August 2014 Updates - Implied Easements and Easement Disputes: A Success Story

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In July, I successfully defended two property owners against an interesting claim their neighbor made for an implied easement by way of necessity over their properties.

In Arizona, as in most states, an implied easement arises over the portion of an original parcel that retains access to a public street if the original parcel is split in two and the split results in one parcel losing access to the public road network. The slideshow below demonstrates the concept using three parcels instead of two. Note that these properties are for example only; they are not the properties involved in the litigation:

 
 

In the litigated case, the owner of the landlocked parcel (similar to Parcel B in the above example) claimed an implied easement over properties that had once been held in common ownership (such as Parcels B and C in the example). However, two important subsequent transactions had occurred that made this litigation more interesting than the typical implied easement case. The owner of the landlocked parcel subsequently purchased adjacent property having access to the public road network, but then, for unknown reasons,  sold that adjacent property, leaving the parcel again landlocked. This slideshow illustrates the two further transactions:

 
 

I was successful in arguing on summary judgment the Pima County Superior Court should apply the same logic an appeals court in Florida used in a similar case to hold that an implied easement by way of necessity disappears if the landlocked parcel subsequently gains access to the public road network and again loses it. A landlocked parcel owner should not be able to "reinvigorate" implied easements arising out of necessity if the landlocked parcel owner had previously solved his or her access issue but subsequently recreated the same problem of his or her own free will.

Implied easements present an interesting land use issue that arises more often than one would think. Having an experienced real estate attorney whom you trust can help resolve these disputes favorably before the litigation gets out of control. 

May 2014 Updates

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The Arizona Supreme Court handed private property owners a victory in City of Phoenix v. Garretson:

“Consistent with our prior cases, we hold that a property owner is entitled to compensation if the government either completely eliminates or substantially impairs the owner’s access to an abutting road and thereby causes the property’s fair market value to decrease. As noted above, however, a landowner who claims or establishes only substantial impairment is not entitled to compensation unless the remaining access is unreasonably circuitous.”
— City of Phoenix v. Garretson, Arizona Supreme Court

The Arizona Supreme Court

Arizona law is now crystal clear regarding the complete destruction of access. Before Garretson, lawyers for condemnors had argued that complete destruction of one access point was non-compensable if the property retained other, non-circuitous, and reasonable access to the road network. Garretson prevents condemning authorities from eliminating one point of access completely for a property to a certain road without paying for any devaluation that occurs to the property as a result. 

The facts of Garretson were first related in this space here. And, as suggested here, the Supreme Court essentially affirmed the Court of Appeals, albeit while substituting a Supreme Court opinion for the written opinion of the lower court.

Government lawyers are never nice to anybody.

Attribution: http://xkcd.com/1332/ Under Creative Commons Attribution NonCommercial 2.5 License 

There are three great things about the ruling. First, superior courts, where trial of these cases occurs, now have a clear statement of the law upon which they can base their rulings.

Second, private property owners are entitled to compensation for access restrictions, which most people intuitively perceive as decreasing the value of real estate. (Whether or not this perception is true is sure to be hotly contested.)

Finally, private property owners now are able to bring into being the parade of horribles surely elucidated in the briefs the city and those aligned with the city submitted to the Supreme Court. The fear of the city and those aligned with it, expressed in those briefs, was surely that lawyers defending property owners would push to extend a favorable ruling to try to capture compensation for every destruction of access in a way that would threaten the very existence of a free society as we know it.

This is known as a "slippery slope" argument (see right), and the city and its minions were, to some extent, correct. For instance, I believe this ruling gives rise to a claim for just compensation when temporary complete destruction of access occurs during construction of improvements even if the access will be re-opened once construction is complete. Temporary complete destruction of access occurs frequently. 

Congratulations again to Dale Zeitlin on giving us a great case with which to go forward once more unto the breach. 

January 2014 Updates - Unpacking Arizona Supreme Court Discretionary Review

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Arizona Supreme Court Seal.jpg

The Arizona Supreme Court has granted the petition to review the City of Phoenix v. Garretson decision of the Arizona Court of Appeals, Division One. Southern Arizona Public Works discussed the appellate decision here. The supreme court will hear oral argument in the case on January 22, 2014.

What does the supreme court's decision mean? In Arizona, civil litigants generally do not have an absolute right to supreme court review. The Supreme Court of Arizona may exercise its discretion to grant a petition for review, but does so infrequently in civil cases. In the court's 2012 fiscal year (July 1, 2012, through July 1, 2013), it received 313 civil petitions for review and granted only 12 petitions, or 3.8%.

The conclusion most lawyers draw from the discretionary nature of supreme court review and the court's limited exercise of it is the court grants petitions for review primarily when it wishes to correct an error at the appellate level, which would bode unwell for the Garretson decision and those who support the decision's reasoning and outcome. However, most lawyers would admit the supreme court sometimes grants review if it wishes to clarify the law by affirming the reasoning of the appellate court and elevating that reasoning into a supreme court opinion. 

How likely is it that the Arizona Supreme Court granted review in Garretson simply to affirm the court of appeals?

The answer is: unlikely, but more likely than you might think, depending on how you interpret the data. In the last 16 years, the Arizona Supreme Court has granted 247 petitions to review civil cases and has affirmed the appellate court only 36 times, or 14.5% of the time. Here is a breakdown:

Arizona Supreme Court Petition for Review Affirmances 1998-2013

Arizona Supreme Court Petition for Review Affirmances 1998-2013

However, during the four full years of Rebecca White Berch's term as Chief Justice, the court affirmed 30-40% of the civil cases the court elected to review. This graph demonstrates the trend:

Arizona Supreme Court Petition for Review Results 1998-2013

The trend line demonstrates a change in attitude over time from the Zlaket court to the Berch court. The reasons for this trend are best left to (probably pointless -- but amusing) speculation, but there is a clear, data-based suggestion the current court looks more favorably upon elevating appellate decisions to become the law of the land. Further, the chances of affirmance in Garretson may be more likely than this analysis shows because this data does not account for partial affirmances. A case partially vacated with regards to, say an award of attorneys' fees, was not coded as "affirmed," even though the court may have affirmed the salient portion of the appellate court's analysis.

It is correct to say the supreme court's decision to grant the petition for review in Garretson is a victory for the petitioner. It would be incorrect to assume, however, the outcome in the supreme court is assured. Good luck to the lawyers arguing the case on January 22nd - Mr. Ayers for the City of Phoenix and Mr. Zeitlin for Garretson. But a little more luck to Mr. Zeitlin. 

 

Does a Commitment to Keep Your Business Open During Construction Change the Amount of Compensation You are Owed for a Temporary Construction Easement?

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Some government agencies will pledge to do whatever it takes to make sure your business stays open while the government is using your property to construct its new public facility, like a road or utility lines. In some instances, the government may go so far as to create an alternate access plan or state in bold on its construction plans, “Access To Remain Open During Construction.”

These assurances do not change the legal rights to use your property that the government takes from you by condemning a temporary construction easement. In condemning an easement over your property, the government takes from you the legal right to use your property in the manner the easement states, and the government cannot lessen the amount of compensation you are owed by promising to use the easement a certain, limited way. In Arizona, this rule is stated in Phoenix Title & Trust Co. v. Arizona Public Serv. Co.:

“When property is acquired by virtue of the power of eminent domain, the compensation of the owner is to be estimated by the actual legal rights acquired by the condemnor and not by the use that he may make of the right.”
— Phoenix Title & Trust Co. v. Arizona Public Serv. Co., 445 P. 2d 169, 8 Ariz. App. 221, 226 (1968).

Property owners should use this to their advantage. The best way to resolve a legal dispute is by agreement, and often times businesses would rather have some say in how the government uses their property than a few more dollars in compensation. Using this principle as leverage could result in an agreement with the city or county to redesign its project and temporary construction easement to lessen the burden on your business.

Keeping your business open during construction is important, but it should not change the amount you are owed for the taking of a temporary construction easement. 

Arizona Clarifies Just Compensation Owed in Eminent Domain When Owner Loses Driveway Access to Public Street

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There is an update to this post here. 

In City of Phoenix v. Garretson, the Arizona Court of Appeals has clarified the law regarding the just compensation a condemnor must pay for restricting a property owner's access to an adjoining street as a result of taking a portion of the property through eminent domain.  

The decision discusses the long, tortuous route the Arizona courts have taken to finally arrive at a very simple rule:

“The government may not completely remove or substantially impair a property’s existing access to an abutting roadway without providing just compensation to the owner. ”
— City of Phoenix v. Garretson

The Garretson property is located in downtown Phoenix, and the City of Phoenix took a temporary construction easement along the north boundary of the property to construct the Phoenix METRO light rail. Garretson claimed that he was owed money because, in constructing the light rail, the City blocked Garretson's driveways onto East Jefferson Street. 

The Garretson property in downtown Phoenix.

The City off Phoenix raised arguments that previous Arizona cases have suggested that a property owner is owed no money for loss of access unless the remaining access is unreasonably circuitous. Arizona has also suggested destroying such access is allowed pursuant to the City's police powers and therefore noncompensable. 

The Court of Appeals dispensed with the City's arguments, which is a victory for private property owners. Now there is no ambiguity in Arizona law regarding the circumstances in which a condemning authority must compensate a property owner for restricting access to a public street. Congratulations to Mr. Dale Zeitlin, of Zeitlin & Zeitlin, P.C., who represented Mr. Garretson.