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SALT LAKE CITY — The Utah Supreme Court has ruled in favor of a southern Utah business in a legal dispute where the business claimed the Washington County School District should have offered to sell land to the business first, since the district had purchased the land from it under threat of eminent domain.
This decision reverses a district court dismissal of the lawsuit.
The high court's opinion, which was issued on Thursday, says Cardiff Wales LLC claims it initially sold a parcel of land to the Washington County School District "to avoid an eminent domain lawsuit" that the school district had threatened.
At the time, Cardiff Wales had been planning to develop the property — about 24 acres in Washington City — and was working with the city to obtain permits to develop the land. The opinion said the school district sent a letter suggesting it would use eminent domain to obtain the property if a sale did not occur.
About a decade after Washington County School District acquired the property, where it had considered building two schools, it decided to sell it to a third party, the filing said. Cardiff Wales did not learn about the sale until after it was finalized and argued that it should have had the right of first refusal to buy the property back.
"Utah law requires a government entity to offer property acquired through condemnation or a threat of condemnation to the original owner before disposing of it," the opinion explains.
The company filed a lawsuit, arguing that this law should apply. But a 5th District Court judge ruled that there was never a threat of condemnation from an official body in this instance and dismissed the case.
Cardiff Wales appealed the decision and the Utah Court of Appeals agreed with the district court's decision, saying a threat of eminent domain requires a government entity to "specifically authorize" the taking. The appeals court said this required a vote to approve filing an eminent domain complaint.
But the Utah Supreme Court reversed that decision, saying Utah laws do not support the appeals court's interpretation of what it means to be "specifically authorized."
"The Court of Appeals correctly held that property is not sold under a 'threat of condemnation' unless the government entity specifically authorizes the use of eminent domain. The court of appeals erred, however, when it concluded that a government entity must approve the filing of an eminent domain complaint to specifically authorize the use of condemnation," the opinion states.
The decision sends the case back to the 5th District Court to consider the case again now that the case is no longer dismissed.
