New Case Summary — Schroeder Investments, LC v. Edwards & UDOT

Supreme Court of Utah

2013 UT 25 (Click for full text of Opinion)

May 3, 2013

          The Utah Supreme Court considered an application of the “more necessary public use” provision of Utah’s eminent domain statute, and rejected an expanded version of the so-called “compatible use exception” to that provision.

          Schroeder Investments hoped to develop its property but needed a wider access road.  Schroeder initiated a condemnation action to acquire the needed width, but, before the action was resolved, UDOT purchased the property for a detention pond.  Schroeder continued its condemnation action against UDOT.  UDOT moved to dismiss the condemnation action, under the “more necessary public use” provision, found at 78B-6-504(1)(d) which states that property already appropriated to a public use cannot be taken through eminent domain, unless the proposed use is a “more necessary public use.”

          Schroeder conceded that UDOT’s detention pond was “more necessary” than its proposed private access road, but claimed it qualified for the “compatible use” exception.  Schroeder argued that is was possible to accommodate both the road and the detention pond, if UDOT modified its design.  Schroeder offered to give UDOT a portion of its property for the modified pond, in exchange for the access road.  Schroeder also offered to reimburse UDOT for plan and design modifications.

          The Supreme Court rejected Schroeder’s argument that the “compatible use” exception applied because the road and the detention pond could coexist, if UDOT accepted Schroeder’s proposal to modify the pond to allow space for the road.  In other words, Schroeder claimed the right to condemn the property because it was willing to compensate UDOT for the road.  The Court explained that the “compatible use” exception applied only when there was property available to use or condemn, and the exception did not become available through a willingness to pay for modifications to the other use.

          The Court illustrated its holding through two Utah cases from the early 1900s.  In the first, a telegraph company sought to condemn an easement along the edge of a railroad company’s right-of-way.  The Utah Supreme Court held that since the railroad was not using its full right-of-way, the unused portion was available for condemnation.  Furthermore, the telegraph lines could be installed and used without affecting the railroad’s use of the right-of-way.

          The second case concerned a mining tunnel that had excess capacity.  A different mining company sought to condemn an easement to use the tunnel.  The additional use could be carried out with some minor modifications to the original owner’s use.  The Court in that case held that the excess capacity of the tunnel was available for condemnation.

          In Schroeder’s case, the Court held that since there was no excess or unused property available, there was no property to condemn, and the “compatible use” exception did not apply.  Schroeder’s willingness to pay to have the pond modified did not qualify for the exception.

          It is noteworthy that the Court did not determine that UDOT’s retention pond was “more necessary” than Schroeder’s access road, because Schroeder conceded that point.  This case does not preclude the parties from reaching an agreement to modify the pond and allow the access road.  However, Schroeder may not use eminent domain to force UDOT to modify the pond and transfer the road easement.

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