888 N.W.2d 217
S.D.2016Background
- Carlyle Schliem (owner) and Farmers State Bank (mortgagee) sued the State for inverse condemnation after the State reconstructed I-90/Cliff Avenue in Sioux Falls and closed the nearby intersection at 63rd Street and Cliff Avenue.
- The State did not take any of Schliem’s parcels; it did purchase other nearby lots and altered local street connections by connecting two segments of 63rd Street, increasing the driving distance from Schliem’s property to the nearest intersecting highway by about 86 feet.
- Schliem produced appraisals claiming the property’s market value fell from $464,800 to $151,000 and argued the closure destroyed commercial accessibility, changed highest-and-best-use, and impaired his access/assemblage rights.
- The circuit court converted motions to dismiss into cross-motions for summary judgment, concluded Schliem failed to identify a recognized property right that was taken or damaged, and granted summary judgment for the State.
- The Supreme Court reviewed de novo whether a recognized property interest was infringed (i.e., whether access was destroyed or substantially impaired) and whether any injury was peculiar to Schliem’s land.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether State conduct effected a compensable "taking or damaging" under Art. VI, §13 | Schliem: closure of intersection destroyed commercial accessibility and substantially impaired access, causing major devaluation | State: no property interest was taken; only minor circuity (86 ft) and reasonable alternative access to the highway system remains | Held for State: mere diminution in value is insufficient absent an infringement of a recognized property right |
| Whether Schliem had a legal right to access the specific intersection (right to a particular route) | Schliem: claimed legal interest in direct access to the intersection via 63rd St. | State: nonabutting owner has no right to a particular route; only right to reasonable access to the public road system | Held for State: nonabutting owner has no right to a particular access route; only reasonable access to system is protected |
| Whether replacement access was unreasonable / access was substantially impaired | Schliem: replacement routes are unreasonable; assemblage and highest-and-best-use were destroyed | State: alternative access via National/Gulby (and other routes) preserves reasonable access; increased circuity trivial | Held for State: increase of ~86 feet and otherwise similar physical access does not substantially impair access; no compensable injury |
| Whether alleged injury was peculiar to plaintiff’s land (required if no physical taking) | Schliem: devaluation and changed use (commercial to industrial) are peculiar and compensable | State: any loss is general diversion/circuity affecting public and nearby owners, not special injury | Held for State: injury is not peculiar; property not landlocked and remains accessible, so no compensation due |
Key Cases Cited
- Hurley v. State, 82 S.D. 156, 143 N.W.2d 722 (1966) (access right protected for abutting landowners; compensation only when access is destroyed or materially impaired)
- Hyde v. Minn., Dak & Pac. Ry. Co., 29 S.D. 220, 136 N.W. 92 (1912) (mere diminution in value does not entitle owner to compensation absent infringement of a legal right)
- Darnall v. State, 79 S.D. 59, 108 N.W.2d 201 (1961) (diversion of traffic and ordinary circuity of travel are generally noncompensable)
- Hall v. State ex rel. S.D. Dep’t of Transp., 2006 S.D. 24, 712 N.W.2d 22 (2006) (court must consider whether reasonable access remains and whether state action was arbitrary; validity of state purpose may be separately relevant)
- Miller & Walsh, 2016 S.D. 88, 889 N.W.2d 141 (2016) (articulates factors for evaluating substantial impairment: nature of property, character of access before and after, location, and whether access essential to intended use)
- Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005) (clarifies inquiry into purpose of regulation is distinct and logically prior to takings analysis)