State ex rel. Miller v. Superior Court

• Decision Date: 08 May 1997
• Docket Number: No. 1CA-SA,1CA-SA
• Citation: State ex rel. Miller v. Superior Court, 189 Ariz. 228, 941 P.2d 240 (Ariz. App. 1997)
• Parties: , 242 Ariz. Adv. Rep. 58 STATE of Arizona, ex rel., Charles L. MILLER, Director, Department of Transportation, Petitioner, v. SUPERIOR COURT of the State of Arizona, in and for the County of Maricopa, the Honorable Ruth H. Hilliard, a judge thereof, Respondent Judge, A. Paul STEPHENS, Sr. and Jane Doe Stephens, husband and wife; A. Paul Stephens, Sr. a married man, as his sole and separate property; A. Paul Stephens, Jr., a married man, as his sole and separate property; A. Paul Stephens, Jr. and Jane Doe Stephens, husband and wife; Elizabeth Jane Stephens, as her sole and separate property; First Interstate Bank; Arrowhead Section 30 Corporation, an Arizona corporation; Skunk Creek Properties, Inc., an Arizona corporation, Real Parties in Interest. 96-0314.
• Court: Arizona Court of Appeals

Page 240

941 P.2d 240

189 Ariz. 228, 242 Ariz. Adv. Rep. 58

STATE of Arizona, ex rel., Charles L. MILLER, Director, Department of Transportation, Petitioner, v. SUPERIOR COURT of the State of Arizona, in and for the County of Maricopa, the Honorable Ruth H. Hilliard, a judge thereof, Respondent Judge A. Paul STEPHENS, Sr. and Jane Doe Stephens, husband and wife; A. Paul Stephens, Sr. a married man, as his sole and separate property; A. Paul Stephens, Jr., a married man, as his sole and separate property; A. Paul Stephens, Jr. and Jane Doe Stephens, husband and wife; Elizabeth Jane Stephens, as her sole and separate property; First Interstate Bank; Arrowhead Section 30 Corporation, an Arizona corporation; Skunk Creek Properties, Inc., an Arizona corporation, Real Parties in Interest.

No. 1CA-SA 96-0314.

Court of Appeals of Arizona Division 1, Department C.

May 8, 1997.

[189 Ariz. 229] Grant Woods, The Attorney General by James R. Redpath, Joe Acosta, Jr., and George E. Mariscal, Assistant Attorneys General, Transportation Section, Phoenix, for Petitioner Phoenix.

Meyer & Vucichevich by Rad L. Vucichevich and Stanley Z. Goodfarb,Phoenix, for Real Parties in Interest Stephens Phoenix.

Bell Law Office by Leonard M. Bell, Scottsdale, and Streich Lang by Dan M.

[189 Ariz. 230] Durrant, Phoenix, for Real Parties in Interest First Interstate Bank Phoenix.

OPINION

THOMPSON, Presiding Judge.

Can a property owner introduce an Arizona Department of Transportation (ADOT) appraisal and portions of a stipulated agreement as an admission against interest on value after a partial taking? We find such evidence is barred as evidence of compromise under Arizona Rule of Evidence 408 if not already statutorily precluded by Ariz.Rev.Stat.Ann. (A.R.S.) § 12-1116(J). ¹ Relief granted.

I. JURISDICTION

Petitioner ADOT urges us to accept special action jurisdiction to address the trial court's denial of two of its motions in limine. The motions sought to preclude an appraisal review and valuation approval (the Appraisal) prepared by an ADOT employee and the stipulation agreement (the Agreement) ² between the property owners and ADOT. ³ Admission of the Appraisal and Agreement at trial, ADOT claims, would result in reversible error.

ADOT partially condemned real party in interest Stephens's ⁴ property in Arrowhead Ranch for highway construction in February 1987. Recognizing the magnitude of this condemnation, our supreme court stated: "[A]DOT's exercise of eminent domain against the condemnees in these proceedings is the largest in Arizona history and will result in at least 9 separate condemnation trials...." State ex rel. Miller v. Filler, 168 Ariz. 147, 148, 812 P.2d 620, 621 (1991) (addressing another evidentiary issue on special action). Six years after Filler and ten years after the condemnation, six of those cases still await resolution--including Stephens's case.

Special action relief is reserved for those instances where there is no other equally plain, speedy or adequate remedy and is appropriately granted on pure questions of law where the issue is a matter of first impression and of statewide importance; this is one of those cases. See Orme School v. Reeves, 166 Ariz. 301, 303, 802 P.2d 1000, 1002 (1990); Arizona Rules of Procedure for Special Actions 1.

II. ISSUES

We grant review of the following evidentiary issues:

1. Whether the Appraisal and Agreement are precluded from use at trial by Ariz.R.Evid. 408 (Rule 408) as evidence of compromise or an offer to compromise.

2. Whether the Appraisal and Agreement are precluded from use at trial under A.R.S. § 12-1116(J) as evidence of a stipulation for immediate possession or to prejudice ADOT.

We review legal questions de novo. Libra Group, Inc. v. State, 167 Ariz. 176, 179, 805 P.2d 409, 412 (App.1991).

III. FACTUAL AND PROCEDURAL HISTORY

The facts before us are undisputed. ADOT is the plaintiff in multiple lawsuits arising from condemnations in the Arrowhead Ranch area. On January 12, 1987, a stipulated agreement for immediate possession was reached between ADOT and some of the property owners, including Stephens. Pursuant to the Agreement, the signatory property owners agreed to make no objection to "ADOT's initiation, maintenance and prosecution of condemnation actions...." ADOT agreed to seek immediate possession and to deposit $30,795,000 as the "value estimated by ADOT to be the fair value of the fee interest in the Property." The Agreement provided that the property owners could withdraw the funds deposited.

The value estimated by ADOT was supported by Exhibit C to the Agreement; the bases for Exhibit C were the 1986 appraisal and the resulting January 9, 1987 appraisal review by ADOT employee Mike Chierighino (Chierighino).

On February 13, 1987, ADOT initiated condemnation proceedings in superior court. ADOT took immediate possession of a portion of Stephens's property around Beardsley Road and 59th Avenue.

The only viable issue for trial is the value of the property and the property owners' damages. Each party plans to offer expert testimony at trial on the value of the land. ADOT's recent valuations are lower than the amounts indicated in the Appraisal and Agreement. ⁵ Therefore the property owners seek to introduce the Appraisal and Agreement as evidence relevant to value; they claim that these documents are "admissions against interest" ⁶ by ADOT.

ADOT made motions in limine to preclude the Appraisal and Agreement. In support of its motions, ADOT introduced Chierighino's sworn affidavit that appraisal reviews are generally done for two purposes: (1) as a basis for the acquisition offer, and (2) to set the deposit amount for immediate possession. Chierighino's sworn statement says that his January 9, 1987 appraisal review was specifically prepared for the purposes of making an offer and setting the deposit amount.

The trial court found the Appraisal and Agreement admissible in its October 30, 1996 minute entry, which reads in pertinent part:

As to Plaintiff's Motion in Limine re. State's Deposit and Chierighino Appraisal, the Court notes that all parties agree that the amount of the deposit is not admissible. As to the issue of whether the review appraisal prepared by Chierighino dated 1/9/87 and the Summary and Distribution of ADOT Values dated 1/12/87 are admissible, the State seeks to preclude these documents based on ARS 12-1116(J) and seeks to preclude any witness from testifying about any figures included in those documents. The Defendants argue that the values included in these reports are admissible as the State's determination of value per ARS 28-1865 now (J), then (I) and, therefore, as an admission against interest under Rule 801(d)(2), Rules of Evidence.

The Court finds that the statutory determination of value is admissible as an admission against interest. Only the valuation figures are admissible, however.

IT IS ORDERED allowing into evidence the schedule of values from the 1/12/87 agreement.

Following this ruling, ADOT filed the special action petition now before us.

IV. DISCUSSION

The Arizona Constitution requires "just compensation" be paid to property owners prior to a taking. Ariz. Const. art. 2, § 17. "Just compensation" puts the property owner in the position he would have been in if no taking had occurred. Filler, 168 Ariz. at 149, 812 P.2d 620. "Just compensation" in partial takings is measured by (1) the fair market value of the property actually taken and (2) the diminution of the value of the remaining property. Id.; A.R.S. § 12-1122(A). "Fair market value" is the price a willing buyer would pay and a willing seller would accept. Defnet Land & Inv. Co. v. State ex rel. Herman, 103 Ariz. 388, 389, 442 P.2d 835, 836 (1968).

ADOT asserts two distinct bases supporting preclusion of the Appraisal and Agreement: (1) A.R.S. § 12-1116(J), and (2) Rule oF evidence 408, which pertains to evidence of settlement negotiations.

Property owners argued to the lower court that: (1) the appraisal report was statutorily required under A.R.S. § 28-1865(J) ⁷ to support the price for acquisition and therefore is a party admission under Rule 801(d)(2); (2) California law formed the basis for Arizona eminent domain law and, property owners argue, would have allowed for admission of the appraisal under a similar statute; (3) the evidence was not introduced under A.R.S. § 12-1116(J) and therefore, the prohibition is irrelevant; and (4) Rule 408 is inapplicable.

1. Statutory Preclusion under A.R.S. § 12-1116(J)

ADOT maintains that both A.R.S. § 12-1116(J) and Rule 408 preclude the Appraisal and Agreement. Property owners claim that because no evidence was ever "introduced" pursuant to A.R.S. § 12-1116(J), the prohibition is irrelevant.

A.R.S. § 12-1116 is entitled "Actions for condemnation; immediate possession; money deposit" and details the procedure whereby immediate possession may be taken of condemned property. A.R.S. § 12-1116(J) reads:

No stipulation which is made nor any evidence which is introduced pursuant to this section shall be introduced in evidence or used to the prejudice of any party in interest on the trial of the action.

The statute explicitly precludes the use of either the stipulation or evidence introduced pursuant to the stipulation. Property owners assert that (1) A.R.S. § 12-1116(J) is inapplicable because it is the exhibits and not the Agreement itself which property owners wish to introduce; and (2) because the stipulation agreement happened privately and without a judicial hearing the protections of the statute no longer apply.

To apply the property owners' interpretation would be to read the statute too narrowly. We find that the stipulated agreement for immediate possession is a "stipulation" covered under the statute and Chierighino's appraisal review is "evidence" produced to show probable damages in court or used to effectuate that stipulation. Furthermore, we agree that any use of the...