MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),                                           FILED
this Memorandum Decision shall not be
                                                                            Dec 12 2018, 8:53 am
regarded as precedent or cited before any
court except for the purpose of establishing                                     CLERK
                                                                             Indiana Supreme Court
the defense of res judicata, collateral                                         Court of Appeals
                                                                                  and Tax Court

estoppel, or the law of the case.


ATTORNEYS FOR APPELLANT                                  ATTORNEYS FOR APPELLEE
David M. Austgen                                         Bonnie C. Coleman
Michael L. Muenich                                       Steven J. Scott
Ryan A. Deutmeyer                                        HODGES & DAVIS, P.C.
AUSTGEN KUIPER JASAITIS P.C.                             Merrillville, Indiana
Crown Point, Indiana



                                          IN THE
    COURT OF APPEALS OF INDIANA

Daniel Enterprises, L.P., et al.,                        December 12, 2018
Appellants-Defendants,                                   Court of Appeals Case No.
                                                         18A-PL-1594
        v.                                               Appeal from the Porter Superior
                                                         Court
City of Portage, Indiana,                                The Honorable Jeffrey W. Clymer,
Appellee-Plaintiff.                                      Special Judge
                                                         Trial Court Cause No.
                                                         64D05-1711-PL-10862



Bailey, Judge.




Court of Appeals of Indiana | Memorandum Decision 18A-PL-1594 | December 12, 2018                    Page 1 of 7
                                           Case Summary
[1]   Daniel Enterprises, L.P. (“Daniel”) appeals an order of condemnation in favor

      of the City of Portage, Indiana (“the City”) appropriating footage (0.287 acres)

      from a parcel of commercial property (“the Property”) owned by Daniel and

      leased by Heartland Midwest, LLC (“Heartland”).1 Daniel presents a sole,

      consolidated issue: whether the trial court clearly erred in overruling Daniel’s

      objections to the appropriation. We affirm.



                             Facts and Procedural History
[2]   In 2017, the City was engaged in a road improvement project involving

      Willowcreek Road. The Property is located on Willowcreek Road; the

      improvements include a commercial building from which a fast food restaurant

      is operated.


[3]   On November 16, 2017, the City filed a condemnation complaint against

      Daniel, the owner of the property. The City also named Heartland, who had

      recorded on April 2, 2012 a memorandum of lease in the office of the Recorder

      of Porter County. Daniel entered an appearance and filed objections,




      1
        Heartland, although a named defendant, has not entered an appearance in the case below or on appeal and
      is thus not an active party on appeal. Purportedly, Heartland sublet the property to Tri City Foods of
      Indiana, Inc., (“Tri City”) who was not a named defendant and has not been joined as a party.

      Court of Appeals of Indiana | Memorandum Decision 18A-PL-1594 | December 12, 2018              Page 2 of 7
      contending a lack of statutory compliance on the part of the City. Heartland

      did not appear.


[4]   On May 9, 2018, the trial court conducted a hearing and heard testimony from

      a single witness, Nancy Hermann (“Hermann”), an agent for an acquisition

      firm employed by the City. Daniel did not present testimonial or documentary

      evidence but argued that the appropriation order should not be granted because

      the City had failed to negotiate with the real party in interest, sub-lessee Tri

      City.


[5]   On June 8, 2018, the trial court entered an Order of Condemnation and for

      Appointment of Appraisers. In so doing, the court overruled the objections

      filed by Daniel and appointed three appraisers to assess the damages. Daniel

      now appeals.



                                 Discussion and Decision
[6]   The State has inherent authority to take private property for public use. Sagarin

      v. City of Bloomington, 932 N.E.2d 739, 744 (Ind. Ct. App. 2010), trans. denied.

      “The taking of private property for public purposes like roads and schools has

      historically been treated, constitutionally speaking, as a matter consigned to

      legislative judgment.” Boyd v. State, 976 N.E.2d 767, 768 (Ind. Ct. App. 2012)

      (citing Randall T. Shepard, Land Use Regulation in the Rehnquist Court: The Fifth

      Amendment and Judicial Intervention, 38 Cath. U. L. Rev. 847, 853-57 (1989)).

      The courts are not to infringe upon an administrative act of determining the


      Court of Appeals of Indiana | Memorandum Decision 18A-PL-1594 | December 12, 2018   Page 3 of 7
      necessity or reasonableness of a taking; rather, judicial review is limited to

      whether the condemnation proceedings were legal, whether the condemner had

      the authority to condemn the property, and whether the property was to be

      taken for a public purpose. Id. at 769.


[7]   Article 1, Section 21 of the Indiana Constitution, otherwise known as Indiana’s

      eminent domain provision, provides, “No person’s property shall be taken by

      law, without just compensation; nor, except in the case of the State, without

      such compensation first assessed and tendered.” Eminent domain proceedings

      are governed by Indiana Code chapter 32-24-1 and take place in two separate

      phases: (1) the initial or summary phase, and (2) a phase for determination of

      damages. State v. Dunn, 888 N.E.2d 858, 861 (Ind. Ct. App. 2008), trans. denied,

      cert. denied, 558 U.S. 823 (2009).


[8]   Pursuant to Indiana Code section 32-24-1-8(a), a defendant may file objections

      during the initial phase of the proceedings, on grounds that the court does not

      have jurisdiction, the plaintiff does not have the right to exercise the power of

      eminent domain for the use sought, or “for any other reason disclosed in the

      complaint or set up in the objections.” “After a consideration of the legality of

      the action and any objections which may have been filed, the trial court

      concludes this phase of the proceedings by entering an order of appropriation

      and appointing appraisers to assess the damages.” State ex rel. Bd. of Aviation

      Comm’rs of City of Warsaw v. Kosciusko Cty. Super. Ct., 430 N.E.2d 754, 755 (Ind.

      1982).



      Court of Appeals of Indiana | Memorandum Decision 18A-PL-1594 | December 12, 2018   Page 4 of 7
[9]    Daniel’s objections concerned the City’s alleged non-compliance with Indiana

       Code Sections 32-24-1-3 and -5. Indiana Code Section 32-24-1-3(b) requires

       that the condemner must first “make an effort to purchase for the use intended

       the land, right-of-way, easement, or other interest, in the property.” The effort

       must include (1) establishing a proposed purchase price, (2) providing the

       owner with an appraisal or other evidence used to establish the proposed

       purchase price, and (3) conducting good faith negotiations with the owner of

       the property. An “owner” is defined as “the persons listed on the tax

       assessment rolls as being responsible for the payment of real estate taxes

       imposed on the property and the persons in whose name title to real estate is

       shown in the records of the recorder of the county in which the real estate is

       located.” Ind. Code § 32-24-1-2. “As a condition precedent to filing a

       complaint in condemnation,” a condemner must, at least thirty days before

       filing a complaint, make an offer to purchase the property to (1) the owner of

       the property sought to be acquired; or (2) the owner’s designated representative.

       I. C. § 32-24-1-5.


[10]   At the hearing, Hermann testified on behalf of the City. She described the area

       sought to be condemned as grass and a portion of the concrete apron. The

       drive, parking spaces, and building were not directly affected. However, the

       traffic pattern would be changed such that patrons could only access the

       premises with a right-hand turn. Hermann testified that the City had

       commissioned an appraisal and had made an acquisition offer of $42,300.00 to

       Daniel. A return receipt indicated that the offer had been received. No offer


       Court of Appeals of Indiana | Memorandum Decision 18A-PL-1594 | December 12, 2018   Page 5 of 7
       had been made to either Heartland or Tri City. Daniel presented no evidence,

       but its counsel argued that the City should have dealt with the leaseholder.

       According to counsel, Tri City “took over” at some point, he was “not positive

       how,” and Tri City was “not here” to represent its own interests. (Tr. at 9.)

       Daniel conceded that any transfer of leasehold interest from Heartland to Tri

       City was not recorded.


[11]   On appeal, Daniel concedes that the City performed the statutory condition

       precedent of making an offer to purchase to the owner of the Property.

       However, Daniel insists that a parallel offer must have been made to the current

       leaseholder. Apart from the lack of evidence to establish that Tri City is indeed

       a leaseholder, Daniel cites no authority for the proposition that a public entity

       seeking condemnation of property must negotiate with any party other than the

       owner. In its reply brief, Daniel attempts to present a public policy argument

       that leaseholders should be elevated to the status of owners during negotiations.

       Nonetheless, the public policy of this State regarding eminent domain

       proceedings is specifically embodied in the statutory scheme. The record is

       devoid of any basis, factual or legal, upon which the trial court was obliged to

       grant the objections from Daniel.



                                               Conclusion
[12]   Daniel has identified no illegality in the proceedings. The trial court properly

       overruled Daniel’s objections to the City’s condemnation action.



       Court of Appeals of Indiana | Memorandum Decision 18A-PL-1594 | December 12, 2018   Page 6 of 7
[13]   Affirmed.


       Bradford, J., and Brown, J., concur.




       Court of Appeals of Indiana | Memorandum Decision 18A-PL-1594 | December 12, 2018   Page 7 of 7
