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Ndmontana-Dakota Utilities Co. v. Behm

Supreme Court of North Dakota

May 16, 2019

Montana-Dakota Utilities Co., a Division of MDU Resources Group, Inc., n/k/a Montana-Dakota Utilities Co., a Subsidiary of MDU Resources Group, Inc., Plaintiff, Appellant, and Cross-Appellee
v.
Lavern Behm, Defendant, Appellee, and Cross-Appellant

          Appeal from the District Court of Ward County, North Central Judicial District, the Honorable Gary H. Lee, Judge.

          Anthony J. Ford (argued) and Malcolm H. Brown (appeared), Bismarck, N.D., for plaintiff, appellant, and cross-appellee.

          Lynn M. Boughey, Mandan, N.D., for defendant, appellee, and cross-appellant.

          OPINION

          TUFTE, JUSTICE.

         [¶1] Montana-Dakota Utilities Co. ("MDU") appeals, and Lavern Behm cross-appeals, from a judgment dismissing MDU's eminent domain action. Because the district court misapplied North Dakota law in concluding a taking was not necessary for a public use, we reverse and remand for trial on eminent domain damages to be awarded to Behm.

         I [¶2] MDU brought an eminent domain action under N.D.C.C. ch. 32-15 to acquire an easement across Behm's property for a 3, 000-foot natural gas pipeline to service a Burlington Northern Santa Fe ("BNSF") railroad switch. The railroad switch must be heated to keep it operable during winter months. The switch is currently heated using propane from tanks that are serviced and refilled by truck. Winter weather occasionally prevents service trucks from accessing the tanks to refill the propane. BNSF requested service from MDU by gas pipeline, believing that natural gas by pipeline would increase reliability and decrease the cost associated with heating the switch. MDU claimed that other routes for the pipeline would be too expensive or might in the future require modification or removal of the pipeline.

         [¶3] The district court bifurcated the proceedings between necessity and damages. Following a bench trial, the district court concluded that the "proposed pipeline is . . . a use authorized by Section 32-15-02, NDCC," but that a taking of Behm's property was not necessary for the public use under N.D.C.C. § 32-15-05. Relying on an 1883 California case for the proposition that "necessity cannot mean mere convenience," the court explained:

MDU's proposal is to place a 3000 foot pipeline beneath Lavern Behm's property for the benefit of a single user, Burlington Northern Santa Fe. While it is certainly not subject to dispute that maintaining railway switches is a necessity to the safe operations of the railroad, the construction of this pipeline is not necessary for this purpose. The current switch has been, and can continue to be maintained through the use of propane. The proposed pipeline serves only the convenience of a single user, Burlington Northern Santa Fe, while imposing a permanent restriction on Lavern Behm's use of his private property. The location of the proposed pipeline further stretches the meaning of necessity to mean mere convenience to MDU. That convenience is not even a present convenience, but one of a future, highly speculative convenience.
The proposed taking [of] Lavern Behm's property for the purpose of this pipeline is thus premised on a project to benefit a single user, Burlington Northern Santa Fe. It is to be placed on Lavern Behm's property, a mere 5 feet from the existing 33 foot section line right [of way]. That placement is deemed necessary by MDU based on the speculative fear of a future event which may never occur, and even if it does, may not necessitate the repair or replacement of the pipeline. The necessity proposed by MDU is nothing more than its own mere convenience.
Contrasted to this are Lavern Behm's rights to own his property and to farm or otherwise develop it as he sees fit, without the burden of this easement. The burden on Lavern Behm is immediate and permanent as opposed to the uncertain and speculative necessity argued by MDU.
The Court therefore finds that the proposed taking and pipeline route is not compatible with the greatest public benefit when weighed against the immediate and permanent private injury to Lavern Behm.

         The court further concluded that "[t]his one-sided analysis by MDU, resolving all uncertainties and speculations in its favor, and without consideration of Lavern Behm's rights of ownership is arbitrary and capricious."

         II

         [¶4] MDU argues the district court's ruling that the proposed taking was not ...


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