Trailhead v. Phoenix

CourtCourt of Appeals of Arizona
DecidedOctober 3, 2023
Docket1 CA-CV 22-0735
StatusUnpublished

This text of Trailhead v. Phoenix (Trailhead v. Phoenix) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trailhead v. Phoenix, (Ark. Ct. App. 2023).

Opinion

NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE ARIZONA COURT OF APPEALS DIVISION ONE

TRAILHEAD RESTRICTION, LLC, Plaintiff/Appellant,

v.

CITY OF PHOENIX, et al., Defendants/Appellees.

No. 1 CA-CV 22-0735 FILED 10-3-2023

Appeal from the Superior Court in Maricopa County No. CV2020-009035 The Honorable Joan M. Sinclair, Judge

AFFIRMED

COUNSEL

McGill Law Firm, Scottsdale By Gregory G. McGill Counsel for Plaintiff/Appellant

Burch & Cracchiolo, P.A., Phoenix By Casey S. Blais, Andrew Abraham, Daryl Manhart Counsel for Defendant/Appellee City of Phoenix

Fidelity National Law Group, Phoenix By Nathaniel B. Rose Counsel for Defendant/Appellee Fidelity National Title Insurance Company TRAILHEAD v. PHOENIX, et al. Decision of the Court

MEMORANDUM DECISION

Judge Daniel J. Kiley delivered the decision of the Court, in which Vice Chief Judge Randall M. Howe and Judge Jennifer M. Perkins joined.

K I L E Y, Judge:

¶1 Trailhead Restriction, LLC (“Trailhead”) appeals the grant of summary judgment on its claims against the City of Phoenix (the “City”) and Fidelity National Title Insurance Company f/k/a Lawyers Title of Arizona, Inc. (“Lawyers Title”). For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 This dispute arises out of a decades-old land swap transaction involving property in the Laveen area of the foothills of South Mountain in Phoenix. Viewed in the requisite light most favorable to Trailhead as the party against whom summary judgment was entered, see Kim v. Wong, 253 Ariz. 247, 248, ¶ 9 (App. 2022), the evidence shows that Trailhead’s predecessor-in-interest Barbara Nerison (“Nerison”), along with her now- deceased husband James Nerison, entered into a land swap transaction with the City in 1977. As part of the transaction, the Nerisons sold 6.13 acres of hillside land (the “hillside property”), located in what the parties refer to as “South Mountain Preserve Lot 13,” to the City for $17,100 while the City simultaneously sold 4.4 acres of nearby land to the Nerisons for $22,600. According to Trailhead, this exchange allowed the Nerisons to acquire developable land in the South Mountain foothills to be subdivided into “buildable lots” for resale while the City acquired “pristine hillside property” in its “natural state” to add to the South Mountain Preserve.

¶3 The terms of the parties’ agreement also required the Nerisons to purchase, from third parties John and Ila Christensen, a parcel of land (the “Christensen property”) located between the hillside property and the 4.4 acres the Nerisons acquired from the City. As Nerison later explained, she and her husband “had to agree,” as “part of the [land swap] deal,” that the Christensen property would be added to the property they bought from the City and then subdivided for resale. According to Nerison, this arrangement gave the buyers of the subdivided lots “additional square footage” to help meet “setback and permitting requirements” while generating additional property tax revenue for the City.

2 TRAILHEAD v. PHOENIX, et al. Decision of the Court

¶4 The deeds to the properties that the Nerisons and the City exchanged, signed by the Nerisons and a representative of the City, contain identical language to the effect that the conveyance of the deeded property was subject to “[r]eservations in patents and all easements, rights of way, covenants, conditions, and restrictions as may appear of record.”

¶5 The deed to the Christensen property, signed by the Nerisons and the Christensens, similarly provides that the conveyance of the deeded property was subject to “[c]urrent taxes and other assessments, reservations in patents and all easements, rights of way, encumbrances, liens, covenants, conditions, restrictions, obligations and liabilities as may appear of record.”

¶6 The deed to the Christensen property also contains the following development restriction, which does not appear in the deeds to the other properties involved in the land swap:

RESTRICTIONS: That this land remain in its natural state forever. This restriction prohibits construction of any kind or type of buildings, structures, walls, fences, improvements or any roads in or upon the property above described.

IT IS UNDERSTOOD that the above restrictions cannot be removed without a written agreement from all the property owners that adjoin the restricted area, stating they have no objection to its removal.

(Emphasis added.)

¶7 The deeds for all properties involved in the land swap, including the Christensen property, were recorded on the same day, May 17, 1977.

¶8 The Nerisons later subdivided the 4.4 acres they acquired from the City into lots zoned for single-family residences, which they then sold to Gordon Dysthe and other buyers.

¶9 In 2019, the City began constructing trails for hiking and horseback riding on part of the hillside property it purchased from the Nerisons in 1977. Concerned that the presence of hikers and riders on the hillside property would lead to “increased litter,” “noise,” and “reduc[ed] privacy and . . . property values,” Nerison, Dysthe, and the owners of the other subdivided lots formed Trailhead to “facilitate their joint interests in maintaining the natural surroundings in the South Mountain Preserve area.” Trailhead requested that the City cease construction of the trails,

3 TRAILHEAD v. PHOENIX, et al. Decision of the Court

asserting that the development prohibition in the deed to the Christensen property also applies to the hillside property that was conveyed to the City as part of the same land swap. Responding that the hillside property is subject to no development restrictions, the City continued constructing the trails.

¶10 Trailhead then sued the City and Lawyers Title for breach of contract and breach of the implied-in-law covenant of good faith and fair dealing, asserting that the deed and escrow instructions for the 1977 land swap transaction constitute an enforceable contract that prohibits the construction of trails on the hillside property. Trailhead also asserted a claim for promissory estoppel, arguing that its members purchased the subdivided lots in reasonable reliance on the defendants’ assurances to the Nerisons that the hillside property would remain undeveloped. In the alternative, Trailhead asserted tort claims against the City, including fraudulent concealment and negligent misrepresentation, and against Lawyers Title for breach of fiduciary duty, alleging that the absence of a development restriction in the deed to the hillside property is attributable to the defendants’ negligent or otherwise wrongful conduct.

¶11 The City and Lawyers Title each moved for summary judgment, arguing that the hillside property is subject to no development restrictions and that, in any event, various defenses, including the statute of limitations and the statute of frauds, apply to bar Trailhead’s claims.

¶12 Trailhead responded that the parties to the 1977 land swap transaction intended that the development prohibition set forth in the deed to the Christensen property also apply to the hillside property. Trailhead sought to establish the intent of the parties to the land swap through extrinsic evidence in the form of an affidavit (the “Nerison affidavit”) that Nerison signed in 2019 and a declaration (the “Dysthe declaration”) that Dysthe signed in 2022.

¶13 The superior court granted summary judgment on all of Trailhead’s claims. After denying Trailhead’s subsequent motion for a new trial and granting the defendants’ applications for attorney fees and costs, the court entered the final judgment from which Trailhead appeals.

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Trailhead v. Phoenix, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trailhead-v-phoenix-arizctapp-2023.