Moongate Water Co. v. City of Las Cruces

• Decision Date: 17 April 2014
• Docket Number: No. 29,083.,29,083.
• Citation: 329 P.3d 727
• Parties: MOONGATE WATER COMPANY, INC., Plaintiff–Appellant, v. CITY OF LAS CRUCES, Defendant–Appellee.
• Court: Court of Appeals of New Mexico

329 P.3d 727

MOONGATE WATER COMPANY, INC., Plaintiff–Appellant,

v.CITY OF LAS CRUCES, Defendant–Appellee.

No. 29,083.

Court of Appeals of New Mexico.

April 17, 2014.

Montgomery & Andrews, P.A., Stephen S. Hamilton, Andrew S. Montgomery, Santa Fe, NM, William A. Walker, Jr., P.C., William A. Walker, Jr., Las Cruces, NM, for Appellant.

City of Las Cruces, Marcia B. Driggers, Las Cruces, NM, Keleher & McLeod, P.A., Thomas C. Bird, Kurt Wihl, Nathan S. Stimson, Albuquerque, NM, for Appellee.

OPINION

VANZI, Judge.

{1} Moongate Water Company, Inc., (Moongate) appeals the district court's order awarding costs to the City of Las Cruces (the City) as the prevailing party in an inverse condemnation action brought by Moongate. The sole question we must address is whether the Eminent Domain Code (the Code), NMSA 1978, §§ 42A–1–1 to –33 (1980, as amended through 2001), permits costs to be taxed against a property owner who exercises the constitutional or statutory right to seek just compensation for a taking of private property. We answer in the affirmative and uphold the decision of the district court.

BACKGROUND

{2} We briefly review the facts and proceedings leading up to this appeal. Moongate is a private company that has been authorized by the Public Regulation Commission (PRC) since 1983 to supply water as a public utility in an area on the outskirts of the City. Moongate Water Co. v. City of Las Cruces, 2012–NMCA–003, ¶ 3, 269 P.3d 1, aff'd,2013–NMSC–018, 302 P.3d 405. In 2004 and 2005, the City annexed three undeveloped tracts of land within Moongate's certified area and committed itself to provide water to the subdivisions it was developing there. Id. ¶ 4. Moongate sued, seeking just compensation from the City, asserting, among other things, a claim for a partial taking of its property under Section 42A–1–29(A) of the Code and a claim under the New Mexico and United States Constitutions for a regulatory taking of its property.

{3} On cross motions for summary judgment, the district court found that the City had taken Moongate's property based upon its exclusive right to provide service within its service area. However, after an evidentiary hearing, the court determined that, although a partial taking had occurred, the evidence did not support an award of damages to Moongate. On that basis, the district court entered judgment holding that the City had taken Moongate's property but that there were no damages. Thereafter, the City filed a cost bill pursuant to Rule 1–054(D) NMRA. Citing several sections of the Code that authorize an award of costs and litigation expenses to a condemnee but not a condemnor, ¹ Moongate argued that the City was not entitled to costs because the specific cost provisions of the Code prevail over the general cost provisions of Rule 1–054(D). Unpersuaded by Moongate's argument, the district court entered an order that the City, as the prevailing party, was entitled to reasonable costs pursuant to Section 42A–1–29 and Rule 1–054(D), and awarded costs of $138,170.58 against Moongate.

{4} On appeal from the judgment on the merits, this Court reversed the district court's holding that the City had taken Moongate's property. Moongate, 2012–NMCA–003, ¶¶ 25–28, 269 P.3d 1. Our Supreme Court subsequently affirmed, concluding that Moongate did not have exclusive rights against the City's water utility and that, therefore, Moongate's loss of a right to serve was not a compensable taking. Moongate, 2013–NMSC–018, ¶¶ 15 –24, 302 P.3d 405. The case was remanded to the district court to enter judgment for the City. Id. ¶ 24. This appeal on the remaining issue of the award of costs timely followed. Moongate does not challenge the amount of the award. Rather, it opposes any award of costs to a prevailing party defendant in an inverse condemnation action.

DISCUSSIONStandard of Review

{5} Whether the City is entitled to an award of costs involves the interpretation and application of the Code and is a question of law that we review independently of the district court's determination. See Hovet v. Allstate Ins. Co., 2004–NMSC–010, ¶ 10, 135 N.M. 397, 89 P.3d 69 (“Statutory interpretation is a question of law, which we review de novo.”). “In construing a statute, our charge is to determine and give effect to the Legislature's intent.” Marbob Energy Corp. v. N.M. Oil Conservation Comm'n, 2009–NMSC–013, ¶ 9, 146 N.M. 24, 206 P.3d 135. “In discerning the Legislature's intent, we are aided by classic canons of statutory construction, and we look first to the plain language of the statute, giving the words their ordinary meaning, unless the Legislature indicates a different one was intended.” Id. (alteration, internal quotation marks, and citation omitted). “We will not depart from the plain wording of a statute, unless it is necessary to resolve an ambiguity, correct a mistake or an absurdity that the Legislature could not have intended, or to deal with an irreconcilable conflict among statutory provisions.” Regents of the Univ. of N.M. v. N.M. Fed'n of Teachers, 1998–NMSC–020, ¶ 28, 125 N.M. 401, 962 P.2d 1236.

The Act Authorizes Costs to the Prevailing Party Under Rule 1–054(D)

{6} It is well established that the right to recover costs exists only by virtue of statutory authority or court rule. N.M. Bureau of Revenue v. W. Elec. Co., 1976–NMSC–049, ¶ 6, 89 N.M. 468, 553 P.2d 1275; Gurule v. Ault, 1985–NMCA–056, ¶ 11, 103 N.M. 17, 702 P.2d 7. Here, Moongate contends that the district court erred when it awarded costs to the City as the prevailing party in the litigation because, it argues, the Code does not permit costs to be taxed against a property owner. We disagree with Moongate's interpretation of the Code and its application of the Code's various provisions. We begin our analysis with the nature of this action.

{7} Moongate sought recourse against the City through an inverse condemnation proceeding. An inverse condemnation proceeding is an action or eminent domain proceeding initiated by the property owner (condemnee) rather than the governmental entity (condemnor), and is generally available where private property has been taken for public use without a formal condemnation proceeding. See North v. Pub. Serv. Co. of N.M., 1983–NMCA–124, ¶ 9, 101 N.M. 222, 680 P.2d 603 (noting that if the condemnor “has taken or damaged property for public use without making just compensation therefor or without initiating proceedings to do so, the property owner has recourse through inverse condemnation proceedings”). The mere fact that a party brings an inverse condemnation action, however, does not mean that there has been a taking.

{8} Section 42A–1–29 of the Code governs inverse condemnation proceedings, and it explicitly states that such proceedings are to be “brought under and governed by the Rules of Civil Procedure for the District Courts of this state.” Section 42A–1–29(A); see § 42A–1–15 (stating that, unless the Code specifically provides to the contrary, the Rules of Civil Procedure for the District Courts govern matters pursuant to the Code). Civil Procedure Rule 1–054(D)(1) provides, in pertinent part:

Except when express provision therefor is made either in a statute or in these rules, costs, other than attorney fees, shall be allowed to the prevailing party unless the court otherwise directs[.]

{9} Because Section 42A–1–29(A) specifically directs that inverse condemnation actions are to be brought under the Rules of Civil Procedure, and because Rule 1–054(D) authorizes an award of costs, the City was clearly entitled to recover costs under the Code. Our interpretation is mandated by the plain language of Section 42A–1–29(A) and is consistent with the general rule that a district court has sound discretion to award, deny, and/or apportion costs to the prevailing party under Rule 1–054(D).

{10} We note further that nothing in the Code specifically prohibits or exempts an award of costs in an inverse condemnation proceeding and that, had Moongate prevailed in this action, it would have been entitled to costs under the same rule—Rule 1–054(D). If the Legislature had intended to prohibit the award of costs to prevailing party defendants in inverse condemnation cases, it could have done so explicitly. See City of Roswell v. Smith, 2006–NMCA–040, ¶ 12, 139 N.M. 381, 133 P.3d 271 (noting that the Legislature could have included language in a statute if it had so desired). Reading the statute as we must, where the plain language is clear and contains no exceptions, we conclude that once the district court dismissed Moongate's inverse condemnation complaint, Section 42A–1–29 of the Code unambiguously provides that the City, as the prevailing party, was entitled to its costs.

Moongate's Arguments

{11} We understand Moongate to raise three arguments in support of its contention that the district court lacked authority to award costs to the City. First, it argues that the “Code's language, history, and object are inconsistent with an award of costs against a condemnee.” It contends that the plain language of the Code allows a district court to shift a condemnee's costs to a condemnor but does not authorize a court to shift a condemnor's costs to the condemnee. Second, Moongate argues that the Code's specific cost provisions trump the general cost provisions outside the Code. Lastly, Moongate argues that interpreting the Code's inverse condemnation provisions to allow costs to be awarded to a prevailing party defendant would burden the constitutional right to seek just compensation for a taking of private property. In each of these arguments, Moongate ignores Section 42A–1–29, the Code provision that governs the inverse condemnation proceeding at issue here, and urges us instead to apply inapplicable statutory provisions and constitutional law. We are not persuaded for the reasons that follow.

{12} Moongate's first argument is premised on the statutory definition of “condemnee” and three provisions of...