Cardiff Wales v. Washington County School District

2021 UT App 21
THE UTAH C OURT OF APPEALS
C ARDIFF WALES LLC,
Appellant,
v.
WASHINGTON C OUNTY SCHOOL D ISTRICT , D ESERT C ANYONS
D EVELOPMENT INC., AND DSG HOLDINGS LLC,
Appellees.
Opinion
No. 20191035-CA
Filed March 4, 2021
Fifth District Court, St. George Department
The Honorable G. Michael Westfall
No. 190500076
Justin P. Matkin, Robert A. McConnell, and Jeffery A.
Balls, Attorneys for Appellant
Russell S. Mitchell, Attorney for Appellee
Washington County School District
J. Gregory Hardman and Devon J. Herrmann,
Attorneys for Appellees Desert Canyons
Development Inc. and DSG Holdings LLC
J UDGE D AVID N. MORTENSEN authored this Opinion, in which
J UDGES G REGORY K. ORME and J ILL M. P OHLMAN concurred.
MORTENSEN, Judge:
¶1 	Cardiff Wales LLC (Cardiff) appeals the dismissal of its
complaint for failure to state a claim upon which relief can be
granted. In its complaint, Cardiff sought declaratory relief and to
set 	aside 	the 	sale 	of 	certain 	property 	(the 	Property) 	by
Washington County School District (WCSD). Cardiff asserts that
it 	conveyed 	the 	Property 	to 	WCSD 	under 	threat 	of

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20191035-CA 	2 	2021 UT App 21
condemnation, 	and 	therefore 	Utah 	Code 	section 	78-34-201
afforded it a right of first refusal in the event WCSD sought to
later sell the Property. We hold that the Property was not
conveyed to WCSD under threat of condemnation, and we
affirm the dismissal.
BACKGROUND2
¶2 	In February 2007, WCSD notified Cardiff that it wanted to
purchase 	the 	Property 	for 	a 	new 	high 	school. 	During 	the
negotiation process, WCSD informed Cardiff that if a voluntary
negotiation was not successful, WCSD would seek to acquire the
Property by eminent domain. So, “[i]n order to avoid an eminent
domain 	lawsuit, 	[Cardiff] 	agreed 	to 	sell 	the 	Property 	to
[WCSD].”
¶3 	The parties entered into a Real Estate Purchase and Sale
Agreement (the Agreement) by which Cardiff conveyed the
Property to WCSD. The Agreement indicated that WCSD had
advised Cardiff that it intended “to acquire a portion of the
[Property] through condemnation if necessary” but that the
parties had “negotiated an alternative to the condemnation
proceeding.” 	The 	Agreement 	further 	stated, 	“In 	lieu 	of 	an
involuntary 	conversion 	thereof, 	[Cardiff] 	agrees 	to 	sell 	the
1. At the time of the relevant events, Utah Code section 78-34-20
was the provision governing threat of condemnation and right of
refusal. Utah Code section 78-34-20 has since been renumbered
as section 78B-6-521. See H.B. 78, 57th Leg., 2008 Gen. Sess. (Utah
2008).
2. “When reviewing a motion to dismiss based on Rule 12(b)(6),
an appellate court must accept the material allegations of the
complaint as true.” Haynes v. Department of Public Safety, 2020 UT
App 19, ¶ 5, 460 P.3d 565 (cleaned up). We recite the facts in
accordance with that standard.

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20191035-CA 	3 	2021 UT App 21
[Property] to [WCSD] . . . upon the terms . . . set forth in this
Agreement.”
¶4 	Approximately ten years after it acquired the Property,
WCSD determined that it no longer needed the Property and
decided to sell it. WCSD did not offer Cardiff a right of first
refusal, 	instead 	selling 	the 	Property 	to 	Desert 	Canyons
Development 	Inc. 	and 	DSG 	Holdings 	LLC 	(collectively,
Purchaser).
¶5 	In February 2019, Cardiff filed suit against WCSD and
Purchaser. 	Cardiff 	brought 	a 	single 	claim 	for 	declaratory
judgment, asserting that it had a right of first refusal under Utah
Code section 78-34-20 and that the sale to Purchaser should be
set aside. WCSD moved to dismiss the complaint under rule
12(b)(6) of the Utah Rules of Civil Procedure, arguing Cardiff
had not alleged that WCSD acquired the Property under threat
of condemnation as defined by the statute. The district court
granted the motion and dismissed the case.
¶6 	Cardiff appeals.
ISSUE AND STANDARDS OF REVIEW
¶7 	Cardiff’s appeal boils down to whether the district court
interpreted Utah Code section 78-34-20 correctly in dismissing
its claim. “We review a decision granting a motion to dismiss for
correctness,” Haynes v. Department of Public Safety, 2020 UT App
19, ¶ 5, 460 P.3d 565 (cleaned up), and also review the district
court’s interpretation of a statute for correctness, see Bilanzich v.
Lonetti, 2007 UT 26, ¶ 10, 160 P.3d 1041.
ANALYSIS
¶8 	“To survive a motion to dismiss, the complaint must
allege 	facts 	sufficient 	to 	satisfy 	each 	element 	of 	a 	claim,
otherwise the plaintiff has failed to show that he is entitled to

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20191035-CA 	4 	2021 UT App 21
relief.” Haynes v. Department of Public Safety, 2020 UT App 19, ¶ 6,
460 P.3d 565 (cleaned up). In this case, to state a claim for
declaratory relief that Cardiff has a right of first refusal in the
Property pursuant to Utah Code section 78-34-20, Cardiff must
allege facts sufficient to show that the Property was acquired
either by condemnation or under threat of condemnation. See
Utah 	Code 	Ann. 	§ 	78-34-20 	(LexisNexis 	2007). 	Here, 	“[t]he
parties agree that the Property was not acquired ‘through an
eminent 	domain 	proceeding.’” 	But 	Cardiff 	asserts 	that 	the
complaint alleges that the Property was acquired under threat of
condemnation, 	as 	contemplated 	by 	section 	78-34-20. 	We
disagree.
¶9 	Utah Code section 78-34-20 provides in relevant part:
(1) As used in this section, “condemnation or threat
of condemnation” means:
(a) 	acquisition 	through 	an 	eminent 	domain
proceeding; or
(b) an official body of the state or a subdivision
of the state, having the power of eminent domain,
has 	specifically 	authorized 	the 	use 	of 	eminent
domain to acquire the real property.
(2) If the state or one of its subdivisions, at its sole
discretion, declares real property that is acquired
through condemnation or threat of condemnation
to be surplus real property, it may not sell the real
property on the open market unless:
(a) the real property has been offered for sale to
the original grantor, at the highest offer made to
the state or one of its subdivisions with first right
of refusal being given to the original grantor . . . .
Id. Cardiff’s assertion that the complaint alleges that WCSD
acquired the Property under threat of condemnation is based on
WCSD’s 	statements 	that 	it 	would 	use 	its 	eminent 	domain
powers 	to 	acquire 	the 	Property 	if 	necessary. 	But 	those

Cardiff Wales v. Washington County School District
20191035-CA 	5 	2021 UT App 21
allegations 	do 	not 	satisfy 	section 	78-34-20’s 	definition 	of
acquisition under “threat of condemnation.”3
¶10 	“When interpreting statutes, our primary objective is to
give effect to the legislature’s intent.” Harold Selman, Inc. v. Box
Elder County, 2011 UT 18, ¶ 18, 251 P.3d 804 (cleaned up). “To
discern legislative intent, we look first to the statute’s plain
language.” Id. (cleaned up). “We read the plain language of the
statute as a whole and interpret its provisions in harmony with
other statutes in the same chapter.” Id. (cleaned up). “When the
plain meaning of the statute can be discerned from its language,
no other interpretive tools are needed.” Id. (cleaned up).
¶11 	Section 78-34-20’s plain language defines when property
is acquired under “condemnation or threat of condemnation.”
3. In an attempt to bolster its argument, Cardiff cites an IRS
publication indicating, “A threat of condemnation exists if a
representative 	of 	a 	government 	body 	or 	a 	public 	official
authorized to acquire property for public use informs you that
the government body or official has decided to acquire your
property. You must have reasonable grounds to believe that, if
you do not sell voluntarily, your property will be condemned.”
IRS Pub. No. 544, Sales and Other Dispositions of Assets (2018).
The 2007 publication uses the same language. See id. (2007). But,
as we have pointed out, our legislature has specifically defined
the term at issue in the statute, and we need not look to outside
sources to understand our legislature’s intent. See Harold Selman,
Inc. v. Box Elder County, 2011 UT 18, ¶ 18, 251 P.3d 804 (“When
the plain meaning of the statute can be discerned from its
language, no other interpretive tools are needed.” (cleaned up)).
Additionally, we note that these definitions do not have
to be mutually exclusive. Rather, each definition may have
application within the text in which it is laid forth. And here,
where we are interpreting the Utah Code, the Utah Code’s
provided definition controls.

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Utah 	Code 	Ann. 	§ 	78-34-20(1). 	The 	provided 	definition
comprises two distinct parts. Subsection (1)(a) clearly comports
with acquisition by “condemnation.” See id. Subsection (1)(b)
comports with acquisition by “threat of condemnation.” See id.
Thus, the statute’s plain language provides that property is
acquired under “threat of condemnation” when “an official body
of the state or a subdivision of the state, having the power of
eminent domain, has specifically authorized the use of eminent
domain to acquire the real property.” Id. (emphasis added).
¶12 	Cardiff argues that the complaint “alleges sufficient facts
to support a reasonable inference that [WCSD] authorized its
representatives 	to 	threaten 	to 	use 	the 	power 	of 	eminent
domain.” But in so doing, Cardiff fails to give due meaning to
the requirement that the use of eminent domain be “specifically
authorized.” See id. In 2007, Utah Code section 78-34-44 governed
the 	process 	to 	specifically 	authorize 	eminent 	domain’s 	use,
providing that “[p]roperty may not be taken by a political
subdivision 	of 	the 	state 	unless 	the 	governing 	body 	of 	the
political subdivision approves the taking,” id. § 78-34-4(2)(b)—
i.e., 	specifically 	authorizes 	it. 	That 	specific 	authorization 	or
approval was by final vote of the governing body, before which
the body had to “provide written notice to each owner of
property to be taken of each public meeting . . . at which a vote
on the proposed taking is expected to occur.” Id. § 78-34-4(2)(c);
see also id. § 78-34-4.5 (LexisNexis 2007)5 (“Each person who
seeks to acquire property by eminent domain or who intends to
use eminent domain to acquire property if the property cannot
be acquired in a voluntary transaction shall: . . . before taking a
final vote to approve the filing of an eminent domain action,
make a reasonable effort to negotiate with the property owner
4. Utah Code section 78-34-4 has since been renumbered as
section 78B-6-504. H.B. 78, 57th Leg., 2008 Gen. Sess. (Utah 2008).
5. Utah Code section 78-34-4.5 has since been renumbered as
section 78B-6-505. H.B. 78, 57th Leg., 2008 Gen. Sess. (Utah 2008).

Cardiff Wales v. Washington County School District
20191035-CA 	7 	2021 UT App 21
for the purchase of the property . . . .”). Accordingly, it is only
after a final vote, and the use of eminent domain powers thereby
approved, that eminent domain’s use has been “specifically
authorized” as contemplated by section 78-34-20. See id. §§ 78-34-
20(1)(b), -4(2), -4.5.6
¶13 	Accordingly, to survive the motion to dismiss under the
theory 	that 	WCSD 	acquired 	the 	Property 	by 	threat 	of
condemnation, 	Cardiff 	must 	allege 	that 	WCSD 	voted 	and
approved the use of its eminent domain power to acquire the
Property. And as the district court determined—and Cardiff
does not challenge—“there is no claim of any vote to specifically
approve 	the 	filing 	of 	an 	eminent 	domain 	action 	in 	court.”
Because Cardiff made no allegation that a final vote was taken
and 	the 	use 	of 	eminent 	domain 	powers 	approved 	in 	the
complaint, the district court correctly dismissed the complaint
for failure to state a claim upon which relief can be granted.7
6. Cardiff suggests that the conclusion we reach means that “a
landowner who has been threatened with condemnation must
force the condemning agency to perform all steps to initiate an
eminent domain action if it wants to preserve a right of first
refusal in the property.” If a landowner wants to secure the
statutory right of first refusal, Cardiff is correct. But a landowner
is not limited to that course of action; it can instead negotiate for
a 	contractual 	right 	of 	first 	refusal 	as 	part 	of 	a 	voluntary
transaction.
7. 	Cardiff 	also 	argues 	on 	appeal 	that, 	based 	on 	WCSD’s
statements, WCSD is estopped from claiming it acquired the
Property 	without 	threat 	of 	condemnation. 	“There 	are 	three
elements 	to 	estoppel: 	(1) 	an 	admission, 	statement, 	or 	act
inconsistent with the claim afterwards asserted, (2) action by the
other party on the faith of such admission, statement, or act, and
(3) injury to such other party resulting from allowing the first
(continued…)

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CONCLUSION
¶14 	Cardiff’s complaint does not allege the Property was
acquired under threat of condemnation, as defined by Utah
Code section 78-34-20, and the district court correctly dismissed
it for failure to state a claim upon which relief can be granted.
¶15 	Affirmed.
(…continued)
party to contradict or repudiate such admission, statement, or
act.” Monarrez v. Utah Dep’t of Transp., 2016 UT 10, ¶ 35, 368 P.3d
846 	(cleaned 	up). 	But 	this 	argument, 	like 	the 	argument
addressed in the body of this opinion, relies on a definition of
“threat of condemnation” that is beyond that provided in the
statute, and it therefore fails to satisfy the first requirement.