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ATTORNEYS FOR APPELLANT Gregory F. Zoeller Attorney General of Indiana David L. Steiner Deputy Attorney General Indianapolis, Indiana ATTORNEY FOR AMICI CURIAE INDIANA ASSOCIATION OF CITIES AND TOWNS INDIANA MUNICIPAL LAWYERS ASSOCIATION Douglas D. Church Fishers, Indiana

ATTORNEYS FOR APPELLEES Gerard T. Carmody Kelley F. Farrell Erwin O. Switzer St. Louis, Missouri R. Thomas Bodkin Evansville, Indiana

FILED
Mar 04 2009, 8:19 am

______________________________________________________________________________

Indiana Supreme Court
_________________________________ No. 82S01-0806-CV-308 STATE OF INDIANA, Appellant (Plaintiff below), v. KIMCO OF EVANSVILLE, INC., N/K/A KCH ACQUISITION, INC., THE FRANKLIN LIFE INSURANCE COMPANY, AND VANDERBURGH COUNTY, INDIANA Appellees (Defendants below). _________________________________ Appeal from the Vanderburgh Circuit Court, No. 82C01-0006-CP-315 The Honorable Carl A. Heldt, Judge _________________________________ On Petition to Transfer from the Indiana Court of Appeals, No. 82A01-0607-CV-301 _________________________________ March 4, 2009

In the

of the supreme court, court of appeals and tax court

CLERK

Boehm, Justice. In State v. Ensley, 240 Ind. 472, 164 N.E.2d 342 (1960), this Court held that roadway improvements that reduce or interfere with traffic flow to a commercial property do not constitute takings of a property right of the owner of the property. We reaffirm Ensley and hold that the shopping center owners are not entitled to consequential damages from street reconfigurations that affect traffic flow through the center and prevent expansion of existing points of ingress or egress, but leave existing points in place. Facts and Procedural History Kimco owns the Plaza East Shopping Center in Evansville. Plaza East is an open-air shopping complex bordered by Lloyd Expressway on the south and Green River Road on the west. As shown on the schematic diagram in Appendix A, retail stores are located on the north and east sides of a roughly square property, and a parking area occupies the area to the south and west. There are two main entrances/exits to the center, both on Green River Road.1 The southern entrance has three lanes and opens into Plaza East`s parking lot. The northern entrance has two lanes and is situated near the northern strip of storefronts. Before the construction at issue in this case, both northbound and southbound traffic on Green River Road could use the southern entrance to enter or exit the center. The northern entrance provided access for both north and southbound traffic, but permitted only northbound exits (right turns) due to a no left turn sign and a concrete divider in the entrance.2 In 2000, the State filed its Complaint seeking to acquire a 0.154-acre strip of land along the western border of Plaza East to widen Green River Road and improve traffic flow to and
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Cars can also enter the complex from the east leg of Plaza East Boulevard, which borders the shopping center on the north and east. Because of limited visibility and access from major arteries, Plaza East Boulevard is not considered a principal entry to the mall. At one time Plaza East had entrances along its southern boundary. However, in a previous taking not at issue here, the State condemned the southern access points to construct part of the Lloyd Expressway, a limited access expressway. Kimco was compensated for that taking following a jury trial in 1989.
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There are assertions in the record that only northbound traffic could access the northern entrance prior to the roadway reconstruction. But the photographs and other exhibits show that southbound traffic on Green River Road could access the northern entrance as well.

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from Lloyd Expressway. The State also sought the permanent extinguishment of all rights and easements of ingress and egress to, from and across Green River Road along the length of the acquired property. As a practical matter this would preclude Plaza East from adding new entrances on Green River Road or widening its existing access points. The State also requested a temporary construction easement giving the State access to the center`s parking lot for the duration of the project. In October 2000, the trial court issued an Order of Appropriation allowing the State to proceed with the condemnation. Kimco requested a jury trial on the issue of damages.3 In the ensuing four and one-half years, the State added and reconfigured the lanes on Green River Road, modified the Lloyd Expressway intersection, and installed a raised median in Green River Road that prevented southbound traffic from using the center`s southern entrance for ingress or egress. The State created a merge lane on the eastern side of Green River Road for northbound traffic exiting from Lloyd Expressway. Northbound motorists on Green River Road now must use the merge lane, defined by a solid white line in the 0.154-acre strip, to access Plaza East`s southern entrance. Finally, the northern entrance was changed to permit full ingress and egress by removing the concrete divider and allowing exiting traffic to turn left onto South Green River. The width of both the northern and southern entrances to Plaza East remained unchanged. The case proceeded to trial in February 2006. During Kimco`s case-in-chief, evidence of loss of access at Plaza East and its effect on the shopping complex included testimony that (1) the new median and merge lane restricted motorists` access to the mall`s southern entrance; (2) the impaired access at the southern entrance, combined with allowing left turns at the northern drive, created unsafe congestion at the northern entrance near the Plaza East storefronts; (3) the road reconfigurations made the shopping complex undesirable to retail tenants; and (4) Plaza

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After the State filed its complaint, Kimco initially failed to enter an appearance in the case. The trial court subsequently issued its Order of Appropriation and instructed court-appointed appraisers to calculate damages. The appraisers assessed the State`s taking at $95,300.00 and the trial court ordered the State to compensate Kimco accordingly. In May 2001, Kimco entered an appearance alleging that it had not received service of process and was unaware of the condemnation action. After the parties agreed to reinstate the litigation, Kimco filed exceptions to the court-sanctioned appraisal, and requested a jury trial on the issue of damages.

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East`s occupancy had dropped by nearly forty percent due to the access problems. Kimco`s appraiser testified that Plaza East depreciated from a preconstruction value of $7,300,000 to roughly $5,000,000 due in large part to the access issues. He assessed the value of the property acquired by the State at $67,000 for the strip and $8,400 for the temporary construction easement, and assigned a value of $2,233,000 to the impaired access and any remaining cost-to-cure, i.e., damage to the residual property. The State unsuccessfully moved for judgment on the evidence at the close of Kimco`s case on the ground that impaired access at Plaza East was not compensable. Following the close of the evidence, the State objected to the submission of the issue of compensability of access rights to the jury and reiterated its prior objection to the admission of loss-of-access evidence. The trial court, over objection of the State, instructed the jury as follows: In order for you to award damages for loss of access, Kimco must have suffered a particular, private injury resulting from a substantial and material interference with Kimco`s rights of ingress and egress which are special and peculiar to this property and when no other reasonable means of access are available. You may not award damages for loss of access if the remaining access is merely more inconvenient or difficult, as long as it is reasonable. Other reasonable means of access, as used in this instruction, does not mean access that is reasonable for some other use of the land. Rather, it refers to the access that will permit the land to be used for that purpose regarded as its highest and best use immediately before the taking. The jury awarded Kimco $2,300,000.4 The State appealed, arguing that the trial court erred by admitting Kimco`s loss-of-access evidence and by giving the quoted instruction. See State v. Kimco of Evansville, Inc., 881 N.E.2d 987 (Ind. Ct. App. 2007). The Court of Appeals affirmed, concluding that the sum of the State`s roadway improvements created an injury to Plaza East that amounted to more than mere inconvenience, and that Kimco suffered a taking of its access rights as a matter of law. Id. at 995. The Court of Appeals held that the trial court therefore properly admitted Kimco`s loss -of-

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The trial court entered a total judgment in the amount of $3,196,859.82, reflecting the addition of $896,859.82 in prejudgment interest. See Ind. Code

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