Court Opinion

ID: 2774570
Source: CourtListenerOpinion
Date Created: 2015-01-29 18:12:02.129119+00
Date Added: 2024-06-11T08:31:58.818119
License: Public Domain

131 Nev., Advance Opinion I
                         IN THE SUPREME COURT OF THE STATE OF NEVADA

                  BUZZ STEW, LLC, A NEVADA                            No. 55220
                  LIMITED LIABILITY COMPANY,
                  Appellant,
                    vs.
                  CITY OF NORTH LAS VEGAS,                                    FILED
                  NEVADA, A MUNICIPAL
                  CORPORATION,                                                JAN 29 2 1315
                  Respondent.                                                TRAQE.
                                                                          CLE/

                                                                         BY

                             Appeal from a district court judgment on a jury verdict, on
                  remand, in a real property action. Eighth Judicial District Court, Clark
                  County; Michael Villani, Judge.
                             Affirmed.

                  Law Offices of Kermitt L. Waters and James J. Leavitt, Kermitt L.
                  Waters, Michael A. Schneider, and Autumn L Waters, Las Vegas,
                  for Appellant.

                  Holley, Driggs, Walch, Puzey & Thompson and Stacy D. Harrop and
                  Gregory J. Walch, Las Vegas,
                  for Respondent.

                  BEFORE THE COURT EN BANC.

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                                                   OPINION'

                  By the Court, HARDESTY, C.J.:
                               Article 1, Section 8(6) of the Nevada Constitution states that a
                  landowner's property may not be taken for public use without just
                  compensation. In Buzz Stew, LLC ii. City of North Las Vegas,         124 Nev.
224, 181 P.3d 670 (2008) (Buzz Stew I), we recognized that, regardless of
                  whether property has actually been taken, the just compensation provision
                  requires compensating a landowner for a lesser invasion of his property
                  rights when a would-be condemnor acts improperly following its
                  announcement of intent to condemn, such as by unreasonably delaying
                  condemnation of the property. Id. at 228-29, 181 P.3d at 672-73. Thus, in
                  Buzz Stew I, we held that even though appellant Buzz Stew, LLC, failed to
                  state a claim for the actual taking of its property, it could still maintain a
                  claim for precondemnation damages against respondent City of North Las
                  Vegas, and we remanded the matter for a jury trial on the issue of
                  whether the City acted unreasonably in delaying its condemnation of Buzz
                  Stew's property after publicly announcing its intent to do so.     Id. at 230,
                  181 P.3d at 674. On remand, the jury found that the City did not act
                  unreasonably, and the district court entered judgment against Buzz Stew.
                  Buzz Stew now appeals to this court for a second time.

                        1 We originally resolved this appeal in a nonprecedential order of
                  affirmance. Respondent City of North Las Vegas and nonparty Nevada
                  Department of Transportation filed motions to publish the order as an
                  opinion. We grant the motions and replace our earlier order with this
                  opinion. See NRAP 36(1).

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                            In this appeal, Buzz Stew asserts that a new trial is required
                due to a number of errors made below, both with regard to the
                precondemnation claim and with respect to new evidence demonstrating
                that the City actually took its property. With respect to the latter
                assertion, we conclude that the evidence presented at trial did not
                establish that a taking occurred while Buzz Stew maintained an interest
                in the property, either by the eventual construction of a drainage system
                on the property or by any prior water invasion. Further, we conclude that
                no error made below warrants a new trial. Finally, we conclude that, even
                though costs are unavailable in eminent domain actions, here, costs may
                be recovered by the City with respect to the unsuccessful precondemnation
                claim. Therefore, we affirm the judgment of the district court.
                                 FACTS AND PROCEDURAL HISTORY
                            Appellant Buzz Stew, LLC, purchased a 20-acre parcel of land
                located in North Las Vegas in 2002. Around this same time, respondent
                City of North Las Vegas was preparing to construct a flood waters
                drainage system that would traverse Buzz Stew's property. The City
                offered to purchase an easement across Buzz Stew's land, but Buzz Stew
                refused the offer. In 2003, the City publicly announced its intent to
                condemn the portion of the land needed for the project. A condemnation
                action was not filed, however, because the City was unable to secure
                construction funding. Notwithstanding its inability to proceed with the
                project, the City failed to publicly retract its prior public announcement of
                its intent to condemn the parcel. Buzz Stew subsequently sold the land 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

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                       resulting from a condemnation of the area proposed in the easement. 2
                       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, LLC 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 publicly 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.

                             2The   disclosures clause, part one, reads as follows:

                                    Seller discloses that there is a pending demand for
                                    permanent drainage easement for the Centennial
                                    Parkway Channel East Project, in favor of the City
                                    of North Las Vegas. Seller shall retain all rights
                                    to any proceeds arising out of any condemnation
                                    proceeding relating thereto, and buyer's title shall
                                    be subject to the drainage easement.

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                               On remand, the district court declined to apply eminent
                   domain and inverse condemnation principles to Buzz Stew's
                   precondemnation damages claim and to instruct the jury on those
                   principles. After the close of evidence in the seven-day jury trial, Buzz
                   Stew orally indicated a desire to amend the pleadings to "conform to the
                   evidence," asserting that takings claims should be allowed to proceed
                   based on new evidence that had been presented at trial of the City's
                   eventual construction of the drainage project in 2008 and of its diversion
                   of water onto the property. While the district court appears to have
                   agreed, it later clarified that it was rejecting the takings claims and
                   ultimately instructed the jury on only the precondemnation claim. 3 Buzz
                   Stew did not raise the amendment issue again or 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.

                         3 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 on
                   which Buzz Stew asserted any intent to amend (as opposed to moving for a
                   new trial or a judgment notwithstanding the verdict) 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.

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                               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 and recover, despite our prior opinion
                concluding that Buzz Stew had not stated a takings claim upon which
                relief could be granted. 4 The City asserts that no new evidence was
                presented at trial, 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.
                                               DISCUSSION
                Pursuit of a new takings claim
                            "Whether a taking has occurred is a question of law that [we]
                review] ] de novo." City of Las Vegas v. Cliff Shadows Prof? Plaza, LLC,
                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

                      4 Buzz Stew 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 new takings claims.
                Generally, however, "an appeal does not lie from a district court order that
                denies a post-judgment motion for judgment notwithstanding the verdict."
                Banks ex rd. Banks v. Sunrise Hosp., 120 Nev. 822, 827 n.1, 102 P.3d 52,
                56 n.1 (2004). Regardless, as explained in this opinion, Buzz Stew failed
                to demonstrate the viability of any new takings claims.

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                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 ,
                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
                • eventual construction of a drainage channel on the property in 2008 and
                the diversion of flood waters over the property. Much of the conduct that
                Buzz Stew complains of as having occurred while it owned the property
                was previously presented to this court in Buzz Stew I,             where we
                determined that the conduct was 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 I.
                See Hsu ix Cnty. of Clark, 123 Nev. 625, 629-30, 173 P.3d 724, 728 (2007)
                (explaining that the law of the case doctrine requires a ruling 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

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                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
                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 the 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 it demonstrated a diversion of flood
                water constituting a taking. Because Buzz Stew has failed to demonstrate

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                  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. 5
                  New trial
                                Buzz Stew additionally argues that multiple errors by the
                  district court entitle it to a new tria1. 6 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

                        5 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 a City of N. Las Vegas, 124
Nev. 224, 229,181 P.3d 670, 673 (2008). Second, in Buzz Stew I we did not
                  interpret the contract clause at issue here, but we do so now, and we agree
                  with the district court that Buzz Stew failed to reserve 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.

                        6We   do not consider Buzz Stew's arguments regarding attorney
                  misconduct, as these arguments are not properly before this court because
                  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).

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                were not oppressive, as is required for an award of precondemnation
                damages. 7 See Buzz Stew I, 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
                decide, id. at 230, 181 P.3d at 673, and because expert witnesses may not
                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.

                      7 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 benefited the value of the property, and (2)
                excluding evidence referencing eminent domain.

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                                   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. MRS 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 u.
                     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
                     entitled to be shielded by the law against awarding costs in eminent
                     domain actions). 8 Accordingly, we affirm the judgment of the district
                     court.

                                                                       cAdati           , C.J.
                                                         Hardesty

                     We concur:

                     Parraguirre
                     7- I:

                                                 J.                      g dead. CUP
                     Saitta                                      Pickering

                              8 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, J., 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 Profl Plaza,
                      LLC, 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.'" 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 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, LLC 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

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