Summary of State of Indiana v. Gordon Smith and Joan Smith, et al.
381 N.E.2d 873 (Ind. Ct. App. 1978)
In the mid-1970s, the State of Indiana constructed an access ramp for Interstate 65, subsequently reducing the width of Market Street in downtown Indianapolis. Modern Photo Offset Supply Company, a business located in the area, often utilized an alleyway off of Market Street. However, when the State created its access ramp and narrowed Market Street, Modern Photo’s delivery trucks were no longer able to maneuver into the alleyway. The company had a conference with representatives from the Indiana State Highway Commission. And in June of 1975, the Commission prepared to acquire a tract of land, deemed “parcel #4”, which would make it possible for Modern Photo’s trucks to once again use the alleyway off of Market Street. The Commission, and ultimately the State of Indiana, attempted to acquire ownership of parcel #4 from private landowners through its power of eminent domain.
There was one problem, however. Under the laws of Indiana, the State may only acquire land through eminent domain for a “public use.” The private landowners argued that the attempted taking by the State was for a private use, in essence, for Modern Photo’s delivery trucks.
The State, on the other hand, cited to prior case law, specifically Andrews v. State, 229 N.E.2d 806 (1967). The Court in Andrews held that “providing a service road to a land-locked owner. . . would reduce the damages payable to that owner and therefore would constitute a public use.”
The Indiana Court of Appeals upheld the lower court’s determination, siding with the private landowners in ownership of parcel #4. The Court distinguished the case at hand from Andrews. It noted that the State became interested in parcel #4 only after Modern Photo talked with representatives from the Commission and then it established dimensions for the take based on the dimensions of semi-tractor trailers as used by Modern Photo. Also, the Court reaffirmed private property as “an integral part of the freedom, security and independence we enjoy.” It further stated that “[t]he State must not capriciously resort to the power of eminent domain when other suitable and perhaps less expensive alternatives are available to contend otherwise is to repudiate our time honored concept of private property and the paramount value we place upon it.”
Liz Currid
]]>Indiana case law holds that, when the government takes an individual’s property through its power of eminent domain, it also has taken control of the materials present on the land. As a result, courts have held that the existence of such materials in an individual’s land may potentially be taken into consideration in determining the value of that land. The presence of such valuable assets, such as mineral deposits, may make a drastic difference in the amount the government is required to compensate a landowner for his or her property.
In the past, the government has consistently taken advantage of people by not compensating them properly for such valuable materials. For example, when the cities of Dallas and Fort Worth acquired land for the Dallas-Fort Worth Airport through eminent domain in the 1960s and 1970s, it has been reported that few landowners even included mineral rights in their just compensation calculations. According to Fort Worth’s land manager at the time, “nine out of 10 people wouldn’t even know what you were talking about with mineral rights.” Now, these same mineral rights are worth millions of dollars. For instance, the Chesapeake Energy Corporation paid $185 million, with a promise to pay 25% of all future gas royalties. It is important to note that the original property owners received no money from the Corporation.
In order to avoid such an egregious result, it is strongly recommended that a landowner contact an attorney, especially one well-versed in eminent domain law and mineral rights.
By Liz Currid, Sever Storey Associate Attorney
If you have any questions about this article, mineral rights, eminent domain or condemnation please feel free to contact one of the attorneys at Sever Storey for a free consultation at 1-888-318-3761 or on the web at www.severstorey.com.
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