Franciscan, under their former name St. Francis, planned a campus near Fairview Road and State Road 37 as pictured in 2010. The Indiana Supreme Court has ruled Franciscan and the owners of a nearby CVS Pharmacy shouldn’t have be awarded damages due to a a change in traffic flow as a result of the construction of Interstate 69. Daily Journal File Photo
Indiana’s highest court has ruled the damages awarded to two businesses negatively affected by a road closure for Interstate 69 in White River Township in a lawsuit were invalid.
In a 5-0 decision, the Indiana Supreme Court ruled Thursday that the more than $2 million in damages awarded by a Johnson Superior Court 4 jury to Franciscan Alliance Inc. and SCP 2010-C36-018 LLC and against the state of Indiana were incorrect, reversing the judgment. Justices also ruled that another hearing take place to determine the amount of compensation owed to Franciscan for the land taken for I-69 due to differing appraisal amounts.
Chief Justice Loretta H. Rush wrote the opinion, with four other justices — Christopher M. Goff, Mark S. Massa, Derek R. Molter and Geoffrey G. Slaughter — concurring.
The circumstances of the case filed by Franciscan and SCP stems from proceedings which started in 2019, when the state began the eminent domain process to seize 0.632 acres of land owned by Franciscan in White River Township for the I-69 Finish Line project, also leading to the closure of Fairview Road near State Road 37.
In 2020, Johnson Superior 4 Judge Marla Clark ruled the state was legally entitled to take the land, appointing three appraisers to determine the amount of compensation due. After the appraisers valued the amount of damages to Franciscan at nearly $2 million, the state filed exceptions to the report and demanded a jury trial, according to court documents.
Franciscan argued the closure of Fairview Road “consequently altered the traffic flow” to their existing undeveloped land and an adjacent CVS Pharmacy owned by SCP. Franciscan also claimed the closure of the road “resulted in a loss of access to its property,” while an appraiser for SCP testified during a three-day jury trial in 2022 that the loss of easy access would “doom” the CVS store, according to court documents.
A Superior Court 4 jury ultimately determined Franciscan and SCP were owed money, with Franciscan awarded $680,000 and SCP awarded $1.5 million in damages. The state appealed the damage awards to the Indiana Court of Appeals in December 2022, questioning whether the inconvenience associated with traffic flow was a “compensable injury.” State officials believed it was not, and asked for the appellate court to reduce the damage awards to $47,400, according to court documents.
They also highlighted Indiana Supreme Court precedent, which said damages associated with “traffic flow variations are not compensable,” court documents say.
The Court of Appeals reversed the damage award in a unanimous 3-0 opinion on Nov. 28, 2023, claiming the issue was a “textbook illustration of the traffic-flow rule.” They also ruled that Franciscan still had access to State Road 37 even though construction added more travel distance to get to it, the opinion shows.
Judges also said the jury’s award reflected non-compensable damages, according to the opinion.
Both Franciscan and SCP appealed the decision to the Supreme Court in January, asking justices to re-evaluate the traffic-flow rule, along with how much damage the construction did to their businesses. The state asked the Supreme Court to deny the transfer to the court, saying Franciscan and SCP “provided no basis” to re-visit the appellate decision, court documents show.
The case was ultimately transferred to the Supreme Court in April, and justices heard arguments in the case earlier this year before rendering their decision Thursday.
In the Supreme Court ruling, Chief Justice Rush wrote that neither Franciscan’s nor SCP’s damages from the Fairview Road closure were based on the state’s taking of Franciscan’s land or on any changes to either property’s entry and exit points. Instead, these damages resulted only from traffic being either “diverted from their properties or made to travel a longer route to and from the highway.”
The change in traffic flow is not a deprivation of a property right, so the damages awarded from the intersection closure were not compensable, Rush wrote.
“Thus, the trial court committed reversible error in admitting Franciscan’s and SCP’s evidence of damages related to the intersection closure, as that evidence led to the jury awarding both parties non-compensable damages,” she wrote.
As for the new hearing on damages, none have been set yet.
A Franciscan spokesperson was unable return a request for comment before deadline.
