Buzz Stew, LLC v. City of N. Las Vegas

 in 2004 to a third party, Dark, LLC. In the seller's disclosures clause in
the sale contract, Buzz Stew informed Dark, LLC, of the City's demand for
a drainage easement, and Buzz Stew retained the right to any proceeds
resulting from a condemnation of the area proposed in the easement.
Dark, LLC, eventually sold the property to Standard Pacific of Las Vegas,
Inc., who thereafter granted the City an easement to accommodate the
water drainage project.
A few years after selling the land, Buzz Stew filed a complaint
against the City for inverse condemnation and precondemnation damages.
The district court granted the City's motion to dismiss the complaint for
failure to state a claim, and Buzz Stew appealed. See Buzz Stew, L.L.C. v.
City of N. Las Vegas, 124 Nev. 224, 181 P.3d 670 (2008) (Buzz Stew I) In
Buzz Stew I, we affirmed, in part, the district court's order dismissing the
inverse condemnation claim because we concluded that Buzz Stew had not
alleged any facts demonstrating that a taking had occurred. Id. at 230-31,
181 P.3d at 674. We also concluded that Buzz Stew had a viable claim for
precondemnation delay damages because questions of fact remained
regarding whether the City's delay in condemning the property after the
City had publically announced in 2003 its intent to condemn but then
failed to do so was unreasonable and injurious. Id. at 230, 181 P.3d at
674. Accordingly, we reversed the district court's order as to Buzz Stew's
precondemnation damages claim and remanded the matter for further
proceedings. Id.On remand, the district court declined to either apply eminent
domain and inverse condemnation principles to Buzz Stew's
precondemnation damages claim or to instruct the jury on those
principles. After the close of evidence in the seven-day jury trial, Buzz
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Stew moved to amend the pleadings to conform to the evidence." While
the district court appears to have agreed, it later clarified that it was
rejecting the takings claim and ultimately instructed the jury on a
precondemnation claim. Buzz Stew did not raise the amendment issue
again nor submit an amended complaint. The jury returned a verdict for
the City, finding that the City's delay was not unreasonable. Buzz Stew
then filed motions for a new trial and judgment notwithstanding the
verdict, which the district court denied. The district court entered
judgment in favor of the City and awarded it costs. This appeal followed.
On appeal, Buzz Stew argues that newly discovered evidence
presented at trial demonstrated that a taking of its property occurred, for
which just compensation is due, and concerning which it should have been
allowed to amend its complaint, 1 despite our prior opinion concluding that
Buzz Stew had not stated a takings claim upon which relief could be
granted. 2 The City asserts that no new evidence was presented at trial,
'Some confusion exists regarding whether Buzz Stew successfully
moved to amend its complaint From Buzz Stew's record citations and our
independent review of the record, it appears that the only occasion at
which Buzz Stew asserted any intent to amend (as opposed to moving for a
new trial or a verdict notwithstanding the judgment) was in a discussion
with the trial judge at the close of evidence. There, counsel for Buzz Stew
stated "we wanted to amend the pleadings to conform to the evidence
[showing] . . a taking . . ," but the trial judge countered the court had
"already ruled. . . [t]hat it's not [a taking]," and Buzz Stew did not pursue
the matter further. We conclude that this oral exchange between Buzz
Stew and the district court was insufficient to establish that Buzz Stew
actually moved to amend the pleadings.
2 BuzzStew also argues that the district court improperly denied its
motion for judgment notwithstanding the verdict, or judgment as a matter
of law, in which Buzz Stew again sought to recover on a takings claim.
Generally, however, "an appeal does not lie from a district court order that
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that the law of the case doctrine precludes any takings claim, and that
regardless, no taking of any property owned by Buzz Stew was shown.
Because we are not convinced by the record that any compensable taking
of Buzz Stew's property occurred, we conclude that the district court
properly precluded Buzz Stew's newly asserted takings claims.
"Whether a taking has occurred is a question of law that [we]
review[ ] de novo." City of Las Vegas v. Cliff Shadows Prof'l Plaza, L.L.C.,
129 Nev. , , 293 P.3d 860, 866 (2013). Pursuant to the Nevada and
United States Constitutions, the government may not take private
property for public use unless it pays just compensation. Nev. Const. art.
1, § 8(6); U.S. Const. amend. V. To bring a takings claim, the party must
have "a legitimate interest in property that is affected by the government's
activity" at the time of the alleged taking. Cliff Shadows, 129 Nev. at 866,
293 P.3d at 866; see also McCarran Int'l Airport v. Sisolak, 122 Nev. 645,
658, 137 P.3d 1110, 1119 (2006); United States v. Dow, 357 U.S. 17, 20
(1958). Thus, we first determine whether Buzz Stew had "a legitimate
interest in property that is affected by the government's activity" at the
time of the City's alleged taking. Cliff Shadows, 129 Nev. at , 293 P.3d
at 866.
Buzz Stew asserts two bases for its takings argument: the
diversion of flood waters over the property, and the eventual construction
of a drainage channel on the property in 2008. Much of the conduct that
Buzz Stew complains of as having occurred while it owned the property
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denies a post-judgment motion for judgment notwithstanding the verdict."
Banks ex rel. Banks v. Sunrise Hasp., 120 Nev. 822, 827 n.1, 102 P.3d 52,
56 n.1 (2004).
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was previously presented to this court in Buzz Stew I, where we rejected
this conduct as insufficient to support a takings claim. See Buzz Stew I,
124 Nev. at 230-31, 181 P.3d at 674. To the extent its claims rely on this
conduct, we reject them as precluded by Buzz Stew L See Hsu v. Cnty. of
Clark, 123 Nev. 625, 629-30, 173 P.3d 724, 728 (2007) (law-of-the-case
doctrine requires a rulingS made on appeal be followed in subsequent
proceedings in both the lower court and a later appeal).
Regarding the drainage channel, Buzz Stew argues that it has
a property interest in the parcel because it reserved an easement over the
project site in its land sale contract to Dark, LLC. The City disputes that
an easement in favor of Buzz Stew was created. Whether an instrument
has created "an easement is a question of law that we review de novo."
Cliff Shadows, 129 Nev. at , 293 P.3d at 863. "Generally, when a
contract is clear on its face, it 'will be construed from the written language
and enforced as written.' Canfora v. Coast Hotels & Casinos, Inc., 121
Nev. 771, 776,121 P.3d 599, 603 (2005) (quoting Ellison v. Cal. State Auto.
Ass'n, 106 Nev. 601, 603, 797 P.2d 975, 977 (1990)). Here, the plain
language of the sales contract between Buzz Stew and Dark, LLC, merely
notifies Dark, LLC, that its title may be subject to a future drainage
easement and reserves to Buzz Stew only the right to proceeds arising
from a future condemnation action. It does not reserve a property interest
to Buzz Stew. As a result, Buzz Stew had a legitimate interest in the
property affected by the City's project only from 2002-2004, when it owned
the parcel. Therefore, we conclude that the eventual construction of the
easement does not evince a taking of Buzz Stew's property.
As to the diversion of flood waters, Buzz Stew has failed to
show that water was actually diverted onto the property during the time
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Buzz Stew held title. Takings claims lie only with the party who owned
the property at the time the taking occurred. Argier v. Nev. Power Co,,
114 Nev. 137, 139, 952 P.2d 1390, 1391 (1998). Nevada law requires a
plaintiff in a takings action involving drainage of surface waters to show
both a physical invasion of flood waters and resulting substantial injury.
Cnty. of Clark v. Powers, 96 Nev. 497, 501 n.3, 504, 611 P.2d 1072, 1075
n.3, 1076 (1980); see also ASAP Storage, Inc. v. City of Sparks, 123 Nev.
639, 647-48, 173 P.3d 734, 739-40 (2007). Although Buzz Stew presented
evidence that during a 100-year flood event water may pool on one corner
of the property, the evidence did not demonstrate that any pooling had
occurred while Buzz Stew owned the property or that Buzz Stew suffered
any substantial injury from any water diversion. Therefore, we reject
Buzz Stew's claims that a diversion of flood water constituted a taking.
Because Buzz Stew has failed to demonstrate any conduct by
the City that would effect a taking, we conclude that the district court did
not err in refusing to recognize a taking of Buzz Stew's property, convert
the case to a takings case, instruct the jury on takings, or order that just
compensation was due to Buzz Stew. 3
3 The dissent argues that Buzz Stew I impliedly recognized both a
continuing property interest and the possibility of a takings claim by
remanding for precondemnation damages and by noting that Buzz Stew
may be entitled to just compensation. This reasoning first incorrectly
assumes that in Buzz Stew I we impliedly remanded for a takings claim.
Such was not the case. We remanded solely for a trial on
precondemnation damages—a decision that rested in large part on our
holding that there need be no taking before a party may bring a claim for
precondemnation damages. Buzz Stew, LLC v. City of North Las Vegas,
124 Nev. 224, 229, 181 P.3d 670, 673 (2008). Second, in Buzz Stew 1 we
did not interpret the contract clause at issue here, but we do so now in this
order and we agree with the district court that Buzz Stew failed to reserve
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Buzz Stew additionally argues that multiple errors by the
district court entitle it to a new tria1. 4 We disagree. On the question of
whether precondemnation damages were merited, Buzz Stew fails to
express any argument refuting the jury's findings that the City's actions
were not oppressive, as is required for an award of precondemnation
damages. 5 See Buzz Stew L 124 Nev. at 229, 181 P.3d at 673. To the
extent Buzz Stew implies such an argument by asserting its experts
should have been allowed to testify concerning the City's misconduct and
violation of the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970 (Relocation Act), this argument is without
merit. The question of oppressive conduct is one of fact for the jury to
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a property interest in the parcel. To the extent that the dissent's
arguments rest on an interpretation that would recognize a continuing
property interest to Buzz Stew, these arguments fail as they assume that
any reservation of the rights to future condemnation proceeds must rest
on a continuing property interest and overlook the reality that it is the
subsequent owner, not the party reserving the interest in future proceeds,
who must bring suit, thereby leaving open the possibility that no suit will
ever be brought and no such proceeds will ever be realized.
4 We do not consider Buzz Stew's arguments regarding attorney
misconduct, as these arguments are not properly before this court where
Buzz Stew did not object to the conduct below and raises the issue for the
first time on appeal. See Lioce v. Cohen, 124 Nev. 1, 19, 174 P.3d 970, 981
(2008).
°Because the jury did not reach the issue of precondemnation
damages and because the question before the jury was whether Buzz Stew
was entitled to precondemnation damages, we reject Buzz Stew's
arguments that the district court abused its discretion (1) in admitting
evidence that the project benefitted the value of the property, and (2)
excluding evidence referencing eminent domain.
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testify as to their "opinion on the state of the law," United Fire Ins. Co, v.
McClelland, 105 Nev. 504, 509, 780 P.2d 193, 196 (1989), the district court
properly determined that Buzz Stew's experts could not state as a matter
of law whether the City acted oppressively. As to any additional
testimony regarding the Relocation Act, the district court did not err in
excluding this evidence as Buzz Stew failed to show that federal funds
were used for the project. See Rhodes v. City of Chi. for Use of Sch., 516
F.2d 1373, 1377 (7th Cir. 1975); Reg'l Transp. Dist. v. Outdoor Sys., Inc.,
34 P.3d 408, 418 (Colo. 2001). And as to the other evidentiary errors
asserted, in light of our holding that there was no taking and Buzz Stew's
failure to present any facts that would support overturning the jury's
verdict, we summarily dismiss those arguments.
Finally, we are not persuaded by Buzz Stew's argument that
the district court improperly awarded costs to the City. Generally, a
prevailing party is entitled to costs. NRS 18.020; see also Bergmann v.
Boyce, 109 Nev. 670, 678-79, 856 P.2d 560, 565 (1993). While in eminent
domain actions such costs are curtailed, Nev. Const. art. 1, § 22(7), the
present case was an unsuccessful action for precondemnation damages
wherein the City prevailed on its defense. Therefore, we cannot say that
under the facts of this case the district court clearly erred. See Locklin v.
City of Lafayette, 867 P.2d 724, 756 (Cal. 1994) (holding that an inverse
condemnation plaintiff who did not prevail on a takings claim was not
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entitled to be shielded by the law against awarding costs in eminent
domain actions). 6
Accordingly, we
ORDER the judgment of the district court AFFIRMED.
, J.
Hni clesty
Parraguirre
Saitta
cc: Hon. Michael Villani, District Judge
Dana Jonathon Nitz, Settlement Judge
Law Offices of Kermitt L. Waters
Holley, Driggs, Walch, Puzey & Thompson/Las Vegas
Gregory J. Walch
Eighth District Court Clerk
6 Because the City prevailed below and in light of our resolution of
this appeal, we do not address its argument that the district court should
have granted it summary judgment based on sovereign immunity.
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GIBBONS, CA., with whom, Cherry J., agrees, dissenting:
I disagree with the majority's conclusion that the district court
did not abuse its discretion by denying Buzz Stew's motion to amend the
pleadings. Therefore, I would reverse and remand the case to allow Buzz
Stew to amend its pleadings to conform to the evidence presented at trial.
Once amended, the trier of fact could determine if Buzz Stew sustained
any precondemnation damages.
Buzz Stew retained a legitimate interest in the subject property through its
land sale contract with Dark, LLC
The government cannot take private property for public use
without paying just compensation. Nev. Const. art. 1, § 8(6); U.S. Const.
amend. V. A party bringing a takings claim must have "a legitimate
interest in property that is affected by the government's activity" at the
time of the alleged taking. City of Las Vegas v. Cliff Shadows Prof'l Plaza,
L.L.C., 129 Nev. , 293 P.3d 860, 866 (2013); see also McCarran
Int'l Airport v. Sisolak, 122 Nev. 645, 658, 137 P.3d 1110, 1119 (2006);
United States v. Dow, 357 U.S. 17, 20 (1958). The majority concludes that
Buzz Stew does not have a valid takings claim, in part, because it did not
have a 'legitimate interest' in the subject property when the drainage
channel was constructed in 2008. I disagree.
In my view, Buzz Stew retained a 'legitimate interest' in the
subject property through its land sale contract with Dark, LLC.
"Generally, when a contract is clear on its face, it 'will be construed from
the written language and enforced as written." Can fora v. Coast Hotels &
Casinos, Inc., 121 Nev. 771, 776, 121 P.3d 599, 603 (2005) (quoting Ellison
v. Cal. State Auto. Ass'n, 106 Nev. 601, 603, 797 P.2d 975, 977 (1990)).
Here, the plain language of the land sale contract states that Buzz Stew
retains all rights to any proceeds arising out of the condemnation of the
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City's proposed easement. The majority concludes that through this
reservation of rights, Buzz Stew only retained an interest in the proceeds
from a future condemnation of the property, but did not retain any
interest in the property itself. In my view, however, the plain language of
the contract does not draw such a distinction. Instead, I conclude that by
retaining an interest in the proceeds from a future condemnation, Buzz
Stew also retained a sufficient interest in the property to maintain a
takings claim. Cliff Shadows, 129 Nev. at , 293 P.3d at 866. As such
the district court should have allowed Buzz Stew to amend the pleadings
to include a takings claim. See Cohen v. Mirage Resorts, Inc., 119 Nev. 1,
22, 62 P.3d 720, 734 (2003) ("Leave to amend should be freely given when
justice requires . . . .").
This court previously recognized Buzz Stew's interest in the subject
property
In Buzz Stew I, we implicitly held that Buzz Stew had an
actionable interest in the property when we remanded the case back to the
district court to consider the reasonableness of the City's actions for
precondemnation purposes. Buzz Stew, L.L.C. v. City of N. Las Vegas, 124
Nev. 224, 228-29, 231, 181 P.3d 670, 672-73, 674-75 (2008). We also noted
in Buzz Stew I that even though Buzz Stew no longer owned the property,
"[Buzz Stew] may be entitled to compensation because just compensation
should be paid to the person who was the owner at the time of the taking."
Id. at 226 n.1, 181 P.3d at 671 n.1. It is inconsistent to now conclude that
Buzz Stew lacked an interest in the property and not allow the issue to go
to the jury. See Hsu v. Cnty. of Clark, 123 Nev. 625, 629, 173 P.3d 724,
728 (2007) (stating that the law of the case doctrine requires that "the law
or ruling of a first appeal must be followed in all subsequent proceedings,
both in the lower court and on any later appeal").
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Therefore, because Buzz Stew retained a 'legitimate interest'
in the easement property, I depart from the majority and conclude that
the district court abused its discretion by denying Buzz Stew's motion to
amend the pleadings to conform to the evidence.
,J.
Gibbons
I concur:
Cherry
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