Court Opinion

ID: 9784254
Source: CourtListenerOpinion
Date Created: 2023-08-30 20:40:58.369539+00
Date Added: 2024-06-11T07:35:51.674888
License: Public Domain

HOWARD, Judge,
dissenting.
¶ 12 I dissent because I believe that Rule 68, Ariz. R. Civ. P., 16 A.R.S., can be harmonized with A.R.S. § 12-1128, that it imposes a sanction rather than impermissibly impairs a substantive constitutional right, and that it properly balances the public policies involved.
¶ 13 Rule 68 and § 12-1128(A) can be harmonized because they deal with distinct situations. See Drozda v. McComas, 181 Ariz. 82, 887 P.2d 612 (App.1994) (apparently conflicting rules and statutes should be harmonized wherever possible). Section 12-1128(A) gives the trial court discretion to allocate costs between the parties. Rule 68 does not award costs; it imposes a sanction — reasonable expert witness fees, double taxable costs, and prejudgment interest — when a party refuses an offer of judgment and fails to obtain a more favorable result. See State v. McDonald, 88 Ariz. 1, 352 P.2d 343 (1960) (expert witness fees not costs under § 12-1128(A)).
¶ 14 The distinction between sanctions in Rule 68 and cost awards in § 12-1128(A) becomes even more clear when considering the interaction between Rule 68 and A.R.S. *142§ 12-341 in noncondemnation cases. Section 12-341 requires an award of costs to the successful party. But Rule 68 often sanctions the same “successful” party when an offer of judgment has been made and the successful party receives a judgment less than the offer. See Drozda. Rule 68 and § 12-341 could not be harmonized if they dealt with the same situation. They do not. Section 12-341 deals with costs and Rule 68 imposes a sanction. Likewise, § 12-1128(A) allocates costs and Rule 68 imposes a sanction. If Rule 68 can coexist with § 12-341, see Drozda, it can also coexist with § 12-1128(A).
¶ 15 Rule 68 and § 12-1128(0) also apply in different situations. First, § 12-1128(0) awards a sanction only in the small minority of condemnation actions that are initiated by “an educational, reformatory or penal institution” and therefore does not provide any impetus for settlement in the remainder of condemnation cases. Second, the statute awards a sanction only if the landowner fails to obtain a better judgment than an offer made “prior to commencement of the action or proceeding.” Rule 68, however, only applies to offers “to allow judgment to be entered in the action” and which are made “[a]t any time more than 30 days before the trial begins.” (Emphasis added.) Because Rule 68 and § 12-1128(0) apply to offers made at different time periods and could be applied in the same action, they do not conflict.3
¶ 16 I also disagree with the majority’s conclusion that, because Rule 68 “affects a substantive right” in condemnation eases, it impermissibly infringes on the substantive constitutional right to just compensation as determined by a jury. See Ariz. Const, art. II, § 17. First, Rule 68 is a procedural device and its purpose is to encourage settlement of actions filed in superior court, see Wersch v. Radnor/Landgrawtr-A Phoenix Partnership, 192 Ariz. 99, 961 P.2d 1047 (App.1997), not to change the landowner’s substantive right to compensation.4 Second, all of the Rules of Civil Procedure affect the exercise of the litigants’ substantive, even constitutional, rights in all cases, but that does not necessarily render them inapplicable. For example, Rule 56, Ariz. R. Civ. P., which allows for the entry of summary judgment, applies in all cases and does not violate article II, § 23, of the Arizona Constitution, which provides that “[t]he right of trial by jury shall remain inviolate.” See K.B. v. State Farm Fire & Cas. Co., 189 Ariz. 263, 941 P.2d 1288 (App.1997); Morrell v. St. Luke’s Med. Ctr., 27 Ariz.App. 486, 556 P.2d 334 (1976) (Rule 56 does not unconstitutionally impair right to jury trial). Rule 56 creates a far greater encroachment on the constitutional right to a jury trial than an assessment of sanctions under Rule 68. And Rule 68 is routinely applied in cases where the parties are entitled to a jury trial under article II, § 23, despite any potential chilling effect it may have. I see no reason for the constitutional right to a jury trial under article II, § 17, of the Arizona Constitution in condemnation eases to be treated differently than the constitutional right to a jury trial under article II, § 23. In each situation, Rule 68 is a procedural rule which regulates the method of exercising a litigant’s substantive rights.
¶ 17 Turning then to the case at hand, article II, § 17, provides that a landowner is entitled to just compensation, as determined by a jury, when private property is taken for public use. As noted by the majority, there is authority for the proposition that awarding costs to the condemning authority impermis-sibly lowers the passive landowner’s just compensation. But reducing constitutionally-guaranteed just compensation has already been upheld in City of Phoenix v. Mori, 182 Ariz. 612, 898 P.2d 990 (App.1995) (allocation of costs) and in McDonald (refusing to grant landowner its expert witness fees). And Rule 68 awards a sanction, not costs, to the condemning authority when the landowner refuses an offer of just compensation, need*143lessly extends the litigation, and fails to obtain a better judgment. It applies only to landowners who unjustifiably continue litigation and therefore does not apply to the passive landowner referred to in the award of costs cases or in Nichols’s discussion cited in the majority. Finally, any requirement for just compensation is satisfied when the condemnation plaintiff offers the landowner just compensation without further litigation. If the landowner refuses the offer of just compensation, persists with the litigation, and receives “just compensation” which is less than or equal to the offer, I see no constitutional impediment to imposing a sanction.
¶ 18 The majority correctly cites City of Anchorage v. Scavenius, 539 P.2d 1169 (Alaska 1975), as having resolved a similar issue. In Scavenius, Rule 72, Alaska R. Civ. P., applied solely to condemnation actions and had been interpreted as being the exclusive authority for the award of costs and attorney’s fees in such actions. The Scavenius court found that Rule 68, Alaska R. Civ. P., should not apply because it conflicted with the condemnation-specific Rule 72. But we have no rule in Arizona similar to Alaska’s Rule 72. The court also held that allowing an award of costs might prevent the landowner from taking the risk of challenging the condemnor’s appraisal of the property. In doing so, I believe it improperly balanced the conflicting policy considerations.
¶ 19 In every type of case other than condemnation, the public policy in favor of reducing needless litigation has outweighed the policy in favor of a trial on the merits. See Ariz. R. Civ. P. 68. The opinion in Scavenius and our record here are devoid of any factual support for prohibiting Rule 68 sanctions only in condemnation cases. Governmental agencies are sued constantly for, among other things, motor vehicle accidents, wrongful discharge, assault and battery, wrongful death, defamation, trespass, and breach of contract. In each such litigation, an average person5 could be at a disadvantage because of the economic power of the governmental agency. Yet we unflinchingly apply Rule 68 to these situations, apparently satisfied that the rights of the average person are adequately protected. We have been presented with no evidence distinguishing these litigants from a landowner in a condemnation action or supporting a finding of a chilling effect from governmental agencies’ offers of judgment.
¶20 I see no valid distinction between condemnation cases and other civil cases that would justify treating them differently. In condemnation eases, a landowner who had no prior relationship with the condemning authority is indeed unwillingly dragged into litigation against a powerful adversary. This situation is, however, no different than an unwilling plaintiff who is struck by a vehicle owned and operated by a governmental agency. In the motor vehicle accident case, the adversaries had no prior relationship, there is often an inequality of resources between the parties, and a jury trial is constitutionally available. The rules of procedure have balanced the public policy considerations in favor of reducing unnecessary litigation by providing for a sanction under Rule 68 and an assessment of costs under § 12-341. I see no principled distinction between the personal injury plaintiff who is unfortunately in the path of a government truck and the landowner whose property is unfortunately in the path of a government road.
¶ 21 In this day of litigiousness and overcrowded courts, needless litigation should be avoided and there should be a penalty for unjustifiably pursuing or defending an action. Public policy is best served by treating condemnation cases the same as any other case for purposes of applying Rule 68. If a landowner refuses an offer of just compensation without further litigation, and fails to receive a greater judgment after trial, Rule 68 sanctions should be applied. In Mori, Division One of this court opined, in dicta, based on its review of California law, that a court could award sanctions against an obstructive landowner pursuant to A.R.S. §§ 12-341.01(C) or 12-349. I would hold today that, when appropriate, a court is required to *144award sanctions against an obstructive landowner under Rule 68.
¶ 22 Finally, when our supreme court has adopted a rule which on its face applies to all actions, I believe courts should apply it until the supreme court changes it, as has occurred in Alaska.
¶ 23 For all of these reasons, I dissent.

. Section 12-1127, A.R.S., which provides for an award of costs if a landowner applies for and receives a new trial, but fails to obtain greater compensation, imposes a sanction similar to Rule 68, but, again, in a different context.

. Assuming there is a conflict between Rule 68 and § 12-1128, therefore, Rule 68 would take precedence over the statute. See State v. Robinson, 153 Ariz. 191, 735 P.2d 801 (1987) (court rules prevail over conflicting statute on procedural matters).

. We have been presented no evidence that landowners are typically "average persons,” or land speculators, developers, ranchers, or corporations.