High court reverses $2.3 million jury award

The Indiana Supreme Court reduced a $2.3 million jury award in favor of an Evansville shopping center owner, affirming a previous ruling that shopping center owners aren't entitled to consequential damages from street reconfigurations that affect traffic flow to the shops and prevent expansion of existing exit and entrance points.

The high court was split 3-2 in its decision in State of Indiana v. Kimco of Evansville, Inc., et al., No. 82S01-0806-CV-308, in which the majority reaffirmed its decision in State v. Ensley, 240 Ind. 472, 164 N.E.2d 342 (1960).

Kimco owns the Plaza East Shopping Center, which has two main entrances and exits on Green River Road in Evansville. The state acquired a 0.1540-acre strip of land along the western border of the shopping center to widen Green River Road and improve traffic flow to and from the Lloyd Expressway. Because of the construction, Plaza East couldn't add new entrances on Green River Road or widen its existing access points. The construction also modified the original traffic flow in and out of the center, but kept the existing entrances and exits.

After construction was complete, Kimco filed suit for damages, claiming the construction affected traffic flow to and from the complex and the shopping center had depreciated in value. The jury awarded Kimco $2.3 million, finding the company suffered a particular, private injury resulting from interference of Kimco's rights of ingress and egress. The Indiana Court of Appeals affirmed the admittance of Kimco's loss-of-access evidence and the jury award.

Citing its previous ruling in Ensley, the Supreme Court found Kimco is only entitled to $100,700, the value of the physical taking of the strip of land and temporary construction easement. Although an elimination of rights of ingress and egress constitutes a compensable taking, the mere reduction in or reduction of traffic flow to a commercial property isn't a compensable taking of a property right, wrote Justice Theodore Boehm.

As in Ensley, Plaza East Shopping Center's existing access points hadn't been eliminated or narrowed as a result of the construction, nor did the reconfigurations deprive the owners of their right to ingress or egress.

"The only substantive allegation is that traffic flow to the shopping complex has been encumbered. Under Ensley and its progeny, these consequences from the State's roadway improvements are not compensable because no property right has been taken," he wrote.

While the instant case has a merge lane and entrance congestion that wasn't present in Ensley, neither affects the fundamental point that they aren't attributable to the deprivation of any property right.

The majority reversed the judgment and remanded for proceedings consistent with the opinion. Justices Brent Dickson and Robert Rucker dissented, believing the Court of Appeals correctly decided the case.