Lead Opinion
delivered the Opinion of the Court.
Wheat Ridge Urban Renewal Authority sought review of the court of appeals’ judgment in Cornerstone Group XXII, L.L.C. v. Wheat Ridge Urban Renewal Authority,
We granted the Renewal Authority’s petition challenging the latter holding. Because the district court rightly determined that it lacked the authority to order the specific performance of a contractual obligation to exercise the core governmental power of eminent domain, and the Renewal Authority could 'not be estopped from abandoning its petitions in condemnation, under the circumstances of this case, the judgment of the court of appeals is reversed. Because, however, the Renewal Authority’s agreement to acquire specific properties, by condemnation if necessary, does not render the contract void, the case is remanded with directions to return it to the district court for consideration of Cornerstone’s remaining claims, including its claims for breach of contract.
I.
The Cornerstone Group filed a civil action against the Wheat Ridge Urban Renewal Authority and the City of Wheat Ridge, alleging breach of contract and claims of equitable and promissory estoppel. As relief, it sought indemnification from damage claims by Walgreens, a constructive trust, declaratory and injunctive relief, specific performance of the breached contracts, and damages for the breaches. Cornerstone also filed a motion for preliminary injunction, with regard to which the district court took evidence and made findings of fact and conclusions of law.
After the Renewal Authority failed to obtain the necessary financing, Cornerstone agreed to provide financing on terms memorialized in a separate “Loan Agreement” and “Line of Credit Note.” The loan agreement obligated the Renewal Authority to initiate litigation in eminent domain for the immediate possession and acquisition of the parcels if negotiated agreements were not reached by a certain date, and it too provided for its own enforcement by specific performance.
When the Renewal Authority failed to acquire all five properties or begin condemnation proceedings by the loan agreement’s deadline, Cornerstone sent notice that the Renewal Authority had defaulted its obligation under the loan agreement. Although the Renewal Authority later filed petitions in condemnation against the four properties it had thus far failed to acquire, the petitions did not salvage the deal. Cornerstone and the Renewal Authority exchanged a series of recriminating letters, and ultimately the Renewal Authority notified Cornerstone that it was terminating the DDA and rescinding its approval of the loan agreement. It subsequently negotiated settlements with two of the landowners to abandon already initiated condemnation proceedings, and it was in the process of negotiating similar settlements with the other two owners.
The district court largely granted the motion for preliminary injunction, ordering the Renewal Authority to retain all assets and funds necessary and incidental to the redevelopment project. With regard to Cornerstone’s tenth claim for relief — its demand for specific performance of the contracts — the district court found that the subject properties could not be acquired unless the Renewal Authority exercised its power of eminent domain, but ruled that it lacked the authority to order the Renewal Authority to do so; and in response to Cornerstone’s ensuing motion, the court entered final judgment pursuant to C.R.C.P. 54(b), dismissing that claim for relief in its entirety. Both parties appealed the district court’s rulings, Cornerstone challenging the dismissal of its claim for specific performance and the Renewal Authority challenging the preliminary injunction.
The court of appeals affirmed the district court’s preliminary injunction but reversed its judgment dismissing Cornerstone’s tenth claim for relief. With one member of the panel dissenting, the court rejected the Renewal Authority’s assertion that contractual agreements to exercise the uniquely governmental power of eminent domain are necessarily void, instead apparently considering their enforceability dependent upon the extent to which eminent domain proceedings had already progressed and the equities of the individual case. The court of appeals ultimately remanded for reconsideration of Cornerstone’s claim for specific performance, ordering the district court to determine, under the circumstances of this case, whether the Renewal Authority should be estopped from abandoning its condemnation petitions and whether Cornerstone, in fact, has a vested right to specific performance of the Renewal Authority’s promise to condemn.
The Renewal Authority petitioned this court for a writ of certiorari, solely to review the court of appeals’ holding with regard to specific performance.
II.
Specific performance is an equitable remedy for breach of contract. Setchell v. Dellacroce,
It appears that the appellate court equated any theory requiring condemnation of the subject properties with specific performance of the contract or at least that the question of specific performance could not be fully resolved without consideration of Cornerstone’s estoppel claim. It therefore immediately moved to the question whether the Renewal Authority could be estopped from abandoning its earlier-initiated condemnation proceedings. Determining that under certain circumstances it could, the appellate court, without ever directly addressing the district court’s authority to order the specific performance of a contractual obligation to exercise the power of eminent domain, reversed the district court’s order of dismissal and remanded for consideration of the relative equities involved in evaluating a claim of estoppel. In light of the appellate court’s directions on remand, and its implication that Cornerstone’s claim of specific performance could not be fully resolved without simultaneous resolution of its assertions of estoppel, the applicability of estoppel principles is necessarily before this court.
Promissory estoppel is an offensive theory of recovery, or cause of action, providing a remedy for those who rely to their detriment, under certain circumstances, on promises, despite the absence of any mutual agreement by the parties on all the essential terms of a contract. Vigoda v. Denver Urban Renewal Auth.,
In the course of distinguishing it from the quasi-contractual action of promissory estop-pel, we have at times loosely referred to equitable estoppel as a tort action, but it is more precisely characterized as an equitable doctrine that suggests a tort-related theory in that it attempts to allocate loss resulting from the misrepresentation of facts to the most culpable party and to ameliorate an innocent party’s losses. Compare Bd. of County Comm’rs v. DeLozier,
In Piz, this court, in express reliance on the California case of Times-Mirror Co. v. Superior Court,
Although estoppel under those circumstances effectively forced the municipality to finalize its condemnation action, there was never any suggestion that the municipality could be forced to condemn private property as the result of a prior agreement. Precluding abandonment under those circumstances was merely one method of insuring payment for property the municipality had, by its own representations and conduct, already rendered valueless to its owner. Piz’s assertion
While we nowhere expressly limited the applicability of equitable estoppel in the context of condemnation proceedings to an owner whose property is subject to condemnation, that was the necessary implication of our holding in Piz. Only a party to a condemnation proceeding would be positioned to assert equitable estoppel as a defense to a maneuver by the condemnor to terminate the proceeding without compensating the condemnee for damage already done. Piz properly applied the doctrine of equitable es-toppel to prevent the municipality from exercising its right to abandon condemnation proceedings and thereby avoid compensating Piz for property it had already effectively taken. To extend the doctrine to a third party seeking enforcement of a contract, as the court of appeals proposes, would transform its fundamental character from that of an equitable defense to one of an offensive cause of action.
The doctrine of equitable estoppel relied on by this court in Piz therefore cannot provide a basis for Cornerstone to force acquisition of private property by eminent domain. This is true regardless of the indefen-sibility of the Renewal Authority’s conduct, the extent of the injuries actually suffered by Cornerstone, or the willingness of the individual owners to have their property condemned. As a result, the court of appeals erred in reversing the dismissal of Cornerstone’s claim for specific performance, even if the appellate court merely intended that any ruling on specific performance be made in conjunction with consideration of Cornerstone’s claim of equitable estoppel.
III.
The Renewal Authority asserted, and the dissenting panelist of the court of appeals concurred, that a contractual condition to condemn particular property is necessarily void. If that were indeed the ease, there would still be no need to directly consider the district court’s authority to order specific performance as a remedy for breach of contract by a governmental entity. In the absence of a valid contract to be breached, a remedy for breach would simply not be at issue. The matter of the court’s authority to order specific performance is not so easily avoided, however, because a contract is not rendered void merely by the fact that it includes a commitment to exercise a core governmental power.
The Renewal Authority’s assertion of voidness derives from what has come to be known as the doctrine of reserved powers. It has long been held that certain core governmental powers, like the power of eminent domain and the police power, are reserved to the sovereign and cannot be abdicated or surrendered by contract.
The notion of reserved sovereign powers first arose in the jurisprudence of the United States Supreme Court as an explanation of the limits of the Contract Clause. United States v. Winstar Corp.,
The same, however, cannot be said of commercial agreements to acquire particular private properties, by condemnation if necessary, and sell them for redevelopment. The reserved powers doctrine rests on a fundamental inability of sovereign governments to contract away essential attributes of their sovereignty. Georgia v. City of Chattanooga,
The power of eminent domain is the ability to take private property in the public interest, not the ability to refrain from such a taking. In common parlance, it seems highly questionable that a choice not to exercise a
Beyond the Supreme Court’s specific reference to “surrender” and “contracting away” the power of eminent domain, however, its concern that the Contract Clause not become a barrier to the future exercise of essential attributes of state government does not suggest similar treatment of contracts to acquire particular properties through the power of eminent domain. As long as government has not surrendered its power to take private property — as distinguished from its “power” not to take private property — it remains empowered to take, or retake as the cáse may be, that or other property in the future (for just compensation) and redistribute it in any manner that future circumstances and the public welfare demand.
It would in fact be counterproductive of the purposes of the Contract Clause to deny states the power to bind themselves to the exercise of their powers as a condition of commercially beneficial transactions. See Robie v. Mass. Tpk. Auth.,
IV.
The Supreme Court has never suggested, however, that the Contract Clause subjects states to lawsuits for breach of contract, much less that it confers upon state courts the power to order specific performance against coordinate branches of government, or their delegees, for breach of contract. Quite the contrary, the Supreme Court has steadfastly recognized the principle of sovereign immunity from suit, including suit for breach of contract; and with regard to the federal government itself, it has limited relief for breach of contract to that expressly authorized by Congress. See, e.g., Richardson v. Morris,
In contrast to the United States Supreme Court,
Apart from any implied waiver of sovereign immunity, or consent to be sued in court, the question of equitable relief for breach of contract, or specific performance, implicates an additional concern for the separation of governmental powers. As recognized by the Supreme Court, there are “the strongest reasons of public policy” for the rule that specific performance cannot be had against the sovereign. Larson,
The Government as representative of the community as a whole, cannot be stopped in its tracks by any plaintiff who presents a disputed question of property or contract right. As was early recognized, ‘the interference of the Courts with the performance of the ordinary duties of the executive departments of the government would be productive of nothing but mischief.’
Id. (quoting Decatur v. Paulding,
While the Supreme Court has readily acknowledged that Congress has the power to entrust the business of the government to agencies that are able to contract and be sued in their own names, in the absence of such congressional action it nevertheless holds that courts are without the authority to order specific relief against the government for breach of contract. Larson,
It has long been recognized that the power of eminent domain lies within the exclusive province of the legislature, to exercise or delegate according to its discretion. See Potashnik v. Pub. Serv. Co. of Colo.,
y.
Because the district court lacked the authority to order the specific performance of a contractual obligation to exercise the core governmental power of eminent domain and the Renewal Authority was not estopped from abandoning its condemnation petitions, the judgment of the court of appeals is reversed. Because, however, the Renewal Authority’s agreement to acquire specific properties, by condemnation if necessary, does not render the contract void, the case is remanded with directions to return it to the district court for consideration of Cornerstone’s remaining claims, including its claims for breach of contract.
Notes
. The scope of the police power is not before the court in this case.
. See Joleewu, Ltd. v. City of Austin,
. The Court has rejected the theory that a state impliedly- waives its immunity from suit when it enters a contract. Fla. Dep't of Health & Rehab. Servs. v. Fla. Nursing Home Assoc.,
. We have in the past found that under certain circumstances principles of equitable estoppel may prevent the government from denying the existence of a valid express contract. Perl-Mack Enters. Co. v. City & County of Denver,
. In the respect that Cornerstone seeks a court order compelling the Renewal Authority to act, the case has much in common with a mandamus proceeding. Cf C.R.C.P. 106(a)(2). We have consistently stated that "mandamus ordinarily does not lie to control the discretion of a public official.” Hawkins v. Cline,
Concurrence Opinion
concurring in part and concurring in the judgment only in part.
I join in all but Part III of the majority’s opinion, which addresses, and rejects, the Renewal Authority’s argument that an agreement to condemn particular property is void. Maj. op. at 742-44. Even assuming, arguen-do, that such an agreement is valid, the trial court has no authority to order specific performance as a remedy to compel the sovereign to exercise its eminent domain power under the agreement. Id. at 746. Thus, it is not necessary to decide the issue of the validity of the agreement — an issue with important constitutional implications — to arrive at the result we reach today. I therefore would not decide the issue. See Town of Orchard City v. Bd. of Delta County Comm’rs,
