Is an inverse condemnation action available to landowner who is in process of being condemned for highway purposes by State of Tennessee for land contiguous to land being condemned and now used by state? Area presently used for highway was never condemned and expressly granted to state. Highway constructed circa 1930-1933?

The statute of limitations for inverse condemnation is one year from the time the taking was discovered or should have been discovered. See TCA 29-16-124. So it sounds like the landowner is out of luck.

The taking to this point in time was an easement. The State is now taking a fee simple. Can they convert an easement into a fee simple without compensating the landowner?

I don't think they can. It may be hard to determine what the landowner's damages are, though. You might look at the Buhl v. U.S. Sprint ( Tenn. 1992). I don't have the citation, but it's reported. That case isn't directly on point, but it may give you some ideas. There, the Supreme Court held that a railroad had to compensate the landowner when it granted a subeasement.