Court Opinion

ID: 5133532
Source: CourtListenerOpinion
Date Created: 2021-12-09 17:18:36.914157+00
Date Added: 2024-06-11T09:39:33.929642
License: Public Domain

134 Nev., Advance Opinion 5,
                       IN THE SUPREME COURT OF THE STATE OF NEVADA

                CLARK COUNTY, A POLITICAL                              No. 71877
                SUBDIVISION OF THE STATE OF
                NEVADA,
                Appellant,
                                                                           HIED
                vs.                                                         AUG 0 2 2018
                HQ METRO, LLC, AN ARIZONA                                           2ROWN
                LIMITED LIABILITY COMPANY;                                                  :11T

                                                                        BYA
                PROJECT ALTA, LLC, A NEVADA                                HIE
                LIMITED LIABILITY COMPANY;
                PROJECT ALTA II, LLC, A NEVADA
                LIMITED LIABILITY COMPANY;
                PROJECT ALTA III, LLC, A NEVADA
                LIMITED LIABILITY COMPANY; AND
                PROJECT ALTA LIQUIDATING TRUST
                U/A/D 12/31/09, BY AND THROUGH
                MARK L. FINE & ASSOCIATES, A
                NEVADA CORPORATION,
                INDIVIDUALLY AND AS TRUSTEE,
                Respondents.

                            Appeal from a final judgment in an action for eminent domain.
                Eighth Judicial District Court, Clark County; Ronald J. Israel, Judge.
                           Affirmed.

                Steven B. Wolfson, District Attorney, and Leslie A. Nielsen and Laura C.
                Rehfeldt, Deputy District Attorneys, Clark County,
                for Appellant.

                Law Offices of Brian C. Padgett and Amy L. Sugden, Brian C. Padgett, and
                Jeremy B. Duke, Las Vegas,
                for Respondents.

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                BEFORE THE COURT EN BANC.'

                                                 OPINION

                By the Court, CHERRY, J.:
                            This appeal challenges a district court order apportioning just
                compensation proceeds in an action for eminent domain. Nevada Power
                Company, d/b/a Nevada Energy (NV Energy), filed a complaint in eminent
                domain to obtain an easement for the installation of electrical transmission
                lines on property owned by respondent HQ Metro, LLC, and leased to
                appellant Clark County. In October 2013, the district court entered an
                order allowing NV Energy to occupy the easement area and construct the
                transmission lines. Before NV Energy physically entered the property to
                begin construction, however, HQ Metro sold the property to Clark County.
                The district court concluded that HQ Metro was entitled to compensation
                for the permanent easement because it was the owner at the time of the
                order granting occupancy, and the court apportioned the proceeds
                accordingly. On appeal, HQ Metro and Clark County dispute which one is
                entitled to compensation for the permanent easement.
                            We conclude that the right to compensation vested when the
                district court entered the order granting immediate occupancy in October
                2013, which permitted NV Energy to permanently occupy the easement
                area and to construct and maintain the transmission lines. Thus, the
                district court properly concluded that HQ Metro, as the property's owner at
                the time of the taking, was entitled to compensation for the permanent
                easement.

                     'The Honorable Ron D. Parraguirre, Justice, voluntarily recused
                himself from participation in the decision of this matter.
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                                  FACTS AND PROCEDURAL HISTORY
                              In May 2013, NV Energy filed a complaint in eminent domain
                to acquire certain easements to construct, operate, and maintain electrical
                transmission lines on property located at 400 S. Martin Luther King
                Boulevard in Las Vegas, Nevada. NV Energy sought both a temporary
                construction easement of 36,863 square feet and a permanent easement of
                16,861 square feet for the transmission lines across the property. HQ Metro
                was named in the complaint as the property's record owner. The complaint
                also named Clark County as a tenant based on a recorded memorandum of
                lease and purchase option with four Project Alta entities. 2 The lease
                provided for the development and 30-year lease of office space and a parking
                garage on the property to Clark County for sublease to the Las Vegas
                Metropolitan Police Department (LVMPD). The lease also gave Clark
                County the option to purchase the property three years after LVMPD
                commenced operations on the property.
                              After filing the complaint, NV Energy moved for immediate
                occupancy under NRS 37.100. Negotiations ensued and the parties entered
                into a stipulation and order for immediate occupancy, conditioned on NV
                Energy depositing $281,000 with the district court. The stipulation
                provided that NV Energy was acquiring the easements for public use and
                authorized NV Energy to immediately occupy both the temporary and

                      2 The  Project Alta entities identified in the complaint included
                respondents Project Alta, LLC; Project Alta II, LLC; Project Alta, III, LLC;
                and Project Alta Liquidating Trust U/A/D 12/31109, by and through Mark
                L. Fine & Associates. Although the nature of their interest in the property
                is not entirely clear from the record, they moved collectively with HQ Metro
                for summary judgment as the prior landowners entitled to the
                condemnation proceeds. Therefore, we refer to the prior landowners
                collectively as HQ Metro.
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                                                                                It I
                permanent easement areas for the purposes of permitting, construction,
                operation, and maintenance of the transmission lines and associated
                facilities on the property. The stipulation further restrained and enjoined
                HQ Metro from interfering with NV Energy's occupancy and performance
                of the work required for the easements. On October 15, 2013, the district
                court filed an order granting immediate occupancy pursuant to the
                stipulation's terms. Shortly thereafter, NV Energy deposited the sum with
                the court, and the order granting immediate occupancy was recorded
                against the property.
                            About a year after the order granting immediate occupancy was
                entered, but before NV Energy began construction on the project, HQ Metro
                sold the property to Clark County for $205 million. The September 2014
                purchase and sale agreement transferred from HQ Metro to Clark County
                the real property together with "any and all of [HQ Metro's] rights,
                easements, licenses and privileges presently thereon or appertaining
                thereto." Attached to the agreement was a list of title exceptions that
                included the order granting occupancy, but the agreement did not mention
                the compensation from the condemnation case or who was entitled to it. The
                grant, bargain, and sale deed, recorded in October 2014, conveyed title to
                Clark County subject to an attached list of exceptions, which also included
                the order granting occupancy to NV Energy.
                            In January 2015, NV Energy entered the property to begin
                construction of its facilities. Construction of the transmission lines was
                completed four months later in May 2015.

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                              HQ Metro and Clark County each moved for summary
                  judgment and claimed entitlement to the just compensation proceeds. HQ
                  Metro argued that it was entitled to the proceeds as the landowner at the
                  time NV Energy obtained the order granting immediate occupancy on
                  October 15, 2013. Conversely, Clark County asserted that the right to
                  compensation did not vest until NV Energy physically entered the property
                  to install the transmission lines in January 2015.
                              The district court entered a summary judgment order
                  determining that HQ Metro was entitled to damages for the permanent
                  easement because it owned the property when the permanent construction
                  easement was granted in October 2013. The court also determined that
                  LVMPD was entitled to damages under the temporary construction
                  easement. Thereafter, the parties reached a global settlement for the total
                  amount of $850,000 as compensation due for both the temporary and
                  permanent easements. Consistent with its summary judgment order, the
                  district court apportioned $775,000 to HQ Metro as damages for the
                  permanent easement. Clark County filed this appeal.
                                                DISCUSSION
                              Under both the Nevada and United States Constitutions, the
                  government may not take private property for public use without the
                  payment of just compensation. Nev. Const. art. 1, § 8(6) ("Private property
                  shall not be taken for public use without just compensation having been
                  first made."); see also U.S. Const. amend. V ("[N]or shall private property
                  be taken for public use, without just compensation."). The parties agree
                  that the owner of the property at the time of the taking is entitled to the
                  compensation proceeds but they disagree as to the event that constituted
                  the taking. HQ Metro argues that the taking occurred when the court
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                entered the order granting immediate occupancy in October 2013, whereas
                Clark County argues that the taking did not occur until NV Energy entered
                the property to begin construction in January 2015.
                             Whether a taking has occurred presents a question of law that
                we review de novo. See City of Las Vegas v. Cliff Shadows Prof 1 Plaza, LLC,
                129 Nev. 1, 11, 293 P.3d 860, 866 (2013). "A taking can arise when the
                government regulates or physically appropriates an individual's private
                property. Physical appropriation exists when the government seizes or
                occupies private property or ousts owners from their private property."
                ASAP Storage, Inc. v. City of Sparks, 123 Nev. 639, 647, 173 P.3d 734, 740
                (2007). When a condemnation proceeding is commenced, NRS 37.100 allows
                the district court to permit a plaintiff, upon a deposit with the court, to
                occupy the premises sought to be condemned pending the entry of judgment.
                See NRS 37.100(2), (6). The court may "restrain the defendant from
                hindering or interfering with the occupation of the premises and the doing
                thereon of the work required for the easement, fee or property rights." NRS
                37.100(8).
                             The owner of the property at the time of the taking is the one
                entitled to compensation rather than a subsequent purchaser who owned
                the property when compensation was paid. Argier v. Nev. Power Co., 114
                Nev. 137, 139, 952 P.2d 1390, 1391 (1998). In Argier, the power company
                filed a complaint to obtain an easement across land owned by the Argiers.
                Id. at 138, 952 P.2d at 1390. The district court granted immediate
                occupancy and the power company installed the power lines, but the Argiers
                sold the property to the county before the court determined the value of the
                easement and the amount of compensation. Id. at 138, 952 P.2d at 1390-
                91, Consequently, the power company argued it no longer had a duty to
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                                                                    i   aaardi
                   compensate the Argiers for the easement because the property was sold
                   before the taking occurred when the agency received title in the final order
                   of condemnation, whereas the Argiers argued that the taking occurred at
                   the point of physical occupation of the property, before it was sold.    Id. at
                   138-39, 952 P.2d at 1391. We held that the power company "effected a
                   taking once it entered upon the land," and that equity mandates that the
                   right to compensation vests when the condemning agency enters into
                   possession of the landowner's property.    Id. at 141, 952 P.2d at 1392-93.
                   Because the Argiers' right to compensation vested when the power company
                   entered their property, before the sale to the county, the Argiers were
                   entitled to compensation. Id. at 142, 952 P.2d at 1393.
                               The decision in Argier, however, is not directly dispositive of the
                   issue before us because, in that case, the power company physically entered
                   the property to install the power lines before the land was sold, and, thus,
                   the Argier court made no distinction between the order for immediate
                   occupancy and the physical entry onto the land. Nonetheless, the reasoning
                   in Argier is instructive. In particular, the Argier court explained that
                   because compensation for a taking is intended as a substitute for the
                   owner's lost interest in the property, the person who owns the property at
                   the time of the taking is entitled to the compensation:
                               When the government interferes with a person's
                               possession of his/her property, the owner loses an
                               interest in that property. The award of just
                               compensation is a substitute for that lost interest
                               in the property. When the owner sells what
                               remains of her property, she does not also sell the
                               right to compensation. If she did, the original
                               owner would suffer a loss and the purchaser would
                               receive a windfall.

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                                                                        AID
                  Id. at 140, 952 P.2d at 1392 (recognizing agreement amongst other
                  jurisdictions on the issue).
                               In this case, the order granting immediate• occupancy
                  constituted a substantial governmental interference with HQ Metro's
                  property rights. "The bundle of property rights includes all rights inherent
                  in ownership, including the inalienable right to possess, use, and enjoy the
                  property."   ASAP Storage, 123 Nev. at 647, 173 P.3d at 740 (internal
                  quotations omitted). The order authorized NV Energy to permanently
                  occupy the easement area for the purpose of constructing and maintaining
                  the transmission lines and associated facilities on the property, and
                  restrained and enjoined HQ Metro from interfering with NV Energy's
                  occupation and performance of the work required for the easement. The
                  order restricted HQ Metro's full use and enjoyment of the property, and the
                  entitlement to compensation is a substitute for that lost interest. When HQ
                  Metro sold the property, it conveyed title subject to the occupancy order.
                  Thus, we conclude that the order granting immediate occupancy constituted
                  a taking of property rights and the right to compensation vested at that
                  time. Because HQ Metro was the owner of the property, it was entitled to
                  compensation for the permanent easement. 3

                               County cites Buzz Stew, LLC v. City of North Las Vegas for the
                         3 Clark
                  holding that a former property owner had failed to establish that a taking
                  occurred while it owned the property, and therefore, a provision in the sales
                  contract retaining only the right to proceeds from a future condemnation
                  action reserved no property interest in the former owner. 131 Nev. 1, 7, 341
                  P.3d 646, 650 (2015). Buzz Stew is distinguishable, however, because here,
                  the parties entered into a stipulation and order providing that the
                  easements were being acquired for public use and establishing the date of
                  occupancy as October 15, 2013. Thus, a taking occurred and the right to
                  compensation vested while HQ Metro owned the property.
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                            Clark County maintains that a taking did not occur until NV
                Energy could no longer abandon the proceeding, when construction on the
                project commenced. We reject this argument because the order granting
                immediate occupancy constituted an injury to HQ Metro's property rights.
                See Argier, 114 Nev. at 140, 952 P.2d at 1391 ("Damages for the taking of
                land or for the injury to the land not taken belong to the one who owns the
                land at the time of the taking or injury, and they do not pass to a subsequent
                grantee of the land except by a provision to that effect in the deed or by
                separate assignment." (quoting 29A C.J.S. Eminent Domain § 194 (1992))).
                Although a plaintiff may abandon the proceeding at any time until 30 days
                after the final judgment, if the plaintiff has been placed in possession of the
                premises under NRS 37.100, the defendant is entitled to damages from
                occupancy of the abandoned property. NRS 37.180(1), (2). Abandonment
                "merely results in an alteration in the property interest taken—from full
                ownership to one of temporary use and occupation." United States v. Dow,
                357 U.S. 17, 26 (1958). Because the order granting occupancy constitutes
                an injury to property rights, the right to compensation vested at that time.
                See Argier, 114 Nev. at 141,952 P.2d at 1393 (holding that equity mandates
                vesting occurs when the condemning agency enters into possession of the
                landowner's property).
                            Finally, Clark County argues that allowing HQ Metro to keep
                the condemnation proceeds will result in a windfall to HQ Metro because
                there is no evidence that the purchase price was discounted for any taking
                by NV Energy, and that an appraisal obtained by HQ Metro in 2013 did not
                mention the condemnation proceeding or the easement. This court will not
                speculate on whether the purchase price accounted for the property interest
                taken by the condemnation proceeding as it has no bearing on the legal

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                issue of whether the order granting immediate occupancy constituted a
                taking of property rights. As we explained in Argier, the award of just
                compensation is a substitute for the owner's loss occasioned by the taking,
                and the owner sells what remains of her property. 114 Nev. at 140, 952
                P.2d at 1392. "Presumably, the purchaser will pay the seller only for the
                real property interest that the seller possesses at the time of the sale and
                can transfer." Brooks Inv. Co. v. City of Bloomington, 232 N.W.2d 911, 918
                (1975). Moreover, Clark County had notice of the condemnation proceeding
                and stipulated to entry of the order granting immediate occupancy, and
                Clark County could have contracted for the right to the just compensation
                proceeds when it purchased the property from HQ Metro.         See Dow, 357
                U.S. at 27 (rejecting an equitable argument where the purchaser had full
                notice of the condemnation proceeding and had "available contractual
                means by which he could have protected himself vis-a-vis his grantors
                against the contingency that• his claim" for compensation would be
                subsequently invalidated under the law). Thus, the equities do not lie in
                Clark County's favor.

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                                              CONCLUSION
                             We conclude that the right to compensation vested when the
                district court entered the order for immediate occupancy, permitting NV
                Energy to occupy the permanent easement area and enjoining HQ Metro
                from interfering with that occupancy. Consequently, HQ Metro as
                landowner was entitled to compensation for the permanent easement, and
                we affirm the district court's order apportioning the proceeds.

                We concur:
                Th

                                             , C.J.
                Douglas

                                                J.
                Pickering

                Hardesty

                    144.1C44..0
                                                J.
                Stiglich

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