CBS v. Alma School ( 2016 )


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  •                      NOTICE: NOT FOR OFFICIAL PUBLICATION.
    UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
    PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
    IN THE
    ARIZONA COURT OF APPEALS
    DIVISION ONE
    CBS OUTDOOR INC. f/k/a OUTDOOR SYSTEMS ADVERTISING, INC.,
    a Delaware corporation, Plaintiff/Counterdefendant/Appellant,
    v.
    ALMA SCHOOL LANDFILL, INC., an Arizona corporation,
    Defendant/Counterclaimant/Appellee.
    No. 1 CA-CV 14-0665
    FILED 1-21-2016
    Appeal from the Superior Court in Maricopa County
    No. CV2010-027590
    The Honorable John Christian Rea, Judge
    AFFIRMED
    COUNSEL
    Morrill & Aronson, PLC, Phoenix
    By Martin A. Aronson, John T. Moshier
    Counsel for Plaintiff/Counterdefendant/Appellant
    Tiffany & Bosco, PA, Phoenix
    By Dow Glenn Ostlund
    Counsel for Defendant/Counterclaimant/Appellee
    CBS v. ALMA SCHOOL
    Decision of the Court
    MEMORANDUM DECISION
    Judge Samuel A. Thumma delivered the decision of the Court, in which
    Presiding Judge Kenton D. Jones and Judge Peter B. Swann joined.
    T H U M M A, Judge:
    ¶1           This case turns on the terms of a judgment issued more than
    a dozen years ago in a condemnation case. CBS Outdoor Systems, Inc.,
    appeals from a judgment in this case, declaring Alma School Landfill, Inc.,
    the exclusive owner of easement rights described in the judgment in the
    condemnation case. Because CBS has shown no error, the judgment is
    affirmed.
    FACTS AND PROCEDURAL BACKGROUND
    ¶2            In 1995, Alma School and CBS1 entered into a 15-year written
    lease allowing CBS to place and maintain a billboard on real estate Alma
    School owned. Under that lease, if any property was taken through eminent
    domain, Alma School received all compensation and severance damages.
    The lease did, however, allow CBS to pursue compensation for damages to
    its leasehold interest caused by any taking. The lease expressly provided
    that, other than its lease rights, CBS did not have any interest in the real
    property owned by Alma School.
    ¶3             In 1996, the Arizona Department of Transportation (ADOT)
    filed a condemnation action against Alma School and CBS, seeking to take
    from Alma School approximately 15 acres of land “together with any
    leasehold interest.” The billboard subject to the lease was (and is) located
    on this land. After discussing the billboard and lease with Alma School and
    CBS, ADOT amended the condemnation complaint to exclude the billboard
    from the condemnation. By 2002, the condemnation court had issued an
    order of condemnation and final judgment (2002 Judgment). The 2002
    Judgment (1) condemned “an estate in fee and the extinguishment of any
    leasehold interests in and to” the real estate taken; (2) vested in ADOT title
    to the real estate taken but (3) expressly excepted (reserved) from the real
    1 Although CBS was previously known as Outdoor Systems Advertising,
    Inc., this decision refers to CBS throughout.
    2
    CBS v. ALMA SCHOOL
    Decision of the Court
    estate taken “an easement for the maintenance of a billboard,” and “an
    easement for access to the billboard easement,” in favor of Alma School and
    CBS. It is undisputed the State did not condemn the billboard. The 2002
    Judgment awarded Alma School a significant sum for the real estate taken,
    but awarded CBS nothing “since its claims have not been settled or
    adjudicated.” There is no claim that ADOT paid CBS anything in or as a
    result of the condemnation.
    ¶4             After entry of the 2002 Judgment, CBS continued to pay Alma
    School rent under the lease until it expired on July 31, 2010. In 2010, the
    parties unsuccessfully attempted to negotiate an extension of the lease. As
    those negotiations proceeded, CBS first claimed it had the ability to use the
    billboard as a “co-tenant” under the 2002 Judgment, apart from its rights
    under the lease. Nearly two months after the lease expired, CBS filed this
    action seeking declaratory and injunctive relief. Specifically, CBS sought a
    declaration that it was a “co-tenant” of the easements; that CBS “has the
    sole right to operate and maintain a billboard or other sign” in the easement
    area; that Alma School could not eject, evict or oust CBS from the easement
    area and that Alma School could not “maintain or erect its own billboard or
    sign structure in the easement premises” or permit anyone other than CBS
    to do so. Alma School answered and counterclaimed, seeking declaratory
    and injunctive relief, asserting contract and contract-related claims and
    seeking holdover rent and attorneys’ fees.
    ¶5            CBS moved for summary judgment, which the superior court
    denied, finding the 2002 Judgment:
    declared the rights of Alma School and CBS as
    they related to the State but does not, either
    expressly or impliedly, change the relationship
    between Alma School and CBS. The
    fundamental nature of that relationship --
    landlord and tenant -- remains the same
    although in a modified form that is subject to
    the State’s fee simple title.
    ¶6            Alma School then moved for summary judgment, seeking a
    declaration that it was the exclusive owner and beneficiary of the easement.
    The superior court granted summary judgment for Alma School in part,
    finding CBS had no ownership rights in the easement, but denied the
    motion as to Alma School’s claims for holdover rent and attorneys’ fees.
    After those remaining claims were resolved, the court entered judgment
    that, as relevant here, declared Alma School the exclusive owner of the
    3
    CBS v. ALMA SCHOOL
    Decision of the Court
    easement, that CBS’ right of possession terminated on July 31, 2010 when
    the lease expired and dismissed CBS’ claims. This court has jurisdiction
    over CBS’ timely appeal pursuant to Arizona Revised Statutes (A.R.S.)
    section 12-2101(A)(1) (2016).2
    DISCUSSION
    ¶7           CBS argues it became a co-owner of the easement, and was no
    longer a lessee, upon the entry of the 2002 Judgment. CBS argues the
    superior court erred in rejecting its argument that the 2002 Judgment made
    CBS and Alma School co-owners of the easement and granting summary
    judgment in favor of Alma School.
    ¶8             Summary judgment is proper “if the moving party shows that
    there is no genuine dispute as to any material fact and the moving party is
    entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). This court
    “determine[s] de novo whether a genuine issue of material fact exists,”
    Federico v. Maric, 
    224 Ariz. 34
    , 36 ¶ 7 (App. 2010) (citation omitted), and
    “independently review[s] questions of law,” Logerquist v. Danforth, 
    188 Ariz. 16
    , 18 (App. 1996) (citations omitted). The interpretation of a judgment
    is a question of law subject to de novo review. Cohen v. Frey, 
    215 Ariz. 62
    ,
    66 ¶ 10 (App. 2007).
    ¶9            When the parties dispute the meaning of a judgment, the
    court must determine whether the language of the judgment is ambiguous.
    
    Cohen, 215 Ariz. at 66
    ¶ 11; see also In re Marriage of Johnson & Gravino, 
    231 Ariz. 228
    , 233 ¶ 16 (App. 2012) (“First, we must determine if the decree is
    ambiguous.”). CBS contends Cohen is contrary to In re Marriage of Zale,
    which held that “the parol evidence rule, a rule of substantive contract law,
    does not apply to a judgment.” 
    193 Ariz. 246
    , 250 ¶ 15 (1999). Recognizing
    that a judgment may be ambiguous, however, Zale added that “’[a]
    judgment which is ambiguous and uncertain may be read in connection
    with the entire record and construed accordingly.’” 
    Id. at 250-51
    ¶ 18
    (quoting Benson v. State, 
    108 Ariz. 513
    , 515 (1972)). Thus, as relevant here,
    Cohen and Zale can peacefully co-exist and echo the proposition that a
    judgment “must be construed in light of the situation of the court, what was
    before it, and the accompanying circumstances. In cases of ambiguity or
    doubt the meaning of the judgment must be determined by that which
    2Absent material revisions after the relevant dates, statutes and rules cited
    refer to the current version unless otherwise indicated.
    4
    CBS v. ALMA SCHOOL
    Decision of the Court
    preceded it and that which it was intended to execute.” Paxton v. McDonald,
    
    72 Ariz. 378
    , 383 (1951); accord 
    Benson, 108 Ariz. at 515
    .
    ¶10            As applied, when the State filed the condemnation action in
    1996, Alma School owned a fee-simple interest in the land being taken
    (albeit subject to the lease with CBS) and CBS had a leasehold interest under
    the lease with Alma School. CBS had no other interest in the land being
    taken. CBS had no claim of right -- against either Alma School or ADOT --
    to obtain an interest greater than it had under the lease.
    ¶11            In the condemnation, ADOT obtained a fee-simple interest in
    the land taken and “the extinguishment of any leasehold interest in and to”
    that land. ADOT paid Alma School for its fee-simple interest in the land
    being taken. Had ADOT practically ended CBS’ rights to use the billboard,
    it would have been constitutionally required to pay CBS just compensation.
    See Ariz. Const. art. 2 § 17. In the condemnation, however, ADOT did not
    pay CBS anything. Nor is there any suggestion that ADOT paid Alma
    School anything for what CBS now claims was a transfer of some of Alma
    School’s rights to CBS. Finally, in the condemnation, ADOT could not
    properly have given CBS rights to which it was not entitled. See Ariz. Const.
    Art. 9 § 7. As noted by the superior court,
    It is undisputed that the easement
    reservations in the [2002] Judgment were
    included in order to absolve the State from
    paying just compensation to either Alma School
    or CBS for the taking of the billboard property.
    CBS’s interpretation of the easement language
    would mean that the [2002] Judgment took a
    valuable property right from Alma School and
    gave it CBS without just compensation to Alma
    School.
    The Court’s interpretation of the [2002]
    Judgment is that it does not give CBS perpetual
    ownership rights in the easement. CBS’s interest
    in the easement is subject to the terms and
    conditions of the [lease].
    This analysis of the 2002 Judgment, “in connection with the entire record
    and construed accordingly,” is what Zale directs should 
    occur. 193 Ariz. at 250-51
    ¶ 18 (quoting 
    Benson, 108 Ariz. at 515
    ); accord 
    Paxton, 72 Ariz. at 383
    .
    5
    CBS v. ALMA SCHOOL
    Decision of the Court
    ¶12           As recognized by the superior court, ADOT did not
    compensate Alma School or CBS for the lease because the easement
    maintained the status quo as to the relationship between those parties
    (Alma School and CBS). Excluding the easement from the land being taken
    allowed CBS to retain the benefit of its bargain in the lease with Alma
    School and allowed that lease to continue uninterrupted. CBS’
    interpretation is contrary to the property rights taken in the condemnation
    action and contrary to the property rights that were subject to adjudication
    in the 2002 Judgment, given the amended pleading filed by ADOT. Viewed
    in the context of what was sought in the condemnation action, there is no
    basis to conclude that the 2002 Judgment, through the easements, properly
    reallocated property rights between CBS and Alma School. Although the
    2002 Judgment clearly could have used more precise language, and the
    language it did use is not a model of clarity when viewed in the abstract,
    given these circumstances, the superior court properly granted summary
    judgment to Alma School. See 
    Paxton, 72 Ariz. at 383
    (“In cases of ambiguity
    or doubt the meaning of the judgment must be determined by that which
    preceded it and that which it was intended to execute.”).3
    ¶13             Both parties request attorneys’ fees and costs on appeal
    pursuant to paragraph 14 of the lease and A.R.S. § 12-341.01. Because CBS
    did not prevail, its request is denied. As the successful party, Alma School
    is entitled to an award of its attorneys’ fees and costs on appeal pursuant to
    paragraph 14 of the lease contingent upon compliance with Ariz. R. Civ.
    App. P. 21.
    CONCLUSION
    ¶14           The judgment in favor of Alma School is affirmed.
    :ama
    3Given this resolution, this court need not address the parties’ arguments
    regarding a “Southern Billboard Settlement Agreement.”
    6
    

Document Info

Docket Number: 1 CA-CV 14-0665

Filed Date: 1/21/2016

Precedential Status: Non-Precedential

Modified Date: 4/18/2021