Salt Lake City Corp. v. Evans Dev. Grp., LLC

• Decision Date: 24 March 2016
• Docket Number: No. 20130741.,20130741.
• Citation: 369 P.3d 1263
• Parties: SALT LAKE CITY CORPORATION, Appellee, v. EVANS DEVELOPMENT GROUP, LLC, Appellant.
• Court: Utah Supreme Court

369 P.3d 1263

SALT LAKE CITY CORPORATION, Appellee,

v.EVANS DEVELOPMENT GROUP, LLC, Appellant.

No. 20130741.

Supreme Court of Utah.

March 24, 2016.

Kevin Egan Anderson, J. Elizabeth Haws, Salt Lake City, for appellee.

Robert E. Mansfield, Steven J. Joffee, Salt Lake City, for appellant.

Justice DURHAM authored the opinion of the Court in which Chief Justice DURRANT, Associate Chief Justice LEE, and Justice HIMONAS joined. Justice PEARCE became a member of the Court on December 17, 2015, after oral argument in this matter, and accordingly did not participate.

Justice DURHAM

, opinion of the Court:

INTRODUCTION

¶ 1 Salt Lake City Corp. (City) used its eminent domain power to condemn land owned by Evans Development Group, LLC (Evans). Rather than using the Evans property for itself, however, the City condemned the property in order to exchange it for another piece of property owned by Rocky Mountain Power. Evans appealed the district court's decision authorizing the City to exercise its eminent domain power for exchange purposes. We conclude that the City did not follow the condemnation procedures required by statute, and thus reverse the district court's decision.

BACKGROUND

¶ 2 In 2007, Salt Lake City began working on a $50 million railroad realignment project called the Westside Railroad Realignment Project. The purpose of this project was to permanently remove railroad lines running along 900 South and Folsom Street, in order to decrease noise, pollution, and interference with residential neighborhoods, as well as to improve traffic circulation.

¶ 3 To complete this project, the City needed to acquire certain parcels of land, including a 2.39–acre parcel owned by Rocky Mountain Power. But Rocky Mountain Power did not wish to sell its property as it needed the land to build a substation and provide the future electricity necessary for the northern quadrant of downtown Salt Lake City. The City initially contemplated condemning the property, but decided against it because it needed the property immediately and the City had concerns about whether it could condemn a property already being held for public use. See UTAH CODE § 78B–6–504(1)(d)

(requiring condemnation to be for a "more necessary public use" if the land is already held for public use).

¶ 4 The City and Rocky Mountain Power eventually agreed that Rocky Mountain Power would transfer its property to the City if the City would "make an alternative location immediately available that was equally useful for the construction and operation of a substation." The City and PacifiCorp (Rocky Mountain Power's parent company) entered into a "Property Exchange Agreement" on March 14, 2007, which provided that Rocky Mountain Power would transfer its property to the City in exchange for a parcel of land that would be "acceptable for the construction and operation of a substation" and would meet several criteria, including size and location specifications. At the time of the agreement, the City had outlined nine potential properties.

¶ 5 To fulfill its obligation under the Exchange Agreement, the City decided to condemn Evans' 2.67–acre parcel of land, located at approximately 436 West 400 North in Salt Lake City. The City began the condemnation proceedings on October 3, 2007. The complaint asserted several public uses and public purposes for the condemnation, including "acquiring property for an electrical power plant/generation/transmission site" and "facilitating and enabling the removal and realignment of freight railroad tracks."

¶ 6 Evans moved for summary judgment on November 28, 2007, alleging that the City lacked statutory authority to condemn its property. Evans argued that the condemnation was not for a public use as required by Utah Code section 78B–6–501

, but merely for use as an exchange property, a use not enumerated in the statute. The City filed a cross-motion for partial summary judgment as to the issue of public use.

¶ 7 The district court granted the City's motion, finding that after "reviewing the relevant statutory and case law, it is clear the proposed use for the [Evans] property is public, not private." Evans filed a motion to reconsider, and after reconsideration, the district court again concluded that the City condemned the Evans property for public, not private, use. The court reasoned that it was "undisputed the uses the City seeks to condemn the subject property for: to facilitate the West Side Railroad Relocation project, and for an electrical power site to ensure adequate electrical power facilities for a quadrant of the City." The court further found that the "condemnation and exchange process [was] merely the method by which the properties were acquired for the ultimate condemnation purpose of public uses. The ultimate use of the property is the controlling factor as to the purpose of the condemnation."

¶ 8 Evans appeals the district court's ruling, asking us to determine whether a "municipality has statutory authority to condemn private property when the purpose of the taking is to exchange or trade the private property to a third party for another parcel of real property."¹ We have jurisdiction to review the district court's decision under Utah Code section 78A–3–102(3)(j)

.

STANDARD OF REVIEW

¶ 9 "We review questions of statutory interpretation for correctness, affording no deference to the district court's legal conclusions." Marion Energy, Inc. v. KFJ Ranch P'ship, 2011 UT 50, ¶ 12, 267 P.3d 863

(citation omitted). We also " ‘review a district court's decision to grant summary judgment for correctness,’ giving no deference to the court below." Giusti v. Sterling Wentworth Corp., 2009 UT 2, ¶ 19, 201 P.3d 966 (citation omitted).

ANALYSIS

I. THIS TYPE OF PROPERTY EXCHANGE DOES NOT SATISFY UTAH'S EMINENT DOMAIN STATUTES' PUBLIC USE REQUIREMENT

¶ 10 When a government entity condemns property, our eminent domain statutes require that the entity not only "have the authority to condemn property," Utah Cty. v. Ivie, 2006 UT 33, ¶ 16, 137 P.3d 797

, but also that "the use to which [the property] is to be applied is a use authorized by law ... [and] the taking is necessary for the use." UTAH CODE § 78B–6–504(1).

¶ 11 Utah Code section 78B–6–501

lists the uses for which eminent domain may be exercised. First, the statute requires that eminent domain be exercised for a public use. The statute then continues with a nonexclusive list of public uses. See

Utah Dep't of Transp. v. Carlson, 2014 UT 24, ¶ 20, 332 P.3d 900

("[T]hese enumerated public uses are not exclusive. They merely establish a general starting point."). Section 501(4) includes "railroads and street railways for public transportation." And section 501(8) includes "electric light and electric power lines, [and] sites for electric light and power plants." The statute also contains a catchall for "all other public uses for the benefit of any county, city, or town, or its inhabitants." UTAH CODE § 78B–6–501(3)(f).

¶ 12 The City argues that these sections "provide express statutory authority" for its Exchange Agreement. In order to complete the Westside Railroad Realignment Project, the City had to take Rocky Mountain Power's property, and in order to take Rocky Mountain Power's property, the City condemned the Evans property to provide Rocky Mountain Power with an adequate substitute property. Both railroads and power plants—the City points out—are expressly authorized public uses in the statute.

¶ 13 We disagree with the City's reading of the statute and conclude that it does not contemplate this type of property use. It is not enough to accomplish a public use on some property; the condemnor must satisfy the public use requirement on the property subject to the condemnation. See id. § 78B–6–504(1)

("Before property can be taken it must appear that ... the use to which it is to be applied is a use authorized by law." (emphasis added)). Therefore, while section 501(4) might provide authority for the City to condemn Rocky Mountain Power's property, it does not authorize the City to condemn the Evans property.

¶ 14 Likewise, section 501(8) does not provide authorization for the City to condemn, because even though the ultimate proposed use of the property is to provide electricity, it would be a third party—Rocky Mountain Power—that would own the property and be in charge of the public use. Even if the City's planned use of the property for an exchange purpose could arguably be considered some "other public use[ ]," see id. § 78B–6–501(3)(f)

, there are three provisions in which the legislature makes clear that the eminent domain statutes require that it is the condemnor that must maintain ownership of the property and be in charge of the public use—not a third party. We discuss each in turn.

A. The Party "in Charge of the Public Use for Which the Property Is Sought" Must Be Listed as the Condemnor in the Condemnation Proceeding

¶ 15 Utah Code section 78B–6–507(1)(a)

requires the condemnation complaint to contain the name of the entity "in charge of the public use for which the property is sought." This entity, which is the condemnor, "must be styled plaintiff." Id. In this case, the City condemned the Evans property in order to give it to Rocky Mountain Power. The only valid public use to which this property would be put is a substation, but Rocky Mountain Power, the entity that would build and operate it, is not a party to the condemnation action.

¶ 16 The City relies on Utah County to assert that "a public use can be accomplished by a third party pursuant to an Exchange Agreement." In Utah County , Provo City wanted to construct a road that would "connect two Provo City streets over an island of unincorporated Utah County" land. 2006 UT 33, ¶ 1, 137 P.3d 797

. Provo City lacked constitutional or statutory authority to condemn property located in unincorporated Utah County, so it entered into a contract with Utah County in which Utah County would condemn the property if Provo City paid the expenses of...