Freightways, Inc. v. Arizona Corp. Commission

• Decision Date: 02 February 1981
• Docket Number: No. 15087,A-M,15087
• Citation: 630 P.2d 541,129 Ariz. 245
• Parties: FREIGHTWAYS, INC., dba Arizona Couriers, an Arizona Corporation, Petitioner, v. The ARIZONA CORPORATION COMMISSION, Bud Tims, Jim Weeks and John Ahearn, as Members of Said Commission, and Purolator Courier Corp. a New York corporation, and Dial-essenger, Inc. an Arizona corporation, Real Parties in Interest, Respondents.
• Court: Arizona Supreme Court

Page 541

630 P.2d 541

129 Ariz. 245

FREIGHTWAYS, INC., dba Arizona Couriers, an Arizona Corporation, Petitioner, v. The ARIZONA CORPORATION COMMISSION, Bud Tims, Jim Weeks and John Ahearn, as Members of Said Commission, and Purolator Courier Corp. a New York corporation, and Dial-A-Messenger, Inc. an Arizona corporation, Real Parties in Interest, Respondents.

No. 15087.

Supreme Court of Arizona.

Feb. 2, 1981.

Rehearing Denied March 10, 1981.

Yankee, Bernstein & Lutich, P. C. by Thomas W. McLellan and A. Michael Bernstein, Phoenix, for petitioner.

Robert K. Corbin, Atty. Gen. by Charles S. Pierson, Asst. Atty. Gen., Phoenix, for Arizona Corp. Commission.

Evans, Hammond & Milliken by Phil B. Hammond and John R. Tellier, Phoenix, for Purolator Courier Corp.

CAMERON, Justice.

We granted this petition for special action pursuant to Rule 7(a), Rules of Procedure for Special Actions, 17A A.R.S., and Article 6, § 5 of the Arizona Constitution because this is a matter of state-wide importance and there is no equal, plain, speedy and adequate remedy by appeal.

We must answer the following question: Is the Arizona corporation Commission estopped to deny the validity of a certificate of public convenience and necessity because of a defect in the certificate's renewal or issuance in 1928, some fifty years earlier?

The facts necessary to a resolution of this issue are as follows. On 4 June 1924, the Arizona Corporation Commission issued a motor carrier certificate of public convenience and necessity (then called a "permission") to Louis Schade for a one year period. Upon Schade's application, the Commission renewed the permission setting an expiration date of 9 May 1926.

In 1925, the Commission promulgated an order which read in relevant part:

" * * * all permits and certificates now issued and outstanding and which are not for any reason subject to revocation, shall be automatically extended to expire on the 31st day of December, 1926 if the date of expiration named in the permit or certificate is prior to that date * * *.

"Applications for renewal of permits and certificates must be filed on or before the 30th day of November of the calendar year in which the authority to operate expires.

* * *" General Order No. 102-A.

Renewals of Schade's certificate were granted by the Commission extending Schade's authority to operate as a motor carrier until 31 December 1928. Schade filed an application for renewal of the certificate for the year 1929 on 26 December 1928, 26 days after the filing deadline of 30 November imposed by the Commission through General Order 102-A, but 5 days prior to expiration of the certificate. Schade also filed an application on 19 February 1930. Unlike the 26 December application which indicated on its face that it was an application for renewal, the 19 February application did not indicate that it was a renewal application. On 6 March 1930, Schade's certificate was renewed without hearing by the Commission, although it is unclear whether the certificate was issued in response to the application for renewal, filed on 26 December 1929, or the application filed by Schade on 19 February 1930.

After a series of transfers, all approved by the Commission, the petitioner Freightways came into possession of the certificate. Thus the certificate in question has been, as far as the Commission and the holder of the certificate are concerned, continually in force and effect, if not since the certificate was originally issued on 9 June 1924, at least since 6 March 1930.

On 21 December 1979, Freightways filed an application with the Commission to transfer the certificate to United Couriers, Inc. Respondents Purolator Courier Corporation and Dial-a-Messenger, Inc., were granted leave to intervene as protestants and filed a memorandum of law, which was treated by the Commission as a motion to dismiss the transfer application. Respondents contended that the certificate expired on 31 December 1928 because of Schade's failure to comply with the 30 November filing date of General Order 102-A. The Commission denied the motion to dismiss. Purolator filed an application for rehearing, and the Commission rescinded its prior decision and granted Purolator's motion to dismiss the transfer application on the grounds that the certificate expired on 31 December 1928, and consequently there was no certificate to transfer. The Commission also ordered the Attorney General of Arizona to bring an action to enjoin Freightways from further operations as a certificated motor carrier.

From the decisions of the Arizona Corporation Commission, petitioner Freightways, Inc. brought this special action. We accepted jurisdiction and stayed the Commission decision and order pending determination by this court.

If the issuance of the certificate on 6 March 1930 was the result of the 19 February original application, the Commission would have been without jurisdiction to issue the certificate as there was no hearing on the application. George v. Arizona Corporation Commission, 83 Ariz. 387, 322 P.2d 369 (1958). As to the late application for renewal filed 26 December 1929, the Commission, in its order, contends:

"In our view, the language of General Order No. 102-A as to the deadline for filing renewal application is jurisdictional. As we noted above, the only authority for renewal of certificates in 1928 was General Order No. 102-A. It would appear, then, that strict compliance with its provisions would be a prerequisite to exercise of the privilege of renewing under General Order 102-A."

The parties agree that the Commission at that time had the power to waive strict compliance with its rules, but there is no indication that this was done in the instant case. This is not surprising because, by the passage of time, such action might not be reflected in the contents of the file presently available. Assuming, however, that the 30 November filing date was jurisdictional and that the certificate (permission) was void after 31 December 1928, we believe that the Commission is estopped to deny the validity of the certificate after over fifty years of use by various holders.

Equitable estoppel or, as it is sometimes called, estoppel in pais, generally may not be invoked against the sovereign. This assumes, of course, that the elements of estoppel exist:

"Equitable estoppel is a rule of justice which, in its proper field, prevails over all other rules. (citation omitted) An equitable estoppel will be found only where all the elements necessary for its invocation are shown to the court. * * *" United States v. Georgia-Pacific Company, 421 F.2d 92, 96 (9th Cir. 1970).

The United States Ninth Circuit Court of Appeals has stated:

"Four elements must be present to establish the defense for estoppel: (1) The party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended; (3) the latter must be ignorant of the true facts; and (4) he must rely on the former's conduct to his injury. (citation omitted)" Hampton v. Paramount Pictures Corporation, 279 F.2d 100, 104, 84 A.L.R.2d 454, 461 (9th Cir.), ¹ cert. denied 364 U.S. 882, 81 S.Ct. 170, 5 L.Ed.2d 103 (1960).

We feel that the necessary elements of estoppel have been demonstrated by the facts in the instant case. The Commission knew of the defect in the filing of the application. Indeed, the Commission file contains a memo to the Commission which states that Schade's certificate "was not renewed last year" because of a failure to file reports and pay taxes as a result of a lawsuit by the Arizona Transferman's Association. The memo...