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Court News Ohio

State Must Compensate Licking County Restaurant Owner for Cutting Off Highway Access

The owner of a Wendy’s restaurant near a state highway intersection that was removed is entitled to compensation for the impact the business suffered from being cut off, the Ohio Supreme Court ruled today.

In a 4-3 decision, the Supreme Court ruled the Ohio Department of Transportation’s (ODOT) closure of Cherry Valley Road along Ohio State Route 16 in Licking County constituted a “taking” under the U.S. and Ohio constitutions, and that New Wen Inc., the owner of a Wendy’s near the intersection since 1992, must be compensated for the loss of access to the highway.

Writing for the Court majority, Justice Judith L. French stated while ODOT compensated the prior landowner for the right to cut off direct access to the highway, the plan indicated that New Wen’s predecessor would retain a “point of access” to Route 16  at Cherry Valley Road (County Road 128). New Wen’s predecessor was not compensated for the loss of full access to the highway from its property, she concluded.

Justices Sharon L. Kennedy, Patrick F. Fischer, and R. Patrick DeWine joined Justice French’s opinion.

In a dissenting opinion, Chief Justice Maureen O’Connor stated that ODOT fully compensated the prior landowner for the right to cut off access to the highway. She wrote that New Wen does not hold a right to access the highway and warned the Court’s majority opinion will increase ODOT’s costs to improve limited-access highways and undermine the agency’s “ability to keep our limited-access highways safe.”

Justices Michael P. Donnelly and Melody J. Stewart joined the dissent.

Justice Kennedy also wrote a concurring opinion to address the dissenting opinion’s conclusion that the original landowner fully waived her access to Route 16. Justice Kennedy maintained the state’s purchase was limited to cutting off direct access, and when it closed the indirect access, the state decreased the property owner’s right of use without compensation. Justice DeWine joined Justice Kennedy’s concurrence.

New Highway Off-Ramps Prompt Complaints
Route 16 runs east-west through Licking County. ODOT began purchasing easements to construct it as a four-lane, limited-access highway in the 1960s. At the time of Route 16’s construction, Cherry Valley Road ran north-south and intersected Route 16. At the time of its closure in 2016, the intersection had a four-way, signalized stop that allowed for traffic to enter and exit Cherry Valley Road. Near that intersection were several businesses, including Wendy’s.

In November 2016, ODOT closed the access to Route 16 from Cherry Valley Road by removing parts of Cherry Valley Road and putting up guardrails. Cherry Valley Road now dead-ends at the entrance to the Wendy’s parking lot. After closing the intersection, ODOT opened new eastbound and westbound interchanges on Route 16 less than a half mile from Cherry Valley Road.

New Wen complained to ODOT that the re-routing heavily damaged their business. New Wen noted that with the Cherry Valley Road intersection, motorists could exit the highway and pull into the restaurant by traveling less than a quarter mile. With the new off-ramps, drivers now have to use two roads and travel about 1.5 miles to get to the restaurant.

New Wen sought a writ of mandamus from the Supreme Court, arguing the closure constituted a taking and that it was entitled to compensation from ODOT.

Court Examines Original Transfer
In 1960, the state recorded a plat in the Licking County Recorder’s Office showing its proposed route for the portion of Route 16 that would run through Licking County. At that time, the parcel on the northwest corner of Route 16 and Cherry Valley Road, where the Wendy’s is now located, was owned by Alice Olmstead. In 1961, the state paid Olmstead $23,229 for a permanent highway easement.

The conveyance stated that Olmstead specifically waived and released all rights of direct access to the future highway “as called for by the plans herein referred to.” At the same time, the state also bought a second easement from Olmstead over the eastern portion of her property, an area that was already largely subject to a preexisting easement for Cherry Valley Road. That portion would later include the entrance to the Wendy’s parking lot.

The Route 16 project plan identified a “point of access” at the point on Olmstead’s land where the easements for the future highway and for Cherry Valley Road would intersect.

The portion of the Olmstead property that New Wen purchased did not include land subject to the Route 16 easement, but it did include land subject to the Cherry Valley Road easement. New Wen claims the closure constituted a taking of its property rights — not because ODOT physically took its property, but because it interfered with its right to use the property.

“The evidence here shows that a taking of a property right occurred. A landowner’s right of access to abutting public roadway is [one] of the elemental rights growing out of the ownership of a parcel of real property,” Justice French stated.

Company Entitled to Compensation
ODOT argued that Olmstead was compensated for the state’s right to take away any access to the highway from her property and that New Wen did not acquire any rights that would entitle it to compensation when the state opted to fully close the intersection.

The majority opinion points to the phrase in the easement conveyance stating that Olmstead did not completely relinquish her right to access the highway but only gave up access “as called for by the plans herein referred to.” Because those plans included a point of access to the highway from Cherry Valley Road, Olmstead was not compensated for a taking of her land that included cutting off indirect access to the highway via that intersection.

“The compensation paid in 1961 to Olmsted could not have included damages for the loss of all access to Route 16 because that access was not lost at the time and the project plans expressly guaranteed it,” the opinion stated.

The Court also indicated the payment to Olmsted could not have factored in compensation for a future complete closure of the intersection because damages paid in an eminent-domain award must be for actual losses and not speculative losses from future work.

“If, however, after an initial taking, the state imposes new burdens on the property in the future that were not contemplated in the original plans, the property owner may be entitled to additional compensation,” the opinion concluded.

Landowner Has No Property Right to Highway Entrance, Dissent Stated
In her dissent, Chief Justice O’Connor wrote the majority does not acknowledge the unconditional nature of Olmsted’s complete waiver of highway access rights in 1961, and because New Wen does not hold a right to access the highway, ODOT did not violate that right when it closed the intersection in 2016, meaning the company is not entitled to compensation.

The dissent noted that R.C. 5511.02 defines a limited-access highway as one where property owners abutting the highway have no right of direct access, and that access to the highway is limited to intersections designated by the ODOT director. The plan referenced an intersection at a point on Olmsted’s plan, but the mention of a physical intersection does not mean Olmsted has a property right to access the highway, the dissent stated.

“The majority points to no clear language to that effect in either of the easements granted by Olmsted that are mentioned in the majority opinion. It simply assumes that such a right must have been preserved because of what it presumes the parties foresaw for Route 16 when they agreed to compensation in 1961. That is an odd way to find the reservation of a property right,” the dissenting opinion stated.

The dissent stated the implications of the today’s decision are significant as owners of land abutting limited-access highways may be found to have retained a right to access such a highway even after they expressly waived that right. ODOT’s routine work of maintaining and upgrading limited-access highways could become “much more cumbersome and expensive,” the opinion concluded.

Concurrence Asserts Landowner Never Relinquished All Access to Highway
In her concurring opinion, Justice Kennedy addressed the dissenting opinion’s contention that Olmsted had fully waived her right of access to Route 16.  She noted that the version of R.C. 5511.02 in effect at the time the easements were executed, authorized the ODOT director to establish limited access highways and to extinguish “by purchase, gift, agreement or by condemnation” “existing easements of access.”

She pointed to the Court’s precedent in Rothwell v. Linzell (1955), which held that the language of R.C. 5511.02 authorized, but did not require, the ODOT director to extinguish easements of access to a limited access highway. Therefore, the ODOT director “had discretion to exercise as much or as little authority and power as he saw fit regarding access to a limited-access highway,” the opinion stated.

The concurring opinion noted that the Route 16 easement limited Olmsted’s waiver of her right of direct access “as called for by the plans herein referred to” and the plans identified a “point of access” at the juncture of the Route 16 and Cherry Valley Road easements.

“[T]he state’s taking of Olmsted’s right of access was limited to that which the plans called for and it was only that taking that Olmsted was compensated for,” the opinion stated.

When New Wen acquired a portion of Olmsted’s property covered by the Cherry Road easement, it purchased the point of access called for in the plans. 

The opinion noted that: “[w]herever an easement of access to a highway by an abutting property owner is extinguished, then, to the extent of the inevitable resulting elimination of potential interference with travel on the highway there will necessarily be an increase of the right of use of the highway by the public; and the taking of such an easement of access will therefore be a taking for public use.” 

Because the state could not have compensated Olmsted for the loss of all access to Route 16 as the easement and the plans expressly guaranteed access, and because R.C. 5511.02 grants the ODOT director “reasonable discretion in the exercise of his authority and power regarding access to a limited-access highway,” ODOT deprived New Wen of its “retained right of access” to Route  16 without compensating the company, the concurrence stated, and ODOT must begin the process of determining what is just compensation for its actions.

2017-0813. New Wen Inc. v. Marchbanks, Slip Opinion No. 2020-Ohio-63.

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