Opinion
No. 111,082.
2015-01-23
James M. CREEGAN, et al., Appellants, v. The STATE of Kansas, et al., Appellees.
Appeal from Johnson District Court; James F. Vano, Judge.Douglas J. Patterson and Kellie K. Warren, of Property Law Firm, LLC, of Leawood, for appellants.Timothy P. Orrick and Paul G. Schepers, of Orrick & Erskine, LLP, of Overland Park, and Barbara W. Rankin, chief counsel, of Kansas Department of Transportation, for appellees.
Appeal from Johnson District Court; James F. Vano, Judge.
Douglas J. Patterson and Kellie K. Warren, of Property Law Firm, LLC, of Leawood, for appellants. Timothy P. Orrick and Paul G. Schepers, of Orrick & Erskine, LLP, of Overland Park, and Barbara W. Rankin, chief counsel, of Kansas Department of Transportation, for appellees.
Before STANDRIDGE, P.J., ATCHESON, J., and BURGESS, S.J.
MEMORANDUM OPINION
PER CURIAM.
James M. Creegan and 11 other property owners (Plaintiffs) initiated an inverse condemnation action against the State of Kansas and the Secretary of the Kansas Department of Transportation (KDOT) (collectively Defendants). Plaintiffs claim they have a compensable property interest in the restrictive covenant limiting use of property in the Grande Oaks subdivision to single-family residences and KDOT's violation of the restrictive covenant amounts to a taking without just compensation. Although readily acknowledging that KDOT violated the subdivision's restrictive covenant, the district court granted summary judgment to Defendants on grounds that KDOT's violation of the restrictive covenant was not a compensable taking subject to an eminent domain action under Kansas law. Contrary to the decision reached by the district court, we conclude that restrictive covenants are compensable property interests entitled to eminent domain protection under the Takings Clause of the Fifth Amendment to the United States Constitution and the Kansas Eminent Domain Procedure Act (EDPA), K.S.A. 26–501 et seq. For this reason, we reverse and remand for further proceedings on the amount of compensation due to Plaintiffs, if any, as a result of the taking, which is an issue of fact.
Facts
Grande Oaks is a subdivision in Johnson County, Kansas. The plots within Grande Oaks were made subject to a Declaration of Restrictions filed in the Register of Deeds Office of Johnson County, Kansas, on June 22, 1978. In relevant part, the Declaration of Restrictions stated that the property within Grande Oaks should be occupied and used for single-family residence purposes only.
In 1999, KDOT purchased a sizeable section of real property from Christ Evangelical Lutheran Church of Lenexa, Kansas, Inc., which included land platted as lots 55 through 75 in Grande Oaks. In 2005, KDOT placed trailers on these lots and, in subsequent years, used the lots for various construction activities. Eventually, KDOT constructed permanent bridges and pavements on a number of the lots. The existing traffic pattern currently utilizes these newly constructed facilities.
In March 2012, Plaintiffs, who all owned real property in Grande Oaks, initiated this lawsuit claiming inverse condemnation by Defendants. After some limited discovery, Defendants filed a motion for summary judgment arguing that violation of the restrictive covenant in this case was not a compensable taking under Kansas law. A transcript from the hearing on summary judgment was not included in the appellate record, but the district court issued a memorandum decision ruling on the motion. Although acknowledging KDOT violated the subdivision restrictive covenant, the district court held the violation was not tantamount to a taking of real property owned by Plaintiffs. As such, the court granted Defendants' motion for summary judgment.
Analysis
In this appeal, we must decide whether restrictive covenants such as those governing the real property in the Grande Oaks subdivision constitute compensable interests in real property entitled to eminent domain protection.
The Fifth Amendment prohibits the government from taking private property for public use without paying the owner just compensation. The Fifth Amendment prohibition applies to the states through the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Estate of Kirkpatrick v. City of Olathe, 289 Kan. 554, 558, 215 P.3d 561 (2009). In Kansas, the exercise of eminent domain is governed by the EDPA. The EDPA codifies the prohibition in the Fifth Amendment by stating, in part, that “[p]rivate property shall not be taken or damaged for public use without just compensation.” K.S.A. 26–513(a).
Typically, the government initiates eminent domain proceedings to determine the compensation due as the result of a taking. When the government interferes with the private property rights of a landowner without initiating eminent domain proceedings, the landowner may file a claim for inverse condemnation. See Estate of Kirkpatrick, 289 Kan. at 558–59. In order to prevail on an inverse condemnation claim, a landowner must prove he or she owns an interest in real property affected by a public improvement project and a compensable taking. The question of whether there has been a compensable taking is a legal one subject to unlimited review. 289 Kan. at 559. Applying these legal principles, the question presented for decision here is whether the landowners who are parties to the Grande Oaks restrictive covenant possess an interest in real property and, if so, whether KDOT's violation of the restrictive covenant constitutes a compensable taking.
Real property interest
Defendants argued to the district court that summary judgment was appropriate because the restrictive covenant at issue here did not rise to the level of an interest in real property entitled to eminent domain protection. In opposing summary judgment, Plaintiffs claimed Defendants' position was not supported by this court's holding in Board of Reno County Comm'rs v. Asset Mgmt. & Marketing L.L.C., 28 Kan.App.2d 501, 18 P.3d 286 (2001). In that case, Reno County purchased land in a subdivision that was burdened by a restrictive covenant limiting it to single-family residential use. After purchasing the land, Reno County adopted a resolution authorizing it to build a water tower on the land. After the resolution passed, the subdivision landowners conveyed their intention to seek an injunction to prevent the county from building the water tower. In anticipation of the landowners' request for an injunction, Reno County filed a petition for a declaratory judgment seeking a declaration from the court that construction of the water tower did not violate the restrictive covenants and that an injunction would cause economic loss. In their answer to the petition, the landowners generally denied the allegations and, as Reno County anticipated, filed a counterclaim seeking an injunction to prevent construction.
After an evidentiary hearing, the trial court determined that building the water tower violated the restrictive covenant. But because Reno County's petition sought a declaration from the court on the landowner's request for an injunction to prevent construction of the water tower, the trial court analyzed the issue using principles of equity. See Smith v. State, 264 Kan. 348, 355, 955 P.2d 1293 (1998) (injunction is an equitable remedy designed to prevent irreparable injury by prohibiting or commanding certain acts). In weighing the equities, the trial court found the existing water system was insufficient for peak usage periods and questionable for purposes of fire protection. In support of its decision to grant judgment in favor of Reno County and deny the landowners' request for an injunction, the trial court concluded that “ ‘grant [ing] an injunction in this case would not be equitable or just. The public interest in this case will be best served if the proposed water tower is constructed as planned.’ “ Asset Mgrnt. & Marketing L.L.C., 28 Kan.App.2d at 503.
A panel of this court affirmed the decision, finding the landowners failed to provide evidence that they would face irreparable injury if the water tower were built, a necessary element of an injunction request. Relevant to the issue before us in this case, the court further found injunctive relief inappropriate because a full, complete, and adequate remedy at law was available to the landowners:
“There is nothing which would prevent appellants from initiating an inverse condemnation proceeding. Appellants claim that it is not a full remedy because it would be unfair to force private landowners to suffer the burden and expense of filing an inverse condemnation claim. However, the law does not require that landowners be given the most expedient remedy.” 28 Kan.App.2d at 507.
Of course, implicit within the court's finding that there was nothing to prevent the landowners from filing an inverse condemnation proceeding is the legal conclusion that a subdivision restrictive covenant represents an interest in real property entitled to eminent domain protection.
The conclusion that Kansas recognizes restrictive covenants as real property interests is further supported by Persimmon Hill First Homes Ass'n v. Lonsdale, 31 Kan.App.2d 889, 895, 75 P.3d 278 (2003). There, this court cited with approval the following language from a Georgia case: “ ‘[T]he violation of a restrictive covenant that is part of the development scheme affects the grantor and all other grantees, causing irreparable harm to the value of their respective property interests, because such restrictive covenant was part of the valuable contract consideration given and relied upon in the conveyance of land.’ “ Lonsdale, 31 Kan.App.2d at 895 (quoting Focus Entertainment v. Partridge Greene, 253 Ga.App. 121,127–28, 558 S.E.2d 440 [2001] ). Plaintiffs persuasively argue that because a restrictive covenant is part of the valuable consideration given and relied upon in a conveyance of land, a restrictive covenant constitutes a property interest. Although the State urges us to distinguish Lonsdale because it involved a dispute between two private parties, the identity of the parties is irrelevant to whether a property interest exists. Further, Plaintiffs' interpretation of the case is bolstered by the fact that the court in Lonsdale cited Asset Mgmt. & Marketing L.L.C. and noted, without any apparent disagreement, that the case was decided in part on the availability of inverse condemnation as a remedy. Lonsdale, 31 Kan.App.2d at 893.
Finally, and most significantly, the Kansas Supreme Court has held that a restrictive covenant is a property interest in land within the context of the statute of frauds. Cooper v. RE–MAX Wyandotte County Real Estate, Inc., 241 Kan. 281, 291, 736 P.2d 900 (1987). In Cooper, the purchaser of certain real estate allegedly made an oral promise to build a small office building—about 4,000 square feet—and use the property only for that purpose. Later, a subsequent purchaser built an office building larger than 4,000 feet and Cooper, the original seller, sued. The Kansas Supreme Court stated: “It is clear to us that under established law, an oral agreement made in connection with a written contract for the sale of real estate, whereby the buyer agrees to build only a particular type of building on the premises, creates an interest in real estate and falls within the statute of frauds.” (Emphasis added.) 241 Kan. at 290. Among other things, the statute of frauds generally requires that actions brought upon a contract for the sale of land or any interest concerning land be in writing and signed by the party against whom the contract is to be enforced. K.S.A. 33–106.
There is no apparent reason to distinguish between the status of a restrictive covenant in the context of a case involving the statute of frauds and a case involving inverse condemnation or eminent domain. To do so would only establish a confusing web of caselaw which would simultaneously accept and reject the idea that restrictive covenants constitute interests in real property, depending on the particular cause of action stated in a petition. This court is duty bound to follow Kansas Supreme Court precedent absent some indication the court is departing from its previous position. Anderson Office Supply v. Advanced Medical Assocs., 47 Kan.App.2d 140, 161, 273 P.3d 786 (2012). Because the Kansas Supreme Court has already recognized restrictive covenants as real property interests in the context of the statute of frauds, we will not depart from that holding here.
Compensable taking
Having determined that the restrictive covenant here represents a legally cognizable interest in real property, we now must decide whether KDOT's violation of the restrictive covenant rises to the level of a compensable taking. Before we begin our analysis, we believe it is important to draw a distinction between what we are and are not deciding with regard to this issue. We are deciding whether KDOT's use of subdivision property in violation of the restrictive covenant is a taking for which the government must provide just compensation. But even if KDOT's violation is held to be a compensable taking, we are not deciding the amount of compensation due Plaintiffs, if any, as a result of the taking, which is an issue of fact.
As interpreted by our Supreme Court, the “takings” provision of the EDPA requires the government to pay the owner of a property interest just compensation not only when private property is physically taken as a result of government action carried out for public benefit, but also when private property is damaged as well. Estate of Kirkpatrick, 289 Kan. at 568 (construing K.S.A. 26–513[a] ). The Estate of Kirkpatrick court further held, however, that not all property damage is compensable in eminent domain. To be compensable under K.S.A. 26–513(a) and other provisions of the EDPA, the court specifically held that the damage to property must be (1) a result of government action carried out for public benefit and (2) substantial in nature. 289 Kan. at 569.
With regard to this first factor, Defendants argued on summary judgment that violation of the restrictive covenant was not a direct result of KDOT's construction project but instead was merely a tangential or incidental consequence of building the bridges and roadways. Defendants' argument is not persuasive. We already have determined that each of the landowners who are a party to the Grande Oaks restrictive covenant possess an interest in real property. And there appears to be no dispute that KDOT purchased the land at issue with notice of the restrictive covenant limiting use of the land to single-family residences. Finally, Defendants concede KDOT violated the restrictive covenant by building a public works project on land that was restricted to single-family residences. From these facts, we necessarily conclude that permanently depriving Plaintiffs of their right to enforce the restrictive covenant limiting subdivision property to single-family residences was a planned (or at least inevitable) and direct result of KDOT's decision to build roads and bridges on subdivision land it owned.
Defendants also argued that summary judgment was proper on the second factor because Plaintiffs only alleged damages in the form of diminution in property values. We agree with Defendants that governmental action resulting merely in a diminution in the value of property is not a compensable taking. See Kau Kau Take Home No. 1 v. City of Wichita, 281 Kan. 1185, 1195, 135 P.3d 1221 (2006), cert. denied 549 U.S. 1265 (2007), overruled on other grounds by Estate of Kirkpatrick, 289 Kan. 554. We do not, however, agree with Defendants' characterization of Plaintiffs' alleged damages. As damages, Plaintiffs claim they have been permanently deprived of their rights to enforce an interest in real property (the restrictive covenant) that limits use of subdivision property to single-family residences. We readily acknowledge that depriving Plaintiffs of their property interests in this manner may have, in turn, caused subdivision property values to diminish. As one legal scholar has noted, restrictive covenants “are designed to enhance the value and marketability of property” and “one of the purposes of restrictive covenants is to maintain or enhance the value of land by controlling the nature and use of lands subject to a covenant's provisions.” 20 Am.Jur.2d, Covenants, Conditions, and Restrictions § 148, p. 667. Thus, notwithstanding Plaintiffs' assertion that property values have diminished, we find Plaintiffs have adequately identified their damages as being permanently deprived of the right to enforce the restrictive covenant.
As a final note, Defendants made several public policy arguments in support of summary judgment. In essence, Defendants argued that finding violations of a subdivision restrictive covenant to be a compensable taking would unduly limit the government's power and would impose heavy procedural and financial burdens that would make many public works projects too costly. But the protections provided by the Fifth Amendment are “designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960). Therefore, expenses or procedural difficulties connected with public works projects are properly shouldered by the government. To deny an otherwise valid inverse condemnation claim because of the burdens it would place on the government would run counter to the purpose of the Fifth Amendment. At its core, the Takings Clause is not designed to limit “governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking.” First Lutheran Church v. Los Angeles County, 482 U.S. 304, 315, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987). Simply put, government action that works a taking of property rights necessarily implicates the constitutional obligation to pay just compensation and “[a] landowner is entitled to bring [an inverse condemnation] action as a result of the self-executing character of [that] constitutional provision with respect to compensation....' “ United States v.. Clarke, 445 U.S. 253, 257, 100 S.Ct. 1127, 63 L.Ed.2d 373 (1980).
For the reasons stated above, we conclude the restrictive covenant here represents a legally cognizable interest in real property and KDOT's use of subdivision property in violation of the restrictive covenant is a taking for which the government must provide just compensation. Because the question of what amount constitutes just compensation is an issue of fact upon which evidence must be taken, we reverse and remand for further proceedings on the amount of compensation due Plaintiffs, if any, as a result of the taking.
Reversed and remanded with directions.
* * *
ATCHESON, J., concurring.
I concur in the broad result the majority reaches in reversing and remanding the Johnson County District Court's dismissal of the plaintiffs' inverse condemnation action. The district court incorrectly found that the restrictive covenants limiting the use of land in the plaintiffs' subdivision to single-family residences created no compensable property interests that were taken when KDOT acquired some of that land and built a highway access ramp on it. But I disagree with the reasons for reversing and with the considerations on remand for valuing the property rights taken. I outline those disagreements in the balance of my concurrence.
The question before us may fairly be stated this way: When a government entity acquires land subject to a restrictive covenant limiting its use and puts that land to a nonconforming use, do the private landowners bound by that covenant incur the loss of a property interest compensable in eminent domain? The answer has bedeviled the courts, resulting in conflicting decisions finding a restrictive covenant to be either a contractual right and thus noncompensable or a property interest and thus compensable. I suggest restrictive covenants are hybrids consisting of both and should be considered that way in this case and in condemnation proceedings generally. Given the posture of this case, the issue before us presents a question of law.
My examination of the issue consists of five parts:
*Part I explains why, contrary to the majority, I do not believe the Kansas appellate courts have addressed or resolved the issue. The question is an open one. The section also considers the district court's ruling.
*Part II discusses the conflicting authority from other jurisdictions.
*Part III outlines why restrictive covenants should be treated as hybrids combining contractual rights and property interests and why the majority's approach likely will result in compensation for landowners suffering no loss of a property interest but only contract rights—if not in this case, then in future eminent domain proceedings.
*Part IV looks at public policy considerations in allocating loss of value when a government entity uses land in violation of a restrictive covenant. Loss allocation amounts to a legislative function that should not influence the judicial determination of how restrictive covenants should be treated in the absence of statutory direction. There is no such legislative guidance in Kansas.
*Part V examines how the hybrid character of restrictive covenants as both property interests and contract rights would affect liability and damage determinations in this and other cases involving the eminent domain process or inverse condemnation claims.
Before turning to that examination, I make a few general comments framing the discussion.
First, the Takings Clause of the Fifth Amendment to the United States Constitution, as applied through the Due Process Clause of the Fourteenth Amendment, requires state governmental entities to compensate private parties when they take property. See Palazzolo v. Rhode Island, 533 U.S. 606, 617, 121 S.Ct. 2448, 150 L.Ed.2d 592 (2001). Those constitutional principles are in play. The Kansas Supreme Court has said the Eminent Domain Procedures Act, K.S .A. 26–501 et seq. , codifies the Takings Clause. Miller v. Bartle, 283 Kan. 108, 117, 150 P.3d 1282 (2007). The Act requires just compensation when the government “take[s] or damage[s]” private property for public use. K.S.A. 26–513(a). Assuming the Act actually expands the constitutional protection by including damage to property, that makes no difference with respect to the restrictive covenant at issue. The analysis and result are the same whether there is a taking or simply damage. In this case, any damage to the property interests really amounts to a partial taking; a partial taking is compensable under the Fifth Amendment. See Tee–Hit–Ton Indians v. United States, 348 U.S. 272, 273 n. 1, 75 S.Ct. 313, 99 L.Ed. 314 (1955); Greene v. District of Columbia, 56 A.3d 1170, 1176 (D.C.2012).
Next, the controlling principles are the same for government takings accomplished through eminent domain or condemnation and for inverse condemnation, where a private landowner asserts government action has effected a taking even though the eminent domain process has not been engaged. And the parties are unconcerned that KDOT purchased the land it used for the highway access ramp rather than taking it in an eminent domain proceeding. Counsel for both sides assured us at oral argument the means of acquisition hasn't any legal significance. I have no particular reason to conclude otherwise. Finally, restrictive covenants limiting land use are sometimes called negative or equitable easements, and the Restatement (Third) of Property (Servitudes) § 1.3 (1998) refers to them as a species of servitude. The label makes no difference.
I.
The majority reads far too much into the three Kansas appellate decisions it cites as supporting the proposition that at least some restrictive covenants create real property interests the State may impair through inverse condemnation. The cases did not purport to address the issue and to tease such a rule from them overtaxes what's there.
In Board of Reno County Comm'rs v. Asset Mgmt. & Marketing L.L.C., 28 Kan.App.2d 501, 505–07, 18 P.3d 286 (2001), the court simply affirmed a declaratory judgment in favor of Reno County that an injunction would be an inappropriate remedy to block construction of a municipal water tower, even though the project violated a restrictive covenant limiting the use of land in the surrounding subdivision to single-family residences. The homeowners had threatened their own suit—they viewed the water tower as a poor neighbor that likely would reduce the value of their properties. The court reasoned that whatever the legal grounds for the claimed harm to property values, a permanent injunction, as an equitable remedy, would be unwarranted because the homeowners in the subdivision could seek money damages for any loss. So the court merely ruled that if the homeowners could state a legal claim on some theory, their remedy would be money damages rather than injunctive relief. See 28 Kan.App.2d at 506–07. The county suggested one theory might be inverse condemnation, a claim based on property interests. The homeowners had indicated they would consider suing for breach of the restrictive covenant, a contractual claim. This court, however, didn't endorse either as legally cognizable. The decision, therefore, should not be construed as recognizing that restrictive covenants are interests in land subject to a compensable government taking through inverse condemnation.
The decision in Persimmon Hill First Homes Ass'n v. Lonsdale, 31 Kan.App.2d 889, 75 P.3d 278 (2003), is even more oblique. In that case, the court held that, as between homeowners subject to restrictive covenants, the customary remedy for a violation should be an injunction to halt the breach. 31 Kan.App.2d at 894–96. There, the parties were warring over a fence that didn't comply with the restrictions. The panel's reference to the Georgia Court of Appeals decision in Focus Entertainment v. Partridge Greene, 253 Ga.App. 121, 127–28, 558 S.E.2d 440 (2001), at least arguably suggests the interest at stake was tied up in “ ‘the valuable contract consideration’ “ reflected in the conveyance of the parcels rather than in a real property interest that could be taken through inverse condemnation. Persimmon Hill First Homes Ass'n, 31 Kan.App.2d at 895. But nowhere does the panel discuss a government taking or how restrictive covenants might be treated for that purpose.
Finally, in Cooper v. RE–MAX Wyandotte County Real Estate, Inc., 241 Kan. 281, 289–91, 736 P.2d 900 (1987), the Kansas Supreme Court held that a purported oral restriction on the use of real property negotiated as part of the sale could not be enforced because it violated the statute of frauds, K.S.A. 33–106. The court characterized the purported restriction as “an interest in land” covered by the statute of frauds without any elaboration on the nature of that interest. That casual characterization proves too little. The statute of frauds requires that the terms of “any contract for the sale of lands” be memorialized in a writing signed by the party to be bound. K.S.A. 33–106. The statute of frauds covers every provision of an agreement to sell land, not just those portions describing the real property interest being conveyed. So a purported oral agreement that payment of the stated price would come due 10 years after closing couldn't be enforced, consistent with the statute of frauds, even though it has nothing particularly to do with the real property interest being sold. The Cooper decision didn't consider, let alone decide, what sort of real property interests could be taken by government action.
In short, those decisions do not consider the issue now before us. Brief references in them should not be abstracted from their factual underpinnings to support a quite unconnected legal proposition. Such an approach lends undue precedential weight to peripheral judicial comments never intended to capture the holding of the case in which they appear, let alone to bear that weight in resolving an issue factually and legally divergent from the one prompting them. I have previously discussed at some length the procedural and substantive harm in citing judicial commentary from one case and infusing it with controlling authority in a markedly different setting. See Brown v. Ryan, No. 104,088, 2011 WL 6309451, at *7–8 (Kan.App.2011) (unpublished opinion) (Atcheson, J., concurring).
Accordingly, this case ought not be decided on the basis that the Kansas appellate courts have already spoken in a way that controls or even guides the outcome. In granting summary judgment to the defendants, the district court correctly recognized that no Kansas appellate decision has addressed the substantive issue of how to treat restrictive covenants in condemnation proceedings or inverse condemnation actions. Although recognizing the question to be an open one, the district court opted “not [to] create or expand” Kansas law to provide an answer. But deciding a novel question necessarily expands the law to fill that void—and to make a decision consciously geared toward doing just the opposite artificially constrains a court's field of vision in arriving at the best legal response.
Here, the district court looked at the Eminent Domain Procedures Act, K.S.A. 26–501 et seq. , and accurately assessed that it is geared toward situations in which a government entity wants to acquire a piece of land or an easement or other interest allowing it access to real property. But the Act is neither expressly nor implicitly confined to those situations. Government takings compensable under the Fifth Amendment aren't either. Nonetheless, the district court concluded that only “physical takings” of or “substantial physical damage” to real property are compensable. But that premise establishes too narrow a view of protected private property interests. The circumstances the district court fixes as controlling criteria are sufficient conditions to require compensation but not the exclusive ones. See Argent v. United States, 124 F.3d 1277, 1283 (Fed.1997) (government “may take property not only by physical occupancy, but also by imposing such burdens upon the use of property as to deprive the owner of the enjoyment of the land”); Adaman Mutual Water Company v. United States, 278 F.2d 842, 846 (9th Cir.1960) (“[I]f an interest in land is lost as a result of the taking of the parcel to which the interest attached, a direct connection with the physical substance condemned is established....”).
The district court failed to take account of the reciprocal property interests created in the restrictive covenant limiting the use of the tracts the government acquired and the mutual limitation on the other landowners' use of their tracts. The government's nonconforming use—constructing a highway access ramp—effectively took the mutual property interests in the restrictive covenants to the extent negative physical consequences of the access ramp, such as noise and exhaust fumes, have invaded the land of some of the private owners. See 278 F.2d at 846. The government's actions materially impaired those property rights, resulting in a compensable taking.
II.
The state and federal courts considering whether restrictive covenants limiting the use of land create real property interests that governmental entities may take through condemnation or inverse condemnation have come to differing conclusions. The cited caselaw spans more than a century and is deeply divided. Some courts ultimately treat restrictive covenants as contract rights that cannot be taken under the Fifth Amendment or by eminent domain. Other courts treat them as real property interests that must be compensated in condemnation proceedings. See United States v. 0.073 Acres of Land, 705 F.3d 540, 547–48 (5th Cir.2013) (noting “conflicting” authority with majority favoring compensability of covenants restricting use and “strong minority” saying not); Wharton v. United States, 153 F. 876, 878 (1st Cir.1907) (finding that restrictive covenant, by its terms, limited use of land by private parties not government entities and suggesting in dicta that such restrictions were not genuine easements or real property interests, citing a single treatise on easements); see also, e.g., Board of Public Instruction v. Town of Bay Harbor I., 81 So.2d 637, 641–42 (Fla.1955) (holding restrictive covenants limiting nonresidential uses of land “do not vest ... a property right” requiring compensation in eminent domain); contra Washington Sub. San. Com'n v. Frankel, 57 Md.App. 419, 434, 470 A.2d 813 (1984) (restrictive covenants limiting use of land create property interest that may be taken in constitutional sense). Many decisions, however, provide little analytical explanation of their respective conclusions. The Ninth Circuit Court of Appeals found the dueling state authorities, though “numerous,” to be “in hopeless conflict” and of “little help.” Adaman Mutual Water Company, 278 F.2d at 849.
Those favoring a compensable real property interest often rely heavily on that being the majority view to bolster their position. See Washington Sub. San. Com'n, 57 Md.App. at 426–27 (citing the “rather formidable array of authority” recognizing restrictive covenants as compensable property interests as supporting its holding—without explaining legal basis for that view, though dissecting and rejecting arguments for contrary view); Horst v. Housing Authority, 184 Neb. 215, 217, 166 N.W.2d 119 (1969); Leigh v. Village of Los Lunas, 137 N.M. 119, 123–24, 108 P.3d 525 (Ct.App.2004). This refrain dates back more than 50 years. See Raleigh v. Edwards, 235 N.C. 671, 677, 71 S.E.2d 396 (1952) (characterizing “decided weight of authority” as recognizing restrictive covenants to be compensable property interests). But it isn't entirely clear to me who has been doing the counting or how. See Board of Public Instruction, 81 So.2d at 641–42 (In 1955, the Florida Supreme Court questioned just which side of the debate had the larger cheering section.). As of 3 years ago, a leading treatise identified appellate courts in 19 states and one federal circuit as saying restrictive covenants are property interests requiring compensation in eminent domain proceedings. 2 Nichols on Eminent Domain § 5.07[4][a] & n. 80 (3d ed.2014). The position, however, appears to reflect a plurality among the jurisdictions that could rule on the issue. The treatise lists 13 state appellate courts and 3 federal circuit courts on the other side, recognizing restrictive covenants as noncompensable in eminent domain. 2 Nichols on Eminent Domain § 5.07[4][b] & nn. 86–91. Assuming the general accuracy of that survey, appellate courts in 18 states (including Kansas) and 8 federal circuits—thus, the largest group—haven't addressed the issue.[1]
[1] Some of the surveyed cases actually deal with roughly analogous situations. See, e.g., Burger v. City of St. Paul, 241 Minn. 285, 64 N.W.2d 73 (1954). The treatise puts New Mexico in neither camp and, thus, by implication among the undecideds. But the New Mexico Court of Appeals has found restrictive covenants limiting land use to be compensable property interests in condemnation. Leigh, 137 N.M. at 123–24. And the survey seems to have incorrectly placed North Carolina in the no-compensable-interest group by misconstruing or overlooking an extended discussion, albeit arguably dicta, in Raleigh, 235 N.C. at 677–79, recognizing restrictive covenants to be compensable in condemnation. See 2 Nichols on Eminent Domain § 5.07[4][b] & n. 91. I have not reviewed all of the cited cases, which include multiple authorities from the same jurisdiction. Nor have I attempted to recalculate the split of authority outlined in the treatise. The point isn't so much the precise count as the marked division. Cases have also been collected in the Restatement (Third) of Property (Servitudes) § 7.8 (1998) and Annot., 4 A.LR.3d 1137. The Restatement authors characterize compensability as “generally accepted,” while noting “some jurisdictions” hold to the contrary. Restatement (Third) of Property (Servitudes) § 7.8, Reporter's Note, p. 383. Neither of those sources cites a Kansas appellate case as having decided the issue.
Among those courts having spoken, support for the compensable-real-property view can't be described as numerically overwhelming. And the courts favoring the contrary position are far too prevalent to be dismissed as outliers. Particularly in that circumstance, siding with the purported majority is not itself an especially satisfying rationale. The contract-rights contingent doesn't necessarily do much better in offering sharp reasoning and sometimes relies on little more than the self-evident correctness of its position—a porous foundation for all but the most obvious propositions. See Moses v. Hazen, 69 F.2d 842, 844 (D.C.Cir.1934) (declaring with minimal explanation and no direct authority that restrictive covenants “are not truly property rights, but contractual rights”); Board of Public Instruction, 81 So.2d at 643 (invoking “the best considered cases” coupled with “logic and reason” to hold restrictive covenants noncompensable); cf. Washington Sub. San. Com'n, 57 Md.App. at 429 (rejecting argument that restrictive covenants are contracts and, therefore, unenforceable against government entities undertaking projects benefiting the public because the argument says nothing more than “they are void because they are void”).
Many contract-rights decisions submit that restrictive covenants limiting land use cannot be enforced against government entities taking real property because they would effectively inhibit that process and, therefore, must be considered void as against public policy. The argument, however, fails in at least two ways. First, nobody suggests a restrictive covenant could be interposed to prevent a government taking, only that compensation must be paid to the remaining private landowners for a violation of the reciprocal restriction on use. Washington Sub. San. Com'n, 57 Md.App. at 430–31; Horst, 184 Neb. at 218–19; Leigh, 137 N.M. at 124. As a general rule, contracts are void as against public policy when the objective of the contract is, itself, illegal or inimical to the community's health and welfare. Frazier v. Goudschaal, 296 Kan. 730, 749, 295 P.3d 542 (2013) (“ ‘Public policy forbids enforcement of an illegal or immoral contract.’ “ [quoting In re Estate of Shirk, 186 Kan. 311, 326, 350 P.2d 1 (1960) ] ). Limiting development in a subdivision to residential uses doesn't seem to qualify.
The issue, however, is not an easy one. I have endeavored to make my best judgment in the face of conflicting and often unilluminating authority.
III.
A superficially attractive argument favors the contract-rights treatment of restrictive covenants of the sort at issue here. The restrictions reflect a mutual exchange among the landowners so bound perpetuated in contracts for the sale of the real property. But a sounder analysis treats them as the hybrid product of property and contract law that they are. So the restrictions also entail real property interests subject to a compensable government taking in some, though not all, circumstances.
The restriction here, limiting use of the tracts in the subdivision to single-family residences, has its genesis in a mutual contractual agreement. As a condition of the purchase of a tract, the buyer agrees to abide by various restrictions in the deed. That's a contract term. See City of Shelbyville v. Kilpatrick, 204 Tenn. 484, 487, 322 S.W.2d 203 (1959) (one private landowner may specifically enforce restrictive covenant against another based on “contract creating this equitable servitude”). But those restrictions run with the land, binding successive owners. And persons selling their tracts are no longer bound. The restrictions, therefore, are tied to the land rather than to the contract of sale or the contracting parties.
More significantly, however, the restriction limits how the landowners in the subdivision may use their fee simple interests. The restriction does not slice away part of the fee simple or otherwise diminish it. At first blush, that would seem to make the restriction something other than a common (and compensable) interest in the real property. By contrast, for example, a mineral lease transfers part of the fee simple interest to the lessee. The lessee can enter the real property; explore for oil, gas, or gold; and extract and sell any minerals found in paying quantities. During the term of the lease, the lessor no longer owns a full fee simple. Similarly, if a landowner grants an easement for use of a portion of the surface for some purpose—for instance, an access road to a store several tracts over—he or she then holds less than an unburdened fee simple. The holder of the easement has an interest in the land that directly diminishes the fee simple. The restrictive covenant, however, doesn't grant one covered landowner the right to enter onto or use the land of his or her neighbors in any way. From that perspective, the restriction doesn't have a significant attribute of a traditional property interest.
But a deed restriction permitting a landowner to use the property only for a single-family residence indirectly—and substantially—burdens the fee simple interest. As a practical matter, the restriction renders the mineral interests worthless as a severable slice of the fee simple. A lessee of those interests could not excavate for gold or sink a well to pump out oil. So the landowner probably couldn't give away a mineral lease even if he or she wanted to.[2] Similarly, a landowner could not grant an easement for any use inconsistent with a single-family residence, such as the access road to a commercial establishment. In effect, the restrictive covenant severely limits how landowners may use their fee simple interests and prohibits a host of ways a landowner might profit from transferring some part of that interest. See Johnstone v. Detroit, Etc., R. Co., 245 Mich. 65, 79, 222 N.W. 325 (1928) ( “the right to restrict the use of real estate is an invasion of ownership”); Kilpatrick, 204 Tenn. at 490. Moreover, that covenant interlocks with identical covenants restricting every other tract in the subdivision. So each landowner benefits from the restrictions on the other landowners. On balance, I think that creates an interest in and a limitation on the use of the land sufficiently like other real property interests that it can be taken by condemnation or inverse condemnation in appropriate circumstances.
[2] In highly improbable circumstances, an oil and gas lease could be unitized and a well drilled on part of the unit outside the reach of the restrictive covenants. But that scenario is more academic than real. I expect that in most places with planned residential subdivisions, zoning regulations would prohibit mining operations or oil wells anywhere in the vicinity regardless of any restrictive covenants. My discussion puts aside zoning regulations, since they effectively operate independently of restrictive deed covenants.
But, as I have outlined, restrictive covenants combine contract rights and real property interests and result in a legal arrangement that is neither wholly contractual nor wholly property based. I fail to understand the judicial need to categorize the duties and benefits created in those covenants as exclusively one or the other. The courts strive mightily to find an unalloyed product—purely contract or purely real property at least for purposes of condemnation and inverse condemnation—when restrictive covenants actually are an amalgam. The effort amounts to a failed experiment as the pronounced split in authority attests.
The better approach would acknowledge that reality and, therefore, treat restrictive covenants as legal hybrids and analyze the takings issue accordingly. The impact of the government's nonconforming use channels the analysis. As I discuss later, only those private landowners facing a measureable diminution in the use or quiet enjoyment of their own property as a result of the government's actions suffer a compensable taking of property interest embodied in the restrictive covenant. Landowners without such a loss realize only a breach of the contractual rights created in the restrictive covenant. This case illustrates the implications .[3]
[3] The arcane world of regulatory takings under the Fifth Amendment has no bearing on this case or compensatory takings bound up in restrictive covenants. See First Lutheran Church v. Los Angeles County, 482 U.S. 304, 340 n. 17, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987) (Stevens, J., dissenting) (“[T]he Court has repeatedly recognized that it itself cannot establish any objective rules to assess when a regulation becomes a taking.”); Kent, “Construing the Canon: An Exegesis of Regulatory Takings Jurisprudence After Lingle v. Chevron, ” 16 N.Y.U. Envtl. L.J. 63, 63–65 (2008) (suggesting Lingle v. Chevron, U.S.A., Inc., 544 U.S. 528, 540, 125 S.Ct. 2074, 161 L.Ed.2d 876 (2005), has brought “some clarity” to a regulatory takings jurisprudence fairly characterized as muddled and confused). This case does not involve such a taking, so that authority is instructive only insofar as it outlines settled principles of takings law generally. See Tahoe–Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 324, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002). Likewise, this case falls outside the Private Property Protection Act, K.S.A. 77–701 et seq. The Act is aimed at Kansas regulatory actions that may affect private property. See K.S.A. 77–703(b)(1) (defining covered government actions as proposed legislation, proposed rules or regulations, and proposed agency guidelines and procedures for issuing licenses or permits).
The majority effectively holds that each of the plaintiff landowners has incurred a compensable taking and remands for a determination of the amount due. The majority states: “We are deciding whether KDOT's use of subdivision property in violation of the restrictive covenant is a taking for which the government must provide just compensation.” Slip op. at 7. The majority seems to hedge by adding that the district court should decide the amount “if any” due a particular plaintiff. But when there has been a Fifth Amendment taking of a property interest, the responsible government entity must provide some compensation. See Lingle, 544 U.S. at 539 (physical taking, however minimal its economic impact, requires compensation); First Lutheran Church, 482 U.S. at 316 (“[T]he Court has frequently repeated the view that in the event of a taking, the compensation remedy is required by the Constitution.”); Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 434–35, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982) (Court finds municipal regulation requiring owner of apartment building to install cables and related hardware to supply television service to tenants effects a constitutional taking and remands for determination of compensation due).
The majority's holding, if applied beyond this case, has significant ramifications for government entities condemning real property in multitract areas subject to restrictive covenants limiting land use.[4] Should the government entity contemplate a use inconsistent with those restrictions, it theoretically ought to condemn and take the specific real property interests of the other landowners created by their restrictive covenants. By failing to do so, the government entity could be sued in an inverse condemnation action, as the plaintiffs have done here. Each landowner bound by the covenant would hold a compensable real property interest. In this case, scores of landowners have compensable property interests, although not all of them have chosen to seek relief.
[4]If the majority's assessment of Kansas caselaw is correct, our decision simply conforms to the existing rule. But assuming the issue actually hasn't been decided until now, as I suggest, our decision—as an unpublished opinion—has no binding effect outside this particular legal dispute and these parties. See Graham v. Herring, 297 Kan. 847, 861, 305 P.3d 585 (2013).
The cost and complexity of condemnation actions commonly would be increased. In addition to taking (and paying for) the land to be used for a highway access ramp, for example, KDOT should condemn the restrictive covenant interests of the rest of the landowners. The nonconforming use, by its very existence, effects a taking of the property interests reflected in the other landowners' covenants.
The price for those interests presumably would be tied to the loss in value of those properties occasioned by the use violating the restriction. That gets pretty subjective. Most people would agree water towers and highway ramps make poor neighbors, but putting a dollar value on the harm is another matter. And the value of the lost interest wouldn't be uniform. Landowners closer to the highway ramp would, I suppose, incur greater losses than more distant residents. See Redevelopment Agency v. Tobriner, 153 Cal.App.3d 367, 374–75, 200 Cal.Rptr. 364 (1984). It doesn't even follow that everyone in the subdivision would sustain a discernible, objective loss—someone living several blocks from the ramp arguably would suffer no such harm. For landowners on the opposite side of the subdivision from the access ramp, any perceived harm could well be nothing more than a subjective aesthetic affront. The diminishing losses and the point at which they disappear are necessarily squishy. But neither the Takings Clause nor Kansas eminent domain law is supposed to compensate simply for offended aesthetics alone. Bruised sensibilities do not a taking make. The loss of a legally recognized property interest, however, does, even if the value might be considered more or less nominal.
Again, beyond this case, the use the government entity contemplates also could complicate valuing the landowners' restrictive covenant property interests taken through the government's nonconforming use. See Tobriner, 153 Cal.App.3d at 374–75. If the use were a park or an elementary school, the government could say with some force that the overall attractiveness (and value) of the subdivision might be enhanced. Nonetheless, some residents in the immediate vicinity might honestly be put off by increased motor vehicle and foot traffic going into and out of a park or a school. Noise associated with some activities might be objectionable to some. But it seems to me fairly debatable whether a park or an elementary school should objectively be considered a disagreeable neighbor at all, let alone one like a water tower or a highway access ramp. Potential uses run the gamut from garden parks on the one hand to wastewater treatment plants on the other. Various uses falling along that continuum only redouble the difficulty in sorting out condemnation considerations if restrictive covenants are categorically compensable property interests. The majority decision necessarily appears to call for compensation in some amount to every landowner in a subdivision for the taking of a restrictive covenant interest should a government entity pursue a nonconforming use. I do not share that view.
IV.
The characterization of restrictive covenants as categorically either contract rights or real property interests necessarily effects a public policy of loss allocation in government takings. If the restrictive covenants are contractual, landowners, such as the plaintiffs here, must bear the loss of value in their property when the government condemns other land subject to those covenants for a use violating the restrictions. Conversely, if the restrictions are property interests, the governmental entity and, thus, the taxpayers must bear that loss in value. As in this case, the government would be required to condemn and pay for the partial loss of the property interest reflected in the restrictive covenants. The loss or taking would be only partial, since the plaintiffs may still enforce the restrictive covenants against any of the other private landowners in the subdivision should one of them breach the restrictions. The restrictive covenants have not been extinguished.
Because restrictive covenants establish nontraditional property interests among landowners, a state legislature presumably has the authority to exclude them from what must be compensated through eminent domain procedures without offending the Takings Clause. See Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1016 n. 7, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992) (state property law informs what interests may be compensable under the Takings Clause); Casitas Mun. Water Dist. v. United States, 708 F.3d 1340, 1348 (Fed.Cir.2013); Vandevere v. Lloyd, 644 F.3d 957, 963 (9th Cir.2011). If the law were otherwise, the judicial decisions finding restrictive covenants to be noncompensable contract rights would be constitutionally infirm. They do not appear to be. Kansas has not statutorily defined or expressly included or excluded particular property interests for eminent domain purposes. The Eminent Domain Procedures Act, K.S.A. 26–501 et seq. , doesn't really address restrictive covenants and, thus, neither favors nor precludes them as a source of property interests that may be compensable in some fashion. So the courts properly may construe the general statutory language, consistent with constitutional requirements, to determine how restrictive covenants should be treated.[5]
[5] Neither a state's courts nor its legislature could define compensable property interests to exclude, for example, fee simple ownership, since that would contravene the plain purpose of the Takings Clause and, thus, impermissibly constrict a constitutional right. See Phillips v. Washington Legal Foundation, 524 U.S. 156, 167, 118 S.Ct. 1925, 141 L.Ed.2d 174 (1998); Lucas, 505 U.S. at 1016 n. 7. But restrictive covenants do not fall in that category. By the same token, however, a state may expand the scope of its eminent domain processes to require compensation for the taking of privately held interests not protected under the Fifth Amendment. See State v. Carapezza, 293 Kan. 1071, 1077, 272 P.3d 10 (2012) (State may provide greater rights or protections than United States Constitution guarantees); Tapps Brewing, Inc. v. City of Sumner, 482 F.Supp.2d 1218, 1231 (W.D.Wash.2007) (noting Washington Constitution affords broader protections than Fifth Amendment when government takes private property).
Whether to spread the loss among the taxpayers on the notion they collectively benefit from the nonconforming government use or to confine the loss to the landowners in the subdivision as one of the costs of the social compact that is government presents a public policy determination. Those kinds of policy issues, especially involving the public fisc, are entrusted to the wisdom of the legislature. See University of Kansas Hosp. Auth. v. Board of Wabaunsee County Comm'rs, 299 Kan. 942, 955–56, 327 P.3d 430 (2014). Even in the absence of legislative action, the judicial branch may not usurp that policymaking authority. So loss allocation ought to be a consequence of a court's characterization of a restrictive covenant not a factor in determining it.
But judicial management of loss allocation appears to drive many of the decisions on this issue. In some cases, particularly those favoring the contract-rights treatment of restrictive covenants, the courts have expressly invoked loss allocation. See Smith v. Clifton District, 134 Colo. 116, 120, 300 P.2d 548 (1956); Board of Public Instruction v. Town of Bay Harbor I., 81 So.2d 637, 644–45 (Fla.1955); cf. Southern Cal. Edison Co. v. Bourgerie, 9 Cal.3d 169, 175, 107 Cal.Rptr. 76, 507 P.2d 964 (1973) (dismissing contract-rights approach as “placing a disproportionate share of the costs of public improvements upon a few individuals”). In others, it ripples covertly beneath the articulated reasons, perhaps accounting for the conclusory explanations of the results. See 9 Cal.3d at 173 (“real basis” for judicial classification of restrictive covenants as contracts and, thus, noncompensable or as property interests and, thus, compensable often lies in “pragmatic considerations of public policy”); Washington Sub. San. Com'n v. Frankel, 57 Md.App. 419, 428, 470 A.2d 813 (1984) (suggesting as much with respect to arguments against finding restrictive covenants compensable and holding them to be compensable); Horst v. Housing Authority, 184 Neb. 215, 218, 166 N.W.2d 119 (1969) (In finding restrictive covenants reflect compensable property interests, the court rejects the notion that “the government should be permitted to inflict damage without liability simply because it is the government.”). The ostensible legal reasoning undergirding much of the precedent on the issue may represent little more than a veneer for a public policy call more properly left for legislative consideration.
V.
Applying recognized principles of takings jurisprudence in keeping with the hybrid nature of restrictive covenants as neither strictly contractual nor strictly property based yields a middle ground on what may be compensable both in this case and generally when governments put condemned land to nonconforming uses. The result rests on the legal rights and interests alone without intruding on legislative policymaking in allocating losses associated with condemnation of real property subject to restrictive covenants.
A government entity takes the property interests embodied in a restrictive covenant to the extent the nonconforming use to which it puts restricted land creates or causes conditions that intrude upon privately owned land subject to that same restriction. The intrusion must be measurable in some sensory way and not merely the product of an entirely subjective aesthetic aversion to the use. In this case, for example, the intrusion could entail traffic noise, exhaust odors, light from motor vehicles or roadway lamps, or some combination of those or similar conditions. Those are the sorts of conditions that may create an actionable nuisance. See Caywood v. Board of County Commissioners, 200 Kan. 134, 142, 434 P.2d 780 (1967) (“A school athletic field with a loudspeaker, bright lights and clouds of dust at ball games so annoyed adjacent property owners as to be nuisance.” [citing Neiman v. Common School District, 171 Kan. 237, 232 P.2d 422 (1951) ] ); McVicars v. Christensen, 156 Idaho 58, 61–62, 320 P.3d 948 (2014); Lesh v. Chandler, 944 N.E.2d 942, 951–52 (Ind.App.2011). Other nonconforming uses could cause other kinds of intrusions inconsistent with the property interests protected in a restrictive covenant.
Although the degree of intrusion necessary for a tort action based on nuisance cannot be precisely defined, it requires especially noxious or vexatious conditions of some duration. Caywood, 200 Kan. at 143–44. The taking of the real property interests in the restrictive covenant in this case wouldn't demand that degree of invasion. A measurable intrusion would be enough. That's because the property interest that has been taken is the quiet enjoyment of a single-family residence flanked by other single-family residences. The sights, sounds, and other conditions associated with a highway access ramp are materially different and, therefore, necessarily compromise that quiet enjoyment. They needn't rise to the level of an actionable nuisance to do so. So that adverse impact on quiet enjoyment—otherwise protected through the restrictive covenant—is the property interest the government has taken and what it must compensate for in this inverse condemnation action.
As with much else in the law, however, de minimis intrusion would not create a compensable taking of or damage to the property interest. See Estate of Kirkpatrick v. City of Olathe, 289 Kan. 554, 569, 215 P.3d 561 (2009) (to be compensable in eminent domain proceeding or in inverse condemnation action, damage to property “must be substantial”); cf. Delaney v. Cade, 255 Kan. 199, Syl. ¶ 7, 873 P.2d 175 (1994) (medical malpractice plaintiff may not recover on loss-of-a-chance theory when chance was “nothing more than a token or de minimis”); Calci v. Reitano, 66 Mass.App. 245, 251–52, 846 N.E.2d 1164 (2006) (acknowledging authority that encroachment of public sewer underneath 6–inch strip of plaintiff's land was de minimis and, thus, not actionable); Grundy v. Brack Family Trust, 151 Wash.App. 557, 560, 213 P.3d 619 (2009) (no civil liability when unintentional act results in de minimis encroachment on plaintiff's property). A technical intrusion neither effects a taking of the property interests in the restrictive covenant nor damages those interests. So the intrusion is not compensable under the Fifth Amendment or Kansas eminent domain law. In this respect, I differ with the majority decision. As I have indicated, the majority appears to find a constitutional taking in the breach of the restrictive covenant regardless of the actual impact of the nonconforming use on a given tract.
In my view, those landowners in the subdivision who have experienced no measurable intrusion of noise, light, odor, or other invasive condition as the result of the highway access ramp have not lost any property interest arising from the restrictive covenant. As a nonconforming use, the highway access ramp violates the terms of the covenant restriction. But that is a breach of the contract rights arising from the covenant. Those landowners would have no compensable property interest in either a condemnation proceeding or an inverse condemnation action. Because we have no contract claim before us, I don't venture into how that claim might be handled or valued.
This approach holds true to the hybrid character of the restrictive covenant restricting the use of the land in the subdivision. It provides compensation for the taking of a property interest but recognizes the distinct contract rights arising from the covenant as well. Cf. Johnstone, 245 Mich. at 78 (acknowledging both “the contractual nature of the covenant and its effect as a conveyance of an equitable interest in real estate”).[6]
[6]The hybrid quality of those restrictive covenants results in this binary treatment of the legal effects of a government entity's violation of such restrictions. The analysis, therefore, does not inform more conventional government takings. Government confiscation of property, even of minimal value, requires fair compensation under the Fifth Amendment. Here, however, there is no confiscatory conduct. Nor is there even a physical diminution of the landowners' fee simple interests, as would be true if a government entity acquired even a minimally intrusive easement allowing direct entry on or use of their property.
In the same vein, not all duties or obligations created in deed covenants give rise to property rights that may be taken through government action. For example, the obligation of a landowner in a subdivision to pay monthly fees to a homes association to maintain common or recreational areas, such as swimming pools or golf courses, is a contractual duty implicating no property interests requiring compensation under the Fifth Amendment. United States v.. 0.073 Acres of Land, 705 F.3d 540, 548–49 (5th Cir.2013) (federal government not obligated under Fifth Amendment to compensate for assessments property owners pay to townhome association for services and common areas when it acquired 14 tracts through eminent domain because affirmative duty to pay was contractual even though it arose from covenant running with the land); contra Palm Beach County v. Cove Club Investors, 734 So.2d 379, 380, 383–90 (Fla.1999).
Given the nature of the interests, determination of a taking and valuation of the loss would not be amenable to a set of rules predicting a certain outcome in a given case or, more particularly, among landowners subject to the same restrictive covenant. I have already acknowledged those general difficulties in discussing the majority's suggested scope of relief. But a taking is triggered by an objective showing of an actual intrusion.
I will grant that establishing a measurable intrusion could be difficult at the geographical periphery of the invasive conditions. The impact on a tract 14 lots from the nonconforming use likely would be difficult to distinguish from that on a tract 15 or even 20 lots removed. And lots just on either side of the point at which an intrusion ceases to be legally measurable could be hard to differentiate in any gross way. But line drawing in the law sometimes yields results that approach arbitrariness. That's not a good reason to reject tests or measures that draw lines to separate viable rights or claims from those that aren't, especially when circumstances lend themselves to no more fair an option. See Klein v. Board of Supervisors, 282 U.S. 19, 23, 51 S.Ct. 15, 75 L.Ed. 140 (1930) (“Thus we come to the usual question of degree and of drawing a line where no important distinction can be seen between the nearest point on the two sides, but where the distinction between the extremes is plain.”). More generally, however, valuing real estate and related interests, such as easements, in legal disputes seems to be more art than science—a euphemistic phrase for the highly variable expert approaches to and results in putting a dollar value on land. See United States v. 0 .376 Acres of Land, 838 F.2d 819, 825 (6th Cir.1988); State v. Childers, 979 So.2d 412, 413 (Fla.App.2008). So the law tolerates inexactness as necessity in resolving conflicts requiring valuation of real estate interests.
The Eminent Domain Procedure Act provides a nonexclusive list of factors to be considered in assessing the value of condemned property. K.S.A. 26–513(d). Those factors, however, generally presuppose the government has taken all or some part of a private owner's fee simple interest. In turn, they have little application to valuing the property interests taken when the government's use of land violates a restrictive covenant but doesn't physically diminish the nearby landowners' fee simple interests or preclude access to their tracts. But that doesn't affect a landowner's right to an appropriate remedy—only how a compensatory remedy ought to be determined. Courts often receive expert testimony on the loss of value to a tract of land because of intrusions amounting to tortious nuisance. See, e.g., McGinnis v. Northland Ready Mix, Inc., 344 S.W.3d 804, 812–13 (Mo.App.2011); see also Ocean Club Condominium Ass'n v. D'Amato, 2006 WL 2335073, at *5 (N.J.Super.2006) (unpublished opinion) (in nuisance action, court notes “[j]udges in this state have been cautioned against setting a value for property without an expert appraisal”). And expert appraisers frequently place dollar values on easements and other property interests for litigation purposes. See City of Mission Hills v. Sexton, 284 Kan. 414, 424–27, 160 P.3d 812 (2007); Hudson v. City of Shawnee, 246 Kan. 395, 407–08, 790 P.2d 933 (1990). Notwithstanding the exceptional artistry sometimes going into that work, expert opinion evidence, subject to the rigors of testing through the adversarial process, provides a reasonable basis to determine property values and corresponding damages.
On remand, I would have the district court first determine who among the plaintiffs has sustained a taking of a property interest and who has only a breach of contract rights. After making that cut and dismissing the plaintiffs with contract claims, the district court should then hear evidence on the value of the partial takings the highway access ramp has imposed on the remaining landowners.