Arizona Water Co. v. City of Yuma
| Decision Date | 17 January 1968 |
| Docket Number | No. 1,CA-CIV,1 |
| Citation | 7 Ariz.App. 53,436 P.2d 147 |
| Parties | ARIZONA WATER COMPANY, a corporation, Appellant, v. CITY OF YUMA, a municipal corporation, Appellee. 494. |
| Court | Arizona Court of Appeals |
Benton & Case, Yuma, and Fennemore Craig, von Ammon, McClennen & Udall, by Kent A. Blake, Phoenix, for appellant.
John B. Wisely, Jr., City Atty. City of Yuma, and Powers & Rehnquist, by William H. Rehnquist, Phoenix, for appellee.
This appeal involves a condemnation action brought by the appellee, City of Yuma, hereinafter referred to as The City, against the appellant, Arizona Water Company, hereinafter referred to as The Company, to condemn the waterworks system, including all plant, property and water rights used in distributing domestic water used in the City of Yuma, Arizona, and environs. There was no issue raised as to the right of condemnation. The sole issue in dispute was the amount of just compensation which The Company was entitled to receive.
The Company is an Arizona corporation, privately owned, engaged in the distribution and the sale of water for domestic, industrial and commercial uses in the State of Arizona. Yuma is the largest City in the State served by The Company, and the properties, customers and volume of business in Yuma represented about 1/3rd of the entire properties of The Company. The Company has one or more certificates of convenience and necessity from The Arizona Corporation Commission. The Company has a central office located in Phoenix at which location it has a staff which performs centralized billing, accounting, engineering, purchasing and other functions normally handled by a central office.
In September, 1960, at an election held, the voters of the City of Yuma approved the acquisition of the Company's water utility plant serving The City. Some two years later this action was brought in the Superior Court for Yuma County by The City for the purpose of condemning The Company's utility plant. The action was tried in February, 1966. In May 1966, the trial court entered a judgment based upon the verdicts which the jury had returned at the close of the trial.
Counsel, by written stipulation, agreed that the reproduction cost, new, of the supply and distribution system and the general plant of The Company in Yuma and environs, as of 31 December 1962, was $6,461,829.00, and that the reproduction cost less depreciation on the same date was $4,822,542.00. The stipulation specifically excluded the value of The Company's water rights, going concern value, and severance damages. By stipulation the matter of the value of additions to the water system which were made after 31 December 1962 was reserved for determination in a proceeding to be conducted after the conclusion of the trial in question. These matters are not before the Court. At the trial there was evidence bringing forward the 31 December 1962 stipulated values to the date of trial, the trial date being the controlling date under the statute hereinafter quoted. At the trial there was also evidence as to the value of the items specifically excluded from the stipulation above referred to. The guiding principle before the trial court in setting the amount of compensation was A.R.S. § 9--518 Subsection B, which provides:
This statute was added by the Laws of 1962 and is significantly different from the general real property condemnation statutes.
During the trial, three valuation experts expressed opinions as to the total amount of compensation which The Company was entitled to be paid. There was a substantial difference of opinion as to value expressed by The City's valuation witness and the opinions as to value expressed by The Company's two valuation witnesses. Ernest North, testifying for The Company, stated that in his opinion the fair and equitable value of the properties of the Arizona Water Company in Yuma includng going concern value and all other items exclusive of severance damages, was $5,822,000. He further estimated severance damages as $200,000. John Luthin, also testifying for The Company, fixed compensation at $5,744,000, including in that figure the sum of $300,000 as severance damages. As will be pointed out later, the Court reduced the amount of his opinion as to severance damages from $300,000 to $200,000. William Patterson, testifying for the City, fixed the amount of compensation at $4,300,000 and included in this figure the sum of $10,000 for severance damages.
The jury returned a verdict in the amount of $4,999,213 and by separate verdict stated that the amount of severance damages included in the larger figure was $50,000. The Company then appealed seeking a review of several rulings made by the trial court.
First, The Company contends that it was entitled to a change of venue because a substantial portion of the jury were customers of The Company, therefore, the amount of the verdict would directly affect their water rates after The City took over The Company. A motion for change of venue was filed pursuant to the provisions of A.R.S. § 12--406. Change of venue under this section is not a matter of right but is within the sound discretion of the court. A.R.S. § 12--408 provides for a change of venue by the opposite party when a county is a party. The Company does not contend that this section is applicable when a municipal corporation is a party. The Company does contend that the reason for granting a change of venue, as a matter of right when the county is a party, is applicable to this case. The Company points out that The City of Yuma had a population greater than the entire remaining population of Yuma County; that the acquisition of the water properties of the appellant was of major importance to the residents of Yuma and that many headline stories and front page editorials were written and published in the Yuma newspapers in connection therewith; that the bonds to be issued by The City for the purchase of The Company's properties will be revenue bonds and that the water rates set by The City must be sufficient to pay all bonds and interest thereon plus all other expenses of operating the waterworks; that nine of the eleven jurors who (on stipulation) determined the compensation to be paid for the water properties were customers of the appellant. Whether a change of venue should have been granted on the basis that The City constituted such a large part of the county that the reasoning behind A.R.S. § 12--408 should be applied in refuted by the case of Riverside County Flood Control & Water Conservation District v. Joseph W. Wolfskill Company, 147 Cal.App.2d 714, 306 P.2d 22 (1957), in which the appellant had sought a change of venue against a county-wide flood control district under a statute somewhat similar to A.R.S. § 12--408. The California court said that this was a legislative and not a judicial problem. This reasoning is applicable to our case also. The Legislature specified 'county' in the statute tending to indicate that if less than the whole county were involved, no change of venue could be had as a matter of right.
As to the adverse newspaper publicity, all the articles attached to the exhibits were dated 1960. The case wasn't actually tried until February 1966. The articles were directed to the issue as to whether the voters should approve The City's decision to condemn The Company's property. Due to the nature of the publicity and the remoteness from the date of trial it does not appear that it was sufficient to allow a change of venue. In order to support a change of venue, newspaper publicity must be widespread and close to the time of the trial. Pennsylvania Railroad Company v. City of Reading, 254 Pa. 110, 98 A. 791 (1916).
As to the contention that there should have been a change of venue because the jurors had an interest as taxpayers in seeing that the award was kept to a low amount, the case of City of Prescott v. Sumid, 30 Ariz. 347, 247 P. 122 (1926) appears to be controlling. In that case the Supreme Court of Arizona recognized the majority rule to be that in an action against a municipality, a taxpayer thereof is disqualified from sitting on a jury. However, the court declined to follow this rule and said that the mere showing that a prospective juror was a taxpayer was not...
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