Court Opinion

ID: 2716615
Source: CourtListenerOpinion
Date Created: 2014-08-08 18:10:00.340702+00
Date Added: 2024-06-11T12:39:08.413410
License: Public Domain

130 Nev., Advance Opinion tip
                       IN THE SUPREME COURT OF THE STATE OF NEVADA

                CITY OF NORTH LAS VEGAS,                               No. 58530
                Appellant/Cross-Respondent,
                vs.
                5TH & CENTENNIAL, LLC, A NEVADA                             FILED
                LIMITED LIABILITY COMPANY; 5TH
                & CENTENNIAL II, LLC, A NEVADA                              AUG 0 7 2014
                LIMITED LIABILITY COMPANY; 5TH                           CLERK
                & CENTENNIAL III, LLC, A NEVADA                         BY AIEF DE
                LIMITED LIABILITY COMPANY; ALL
                FOR ONE FAMILY TRUST; BRIAN A.
                LEE AND JULIE A. LEE, TRUSTEES
                FOR THE ALL FOR ONE FAMILY
                TRUST; AND BRIAN A. LEE; AND
                JULIE A. LEE,
                Respondents/Cross-Appellants.

                CITY OF NORTH LAS VEGAS,                               No. 59162
                Appellant/Cross-Respondent,
                vs.
                5TH & CENTENNIAL, LLC, A NEVADA
                LIMITED LIABILITY COMPANY; 5TH
                & CENTENNIAL II, LLC, A NEVADA
                LIMITED LIABILITY COMPANY; 5TH
                & CENTENNIAL III, LLC, A NEVADA
                LIMITED LIABILITY COMPANY; ALL
                FOR ONE FAMILY TRUST; BRIAN A.
                LEE; AND JULIE A. LEE,
                Respondents/Cross-Appellants.

                           Petition for rehearing of this court's March 21, 2014, order
                affirming in part, reversing in part, and remanding to determine
                prejudgment interest in this eminent domain matter. Eighth Judicial
                District Court, Clark County; Mark R. Denton, Judge.
                           Rehearing denied.
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                Marquis Aurbach Coifing and Micah S. Echols, Brian R. Hardy, and Jack
                C. Juan, Las Vegas,
                for Appellant/Cross-Respondent.

                John Peter Lee Ltd. and John C. Courtney and John Peter Lee, Las Vegas;
                Kemp, Jones & Coulthard, LLP, and William L. Coulthard, Jennifer C.
                Dorsey, and Eric M. Pepperman, Las Vegas,
                for Respondents/Cross-Appellants.

                BEFORE THE COURT EN BANG.'

                                                 OPINION
                By the Court, GIBBONS, C.J.:
                            On March 21, 2014, this court issued a dispositional order
                regarding this appeal from the district court's decision in an eminent
                domain action. In that order we addressed a number of issues, but
                pertinent to this opinion, we considered whether the district court erred in
                calculating the prejudgment interest award from the date on which the
                summons and complaint were served, rather than from the date on which
                the injury resulting from the conduct that supported precondemnation
                damages arose. We concluded that the district court did err in its
                calculation of prejudgment interest, and we held that prejudgment
                interest should be calculated from the date on which the resulting injury
                arose. Appellant/cross-respondent City of North Las Vegas seeks
                rehearing of that order on the prejudgment interest issue, as well as on

                     'The Honorable Ron Parraguirre, Justice, voluntarily recused
                himself from participation in the decision of this matter.

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                issues concerning the statute of limitations and standing. Although
                rehearing is not warranted, we take this opportunity to address the issues
                raised by the City in order to clarify the relevant law.
                                  FACTS AND PROCEDURAL HISTORY
                            Beginning in 2002, the City planned, adopted, and began
                construction on a seven-mile-long, eight-lane, high-speed, super-arterial
                roadway along North 5th Street to relieve regional traffic congestion on
                Interstate 15 (the Project). Over the next eight years, the City and others
                conducted a number of studies, developed reports, budgeted, and
                authorized planning documents for the Project. The City's 2004
                amendment to its Master Plan of Streets and Highways (AMP-70-04)
                allowed for North 5th Street to be widened up to 150 feet and provided
                that approval of development applications must be conditioned upon
                landowners giving up a 75-foot right-of-way on the land fronting that
                street. The Project was divided into two sections: a northern half, from
                Owens Avenue to Cheyenne Avenue; and a southern half, from Cheyenne
                Avenue to Clark County 215. Between 2000 and 2005, respondents/cross-
                appellants 5th & Centennial, LLC; 5th & Centennial II, LLC; 5th &
                Centennial III, LLC; All for One Family Trust; and Brian and Julie Lee
                (collectively, the Landowners) acquired five vacant parcels totaling more
                than 20 acres on the northwest corner of North 5th Street and Centennial
                Parkway (the Property), in the northern half of the Project.
                            When the economy stalled in recent years, so did the City's
                progress on the northern half of the Project, which relied on federal
                funding. On January 1, 2010, the Landowners filed a complaint against
                the City for inverse condemnation and precondemnation damages,
                asserting that the City's delay in condemning their properties had

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                  prevented them from advantageously selling the properties. Following an
                  eight-day bench trial, the district court concluded that the inverse
                  condemnation claim was not ripe but awarded the Landowners
                  precondemnation damages. The district court further awarded the
                  Landowners attorney fees, costs, and prejudgment interest.
                              On appeal, we affirmed the district court's orders, except for
                  the prejudgment interest award, which we reversed and remanded for a
                  new determination of when that interest began to accrue. 2 The City then
                  filed this petition for rehearing on the prejudgment interest issue, while
                  also arguing that it is entitled to an opportunity to raise statute of
                  limitations and standing defenses.
                                                DISCUSSION
                              The City argues that we overlooked controlling authority
                  when deciding that the district court had improperly calculated the
                  prejudgment interest award from the date when process was served. The
                  City further argues that it should be given an opportunity to assert
                  statute of limitations and standing defenses based on the date of
                  compensable injury.
                              We disagree. Our conclusion in City of Sparks v. Armstrong,
                  103 Nev. 619, 748 P.2d 7 (1987), coupled with the Nevada Constitution's
                  definition of just compensation, allows for interest to be calculated from
                  the date of taking. Further, the Landowners' claims are not barred by the
                  applicable statute of limitations, and additionally, the City cannot raise
                  the statute of limitations defense for the first time on rehearing. Lastly,

                        We also concluded that the district court abused its discretion in
                        2
                  awarding attorney fees.

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                   the City fails to demonstrate why this court should address its standing
                   defense on rehearing.
                   Standard of review
                               NRAP 40(c)(2) permits this court to grant a petition for
                   rehearing when it has overlooked or misapprehended a material fact or
                   has overlooked or misapplied controlling law.    See Bahena v. Goodyear
                   Tire & Rubber Co., 126 Nev. „ 245 P.3d 1182, 1184 (2010). In
                   petitions for rehearing, parties may not reargue matters they presented in
                   their appellate briefs and during oral arguments, and no point may be
                   raised for the first time. NRAP 40(c)(1).
                   Prejudgment interest
                               The City contends that prejudgment interest should
                   commence on the date of the service of the summons and argues that in
                   our order we overlooked our prior decision in Manke v. Airport Authority of
                   Washoe County, 101 Nev. 755, 710 P.2d 80 (1985). Further, the City
                   argues that we should not have relied on City of Sparks v. Armstrong, 103
Nev. 619, 748 P.2d 7 (1987), because Armstrong applied a former version
                   of NRS 37.175. We disagree.
                               In Manke, the Airport Authority of Washoe County filed and
                   served a summons and complaint to condemn the Mankes' property, which
                   consisted of 4.24 acres of "vacant, unimproved, commercially zoned real
                   property." 101 Nev. at 756-57, 710 P.2d at 81. When reviewing the
                   district court's calculation of interest, this court agreed that the
                   constitutionally required "just compensation" includes interest from the
                   date of the taking and held that the district court erred in calculating
                   interest from the date of judgment, noting that under NRS 37.120(1)-(2),
                   condemned property is valued as of the "date of the service of summons."

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                Id. at 758, 710 P.2d at 82. Because the taking occurred at the service of
                summons, interest was also calculated as of that date. Id. at 759, 710 P.2d
                at 82.
                                 Two years after Manke, this court determined that a taking
                could occur before service of thefl summons. Armstrong, 103 Nev. at 621-
                22, 748 P.2d at 8-9. In Armstrong, the district court found that a
                regulatory taking occurred when the City of Sparks approved a tentative
                subdivision map, prohibiting development on Armstrong's parcels. Id. at
                621, 748 P.2d at 8. This court agreed that a taking occurred and clarified
                that Armstrong was entitled to prejudgment interest from the date of the
                taking, which occurred prior to the service of the summons         Id. at 623,
                748 P.2d at 9. This court again reasoned that the constitutional
                requirement of "just compensation" includes "interest from the date of the
                taking." Id. (citing Manke).       Thus, this court held that Armstrong was
                entitled to interest from the time that the regulatory taking occurred, even
                though it occurred prior to the summons. Id.
                                 When private property is taken from an owner for public use,
                he or she is entitled to just compensation for that taking. Nev. Const. art.
                1, § 8(6); NRS 37.120(3). Further, the Nevada Constitution was amended
                effective November 2008. 3 This amendment states in part that "just
                compensation shall be defined as that sum of money, necessary to place
                the property owner back in the same position, monetarily, without any
                governmental offsets, as if the property had never been taken." Nev.
                Const. art. 1, § 22(4). "Just compensation shall include, but is not limited

                         3 The
                           voters first approved this ballot initiative on the November 7,
                2006, ballot, and then again on the November 4, 2008, ballot.

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                to, compounded interest and all reasonable costs and expenses actually
                incurred." Id. Statutorily, "[just compensation for the property taken by
                the exercise of eminent domain must include, without limitation, interest
                computed pursuant to NRS 37.175." NRS 37.120(3). In order to calculate
                that award consistent with the constitution, NRS 37.175(4) instructs the
                district court to "determine, in a posttrial hearing, the award of interest
                and award as interest the amount of money which will put the person
                from whom the property is taken in as good a position monetarily as if the
                property had not been taken."
                             With regard to our decision in this case, we relied on the
                Nevada Constitution and Armstrong in recognizing that just compensation
                includes interest from the date of taking. Further, we concluded that NRS
                37.175(4) is more appropriate than NRS 17.130(2), the general
                prejudgment interest statute, for calculating precondemnation damages
                because NRS 37.175 is specific to eminent domain cases. We determined
                that NRS 37.175(4) also "directs the district court to calculate the interest
                from the date of taking" in order to provide just compensation. Thus, for
                precondemnation cases, we concluded that the date akin to the taking
                date, and thus the most appropriate to use here, is the first compensable
                date of injury resulting from the City's oppressive and unreasonable
                conduct, which in this case was prior to service of the summons and
                complaint.
                             Accordingly, we decline to grant the City's petition for
                rehearing on the prejudgment interest issue. While Manke and Armstrong
                held that different dates controlled for the calculation of prejudgment
                interest, the underlying rule remains consistent in both cases:
                prejudgment interest begins at the time a taking occurs. Here, the

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                Landowners suffered injury to their property prior to the summons,
                making this factual scenario more akin to Armstrong, where the property
                owner suffered damage when Sparks approved a subdivision plan and the
                court concluded that a taking occurred at that time.
                            Further, the City's argument that Armstrong relied on an old
                version of the statute is without merit because Armstrong (1) did not rely
                on a prior version of NRS 37.175 in making its ruling that prejudgment
                interest begins at the date of taking, 4 (2) relied on the constitutional
                requirement of just compensation to determine when the prejudgnent
                interest should begin, and (3) relied on        Manke to conclude that
                prejudgment interest begins at the date of taking. Further, the "just
                compensation" definition for eminent domain cases was added to the
                Nevada Constitution in 2008, subsequent to the Manke and Armstrong
                cases. As a result, the constitutional language would supersede any
                inconsistency that existed between the Constitution and the Manke and
                Armstrong cases. Lueck v. Teuton, 125 Nev. 674, 684 n.2, 219 P.3d 895,
                902 n.2 (2009) (noting that to the extent a statutory provision conflicts
                with the Nevada Constitution, the Constitution supersedes the statute).
                Therefore, we properly (1) concluded that just compensation includes

                      4 Instead, this court referred to a prior version of NRS 37.175(2) in
                noting that, according to Manke, "if the condemned property is neither
                unimproved, nor vacant, nor of value to the condemnee for purposes of
                investment or development, the recipient of the condemnation award is
                only entitled to interest according to NRS 37.175(2)." Armstrong, 103 Nev.
                at 623, 748 P.2d at 9 (citing Manke, 101 Nev. at 759 n.6, 710 P.2d at 82
                n.6). However, since the property in Armstrong was "vacant, unimproved,
                and held for investment purposes at the time of taking," the interest was
                not limited by the former NRS 37.175(2). Id.

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                interest from the date when the injury began, and (2) remanded this issue
                to the district court to determine when the first compensable date of injury
                was for the Landowners. 5
                               Lastly, this court properly relied on MRS 37.175(4) for
                calculating interest because it is specific to eminent domain actions. Since
                MRS 37.175(4) and NRS 37.120(3) aim to provide the property owner with
                just compensation, this court properly concluded that prejudgment
                interest for precondemnation damages begins at the date of injury.
                Therefore, our analysis of prejudgment interest is consistent with prior
                case law and properly relies on NRS 37.175(4), coupled with the
                constitutional definition of "just compensation." 8
                Statute of limitations
                               The City also argues that, on remand, it should be allowed to
                assert a statute of limitations defense since we instructed the district

                      5 Thiscourt's conclusion in this case is further buttressed by the fact
                that the City's oppressive and unreasonable conduct benefited the City's
                ultimate goal while burdening the Landowners. See Manke, 101 Nev. at
                759, 710 P.2d at 82.

                      6The  City argues that Klopping v. City of Whittier, 500 P.2d 1345,
                1349 (Cal. 1972) stands for the proposition that "just compensation"
                should be measured at the time of taking. We conclude that Klopping is
                distinguishable from the present case because the valuation date used in
                Klopping "is set by statute at the time the summons is issued." 500 P.2d
                at 1349. Additionally, Klopping even notes that "depending on the nature
                of those activities occurring prior to the issuance of summons a different
                date may be required in order to effectuate the constitutional requirement
                of just compensation." Id. Thus, Klopping actually supports the notion
                that a date other than the date of summons could be appropriate to
                provide "just compensation."

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                  court to determine the first date of injury resulting from the City's
                  oppressive and unreasonable conduct. We disagree.
                              First, the Landowners' claims are not barred by the applicable
                  statute of limitations. This court has concluded that a 15-year statute of
                  limitations applies "in 'takings' actions." White Pine Lumber Co. v. City of
                  Reno, 106 Nev. 778, 780, 801 P.2d 1370, 1371-72 (1990) (involving an
                  inverse condemnation claim against the City of Reno when it conditioned
                  approval of a project on the donation of the project parcel to the City).
                  Although separate from inverse condemnation claims, we see no reason to
                  apply a different limitations period to precondemnation claims, which are
                  often brought together with an inverse condemnation claim. Under this
                  ruling, the Landowners'S claims are clearly not barred because they first
                  purchased parcels in 2000 and filed their complaint in January 2010.
                              Moreover, the City failed to assert this issue in response to the
                  Landowners' argument that prejudgment interest           should have been
                  calculated from an earlier date. We conclude that the City cannot pursue
                  this argument for the first time in its petition for rehearing. NRAP
                  40(c)(1).
                  Standing
                              Finally, the City also contends that it should be given an
                  opportunity to assert a lack of standing defense against the Landowners
                  as to the latter three parcels that were not acquired until January 2005,
                  and the district court could conclude on remand that the injury occurred
                  earlier than then. We decline to address this argument, however, because
                  it does not set forth how this court (1) overlooked or misapprehended a

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                  material fact, or (2) overlooked or misapplied controlling law. NRAP
                  40(c)(2).
                                                CONCLUSION
                               Our dispositional order properly concluded that prejudgment
                  interest should be calculated from the date of taking, which in this case is
                  the first date of compensable injury. Further, we conclude that the City
                  cannot raise its statute of limitations argument for the first time on
                  rehearing, and regardless, that defense is inapplicable to the facts of this
                  case. Finally, rehearing is not warranted to clarify whether the City can
                  assert a standing defense on remand

                                                                     remt-
                                                                         C          C.J.
                                                       Gibbons

                  We concur:

                                                  J.

                     /--Aset,t cet-d1-1           J.
                  Hardesty

                  Do/eat

                   L,- Kt-i2

                                                  J.
                  Saitta

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