STATE OF ARIZONA, ET AL., Plaintiffs/Appellants, υ. FOOTHILLS RESERVE MASTER OWNERS ASSOCIATION, INC., Defendant/Appellee. DIETMAR HANKE, ET AL., Intervenors/Appellees.
No. CV-23-0292-PR
SUPREME COURT OF THE STATE OF ARIZONA
January 28, 2025
Appeal from the Superior Court in Maricopa County, The Honorable Timothy J. Thomason, Judge (Retired), No. CV2017-010359. AFFIRMED. Opinion of the Court of Appeals, Division One, 256 Ariz. 476 (App. 2023). VACATED.
Kristin K. Mayes, Arizona Attorney General, Hayleigh S. Crawford (argued), Clinten N. Garrett, Michelle Burton, Joe Acosta, Jr., Assistant
Dale S. Zeitlin (argued), Casandra C. Zeitlin, Zeitlin & Zeitlin, P.C., Phoenix, Attorneys for Foothills Reserve Master Owners Association, Inc.
Timothy Sandefur, Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute, Phoenix, Attorneys for Amicus Curiae Goldwater Institute
CHIEF JUSTICE TIMMER authored the Opinion of the Court, in which VICE CHIEF JUSTICE LOPEZ, JUSTICES BOLICK, BEENE, MONTGOMERY, KING, and PELANDER (Retired)* joined.
CHIEF JUSTICE TIMMER, Opinion of the Court:
¶1 The
¶2 The issue here is whether severance damages are available to landowners when their appurtenant easements are condemned but their physical real property is not taken. We conclude that
* Before his retirement from this Court, Justice Robert M. Brutinel (Retired) was recused from this matter. Pursuant to
¶3 Foothills Reserve Community, a master-planned community, was created in the early 2000s and now consists of 590 single-family homes, recreational areas, and open spaces. Although located in Phoenix, the community was initially isolated from the city‘s general bustle due to its location between South Mountain Park to the north, two undeveloped desert parcels to the east and west, and the Gila River Indian Community reservation to the south. The Foothills Reserve Master Owners Association (the “HOA“) owned the two desert parcels and maintained them as common areas (the “Common Areas“) for all homeowners to enjoy.
¶4 The homeowners had both positive and negative easements in the Common Areas. The Declaration of Covenants, Conditions, Restrictions and Easements for the community granted each homeowner a non-exclusive positive easement to enter and use the Common Areas for enjoyment. The dedicated plat for the community granted homeowners a negative easement in the Common Areas by restricting the property‘s use to undevelopable open space.1 The easements passed with the titles to the homeowners’ properties and were therefore “appurtenant” to those properties. See Solana Land Co. v. Murphey, 69 Ariz. 117, 122 (1949); Restatement (Third) § 4.5(1) (explaining what qualifies as an “appurtenant easement“).
¶5 Phoenix‘s growth eventually encroached on Foothills Reserve Community‘s relative seclusion. In 2017, the State sued to condemn the Common Areas and the homeowners’ easements to construct the Loop 202 South Mountain Freeway. See
¶6 The HOA, representing 589 homeowners (the “Homeowners“), sought both the value of the easements themselves and damages for the reduction in home values due to the new freeway‘s
¶7 Both parties moved for partial summary judgment. In 2022, the superior court ruled in favor of the HOA, permitting it to continue pursuing the proximity damages claim. Thereafter, the parties stipulated to a final judgment that preserved the State‘s right to appeal that ruling. Specifically, the HOA, on behalf of the Homeowners, was granted judgment for $18 million, plus interest and costs. Six million dollars—the difference in the homes’ value with the easements and without them—was awarded pursuant to
¶8 The court of appeals reversed and remanded with instructions for the superior court to enter a new judgment excising the $12 million in proximity damages. State v. Foothills Rsrv. Master Owners Ass‘n, Inc., 256 Ariz. 476, 480 ¶ 25 (App. 2023). It reasoned that the Homeowners were not entitled to proximity damages under
¶9 We granted the HOA‘s petition for review to decide whether
DISCUSSION
¶10 We review the superior court‘s grant of partial summary judgment for the HOA de novo. Glazer v. State, 237 Ariz. 160, 167 ¶ 29 (2015). Partial summary judgment was appropriate if the material facts were not genuinely disputed, and the HOA was entitled to judgment as a matter of law. See
A. Property Owners Are Entitled To Compensation For The Value Of Their Condemned Property And Any Severance Damages.
¶11 The
¶12 Section 12-1122 provides two elements of damages when property is condemned:
A. The court or jury shall ascertain and assess:
1. The value of the property sought to be condemned and all improvements on the property pertaining to the realty, and of each and every separate estate or interest in the property, and if it consists of different parcels, the value of each parcel and each estate or interest in the parcel separately.
2. If the property sought to be condemned constitutes only a part of a larger parcel, the damages that will accrue to the portion not sought to be condemned by reason of its severance from the portion sought to be condemned, and the construction of the improvement in the manner proposed by the plaintiff.
3. How much the portion not sought to be condemned and each estate or interest in the portion will be benefited separately, if at all, by construction of the improvement proposed by the plaintiff. If the benefit is equal to the damages assessed under paragraph 2 of this subsection, the owner of the parcel shall be allowed no compensation except for the value of the portion taken, but if the benefit is less than the damages so assessed, the benefit shall be deducted from the damages, and the remainder shall be the only damages allowed in addition to the value.
(Emphasis added.) The damages described in (A)(1), which are not at issue here, are called “valuation damages” and compensate an owner for “the value of the property actually taken by condemnation.” See Ariz. State Land Dep‘t v. State ex rel. Herman, 113 Ariz. 125, 128 (1976). “Severance damages,” at issue here and described in subsection (A)(2), are calculated after deducting any benefits from the newly constructed improvement per subsection (A)(3). See State ex rel. Miller v. Wells Fargo Bank of Ariz., N.A., 194 Ariz. 126, 128–29 ¶ 10 (App. 1998). “Severance damages compensate an owner whose property has been taken for any reduction in the fair market value of remaining property not taken.” Catalina Foothills, 238 Ariz. at 516 ¶ 21 (citing Pima County v. De Concini, 79 Ariz. 154, 157–58 (1955)); see Herman, 113 Ariz. at 128.
¶13 One type of severance damage, proximity damages, occurs when the remaining property is in close proximity to a newly built improvement on the condemned property, like the freeway here. See Wells Fargo Bank, 194 Ariz. at 129 ¶ 10. But not every property owner damaged by the property‘s nearness to a freeway is entitled to proximity damages under
¶15 The HOA asserts that before the condemnation, the Homeowners’ properties included the appurtenant easements which, together with the land and the houses, constituted “parcels” under
B. A.R.S. § 12-1122(A)(2) Can Apply To Require Payment Of Proximity Damages Resulting From The Condemnation Of An Appurtenant Easement.
1. Nonpossessory interests in land can form “part of a larger parcel” of land.
¶16 To determine whether
¶17 Section 12-1122 is included within
a. The meaning of “property”
¶18 Neither party disputes that “property” subject to condemnation in Arizona includes nonpossessory interests in land, like easements, and we agree. See
¶19 The court of appeals applied a different definition for “property sought to be condemned” as used in
¶20 We disagree with the court of appeals that “part of a larger parcel” limits “the property sought to be condemned” to a parcel of land. See id. ¶¶ 19-21. In our view, that court arrived at this conclusion by incorrectly applying the negative-implication canon. The “one thing” expressed in
¶21 Instead, if the legislature had intended this meaning, we would expect
¶22 The real dispute here is whether condemned easements and other nonpossessory property interests can be “part of a larger parcel” under
¶23 We agree with the HOA that nonpossessory property interests, like easements, may form part of a “parcel.” First, the ordinary meaning of “parcel” supports this conclusion. See Barriga v. Ariz. Dep‘t of Econ. Sec., 256 Ariz. 543, 547 ¶ 13 (2024) (stating that to interpret statutes “we look first to the text itself, applying common and ordinary meanings“). “Parcel,” as it relates to real property, means “[a] tract of land.” Parcel, Black‘s Law Dictionary (12th ed. 2024); see Silverman, 257 Ariz. at 362 ¶ 14 (explaining that dictionary definitions ascribe ordinary meaning to terms). “Land,” in turn, is defined, in relevant part, as both “[a]n immovable and indestructible three-dimensional area consisting of a portion of the earth‘s surface,” and “[a]n estate or interest in real property.” Land, Black‘s Law Dictionary (12th ed. 2024). Putting these definitions together, the term “parcel” broadly includes all estates and interests in property, including nonpossessory interests, like easements.
¶24 Second, interpreting “parcel” as including nonpossessory interests aligns with the statutes governing eminent domain for public works, which supplement the statutes generally governing eminent domain. See
¶25 Third, interpreting “parcel” in
¶26 The State argues that because subsection (A)(1) directs valuation of “property,” “parcel[s],” and each “estate or interest” in property or parcels, the legislature intended “estate or interest” as something different from “property” or “parcel.” See Nicaise v. Sundaram, 245 Ariz. 566, 568 ¶ 11 (2018) (disapproving interpretations that render language superfluous). The State further asserts that, by not referring to “estate or interest” in subsection (A)(2), the legislature intended to exclude “estate or interest” from eligibility for severance damages. See AZ Petition Partners LLC v. Thompson, 255 Ariz. 254, 260 ¶ 29 (2023) (“[W]hen the legislature uses certain language in one part of the statue and different language in another, the court assumes different meanings were intended.” (alteration in original) (quoting DePierre v. United States, 564 U.S. 70, 83 (2011))).
¶27 We are not persuaded that subsection (A)(1) evidences a legislative intent to exclude “estate or interest” in property from eligibility for severance damages under subsection (A)(2). Subsection (A)(1)‘s stated purpose in naming “estate or interest” is not to cull the terms from the meanings of “property” and “parcel.” Instead, it is to direct a separate ascertainment and assessment of value for component parts of “property” and “parcel.” As next explained, see Part (B)(1)(b) ¶ 28, a similar separate assessment is made in calculating any benefits that offset severance damages. See
¶28 Fourth, our interpretation of “parcel” as including nonpossessory interests best aligns with the damages/benefits calculation required by
¶29 Fifth, and importantly, interpreting “parcel” as including nonpossessory interests comports with the constitution‘s directive to compensate persons for “damages” sustained as a consequence of condemnation. See
¶30 In sum, “parcel,” as used in
c. The meaning of “larger parcel”
¶31 “Larger parcel,” as used in
¶32 We identify the ordinary meaning of “larger parcel” by examining its statutory context and using logic. Section 12-1122(A)(2) contemplates a “larger parcel” comprised of two parts: “the property sought to be condemned” and “the portion not sought to be condemned.”
¶33 The term “larger parcel” also has a technical meaning when the condemned property is sufficiently related to the owner‘s interests in another, distinct parcel of property. See
¶34 This Court, however, has adopted the “more equitable” exception to this general rule. State ex rel. LaPrade v. Carrow, 57 Ariz. 429, 433 (1941). Under it, a “larger parcel” exists for purposes of severance damages when the property sought to be condemned is held and used for a common purpose with the condemnee‘s property interests in separate, distinct parcels of land. See id.; Herman, 113 Ariz. at 128. The property interests can form a “larger parcel” “even though [the owner‘s] title thereto varies both in quality and quantity” and the parcels are noncontiguous. Carrow, 57 Ariz. at 431, 432–33 (concluding a “larger parcel” existed where the condemnee used for a cattle range noncontiguous parcels of land they owned, leased, and held under a government permit). To determine whether the property interests are sufficiently intertwined, a court examines “the unities of use, ownership and contiguity.” See Herman, 113 Ariz. at 128; Nichols § 14B.02; see also State ex rel. Morrison v. Jay Six Cattle Co., 88 Ariz. 97, 107 (1960) (“All of the [separate parcels of] land owned by [the condemnees were] contiguous and thus can properly be considered as a ‘larger parcel,’ only part of which is sought to be condemned, within the meaning of
¶36 If the answer to the initial inquiry is “no,” the court must ask if the condemned property nevertheless forms part of a “larger parcel” with a separate, distinct parcel owned by the condemnee. The court should examine “the unities of use, ownership and contiguity” to make that determination. See Herman, 113 Ariz. at 128; Nichols § 14B.02. If the court determines that the condemned property is not part of a “larger parcel,” the inquiry ends, and the condemnee is not entitled to severance damages. If the court determines that the condemned property forms part of a “larger parcel,” the court should then decide whether the condemnation or any improvements built on the condemned property injured the remaining portion. If so, the condemnee is entitled to severance damages.
2. Appurtenant easements are part of the dominant estate.
¶37 Easements can be “in gross” or “appurtenant.” See Solana Land, 69 Ariz. at 122. An easement in gross is a personal privilege that grants the holder the right to use someone else‘s land for a limited purpose but is not attached to any land owned by the easement holder. See id.; Ammer v. Ariz. Water Co., 169 Ariz. 205, 209 (App. 1991); 25 Am. Jur. 2d Easements and Licenses § 1 (2025). As such, an easement in gross dies with the easement holder. See Solana Land, 69 Ariz. at 122. Thus, a condemned easement in gross is neither attached to land nor “part of a larger parcel,” and the condemnee of an easement in gross is not entitled to severance damages under
¶38 The Homeowners’ easements were not “in gross” but were instead “appurtenant easements.” An “appurtenant easement” involves two parcels of land: a “servient estate,” which is burdened by the easement (here, the Common Areas); and a “dominant estate,” which benefits from the easement (here, the Homeowners’ properties). See id. at 122; Ammer, 169 Ariz. at 209. Appurtenant easements are created to benefit the dominant estate owners’ use of their land. See Solana Land, 69 Ariz. at 122;
¶39 “The dominant estate and the easement together constitute one entity.” 4 Nichols § 12B.02; see also United States v. Welch, 217 U.S. 333, 339 (1910) (describing an easement extinguished by condemnation as “attached” to the dominant estate). Arizona courts have not addressed this principle in eminent domain cases but have done so in the property tax context. See Recreation Ctrs. of Sun City, Inc. v. Maricopa County, 162 Ariz. 281, 287 (1989) (noting that a dominant estate must be valued as including how its use is enhanced by the easement); Ariz. R.C.I.A. Lands, Inc. v. Ainsworth, 21 Ariz. App. 38, 41 (1973) (stating that the dominant estate increases in taxable value due to the easement).
¶40 Ainsworth is particularly instructive. There, Arizona R.C.I.A. Lands (“R.C.I.A.“) bought real property sold by the county treasurer for delinquent taxes. 21 Ariz. App. at 39. Ainsworth, an adjoining property owner, had an appurtenant easement for ingress and egress over that property, which by law was not extinguished by the tax sale. See id. R.C.I.A. unsuccessfully sued to compel Ainsworth to either redeem R.C.I.A.‘s fee simple interest in the property or relinquish the easement. See id. The court of appeals concluded that R.C.I.A. acquired the land at the tax sale subject to Ainsworth‘s easement, and Ainsworth did not have to redeem the property to preserve that easement. See id. In stating why property sold at a tax sale is subject to any easements thereon, the court explained that “when an easement is appurtenant to a dominant estate it attaches to that estate, being carved out of the servient estate . . . the value of the dominant estate is increased by the existence of the easement and in effect thus includes the value of the easement.” Id. at 40 (quoting Engel v. Catucci, 197 F.2d 597, 599 (D.C. Cir. 1952)).
¶41 The court also rejected R.C.I.A.‘s argument that the law preserving Ainsworth‘s easement was an unconstitutional taking. See id. at 40–41. The court reasoned that “plaintiff never acquired any interest which [Arizona law] could take from it” because R.C.I.A. never possessed a fee simple interest in the land absent the easement‘s burden. See id. at 41 (maintaining that the state could only tax “the fee minus the easement which had ceased to be a part of the servient estate” so that is all the state
¶42 We see no reason to consider an appurtenant easement as part of the dominant estate for purposes of property tax but not eminent domain. Indeed, the fact that an appurtenant easement adds value to the dominant estate for tax purposes logically supports the conclusion that the dominant estate and appurtenant easement must be considered a unified entity that is subject to injury when one part is severed from the other. We therefore conclude that an appurtenant easement is part of the dominant estate.
3. The easements here were severed from a “larger parcel.”
¶43 Because the State condemned the Homeowners’ easements, and they were part of the dominant estate, they were necessarily “part of a larger parcel.” Consequently, the Homeowners are entitled to severance damages under
¶44 Although we were unable to find many cases addressing severance damages when a government only condemns parties’ easements and not their physical property, a few courts have made similar decisions. In Welch, 217 U.S. at 338, the federal government condemned three acres of land and permanently flooded it, cutting off, and therefore taking, the plaintiffs’ access easement to a county road. The trial court awarded plaintiffs severance damages by compensating them for their property‘s lessened value due to loss of the easement, and the Supreme Court affirmed. See id. at 338–39; see also Childers v. United States, 116 Fed. Cl. 486, 532 (Fed. Cl. 2013) (characterizing the damages in Welch as “severance damages“). Notably, the Court recognized that the easement was part of plaintiffs’ land and that damage to the remaining land was compensable. See Welch, 217 U.S. at 338-39 (finding that plaintiffs were properly compensated for “damage . . . to the tract of which a part is taken“).
¶45 In Hughes v. State, 328 P.2d 397 (Idaho 1958), the Idaho Supreme Court addressed the same issue we confront. The Hugheses owned business property on the corner of an intersection with access to each intersecting street. See id. at 398. The state significantly raised the elevation of one street, making the intersection impassable for vehicles and allegedly compelling the local government to “close[] and vacate[]” the
¶46 The Idaho Supreme Court reversed. See id. at 402. In doing so, and after assuming that the access easement had been destroyed, the court addressed whether the Hugheses were eligible for severance damages pursuant to an Idaho statute that was nearly identical to
¶47 In Glessner v. Duval County, 203 So.2d 330 (Fla. Dist. Ct. App. 1967), the Florida Court of Appeals reversed a judgment denying the Glessners’ claim for severance damages after the county condemned part of their easement over an adjoining property. The Glessners had purchased land and a truck body manufacturing business from the adjoining property owner and were granted an access easement over that owner‘s property. See id. at 331-32. The county condemned a strip of property owned by the adjoining property owner along with part of the Glessners’ easement for a street-widening project. See id. at 331. As with the Homeowners here, none of the Glessners’ physical property was taken. See id. Nevertheless, the court applied a statute similar to
¶48 The State argues that cases like Welch, Hughes, and Glessner are distinguishable because they involve public improvements that impair ingress and egress to a property. But the State does not offer any reason to treat condemnation of ingress/egress easements differently from other types of easements. Its real complaint seems grounded on its contention that the Homeowners have not suffered any proximity damages that
¶49 No party disputes that the Homeowners each own single parcels of land. The State condemned easements that were appurtenant to those parcels. Thus, we need not engage in the “unity of interests” analysis required when distinct parcels are not involved. See Herman, 113 Ariz. at 128; Nichols § 14B.02. Because the State condemned the Homeowners’ easements and those easements were part of a larger parcel that included the Homeowners’ physical real property,
CONCLUSION
¶50 For these reasons, we vacate the court of appeals’ opinion and affirm the superior court‘s judgment.