This zoning opinion discusses the relationship between the statute of limitations and a declaratory judgment action.

Flagstaff told CDR that it would deny CDR’s plan to develop property in the City. It never formally did so, however; instead, CDR, though it filed a Notice of Claim in 2004, continued to work with the City to come up with an acceptable plan. It failed and, in 2008, filed suit for declaratory relief and §1983. The City moved to dismiss, asserting, among other things, the one-year statute on actions against a public entity; it argued that the cause of action accrued in 2004 when CDR knew it had been damaged. The trial court granted the motion (which the Court of Appeals treats as summary judgment because documents outside the pleadings were presented).

As to the declaratory judgment the Court of Appeals reverses, holding that the statue on a DJ doesn’t begin to run until “the related damage claims accrue.” Filing a Notice of Claim didn’t cause that; even filing suit for DJ doesn’t necessarily cause that. A justiciable controversy can exist before a party has caused breach or damage that triggers the statute of limitations. The City never did actually reject the plan (the planners had just said that they would), CDR therefore hadn’t exhausted its administrative remedies, so the statute hadn’t even begun to run.

Similarly, the §1983 claim hadn’t accrued.

CDR’s lawsuit also pled misrepresentation: the City staff allegedly hadn’t told it the truth about what certain zoning regulations required. (It is apparently not uncommon in these matters that people actually rely on the legal representations of the same bureaucrats they’re fighting.) But the Notice of Claim hadn’t mention that, so the misrepresentation claim was barred.

(link to opinion)