Paul Turner v. City of Flagstaff – 2/22/2011

February 28, 2011

Arizona Court of Appeals Division One Holds That The A.R.S. § 1134 Requires That the Actual Owner of Real Property File a Notice of Claim Before Filing an Action Under A.R.S. § 12-1134.

In October 2007, Paul Turner filed an action against the City of Flagstaff (the “City”) alleging that Flagstaff City Ordinance No. 2007-34 reduced the fair market value of property located at 528 West Aspen Avenue (the “Property”).  Before filing the complaint, Turner’s lawyer sent the City a demand letter stating that Turner was the owner of the Property and that the ordinance “deprive[d] him of his property rights to a value estimated at $40,000.”  Shortly thereafter, the City moved to dismiss the complaint, arguing that the legal owner of the property – a limited liability company that Turner wholly owned – had failed to file a notice of claim as required by A.R.S. §§ 12-821.01, 1134.  The superior court granted the motion to dismiss, and Turner timely appealed.

The Arizona Court of Appeals upheld the lower court’s dismissal, holding that A.R.S. § 12-1134(E) unambiguously requires that the actual owner of real property file a notice of claim before seeking compensation under § 12-1134(A).  A.R.S. § 12-1134(A) entitles an “owner” of private real property to “just compensation” if a land-use law reduces “the existing rights to use, divide, sell or possess” the property and thereby reduces the “fair market value of the property.”  However, under subsection (E), the cause of action is conditional upon “the owner” first making written demand for a specific amount.  A.R.S. § 12-1136(E).  A.R.S. § 12-821.01 similarly requires “persons” who have claims against a public entity or a public employee to file a notice of a claim within 180 days after the cause of action accrues, stating facts in support of the claim and a “specific amount for which the claim can be settled and the fact supporting that amount.”  According to the Court of Appeals, the language in both of these statutes unambiguously requires the actual owner of real property to file a notice of claim before filing an action under § 1134.  In this case, Turner admitted that he is not the actual owner of the Property and that his notice did not recite or imply that he was making the claim on behalf of the owner of the property.  The Court thus held that, under the plain language of the statute, the superior court correctly granted the City’s motion to dismiss.

Judge Johnsen authored the opinion; Judges Brown and Gemmill concurred.