SPANISH COVE SANITATION, INC. V LOUISVILLE-JEFFERSON COUNTY METROPOLITAN SEWER DISTRICT
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2000-SC-000496-l
SPANISH COVE SANITATION, INC.
V
REVIEW FROM COURT OF APPEALS
9%CA-000770
JEFFERSON CIRCUIT COURT NO. 97-Cl-004911
LOUISVILLE-JEFFERSON COUNTY
METROPOLITAN SEWER DISTRICT
APPELLEES
OPINION OF THE COURT BY JUSTICE GRAVES
AFFIRMING
In 1993. the Court of Appeals declared KRS 65.115’, a statute which was
enacted to provide compensation for taking sewage treatment utility property.
unconstitutional as special legislation. Consequently, the Jefferson Circuit Court in this
case correctly granted a motion to dismiss a subsequent complaint seeking r-ecovery
‘KRS G5.l15(1) Compensation for sewage treatment utility property --Eminent
dumait~ --- SuI-charge to customers: “The provisions of any other law, rule, or regulation
notwithstanding, if any city, county, public body corporate or politic or special district or
subdistrict, other than an urban county, furnishes, or proposes to furnish, sewage
treatment utility services to customers of another sewage treatment utility by means of
all or any part of the installations owned or paid for by such other sewage treatment
utility, then such city, county, public body, district or subdistrict taking over or proposing
to take over the customers; shall pay just compensation for such installations prior to
the tirne the customers are taken over. If an agreement for compensation is not
reached. then just compensation for the installations shall be payable by said city.
county. public body, district or subdistrict after condemnation as provided for in the
Eminent Domain Act of Kentucky.”
based on the same statute. Once an appellate court has declared a statute
unconstitutional in its entirety, the statute cannot thereafter provide any rights or powers
under Kentucky law.
Appellant, Spanish Cove Sanitation, owns a waste water treatment facility that is
composed of grounds, equipment and pipe systems providing waste water and sewage
treatment to residential customers in the Fern Creek area of Jefferson County.
Appellee, Louisville-Jefferson County Metropolitan Sewer District, is a municipal
corporation with the power to acquire land by eminent domain proceedings pursuant to
KRS 76.110. Appellee, as part of its project to expand services into the Fern Creek
area, planned to tie into the pipe system that served Appellant’s customers. This would
render Appellant’s facility valueless. Appellee did not plan to pay Appellant, nor drd it
file an ernincnt domain action.
Appellant filed this action in the Jefferson Circuit Court asserting federal clatms
under the 5”’ and 14’” Amendments of the United States Constitution and state claims
under- Sections 13 and 242 of the Kentucky Constitution relating to the taking of private
property for public use without just compensation. Appellant also made a claim
pursuant to KRS 65.115 which requires a public corporation that maintains a sewer
service to compensate for taking the customers of another sewer service. Appellee
filed a motion to dismiss the action for ripeness, as, at that point, Appellee had not yet
tied into Appellant’s lines. Appellee also argued that the claim under KRS 65.115
should be dismissed because the Court of Appeals had found the statute
unconstitutional in Monticello Co. v. Commonwealth of Kentuckv, Natural Resourcee_S
and Environmental Protection Cabinet, Ky. App., 864 S.W.2d
92’1 (1993).
The trial court granted the motion to dismiss, stating that the record reflected that
the taken property had, in fact, been paid for. The Court of Appeals thereafter stated in
an unpublished opinion that the ruling below indicated the trial court’s confusion
between this case and a previous action between the same parties that had been
resolved in another division of Jefferson Circuit Court.
The Court of Appeals’ opinion focused on KRS 65.115. In Monticello, the Court
of Appeals deemed the statute special legislation*, because it exempted urban county
government from the provisions of the statute, an exemption which only applied to the
Lexington-Fayette Urban County Government. In considering the instant case, the
Court of Appeals panel opined that KRS 65.115 could be saved by severing out the
unconstitutional language “other than an urban county” and leaving the rest of the
statute intact. Thus, in the panel’s opinion the Monticello decision went too far and
Appellant, in fact, had a cause of action. The panel referred the case for en bane
consideration of this proposition and the entire Court split 7-7 on the question.
The Court of Appeals thereafter recommended transfer to this Court. We denied
transfer because the taking had not actually occurred at the time the suit was filed and
a judgment dismissing the claim was entered. On reconsideration by the en bane
panel, the Court of Appeals held that the trial court had dismissed the case “with
prejudice” and such a dismissal
would operate to foreclose Appellant from presenting
the case when the taking actually did occur.3 Further, the panel pointed to a notation
’ Ky Const. 559 provides that “[tjhe General Assembly shall not pass local or special
acts concerning any of the following subjects, or for any of the following purposes : Twentyninth. In all other cases where a general law can be made applicable, no special law shall be
enacted.” Section GO provides in part that “[t]he General Assembly shall not indirectly enact any
special or local act by exempting from the operation of a general act any city, town, district,
or county. .”
’ The parties have indicated this has since happened
on the trial court’s ruling concerning KRS 65.115:
An appeal should be taken in this action in regard to the interpretation of
KRS 446.090 versus the interpretation of KRS 65.115. The issue of a
lack of constitutional standing and the issue of special legislation should
be decided by the appellate court.
KRS 446.0904
deals with severability of unconstitutional provisions from the balance of
a statute
Turning to the KRS 65.115 issue, the panel on reconsideration concluded it was
bouncl by Monticello, supra, because a majority of the Court of Appeals had declined to
overrule it. The panel then turned to a decision of the United States Court of Appeals
for the Sixth Circuit for guidance, Calvert Investments, Inc. v. Louisville-Jefferson
Countv Metrooolitan Sewer District, 847 F.2d 304 (61h Cir. 1988), which held that the
--_owner of the treatment facility had bare legal title to the pipes. However, the customers
had the right of free usage of those pipes. Servicing those customers was deemed to
be a mere expectancy and not a protected property interest. Id. at 308. Thus, the
Court of Appeals panel concluded in this case that Appellant did not have an avenue by
which to seek compensation. We granted discretionary review to address the concerns
raised by _Monticello and we now affirm the Court of Appeals’ decision
At the outset, we should note that the trial court did not abuse its discretion in
determining that the issue was not ripe. Under Kentucky law, before a plaintiff can
‘446.090. Severability. It shall be considered that it is the intent of the General
Assembly, in enacting any statute, that if any part of the statute be held unconstitutional
the remaining parts shall remain in force, unless the statute provides otherwise, or
unless the remaining parts are so essentially and inseparably connected with and
dependent upon the unconstitutional part that it is apparent that the General Assembly
would not have enacted the remaining parts without the unconstitutional part, or unless
the remaining parts, standing alone, are incomplete and incapable of being executed in
accordance with the intent of the General Assembly.
--I-
make a claim of inverse condemnation, there must be an actual taking. Holloway
Const. Co. v. Smith, Ky., 683 S.W.2d 248, 249 (1984). In Associated Industries of
Qntuckv v. Commonwealth, Ky., 912 S.W.2d 947 (1995), we held that Kentucky courts
cannot grant advisory opinions or rule on hypothetical questions, but rather must rule on
real disputes. At the time this action was filed, nothing had even arguably been taken.
Notwithstanding, Appellant’s claim would still fail based on the KRS 65.115
argument. The Court of Appeals, under KRS 446.090, may have theoretically been
able to sever the unconstitutional portion of KRS 65.115, leaving the remainder intact.
However, the Court of Appeals held the statute unconstitutional in its entirety in
Monticetlo, a fact neither this Court nor ihe General Assembly has changed in eight
years. It is not now appropriate for this Court to revisit the severability of a statute
previously held unconstitutional.
What Appellant fails to recognize in arguing that the unconstitutional portions of
KRS 65.115 are severable from the remainder of the statute is that KRS 65.115 no
longer exists. For 85 years, it has been the law in Kentucky that any statute passed in
contravention of the Constitution is void - -1 and any action taken thereunder is a
ab initio
nullity. City of Henderson v. Lieber’s Ex’r, 175 Ky. 15, 192 S.W. 830 (1917). The effect
of the Court of Appeals declaring KRS 65.115 unconstitutional is to render it a nullity. It
is impossible to now parse out the unconstitutional pieces of something that does not
exist.
We agree with the Court of Appeals that, in the absence of KRS 65.115, the
Calvert Investments, Inc., supra, rationale is applicable in this case. Appellant has no
protected property interest in providing sewage treatment services to the Fern Creek
customers; it has but a mere expectancy. Therefore, we affirm the Court of Appeals in
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its opinion that the trial court properly granted summary judgment in favor of the
Louisville-Jefferson County Metropolitan Sewer district.
Lambert, C.J., Cooper, Graves, Johnstone, Stumbo, and Wintersheimer, J.J.,
concur. Keller, J., dissents in a separate opinion.
COUNSEL FOR APPELLANT
Bruce Garrett Anderson
Hargadon Lenihan Harbolt & Herrington
713 West Main St.
Louisville, KY 40202
Christopher Morris
2242 South Preston Street Suite 1
Louisville, KY 40217
COUNSEL FOR APPELLEE
Laurence Zielke
Caroline George Meena
John H. Dwyer, Jr.
Deborah K. Kent
Pedley, Zielke, Gordinier, Olt & Pence
1150 Starks Building
455 South Fourth Ave.
Louisville. KY 40202-2555
RENDERED: APRIL 252002
TO BE PUBLISHED
2000-SC-0496-DG
SPANISH COVE SANITATION, INC.
V.
APPELLANT
ON REVIEW FROM COURT OF APPEALS
98-CA-000770
JEFFERSON CIRCUIT COURT NO. 97-Cl-004911
LOUISVILLE-JEFFERSON COUNTY
METROPOLITAN SEWER DISTRICT
APPELLEES
DISSENTING OPINION BY JUSTICE KELLER
For several reasons, I respectfully dissent. I would reconsider the
constitutionality of KRS 65.115 in light of KRS 446.090, overrule Monticello Co. v.
Commonwealth of Kentuckv. Natural Resources and Environmental Protection
Cabinet,’ reverse the decision of the Court of Appeals in this case, and remand this
action to the trial court for it to resolve the merits of Appellant’s KRS 65.115 claim.
Although I agree with the majority of this Court and with the Court of Appeals that the
trial court correctly dismissed Appellant’s constitutional, inverse (or reverse)*
‘Ky.App., 864 S.W.2d 921 (1993) (hereinafter “Monticello”).
*a Jones v. Commonwealth. Transp. Cabinet, Dept. of Highways, Ky.App.,
875 S.W.2d 892, 893 (1993) (“Ordinarily, the law of eminent domain requires that prior
to such a ‘taking’ occurring that land be condemned. Appellant’s however, brought this
action as a ‘reverse condemnation’ action. A ‘reverse condemnation’ action differs from
an ordinary condemnation action in that the land has already been taken by the
government.“); Commonwealth. Dept. of Highways v. Davidson, Ky., 383 S.W.2d 346
(1964).
condemnation claim because that claim was not yet ripe, I believe the trial court erred
when it dismissed that claim “with prejudice,” and I would reverse the Court of Appeals
and remand that claim to the trial court with instructions for it to dismiss the claim
without prejudice.
First, I observe that the majority proceeds from a mistaken belief that “KRS
65.115 no longer exists.“3
This belief is simply not factually correct. The General
Assembly enacted KRS 65.1 15,4 and only the legislature has the power to repeal that
statute and remove it as part of the Commonwealth’s statutory law? As an inspection
of Volume Four of the Official Edition of the Kentucky Revised Statutes will reveal, the
General Assembly has not repealed KRS 65.115, and that statute remains an enacted
law in this Commonwealth.
Although I recognize that, in Monticello, the Court of
Appeals declared KRS 65.115 unconstitutional, I cannot agree with the majority’s
assertion that “[olnce an appellate court has declared a statute unconstitutional in its
entirety, the statute cannot thereafter provide any rights or powers under Kentucky
law,“” nor can I endorse the majority’s conclusion that the Monticello decision wiped
KRS 65.115 from the books. The Monticello decision held that KRS 65.115’s
unconstitutionality rendered that provision unenforceable, but that holding does not
prevent this Court from revisiting the statute’s unconstitutionality.
(200-) (Slip Op. at 5).
3Majority Opinion, - S.W.3d ,
41 986 Ky. Acts, ch. 445, § 1, effective July 15, 1986.
5K~. CONST. $j 27 & 28.
‘Majority Opinion, supra note 3 at -‘(Slip Op. at 2).
-2-
I
.
While I have concerns about the practical consequences of the majority’s
conc/usion,7 my most significant concern is that the majority cites no authority to
support its contention that a prior appellate determination finding a statute
unconstitutional prevents the judiciary from reconsidering that prior determination
unless and until the General Assembly chooses to reenact the legislation. And, in fact,
I would observe that prior opinions addressing the constitutionality of certain statute of
limitations provisions’ provide ample evidence that the judiciary has the power to
reconsider a previous holding declaring a statute unconstitutional. In 1973, in Savior v.
w,g our predecessor held that these limitations provisions violated the Kentucky
Constitution and accordingly declared the statute unconstitutional. Nine (9) years later,
in Carnev v. Moodv,” this Court revisited the issue, concluded that the provisions were
not constitutionally infirm, and applied them to the pending case. Yet, another four (4)
7For instance, if a circuit court, sitting as an appellate court, see KY. CONST. 5
112(5); CR 72, et seq; RCr 12.02, holds a legislative enactment unconstitutional and
the Court of Appeals either denies discretionary review or no party seeks discretionary
review, the majority’s logic would dictate that the statute is void and unenforceable
throughout the Commonwealth despite the fact that almost no one in the state would
know about the circuit court’s unpublished holding.
‘KRS 413.120(14) [now KRS 413.120(13)] and KRS 413.135(l); See 1964 Ky.
Acts, ch. 124, § 1; 1966 Ky. Acts. ch. 246. These provisions, described as “no action”
statutes, provided home builders and those persons engaged in the “design, planning,
supervision, inspection or construction of any improvement to real property” with
immunity from suit for damages or injuries caused by any deficiency after the expiration
of five (5) years from occupancy and/or substantial completion of improvements.
‘KY., 497 S.W.2d 218, 225 (1973) (“[The provisions] cannot be applied to bar the
plaintiffs’ claims in this action. Such application is constitutionally impermissible in this
state because it would violate the spirit and language of Sections 14, 54, and 241 of the
Constitution of Kentucky . . . . ‘I).
“KY., 646 S.W,2d 40 (1982) (“[Tlhe statutes do not violate the constitutional
provisions.“).
-3-
years later, this Court again revisited the issue in Tabler v. Wallace” and once again
declared the provisions unconstitutional, although on different constitutional grounds:
Carney v. Moody reached an opposite result from Saylor v.
Hall while conceding that there was no “factual distinction”
and without overruling it.
We need not write Chapter Three to Savlor v. Hall and
Carnev v. Moody. The inquiry has shifted from whether the
statute is arbitrary and discriminatory, to constitutional
issues not discussed in those opinions, equal protection and
special legislation.12
Through all of this litigation, however, the statutes remained on the books until they
were amended by subsequent legislation.‘3
Accordingly, KRS 65.115, like the statute of limitations provisions addressed in
the opinions discussed above, was not erased from the books by the Court of Appeals’
decision in Monticello but remains part of our body of statutory law, albeit
unenforceable unless resuscitated by a decision of this Court. Therefore, it is now
appropriate for this Court to review - for the first time - issues concerning the
constitutionality of KRS 65.11 5.14
I would overrule Monticello because the Court of Appeals failed to consider KRS
446.090, which requires us to uphold the constitutionality of a legislative enactment, if
“KY., 704 S.W.2d 179 (1985), cert. denied, 479 U.S. 822, 107 S.Ct. 89, 93
L.Ed.2d 41 (1986).
‘*1d. at 187.
131986 Ky. Acts, ch. 479, § 1, effective July 15, 1986; repealed and reenacted,
1990 Ky. Acts, ch. 425, 5 4, effective July 13, 1990.
14Under the majority’s rationale that it is not appropriate for this Court to revisit a
statute previously held unconstitutional by a final decision of an appellate court, we are
in effect adopting a rule that this Court is bound to follow the precedents of the Court of
Appeals. While the converse is certainly true; “[t]he Court of Appeals is bound by and
shall follow applicable precedents established in the opinions of the Supreme Court[.]”
SCR 1.030(8)(a), I can find no authority supporting the position adopted today.
-4-
possible, by severing the unconstitutional portions while leaving the remainder in force.
Although the Court of Appeals panel that decided this case below recognized the
Monticello court’s oversight, the panel’s “hands were tied” by the previous, equallydivided en bane decision declining to overrule Monticello. Nevertheless, the Court of
Appeals opinion in this case addresses Monticello’s error. Because the panel’s analysis
adequately expresses my views, I see no reason to “reinvent the wheel” in this
dissenting opinion. Thus, I will adopt the panel’s analysis:
Spanish Cove urges us to sever the unconstitutional
portion of KRS 65.115 from the remainder of the statute and
uphold its constitutionality. Because Monticello declared the
entire statute unconstitutional as special legislation, we may
not do so without overruling Monticello. This panel would
overrule Monticello and revive KRS 65.115 except for the
portion of it that was unconstitutional as special legislation.
However, a majority of the entire Court of Appeals, after
considering this issue en bane, refused to do so. We are
therefore bound by Monticello which declares the entire
statute unconstitutional.
The basis of this court’s decision in Monticello was that the
statute was unconstitutional as special legislation because it
excluded urban county governments from its scope.
Although KRS 65.115(2) grants the power of eminent
domain with respect to sewage treatment plants, facilities,
and installations owned by sewage treatment facilities to any
city, county, public body corporate or politic or special district
or subdistrict, KRS 65.115(l) exempts urban counties from
paying just compensation for the use of privately-owned
installations prior to the time the customers are taken over
as is required of all other public bodies. As the Monticello
court held, this is special legislation in violation of Sections
59 and 60 of the Kentucky Constitution. Having properly
determined that KRS 65.115 contained an unconstitutional
portion which constituted special legislation, the Monticello
court did not take the next step and determine whether the
unconstitutional portion of the statute could be severed,
thereby leaving the remainder of the statute intact.
In the opinion of this panel, KRS 446.090 was clearly
applicable. KRS 446.090 states:
-5-
It shall be considered that it is the intent of
the general assembly, in enacting any statute,
that if any part of the statute be held
unconstitutional the remaining parts shall
remain in force, unless the statute provides
otherwise, or unless the remaining parts are so
essentially and inseparably connected with and
dependent upon the unconstitutional part that it
is apparent that the general assembly would
not have enacted the remaining parts without
the unconstitutional part, or unless the
remaining parts, standing alone, are
incomplete and incapable of being executed in
accordance with the intent of the general
assembly.
As KRS 446.090 applies to KRS 65.115, we first note that
the latter statute does not provide that the entire statute
should be determined to be unconstitutional if any portion of
it is so declared. Next, we note that the five-word phrase
“other than an urban county” is neither essential nor
inseparably connected and dependent upon the
constitutional portion such that the general assembly would
not have enacted the statute without it. This very rationale
was applied by this court to a statute regarding horse racing
in Tri-Citv Turf Club. Inc. v. Public Protection & Regulation
Cabinet, Ky. App., 806 S.W.2d 394, 397 (1991). This panel
believes that this court’s decision in Monticello was too
broad in declaring KRS 65.115 unconstitutional in its entirety
and that the statute should have been held to remain in
force after severing the unconstitutional portion concerning
urban county governments under the tenets of the Tri-City
case and KRS 446.090. (footnotes omitted)
For the reasons well-articulated by the Court of Appeals, I would overrule Monticello
and revive the constitutional parts of KRS 65.115. Although the trial court’s judgment
dismissing Appellant’s KRS 65.115 claim may have been correct under the Monticello
holding, I believe that Monticello incorrectly declared KRS 65.115 unconstitutional in its
entirety, and I would thus remand Appellant’s statutory claim to the trial court for
resolution of its merits.
-6-
As to Appellant’s other claim - inverse (or reverse) condemnation premised on
protections contained within the state and federal constitutions - I agree with the
majority that the trial court properly dismissed Appellant’s action because such claims
will not ripen until an actual taking has occurred.15
In my opinion, however, the trial
court erred when it dismissed this claim “with prejudice” - thereby precluding
Appellant from later asserting a reverse condemnation claim after an actual taking and the majority offers an advisory opinion when it affirms the view of the Court of
Appeals that, even if the claim was ripe, Appellant would have no recognizable property
interest to assert. In my opinion, the record at this stage of the proceedings does not
permit the inference that the factual issues in this case - particularly those relating to
the Appellant’s ownership interest in the sewer pipe system that served Appellant’s
customers - are “on all fours” with Calvert Instruments. Inc. v. Louisville JeffersonCounty Metropolitan Sewer District.” This deficiency leaves this Court facing the same
quandary as the Court in Louisville and Jefferson Countv Metropolitan Sewer Dist. v.
Tarrytowne Sanitation CO.:‘~
The big question is, what is being taken? This will generally
be determined bv the circumstances in each barticular case.
There are several relevant questions. Is the acquisition
merely the dedicated public easements containing sewer
lines which have been fully paid for by the abutting and
using property owners? Is the acquisition an established
utility and profitable business? Or, is it something in
between? Who owns the easements, if anyone? Who will
provide the access to the existing easements, if access is
15Jones v. Commonwealth. Transo. Cabinet. Dept. of Hiahways, supra note 2 at
893 (“From the very nature of a ‘reverse condemnation’ action there can be no breach
of the implied promise to pay until first there has been a compensable ‘taking.“‘).
I6847 F.2d 304 (6th Cir. 1988).
17Ky.App., 818 S.W.2d 267 (1991)
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,
necessary? We do not have all of the answers or even all
of the questions.”
Accordingly, I believe factual issues remain which make summary judgment on
Appellant’s inverse (or reverse) condemnation claim improper in the case’s current
posture.
For the above reasons, I would reverse the decision of the Court of Appeals and:
remand this action to the trial court for it to: (1) resolve the merits of Appellant’s KRS
65.115 claim; and (2) dismiss Appellant’s inverse (or reverse) condemnation claim
without prejudice.
181d. at 268 (emphasis added).
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