Court Opinion

ID: 4528333
Source: CourtListenerOpinion
Date Created: 2020-04-23 18:03:33.586145+00
Date Added: 2024-06-11T09:26:42.532365
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                   SUMMARY
                                                                April 23, 2020

                                2020COA73

No. 19CA0191, Aurora Public School District v. Stapleton
Gateway LLC — Eminent Domain — Deposits — Withdrawal of
Deposits

     A division of the court of appeals concludes, as a matter of

first impression and under the facts of this case, that a

condemnation deposit withdrawn with the parties’ consent from a

district court registry need not be immediately returned to the

registry when the condemnation is abandoned. Because the district

court retains jurisdiction over the deposit, the withdrawing party

may retain those funds until the condemnation damages proceeding

is completed but must return any excess beyond the party’s actual

damages.
COLORADO COURT OF APPEALS                                           2020COA73

Court of Appeals No. 19CA0191
Adams County District Court No. 16CV31107
Honorable Edward C. Moss, Judge

Aurora Public School District, a school district in the State of Colorado,

Petitioner-Appellant,

v.

Stapleton Gateway LLC, a Colorado limited liability company,

Respondent-Appellee.

                            JUDGMENT AFFIRMED

                                  Division VI
                          Opinion by JUDGE FREYRE
                        Richman and Grove, JJ., concur

                           Announced April 23, 2020

Hamre, Rodriguez, Ostrander, & Dingess P.C., Richard F. Rodriguez, Donald M.
Ostrander, Denver, Colorado, for Petitioner-Appellant

Faegre Drinker Biddle & Reath, LLP, John R. Sperber, Sean J. Metherell,
Denver, Colorado, for Respondent-Appellee
¶1    In this abandoned condemnation action, we are asked to

 decide whether a security deposit withdrawn from the court registry

 must be immediately returned to the court registry when the

 condemnation is abandoned and the award of damages arising from

 the abandonment is still pending. Condemnor, Aurora Public

 School District (APS), appeals the district court’s order denying its

 request for the deposit’s immediate return to the court registry by

 condemnee, Stapleton Gateway LLC (Stapleton), after APS

 abandoned the condemnation. Recognizing that the condemnation

 statute is silent on this issue and that the district court retains

 jurisdiction over the deposit pending the damages resolution, we

 hold that a district court retains discretion over the location of the

 deposit. Under the particular circumstances of this case, Stapleton

 is not required to return the deposit to the court registry before

 resolving its claim for abandonment damages and, therefore, we

 affirm the court’s judgment.

               I.   Factual and Procedural Background

¶2    Stapleton purchased a commercial property (property) that is

 adjacent to an APS school and parking lot. The property covers a

 city block and supports multiple two-story office buildings

                                    1
 connected to warehouses. APS adopted a resolution to expand the

 school by purchasing Stapleton’s property. When Stapleton refused

 APS’s offers, APS filed a condemnation petition, but did not seek

 immediate possession of the property.

¶3    While the parties were scheduling the valuation trial, APS

 informed Stapleton that it would need to demolish the structures on

 the property no later than the spring of 2018. Therefore, APS

 requested “limited possession of the property” for any lawful

 purposes including, without limitation, surveying, testing, and

 inspecting the property. Consequently, the parties filed a

 stipulation for limited possession (stipulation) with the court that

 allowed APS, upon depositing $2.7 million into the court registry, to

 take limited possession of the property on April 1, 2018, several

 weeks before the valuation trial. The stipulation also allowed

 Stapleton to withdraw 100% of the deposit with notice to and

 consent from APS. APS deposited $2.7 million into the registry on

 December 19, 2017.

¶4    On January 3, 2018, Stapleton moved, with APS’s consent, to

 withdraw $2.7 million from the registry. Three days later, the

 district court granted Stapleton’s motion and ordered disbursement

                                   2
 of the entire deposit. Neither the stipulation, the motion to

 withdraw funds, nor the court’s order allowing the withdrawal

 contained any provision limiting Stapleton’s use of the deposit or

 provided for the money to be refunded in the event the

 condemnation was abandoned. Stapleton used the money to fund

 two new real estate purchases.

¶5      On February 7, 2018, APS notified Stapleton that it was

 abandoning the condemnation, and it filed a “Motion for Forthwith

 Order Directing Return of Funds” (forthwith motion) requesting that

 Stapleton return the $2.7 million deposit to the court registry.

 Stapleton moved to preclude abandonment under the equitable

 estoppel doctrine. The district court denied Stapleton’s attempt to

 preclude abandonment, and a division of this court affirmed the

 district court’s order. See Aurora Pub. Sch. Dist. v. Stapleton

 Gateway LLC, (Colo. App. No. 18CA1502 & 18CA1922, Oct. 31,

 2019) (not published pursuant to C.A.R. 35(e)) (cert. denied Apr. 20,

 2020).1

 1   The court’s denial of Stapleton’s attorney fees was also affirmed.

                                      3
¶6    Thereafter, the parties filed a “Joint Motion and Stipulation

 Regarding Proceedings” (joint motion). In the joint motion, they

 agreed that Stapleton had a claim for abandonment damages and

 the right to pursue “all consequential damages associated with this

 Condemnation Action and APS’s abandonment” in a separate action

 (damages case). The joint motion stated that Stapleton “will pursue

 such a claim seeking all consequential damages . . . in a separately

 filed case.”

¶7    The joint motion also provided that one of the remaining

 issues for the court to decide was APS’s forthwith motion for return

 of the $2.7 million. The court granted the joint motion, using the

 above-quoted language to describe Stapleton’s obligation to file a

 separate case, and requested briefing on the forthwith motion.

¶8    After considering the parties’ legal arguments, the district

 court denied APS’s forthwith motion. Therefore, the narrow

 question we consider is whether, under these facts, Stapleton must

 return $2.7 million to the registry before the court determines

 abandonment damages as part of a separately filed case.

¶9    We answer that question “no” for three reasons. First,

 well-settled Colorado law recognizes that a condemnation deposit

                                   4
functions as security for payment of damages suffered by a

landowner due to abandonment. Swift v. Smith, 119 Colo. 126,

135, 201 P.2d 609, 613-14 (1948). Second, the district court

retains jurisdiction and control over the deposit, whether it resides

in the registry or remains invested in real estate. See United States

v. Miller, 317 U.S. 369, 381 (1943). Third, section 38-1-105(6)(b),

C.R.S. 2019, recognizes a relationship between the deposit and the

total value of the condemned property and permits the court clerk

to offset withdrawals from the deposit against compensation due or

damages awarded to a condemnee in the event of abandonment of

the condemnation proceeding. See Johnson v. Climax Molybdenum

Co., 109 Colo. 308, 310, 124 P.2d 929, 931 (1942) (citing Denver &

New Orleans R.R. Co. v. Lamborn, 8 Colo. 380, 385, 8 P. 582, 585

(1885)). Therefore, as a practical matter, it makes little sense for

Stapleton to incur additional expenses in selling the property that it

acquired to replace the parcel that APS condemned just to return

$2.7 million to the registry when Stapleton may be entitled to some

of the deposit following the damages hearing. See First Interstate

Bank v. Tanktech, Inc., 864 P.2d 116, 121 (Colo. 1993) (“Common

                                   5
  sense suggests that this is a correct result . . . .”). Accordingly, we

  affirm the court’s order.

                         II.   Scope of the Appeal

¶ 10   Initially, we address the scope of this appeal. APS argues at

  length in its opening brief that Stapleton must return the deposit to

  the registry because (1) the deposit cannot legally serve as security

  for abandonment damages and (2) there can be no damages since

  APS never took possession of the property. However, the parties’

  joint motion belies these arguments because the parties agreed that

  Stapleton has a claim for abandonment damages and the right to

  pursue all consequential damages associated with the

  condemnation action, subject to APS’s contrary argument.

  Moreover, they agreed that all issues related to abandonment

  damages would be litigated in a separate damages case. Therefore,

  we decline to address APS’s legal arguments pertaining to damages,

  as they are beyond the scope of the narrow issue appealed. See

  Crown Life Ins. Co. v. Haag Ltd. P’ship, 929 P.2d 42, 45 (Colo. App.

  1996) (declining to address issue not presented to the trial court);

  People in Interest of C.K.G. v. C.D.G., 505 P.2d 979, 982 (Colo. App.

                                     6
  1972) (not published pursuant to C.A.R. 35(f)) (declining to address

  issues outside the scope of appeal).

                         III.   Condemnation Deposit

¶ 11   APS contends that Stapleton cannot retain the condemnation

  deposit and must return it to the court registry immediately.

  Beyond the legal arguments not properly before us, APS cites no

  authority for this contention but asserts that “it should not have to

  live unprotected for years and merely hope that Stapleton is still

  around and has the ability to repay the funds if the future damage

  claims are ultimately unsuccessful.” Because we agree with the

  district court’s legal analysis, we affirm its judgment.

                    A.      Standard of Review and Law

¶ 12   A court’s interpretation of the eminent domain statutes

  presents a question of law that we review de novo. E-470 Pub.

  Highway Auth. v. 455 Co., 3 P.3d 18, 22 (Colo. 2000); Palizzi v. City

  of Brighton, 228 P.3d 957, 962 (Colo. 2010).

¶ 13   Section 38-1-105(6)(a) provides that a court may authorize a

  condemnor to take possession of the property it seeks to condemn if

  the condemnor deposits a sum with the court sufficient to pay the

  compensation when it is later ascertained. “[T]he purpose of

                                       7
  requiring a deposit is to provide the [condemnee] with security for

  the payment of compensation and damages to be ultimately

  awarded.” City of Englewood v. Reffel, 34 Colo. App. 103, 108, 522
P.2d 1241, 1244 (1974); see also Swift, 119 Colo. at 135, 201 P.2d

  at 613-14 (same). Withdrawals from the deposit are provisional,

  pending final ascertainment of compensation and damages. Swift,
119 Colo. at 135, 201 P.2d at 613-14; City of Englewood, 34 Colo.

  App. at 108, 522 P.2d at 1244.

¶ 14   As relevant here, section 38-1-105(6)(b) provides that,

            [u]pon proper application to the court or by
            stipulation between the parties, the
            [condemnee] may withdraw from the sum so
            deposited an amount not to exceed
            three-fourths of the highest valuation
            evidenced or testimony presented by the
            [condemnor] at the hearing for possession,
            unless the [condemnor] agrees to a larger
            withdrawal, if all parties interested in the
            property sought to be acquired consent and
            agree to such withdrawal. Any such
            withdrawal of said deposit shall be a partial
            payment of the amount of total compensation
            to be paid and shall be deducted by the clerk
            of the court from any award or verdict entered
            thereafter.

¶ 15   While the statute plainly permits the withdrawn funds to offset

  the compensation payment, our supreme court has long held that

                                    8
  the withdrawn funds may also be used to offset a landowner’s

  damages flowing from the abandoned condemnation action. See

  Lamborn, 8 Colo. at 382, 8 P. at 583.

                               B.    Analysis

¶ 16   The district court determined that no Colorado law required

  the deposit’s return to the court registry in advance of the damages

  determination. First, it noted that section 38-1-105(6) is silent

  regarding who should hold the deposit pending an abandonment or

  consequential damages determination. Next, it noted that one

  purpose of the deposit was to serve as security for any

  abandonment damages. And it found that it retained jurisdiction

  and control over the deposit under Miller. See Miller, 317 U.S. at

  382 (district court “retain[s] jurisdiction” over a condemnation

  deposit pending a final damages determination). We agree with this

  analysis.

¶ 17   We are not persuaded by APS’s assertion that the district

  court’s reliance on Miller was misplaced because the court’s actual

  control, as opposed to its jurisdiction, over the deposit is at issue.

  APS cites no authority to support this argument, nor have we found

  any. We have, however, found authority in other jurisdictions to

                                      9
  support Stapleton’s contention that it may retain the deposit until

  damages are determined. See People v. Weiss, 133 P.3d 1180, 1187

  (Colo. 2006) (“Although not binding as precedent, we may look to

  decisions of other jurisdictions for persuasive guidance on matters

  that are of first impression to us.”).

¶ 18   In Los Angeles Unified School District v. Wilshire Center

  Marketplace, 108 Cal. Rptr. 2d. 691, 693 (Ct. App. 2001), the

  condemnor deposited approximately $48 million with the court.

  The condemnee withdrew the entire amount after the condemnor

  abandoned the condemnation but before the final damages

  determination. Id. Although the location of the withdrawn funds

  was not at issue, the condemnee retained possession of the entire

  deposit and did not return it to the court registry before damages

  were determined. Id. at 694. When roughly $3 million in damages

  was awarded, the court ordered the condemnee to return the $45

  million excess. Id. This outcome is consistent with Colorado law,

  Swift, 119 Colo. at 135, 201 P.2d at 613-14, and the law of many

  other jurisdictions, see Reynolds v. La., Ark. & Mo. Ry. Co., 26 S.W.
1039, 1039 (Ark. 1894); City of Downey v. Johnson, 145 Cal. Rptr.
298, 299 (Ct. App. 1978); Kellett v. Dep’t of Transp., 329 S.E.2d
10
  514, 516 (Ga. Ct. App. 1985); Dep’t of Transp. v. New Century Eng’g

  & Dev. Corp., 454 N.E.2d 635, 637 (Ill. 1983); Hunsaker v. Ky. Dep’t

  of Transp., Dep’t of Highways, 239 S.W.3d 68, 70 (Ky. 2007); La. ex

  rel. Dep’t of Highways v. Busch, 225 So. 2d 208, 210 (La. 1969); St.

  Louis, Keokuk & Nw. R.R. Co. v. Knapp, Stout & Co., 61 S.W. 300,

  305 (Mo. 1901); Blecha v. Sch. Dist., 112 N.W.2d 783, 786 (Neb.

  1962); Oregon ex rel. Dep’t of Transp. v. Montgomery Ward Dev.

  Corp., 719 P.2d 507, 510-11 (Or. Ct. App. 1986); Sunbelt Props. v.

  Texas, No. 08-02-00322-CV, 2003 WL 756718, at *3 (Tex. App.

  Mar. 6, 2003) (unpublished opinion). Indeed, Stapleton concedes

  that if damages are less than $2.7 million, it must return the excess

  to APS.

¶ 19   Significantly, APS consented to Stapleton’s withdrawal of the

  entire deposit, attached no limitations to Stapleton’s use of the

  deposit, stipulated that Stapleton had a claim for compensatory

  damages related to the condemnation action, and agreed to litigate

  those damages in a separate action. APS does not explain why

  Stapleton should now be required to incur the expense of placing

  the deposit back into the court registry, other than to reference its

  own ability to recover the money if it prevails in the damages

                                    11
  hearing. Absent some authority requiring this procedural

  requirement, we will not read it into section 38-1-105(6)(b).

  Turbyne v. People, 151 P.3d 563, 567 (Colo. 2007) (“We do not add

  words to the statute or subtract words from it.”).

                            IV.    Conclusion

¶ 20   The judgment is affirmed.

       JUDGE RICHMAN and JUDGE GROVE concur.

                                    12