C & G, Inc. v. Canyon Highway District No. 4

75 P.3d 194, 139 Idaho 140, 2003 Ida. LEXIS 126

• Court: Idaho Supreme Court
• Decided: July 29, 2003
• Docket: 28128
• Status: Published

Opinions

KIDWELL, Justice.

C & G, Inc. (C & G) sued the Canyon Highway District No. 4 (Highway District) for inverse condemnation after the Highway District built a road through C & G’s property without compensating C & G. The Highway District defended on the ground C & G failed to file its case within the statute of limitations period. However, the district court found the statute of limitations was not triggered until the Highway District completed the construction project, which brought C & G’s suit within the four-year limitation period. The Highway district failed to prove its other affirmative defenses and C & G was awarded damages, together with costs and attorney fees. The Highway District filed this appeal. The judgment of the district court is affirmed.

I.

FACTS AND PROCEDURAL BACKGROUND

C & G owns and operates a farm on 260 acres in Canyon County, Idaho. Martin Gal-vin (Martin) and Patricia Galvin (Patricia), husband and wife, are the only shareholders of C & G, each owning 50% of C & G’s shares. The Old Middleton Road, a winding road with two very sharp curves, ran north and south along the western edge of C & G’s property. By the early to mid 1980’s, the condition of the Old Middleton Road had deteriorated to the point that it was necessary to rebuild and resurface it. At various times between the mid 1980’s and early 1990’s, Martin and representatives of the Highway District discussed the possibility of moving the Old Middleton Road east so it would follow the north/south section line running through C & G’s property.

Based on a 1921 resolution by the Canyon County Commissioners, the Highway District believed it had a 50 foot easement, 25 feet on each side, over the section line. As a result of the alleged easement, the Highway District assumed it could build a road over the section line crossing C & G’s property without compensating C & G. C & G believed the Highway District’s representations regarding the easement without investigating further. In late 1991, the Highway District contracted with a surveyor to mark the location of a proposed New Middleton Road, which was to run north/south along the section line running through C & G’s property. On December 24,1991, the Highway District’s Board of Commissioners (Commissioners) approved construction of New Middleton Road. Due to the alleged easement, none of the affected property owners were compensated for their land.

Construction of the New Middleton Road began in January 1992. Patricia objected to construction of the road at all times relevant. According to the Highway District, Martin was involved in different aspects of the construction project, particularly in the relocation of irrigation canals required by the construction. In order to lessen the road’s grade, the Highway District asked C & G to grant more than the 50-foot easement along a portion of the road that traversed a steep hill on C & G’s property. C & G refused the Highway District’s request. By October 16, 1992, construction had progressed to the point that the New Middleton Road’s alignment and width across C & G property were established. By November 6, 1992, the Highway District completed construction of the road’s subbase. The New Middleton Road was opened for public use in May 1993, but paving and oiling was not completed until August 1993.

In January 1997, C & G approached a surveyor about developing its property. At that time, C & G learned there was no easement for the road. On January 31,1997, C & G filed suit against the district seeking damages for inverse condemnation. On September 24, 1998, the Highway District filed a motion for summary judgment on the ground the applicable four-year statute of limitations, Idaho Code § 5-224 (2002), ran before C & G filed its complaint. On November 18, 1998, the district court granted the Highway District’s motion for summary judgment on the basis that, by November 6, 1992, construction on the road had progressed to the point that C & G was aware of the nature and extent of the taking of its property, triggering the limitation of action and placing C & G’s complaint beyond the four-year period.

On November 24, 1998, C & G filed a motion to reconsider, citing additional authority for the proposition that the statute of limitations did not begin running until May 1993, when the road was opened for public use. On January 13, 1999, the district court granted C & G’s motion for reconsideration on the ground the statute of limitations was not triggered until the Highway District completed construction of the road, which brought C & G’s complaint within the time period.

The parties stipulated to the facts of the case, including that the Highway District took 3.16 acres of C & G’s property for purposes of constructing the New Middleton Road. On December 20, 1999, the district court conducted a bench trial on the issues of the Highway District’s affirmative defenses of equitable estoppel, quasi estoppel, and waiver. On January 3, 2000, the district court entered its decision finding the Highway District failed to prove any of its affirmative defenses. On December 3, 2001, a jury trial began on the issue of the value of C & G’s condemned property. On December 12, 2001, based on the jury’s verdict, the district court entered a judgment in favor of C & G in the amount of $430,204.64. On February 21, 2002, the district court entered a judgment awarding attorney fees and costs to C & G.

The Highway District timely filed this appeal.

II.

STANDARD OF REVIEW

The date for when a cause of action accrues may be a question of fact or law. Jemmett v. McDonald, 136 Idaho 277, 279, 32 P.3d 669, 671 (2001) (citing Reis v. Cox, 104 Idaho 434, 660 P.2d 46 (1982)). If no disputed issues of material fact exist, when a cause of action accrues is a question of law for determination by this Court. Id.

This Court will only set aside the district court’s findings of fact if clearly erroneous. I.R.C.P. 52(a) (2002); McCray v. Rosenkrance, 135 Idaho 509, 513, 20 P.3d 693, 697 (2001); In re Williamson v. City of McCall, 135 Idaho 452, 454, 19 P.3d 766, 768 (2001). In deciding whether findings of fact are clearly erroneous, this Court determines whether the findings are supported by substantial, competent evidence. In re Williamson at 454, 19 P.3d at 768. Evidence is substantial and competent if a reasonable trier of fact would accept it and rely on it. Id. Findings based on substantial, competent evidence, even if conflicting, will not be disturbed on appeal. Bolger v. Lance, 137 Idaho 792, 794, 53 P.3d 1211, 1213 (2002).

III.

ANALYSIS

A. C & G’s Action For Inverse Condemnation Is Not Time Barred By The I.C. § 5-224 Limitation Of Action.

Neither party disputes the facts of this case. Therefore, whether C & G filed its inverse condemnation lawsuit within the statute of limitations is a question of law over which this Court exercises free review.

I.C. § 5-224 contains the statute of limitations for an inverse condemnation claim. Wadsworth v. Dep’t. of Transp., 128 Idaho 439, 441-42, 915 P.2d 1, 3-4 (1996) (citing McCuskey v. Canyon County Comm’rs, 128 Idaho 213, 912 P.2d 100 (1996)). I.C. § 5-224 states: “[a]n action for ... [inverse condemnation] ... must be commenced within four (4) years after the cause of action shall have accrued.”

The Highway District argues the district court erroneously relied on the project completion rule of Farber v. State, 102 Idaho 398, 630 P.2d 685 (1981), to determine when a claim for inverse condemnation accrues. According to the Highway District, Farber, a case addressing the issue of when the notice provision of the Idaho Tort Claims Act (ITCA) is triggered, has no application in this case. The Highway District argues under Tibbs v. City of Sandpoint, 100 Idaho 667, 671, 603 P.2d 1001, 1005 (1979), a claim for inverse condemnation accrues when a property owner is aware of the nature and extent of his or her damages. The Highway District asserts this Court has consistently applied the Tibbs standard to determine when the statute of limitations is triggered for claims of inverse condemnation and there is no valid reason to create a different standard in this case.

C & G argues Tibbs and its progeny do not apply because none of those cases involved a direct physical taking. C & G urges this Court to follow the district court’s reasoning and apply the “project completion” rule of Farber. Otherwise, C & G claims, private citizens whose land is subjected to a government construction project will be forced to bring their claims before they know the full extent of their damages.

This Court’s holding in Farber, 102 Idaho at 399, 630 P.2d at 686, provides instruction for determining when the statute of limitation is triggered in an inverse condemnation case where the government takes private land by means of a construction project. The Farbers sued the State for damages to their property resulting from construction of a road intersection. Id. The Farber’s claim sounded in tort and the relevant issue on appeal was whether they filed notice under the ITCA within the designated time period. Id. The Farbers contended they could not know the extent of their damages and, therefore, the notice period under the ITCA was not triggered until completion of construction. Id. at 400, 630 P.2d at 687.

Agreeing with the Farbers, this Court held the notice period under the ITCA was not triggered until the State completed the construction project. Id. at 402, 630 P.2d at 689. In adopting the project completion rule, the Farber Court distinguished Farber from an earlier ITCA case, Ralphs v. City of Spirit Lake, 98 Idaho 225, 560 P.2d 1315 (1977), and cited approvingly to the Washington case, Gillam v. City of Centralia, 14 Wash.2d 523, 128 P.2d 661 (1942) (overruled in part on other grounds). Id. at 400, 630 P.2d at 687. In Ralphs, the plaintiff filed notice of his tort claim too late because the damages arose from a single event, which notified the plaintiff of all his damages, and the plaintiff waited beyond the notice period to file his claim. Id. at 401, 630 P.2d at 688. The Farber Court reasoned the nature of the government’s wrongdoing, a continuing construction project, required a different standard for determining when the notice period was triggered.¹

The Farber Court then adopted the project completion rule promulgated by the Washington Supreme Court. Id. In Gillam, it was determined that when a takings claim based on the Constitution occurs by means of a government construction project, the statute of limitations for inverse condemnation does not accrue until completion of the project. Gillam, 128 P.2d at 663. The Washington Supreme Court reasoned that the property owner was justified in waiting until the project was completed before bringing suit for damages because until completion, there was no reliable method to determine the extent of the damages. Id. (quoting Foley v. Cedar Rapids, 133 Iowa 64, 110 N.W. 158 (1907)).

The Father Court also reasoned that in a situation where the wrongful act was a government construction project, the “project completion” rule better suited the purposes of the ITCA’s notice requirement because, until the State completed all the acts pursuant to the contract it made for construction, the parties could not assess the extent of damages. Id. at 401, 630 P.2d at 688. Furthermore, the Father Court reasoned if a party can present the government with a complete claim, the government might better attempt a settlement on the basis of clearly ascertainable facts. Id. The Father Court also based its reasoning on independent policy considerations, primarily the need for certainty and efficiency in resolving claims, which dictated a standard setting forth a clearly ascertainable date that triggers the ITCA’s notice requirement. Id. at 402, 630 P.2d at 689.

We find the reasoning of Father and its “project completion” rule the proper standard for determining when a claim for inverse condemnation accrues for purposes of the statute of limitations. A landowner subjected to the taking of his or her property by a government construction project should not be required to prematurely bring an inverse condemnation claim before damages can be fully assessed. See U.S. v. Dickinson, 331 U.S. 745, 67 S.Ct. 1382, 91 L.Ed. 1789 (1947). Neither should a landowner be forced to engage in piecemeal litigation or risk the effects of res judicata by suing prematurely; rather, a private citizen whose land is taken by means of a construction project has the right to wait until completion of the project before his or her inverse condemnation claim accrues for purposes of calculating the statute of limitations. Id. Furthermore, the Highway District’s erroneous belief it had an easement over the section line caused the confusion in this case. It would be bad precedent for this Court to condone the government’s misrepresentation, albeit innocently mistaken, by holding otherwise. The project completion rule promotes judicial economy and certainty, which benefits all parties involved in a takings case.

Additionally, under Idaho Code § 7-711 (2002), when the government takes a citizen’s real property, he or she is entitled to severance damages when the taking results in separate parcels of land. See Covington v. Jefferson County, 137 Idaho 777, 780, 53 P.3d 828, 831 (2002). At oral argument, C & G’s counsel indicated only a small fraction of the total damages awarded by the jury were for value of the actual property taken. A substantial amount of the damages were due to severance of C & G’s property. Although severance damages may be estimated before a taking occurs, obviously they can be more accurately and satisfactorily determined after completion of construction.

This analysis should not be taken as a-reversal of McCuskey where this Court refused to apply Father’s project completion rule to determine when an inverse condemnation claim accrues. 128 Idaho at 218, 912 P.2d at 105. In McCuskey, the plaintiff asked this Court to analogize the nature of the government’s wrongdoing in Farber, a continuing tort, to that of an inverse condemnation. The McCuskey Court reasoned the plaintiff provided no compelling reason to deviate from the standard established in Tibbs. C & G provides the compelling reasons McCuskey failed to present. Today’s holding is not based on the nature of the government’s wrongdoing. Rather, it is based on sound public policy that requires adoption of the project completion rule. Also, today’s holding should not be read to disrupt the rule of Tibbs and its progeny, which continues to apply to claims of inverse condemnation not involving a construction project.

B. Substantial, Competent Evidence Supports The Finding That The Highway District Failed To Prove The Affirmative Defense Of Quasi Estoppel.

Quasi estoppel prevents a party from asserting a right, to the detriment of another party, which is inconsistent with a position previously taken. Floyd v. Bd. of Comm’rs of Bonneville County, 137 Idaho 718, 726, 52 P.3d 863, 871 (2002) (citing E. Idaho Agric. Credit Ass’n. v. Neibaur, 133 Idaho 402, 410, 987 P.2d 314, 322 (1999)). Quasi estoppel applies when it would be unconscionable to allow the party to be es-topped to change positions from one they acquiesced in or from one they accepted a benefit. Id. For quasi estoppel to apply, the party to be estopped must have either gained some advantage against the other party, produced a disadvantage to the other party, or the other party must have been induced to change positions. Id.

The district court found the Highway District failed to prove the affirmative defense of quasi estoppel because it failed to prove C & G took an inconsistent position regarding whether or not C & G would seek compensation for the taking of its property. The district court found C & G simply believed the representation that the Highway District owned an easement along the section fine. The district court also found, even assuming C & G acquiesced to the Highway District, it is not now unconscionable for C & G to assert the Highway District had no easement and seek compensation.

The district court’s finding regarding the Highway District’s failure to prove quasi es-toppel is supported by substantial, competent evidence. None of the Highway District officials testified that C & G donated or consented to the gratuitous taking of its property. Several of the Highway District officials testified Martin was in favor of moving the road. However, while Martin may have favored moving the road, such an attitude does not reflect donative intent or intent not to seek compensation for C & G’s taken property. The Commissioners testified to knowing Patricia, who owns half of C & G’s shares, opposed the New Middleton Road. All the affected property owners testified they were told the Highway District would not compensate them for their land because the Highway District owned an easement. Patricia testified she was threatened with legal action by one of the Commissioners if she continued opposing the New Middleton Road.

Based on this, substantial, competent evidence supports the district court’s finding that:

Plaintiff did not take an inconsistent position, with knowledge of the facts and his rights, regarding whether or not it was entitled to seek compensation for the taking of its property. Plaintiff merely believed the Highway District’s incorrect assertion that the Highway District had an easement.... Assuming the Plaintiff could be held to have acquiesced in the Highway District’s incorrect assertion that it had an easement across Plaintiffs property, it would not be unconscionable for Plaintiff to now assert that the Highway District did not have such easement and that Plaintiff is therefore entitled to compensation for the taking of its property.

Therefore, we affirm the district court’s finding that the Highway District failed to prove the elements of quasi estoppel.

C. C & G Is Entitled To An Award Of Attorney Fees On Appeal.

A prevailing condemnee is entitled to an award of attorney fees on appeal. State ex. Rel. Smith v. Jardine, 130 Idaho 318, 322, 940 P.2d 1137, 1141 (1997). The rationale for awarding attorney fees on appeal to a prevailing condemnee is so the condemnee is not deprived of part of the just compensation to which he or she is entitled under the Constitution. Id. As a result, C & G, as the prevailing condemnee, is entitled to an award of attorney fees on appeal.

IV.

CONCLUSION

When the government takes private property by means of a construction project without condemnation proceedings, the statute of limitations, for purposes of bringing an inverse condemnation claim, is triggered upon completion of construction. As a result, C & G’s January 31, 1997, complaint for inverse condemnation was timely filed because the Highway District did not substantially complete construction of the road until May 1993. The district court’s finding that the Highway District failed to prove its affirmative defense of quasi estoppel is supported by substantial, competent evidence. C & G, as the prevailing party, is entitled to an award of attorney fees and costs on appeal.

Justices SCHROEDER, and WALTERS, and Justices Pro Tem SCHWARTZMAN and HOHNHORST concur.

1 . This project completion rule was an anomaly to the usual standard for when the notice period is triggered for purposes of the ITCA. See Magnuson Properties P'ship v. City of Coeur d’Alene, 138 Idaho 166, 169-70, 59 P.3d 971, 974-75 (2002) (holding that the notice period for purposes of the ITCA is customarily triggered upon the occurrence of a wrongful act, even if the full extent of damages is not known).