Crain v. Hardin County Water District No. 2

Court of Appeals of Kentucky, No. 2015-CA-000499-MR, June 17, 2016: Ag conservation easement does not create public use protected from taking.

The issues in this case are (1) whether a taking of an easement on private land for a sewer line by the Water District is prohibited because of an agricultural conservation easement which the landowner previously conveyed to the Commonwealth of Kentucky, and (2) whether the District acted in good faith when negotiating a payment for the sewer easement. This PLD report focuses only on the agricultural conservation easement question.

The Crains conveyed an agricultural conservation easement to the Purchase of Agricultural Conservation Easement Corporation (PACE), which is administratively part of the Kentucky Department of Agriculture that was established to administer and hold title to the agricultural preservation easements. KRS 262.906. Hardin County Water District No. 2 (the District) is pursuing a wastewater project in connection with a large economic development project. The wastewater project requires the installation of sewer lines, one of which the District proposes to run through the Crains’ land. To do that, the District proposed to use eminent domain power to take an easement across the Crain property.

The Crains challenged the District’s right to take the sewer easement. In part, they argued that the agricultural conservation easement precluded the District from condemning any portion of the property for non-agricultural purposes. PACE, holder of the easement, did not object to the proposed easement. The trial court found for the District, saying the agricultural conservation easement did not preclude a taking by eminent domain, although the District’s easement would be secondary to the agricultural conservation easement.

On appeal the court held, first, that the Kentucky statute on agricultural conservation easements “clearly permitted” use of such easement areas for a sewer line, citing language saying the Commonwealth is permitted to grant rights of way through restricted land “for the installation of, transportation of, or use of, lines for water, sewage, electric, telephone, gas, oil or oil products….” KRS 262.910(4)(e). The court’s opinion does not discuss the text of the easement, as the Crains evidently did not assert that the text itself prohibited granting a sewer line easement, other than by application of the statute.

The Crains had argued in the alternative that the condemnation is prohibited by the “prior public use doctrine.” As explained by the court, “the doctrine provides that land devoted to a public use may not be taken for another public use under the power of eminent domain.” The court said that the applicability of the doctrine in this case depended on the distinction between public use and public purpose, and held that while the easement had a public purpose, it did not create a public use.

The Crains’ position was that the agricultural conservation easement created a real property interest held by the Commonwealth for a public use. The Court disagreed, quoting Kipling v. City of White Plains, 80 S.W.3d 776 (Ky. App. 2001): “for purposes of condemnation and eminent domain, the fact that the public receives some sort of benefit from a certain use of land does not mean that the land is being used for a public purpose.” (Comment: although this quote says public benefit does not necessarily create a “public purpose,” it seems the court cited it for the principle that public benefit does not equate to public purpose or public use.) The Crains tried to say that an easement is different because it is “a privilege or an interest in land upon the dominant tenement to enjoy a right to enter the servient tenement,” and this interest constitutes a dedication to a prior public use. The court again disagreed, saying that the agricultural conservation easement simply grated the right to PACE to “restrict certain future development of the property” but did not grant either the Commonwealth or the public a right to come onto the Crains’ property. This right, while “clearly a public purpose … does not constitute a prior public use.”

The decision on appeal does not discuss whether the Crains, as grantors of the easement rather than holders, had standing to try to protect the agricultural purpose of the conservation easement.

The court also found against the Crains as to the good faith negotiations issue.

The decision is available at http://law.justia.com/cases/kentucky/court-of-appeals/2016/2015-ca-000499-mr.html and should eventually be available at http://kycourtreport.com/category/court-of-appeals/ and/or http://opinions.kycourts.net/.

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