Cardon Oil Co. v. City of Phoenix

• Decision Date: 28 March 1979
• Docket Number: No. 13557,13557
• Citation: 593 P.2d 656,122 Ariz. 102
• Parties: CARDON OIL COMPANY, an Arizona Corporation, and Cardon Investments, a partnership, Appellants, v. CITY OF PHOENIX, a municipal corporation, Appellee.
• Court: Arizona Supreme Court

Page 656

593 P.2d 656

122 Ariz. 102

CARDON OIL COMPANY, an Arizona Corporation, and Cardon Investments, a partnership, Appellants, v. CITY OF PHOENIX, a municipal corporation, Appellee.

No. 13557.

Supreme Court of Arizona, In Division.

March 28, 1979.

Rehearing Denied April 24, 1979.

Gove L. Allen, Mesa, for appellants.

Andy Baumert, III, Phoenix City Atty. by Edward P. Reeder, Asst. City Atty., Phoenix, for appellee.

HOLOHAN, Justice.

Appellant Cardon Oil Co. brought an action against the city seeking a declaratory judgment that the city's rezoning of appellants' property was invalid, or in the alternative asking for damages for the taking of its property by inverse condemnation. The trial court entered judgment in favor of the City of Phoenix on both counts, and Cardon appeals. We have jurisdiction pursuant to 17A A.R.S. Rules of Civil Appellate Procedure, rule 19(e).

In 1967 Cardon Oil Company purchased a lot at the corner of 48th Street and Broadway, a short distance from the 48th Street off ramp of the Maricopa Freeway. Cardon built a service station on the lot. In order to draw freeway traffic to the station, Cardon planned to erect a sign near the freeway off ramp. At the time it purchased the station lot it contracted with the owner to buy a 10' X 60' parcel of land next to the freeway. When Cardon purchased the 10' X 60' lot, that land and the adjacent property to the west was zoned for industrial use. The east edge of the lot bordered upon a 120-foot-wide utility easement zoned for residential use.

About a year later the surrounding land was purchased by Hallcraft Homes Corp. Hallcraft planned to build condominiums on its land, and for that reason the area west of the easement was rezoned for residential use. The 10' X 60' lot remained industrial, but was now totally surrounded by residential land. Shortly after the Hallcraft land was rezoned, Cardon applied to the City of Phoenix for a variance to erect a sign. The variance was necessary because a city ordinance prohibited illuminated signs which would be visible from residences, and it required signs to be set back from lot lines abutting on residential property. When Cardon made its first application for a variance, the zoning ordinances would have permitted only a ten-foot-high, nonilluminated sign. Cardon wanted to erect a 48-foot illuminated sign. The city denied its request. Cardon appealed to the superior court. The city argued that the variance was not necessary because other signs in the area had been erected which stood only 20 to 25 feet in height. The superior court denied Cardon's petition without prejudice to the right of Cardon to file a new application for variance.

In January 1972, while Cardon's first request for variance was pending, city planning officials recommended that the 10' X 60' lot be rezoned residential. No formal action was taken at that time.

Following the superior court's decision, Cardon applied for a second variance. This application was a more modest request for a 20-foot-high, nonilluminated sign. This request was denied on January 16, 1973. That same day Cardon asked the subdivision committee to approve the lot split which had created the 10' X 60' lot several years earlier. (City planners had noted repeatedly in the earlier proceedings that this approval had never been obtained.) Two months later the committee approved that lot split. City planning officials immediately responded to this by formally seeking to have the 10' X 60' lot rezoned residential. Cardon objected to the rezoning, and no one other than city planning officials spoke in support of it. Nevertheless, on November 8, 1973, the city rezoned the 10' X 60' lot for residential use, making it impossible for Cardon to obtain a variance to erect any sign. ¹ Cardon then brought an action in superior court, setting forth four claims for relief. The first and the fourth involved defendants other than the City of Phoenix and were disposed of by summary judgment in favor of those defendants. From those judgments no appeal was taken. The second claim sought a declaratory judgment allowing Cardon to erect a sign 20 feet high on the property. The third claim alleged in the alternative that the rezoning of Cardon's property to residential use amounted to a taking of the property for which Cardon was entitled to compensation under the theory of inverse condemnation.

The trial court granted the city's motion for summary judgment on the third claim, and tried the second claim without a jury. In a post-trial memorandum, Cardon modified its request for declaratory judgment, asking that the court merely find the rezoning of its property invalid. ² The court found the rezoning to be a valid exercise of the police power and denied relief to Cardon.

Cardon preserved its right to appeal the court's decision on both the second and third claims. In their brief, however, the appellants have limited their discussion to the second claim. Therefore the only issue properly before this court is whether the rezoning of the 10' X 60' lot was a valid exercise of the police power.

Zoning is a legislative act. City of Phoenix v. Fehlner, 90 Ariz. 13, 363 P.2d 607 (1961). The court's role is not to pass judgment upon the wisdom of a zoning decision, but merely to scrutinize the act to determine that it meets constitutional standards. City of Phoenix v. Oglesby, 112 Ariz. 64, 537 P.2d 934 (1975). The principal constitutional test applied to zoning decisions is whether the zoning bears any substantial relation to the public health, safety, morals or general welfare. City of Tucson v. Arizona Mortuary, 34 Ariz. 495, 272 P. 923 (1928). When zoning power is used in such a way that the attempted regulation amounts to a "taking" of property, the zoning ordinance runs into direct conflict with A.R.S. Const. art. 2, § 17, which prohibits government from taking private property without just compensation to the owner.

A mere decrease in property value caused by rezoning does not constitute a taking.

"To establish that the (zoning ordinance) is confiscatory in effect, it must be shown that the zoning restrictions prevent the use of the property for any purpose to which it reasonably might be adapted." City of Phoenix v. Oglesby, 112 Ariz. at 66, 537 P.2d at 936.

In the present case the trial court found that the property in question had some use prior to the rezoning. The effect of rezoning the property was to render it useless. This amounts to a confiscation of property without compensation, making the attempted rezoning void. City of Phoenix v. Oglesby, supra; Davis v. Pima County, 121 Ariz. 343, 590 P.2d 459 (Ct.App.1978). Prior to this rezoning the city had already taken steps that it apparently considered adequate to protect residential areas by establishing setback requirements and limits on illumination of signs abutting residential properties. See Phoenix City Code § 29-54(e)(4) and (9). To single out appellants' property and rezone it as added...