The Mill v. State, Dept. of Health

• Decision Date: 22 April 1993
• Docket Number: Nos. 87CA0502,87CA0838 and 91CA0770,s. 87CA0502
• Citation: 868 P.2d 1099
• Parties: THE MILL, Plaintiff-Appellant, v. STATE of Colorado, DEPARTMENT OF HEALTH, Defendant-Appellee. THE MILL, Plaintiff-Appellee and Cross-Appellant, v. STATE of Colorado, DEPARTMENT OF HEALTH, Defendant-Appellant and Cross-Appellee. DEPARTMENT OF HEALTH, State of Colorado, Petitioner-Appellee, v. THE MILL, Respondent-Appellant. . II
• Court: Colorado Court of Appeals

Page 1099

868 P.2d 1099

THE MILL, Plaintiff-Appellant, v. STATE of Colorado, DEPARTMENT OF HEALTH, Defendant-Appellee.

THE MILL, Plaintiff-Appellee and Cross-Appellant, v. STATE of Colorado, DEPARTMENT OF HEALTH, Defendant-Appellant

and Cross-Appellee.

DEPARTMENT OF HEALTH, State of Colorado, Petitioner-Appellee, v. THE MILL, Respondent-Appellant.

Nos. 87CA0502, 87CA0838 and 91CA0770.

Colorado Court of Appeals, Div. II.

April 22, 1993. *

Rehearing Denied June 10, 1993.

Certiorari Granted March 7, 1994.

Holley, Albertson & Polk, P.C., George Alan Holley, Eric E. Torgersen, Golden, for plaintiff-appellant, plaintiff-appellee and cross-appellant, and respondent-appellant.

Gale A. Norton, Atty. Gen., Raymond T. Slaughter, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., Jerry W. Goad, First Asst. Atty. Gen., Denver, for defendant-appellee, defendant-appellant and cross-appellee, and petitioner-appellee.

Opinion by Judge SMITH **.

In an initial consolidated appeal (87CA0502, 87CA0838), The Mill, a partnership, appealed the trial court's dismissal of its claim in inverse condemnation against the Department of Health (State), and both parties appealed the trial court's award to The Mill of $200,000 in damages for what the court determined to be a temporary regulatory taking. In that appeal, we reinstated The Mill's inverse condemnation claim against the State. The Mill v. State, 787 P.2d 176 (Colo.App.1989). However, on certiorari review, the Supreme Court reversed that ruling, and the matter is now before us on remand. State of Colorado v. The Mill, 809 P.2d 434 (Colo.1991).

In addition to the matters on remand, we have consolidated The Mill's appeal of the State's condemnation of The Mill property (91CA0770) under its newly acquired authority to take, by eminent domain, properties which have been designated under the Uranium Mill Tailings Radiation Control Act, 42 U.S.C. §§ 7901 to 7942 (1988) (UMTRCA) as eligible for remedial action. See § 25-11-303(1)(d)(III), C.R.S. (1989 Repl.Vol. 11A).

As to this latter appeal (91CA0770), we reverse the trial court's judgment and remand the cause for further proceedings.

In light of our disposition of the appeal in the eminent domain proceeding, the damage claim issues based upon "promissory estoppel" and "regulatory taking" theories are largely subsumed in that decision. We arrive at that conclusion because, even if there were a regulatory taking or if a promissory estoppel had arisen, the specific monetary damages arising therefrom could not exceed the fair market value of the property. Thus, since the State will be required to pay the total fair market value of the property in the eminent domain proceeding, the issues in the other two cases are rendered moot, except as to the question concerning whether a regulatory taking occurred and, if so, when it occurred and the effect of such a taking upon the condemnation award. We affirm the trial court's findings and conclusion that a total regulatory taking occurred upon cancellation of the coal company lease in May of 1984.

The property at issue here consists of a 61-acre parcel that was, essentially, divided into two parts: The mill yard (roughly 25 acres) and the tailings pile (approximately 36 acres). The property was operated as a uranium and uranium mill tailings disposal site in the late 1950s and until 1962. This activity left the property and the buildings and equipment located on the property contaminated with radioactive material.

Milling operations were originally conducted pursuant to a license issued by the Atomic Energy Commission (AEC) which, after milling operations ceased, was reissued to permit only the storage on the property of past mill tailing products and contaminated equipment and buildings. The permit was again amended in 1968 to allow the transfer of decontaminated equipment. Also in 1968, the State was delegated authority by the AEC to regulate radioactive materials formerly under the jurisdiction of the AEC. In 1971, the State delicensed the mill yard and the property was authorized for unrestricted use.

In 1973, after reviewing all available governmental records regarding the property and discovering the foregoing information relative to the status of the property, The Mill purchased the entire 61 acres.

In 1978, as a result of the growing awareness of the potential public health hazards presented by uranium mill tailings, Congress passed UMTRCA for the purpose of cleaning up "designated" uranium processing sites. Under UMTRCA, processing sites would be either acquired by the State or decontaminated at the government's expense and returned to the property owner.

All 61 acres of The Mill's property were subsequently designated as a "processing site" under UMTRCA, and, in 1981, The Mill and the Department of Energy (DOE) entered into a limited agreement permitting DOE to test the 35-acre tailings pile. Nonetheless, testing was ultimately performed on all 61 acres and contamination of the 'delicensed' or unregulated mill yard was confirmed by the DOE in 1982.

In 1983, The Mill leased its property to O.C. Coal Company, primarily for the storage of coal, at a rental of $7,000 per month. Subsequent to being notified of this lease, the State began issuing The Mill a series of letters and communications which restricted the property's use for coal storage, and, in May of 1984, the coal company prematurely terminated its lease. Since then, The Mill has earned only approximately $500 to $700 a month from the mill yard based upon 20% building use.

Alleging that, because of the State's restrictions, the property could not be put to any reasonable economic use, The Mill filed a complaint in January 1986, alleging three claims for relief: Inverse condemnation; a regulatory taking; and that the State was estopped to deny it the use of its property. The trial court subsequently dismissed The Mill's claim in inverse condemnation.

Upon trial of the remaining claims, the court ruled that the State had so diminished The Mill's right to use its property that it had effected a regulatory taking. Measuring damages in terms of "loss of use" over the period of time which the trial court anticipated decontamination of the property under UMTRCA would require, the court awarded The Mill $200,000.

While these issues were on appeal, the State initiated an action to condemn The Mill property in fee simple under § 25-11-303(1)(d), C.R.S. (1989 Repl.Vol. 11A). In response, The Mill moved for and was denied a dismissal or stay of the action pending the outcome of the consolidated appeal. Pursuant to a stipulation of the parties, the court determined that the fair market value of the property was zero, and it accordingly entered a "rule and order," or judgment, vesting title to The Mill property in the State.

I. 91CA0770

The eminent domain appeal

In its appeal of the eminent domain proceedings, The Mill contends that the trial court's judgment vesting the State with fee simple title to The Mill property must be vacated. We agree.

The record reveals that the "zero" award in the condemnation action here was the result of a stipulation entered into by the parties in lieu of an evidentiary hearing under § 38-1-106, C.R.S. (1982 Repl.Vol. 16A). That stipulation entered into by The Mill and the State provided in relevant part:

Decontaminating The Mill's property, which is presently contaminated with radioactive material, is a public purpose as set forth by statute in the Uranium Mill Tailings Radiation Control Act, 42 U.S.C. § 7901 et seq. and the Colorado Radiation Control Act, § 25-11-301 et seq. C.R.S.

In its present condition, the cost of remedial action and cleanup of The Mill's property to properly decontaminate it exceeds the fair market value which the property would otherwise have if completely uncontaminated. Therefore, in its present condition, the value of The Mill's property is zero.

....

The Colorado Department of Health has the necessity for immediate possession of The Mill's property in order to commence the remedial action and decontamination operations which are the purpose of the present condemnation proceeding. (emphasis added)

A stipulation, like any other agreement between private parties, may be set aside if "there is a sound reason in law or equity" to do so. See generally Lake Meredith Reservoir Co. v. Amity Mutual Irrigation Co., 698 P.2d 1340 (Colo.1985).

The stipulation is, by implication, a direct result of our decision in Department of Health v. Hecla Mining Co., 781 P.2d 122 (Colo.App.1989), in which, as here, the State sought to condemn property, like that at issue in this appeal, heavily contaminated with radioactive uranium tailings and designated under UMTRCA as one of the specific sites eligible for remedial action. We held that the Hecla condemnation, likewise triggered by UMTRCA, was indisputably for a "public purpose."

Of critical importance, in Hecla, we also held that, as in other eminent domain proceedings, valuation of the condemned property was governed by the principle that an owner of land which is condemned is not entitled to recover the increase or enhancement in the value of his land which is caused by the very improvement for which the land is being acquired. Williams v. City & County of Denver, 147 Colo. 195, 363 P.2d 171 (1961). Determining that evidence of the value of Hecla's property in its uncontaminated condition would represent such an increase or enhancement in value, we ruled that, in ascertaining the fair market value of Hecla's property for the purpose of awarding just compensation, no evidence of the uncontaminated value of the condemned land was admissible even though, as here, in its contaminated condition, the value of the property was zero.

In short, Hecla was entirely dispositive of all the issues to be resolved by the court in The Mill's immediate possession hearing under § 38-1-106, C.R.S. (1982 Repl.Vol. 16A). Likewise, it was...