Cracchiolo v. State, 2
| Decision Date | 13 June 1985 |
| Docket Number | CA-CIV,No. 2,2 |
| Citation | 706 P.2d 1219,146 Ariz. 452 |
| Parties | Dan CRACCHIOLO and Joseph U. Cracchiolo, Plaintiffs/Appellants, v. STATE of Arizona; State Land Department of the State of Arizona, Joe T. Fallini, State Land Commissioner; Arizona State Department of Health Services; James E. Sarn, M.D., M.P.H., Director of the Department of Health Services; the City of Sierra Vista, Defendants/Appellees. 5324. |
| Court | Arizona Court of Appeals |
In this decision we revisit Section 34, Twp. 21 South, Range 21 East, G & SRB & M, in Cochise County, Arizona. This very cause, Cochise County Superior Court No. 40463, was before us on an appeal from an order granting a temporary injunction. That decision is reported as Cracchiolo v. State, 135 Ariz. 243, 660 P.2d 494 (App.1983). We vacated the injunction, finding, in part, that the plaintiffs Cracchiolo had an adequate remedy at law for damages.
Our supreme court has also had occasion to decide a controversy concerning Section 34 and involving these same parties, the Cracchiolos, the State of Arizona, and the City of Sierra Vista. In Arizona State Land Department v. Superior Court, 129 Ariz. 521, 633 P.2d 330 (1981) the court held that a sale of the land to the city was void. And in City of Sierra Vista v. Babbitt, 129 Ariz. 524, 633 P.2d 333 (1981), decided the same day, it was held that the city was entitled to be reimbursed by the state for both the purchase price paid for the land and for the value of improvements which the city had placed upon it. A third case decided by the supreme court at the same time is Gladden Farms, Inc. v. State, 129 Ariz. 516, 633 P.2d 325 (1981). The cases were interrelated since they were all concerned with attempted sales of school trust lands. The supreme court held that under the Enabling Act for admission of Arizona and New Mexico into the United States, Ariz. Enabling Act, §§ 19-35; Act June 20, 1910, § 28, 36 U.S.Stat. 557, 568-579; Ariz. Const. Art. 10, § 1 et seq.; Ariz. Const. Art. 20, Par. 12; such trust lands are not to be sold except to the highest and best bidder at public auction. The state, acting through the state land commissioner, had sold Section 34 to the city without complying with this requirement. The city had purchased the land for the purpose of constructing wastewater treatment facilities to accommodate the rapid population growth of the city. Upon obtaining possession pursuant to the sale, the city placed such improvements on the land at a cost of approximately $4,200,000. About $3,600,000 of these funds were supplied by the federal government through the Environmental Protection Agency (EPA). Cracchiolo, supra. These then were the improvements the value of which was to be paid to the city by the state.
Thus, upon issuance of the mandate by the supreme court in Arizona State Land Department, supra, the parties, other than the Cracchiolos, were left in an unenviable position. The water treatment facility for the city would be owned by the state for the benefit of the common schools. To escape this predicament, the state immediately accomplished a ten-year institutional lease of Section 34 to the State Department of Health Services. See A.R.S. §§ 37-441 through 443. The land was valued at $1,900 per acre, total $1,216,000, and the state received $97,280 annual rent for the benefit of the common schools. The rent is paid by the city, which operates the facility by virtue of an intergovernmental agreement with the state acting by and through the Arizona Department of Health Services. See A.R.S. §§ 11-951 through 954. The injunction which this court vacated in Cracchiolo, supra, would have prevented the city from using its facility for the treatment of its wastewater. Fortunately, the trial court had also stayed the effect of the injunction and the operation of the facility was not interrupted.
The Cracchiolos were, at the most, holders of a grazing lease for Section 34, which entitled them to graze seven head of cattle. They first leased the land in 1957 and the lease had been renewed at intervals, the most recent of which expired May 31, 1984. The lease provided for rent of $100 per annum to be paid to the state. No rent has been paid since 1979, the year of the aborted sale. The Cracchiolos, Dan and Joseph, are brothers. They are both attorneys. We consider this relevant because of the complexity of this litigation and the issues presented, at least one of which is claimed to involve lack of notice to them.
The complaint in this case was filed by the Cracchiolos in August 1981, almost contemporaneously with the institutional "taking" by the Department of Health Services. It sought, inter alia, damages for trespass from both the state and city. The case was tried to the court in November 1983. Pursuant to request, the trial court made findings of fact and conclusions of law. Rule 52(a), Rules of Civil Procedure, 16 A.R.S. The court held that the lease of the school trust land to the State Department of Health Services was valid. It also found that the appellants Cracchiolo were entitled to damages of $11,436 resulting from the loss of their improvements on Section 34, and $466.67 for the loss of their grazing lease, to and including its expiration, May 31, 1984. Judgment was entered for these amounts to the Cracchiolos and for costs and attorney fees to the state as the successful party.
This appeal followed.
The appellants contend: 1) that no damages were awarded to them for the period from February 1980, the possession of the city under the void sale, to August 21, 1981, the institutional taking; 2) that the institutional lease was unlawful and therefore void as contravening the Enabling Act and the Arizona Constitution; 3) that no damages were awarded for their loss of possession to May 31, 1984, and also for such time as the lease could have been expected to continue; and 4) they are entitled to other damage above that allowed.
We hold that the institutional lease is valid and affirm the damage award of $466.67, but disagree with the legal reasoning of the trial court in arriving at the award of $11,436 for the improvements. We remand for a redetermination of that element of damage.
In contrast with the sums awarded by the trial court, the appellants claim they are entitled to damages totaling $1,126,839.52. We believe these are highly exaggerated claims of damage. The appellants are seeking to balloon the right to graze seven head of cattle upon 640 acres of desert under a very restrictive lease and for only four-plus years into a million dollar damage claim.
To some extent, this issue may now be moot, at least as to the appellants, since their grazing lease has expired. Moreover, Section 34 was sold to the city in April 1984 at public auction, allegedly in compliance with A.R.S. § 37-231 (Supp.Pamph.1984), et. seq. The Cracchiolos challenged that sale in superior court in Maricopa County. The sale was upheld and they have appealed to Division One of this court. Those proceedings were not before the trial court here, but are related in the state's answering brief and were admitted in oral argument. However, our review of the complaint and the pre-trial order reveals that in one count the appellants alleged their status as taxpayers and that the state had breached fiduciary duties to the common schools. They sought to have the lease and government agreement be declared invalid. The pre-trial order also contained the validity of the taking as an issue. The issue is also relevant to their alleged damage, and that may explain the pre-trial issue and the court's conclusion deciding the issue. Nevertheless, even though it appears the appellants may have abandoned every count except trespass, we believe we should specifically affirm the validity of the institutional taking.
We observe that any suggestion that the common schools have suffered damage is preposterous. Before the taking they were entitled to only $100 rent per year. They now receive almost $100,000 annually. That is not just a tenfold or hundredfold, but rather a thousandfold increase.
School trust lands may be leased. A.R.S. § 37-132(A)(5) and (6) (Supp.Pamph.1984). This statutory authority does not offend the provisions of the Enabling Act since fee title to the land is undisturbed. See Grossetta v. Choate, 51 Ariz. 248, 75 P.2d 1031 (1938). A.R.S. § 37-441 specifically provides for the institutional lease here involved. It reads:
"The state may, when necessary for its uses or for the uses of any state department or institution, take over any state lands and the improvements thereon by reimbursing the owners for the improvements, and the department or institution so using the lands shall lease them and pay such rental as the state land department requires."
The procedures then next required by A.R.S. § 37-442 were followed for this taking, except as hereafter discussed.
"A. The governing board or officer of a state department or institution desiring to avail itself of the provisions of this article shall make application to the governor for taking the lands over, and, if the application is approved by the governor, it shall be transmitted to the state land department which shall appraise the improvements on the lands.
B. The existence of a permit or lease for the land desired shall not bar the state from taking the land, but the permittee or lessee shall be entitled, in addition to the appraised value of the improvements on the lands, to reasonable compensation for damages he may sustain by reason of the cancellation of...
To continue reading
Request your trial
-
Neal v. City of Kingman
... ... The location of the sign in controversy is positioned on the plat at "Site No. 2." [See Appendix.] ... According to the Kingman ordinance an off-premise sign ... State, 121 Ariz. 6, 588 P.2d 299 (1978) for the proposition that when a statute is so vague that men of ... These powers, either expressed or implied, are conferred by statute. Cracchiolo v. State, 146 Ariz. 452, 457, 706 P.2d 1219, 1224 (App.1985). The board's authority is derived ... ...
-
State ex rel. Miller v. Gannett Outdoor Co. of Arizona, Inc.
...are simply not compensable" and "[d]amages for loss of a leasehold interest are limited to the unexpired term of the lease." Id. at 459-60, 706 P.2d at 1226-27 (emphasis added). In reaching its holding, the Cracchiolo court cited many of the authorities listed above, including Petty Motor a......
-
Vivid, Inc. v. Department of Transp.
...(Alaska 1968); Whiteco Indus., Inc. v. City of Tucson, 168 Ariz. 257, 812 P.2d 1075 (Ariz.Ct.App.1990); 7 Cracchiolo v. Arizona, 146 Ariz. 452, 706 P.2d 1219, 1226 (Ariz.Ct.App.1985); New Jersey v. Jan-Mar Inc., 210 N.J.Super. 236, 509 A.2d 310, 315 (N.J.Super.Ct.Law.Div.1985), aff'd in par......
-
Havasu Heights Ranch and Development Corp. v. State Land Dept. of State of Ariz.
... ... The issues on appeal are (1) whether the leases offered by the department were authorized; (2) whether the department was required to promulgate rules dealing with the type of leases offered; (3) whether the leases offered by the department ... They do not give a preferred right as against the state. See Cracchiolo v. State, 146 Ariz. 452, 459, 706 P.2d 1219, 1226 (App.1985). That right as against other potential lessees has value. Ehle v. Tenney Trading Co., ... ...