City of N. Las Vegas v. 5th & Centennial

130 Nev., Advance Opinion tip
IN THE SUPREME COURT OF THE STATE OF NEVADA
CITY OF NORTH LAS VEGAS, No. 58530
Appellant/Cross-Respondent,
vs.
5TH & CENTENNIAL, LLC, A NEVADA FILED
LIMITED LIABILITY COMPANY; 5TH
& CENTENNIAL II, LLC, A NEVADA AUG 0 7 2014
LIMITED LIABILITY COMPANY; 5TH CLERK
& CENTENNIAL III, LLC, A NEVADA BY AIEF DE
LIMITED LIABILITY COMPANY; ALL
FOR ONE FAMILY TRUST; BRIAN A.
LEE AND JULIE A. LEE, TRUSTEES
FOR THE ALL FOR ONE FAMILY
TRUST; AND BRIAN A. LEE; AND
JULIE A. LEE,
Respondents/Cross-Appellants.
CITY OF NORTH LAS VEGAS, No. 59162
Appellant/Cross-Respondent,
vs.
5TH & CENTENNIAL, LLC, A NEVADA
LIMITED LIABILITY COMPANY; 5TH
& CENTENNIAL II, LLC, A NEVADA
LIMITED LIABILITY COMPANY; 5TH
& CENTENNIAL III, LLC, A NEVADA
LIMITED LIABILITY COMPANY; ALL
FOR ONE FAMILY TRUST; BRIAN A.
LEE; AND JULIE A. LEE,
Respondents/Cross-Appellants.
Petition for rehearing of this court's March 21, 2014, order
affirming in part, reversing in part, and remanding to determine
prejudgment interest in this eminent domain matter. Eighth Judicial
District Court, Clark County; Mark R. Denton, Judge.
Rehearing denied.
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Marquis Aurbach Coifing and Micah S. Echols, Brian R. Hardy, and Jack
C. Juan, Las Vegas,
for Appellant/Cross-Respondent.
John Peter Lee Ltd. and John C. Courtney and John Peter Lee, Las Vegas;
Kemp, Jones & Coulthard, LLP, and William L. Coulthard, Jennifer C.
Dorsey, and Eric M. Pepperman, Las Vegas,
for Respondents/Cross-Appellants.
BEFORE THE COURT EN BANG.'
OPINION
By the Court, GIBBONS, C.J.:
On March 21, 2014, this court issued a dispositional order
regarding this appeal from the district court's decision in an eminent
domain action. In that order we addressed a number of issues, but
pertinent to this opinion, we considered whether the district court erred in
calculating the prejudgment interest award from the date on which the
summons and complaint were served, rather than from the date on which
the injury resulting from the conduct that supported precondemnation
damages arose. We concluded that the district court did err in its
calculation of prejudgment interest, and we held that prejudgment
interest should be calculated from the date on which the resulting injury
arose. Appellant/cross-respondent City of North Las Vegas seeks
rehearing of that order on the prejudgment interest issue, as well as on
'The Honorable Ron Parraguirre, Justice, voluntarily recused
himself from participation in the decision of this matter.
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issues concerning the statute of limitations and standing. Although
rehearing is not warranted, we take this opportunity to address the issues
raised by the City in order to clarify the relevant law.
FACTS AND PROCEDURAL HISTORY
Beginning in 2002, the City planned, adopted, and began
construction on a seven-mile-long, eight-lane, high-speed, super-arterial
roadway along North 5th Street to relieve regional traffic congestion on
Interstate 15 (the Project). Over the next eight years, the City and others
conducted a number of studies, developed reports, budgeted, and
authorized planning documents for the Project. The City's 2004
amendment to its Master Plan of Streets and Highways (AMP-70-04)
allowed for North 5th Street to be widened up to 150 feet and provided
that approval of development applications must be conditioned upon
landowners giving up a 75-foot right-of-way on the land fronting that
street. The Project was divided into two sections: a northern half, from
Owens Avenue to Cheyenne Avenue; and a southern half, from Cheyenne
Avenue to Clark County 215. Between 2000 and 2005, respondents/cross-
appellants 5th & Centennial, LLC; 5th & Centennial II, LLC; 5th &
Centennial III, LLC; All for One Family Trust; and Brian and Julie Lee
(collectively, the Landowners) acquired five vacant parcels totaling more
than 20 acres on the northwest corner of North 5th Street and Centennial
Parkway (the Property), in the northern half of the Project.
When the economy stalled in recent years, so did the City's
progress on the northern half of the Project, which relied on federal
funding. On January 1, 2010, the Landowners filed a complaint against
the City for inverse condemnation and precondemnation damages,
asserting that the City's delay in condemning their properties had
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prevented them from advantageously selling the properties. Following an
eight-day bench trial, the district court concluded that the inverse
condemnation claim was not ripe but awarded the Landowners
precondemnation damages. The district court further awarded the
Landowners attorney fees, costs, and prejudgment interest.
On appeal, we affirmed the district court's orders, except for
the prejudgment interest award, which we reversed and remanded for a
new determination of when that interest began to accrue. 2 The City then
filed this petition for rehearing on the prejudgment interest issue, while
also arguing that it is entitled to an opportunity to raise statute of
limitations and standing defenses.
DISCUSSION
The City argues that we overlooked controlling authority
when deciding that the district court had improperly calculated the
prejudgment interest award from the date when process was served. The
City further argues that it should be given an opportunity to assert
statute of limitations and standing defenses based on the date of
compensable injury.
We disagree. Our conclusion in City of Sparks v. Armstrong,
103 Nev. 619, 748 P.2d 7 (1987), coupled with the Nevada Constitution's
definition of just compensation, allows for interest to be calculated from
the date of taking. Further, the Landowners' claims are not barred by the
applicable statute of limitations, and additionally, the City cannot raise
the statute of limitations defense for the first time on rehearing. Lastly,
We also concluded that the district court abused its discretion in
2
awarding attorney fees.
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the City fails to demonstrate why this court should address its standing
defense on rehearing.
Standard of review
NRAP 40(c)(2) permits this court to grant a petition for
rehearing when it has overlooked or misapprehended a material fact or
has overlooked or misapplied controlling law. See Bahena v. Goodyear
Tire & Rubber Co., 126 Nev. „ 245 P.3d 1182, 1184 (2010). In
petitions for rehearing, parties may not reargue matters they presented in
their appellate briefs and during oral arguments, and no point may be
raised for the first time. NRAP 40(c)(1).
Prejudgment interest
The City contends that prejudgment interest should
commence on the date of the service of the summons and argues that in
our order we overlooked our prior decision in Manke v. Airport Authority of
Washoe County, 101 Nev. 755, 710 P.2d 80 (1985). Further, the City
argues that we should not have relied on City of Sparks v. Armstrong, 103
Nev. 619, 748 P.2d 7 (1987), because Armstrong applied a former version
of NRS 37.175. We disagree.
In Manke, the Airport Authority of Washoe County filed and
served a summons and complaint to condemn the Mankes' property, which
consisted of 4.24 acres of "vacant, unimproved, commercially zoned real
property." 101 Nev. at 756-57, 710 P.2d at 81. When reviewing the
district court's calculation of interest, this court agreed that the
constitutionally required "just compensation" includes interest from the
date of the taking and held that the district court erred in calculating
interest from the date of judgment, noting that under NRS 37.120(1)-(2),
condemned property is valued as of the "date of the service of summons."
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Id. at 758, 710 P.2d at 82. Because the taking occurred at the service of
summons, interest was also calculated as of that date. Id. at 759, 710 P.2d
at 82.
Two years after Manke, this court determined that a taking
could occur before service of thefl summons. Armstrong, 103 Nev. at 621-
22, 748 P.2d at 8-9. In Armstrong, the district court found that a
regulatory taking occurred when the City of Sparks approved a tentative
subdivision map, prohibiting development on Armstrong's parcels. Id. at
621, 748 P.2d at 8. This court agreed that a taking occurred and clarified
that Armstrong was entitled to prejudgment interest from the date of the
taking, which occurred prior to the service of the summons Id. at 623,
748 P.2d at 9. This court again reasoned that the constitutional
requirement of "just compensation" includes "interest from the date of the
taking." Id. (citing Manke). Thus, this court held that Armstrong was
entitled to interest from the time that the regulatory taking occurred, even
though it occurred prior to the summons. Id.
When private property is taken from an owner for public use,
he or she is entitled to just compensation for that taking. Nev. Const. art.
1, § 8(6); NRS 37.120(3). Further, the Nevada Constitution was amended
effective November 2008. 3 This amendment states in part that "just
compensation shall be defined as that sum of money, necessary to place
the property owner back in the same position, monetarily, without any
governmental offsets, as if the property had never been taken." Nev.
Const. art. 1, § 22(4). "Just compensation shall include, but is not limited
3 The
voters first approved this ballot initiative on the November 7,
2006, ballot, and then again on the November 4, 2008, ballot.
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to, compounded interest and all reasonable costs and expenses actually
incurred." Id. Statutorily, "[just compensation for the property taken by
the exercise of eminent domain must include, without limitation, interest
computed pursuant to NRS 37.175." NRS 37.120(3). In order to calculate
that award consistent with the constitution, NRS 37.175(4) instructs the
district court to "determine, in a posttrial hearing, the award of interest
and award as interest the amount of money which will put the person
from whom the property is taken in as good a position monetarily as if the
property had not been taken."
With regard to our decision in this case, we relied on the
Nevada Constitution and Armstrong in recognizing that just compensation
includes interest from the date of taking. Further, we concluded that NRS
37.175(4) is more appropriate than NRS 17.130(2), the general
prejudgment interest statute, for calculating precondemnation damages
because NRS 37.175 is specific to eminent domain cases. We determined
that NRS 37.175(4) also "directs the district court to calculate the interest
from the date of taking" in order to provide just compensation. Thus, for
precondemnation cases, we concluded that the date akin to the taking
date, and thus the most appropriate to use here, is the first compensable
date of injury resulting from the City's oppressive and unreasonable
conduct, which in this case was prior to service of the summons and
complaint.
Accordingly, we decline to grant the City's petition for
rehearing on the prejudgment interest issue. While Manke and Armstrong
held that different dates controlled for the calculation of prejudgment
interest, the underlying rule remains consistent in both cases:
prejudgment interest begins at the time a taking occurs. Here, the
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Landowners suffered injury to their property prior to the summons,
making this factual scenario more akin to Armstrong, where the property
owner suffered damage when Sparks approved a subdivision plan and the
court concluded that a taking occurred at that time.
Further, the City's argument that Armstrong relied on an old
version of the statute is without merit because Armstrong (1) did not rely
on a prior version of NRS 37.175 in making its ruling that prejudgment
interest begins at the date of taking, 4 (2) relied on the constitutional
requirement of just compensation to determine when the prejudgnent
interest should begin, and (3) relied on Manke to conclude that
prejudgment interest begins at the date of taking. Further, the "just
compensation" definition for eminent domain cases was added to the
Nevada Constitution in 2008, subsequent to the Manke and Armstrong
cases. As a result, the constitutional language would supersede any
inconsistency that existed between the Constitution and the Manke and
Armstrong cases. Lueck v. Teuton, 125 Nev. 674, 684 n.2, 219 P.3d 895,
902 n.2 (2009) (noting that to the extent a statutory provision conflicts
with the Nevada Constitution, the Constitution supersedes the statute).
Therefore, we properly (1) concluded that just compensation includes
4 Instead, this court referred to a prior version of NRS 37.175(2) in
noting that, according to Manke, "if the condemned property is neither
unimproved, nor vacant, nor of value to the condemnee for purposes of
investment or development, the recipient of the condemnation award is
only entitled to interest according to NRS 37.175(2)." Armstrong, 103 Nev.
at 623, 748 P.2d at 9 (citing Manke, 101 Nev. at 759 n.6, 710 P.2d at 82
n.6). However, since the property in Armstrong was "vacant, unimproved,
and held for investment purposes at the time of taking," the interest was
not limited by the former NRS 37.175(2). Id.
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interest from the date when the injury began, and (2) remanded this issue
to the district court to determine when the first compensable date of injury
was for the Landowners. 5
Lastly, this court properly relied on MRS 37.175(4) for
calculating interest because it is specific to eminent domain actions. Since
MRS 37.175(4) and NRS 37.120(3) aim to provide the property owner with
just compensation, this court properly concluded that prejudgment
interest for precondemnation damages begins at the date of injury.
Therefore, our analysis of prejudgment interest is consistent with prior
case law and properly relies on NRS 37.175(4), coupled with the
constitutional definition of "just compensation." 8
Statute of limitations
The City also argues that, on remand, it should be allowed to
assert a statute of limitations defense since we instructed the district
5 Thiscourt's conclusion in this case is further buttressed by the fact
that the City's oppressive and unreasonable conduct benefited the City's
ultimate goal while burdening the Landowners. See Manke, 101 Nev. at
759, 710 P.2d at 82.
6The City argues that Klopping v. City of Whittier, 500 P.2d 1345,
1349 (Cal. 1972) stands for the proposition that "just compensation"
should be measured at the time of taking. We conclude that Klopping is
distinguishable from the present case because the valuation date used in
Klopping "is set by statute at the time the summons is issued." 500 P.2d
at 1349. Additionally, Klopping even notes that "depending on the nature
of those activities occurring prior to the issuance of summons a different
date may be required in order to effectuate the constitutional requirement
of just compensation." Id. Thus, Klopping actually supports the notion
that a date other than the date of summons could be appropriate to
provide "just compensation."
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court to determine the first date of injury resulting from the City's
oppressive and unreasonable conduct. We disagree.
First, the Landowners' claims are not barred by the applicable
statute of limitations. This court has concluded that a 15-year statute of
limitations applies "in 'takings' actions." White Pine Lumber Co. v. City of
Reno, 106 Nev. 778, 780, 801 P.2d 1370, 1371-72 (1990) (involving an
inverse condemnation claim against the City of Reno when it conditioned
approval of a project on the donation of the project parcel to the City).
Although separate from inverse condemnation claims, we see no reason to
apply a different limitations period to precondemnation claims, which are
often brought together with an inverse condemnation claim. Under this
ruling, the Landowners'S claims are clearly not barred because they first
purchased parcels in 2000 and filed their complaint in January 2010.
Moreover, the City failed to assert this issue in response to the
Landowners' argument that prejudgment interest should have been
calculated from an earlier date. We conclude that the City cannot pursue
this argument for the first time in its petition for rehearing. NRAP
40(c)(1).
Standing
Finally, the City also contends that it should be given an
opportunity to assert a lack of standing defense against the Landowners
as to the latter three parcels that were not acquired until January 2005,
and the district court could conclude on remand that the injury occurred
earlier than then. We decline to address this argument, however, because
it does not set forth how this court (1) overlooked or misapprehended a
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material fact, or (2) overlooked or misapplied controlling law. NRAP
40(c)(2).
CONCLUSION
Our dispositional order properly concluded that prejudgment
interest should be calculated from the date of taking, which in this case is
the first date of compensable injury. Further, we conclude that the City
cannot raise its statute of limitations argument for the first time on
rehearing, and regardless, that defense is inapplicable to the facts of this
case. Finally, rehearing is not warranted to clarify whether the City can
assert a standing defense on remand
remt-
C C.J.
Gibbons
We concur:
J.
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Hardesty
Do/eat
L,- Kt-i2
J.
Saitta
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