Opinion ID: 1363069
Heading Depth: 2
Heading Rank: 2

Heading: lease-expectancy costs

Text: The trial court awarded the Salzwedels expenses they incurred in developing their claim for the taking of an expectancy of a lease renewal. [8] Both parties agree that Civil Rule 72(k)(4), as interpreted by Stewart & Grindle, Inc. v. State, 524 P.2d 1242 (Alaska 1974), governs the propriety of that award. Civil Rule 72(k)(4) provides that a property owner's costs and attorney's fees may be assessed against the condemning authority when such allowance . . appears necessary to achieve a just and adequate compensation of the owner. [9] In Stewart & Grindle, three property owners appealed from the denial of their motions for costs. All three cases settled out of court for amounts far greater than the state's initial offer, but the property owners did not meet any of the three specific conditions for fees in Civil Rule 72(k)(1), (2) or (3). [10] We held that owners who did not meet any of these conditions were entitled to fees under Civil Rule 72(k)(4) if the expenses were necessarily incurred: We believe that Rule 72(k)(4) when construed in the framework of the just compensation clauses of the United States and Alaska constitutions does entitle the property owner to be made whole for expenses necessarily incurred in connection with the condemnation of his property. Without such a rule, the State forces a property owner to pay a greater portion of the costs of a public project than any other taxpayer must pay by afflicting him with the unavoidable expenses of condemnation. Placing such a burden on the property owner is no more than just than assessing a levy against him but no others. 524 P.2d at 1250 (emphasis in original). [11] Our holding in Stewart & Grindle does not mean that the state must become the guarantor of costs incurred in advancing every possible legal theory an owner may have in an eminent domain proceeding. [12] The Salzwedels sought compensation for the loss of an expected renewal of a lease. They had leased a parcel for a number of years, and the state did not renew the lease in 1973 because it needed the land for an airport access road. In Stroh v. Alaska State Housing Authority, 459 P.2d 480, 482 (Alaska 1969), we squarely held that a tenant's expectation of renewal of a lease was not a compensable interest. [13] Thus, expenses developing this claim were not necessarily incurred within the meaning of Civil Rule 72(k)(4). [14] We cited two factors in Stewart & Grindle which indicated that the owners' expenses were necessarily incurred: land with no established market value and an initial grossly inadequate offer of compensation by the state. 524 P.2d at 1250-51. [15] The Stewart & Grindle factors do not characterize the Salzwedels' expectancy of a lease renewal. That interest had no compensable value. The state offered zero dollars for the lease expectancy, deposited zero dollars for it, and eventually paid zero dollars for it. The trial court implicitly viewed the government's late successful motion for summary judgment as equivalent to an inadequate offer of compensation. [16] This reasoning is faulty. The government is under express, constitutional obligation to compensate the property owner adequately for a taking. Civil Rule 56 govern motions for summary judgment and neither it, nor the federal rule on which it is based, [17] imposes any duty to move for summary judgment, let alone move at some unspecified time prior to the date set for the close of motions. [18] Furthermore, the Salzwedels themselves could have moved for partial summary judgment on the question of law involved in the lease-expectancy claim, thereby avoiding whatever expenses that an earlier motion by the state could have avoided. We hold that it was error to award fees incurred in unsuccessfully seeking compensation for the expectancy of renewal of the lease. The case is remanded for modification of the awards for costs and fees in accordance with this opinion. REMANDED. BURKE, J., not participating.