ARIZONA ELECTRIC POWER COOPERATIVE, INC., Plaintiff/Appellee/Cross-Appellant,
DJL 2007 LLC, an Arizona limited liability company; DJL ENTERPRISES, LLC, an Arizona limited liability company; EAST COAST INVESTOR GROUP 535, LLC, a Delaware limited liability company; MARK G. KNORR and CAROL A. KNORR, husband and wife; SILVER CREEK LAND CO., LLC, an Arizona limited liability company; and MICHAEL SUDA, a married man as his sole and separate property; DONALD SUDA, a married man as his sole and separate property, Defendants/Appellants/Cross-Appellees. MOHAVE ELECTRIC COOPERATIVE, INCORPORATED, an Arizona Electric Cooperative Non-Profit Membership Corporation, Intervenor/Appellee/Cross-Appellant.
from the Superior Court in Mohave County Nos.
B8015CV201404008, B8015CV201404009, B8015CV201404010,
B8015CV201404011, B8015CV201404012, B8015CV201404013 The
Honorable Charles W. Gurtler, Judge
Rosenfeld, PLC, Phoenix By Charles W. Wirken Jennings Strouss
& Salmon, PLC, Phoenix By Christopher W. Kramer
Co-Counsel for Plaintiff/Appellee/Cross-Appellant
Zeitlin & Zeitlin, PC, Phoenix By Dale S. Zeitlin Counsel
Law Offices of Larry K. Udall, PLLC, Chandler By Larry K.
Udall Counsel for Intervenor/Appellee/Cross-Appellant
Presiding Judge Kent E. Cattani delivered the opinion of the
Court, in which Judge Jon W. Thompson and Judge Paul J.
Both sides in these consolidated condemnation cases appeal
from the superior court's rulings (1) fixing a valuation
date for purposes of calculating just compensation for a
right of way for electric transmission lines and (2)
determining the ownership of existing support structures and
transmission lines within the right of way. We affirm the
court's ruling as to ownership of the existing structures
and transmission lines, but we reverse the ruling as to
valuation date. Under the right-of-way clause of Article 2,
Section 17 of the Arizona Constitution, a private corporation
with statutory eminent domain authority cannot effect a
taking (which establishes the valuation date) by simply
occupying property. Instead, the taking occurs only after the
jury determines damages and the private corporation pays full
compensation. Because the superior court chose a pre-taking
valuation date, we reverse and remand for further proceedings
consistent with this decision.
AND PROCEDURAL BACKGROUND
On May 15, 1981, the United States Department of the
Interior, Bureau of Land Management ("BLM"),
granted a 30-year right of way to Arizona Electric Power
Cooperative, Inc., across public lands in Mohave County for
use as an easement for 69kV electric transmission lines. Both
69kV and 230kV transmission lines were built within the right
By 1990, the BLM had transferred title to the property
subject to the right of way into private hands. DJL 2007 LLC,
DJL Enterprises LLC, East Coast Investor Group 535, LLC, Mark
and Carol Knorr, Silver Creek Land Co., Michael Suda, and
Donald Suda (collectively, "Landowners") are the
current owners of the relevant parcels. Southwest
Transmission Cooperative, Inc.,  as a successor in interest,
obtained Arizona Electric Power's interest in the right
of way in the early 2000s, and Southwest Transmission sold
the 69kV line to Mohave Electric Cooperative, Inc., a few
The BLM right-of-way grant expired on May 14, 2011. But
Southwest Transmission and Mohave Electric continued to
operate the transmission lines thereafter, and in January
2013, Landowners sent Southwest Transmission a letter
alleging that it was trespassing.
Southwest Transmission is a nonprofit electric generation and
transmission cooperative corporation under Title 10, Chapter
19, Article 4 of the Arizona Revised Statutes
("A.R.S.") and, as such, has statutory authority to
exercise the power of eminent domain for purposes of
maintaining or operating electric transmission lines.
See A.R.S. § 10-2127(A)(11); see also
A.R.S. § 12-1111(10). Accordingly, in January 2014,
Southwest Transmission filed these eminent domain actions to
condemn rights of way for the transmission lines. Mohave
Electric intervened as the owner of one of the transmission
The superior court ruled that Southwest Transmission was not
entitled to an order of immediate possession under A.R.S.
§ 12-1116. Instead, recognizing the practical reality
that Southwest Transmission would need to continue to
operate, maintain, and repair the lines during the pendency
of the condemnation proceedings, the court entered a
preliminary injunction allowing ongoing access to and
operation of the lines.
Landowners then moved the court to determine the valuation
date for purposes of calculating just compensation to be paid
for the property subject to condemnation. Landowners argued
that the land should be valued as of the date the court
eventually enters the final order of condemnation. Southwest
Transmission countered that the land should be valued as of
May 15, 2011, the date it remained in possession immediately
following expiration of the BLM right-of-way grant. After
briefing and oral argument, the court adopted a middle
ground, ruling that the valuation date would be January 15,
2014: the date the summons issued in the condemnation suit.
The court further ruled that Landowners would be entitled to
rental damages from expiration of the grant to the summons
date, and that interest would accrue from the valuation date
on the amount of compensation ultimately awarded. The court
denied Landowners' subsequent motion for reconsideration.
The parties then filed cross-motions for partial summary
judgment concerning ownership of the transmission lines and
support structures, which would determine whether just
compensation for the taking includes the value of those
improvements or just of the underlying real property
interest. The superior court ruled in favor of Southwest
Transmission, finding no indication that title to the
improvements had passed to Landowners.
At the parties' request, the superior court then entered
a partial final judgment related to the two issues (valuation
date and ownership of the improvements). See Ariz.
R. Civ. P. 54(b). Landowners timely appealed, ...