Court Opinion

ID: 9541235
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:23:46.337717+00
Date Added: 2024-06-11T15:02:40.669574
License: Public Domain

Judge KAPELKE
dissenting.
I respectfully dissent.
In my view, the trial court correctly granted summary judgment in favor of defendant. I agree with the trial court that, because Clare had no governmental contract or franchise, he did not suffer a compensable taking of property within the meaning of Colo. Const, art. II, § 15.
Here, Clare does not contend that the District has acquired his land or physically taken over his actual water distribution facilities. Rather, he premises his claim on the loss of his customers and business which resulted from defendant’s actions in establishing a special water district and requiring Clare’s customers to hook up to the District’s water lines.
By statute, the District has the power to compel landowners to connect their premises to the District’s water lines. Section 32-1-1006(1)(a), C.R.S. (1993 Cum.Supp.).
The pivotal question is whether the District’s statutorily authorized actions constituted a taking of a property interest of Clare so as to entitle him to an award of compensation based upon a claim of inverse condemnation.
Clare had no governmental franchise or exclusive right to furnish water to the residents within the District. Generally, it is recognized that the mere expectation of continued business and customers, standing alone, is not a sufficient property interest to support an award of compensation for inverse condemnation. See 2 J. Saekman & P. Rohan, Nichols on Eminent Domain § 5.22[5] at 5-285 and § 5.24 at 5-291 through 5-298 (rev. 3d ed. 1994).
Without a franchise or exclusive contract, Clare lacks a sufficient “property” interest to support an award of compensation here:
Unless a municipality has granted an exclusive franchise, or has otherwise entered into a valid contract not to compete with a public service company, where it has authority so to do, it may construct a competing water or light plant or street railway, even though the competition may be ruinous, provided there is no statute requiring it to purchase the plant of the existing company engaged in furnishing a supply or service....
12 E. McQuillin, Municipal Corporations § 35.13 at 515 (3d rev. ed. 1986).
If Clare held such a franchise, I would agree that he would have a valid claim for inverse condemnation as recognized in Poudre Valley Royal Electric Ass’n v. City of Loveland, 807 P.2d 547 (Colo.1991).
In Poudre Valley, however, the utility whose business had been excluded or supplanted by the municipality held such a franchise in the form of a certificate of public convenience and necessity granted by the Colorado Public Utilities Commission. Moreover, the statute which the court applied in that case to support the condemnation award specifically requires a payment of compensation when a municipality operates an electric utility and thereby injures a cooperative electric association that has “been granted an exclusive service territory.” See-
*476tion 40-9.5-201, C.R.S. (1993 Cum.Supp.) (emphasis added).
The supreme court emphasized in Poudre Valley that it was the rights associated with the certificate of public convenience and necessity that constituted the requisite property interest: “Both Poudre Valley’s facilities and its right to serve customers under the certificate of public necessity are property for purposes of the takings clause.” Poudre Valley, supra, 807 P.2d at 555 (emphasis added).
The courts of other states have also recognized that, in situations such as this in which a government entity enters into the water supply business and thus destroys or injures a private supplier, compensation need not be paid unless the plaintiff can demonstrate either that there has been a physical taking or a taking of a property right in the form of a governmentally conferred franchise. See Amos Plumbing & Electric Co. v. Bennett, 261 Ga. 810, 411 S.E.2d 490 (1992); Water Development Co. v. Board of Water Works, 488 N.W.2d 158 (Iowa 1992); Alford v. City of Denton, 546 S.W.2d 672 (Tex.Civ.App. 1977). See also Knoxville Water Co. v. Knoxville, 200 U.S. 22, 26 S.Ct. 224, 50 L.Ed. 353 (1906); Skaneateles Waterworks v. Ska-neateles, 184 U.S. 354, 22 S.Ct. 400, 46 L.Ed. 585 (1902).
Clare has no vested property interest here, and his mere expectation of continuing business with his water customers does not constitute “property” for the purpose of an inverse condemnation claim.
I therefore conclude that there has been no “taking of property” within the contemplation of Colo. Const, art. II, § 15, and I would affirm the trial court’s summary judgment in favor of the District.