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Enbridge Energy, Ltd. Partnership v. Fry

Court of Appeals of Illinois, Third District

April 6, 2017

ENBRIDGE ENERGY, LIMITED PARTNERSHIP, Plaintiff-Appellee,
v.
ROCHELLE M. FRY, DOUG RIECKE, JOHN RIECKE, NON-RECORD CLAIMANTS AND UNKNOWN OWNERS, Defendants-Appellants, and BERNADETTE A. LAMORE, ANYA M. BAUER, NON-RECORD CLAIMANTS AND UNKNOWN OWNERS, Defendants-Appellants.

         Appeal from the Circuit Court of the 21st Judicial Circuit, Kankakee County, Illinois. Appeal No. 3-15-0765 Circuit Nos. 14-ED-4, 14-ED-8 The Honorable Adrienne W. Albrecht and Ronald J. Gerts, Judges, presiding.

          CARTER JUSTICE delivered the judgment of the court, with opinion. Presiding Justice Holdridge and Justice Lytton concurred in the judgment and opinion.

          OPINION

          CARTER JUSTICE.

         ¶ 1 Plaintiff, Enbridge Energy, Limited Partnership (Enbridge), filed a condemnation suit to obtain easement rights over certain farmland in Kankakee County so that it could build and operate a new underground pipeline. The landowner defendants opposed the suit for condemnation and filed a traverse and motion to dismiss (traverse motion), which the trial court denied. A jury trial was later held on the condemnation complaint, and a directed verdict was entered for Enbridge as to the amount of just compensation it was required to pay to the landowners. The landowners appeal, raising numerous issues. We affirm the trial court's judgment.

         ¶ 2 FACTS

         ¶ 3 In April 2014, the Illinois Commerce Commission (ICC) granted Enbridge a certificate of public convenience and necessity to build and operate a new underground liquid petroleum pipeline from Pontiac, Illinois, to Griffith, Indiana. The new pipeline was to be known as "Line 78" and was to run across several properties in Livingston, Grundy, Kankakee, Will, and Cook Counties. For the most part, the path of Line 78 was to run parallel to and in close proximity with an existing Enbridge pipeline-Line 62. To obtain the necessary easement rights for Line 78, Enbridge was granted eminent domain authority by the ICC.

         ¶ 4 Prior to filing the instant lawsuit, Enbridge negotiated settlements with many of the landowners involved. As to those landowners with whom Enbridge could not reach an agreement on just compensation, Enbridge filed condemnation complaints in the trial court. The complaints (collectively referred to hereinafter as the complaint) were later consolidated. A copy of the ICC order was attached to the complaint. Three of the landowners who did not settle with Enbridge were named as defendants in the instant case. The dispute involved two pieces of farmland in Kankakee County-the Fry property, owned by Rochelle Fry, and the Bauer-Lamore property, owned by Anya Bauer and Bernadette Lamore. In the trial court, Fry, Bauer, and Lamore were represented by the same attorney, who now represents all three of them in this appeal.

         ¶ 5 In response to the condemnation complaint, Fry filed a traverse motion, alleging, among other things, that Enbridge lacked proper eminent domain authority, that there was no public use or necessity for the pipeline, and that Enbridge had failed to negotiate with the landowners in good faith prior to filing the condemnation suit. A similar traverse motion was later filed on behalf of Bauer and Lamore. Enbridge responded to Fry's traverse motion and attached to its response sworn testimony, affidavits, and business records. Those supporting documents established that Enbridge had made numerous attempts to communicate with the landowners about the easements and the pipeline project. Written offers for easement rights were made to Fry in August 2013 and April 2014 and to Bauer and Lamore in April 2013 and October 2013. The supporting documents also showed that in making its offers to the landowners, Enbridge had been advised by a licensed real estate appraiser who had conducted a land market study in the counties that were going to be impacted by the pipeline.

         ¶ 6 Unable to reach an agreement with the three landowners, Enbridge sent a final offer letter to Fry in May 2014 and to Bauer and Lamore in June 2014. The final offer letter was also sent to the landowners' attorney. In that final offer letter, Enbridge offered to pay Fry approximately $51, 000 as just compensation and to pay Bauer and Lamore approximately $57, 000. A receipt detailing the basis for the offer was provided to all three landowners and their attorney. The final offer was set to expire approximately 11 days from the date of the letter. In addition, Enbridge stated in the letter that it would file an eminent domain action if the final offer was not accepted. None of the three landowners or their attorney responded to those final offers.

         ¶ 7 A status hearing was held in September 2014, and Fry's traverse motion was set for hearing. When the landowners' attorney told the trial court that he would need some time for discovery, the trial judge responded that as a general matter, she did not postpone hearings on a motion to dismiss pending discovery but that if the issue arose, she "certainly [could] recess the hearing and give-allow time for discovery." In the 90 days between the filing of Fry's traverse motion and the date of the hearing on the motion, the landowners did not notice or subpoena any depositions, attempt to compel the appearance of any witnesses or the production of any documents at the hearing, or attempt to obtain any rulings from the trial court on any discovery matter related to the traverse motion.

         ¶ 8 In October 2014, a hearing was held on Fry's traverse motion. At the outset of the hearing, the trial judge acknowledged that a motion had been faxed to the court by the landowners' attorney requesting additional time to conduct discovery. The landowners' attorney indicated in court that he had filed a memorandum on the matter. Despite the request for more time, the trial court went forward with the hearing. The landowners' attorney stated that he was ready to call witnesses but did not seek to do so and did not disclose to the court who those witnesses were or what their testimony would be. Ultimately, although the trial court did not preclude either party from calling witnesses, no witnesses were presented by either side, and the trial court made its ruling on Fry's traverse motion based solely upon the pleadings and supporting documents. After considering those documents, researching the matter, and listening to the arguments of the attorneys, the trial court denied Fry's traverse motion, finding that there was nothing presented to challenge the rebuttable presumption of public use and necessity created by the ICC's order or any evidence presented to refute Enbridge's showing that its offer was made in good faith. Because Bauer and Lamore's traverse motion was essentially identical to that of Fry, the same ruling by the trial court was later applied to that motion as well.

         ¶ 9 With the traverse motion (collective reference to both motions) decided, the case proceeded toward a jury trial on the condemnation complaint and the issue of just compensation. In November 2014, the trial court entered a case management order, which required that all written discovery be completed by December 22, 2014, that all lay witness depositions be completed by January 20, 2015, that all controlled expert witness disclosures be completed by February 2, 2015, and that all controlled expert depositions be completed by February 20, 2015. The landowners subsequently filed a counterclaim for the damage that the pipeline would allegedly cause to the remainder property (the property outside of the easement area).

         ¶ 10 On January 7, 2015, the landowners' attorney tendered on a flash drive the work file of his proposed valuation expert, appraiser Michael McCann. The file contained approximately 7000 pages. Later that same month, landowner Bauer was deposed and testified that she did not have knowledge of the fair market value of the subject property and that she was not qualified to determine a diminution in value caused by the pipeline. Similarly, landowner Fry testified in her deposition that she had no opinions, numbers, or anything related to the fair market value of her property.

         ¶ 11 On February 2, 2015, within the timeframe set by the case management order, Enbridge disclosed their expert valuation witnesses, Joseph Batis and Andrew Brorsen. Brorsen had completed two written appraisal reports, one for each of the properties involved. Brorsen's reports contained his comparable-sales data and an explanation of his opinions as to valuation. Although depositions were taken of Enbridge's valuation experts, the landowners' attorney did not appear for those depositions.

         ¶ 12 The landowners disclosed their expert valuation witness, appraiser McCann, and tendered a brief summary of his appraisal opinions. McCann did not prepare a written appraisal report, and Enbridge did not take McCann's deposition. After the discovery deadline had passed, the landowners submitted supplemental opinions wherein they disclosed that the defendant landowners had belatedly developed opinions of value based on discussions with their attorney and research into environmental effects, stigma, and fear caused by pipelines.

         ¶ 13 In a letter dated February 2015, Enbridge's attorneys warned the landowners' attorney in a letter that the controlled expert witness disclosures and the work file of McCann failed to provide any explanation, analysis, or specificity regarding comparable sales. Attached to the letter were previously-served discovery requests to the landowners asking for the comparable-sales sheets. A second letter from Enbridge's attorneys, dated March 2015, requested that the complete work file of McCann be tendered in relation to the subject properties.

         ¶ 14 In April 2015, about 60 days after the discovery deadline had passed and without obtaining leave of court, the landowners issued a notice of discovery deposition for their controlled expert witness, appraiser McCann. The landowners' attorney, in a later proceeding, acknowledged that the purpose of the deposition was to disclose McCann's new opinions and pointed out that Enbridge had not deposed McCann. On Enbridge's motion, the trial court quashed the notice of deposition.

         ¶ 15 Prior to trial on the condemnation case, Enbridge filed a number of motions in limine. As a result of one such motion, which the trial court granted, the landowners were barred from cross-examining Enbridge's witnesses regarding the specific rights that Enbridge sought to acquire-primarily, that Enbridge sought to acquire the right to mortgage the easement. In another ruling, the trial court barred landowners Fry, Bauer, and Lamore, each of whom had inherited the properties, from testifying as to the value of the properties. The trial court's ruling in that regard was largely based upon the fact that both Fry and Bauer had testified in their prior depositions that they had no idea as to the value of the property. The trial court also ruled that a generic disclosure of "individual [d]efendants" that had been filed by the landowners in February 2015 pursuant to Illinois Supreme Court Rule 213(f)(3) (eff. Jan. 1, 2007) did not allow the landowners to call a witness to testify at trial that had not been specifically identified.

         ¶ 16 The jury trial on the condemnation case and the issue of just compensation began on Monday, June 8, 2015. After the case was called for trial, the landowners' attorney offered to voir dire his own controlled expert witness, appraiser McCann, as a time-saving mechanism because, according to the landowners' attorney, if the trial court ruled that it was not going to allow McCann to testify, the landowners would not have any expert opinion testimony to present as to valuation and the case would result in a directed verdict. A voir dire of McCann, however, was not conducted at that time. In addition, the landowners' attorney told the trial court that if neither the landowners nor McCann were allowed to testify, a directed verdict would result as well.

         ¶ 17 In its case-in-chief, Enbridge introduced an evidentiary stipulation in which it agreed to pay for damage to crops and improvements, to provide the landowners with reasonable access to the properties during construction, and to restore the properties following the completion of construction. One of the main witnesses who was called to testify for Enbridge was licensed real estate appraiser, Andrew Brorsen. After describing his background and experience for the jury, Brorsen testified at length on the issue of just compensation. In sum, Brorsen determined and opined that the total just compensation due for the Fry property was $6200 ($3800 for the permanent easement across the property, $2400 for the temporary construction easement, and $0 for the damage to the remainder property because, according to Brorsen, there would be no damage to the remainder property) and that the total due for the Bauer-Lamore property was $6500 ($3400 for the permanent easement, $3100 for the temporary construction easement, and $0 for the damage to the remainder property). Brorsen explained to the jury in great detail how he had reached those conclusions. Of relevance to this appeal, Brorsen stated that he had used a compared-sales approach to determine the fair market value of the whole properties and that he had used a paired-sales approach, in part, to determine that there was no damage to the remainder properties as a result of the pipeline easement. Brorsen's written appraisal reports on the two properties were admitted into evidence, as were exhibits depicting the comparable and paired sales selected by Brorsen in conducting his appraisals. Brorsen acknowledged during his testimony that he had made some mistakes in his appraisal reports; that he had never in his career as an appraiser found that there was damage to a remainder property as the result of a pipeline easement; that in every single appraisal report he prepared for Enbridge, he determined that the diminution in value in the permanent easement area was 25%, regardless of in which county the property was located; and that his firm had been paid over $300, 000 for its work on the pipeline project.

         ¶ 18 During the afternoon of Thursday, June 11, 2015, after Enbridge had rested or was preparing to rest its case, the landowners' attorney indicated that he planned to call multiple witnesses, including his controlled expert witness on valuation, appraiser McCann. Enbridge was given leave by the trial court to voir dire McCann prior to his testimony. The voir dire, however, could not be conducted until the following morning. Outside the presence of the jury, the trial court and the attorneys discussed when the further proceedings in this case would take place. The following conversation ensued:

"THE COURT: Okay. What I'm trying to figure out is what to tell the jury. My inclination is to tell them to call to see whether or not they need to come back on Monday because I'm unavailable tomorrow afternoon and it doesn't sound like we're gonna get anywhere close to them until tomorrow.
[AN ENBRIDGE ATTORNEY]: I think that's accurate. I think that if we-that tomorrow we could accomplish the voir dire of Mr. McCann. That's- that's what I think we'll get finished so that would be my-I think that's reasonable.
THE COURT: Okay. I need to go check-do-I need to go check on the logistics of it but we're-have reorganized the entire jury system in an effort to save money.
(Whereupon, there was a recess so taken.)
So they're gonna call tomorrow afternoon to see if they need to come in on Monday.
[AN ENBRIDGE ATTORNEY]: Judge we do have one housekeeping matter before we break for the day so I don't know if you want to release the jury.
THE COURT: I want to release the jury because I'm trying to cause the least inconvenience to them." ¶ 19 After the jury was brought back into the courtroom, the following was stated:
"THE COURT: Okay. Do you all still have pieces of paper on your tablets? Okay.
THE BAILIFF: Well, I told them to leave their tablets in there. Are they gonna need 'em?
THE COURT: Well they're gonna need this phone number, which I'm gonna give you, and they're gonna copy down when they go to leave. Okay. Be seated. I told you when we started we [sic] that this is a legally technical case and there would be lots of interruptions, and I would keep them to a minimum. Well I'm trying to figure out how to cause you the least amount of inconvenience. There are some matters that have to be-come up tomorrow that-and I-I also have to tell you that I have a mandatory Judge's meeting-quarterly Judge's meeting tomorrow afternoon.
There are some matters that are gonna happen tomorrow morning that could possibly result in the case not-in us not needing you. I don't know that, and I won't know that, until tomorrow afternoon. So you're definitely not gonna be needed tomorrow, and what I need you to do is call the jury commissioner, whose number I have right here, tomorrow afternoon to find out whether or not you need to come back on Monday. Okay? Any questions about that? Okay.
UNIDENTIFIED JUROR: Any certain time to call? 2:00? 3:00?
THE COURT: I will know by noon so after 1:30 and the courthouse closes at 4:30. Yes?
THE BAILIFF: But when they call this number it will tell them when to report back?
THE COURT: You're gonna be talking to Diane, the jury commissioner directly. You're not gonna get a message. It's not a voice mail. You'll be talking directly to a human person.
UNIDENTIFIED JUROR: Do we identify the case then or she'll know?
THE COURT: You-you call and say does Judge Albrecht need to [sic] me ...

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