City of Phx. v. John E. Garretson of the Emery E. Oldaker Trust

• Decision Date: 17 April 2014
• Docket Number: No. CV–13–0181–PR.,CV–13–0181–PR.
• Citation: 322 P.3d 149,234 Ariz. 332,684 Ariz. Adv. Rep. 22
• Parties: CITY OF PHOENIX, a municipal corporation, Plaintiff/Appellee, v. John E. GARRETSON as Trustee of the Emery E. Oldaker Trust, dated July 30, 1966; John E. Garretson, an unmarried man, Defendant/Appellant.
• Court: Arizona Supreme Court

234 Ariz. 332

322 P.3d 149

684 Ariz. Adv. Rep. 22

CITY OF PHOENIX, a municipal corporation, Plaintiff/Appellee,

v.John E. GARRETSON as Trustee of the Emery E. Oldaker Trust, dated July 30, 1966; John E. Garretson, an unmarried man, Defendant/Appellant.

No. CV–13–0181–PR.

Supreme Court of Arizona.

April 17, 2014.

Charles K. Ayers (argued) and Stephanie Heizer, Ayers & Brown PC, Phoenix, for City of Phoenix.

Dale S. Zeitlin (argued), Zeitlin & Zeitlin PC, Phoenix, for John E. Garretson and John E. Garretson, as Trustee of the Emery E. Oldaker Trust.

Barbara Lawall, Pima County Attorney, Regina L. Nassen and Andrew L. Flagg, Deputy Pima County Attorneys, Tucson, for Amicus Curiae Pima County.

William F. Bock, League of Arizona Cities and Towns, Phoenix, for Amicus Curiae League of Arizona Cities and Towns.

Thomas C. Horne, Attorney General, Robert L. Ellman, Solicitor General, Joe Acosta, Jr. (argued), and Bryan B. Perry, Assistant Attorneys General, Transportation Section, Phoenix, for Amicus Curiae Arizona Department of Transportation on behalf of John Halikowski, Director.

Justice PELANDER authored the opinion of the Court, in which Chief Justice BERCH, Justice BRUTINEL, Justice TIMMER, and Judge HOWARD ^* joined.

Justice PELANDER, opinion of the Court.

¶ 1 The issue in this case is whether a property owner may be entitled to compensation if the government, in the exercise of its police power, eliminates the owner's established access to an abutting roadway. We hold that under those circumstances an owner may claim compensable damage to private property within the meaning of Article 2, Section 17 of the Arizona Constitution, even if other streets provide access to the property.

I.

¶ 2 The superior court granted the City of Phoenix's motion for partial summary judgment. We therefore view the facts in the light most favorable to John Garretson, the non-moving party. Gipson v. Kasey, 214 Ariz. 141, 142 ¶ 2, 150 P.3d 228, 229 (2007).

¶ 3 Garretson owns a parcel of real property in downtown Phoenix that abuts Jefferson Street to the north, First Street to the east, Madison Street to the south, and another parcel to the west. In 2006, the City started installing light rail tracks along the south side of Jefferson Street abutting the north side of Garretson's property. As part of the installation, the City erected a permanent concrete barrier between the south side of the tracks and Garretson's property. This barrier blocked two driveways that provided vehicular access from Jefferson Street to Garretson's property. The property, however, still has access via Madison Street.

¶ 4 After the City finished the project, it filed an eminent domain action to determine the compensation owed to Garretson for a temporary construction easement he granted the City for the purpose of installing the tracks. Garretson counterclaimed, seeking damages for his permanent loss of access to Jefferson Street. The City moved for partial summary judgment on that claim. The superior court granted the motion, ruling that a property owner is not entitled to compensation for loss of access if he retains “free and convenient access” to the property.

¶ 5 The court of appeals vacated that ruling, holding that “when the government eliminates a property owner's established access to an abutting street and the owner retains access from another street, the owner is not necessarily foreclosed from obtaining compensation for damages to the property under the Arizona Constitution.” City of Phoenix v. Garretson, 232 Ariz. 115, 118 ¶ 10, 302 P.3d 640, 643 (App.2013). After summarizing pertinent Arizona cases, id. at 118–21 ¶¶ 13–24, 302 P.3d at 643–46, the court identified a “common thread”: “the government may not completely remove or substantially impair a property's existing access to an abutting roadway without providing just compensation to the owner.” Id. at 121 ¶ 25, 302 P.3d at 646. The court also ruled that governmental police powers do not provide “an unqualified right to destroy or substantially impair access without paying just compensation.” Id. at 122 ¶ 26, 302 P.3d at 647.

¶ 6 We granted the City's petition for review because the legal issues raised regarding private property rights and governmental police power are likely to recur and are of statewide importance. We have jurisdiction under Article 6, Section 5(3) of the Arizona Constitution and A.R.S. § 12–120.24.

II.

¶ 7 The Arizona Constitution provides that “[n]o private property shall be taken or damaged for public or private use without just compensation having first been made.” Ariz. Const. art. 2, § 17. Because the City did not permanently take any of Garretson's land, this case does not involve a “taking” or “severance damages” as traditionally understood in eminent domain or inverse condemnation actions. Rather, this case concerns the damages provision of Article 2, Section 17; the issue is whether the City's elimination of Garretson's preexisting access to Jefferson Street constitutes damage to his private property, supporting a claim for just compensation.

A.

¶ 8 We do not write on a blank slate, but our prior cases are somewhat difficult to reconcile. Although the court of appeals accurately traced this state's jurisprudence, three cases in particular warrant discussion.

¶ 9 In State ex rel. Morrison v. Thelberg, the landowners' property abutted a conventional highway that the state converted to a controlled-access highway with a slightly raised frontage road.¹87 Ariz. 318, 321, 350 P.2d 988, 989–90 (1960). Before the conversion, the landowners had “direct and unlimited access” to the conventional highway from their abutting property. Id. After the conversion, the landowners retained unlimited access, but only to the frontage road rather than the main highway. See id.

¶ 10 Overruling earlier cases, this Court held that “an abutting property owner to a highway has an easement of ingress and egress to and from his property which constitutes a property right” protected by Article 2, Section 17. Id. at 324, 350 P.2d at 991. We further held that the state must compensate landowners when that right of access is “taken away or destroyed or substantially impaired.” Id. Applying that rule to the facts, we concluded that the landowners' access to the new controlled-access highway had been substantially impaired by the conversion and upheld the trial court's damage award. Id. at 325–26, 350 P.2d at 992–93. Because we allowed compensation for that impairment, we implicitly found a property right to directly access a particular road, even when existing access points to and from the property are undisturbed.

¶ 11 We followed Thelberg 's principles in State ex rel. Herman v. Wilson, upholding a compensation award when the government destroyed a property owner's access to an abutting road and did not replace it with a frontage road or otherwise. 103 Ariz. 194, 197, 438 P.2d 760, 763 (1968). In Wilson, we recognized that, in the interest of public safety, the government may limit “direct access to a public highway,” as long as the alternative route “is not unreasonably circuitous.” Id. After observing that “the substitute access road” in that case was “unreasonably circuitous,” id., we held more broadly, “consistent with our former decisions, that the complete destruction of direct access to a public highway constitutes a damaging of property within the meaning of [Article 2, Section 17].” Id.

¶ 12 In dissent, Chief Justice McFarland found our earlier cases “simply not suitable for ... super-highways.” Id. at 200, 438 P.2d at 766 (McFarland, C.J., dissenting). In that new context, he urged reconsideration of “our past decisions on the question of compensation for impaired access.” Id. Chief Justice McFarland asserted that the majority misapplied Thelberg, which “did not intend to change the rules previously established and to include elements of damage not otherwise compensable.” Id. at 201–02, 438 P.2d at 767–68;see also Defnet Land & Inv. Co. v. State ex rel. Herman (Defnet I ), 103 Ariz. 388, 391–92, 442 P.2d 835, 838–39 (1968) (McFarland, C.J., specially concurring) (reiterating his view that prior cases should not apply to controlled-access highway cases).

¶ 13 A decade after Thelberg and just two years after Wilson, Justice McFarland authored the Court's unanimous opinion in State ex rel. Herman v. Schaffer, 105 Ariz. 478, 467 P.2d 66 (1970), the facts of which are very similar to Thelberg 's. In Schaffer, the landowners' properties abutted a divided highway, and each landowner “had direct access to both the northbound and southbound lanes of traffic.” Id. at 479, 467 P.2d at 67. The state converted the divided highway into Interstate 10, after which the landowners retained the same access they previously had, except that the access was to a frontage road that led to I–10, rather than to the freeway itself. Id. The landowners sought compensation because the state's conversion project deprived them of direct access to a divided highway. Id.

¶ 14 We rejected the landowners' argument, holding that “ direct access to a highway is not a private property right within the contemplation of Article 2, Section 17 of the Arizona Constitution.” Id. at 481, 467 P.2d at 69. Writing for the Court, and consistent with his dissent in Wilson, Justice McFarland focused on the novelty of controlled-access highways and the state's need to adequately regulate access for safety reasons. See, e.g., id. at 480–81, 467 P.2d at 68–69. The Court framed the “unreasonably circuitous” test, alluded to in Wilson, as relating to controlled-access highways. ²Id. at 481, 467 P.2d at 69 (precluding compensation if “the ingress and egress to the limited-access highway as provided by a frontage road [is] not so circuitous as to be unreasonable”) (emphasis added).

¶ 15 In adopting and applying the “unreasonably circuitous” test in Schaffer, this Court recognized that the government may regulate traffic and...