Catalina Foothills Unified School Dist. No. 16 v. La Paloma Property Owners Assoc. (11/24/2015)

December 9, 2015

Arizona Court of Appeals Division One holds that a school district’s authority to condemn property for use as buildings or grounds pursuant to A.R.S. § 12-1111(3) includes the power to condemn property to create access to those buildings and grounds.

In 1994, a public school district acquired a school site from a residential subdivision. After building an early childhood learning center on the property in 2007, the school district decided to condemn the subdivision road running adjacent to the campus to allow vehicle access.  The school district sought to condemn the road in fee simple while granting a perpetual easement to the subdivision and its property owners to continue to use the road to enter and leave their neighborhood.

The superior court granted the school district immediate possession of the road and awarded the subdivision the fair market value of the property and cost-to-cure severance damages. 

The Court of Appeals affirmed, holding that the school district had implicit statutory authority under A.R.S. § 12-1111(3) to condemn the road to provide access to the school.  A.R.S. § 12-1111(3) provides that a school district may condemn property for use as “buildings and grounds.”  The subdivision urged that the power to condemn private property for school “grounds” cannot be read to authorize condemnation of a road.  The Court disagreed, concluding that the power to condemn property for buildings and grounds necessarily must include the power to condemn property to create access to school buildings and grounds, and thus the school district had the authority to condemn the road.

The Court also rejected La Paloma’s arguments that (1) by granting La Paloma a perpetual easement over the road, the school district had not taken the property in fee simple as required by A.R.S. § 12-1113(1); (2) La Paloma was entitled to additional severance damages; (3) the school district failed to obtain voter approval for the condemnation and easement pursuant to A.R.S. § 15-342; and (4) that the school district’s complaint was deficient because it failed to name the various subdivision lot owners as defendants.

Despite affirming the condemnation, the Court of Appeals remanded for modification of the award of prejudgment interest.  The superior court awarded prejudgment interest at 10%, but the Court of Appeals held that the correct rate is prime plus 1% under A.R.S. § 44-1201(B), (F) because the amount of compensation the school district owed could not have been known until the time of the verdict.

Judge Diane M. Johnsen wrote the opinion; Judges Kent E. Cattani and John C. Gemmill joined