Justice in land seizure debated

CARSON CITY -- After 12 years of legal battles, former Las Vegas resident Paul Moldon believes he finally will receive appropriate compensation for the seizure of his lot next to the Stratosphere.

"I think the judges got it," Moldon said following a half-hour Supreme Court hearing on Monday. "The city stole my property to give to the Stratosphere and then the county stole my interest."

The city of Las Vegas's redevelopment agency in 1995 used the power of eminent domain to seize Moldon's half-acre lot on behalf of the Stratosphere. The hotel-casino wanted the lot for expansion.

The city deposited $725,000 in a Clark County District Court trust account for him. Moldon challenged the seizure and the money sat in the account.

The interest the account secured -- estimated at $150,000 to $200,000 over 10 years -- was transferred by the court clerk to the Clark County government's general fund.

The Supreme Court is not expected to decide for several months whether the interest belongs to Moldon.

But some justices, including Senior Justice Deborah Agosti, made comments that seemed to support Moldon's position.

Agosti questioned how the county could siphon off the interest since Moldon was contesting the taking and had not relinquished the property.

Now a Washington state resident, Moldon suffers from multiple sclerosis that he contends has been exacerbated by the long legal battle. He hobbled around the Supreme Court building.

A Clark County jury late in 2004 found the land should have been valued at $1.5 million. Moldon then sold the property to the Stratosphere.

He said Monday he has received about $3 million in principal and interest payments from the Stratosphere.

But he never has received the interest earned on the original $725,000 deposit.

"The county used it as if they had sold a bond and the proceeds belong to them," he said. "But it was a deposit for us."

A law at the time allowed counties that support the courts to take interest in court trust accounts.

Earlier this year the Legislature amended the law so that counties no longer can use interest earned in cases like the one affecting Moldon.

Moldon's lawyer Chuck Gardner told justices even the old law did not apply to property taken by government on behalf of private companies.

He called the interest an "undeserved and unearned windfall" for Clark County.

"The county did not have beneficial ownership (in Moldon's land)," he said. "This is the taking of property without just compensation."

In an interview last year, Clark County Clerk Shirley Parraguire said the county simply followed the state law. Interest on court trust accounts transferred to the general fund averages about $120,000 a month, she said.

If the land had been taken for an actual public use, such as a school, then the old law would have applied and the county could have taken the interest, according to Gardner.

Deputy District Attorney Michael Foley said if Moldon wanted the interest, then he should have asked a judge to place the money in a special interest-bearing account on his behalf. Instead, Moldon never requested anything, he said.

"The alternative is for the clerk just to let it sit there and gather no interest," Foley said.

Justice Michael Douglas wondered aloud whether Moldon should have been the one to ask a judge to place the money on his behalf in an interest-bearing account.

Contact reporter Ed Vogel at evogel@reviewjournal.com or (775) 687-3901.