The Appellate Group

Cardiff Wales v. Washington County School District

Cardiff Wales v. Washington County School District, 2021 UT App 21 (Mortensen, J.)

Property: Eminent Domain

A school district notified a business that if the two could not reach an agreement about the sale of property, the school district would acquire the property by eminent domain. The business did sell the property to the district voluntarily. Ten years later, the district decided it did not need the property and sold it to a third party without first giving the business the right of first refusal. The business sued for declaratory relief, and the district court dismissed the complaint for failure to state a claim. The Utah Court of Appeals affirmed, holding:

  • Utah Code § 78-34-20 does not allow the state to sell a piece of property obtained under “the threat of condemnation” without the right of first refusal being given to the original property owner. The phrase “threat of condemnation” means the official body of the state that has the power of eminent domain “has specifically authorized the use of eminent domain to acquire the property.” 
  • Here, the school district’s actions—as alleged in the complaint—do not constitute a “threat of condemnation” because the complaint never alleged that the school district voted and approved the use of its eminent domain power to acquire the property. Because there was no threat of condemnation that was properly alleged in the complaint, the statutory right of first refusal does not apply and the business failed to state a claim.
  • Practice point: The court of appeals noted that to secure the statutory right of first refusal, a landowner would have to force the condemning agency to perform all the steps to initiate an eminent domain action. But a landowner is not limited to that course of action and can negotiate for a contractual right of first refusal as part of a voluntary transaction.

Read the full court opinion