City & Cnty. of Denver v. Monaghan Farms, Inc.

536 P.3d 825

2023 COA 60

CITY AND COUNTY OF DENVER, a Colorado municipal corporation, Plaintiff-Appellee,

v.MONAGHAN FARMS, INC., a Colorado corporation, Defendant-Appellant.

Court of Appeals No. 22CA0956

Colorado Court of Appeals, Division III.

Announced June 29, 2023

Kerry C. Tipper, City Attorney, David P. Steinberger, Assistant City Attorney, Andrew Gomez, Assistant City Attorney, Denver, Colorado, for Plaintiff-Appellee

Montgomery Little Soran P.C., Christopher A. Taravella, Michael R. McCormick, James C. Taravella, Greenwood Village, Colorado; Law Office of Robert R. Duncan, Robert R. Duncan, Denver, Colorado, for Defendant-Appellant

Opinion by JUDGE GRAHAM

¶ 1 Defendant-appellant, Monaghan Farms, Inc. (MF), appeals the district court's orders (1) denying MF's motion to dismiss for failure to join an indispensable party under C.R.C.P. 12(b)(6) ; (2) granting summary judgment for plaintiff-appellee, the City and County of Denver (Denver), on its first (quiet title) and second (release of claims) claims; (3) denying MF's C.R.C.P. 56(f) motion for a denial or continuance on Denver's summary judgment motion; and (4) entering a final judgment and decree quieting title in favor of Denver. We affirm the judgment of the district court.

I. Background

¶ 2 This appeal concerns MF's attempt to recover land ceded to Denver via eminent domain over thirty years ago. In 1988, Denver filed a petition to condemn 8,360 acres of land — the Monaghan Parcels — for the purpose of constructing and operating what would become Denver International Airport (DIA). After Denver was granted immediate possession of the Monaghan Parcels, the condemnation court appointed three commissioners and held a hearing to determine the compensation to which MF was entitled.

¶ 3 The condemnation court entered a "Rule and Decree in Condemnation," stating that upon payment to MF of $27,155,218.31, plus interest, Denver would be "the absolute holder and owner in unconditional fee simple absolute, free of all rights of reversion and reversionary interests," of the Monaghan Parcels. A little over a month later, the court updated the total compensation due to $27,455,218.31 in its "Amended Rule and Decree in Condemnation," correcting a clerical mistake in the prior order. The court determined the fair value of the Monaghan Parcels to be $38,455,218.31.

¶ 4 Both parties eventually appealed the matter to the Colorado Supreme Court, but they settled their respective claims before the case was decided.

¶ 5 The settlement agreement, signed on November 12, 1992, memorialized the parties' agreement as follows:

• Denver would pay MF $30,096,000, less the $11,340,000 that MF had already withdrawn from the court registry, resulting in a net payment of $18,756,000. The parties agreed that this value was not necessarily reflective of the actual market value of the Monaghan Parcels.

• The parties would jointly file a motion for dismissal of the pending appeal with prejudice and remand to the district court for (1) vacatur of the earlier Rule and Decrees; (2) entry of a "Second Amended Rule and Order"; and (3) disbursement of funds consistent with the agreement.

• The parties would release each other (and their predecessors, successors, etc.) "from each and every cause of action ... which the releasing parties had, may now have, or which may hereafter arise against any of the released parties by reason of any act, omission, matter, event, cause or other thing whatsoever occurring prior to the date hereof."

¶ 6 The settlement was conditioned on the condemnation court, upon remand, adopting the settlement as an order of the court and issuing an order for the agreed-upon disbursement of funds, among other things. If those conditions weren't met, then each party's obligations under the agreement would terminate.

¶ 7 On remand, the condemnation court entered its Second Amended Rule and Order, nunc pro tunc to January 30, 1990;¹ vacated its prior two orders; and specified "that all interests of [MF] in said property have been acquired by [Denver,] and that title to the property described in Exhibit A appurtenances thereto belonging, free and clear of all liens and encumbrances, is hereby vested in [Denver.]" Exhibit A described the property as "[a]ll property interests in, above, on and below the surface of the [Monaghan] Parcels."

¶ 8 In May 2017, after learning that Denver planned to lease part of the condemned property for private commercial use instead of for DIA, MF sent a letter to Denver requesting good faith negotiations under the settlement agreement, contending that it retained a "right to reversion" if the parcels were no longer used for DIA. The letter set forth MF's request as follows:

[MF] respectfully demands that Denver immediately cease and desist any private commercial use of the Private Use Parcels and instead use the Monaghan Property solely for public airport uses.

Alternatively, if Denver refuses to cease using the Monaghan Property for private commercial uses, then [MF] respectfully requests that Denver convey title to the Private Use Parcels back to [MF].

¶ 9 On April 20, 2020, MF sent Denver another letter, reasserting its intent to pursue claims for reversion.

¶ 10 On November 3, 2021, Denver filed its complaint against MF for quiet title and declaratory judgment. It requested (1) an order quieting its title to the Monaghan Parcels and rejecting any claims to a right of reverter by MF; (2) a declaration that the 1992 settlement agreement barred MF from pursuing any claims that it had any reversionary interest in or to the Monaghan Parcels; and (3) a declaration that the development of commercial, non-aeronautical land uses at DIA, including within any Monaghan Parcels, was in the service and support of DIA, and therefore a "public airport use."

¶ 11 MF then filed a motion to dismiss for failure to join an indispensable party pursuant to C.R.C.P. 12(b)(6), asserting that Adams County should be joined. Before a hearing could be held on the motion to dismiss, Denver filed its motion for summary judgment on its claims to quiet title and to release claims, arguing that those claims were determinative and should be considered first because the public use issue was relevant only to the motion to dismiss. The court heard argument on those two claims.

¶ 12 After the hearing, MF filed a motion to deny the two claims outright or to delay the court's ruling on the summary judgment motion so that MF could conduct discovery pursuant to C.R.C.P. 56(f).

¶ 13 The district court ruled on the motions, concluding that discovery was not necessary to determine whether Denver's specified land use was a "public airport use" because that issue was irrelevant to Denver's first and second claims. It therefore denied MF's motion to dismiss (finding that Adams County wasn't a party necessary to its adjudication), rejected MF's request to conduct discovery, and granted Denver's motion in part.

¶ 14 As to the quiet title claim, the court found that the use of the phrase "all property interests" in Exhibit A, discussed above, meant that Denver sought and received title to the Monaghan Parcels in fee simple absolute.² It further determined that MF did not retain a reversionary interest in the property and that the release provisions in the settlement agreement included any purported right of reversion following condemnation.

¶ 15 The court also found that the settlement agreement was unambiguous, making extrinsic evidence inadmissible in its interpretation of the agreement, and that MF had failed to engage in good faith negotiations with Denver.

¶ 16 On May 17, 2022, the court entered its "Final Judgment and Decree," declaring that Denver owns the Monaghan Parcels in fee simple absolute and that [MF] retains no residual interest in the property.

¶ 17 MF now appeals the following conclusions from the court's order for summary judgment: (1) the 1992 settlement agreement released MF's claims arising from prior-occurring events; and (2) Denver acquired title to the Monaghan Parcels in fee simple absolute. It also appeals (3) the court's denial of its motion to dismiss finding that Adams County was not a necessary party; and (4) its entry of the Final Judgment and Decree, quieting title in the Monaghan Parcels. Because we agree with Denver that it acquired the Monaghan Parcels in fee simple absolute, we need not reach MF's remaining contentions.

II. Nature of the Condemned Parcels

¶ 18 MF contends that the district court committed reversible error by concluding that Denver condemned the Monaghan Parcels in fee simple absolute because Denver's 1988 petition didn't request condemnation in fee simple absolute, nor did Denver pay for the parcels to be taken in fee simple absolute. MF asserts that Denver merely obtained a defeasible fee subject to the possibility of reverter should the land not be used for "public airport use." Denver counters that the 1992 settlement agreement combined with the Second Amended Rule and Order conveyed the Monaghan Parcels in fee simple absolute and that MF retains no reversionary interest in the property. We agree with Denver.

A. Additional Facts

¶ 19 In the 1988 condemnation petition, Denver sought to acquire "[a]ll property interests in, above, on and below the surface of the Parcels," subject to several exclusions of mineral rights and utility easements not relevant here. Notably, the petition contains no mention of a possibility of reverter, nor do the 1992 settlement agreement or the Second Amended Rule and Order. Instead, the Second Amended Rule and Order describes the acquired interests as follows:

The entry of this Second Amended Rule and Order resolving and settling this action between the parties, including the full compensation to be paid for the taking of said property described in the Petition in Condemnation filed herein, including all appurtenances thereto, and any and all interests therein , including damages, if any, and for any and all other costs of said parties,

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