DOS PICOS LAND LTD. P'ship v. PIMA County

• Decision Date: 29 September 2010
• Docket Number: No. 2 CA-CV 2009-0186.,2 CA-CV 2009-0186.
• Citation: 240 P.3d 853,225 Ariz. 458
• Parties: DOS PICOS LAND LIMITED PARTNERSHIP, an Arizona limited partnership; Harry W. Shepard and Patricia P. Shepard, husband and wife, Plaintiffs/Appellees, v. PIMA COUNTY, a political subdivision of the State of Arizona, Defendant/Appellant.
• Court: Arizona Court of Appeals

225 Ariz. 458

240 P.3d 853

DOS PICOS LAND LIMITED PARTNERSHIP, an Arizona limited partnership; Harry W. Shepard and Patricia P. Shepard, husband and wife, Plaintiffs/Appellees v PIMA COUNTY, a political subdivision of the State of Arizona, Defendant/Appellant.

No. 2 CA-CV 2009-0186.

Court of Appeals of Arizona,Division 2, Department A.

Sept. 29, 2010.

Ayers & Brown, P.C. By Charles K. Ayers and Melinda A. Bird, Phoenix, Attorneys for Plaintiffs/Appellees.

Barbara LaWall, Pima County Attorney By Thomas Weaver, Jr., Lesley M. Lukach, and Andrew L. Flagg, Tucson, Attorneys for Defendant/Appellant.

OPINION

ESPINOSA, Judge.

¶ 1 Pima County challenges the trial court's award of litigation expenses and itscalculation of interest on a judgment compensating landowners in an inverse condemnation action. Concluding the trial court relied on inapplicable statutes in awarding attorney fees, other litigation expenses, and interest, we vacate its ruling and remand this case to the trial court for a recalculation of the award. ¹

Factual and Procedural History

¶ 2 The following facts are undisputed. Dos Picos Land Limited Partnership and Harry and Patricia Shepard (collectively Dos Picos) owned 165 acres of property west of Tucson. Dos Picos's land was surrounded on the south, east, and west by Tucson Mountain Park, a mountain preserve owned by Pima County. At some point during the 1980s, a mountain ridge dividing the northern portion of Dos Picos's land from the southern portion was declared a “protected ridge,” which meant a special use permit from Pima County was then required in order to develop it. During the 1990s, Pima County “identified and approved” Dos Picos's property for potential inclusion in the park and entered into negotiations to purchase it. Dos Picos was unwilling to sell, however, intending instead to subdivide the property and sell individual lots as homesites.

¶ 3 Although the northern portion of Dos Picos's property was accessible from Anklam Road, the southern portion was surrounded by county land with no road access. Consequently, in 1999 Dos Picos sought a special use permit to build a road across the protected ridge in order to connect the northern and southern portions of its land, but Pima County denied its request. Later, in 2004, Dos Picos petitioned the county to build a roadway across county land for access to the southern half of its property. After Pima County denied this request, Dos Picos sued for inverse condemnation, arguing the county's actions constituted a governmental taking of private property.

¶ 4 Thereafter, Dos Picos filed a motion for partial summary judgment. The trial court granted the motion, finding as a matter of law that Pima County had effected a taking of Dos Picos's land. Following a jury trial to establish the property's value, the court entered a judgment ordering Pima County to pay Dos Picos the principal sum of $1,466,455, plus interest at the rate of ten percent from the date of the taking. It also awarded Dos Picos $366,439 in attorney fees as well as $115,282 in other litigation expenses pursuant to A.R.S. § 11-972(B). Pima County timely appealed the award of fees, expenses, and interest. We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(B).

Discussion

Applicability of A.R.S. § 11-972(B)

¶ 5 Pima County first argues the trial court erred in awarding Dos Picos its attorney fees and litigation expenses, contending § 11-972(B) does not apply because this was a regulatory and not a physical taking. A court may award attorney fees only when they are “ ‘expressly authorized by contract or statute,’ ” and the party seeking fees must prove that the statute is applicable and authorizes compensation in his or her case. McMurray v. Dream Catcher USA, Inc., 220 Ariz. 71, ¶ 7, 202 P.3d 536, 539-40 (App.2009), quoting Burke v. Ariz. State Ret. Sys., 206 Ariz. 269, ¶ 7, 77 P.3d 444, 447 (App.2003). On appeal, we review a trial court's interpretation of a statute de novo, Estate of DeSela v. Prescott Unified Sch. Dist. No. 1, 224 Ariz. 202, ¶ 7, 228 P.3d 938, 940 (App.2010), mindful that statutory language is the most reliable evidence of the legislature's intent and construing words “ ‘in conjunction with the full text of the statute,’ ” McMurray, 220 Ariz. 71, ¶ 8, 202 P.3d at 540, quoting Golder v. Dep't of Rev., 123 Ariz. 260, 265, 599 P.2d 216, 221 (1979).

¶ 6 Section 11-972(B) provides that, when a trial court in an inverse condemnation action initiated “because of [an] alleged physical taking” awards compensation to the landowner “for the physical taking of property,” the landowner is entitled to reimbursementfor reasonable costs and litigation expenses. The plain and unambiguous language of the statute establishes, therefore, that § 11-972(B) applies only to physical takings. See Arpaio v. Citizen Publ'g Co., 221 Ariz. 130, ¶ 6, 211 P.3d 8, 10 (App.2008) (statutory language controls if plain and unambiguous); see also Backus v. State, 220 Ariz. 101, ¶ 22, 203 P.3d 499, 504 (2009) (refusing to read into statute term not included by legislature). To hold otherwise effectively would eliminate the qualifying term “physical” from the statute, something we may not do. See Simpson v. Simpson, 224 Ariz. 224, ¶ 6, 229 P.3d 236, 237 (App.2010) (court will not interpret statute in manner rendering any word, phrase, or clause meaningless); see also State v. Pitts, 178 Ariz. 405, 407, 874 P.2d 962, 964 (1994) (“We presume the legislature did not intend to write a statute that contains a void, meaningless, or futile provision.”). Accordingly, Dos Picos was entitled to its litigation expenses under the statute only if it showed Pima County had physically taken its property.

¶ 7 Physical and regulatory takings are two distinct events. See Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 548, 125 S.Ct. 2074, 161 L.Ed.2d 876 (2005); State ex rel. Herman v. Jacobs, 7 Ariz.App. 396, 400, 440 P.2d 32, 36 (1968); see also State ex rel Herman v. Hague, 10 Ariz.App. 404, 406, 459 P.2d 321, 323 (1969) (impairing direct access to property constitutes compensable taking; actual physical taking of property not required). Physical takings are characterized by “direct government appropriation or physical invasion of private property.” Lingle, 544 U.S. at 537, 125 S.Ct. 2074; see, e.g., United States v. Pewee Coal Co., 341 U.S. 114, 71 S.Ct. 670, 95 L.Ed. 809 (1951) (seizure of coal mine); United States v. Gen. Motors Corp., 323 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311 (1945) (occupation of private warehouse). Regulatory takings, in contrast, do not result from physical invasions of property but from government regulations that deprive an owner of the economic benefit of the property. Lingle, 544 U.S. at 537-38, 125 S.Ct. 2074. A “permanent physical invasion, however minimal the economic cost it entails, eviscerates the owner's right to exclude others from entering and using her property” and warrants compensation. Id. at 539, 125 S.Ct. 2074. In contrast, whether a regulatory action constitutes a compensable taking depends “upon the magnitude of [the] regulation's economic impact and the degree to which it interferes with legitimate property interests.” Id. at 540, 125 S.Ct. 2074.

¶ 8 To prove a compensable taking, therefore, Dos Picos was required to show either that Pima County had physically invaded its land or that county regulations substantially interfered with Dos Picos's economic interest in the land. Dos Picos presented no evidence the county had ever physically entered or invaded its property and, contrary to its assertions on appeal, the trial court did not expressly find a physical taking or that the county “had taken [its p]roperty in order to incorporate it into” Tucson Mountain Park. ² Rather, the court's ruling that Dos Picos was entitled to its expenses under § 11-972 rested on its finding that a taking, generally, had occurred. ³ In so finding, the court apparently disregarded Pima County's argument that the court was required to find a physical taking before applying the statute. ⁴¶ 9 Dos Picos maintains that, by denying it a special use permit to build a road over the protected ridge and similarly denying its request that the county build a road to access the southern portion of its land, Pima County physically appropriated the land. Specifically, Dos Picos argues that, by denying all access to the property, Pima County effectively incorporated the land into the Tucson Mountain Park and thus accomplished the same result as a physical taking. Dos Picos further asserts that, because the county wanted the land only for open space within its mountain preserve, it was able to effect a physical taking for that purpose without needing to actually enter the property. Pima County, on the other hand, notes that it had no more physical access to or ownership of the property after it denied Dos Picos's administrative requests than it did before the denials. And it points out that Dos Picos's land was not made a part of Tucson Mountain Park and concludes nothing prevents Dos Picos from erecting fences, prohibiting trespassers, or exhibiting other indicia of private ownership. ⁵

¶ 10 Despite the superficial appeal of Dos Picos's argument that this is an anomalous situation in which Pima County was able to effect a physical taking through regulatory means, such a characterization would undermine the definition of “regulatory taking” altogether. The hallmark of a regulatory taking is the imposition of governmental regulations that impermissibly limit an owner's free use of his or her property. See Lingle, 544 U.S. at 538-39, 125 S.Ct. 2074. “ ‘[W]hile property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.’ ” Ranch 57 v. City of Yuma, 152 Ariz. 218, 225, 731 P.2d 113, 120 (App.1986), quoting Pa. Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 67 L.Ed. 322 (1922).

¶ 11 Dos Picos cites Kaiser...