ELDEN GINN TOBACCO WAREHOUSES, INC. v. EAST KENTUCKY POWER COOPERATIVE, INC. and GERALD WOODS v. EAST KENTUCKY POWER COOPERATIVE, INC.; AND FARM CREDIT SERVICES OF MID-AMERICA, FLCA
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RENDERED: JUNE 2, 2006; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-002339-MR
ELDEN GINN TOBACCO WAREHOUSES, INC.
APPEAL FROM MASON CIRCUIT COURT
HONORABLE JOHN W. McNEILL, III, JUDGE
ACTION NO. 04-CI-00129
v.
EAST KENTUCKY POWER COOPERATIVE, INC.
AND
APPELLEE
NO. 2004-CA-002340-MR
GERALD WOODS
v.
APPELLANT
APPELLANT
APPEAL FROM MASON CIRCUIT COURT
HONORABLE JOHN W. McNEILL, III, JUDGE
ACTION NO. 04-CI-00166
EAST KENTUCKY POWER COOPERATIVE, INC.;
AND FARM CREDIT SERVICES OF MID-AMERICA, FLCA1
APPELLEES
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
1
JOHNSON AND TACKETT,2 JUDGES; BUCKINGHAM, SENIOR JUDGE.3
Farm Credit Services of Mid-America, FLCA was named in the circuit court as
a defendant and on appeal as an appellee because it is a mortgagee of the
subject property.
JOHNSON, JUDGE:
Elden Ginn Tobacco Warehouses, Inc. and Gerald
Woods (hereinafter collectively referred to as “Ginn” unless
individual identification is necessary4) have appealed from the
October 11, 2004, interlocutory judgments of the Mason Circuit
Court, which pursuant to the Eminent Domain Act of Kentucky5
granted East Kentucky Power Cooperative, Inc. (EKPC), a Kentucky
corporation, the right to condemn certain rights-of-way across
their respective properties to construct an electrical
transmission line from a power production facility in Maysville,
Kentucky, to Flemingsburg, Kentucky, and Goddard, Kentucky.
Having concluded that the circuit court improperly applied the
doctrine of collateral estoppel in making its decision, we
reverse and remand.
The facts of this case are not in dispute.
EKPC
sought to construct a new electrical transmission line from its
Spurlock Generating Plant (Spurlock) in Maysville to
Flemingsburg and Goddard.
According to EKPC, this line is
necessary to address three issues related to the integrated
2
Judge Julia K. Tackett concurred in this opinion prior to her retirement
effective June 1, 2006.
3
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 KRS 21.580.
4
Appellants filed a consolidated brief in this matter contesting the circuit
court’s decisions.
5
Kentucky Revised Statutes (KRS) 416.540 through 416.670.
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electrical transmission system in northeastern Kentucky.
According to EKPC, the first issue involved transmission loading
relief on the Kenton-Wedonia electric line owned and operated by
EKPC.
Secondly, the new line was to address unit stability for
generating units #1 and #2 at Spurlock.
And finally, the new
line would provide an alternative source of electricity to
EKPC’s Flemingsburg substation which covers approximately 5,400
customers of Fleming-Mason RECC.
Apparently, after receiving petitions from residents
in Mason County and Fleming County suggesting alternative routes
for the proposed electrical line, the Public Service Commission
(PSC) established a case regarding the project and held a public
hearing concerning it.6
The PSC determined that the project was
necessary to provide EKPC with additional transmission capacity,
that it did not constitute wasteful duplication, and that it was
reasonable.
Thereafter, on May 14, 2004, EKPC filed petitions in
the circuit court to condemn the rights-of-way across the
property of Ginn and Woods so the electrical line could be
constructed.
Answers to the petitions were filed on July 23,
2004, challenging EKPC’s right to take the property.
On August
13, 2004, the circuit court scheduled a hearing date of
6
Case No. 2003-00380.
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September 7, 2004, for the taking issue and ordered that
discovery be completed by September 3, 2004.
On October 11, 2004, the circuit court made its
findings of fact, conclusions of law, and interlocutory
judgments regarding EKPC’s petitions.
The circuit court found
that the PSC in addressing the questions of the “public use” and
“need” for the proposed electrical line had found in favor of
EKPC on those issues.
The circuit court then concluded that the
“determination by the [PSC] is conclusive of the public
necessity for the construction of this line.
That determination
is, by the doctrine of collateral estoppel, binding on this
court.”
The circuit court then ordered that EKPC be allowed to
take the property sought for constructing the electrical line.
EKPC, as a rural electric cooperative corporation, has
been granted under KRS 279.110(4) the right to exercise eminent
domain as provided by the Eminent Domain Act of Kentucky7 to take
property for a public purpose.
Under KRS 416.610(4), when a
property owner has filed an answer putting the right to condemn
in issue, the circuit court is required to hear the matter and
to determine whether or not the petitioner has the right to
condemn the property sought and to make findings regarding that
right.
In making such determination, the circuit court must
consider two basic questions:
7
(1) the authority of the
KRS 416.540 through 416.670.
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petitioner to condemn the property; and (2) the public necessity
in using that authority.8
Further, the condemning body is given
broad discretion regarding the amount of land to be taken and in
determining whether the taking is a necessity.
The party
challenging the condemnation bears the burden of establishing a
lack of necessity for the taking, an absence of public use, or
an abuse of discretion.9
In this case, the circuit court correctly found that
EKPC had the authority to condemn by virtue of KRS 279.110(4),
which permits rural electric cooperative corporations to
exercise the right of eminent domain.
However, the circuit
court did not make proper findings regarding the public
necessity for EKPC to exercise its power of eminent domain in
regard to the Ginn properties.
It was error for the circuit
court to merely conclude that the determination of the PSC was
binding upon it based upon the doctrine of collateral estoppel
because all of the elements necessary to apply that doctrine
were not present.
Collateral estoppel is a subsidiary of the rule of res
judicata which prohibits parties from relitigating issues that
8
Duerson v. East Kentucky Power Cooperative, Inc., 843 S.W.2d 340, 343
(Ky.App. 1992).
9
God’s Center Foundation, Inc. v. Lexington Fayette Urban County Government,
125 S.W.3d 295 (Ky.App. 2002).
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were determined in a prior proceeding.10
The doctrine is
applicable where there is an identity of issues, an identity of
parties or their privities, and a final decision or judgment on
the merits.11
In this case, the decision of the PSC regarding
EKPC’s proposed project did not constitute collateral estoppel
because the PSC did not, and could not, consider EKPC’s claimed
right to take the property.
The PSC order, entered on December
30, 2003, clearly stated that the purpose of the PSC
investigation was to ensure that the construction of the
proposed line would not result in wasteful duplication.
The
action before the PSC did not address EKPC’s authority to take
the Ginn properties for the purpose of constructing the
electrical line or any of Ginn’s challenges under KRS 416.610
that the taking was not necessary nor for a public purpose.
Further, Ginn and Woods were not parties to the proceedings
before the PSC, or involved in any manner other than perhaps
being among the more than 60 residents and local officials who
sent letters and petitions opposing the location of the new
power lines.12
Therefore, the circuit court erred by concluding that
EKPC had established that the taking of the Ginn properties was
10
Gregory v. Commonwealth, 610 S.W.2d 598 (Ky. 1980); Sedley v. City of West
Buechel, 461 S.W.2d 556 (Ky. 1970).
11
Sedley, 461 S.W.2d at 559.
12
Six residents were granted intervention in the PSC proceeding, but they are
not identified in the record on appeal.
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for a public necessity and purpose as required by the Eminent
Domain Act.13
Likewise, by relying upon the determination of the
PSC, the circuit court failed to address Ginn’s claims that EKPC
had acted fraudulently and/or in bad faith in its determination
to take their properties for the electrical-line project.
These
questions must be addressed by the circuit court through proper
findings of fact and conclusions of law.
Ginn also alleges that it was denied due process when
the circuit court denied its motion to continue the September 7,
2004, hearing on EKPC’s motion for interlocutory judgment
because it was not afforded sufficient time to obtain an expert
witness to rebut EKPC’s claim that the taking was necessary and
for a public purpose.
Although Ginn did not file a written
motion for a continuance of the hearing, its counsel did orally
move the circuit court for a continuance prior to the hearing.
However, Ginn has failed to show what efforts it made to obtain
an expert witness or any inability to do so as a result of the
circuit court’s discovery schedule.
We note that KRS 416.610(4)
requires the circuit court to “proceed forthwith to hear and
determine whether or not the petitioner has such right” to
condemn property.
However, because we are remanding this matter
to the circuit court for further proceedings, Ginn may address
13
KRS 416.610.
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to the circuit court its desire to present expert testimony in
rebuttal to EKPC’s claim to take the property at issue.
Based upon the foregoing, we reverse the order of the
Mason Circuit Court and remand this matter for further
proceedings consistent with this Opinion.
ALL CONCUR.
BRIEFS AND ORAL ARGUMENT FOR
APPELLANTS:
BRIEF FOR APPELLEE, EKPC:
Carroll M. Redford, III
Lexington, Kentucky
Dale Henley
Sherman Goodpaster, III
Roger R. Cowden
Winchester, Kentucky
ORAL ARGUMENT FOR APPELLEE,
EKPC:
Roger R. Cowden
Winchester, Kentucky
BRIEF FOR APPELLEE, FARM
CREDIT SERVICES:
No brief filed.
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