AVSG v. Board of County Com'rs of La Plata

• Decision Date: 17 December 2001
• Docket Number: No. 00SC151.,00SC151.
• Citation: 38 P.3d 59
• Parties: ANIMAS VALLEY SAND AND GRAVEL, INC., a Colorado corporation, Petitioner/Cross-Respondent, v. BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF LA PLATA, Colorado, Respondent/Cross-Petitioner.
• Court: Colorado Supreme Court

38 P.3d 59

ANIMAS VALLEY SAND AND GRAVEL, INC., a Colorado corporation, Petitioner/Cross-Respondent, v. BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF LA PLATA, Colorado, Respondent/Cross-Petitioner.

No. 00SC151.

Supreme Court of Colorado, En Banc.

December 17, 2001.

Rehearing Denied January 14, 2002.¹

Abadie & Zimsky, LLC, William E. Zimsky, Durango, CO, Attorneys for Petitioner/Cross-respondent.

Goldman, Robbins & Rogers, LLP, Michael A. Goldman, Jeffrey Robbins, Durango, CO, Attorneys for Respondent/Cross-petitioner.

Carolynne C. White, Denver, CO, Attorney for Amicus Curiae Colorado Municipal League.

Hall & Evans, LLC, Josh A. Marks, Melanie B. Lewis, Denver, CO, Attorneys for Amicus Curiae Colorado Counties Inc.

Grimshaw & Harring, P.C., Wayne B. Schroeder, Denver, CO, Attorneys for Amicus Curiae Peter C. Droste.

Hayes, Phillips & Maloney, P.C., John E. Hayes, Denver, CO, Attorneys for Amicus Curiae American Planning Association.

Bart Miller, Boulder, CO, Attorney for Amicus Curiae (Conservation Group): Clean Water Action (CWA); Colorado Environmental Coalition (CEG); Colorado Wild; Co-PIRG Citizen Lobby (CoPIRG); National Audobon Society; San Juan Citizens Alliance (Alliance); Western Colorado Congress (WCC); Western Slope Environmental Resource Council (WSERC).

Chief Justice MULLARKEY delivered the Opinion of the Court.

This case involves the effect of a county land use plan on real property lying within a river valley in La Plata County. The landowner, a sand and gravel company, initiated an inverse condemnation action against the county. The company alleged that the restrictions placed on its property, pursuant to the plan, result in a compensable taking. In this opinion, we apply the United States Supreme Court decision, Palazzolo v. Rhode Island, 533 U.S. 606, 121 S.Ct. 2448, 150 L.Ed.2d 592 (2001), issued after the court of appeals' decision in this case. Animas Valley Sand & Gravel, Inc. v. Bd. of County Comm'rs, 8 P.3d 522 (Colo.App.2000). Palazzolo makes clear that a two-tiered takings inquiry applies to a regulatory takings claim. First, a court must determine whether the landowner has proved a per se takings claim either by showing that the regulation has no legitimate purpose, or by showing that the regulation leaves his or her land without reasonable economic value. Second, if a landowner fails to prove a per se taking, the landowner still may be able to prove a taking occurred under a fact-specific inquiry.

Furthermore, in this opinion, we address the appropriate scope of a takings inquiry. We hold that a court must look to the regulation's effect on the entire parcel owned by the landowner. Thus, it is inappropriate to limit a takings inquiry solely to one particular right in the land, or, to a particular part of the land.

Because the court of appeals erred by deciding that the economic viability test is dispositive and by focusing only on the portion of the landowner's property most severely affected by the regulation, we reverse and remand.

I.

In 1961, Animas Valley Sand and Gravel (AVSG) purchased 46.57 acres of real property in La Plata County, Colorado. AVSG intended to use the land for sand, gravel, and heavy mineral mining. At the time of purchase, no county, state, or federal regulations governing sand and gravel operations existed.

In 1979, AVSG divided the original property into two tracts: Tract A, comprising 4.65 acres, and Tract B, comprising 41.92 acres. AVSG then sold Tract A to James Hanks, who is currently the president and majority shareholder of AVSG. Tract B remains under AVSG's ownership and is the parcel at issue here. In 1993, La Plata County (the county) adopted the Animas Valley Land Use Plan (the plan). The plan sought to regulate development and activities within certain areas out of concern for flood control and also aesthetic concerns likely aimed at increasing tourism. At that time, AVSG had a permit to mine roughly eight acres of Tract B and two acres of Tract A. The county designated these ten acres as "industrial district" land (Industrial property) pursuant to the plan. Under this designation, AVSG is permitted to continue its sand and gravel operation. The county designated the remaining acreage as "river corridor district" land (River Corridor property). Although some agricultural, residential, professional office, and tourism uses are permitted (either by right or by special permit), mining of sand, gravel, and heavy minerals is not permitted on land with this designation.

Following the county's categorization of the parcel, AVSG requested that the county designate all of Tract B, rather than merely eight acres of it, as Industrial property. The county denied this request. AVSG then sought relief in the district court, pursuant to C.R.C.P. 106(a)(4). The district court denied AVSG's request for certiorari relief, as well as its subsequent motion to reconsider. No appeal was taken from this judgment.

Thereafter, AVSG filed a second lawsuit claiming inverse condemnation pursuant to the Colorado Constitution. AVSG asserted that the mineral estate on the thirty-three acres of River Corridor property is rendered economically idle by the plan. In the alternative, AVSG argued that even if a reasonable economic use remains, a compensable taking still should be found under a fact-specific inquiry because the plan goes too far. After a two-day bench trial, the trial court determined that the plan did not effect a compensable taking. The court focused its inquiry on the River Corridor property but looked at the plan's effect on that property without separating out the effect on the mineral rights. The court determined that a regulation must foreclose all reasonable use of the property for it to effect a taking. It held that because AVSG failed to prove that the plan rendered the River Corridor property economically idle, the plan did not effect a taking.

AVSG appealed the trial court's decision to the court of appeals. The court of appeals agreed with the trial court's definition of the property at issue — agreeing that while certain rights in the land may not be severed, the land may be geographically severed to ascertain the economic viability of the most severely affected portion of the land. Animas Valley, 8 P.3d at 525. Moreover, the court agreed with the trial court's determination that a taking can only occur when there is a total deprivation of reasonable use. Id. The court of appeals remanded the case, however, because it determined that the trial court may have placed an inappropriate burden of proof on AVSG.² Id.

AVSG petitioned this court to review the decision of the court of appeals, asserting that the court erred in holding that the economic use test is dispositive in a regulatory takings claim and in refusing to examine mineral rights separately. The county filed a cross-petition asserting that the court of appeals erred in limiting its focus only to the River Corridor property rather than examining the plan's effect on Tract B as a whole. We granted certiorari.³

II.

Inverse condemnation is a claim for relief brought by a landowner against a government defendant in which the landowner seeks compensation for a taking of its property, even though the governmental entity has not instituted formal condemnation proceedings. A taking may be effected by the government's physical occupation of the land or by regulation. While a landowner is not entitled to the most beneficial use of his or her land, see Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 125, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978); Goldblatt v. Town of Hempstead, 369 U.S. 590, 592, 82 S.Ct. 987, 8 L.Ed.2d 130 (1962); Van Sickle v. Boyes, 797 P.2d 1267, 1271 (Colo.1990); Sellon v. City of Manitou Springs, 745 P.2d 229, 234 (Colo. 1987), extensive regulatory interference warrants compensation.⁴ Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 67 L.Ed. 322 (1922) ("The general rule at least is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.").

Takings jurisprudence balances the competing goals of compensating landowners on whom a significant burden of regulation falls and avoiding prohibitory costs to needed government regulation. Compare Krupp v. Breckenridge Sanitation Dist., 19 P.3d 687, 695 (Colo.2001) ("The Takings Clause assures that the government may not force `some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'") (citing Dolan v. City of Tigard, 512 U.S. 374, 384, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994)), with Mahon, 260 U.S. at 413, 43 S.Ct. 158. ("Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law.").

Both the federal and the Colorado constitutions include takings clauses. The federal takings clause provides, "nor shall private property be taken for public use, without just compensation." U.S. Const. amend. V. This provision is applicable to the states through the Fourteenth Amendment. Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 239, 17 S.Ct. 581, 41 L.Ed. 979 (1887). The Colorado takings clause provides, in relevant part, "[p]rivate property shall not be taken or damaged, for public or private use, without just compensation." Colo. Const. art. II, § 15.

Because AVSG brought this claim pursuant to the Colorado Constitution only, it is first necessary to address the scope of Article II, section 15 of the Colorado Constitution as compared to that of the Fifth Amendment of the Federal Constitution. This court has interpreted the "damage" language in Colorado's takings clause to provide broader rights than does the federal clause but only insofar as it allows recovery to landowners whose land has been damaged by "the making of . . . public improvements abutting their lands, but whose lands...