City of Sierra Vista v. Cochise Enterprises, Inc.

• Decision Date: 30 November 1984
• Docket Number: No. 2,CA-CIV,2
• Parties: CITY OF SIERRA VISTA, a municipal corporation, Plaintiff/Appellee, v. COCHISE ENTERPRISES, INC., an Arizona corporation; Bella Vista Ranches, Inc., an Arizona corporation; Joseph Cracchiolo; and Andrea Cracchiolo, Defendants/Appellants. 4753.
• Court: Arizona Court of Appeals

Page 1125

697 P.2d 1125

144 Ariz. 375

CITY OF SIERRA VISTA, a municipal corporation, Plaintiff/Appellee, v. COCHISE ENTERPRISES, INC., an Arizona corporation; Bella Vista Ranches, Inc., an Arizona corporation; Joseph Cracchiolo; and Andrea Cracchiolo, Defendants/Appellants.

No. 2 CA-CIV 4753.

Court of Appeals of Arizona,

Division 2.

Nov. 30, 1984.

Review Denied March 19, 1985.

Fauver & Till by Stuart L. Fauver, Sierra Vista, for plaintiff/appellee

D'Antonio & D'Antonio, P.C. by Patricia A. Ihnat, Tucson, for defendants/appellants.

HOWARD, Judge.

On August 26, 1975, the appellee City of Sierra Vista, hereinafter referred to as the City, filed an action for a declaratory judgment against appellants, hereinafter referred to as Cochise. In this action the City sought a determination and declaration of the rights, duties and obligations of the parties under a City ordinance which relates to waste disposal and provides for the payment of certain fees to the City when connections are made to the sewer system.

Cochise answered the complaint and filed a counterclaim. In Count I of the counterclaim Cochise asked for declaratory relief, seeking an adjudication of the respective rights and duties of the parties contained in certain agreements made in 1964 and 1967 relative to waste water disposal. Cochise also counterclaimed in inverse eminent domain, contending that the City had appropriated its sewer mains, sewer lines, sewer connections and other property without just compensation.

The City subsequently filed a second lawsuit against Cochise seeking an adjudication of the parties' rights as to certain sewage effluent. The cases were consolidated for trial and at a pretrial conference Cochise elected to proceed only on its claim of inverse eminent domain. It was also stipulated by the parties that the agreements of 1964 and 1967 were void.

The case was tried to the court and after making extensive findings of fact and conclusions of law, the court awarded judgment in favor of Andrea Cracchiolo in the sum of $1,760 and in favor of Joseph Cracchiolo in the sum of $63.

Cochise contends that the trial court erred in (1) holding that it could not reserve to itself an easement for sewer lines; (2) improperly valuing compensation due to Cochise for the taking of other easements; (3) failing to award any amounts for the value of 60 acres in Section 32 taken by the City for the use as a sewage pond, and (4) failing to award severance damages. Cochise also contends for the first time on appeal that it is entitled to interest on the compensation and damages to be paid to it by the City as of the date of the initial taking.

The land involved here is in Townships 21 South Range 20 East and 21 South, Range 21 East of Cochise County. There are three sections of land immediately involved, Sections 35, 36 and 31. Section 36 is immediately east of Section 35 and Section 31 is immediately east of Section 36. In the late 1950s the City of Sierra Vista north of Fry Boulevard was located primarily in Sections 33 and 34, to the west of Section 35. Section 34 was served by a small sewage pond in the northwest corner of the section. As the area expanded, primarily due to the growth of Fort Huachuca, subdivisions were planned and developed east of Section 34. The need for the City to plan and develop larger sewage treatment facilities and a consolidated sewer system became apparent. On December 23, 1959, the City adopted Ordinance No. 26 for the control and administration of sewers. The ordinance prohibited private sewage systems except when a public sewer system was not available, and when available, property served by a private sewer system was required to connect to the public system. The ordinance further provided that no public sewer extension could be Cochise owns property in Sections 35 and 31. The Bella Vista Subdivision is the westernmost of the three, located in the southwest corner of Section 35. The Buena Subdivision lies directly east of Bella Vista in the southeast corner of Section 35. The Montebello Subdivision is located farther east, outside the city limits in the southeast corner of Section 31. Between Sections 35 and 31 was an undeveloped area in Section 36 where such facilities as the high school, city park, city hall and community center are located.

made without the approval of the City and that in new subdivisions where public sewer extensions were authorized, they were to be constructed at the subdivider's expense. The effect of the ordinance was to make any sewer lines connecting with the city system city property.

Beginning in 1960 and as late as 1972, Cochise filed subdivision maps and plats for its Bella Vista, Buena Vista and Montebello subdivisions. The dedications to public use contained in all subdivision plats involved in this action reserved to the dedicator an easement in, on, upon, over, through and across all streets, alleys and easements designated in said plats for utility purposes, including but not limited to water, gas, electric and telephone lines.

When Cochise originally commenced plans to develop its property in 1964, none of Section 35 had available to it any type of central sewage treatment. While the City did maintain a small treatment plant, for the most part, sewage disposal was handled by individual septic tanks. By Resolution 122, adopted by the City on April 28, 1964, the City resolved to construct a sewer outfall line from a designated location near the center of Section 36 to the western boundary of Section 36 to be completed within 90 days after receiving written notice from Cochise that it would construct a connecting outfall line to Section 35.

On June 4, 1964, the City and Cochise entered into an agreement for the purpose of providing sewer facilities for the Bella Vista Subdivision in order to provide a carrier line to carry sewage across Section 35 from Section 34. It was agreed that Cochise would construct a 10-inch outfall line, to be known as the Buena Trunk, along a designated route to the Bella Vista Subdivision and to a temporary sewage pond until the lines had been joined to the proposed sewer line in Section 36; that Cochise would convey to the City an easement for the sewer outfall line; that the City would pay to Cochise the difference in costs between Cochise's original proposed eight-inch pipeline and the City's desired ten-inch outfall line, not to exceed $7,500; that when the City constructed the ten-inch pipeline across Section 36, Cochise would construct a ten-inch outfall line to meet the City's line in Section 36 the Bella Vista Trunk, and abandon its temporary ponds. The City agreed to pay the difference in costs between the eight-inch and ten-inch outfall lines to be constructed by Cochise in the easement agreed to be granted to the City in order to meet the line in Section 36. The City, by Resolution 123, authorized the execution of the agreement for the construction of a public sewer across Section 35. The agreement was fully performed by the parties and the City paid Cochise $7,500 for the Bella Vista trunk and $3,772.52 for the Buena trunk. The Bella Vista trunk, Buena trunk and Bella Vista laterals and Buena laterals were all located in streets, alleys and easements.

On April 24, 1967, the City and Cochise entered into another agreement whereby Cochise agreed to assign its grazing lease consisting of 60 acres in Section 32 to the City for the construction of sanitary ponds, together with the necessary easements for sewer lines for ingress and egress. Cochise also agreed to convey a 15-foot easement for sewer line purposes along the north section line of Section 35 from state highway 90 to the Bella Vista trunk, along the existing drainage way in the southwest corner of Section 35 and across Section 31 from the western boundary line of Section 31 eastward beyond Charleston Road. The City agreed that the sanitary ponds would be located no less than 1,000 feet from the eastern boundary of Section 36; that Cochise The record also contains sewer service agreements which land developers were required to obtain from the City. These sewer service agreements apply to all the subdivision sewer systems in this action. Under these agreements required by the Arizona State Health Department, the City stated that the sewer plans and specifications had been reviewed, that the City had given permission for the proposed sewer system to connect to and become a part of the City sewer system and that the City would inspect the proposed sewer system during construction and would maintain and operate the system upon its completion.

would have the right and privilege without charge to use any drainage from the ponds with necessary access, and that no sewer charges or connection charges for sewer services rendered to Cochise or to lots located in Section 35 would be imposed. The City also agreed to pay the difference between an eight-inch sewer line and a ten-inch sewer line in Section 35 to be installed by Cochise.

The record further shows that all lots and subdivisions involved in this action carry the cost of the sewer system of the subdivision in which said lots are situated and that such costs are recovered by the developer upon the sale of the lots.

THE "TAKING" OF THE PIPELINES

An expert for Cochise testified that the fair market value of the sewer lines in which the City asserted ownership in 1975 was $638,493.08 and that the rental value of the sewer lines prior to that time was $249,157.23. Cochise contends the trial court erred when it concluded that any attempts to reserve easements in the dedicated streets and alleys for sewer line purposes were void and against public policy. We do not agree.

After dedicating the streets and alleys to the use of the public the plats contained a reservation "... for utility purposes, including but not limited to water, gas, electric and telephone lines, an easement in perpetuity in, upon, over, through and...