Appellate courts love constitutional cases. But they aren’t always very good at them.

A Flagstaff ordinance requires owners of property adjoining sidewalks to maintain them and imposes a lien for the costs of repair. Bonito challenged its constitutionality.

On summary judgment, the trial court upheld it under the due process clause. The Court of Appeals affirms that. Making adjoining landowners keep up sidewalks is a valid exercise of the police power under a couple of cases from other states.

But Bonito also argued the takings clause. This opinion says, citing a U.S. Supreme Court case named Lingle (all quotes in this paragraph are from U.S. Supreme Court cases; don’t blame CA1 for them) that even if an ordinance is valid under the due process  it can still be an invalid taking. ““[P]roperty may be regulated to a certain extent, [but] if a regulation goes too far it will be recognized as a taking.” How far is “too far?” Aside from per se takings (permanently invading or completely depriving an owner of use), which this is not, “the Court has ‘generally eschewed’ any ‘set formula for determining how far is too far,’” preferring “ad hoc, factual inquiries.” Don’t you just love that kind of so-called “law?” There is only one type of case in which “we know it when we see it” is laughed at; courts otherwise think it quite sophisticated. So how do you figure it out? Factor analysis, the courts’ most trusted refuge from thought. You examine “[t]he economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations” (you’re no doubt marveling at what a clear and objective standard that is) and ““the character of the governmental action – for instance whether it amounts to a physical invasion or instead merely affects property interest through some public program adjusting the benefits and burdens of economic life to promote the common good” (ditto). But, as always, the stated factors are merely the ones the court wants to talk about to justify this decision since you must also look “into all of the relevant circumstances in a particular case.”

This is (quoting now from this opinion) an “essentially ad hoc, factual . . .  inquiry” which “an appellate court is ill-equipped to apply . . .  when [it has] not been addressed and developed by the parties in the trial court.” The parties didn’t do so because they relied on pre-Lingle cases. So the Court of Appeals remands. For what? “[F]or the court to determine whether the City’s lawful exercise of its police powers nonetheless constituted an unconstitutional taking.” How? Ask for more summary-judgment motions on a different issue? Hold an evidentiary hearing? Who knows. (But keep in mind that being an “essentially” factual issue means that it isn’t really a factual issue and that the appellate court can change the result on the same facts – using our old friends, the “factors” – if it wants to.)

And what about the burden of proof? If Lingle controls, and if it says you have to show certain things, and if somebody didn’t, why don’t they just lose the issue? Since when does relying on superseded precedent earn you a second chance?

The Court also concludes, using all the analysis necessary (in other words, not much) that the lien is not a tax or a special law.

A somewhat longer analysis is necessary to explain why Flagstaff has the power to enact such an ordinance. Under the statutes a city can require a landowner to build a pubic sidewalk and not to obstruct it, and  can abate nuisances. These statues are found in Title 9. So, Title 9 must also mean that  the city can require landowners to abate at public expense nuisances on those sidewalks. Even though no statute in Title 9 actually says that. Got it?

(link to opinion)

This is not an easy one to wade through but turns out to have some interesting points.

Murphy runs the OX Ranch. (The court describes it as a “’cow-calf’ business.” Things have indeed changed in Arizona if cow-calf is obscure enough to warrant quotes. And we bet that some of the legal types in this case thought “OX” referred to a castrated cow.) (The fact that the OX is a cow-calf operation turns out to have nothing to do with anything, by the way.) As a sideline the ranch sold decorative boulders from land it leased from the State to run cattle. It employed Sourant as its boulder-finder until he had a better idea: he quit, bought from the Santa Fe – which owned the mineral rights – the right to take boulders from the State land, and leveraged that into being Murphy’s business partner. (We simplify and greatly shorten complicated facts that the opinion sets out at length; we don’t criticize that, even though its CA1 and Judge Timmer, since here they’re arguably helpful to the resolution – but not, happily, to the procedural take-away.) The parties had a falling-out; Murphy sued for constructive trusts on certain land and also on proceeds of the boulder business. After a bench trial the court found that Sourant had breached contracts but, concluding that Murphy wasn’t entitled to constructive trusts, gave him judgment. It refused give him fees, though, so both parties appealed.

Murphy argued that the trial judge’s findings and conclusions failed to address a couple of issues. Murphy hadn’t raised them in the Complaint but they were in the pretrial statement, “thereby effectively amending the complaint and presenting the matter for adjudication.” The trial court therefore had an obligation to make express findings and conclusions on them. Sourant argued that Murphy wasn’t entitled to injunctive relief anyway. The court responds, in effect, that even if that’s true Rule 52 requires the trial judge to say so; the rule “is designed to: prompt the judge to consider issues more carefully, enable a defeated party to determine whether the ruling should be appealed, clarify the decision for purposes of applying the doctrines of res judicata and estoppel, and, most significantly, permit the appellate courts to examine the trial court’s reasoning more closely.”

The remedy for that is remand for additional findings and conclusions, which is what the opinion orders.

As to what the trial court did address, Murphy argued that because Sourant breached his agreement it should have a constructive trust on some other acreage he got rocks from. The Court of Appeals holds that because Murphy didn’t lose that property or an opportunity to buy it, it had no equitable interest in it and therefore no right to a trust.

Murphy asked on appeal for a constructive trust on certain of Sourant’s profits because he admitted using information gained when he was its employee to get them. But it hadn’t raised that argument below, so it loses it now.

The court then addresses Sourant’s request for fees. “[E]ven in the face of a breach of contract or other improper conduct by a party seeking fees, the court must assess the overall outcome of the case to determine if that party ‘prevailed’ in the lawsuit.” This court decides that Sourant was the prevailing party since, even though he had breached his agreements, “Murphy  . . . did not succeed on any of its claims” – i.e., it wasn’t entitled to any relief. By refusing fees the trial court abused its discretion. (The trial judge did his cause no good by awarding Sourant costs.) However, with that instruction the trial court will decide on remand which party is ultimately successful.

So, what’s interesting about all this?

First, try to avoid issue-creep in your pretrial statement. That’s not always easy with notice pleading and wide-open discovery but you should at least know and keep an eye on what the Complaint actually says. Its surprising (or, sadly, perhaps not) how often it turns out not to say something it should.

Second, make sure that the findings and conclusions cover the issues. Nowadays trial courts seem to want to write them on their own, no matter how scrupulous you are about providing a proposed version; the result can be a mess. That’s what Rule 52(b) is for (amendment of findings and conclusions).

And remember that if you don’t win relief then you probably aren’t the successful party, no matter how bad the other guy was.

(link to opinion)

This case’s only apparent contribution to the law is to confuse it.

BYS sued Smoudi for breach of contract and took default. There followed some email correspondence between him and BYS’s counsel about his either answering the suit or settling it. He did neither but eventually filed (apparently pro se) a pleading called “Application for Default Entry of Default, Request for Time Extension,” explaining why he hadn’t answered (basically, the dog ate his homework) and asking for more time. With it he paid the Answer fee. BYS filed a response.

BYS then moved for judgment. The trial court granted it without hearing, based on counsel’s sum-certain affidavit, and later denied Smoudi’s motion to set it aside. Smoudi appealed.

The Court of Appeals holds that the entry of default was effective because Smoudi hadn’t filed anything within ten days of the default notice as required by Rule 55(a).

(But Smoudi raised on appeal a new argument – that default should be set aside under Rule 55(c) because the service was invalid. “[B]ecause the trial court did not rule on this issue” the Court of Appeals does not, either, and says that Smoudi may raise it on remand. These things are dealt with mostly in a series of footnotes, which were apparently given as much thought as most footnotes are. The court forgets to explain why, the default being valid, not filing an explicit Rule 55(c) motion, and not filing a Rule 12 motion, and not raising the argument in the motions he did file that gave him ample opportunity to do so, and not giving the trial court the chance to “rule on the issue” didn’t waive anything.)

Smoudi also argued, though, that his “Application for Default Entry of Default, Request for Time Extension” was an appearance that entitled him to notice of the default-judgment hearing under Rule 55(b)(2); BYS didn’t disagree, contending instead that no hearing was necessary under 55(b)(1) because the amount was a sum certain. But 55(b)(2) requires notice and hearing whenever an appearance has been made. Failure to give notice renders the judgment void.  The court therefore sets it aside and remands.

(Having earlier said explicitly that setting aside a default judgment requires showing a meritorious defense, another thing the court forgets to explain is that that isn’t true when the judgment is void. That’s the key here, since Smoudi didn’t come close to showing a defense.)

In part (a small part, but a part), the blame for this case lies with Rule 55(b). Its division into two subsections was not artfully done and a poorly-worded amendment in 1984 made things worse. An incautious reader could miss, or misunderstand, the fact that subsection 1 deals with a specialized subset of cases conditioned by subsection 2. But don’t wait for improvement; the Supreme Court doesn’t encourage the amendment of rules merely because they’re badly worded, perhaps because someone might ask why it approved them in the first place. Instead, be cautious, read carefully, and – the real moral here – opt for a hearing if there’s any doubt. Many lawyers try to avoid them because they’re a hassle compared to filing an affidavit. But that’s penny-wise, as BYS discovered by losing its judgment and 2 1/2 years of interest.

Having complained about other footnotes we should mention that footnote 5 is an interesting one, if only because of its extraneousness. In it the court mentions, apparently sua sponte, the Maricopa County procedure that the clerk does nothing to enter default (other than to file the plaintiff’s application for it). “The Smoudis raise no challenge to this Administrative Order or the procedure it implements,” so the court raises the issue merely for the sake of raising it. Given such cases as American Asphalt this is perhaps an invitation, though one could argue that the County’s procedure is more an insult to the intent of the rule than to its strict wording.

This opinion adds nothing substantive to the law, so presumably the excuse for publishing is to call attention to an issue (Rule 111)(b)(2). What it mostly calls attention to is its sloppiness.

(link to opinion)