Private Condemnation for Access Should Be Transferable to a New Buyer
Question: In a recent column you discussed the rights of two brothers who inherited 20 acres of land in Prescott Valley that was “landlocked”, i.e., no legal access to a public highway. You said that the two brothers had the right of private condemnation over the land of the owner of a 5-acre lot between their 20 acres and a public highway. You then said that, after acquiring legal access by private condemnation, the two brothers could then transfer this legal access to a buyer of their 20 acres. I am a real estate lawyer. Are you aware that last year the Court of Appeals in Pima County ruled that private condemnation could not be used to acquire legal access for transfer to a buyer. Your thoughts?
Answer: You are referring to the Memorandum Decision by the Court of Appeals, Division Two, No. 2 CA-CV 2021-0089. (Note: The Court of Appeals, Division Two, is located in Tucson and has jurisdiction over appeals from southern Arizona counties such as Pima County and Cochise County.)
This Memorandum Decision ruled on the following facts: A Phoenix farmer, not represented by an attorney or a real estate broker, purchased 1,200 acres of land in the Sulphur Valley in Cochise County for hay farming. This 1,200 acres of land had been an apple orchard that went bankrupt. At the time of close of escrow, the Phoenix farmer had no legal access to a public highway. The only physical access to a public highway was a 6-mile dirt road that had been used for more than 50 years by the owner of the apple orchard and other prior owners of the 1,200 acres. This 6-mile dirt road to the public highway was over the land of a prominent Cochise County rancher who owned thousands of acres of land in Sulphur Valley. Three months after close of escrow, this Cochise County rancher presented the Phoenix farmer with a three-page access easement (“Easement”) over the 6-mile dirt road to the public highway. The Phoenix farmer signed the Easement. This Easement had a sentence that prohibited the transfer of the Easement to any buyer of the 1,200 acres.
The hay farm was never fully operational and always lost money, so the Phoenix farmer signed a purchase contract to sell the 1,200 acres for $1.8 million to a California pecan and pistachio farmer. (Note: Probably the only thing worse to the Cochise County rancher than a Phoenix farmer owning the 1,200 acres was a California farmer owning the 1,200 acres!)
No buyer “wants to buy a problem,” so as a condition of the closing of the $1.8 million sale, the California farmer demanded legal access over the 6-mile dirt road to the public highway. The Phoenix farmer offered $300,000 to the Cochise County rancher for legal access that could be transferred to the California farmer. The Cochise County rancher refused to negotiate any legal access that could be transferred to the California farmer, and only offered the Phoenix farmer $200,000 to buy his 1,200 acres of land. Therefore, the Phoenix farmer filed a lawsuit to acquire transferable legal access by private condemnation. The local Cochise County judge denied transferable legal access to the Phoenix farmer. The Court of Appeals in Pima County also denied transferable legal access to the Phoenix farmer. The California farmer then cancelled the $1.8 million purchase contract for the 1,200 acres.
By way of background, private condemnation is both in the Arizona Constitution and in Arizona statutes, which were adopted from the state of Washington’s Constitution and statutes. Therefore, Arizona courts have said that the decisions of Washington courts regarding private condemnation are persuasive in interpreting the Arizona law of private condemnation. 169 Ariz. 371. Not only Washington, 97 Wash.2d 30, but other states such as Wyoming, 782 P.2d 1136, have approved the right of private condemnation to include full, transferable legal access.
The opinion by the Court of Appeals in Pima County said, however, that “out-of-state case law” was irrelevant. The only case law cited by the Court of Appeals in Pima County was an Arizona decision, 196 Ariz. 411. In this decision a group of property owners in Yavapai County already had full, transferable access to the north to the I-40 freeway, but wanted to condemn “better” access to the south to Phoenix. The Court of Appeals, Division One, in Maricopa County correctly ruled that “convenience is not necessity,” and denied condemnation for “better” access to the south to Phoenix.
Although the Court of Appeals in Pima County acknowledged that the Arizona Constitution provides “for [private] condemnation in order to promote use of the state’s resources,” the Court of Appeals in Pima County was focused on the 1,200 acres “being developed and interfering with cattle ranching that has occurred in northern Cochise County since the time before Arizona became a state.” [Note: Long before any cattle ranching in the Sulphur Valley, however, the Sulphur Valley had been farmed and settled by the Apache chief Cochise and his followers.]
The result of the ruling by the Court of Appeals in Pima County is that the 1,200 acres of land worth at least $1.8 million is basically worthless. Only nominal property taxes are paid to Cochise County, and a local Cochise County labor force of at least 10-12 workers and supervisors has never been hired to farm pistachios and pecans.
Note: This Memorandum Decision does not create “legal precedent,” is “not for publication,” and can only be cited as legal authority in limited circumstances. Therefore, future Arizona courts will hopefully ignore this Memorandum Decision and enforce the Arizona Constitution and statutes on the right of private condemnation.