Moongate Water Co., Inc. v. City of Las Cruces

Citation: 2014 NMCA 75Docket: 29,083

Court: New Mexico Court of Appeals; April 17, 2014; New Mexico; State Appellate Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Moongate Water Company, Inc. appeals the district court's decision to award costs to the City of Las Cruces, deemed the prevailing party in an inverse condemnation case. The pivotal issue is whether the New Mexico Eminent Domain Code allows costs to be imposed on a property owner who seeks just compensation for property taking. The court affirms that it does. 

Moongate, authorized since 1983 to supply water in a specific area, filed suit after the City annexed land within its certified service area and began developing subdivisions. Moongate claimed both partial and regulatory takings. The district court recognized a partial taking but found insufficient evidence for damages, thus ruling in favor of the City. 

Subsequently, the City sought costs under Rule 1-054(D) NMRA. Moongate contested this, arguing the Code's specific provisions regarding costs favor property owners over condemning entities. However, the court ruled for the City, awarding it $138,170.58 in costs. 

On appeal, the previous determination that the City had taken Moongate's property was overturned, concluding that Moongate lacked exclusive rights against the City’s water utility. The Supreme Court affirmed this and remanded the case for judgment in favor of the City. The current appeal focuses solely on the cost award, which Moongate opposes without challenging the amount.

The standard of review for determining whether the City is entitled to costs is an independent legal question, reviewed de novo, focusing on statutory interpretation and legislative intent. The court utilizes established canons of statutory construction, prioritizing the statute's plain language and ordinary meaning, only deviating to resolve ambiguities or clarify legislative intent.

In this case, Moongate challenges the district court's award of costs to the City as the prevailing party in an inverse condemnation proceeding, arguing that the Code does not allow costs to be taxed against a property owner. The court disagrees with Moongate’s interpretation, clarifying that inverse condemnation actions, where a property owner seeks compensation for property taken without formal condemnation, are governed by the Rules of Civil Procedure. Specifically, Section 42A-1-29 of the Code states that such proceedings adhere to these civil rules, which allow for the recovery of costs by the prevailing party unless otherwise specified. Civil Procedure Rule 1-054(D)(1) articulates that costs, apart from attorney fees, are typically granted to the prevailing party unless the court decides otherwise.

Section 42A-1-29(A) mandates that inverse condemnation actions follow the Rules of Civil Procedure, allowing the City to recover costs under Rule 1-054(D). The language of Section 42A-1-29(A) and the discretionary nature of cost awards in civil cases support the City's entitlement to costs after the dismissal of Moongate's complaint. Moongate's assertion that the Code prohibits cost awards against a condemnee is unfounded, as the Code lacks explicit language to that effect. Should Moongate have prevailed, it too would have been eligible for costs under the same rule. Moongate presents three arguments against the City’s recovery of costs: (1) the Code's intent and language supposedly restrict cost-shifting to the condemnor only; (2) specific cost provisions within the Code should override general provisions; and (3) awarding costs would infringe on the constitutional right to just compensation for property takings. However, these arguments misinterpret Section 42A-1-29 and overlook its governing role in inverse condemnation proceedings. Moongate's reliance on definitions and other sections of the Code fails to recognize the procedural differences between inverse and direct condemnation actions. The overall conclusion is that the City, as the prevailing party, is justified in recovering costs as per the clear provisions of the Code.

Section 42A-1-29 addresses the procedures for condemnees initiating actions for property taken without compensation, demonstrating that inverse condemnation and direct condemnation actions are not synonymous. Moongate's claim against the City falls under this section, which outlines a distinct procedure for such cases, and the validity of the cost award to the City must be evaluated within this framework. Statutory provisions require contextual interpretation, which Moongate overlooks. 

Sections 42A-1-12, 25, and 32 outline specific cost awards applicable in certain condemnation scenarios, but they do not pertain to inverse condemnation proceedings, lacking any stipulation for awarding costs to a prevailing party. Thus, Section 42A-1-29 must be referenced for cost awards in inverse condemnation. 

Moongate's argument that the aforementioned cost provisions create a conflict or limit cost awards is unconvincing, as Section 42A-1-29(A) governs inverse condemnation and incorporates the Rules of Civil Procedure without restrictions. The court refuses to imply exceptions into the statute. Furthermore, the assertion that specific cost provisions in the Code should override general cost provisions fails, as the general provisions are part of the Code and have been adopted within the context of inverse condemnation. The principle that specific statutes control over general ones does not apply here, as there is no conflict between the primary provisions concerning inverse condemnation and the Rules of Civil Procedure.

Moongate argues against awarding costs to a property owner in an inverse condemnation proceeding, citing cases such as Landavazo and City of Sunland Park to support its claim that the Code treats inverse condemnation similarly to other condemnation actions, thus limiting cost awards to specific statutory provisions. The court clarifies that the constitutional requirement for just compensation is governed by distinct procedures and emphasizes the relevance of the specific statutory provisions for inverse condemnation. In Landavazo, the Supreme Court allowed attorney fees for a successful inverse condemnation plaintiff, noting that the statute, while primarily aimed at direct condemnation, does not explicitly exclude inverse cases. However, this decision was based on unique circumstances where a governmental entity took property without compensation, prompting the landowner to incur legal costs to seek justice. The facts of the current case differ significantly, as neither Landavazo nor City of Sunland Park addressed the issue of costs against unsuccessful inverse condemnation plaintiffs. Additionally, the out-of-state cases cited by Moongate primarily pertain to direct condemnation and do not support its position, as they affirm that costs typically fall on the condemnor in direct actions, not inverse ones.

Moongate cited the Supreme Court case Koontz v. St. Johns River Water Management District to argue that governmental actions can unlawfully impede a property owner's right to seek just compensation for property takings. However, the court rejected this assertion, stating that it constituted an unwarranted inference. In Koontz, a landowner's application for a development permit was contingent upon providing a conservation easement or funding improvements, which the Supreme Court deemed to violate the unconstitutional conditions doctrine, necessitating a nexus and proportionality between governmental demands and the effects of land use. The Supreme Court expressed concern over coercive government actions in land-use permitting, affirming that coercively withholding benefits from individuals exercising constitutional rights is impermissible. However, the court clarified that the current case does not involve coercive conduct; it solely addresses whether a prevailing defendant in an inverse condemnation action can recover litigation costs under a procedural rule. The court found no constitutional violation in awarding costs to a prevailing party in such proceedings, interpreting the relevant statute as allowing for such awards. The district court's decision to grant costs to the City was affirmed.