Orsett/Columbia Ltd. Partnership v. Superior Court
Docket: No. 1 CA-SA 03-0171
Court: Court of Appeals of Arizona; January 29, 2004; Arizona; State Appellate Court
The court addressed whether Maricopa County could use eminent domain to condemn a leasehold interest in a privately-owned building. The superior court had interpreted Arizona Revised Statutes (A.R.S. section 12-1113) to permit such condemnation for the Peoria Justice of the Peace Court, referencing the case In re Forsstrom. However, the reviewing court concluded that A.R.S. 12-1113 does not authorize the condemnation of a mere leasehold interest, leading to the vacating of the superior court's order that granted the County immediate possession of the premises.
The facts reveal that H.C. Properties, USA Inc. had leased commercial space to the County since 1989, with the lease expiring in 1995 and subsequently extended through amendments until January 31, 2003. After the lease expired, the County remained in possession, resulting in a forcible entry and detainer action by Orsett, the property’s current owner. The superior court ruled that the County could hold over as a tenant until July 31, 2003.
In June 2003, the County initiated an eminent domain complaint to condemn a twenty-three month leasehold interest in the property, seeking immediate possession. The superior court allowed this, reasoning that the County aimed to acquire a leasehold interest rather than extend the lease, maintaining the previous terms except for rent. Orsett challenged this ruling through a special action.
The court accepted jurisdiction for the special action, noting that there was no adequate remedy by appeal, and statutory interpretation could be resolved on the existing record.
The County argues it is entitled to use eminent domain to condemn a leasehold interest in a shopping center, citing Forsstrom to assert that a leasehold is merely a part of the bundle of property rights that can be acquired through eminent domain. The County contends that under Arizona's eminent domain statutes, it is obligated to "take only what it needs," referring to a specific example where it claims to have properly exercised this right by condemning a leasehold interest for twenty-three months.
The validity of the County's argument is assessed by noting that a county can only exercise eminent domain as granted by the state and acts as an agent of the sovereign state. A.R.S. 12-1111 (2003) restricts counties to exercise this power for explicitly enumerated purposes. Historical cases illustrate that this power is narrowly interpreted; for instance, a city was not allowed to condemn property for parking related to city buildings, as it exceeds the statutory allowance.
The legislature alone determines the scope of the authority granted for eminent domain, and the nature and extent of property interests that can be taken must be strictly construed. The power to take property is not extended by implication, emphasizing that any ambiguous authority is interpreted as withheld. This strict construction policy is intended to protect private property rights from government overreach, reflecting a constitutional responsibility to safeguard these interests.
The County argues it has the right to condemn only a leasehold interest under A.R.S. 12-1113, a claim generally supported by the principle that eminent domain can encompass less than a fee interest. However, the key issue is whether the legislature specifically authorized this under A.R.S. 12-1113. This statute outlines the types of property interests that can be condemned, including fee simple and easements, but does not explicitly permit the condemnation of leasehold interests in a way that would allow for their perpetual acquisition. The County references the case of Forsstrom, where the court held that 'fee simple' refers to the full rights in the condemned property. The court clarified that while the statute allows for the condemnation of rights in their entirety, a leasehold cannot be taken in perpetuity, as it inherently lacks that characteristic. Consequently, A.R.S. 12-1113(1) does not authorize the condemnation of leasehold interests unless it leads to acquiring a fee simple title. The court emphasizes that statutes cannot be expanded to include matters not explicitly stated.
The County's argument is rejected based on a comparison of A.R.S. 12-1113(1) and A.R.S. 12-1113(2), which together allow a condemnor to obtain easements, including temporary rights of occupancy, except for uses related to public buildings, permanent structures, and other specified uses in paragraph 1. The proposed use of the Property as a public building falls under the restrictions of A.R.S. 12-1113(1), rendering A.R.S. 12-1113(2) inapplicable. The County cites several Arizona cases to support its claim that it can condemn less than a fee simple interest in a building; however, these cases do not align with its argument since they either involved interests not in fee simple or existing leases where the political subdivision held the underlying fee. For instance, in Town of Williams v. Perrin, the Supreme Court addressed valuation issues rather than the legitimacy of condemning specific interests for public use, and the takings in that case were proper under A.R.S. 12-1113(3) and (2). Other cited cases are similarly distinguishable, as none resulted in the political subdivision retaining only a lease in a building post-condemnation. Additionally, the County's references to cases from other jurisdictions that allow condemnation of lesser interests are unpersuasive, as those statutes differ significantly from Arizona's, which specifically govern the condemnation process and do not authorize acquiring less than fee interests in buildings.
Federal case law allows broad statutory authority for the United States in condemnation proceedings, exemplified by cases such as *United States v. General Motors Corp.*, where the Secretary of War could acquire property deemed necessary for military purposes, and *United States v. Bedford Assoc.*, which involved the Quiet Title Act permitting the U.S. to retain control of property post-judgment with just compensation. In contrast, Arizona law, specifically A.R.S. 12-1113, restricts the State and its political subdivisions from condemning mere leasehold interests in privately-owned commercial buildings. The court found that the superior court mistakenly ruled that the County could condemn such interests, leading to the vacating of the order granting immediate possession. The case is remanded for further proceedings. The term "mere leasehold interest" is used to clarify that the situation differs from cases where the condemnor seeks the underlying fee simple interest. A.R.S. 12-1111 outlines the permissible uses of eminent domain by counties, while the historical context of A.R.S. 12-1113 remains authoritative despite some portions of related cases being overruled.
