City of Phoenix v. Johnson – 3/3/2009

March 10, 2009

Arizona Court of Appeals Division One Holds that Defendant in Condemnation Action is Entitled to Immediate Disbursement of Money Paid Into Court by City/Condemnor, Despite Appeal by City, Because the Automatic Stay Under Rule 62(g) Conflicts With the Condemnation Statute, Which Controls.

The City of Phoenix (“City”) filed a condemnation action to acquire property for the light rail transit project.  A jury verdict awarded the property owner (“Johnson”) approximately $1 million for the taking.  Under protest, the City paid the amount of the judgment to the Superior Court Clerk and argued in its notice of payment that the court should not release the funds because the automatic stay provision, Rule 62(g), Ariz. R. Civ. P., would apply once the City filed a notice of appeal.  Johnson filed an application for release of the funds held by the court and the City filed its notice of appeal two weeks later. The trial court issued a post-judgment order rejecting the City’s argument that payment to Johnson should be stayed under Rule 62(g) and releasing the funds to Johnson.  The City amended its notice of appeal to include the post-judgment order.

The Court of Appeals affirmed the post-judgment order.  The court found that, under the circumstances, Rule 62(g) conflicts with A.R.S. § 12-1127(B).  Rule 62(g) provides for an automatic stay of money judgments against a political subdivision of the state upon the filing of an appeal.  A.R.S. § 12-1127(B), however, provides for the immediate disbursement of money paid into the court, upon application, to the defendant in a condemnation action.  Because the statute and rule cannot be harmonized, and because the statute is substantive and not procedural, the statute governs to the exclusion of the rule.  Substantive rights created by statute cannot be enlarged or diminished by rules promulgated by the state Supreme Court.

The court addressed the remaining appeal issues through an unpublished memorandum decision.

Judge Barker wrote the opinion; Judges Brown and Reeves concurred.