181 P.3d 670 (Nev. 2008), 47262, Buzz Stew, LLC v. City of North Las Vegas

Docket Nº:47262.
Citation:181 P.3d 670
Opinion Judge:OPINION By the Court, DOUGLAS, J.:
Party Name:BUZZ STEW, LLC, A Nevada Limited Liability Company, Appellant, v. CITY OF NORTH LAS VEGAS, Nevada, A Municipal Corporation, Respondent.
Attorney:Law Offices of Kermitt L. Waters and Kermitt L. Waters, Autumn L. Waters, and James Jack Leavitt, Las Vegas, for Appellant., Santoro, Driggs, Walch, Kearney, Holley & Thompson and Gregory J. Walch and Stella B. Dorman, Las Vegas, for Respondent.
Case Date:April 17, 2008
Court:Supreme Court of Nevada
 
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181 P.3d 670 (Nev. 2008)

BUZZ STEW, LLC, A Nevada Limited Liability Company, Appellant,

v.

CITY OF NORTH LAS VEGAS, Nevada, A Municipal Corporation, Respondent.

No. 47262.

Supreme Court of Nevada

April 17, 2008

Appeal from a district court order dismissing an inverse condemnation action. Eighth Judicial District Court, Clark County; Douglas W. Herndon, Judge.

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Law Offices of Kermitt L. Waters and Kermitt L. Waters, Autumn L. Waters, and James Jack Leavitt, Las Vegas, for Appellant.

Santoro, Driggs, Walch, Kearney, Holley & Thompson and Gregory J. Walch and Stella B. Dorman, Las Vegas, for Respondent.

BEFORE THE COURT EN BANC.

OPINION

DOUGLAS, J.:

In this appeal, we examine whether a landowner may assert a cause of action for precondemnation damages that arise when a municipality announces its intent to condemn a parcel of land and then unreasonably delays instituting an eminent domain action.1 We conclude that a municipality's announcement of intent to condemn a parcel of land may give rise to a cause of action by the landowner for damages based on allegations that, under the circumstances, the municipality acted improperly in making the announcement before instituting an eminent domain action. In this, we expand our ruling in State, Department of Transportation v. Barsy.2

In addition to the precondemnation damages claim, we also consider claims of inverse condemnation, estoppel, abuse of eminent domain laws, prejudgment interest, severance damages, and attorney fees. For the reasons stated below, we reverse the district court's order to the extent that it dismissed the landowner's claim for precondemnation damages, and we remand this matter to the district court for further proceedings with respect to that claim. We nevertheless affirm the remaining portions of the district court's order dismissing the remaining causes of action.

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FACTS

In 2003, respondent City of North Las Vegas began searching for a suitable location to construct a flood control channel. This search led the City to a 20-acre parcel of land in North Las Vegas owned by appellant Buzz Stew, LLC. Before securing funding for the flood control project, the City made an offer to purchase one acre of Buzz Stew's 20-acre parcel for the project. Buzz Stew declined the offer.

Shortly thereafter, in June 2003, the City adopted a resolution of "need and necessity," announcing its intent to condemn one acre of Buzz Stew's property. Then, in July 2004, Buzz Stew sold its entire 20-acre parcel to a third party for $8,200,000.3

After it sold the 20 acres, Buzz Stew learned that, despite the City's resolution of "need and necessity," the City had determined not to institute an eminent domain action against the property because the City could not secure funding for the flood control project. But the City failed to publicly withdraw or retract its resolution of "need and necessity," including its intent to condemn the one-acre parcel.

Consequently, Buzz Stew filed a complaint in the district court asserting claims for precondemnation damages, inverse condemnation, estoppel, abuse of eminent domain laws, prejudgment interest, severance damages, and attorney fees and costs. The City filed a motion to dismiss the complaint, under NRCP 12(b)(5), asserting that Buzz Stew had failed to state a claim upon which relief could be granted. The district court ultimately granted the City's motion to dismiss, concluding that Buzz Stew had failed to state a claim against the City upon which it could grant relief. This appeal followed.

DISCUSSION

The City's motion to dismiss Buzz Stew's complaint under NRCP 12(b)(5) "is subject to a rigorous standard of review on appeal."4 Accordingly, this court will recognize all factual allegations in Buzz Stew's complaint as true and draw all inferences in its favor.5 Buzz Stew's complaint should be dismissed only if it appears beyond a doubt that it could prove no set of facts, which, if true, would entitle it to relief.6 We review the district court's legal conclusions de novo.7

Precondemnation damages

Buzz Stew's cause of action for precondemnation damages alleges that a landowner is entitled to damages, independent of those resulting from a taking, when the municipality acts improperly with respect to announcing its intent to condemn the landowner's property. We agree and conclude that a landowner may bring a cause of action for precondemnation damages based on allegations that the municipality acted improperly

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in announcing that it intended to condemn the landowner's property.

This court addressed a substantially similar issue in Barsy regarding "whether . . . precondemnation activities of the State entitle [a condemnee] to damages in addition to those resulting from the taking of [its] property."8 In Barsy, we recognized that the assertion of damages in addition to those resulting from a taking requires the condemnee to "demonstrate that the condemnor acted improperly following a precondemnation announcement."9 In this opinion, we expand our conclusion in Barsy to allow a landowner to assert a cause of action for precondemnation damages, independent from those resulting from the taking of its property.

To support a claim for precondemnation...

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