TOWN OF MONUMENT, a statutory municipality of the State of Colorado, Plaintiff-Appellant,
STATE of Colorado, BY AND THROUGH the STATE BOARD OF LAND COMMISSIONERS; Forest View Company; and Raymond Decker, Intervenors-Appellees.
County District Court No. 17CV30105 Honorable Eric Bentley,
Dahl Kuechenmeister & Renaud LLP, Malcolm Murray, Joseph
Rivera, Lakewood, Colorado, for Plaintiff-Appellant.
Cynthia H. Coffman, Attorney General, Ed Hamrick, Senior
Assistant Attorney General, Eva La, Assistant Attorney
General, Denver, Colorado, for Intervenor-Appellee State of
Bartels LLC, Richard W. Hanes, Brenda L. Bartels, Colorado
Springs, Colorado, for Intervenors-Appellees Forest View
Company and Richard Decker.
The Town of Monument (the Town) bought a parcel of real
property in a residential subdivision, intending to construct
a municipal water storage tank on the lot. There was only one
problem: a restrictive covenant prohibiting such structures
applies to all lots in the subdivision. So the Town filed
this case, seeking to use its power of eminent domain to have
the court declare its property free of the restrictive
covenant. Not so fast, said some of the other owners of lots
in the subdivision, who had intervened in the
case. They said because the restrictive
covenant benefits all property in the subdivision, the
Town can't eliminate the restrictive covenant on its lot
without paying every property owner in the subdivision an
amount compensating each of them for the loss in value to
their respective properties. The State Board of Land
Commissioners (Land Board), which owns several lots in the
subdivision, presented an even greater obstacle to the
Town's goal. It asserted that because the restrictive
covenant is a compensable interest in the property, and the
power of eminent domain can't be used against the State,
the Town can't eliminate the restrictive covenant on its
lot. The Town fought back, claiming that the restrictive
covenant isn't a compensable interest in property in the
context of an eminent domain case.
Everyone recognized that the case came down to deciding
whether the Colorado Supreme Court's decision in
Smith v. Clifton Sanitation District, 134 Colo. 116,
300 P.2d 548 (1956), or the Colorado Court of Appeals'
decision in City of Steamboat Springs v. Johnson,
252 P.3d 1142 (Colo.App. 2010), controls. In the former, an
eminent domain case, the court held that a restrictive
covenant wasn't a compensable property interest.
Smith, 134 Colo. at 119-21, 300 P.2d at 549-50. In
the latter, also an eminent domain case, the division said
that a restrictive covenant was a compensable property
interest. Johnson, 252 P.3d at 1146.
The district court agreed with the intervening landowners. It
reasoned that Smith, which involved property owners
who agreed to a restrictive covenant for the clear purpose of
preventing a condemnation, must be limited to its particular
facts; this case doesn't involve comparable facts; and
Johnson sets forth the better rule. This ruling
rendered the Town's condemnation action untenable for
several practical reasons, but also because the power of
eminent domain can't be exercised against the State. As a
result, the parties stipulated to a dismissal of the case
with prejudice. The court granted the stipulation. The Town
timely appealed from the dismissal, raising only the issue
whether Smith controls.
We hold that the holding and underlying reasoning of
Smith aren't limited to that case's
particular facts. That is, the court announced a rule of
law— that a restrictive covenant isn't a
compensable property interest in an eminent domain
case— and the rule isn't limited to situations
where the affected property owners agree to the restrictive
covenant in a clear attempt to thwart acquisition of property
by a public entity for public use. We therefore reverse and
remand the case for further proceedings.
Though the Land Board stipulated to the dismissal with
prejudice so that the Town could appeal the issue presented,
it now argues that because of that dismissal we lack
jurisdiction over the appeal. The Land Board says the
order ruling on the Smith issue isn't appealable
because it didn't resolve the case on the merits and,
relying primarily on Foothills Meadow v. Myers, 832
P.2d 1097 (Colo.App. 1992), the stipulation for dismissal
with prejudice means no court has jurisdiction over the case.
Both arguments fail.
The order disposing of the Smith issue may or may
not have been a final judgment. But regardless, the dismissal
with prejudice clearly constituted a final, appealable
judgment. Id. at 1098; Dailey v. Montview
Acceptance Co.,514 P.2d 76, 78 (Colo.App. 1973) (not
published pursuant to C.A.R. 35(f)). And once the court
entered it, the legal ruling on which the dismissal was
premised became appealable. See BCW Enters., Ltd. v.
Indus. Claim Appeals Office,964 P.2d 533, 537
(Colo.App. 1997) ("[A]n interlocutory order becomes
reviewable when appealed incident to or in conjunction with
an otherwise final order."); see also McBride v.
CITGO Petroleum Co.,281 F.3d ...