City of Phoenix v. Garretson (4/17/2014)

May 5, 2014

Arizona Court Supreme Court Holds That a Landowner’s Right of Access from Its Property to a Road Constitutes a Compensable Property Right Under Article 2, Section 17, of the Arizona Constitution, but That the Government Does Not Impair Such a Right if It Alters a Road but Leaves Existing Access Points Unchanged, Unless the Access to the Roadway System Is “Unreasonably Circuitous.”

John Garretson owns real property in downtown Phoenix that abuts Jefferson Street to the north and Madison Street to the south.  In 2006, the City of Phoenix started installing light rail tracks on Jefferson Street and erected a permanent concrete barrier between the south side of the tracks and Garretson’s property, blocking two driveways that provided vehicular access to Jefferson Street.  The property still has access via Madison Street.  The City filed an eminent domain action to determine the compensation owed to Garretson for a temporary construction easement he granted the City for installing the tracks, but Garretson counterclaimed seeking damages for the permanent loss of access to Jefferson Street.  The superior court granted the City summary judgment on the counterclaim.  Garretson timely appealed and the Court of Appeals vacated the superior court’s ruling.  The Arizona Supreme Court then granted the City’s petition for review because the legal issues raised regarding private property rights and governmental police power are likely to recur and are of statewide importance.

The Arizona Supreme Court reversed and remanded the superior court, and vacated the appellate court’s opinion.  Article 2, Section 17 of the Arizona Constitution states:  “No private property shall be taken or damaged for public or private use without just compensation having first been made.”  The Court held that the City’s elimination of Garretson’s preexisting access to Jefferson Street constitutes damage to his private property, supporting a claim for just compensation. 

In reaching this conclusion, the Court construed its prior holdings in State ex. rel. Morrison v. Thalberg, 87 Ariz. 318, 350 P.2d 988 (1960), as well as two subsequent decisions, State ex. rel. Herman v. Wilson, 103 Ariz. 194, 438 P.2d 760 (1968), and State ex. rel. Herman v. Schaffer, 105 Ariz. 478, 467 P.2d 66 (1970).  In Thelberg, the Court held that “an abutting property owner to a highway has an easement of ingress and egress to and from his property which constitutes a property right,” which, when impaired, requires compensation.  87 Ariz. 318, 324, 350 P.2d 988, 991 (1960).  Wilson and Schaffer, however, explain that such a property right is not taken or damaged when the government alters a highway but leaves existing access points unchanged, unless the access to the roadway system is “unreasonably circuitous.”  Wilson, 103 Ariz. at 197, 438 P.2d at 763; Schaffer, 105 Ariz. at 484085, 467 P.2d at 72-73.  The Court explained that this framework does not undermine the government’s broad authority to regulate traffic and maintain safety through its police powers, and that it need not compensate landowners whose property is devalued by various roadway projects and traffic flow changes.  In this case, however, the City did not merely change traffic flow and instead completely eliminated Garretson’s right of access to Jefferson Street.  See City of Wichita v. McDonald’s Corp., 971 P.2d 1189, 1197-98 (Kan. 1999) (explaining distinction).

The Court rejected the City’s argument that two Court of Appeals decisions—Tucson Title Ins. Co. v. State ex. rel. Herman, 15 Ariz. App. 452, 489 P.2d 299 (1971), and City of Phoenix v. Wade, 5 Ariz. App. 505, 428 P.2d 450 (1967)—compel a different result.  Unlike this case, in Tucson Title and Wade, the landowners retained the access they had before the government projects.  The Court also rejected the City’s argument that Garretson is not entitled to compensation because his property is not land-locked, explaining that other means of access do not eliminate damages, but instead go to the measure of damages.  Finally, the Court rejected the City’s contention that the trial court property exercised its gate-keeping function in determining that the City did not materially impair Garretson’s access. The Court explained that this case did not involve a material impairment so much as the total elimination of a preexisting right of access, and in any event, whether a property’s remaining access is reasonable is a question for the trier of fact.  Schaffer, 105 Ariz. at 484, 467 p.2d at 72.

Justice Pelander authored the unanimous opinion