Arizona Supreme Court: State of Arizona, et al. v. Foothills Reserve Master Owners Association, Inc., et al., Case No. CV-23-0292-PR, Filed January 28, 2025
Key Legal Issues:
- Whether severance damages are available to landowners when their appurtenant easements are condemned in the context of eminent domain but their physical real property is not taken.
- Whether appurtenant easements can be considered “part of a larger parcel” under A.R.S. § 12-1122(A)(2) for the purpose of awarding severance damages.
Resulting Opinion of Key Legal Issues:
- The court concluded that A.R.S. § 12-1122(A)(2) authorizes severance damages when appurtenant easements are condemned, even if the physical real property is not taken. The court interpreted “property” and “parcel” in the statute to include nonpossessory interests like easements.
- The court determined that appurtenant easements are part of the dominant estate and can be considered “part of a larger parcel” under A.R.S. § 12-1122(A)(2), forming a unified entity with the physical property, and, thereby, making landowners eligible for severance damages.
The court’s unanimous decision emphasizes the value of appurtenant easements as property rights and their integral connection to the dominant estate, and the constitutional requirement for just compensation in eminent domain cases. However, only an owner whose property is severed by condemnation is entitled to proximity damages. The court clarified that when determining whether property condemned is part of a “larger parcel,” a court must undertake a two-part inquiry, as explained in the opinion.
Outcome of the Case:
The Arizona Supreme Court vacated the Court of Appeals’ opinion and affirmed the Superior Court’s judgment. This ruling allows the Homeowners to receive severance damages for the reduction in their property values due to the proximity of the new freeway, following the condemnation of their appurtenant easements in the Common Areas.