Calmat of Arizona v. State ex rel. Miller (1993)
In Calmat of Arizona v. State ex rel. Miller, 176 Ariz. 190, 195, 859 P.2d 1323 (1993), the State filed a direct condemnation action in October of 1985 in order to widen a highway bridge. Id.
Two months later, in December, the State posted a bond in the amount of its estimate of the value of the land and obtained an order for immediate possession. Id.
After building structures on the land, the State failed to pursue the condemnation action to completion and the action was dismissed eleven months later, in November of 1986. Id.
Seven months later, in June of 1987, Calmat filed an inverse condemnation action to obtain compensation for its property. Id.
Because the real estate market was rising over that period, Calmat argued that, pursuant to the direct condemnation statutes, specifically A.R.S. 12-1123(A), its property should be valued on the date that it filed its inverse condemnation action rather than the earlier date on which the State had taken the property. Id.
Further, Calmat argued that, pursuant to 12-1123(B), it was entitled to interest on the value its property possessed in June of 1987, running retroactively from December of 1985 (when the State took possession) to the date of payment. Id. at 192, 859 P.2d at 1325.
In deciding the issue, our supreme court rejected Calmat's attempt to apply the direct condemnation statutes to inverse condemnation cases and, by so doing, reap a double benefit by valuing the property many months after the actual taking had occurred, and then granting retroactive interest on that higher value beginning from the date of the taking.
The court thus determined that the proper time to value property in inverse condemnation actions is the date on which the government takes the property - in Calmat, December of 1985, "the date of the state's original entry." Id. at 192-95, 859 P.2d at 1325-28.
In the course of its analysis, the Calmat court observed that, in direct condemnation actions, the Legislature's decision to value condemned property on the date of the summons serves the purpose of placing "the property owner in the position he or she would have occupied had no taking occurred" because the date of the summons is usually "close in time to the actual taking." Id. at 193, 859 P.2d at 1326.
This is so because the date of valuation set by the Legislature:
Contemplates an orderly taking of property whereby the condemning agency first files a complaint in condemnation and then seeks a court order to obtain immediate possession. The legislature's decision to value the property as of the summons' date in a direct condemnation action is logical because the commencement of the proceedings . . . may be fairly said to represent the date of taking. Id. at 193-94, 859 P.2d at 1326-27.