, but
the court dismissed the appeal on procedural grounds. This Court reversed in an
unpublished opinion. The Kentucky Supreme Court granted discretionary review,
which is pending.
Meanwhile, Kentucky Utilities initiated condemnation proceedings in
the Hardin Circuit Court to obtain easements over Appellants’ property for the
construction of the transmission line. The Appellants’ cases were consolidated
without objection before the trial court.
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Appellants filed a motion to dismiss the condemnation as premature
or to hold it in abeyance pending the resolution of their appeal of the certificate of
public convenience and necessity, but the circuit court denied the motion. The
court then held a hearing on Kentucky Utilities’ right to condemn the property and
entered an interlocutory judgment in favor of Kentucky Utilities. This appeal
followed.
Appellants first argue that Kentucky Utilities was required to obtain a
final non-appealable certificate of public convenience and necessity before
initiating condemnation proceedings. We disagree.
Prior to 2004, transmission lines were viewed as ordinary extensions
of existing systems and did not require specific authorization. Duerson v. East
Kentucky Power Co-op, Inc., 843 S.W.2d 340, 342 (Ky. App. 1992). In 2004,
however, the General Assembly amended KRS 278.020(2) to read in part as
follows:
For the purposes of this section, construction of any
electric transmission line of one hundred thirty-eight
(138) kilovolts or more and of more than five thousand
two hundred eighty (5,280) feet in length shall not be
considered an ordinary extension of an existing system in
the usual course of business and shall require a certificate
of public convenience and necessity.
Appellants contend that this section, coupled with their right to
challenge the issuance of the certificate contained in KRS 278.020(8), requires the
exhaustion of the appeals process before Kentucky Utilities will be permitted to
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initiate condemnation proceedings. Appellants overlook KRS 278.390, which
states in part:
Every order entered by the commission shall continue in
force until the expiration of the time, if any, named by
the commission in the order, or until revoked or modified
by the commission, unless the order is suspended, or
vacated in whole or in part, by order or decree of a court
of competent jurisdiction.
The mere filing of an appeal does not stay the legal effectiveness of an
order of the commission. Com. ex rel. Stephens v. S. Cent. Bell Tel. Co., 545
S.W.2d 927, 931 (Ky. 1976). Unless and until the order granting Kentucky
Utilities the required certificate is vacated, the order remains in effect. Thus, we
conclude that Kentucky Utilities was not required to have a final non-appealable
certificate of public convenience and necessity before initiating condemnation
proceedings against Appellants’ properties.
Appellants next contend that there is no public necessity for the
construction of the transmission line.
Courts review the necessity of a taking for arbitrariness or action in
excess of the condemnor’s authority. God’s Ctr. Found., Inc. v. Lexington-Fayette
Urban County Gov’t, 125 S.W.3d 295, 299-300 (Ky. App. 2002). Moreover,
“judicial review of necessity is extremely limited and the condemnor’s
determination of necessity will be respected unless the use is . . . ‘plainly without
reasonable foundation.’” Id. at 303 (citation omitted). “Although the factors of
necessity and public use associated with condemnation are ultimately legal issues,
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resolution of those issues encompasses factual matters subject to deferential review
on appeal.” Id. at 300. “The party challenging the condemnation, however, bears
the burden of establishing the lack of necessity or public use and abuse of
discretion.” Id.
The commission found on two occasions that there was a public
necessity for the construction of the transmission lines. The circuit court afforded
great weight to this evidence. The court also heard the testimony of several
witnesses on the question of necessity. Appellants do not demonstrate any clear
error in any of the circuit court’s factual findings. Rather, they simply illustrate
conflicts in the testimony of the parties’ respective expert witnesses. Issues
regarding the weight of evidence and the credibility of witnesses are reserved to
the finder of fact. Id. We conclude that Appellants failed to meet their burden of
establishing a lack of public necessity.
Appellants next argue that condemnation proceedings were premature
because there is a reasonable question concerning whether Kentucky Utilities will
fail to obtain the necessary permits to move forward with the construction of the
transmission lines.
In Northern Kentucky Port Authority, Inc. v. Cornett, 625 S.W.2d 104
(Ky. 1981), the Kentucky Supreme Court adopted the “reasonable assurance” test
to determine whether the right of condemnation may be granted when all necessary
permits have not yet been obtained. Id. at 105. The Court stated:
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There will always be some possibility that a planned
improvement will not be completed and put to the use
intended. The test cannot be whether it is possible,
whether it is conceivable that the project would fail. The
test must be whether there is a reasonable assurance that
the intended use will come to pass. If there is reasonable
probability that the public utility will comply with all
applicable standards, will meet all requirements for the
issuance of necessary permits, and will not otherwise fail
or be unable to prosecute its undertaking to completion,
there is a right of condemnation.
Id. (quoting Falkner v. Northern States Power Co., 75 Wis.2d 116, 248 N.W.2d
885, 893 (1977)).
In the present case, Kentucky Utilities has already obtained the
certificate of public convenience and necessity from the commission. Although
the award of that certificate is currently being appealed, the order of the
commission remains in effect as stated above. We conclude that there is a
reasonable assurance that the construction of the power lines will proceed.
Finally, Appellants argue that Kentucky Utilities acted in bad faith
throughout the proceedings before the commission and the trial court and,
therefore, acted arbitrarily in violation of Section 2 of the Kentucky Constitution.
Appellants have alleged several instances of bad faith by Kentucky
Utilities. These allegations are not supported by citation to the record.2 The record
reflects that Kentucky Utilities properly studied alternate locations and that the
commission rejected the proposed alternate locations submitted by Appellants.
Based upon our review of the record, we cannot conclude that Kentucky Utilities
2
See Kentucky Rules of Civil Procedure (CR) 76.12(4)(v).
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acted in bad faith or arbitrarily in violation of Section 2 of the Kentucky
Constitution.
Accordingly, the interlocutory judgment of the Hardin Circuit Court is
affirmed.
ALL CONCUR.
BRIEFS FOR APPELLANTS:
BRIEF FOR APPELLEE:
W. Henry Graddy, IV
Elizabeth R. Bennet
Randal A. Strobo
Midway, Kentucky
Sheryl G. Snyder
Griffin Terry Sumner
Jason Renzelmann
Louisville, Kentucky
ORAL ARGUMENT FOR
APPELLANTS:
Allyson K. Sturgeon
J. Gregory Cornett
Louisville, Kentucky
W. Henry Graddy, IV
Midway, Kentucky
Robert M. Watt III
David T. Royse
Lexington, Kentucky
ORAL ARGUMENT FOR
APPELLEE:
Sheryl G. Snyder
Louisville, Kentucky
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