Moulton v. Napolitano
| Decision Date | 05 August 2003 |
| Docket Number | No. 1 CA-CV 02-0642.,1 CA-CV 02-0642. |
| Citation | 205 Ariz. 506,73 P.3d 637 |
| Parties | Timothy L. MOULTON and Tanya Moulton, husband and wife; Kathleen M. Kassmann, a single person; Frank Kassmann and Janet Kassmann, husband and wife; Mark W. Clary and Mary Katherine Clary, husband and wife; John A. Sirovy and Sharon L. Sirovy, husband and wife; and Conde T. Sluga and Alice M. Sluga, husband and wife, Plaintiffs-Appellants, v. Janet A. NAPOLITANO, in her capacity as Governor of the State of Arizona; Gilbert Jimenez, in his capacity as Director of the Arizona Department of Commerce; Victor Mendez, in his capacity as Director of the Arizona Department of Transportation; David A. Petersen, in his capacity as Treasurer of the State of Arizona; Betsey Bayless, in her capacity as Director of the Arizona Department of Administration; Terry Goddard, in his capacity as the Arizona Attorney General; State of Arizona; Arizona Department of Commerce; Arizona Department of Administration; Arizona Department of Transportation, Defendants-Appellees. |
| Court | Arizona Court of Appeals |
Timothy L. Moulton and Tanya D. Moulton, Tempe, Kathleen M. Kassmann, Scottsdale, Frank Kassmann and Janet Kassmann, Paradise Valley, Mark W. Clary and Mary Katherine Clary, Mesa, John A. Sirovy and Sharon L. Sirovy, Dewey, Conde T. Sluga and Alice M. Sluga, Scottsdale, Plaintiffs-Appellants In Propriis Personis.
Gallagher & Kennedy, P.A. By Mark C. Dangerfield, Phoenix, Attorneys for Defendants-Appellees.
¶ 1 The Arizona Legislature enacted laws that provided grants, tax credits and other benefits for persons who owned vehicles powered by an "alternative fuel," see 2000 ARIZ. SESS. LAWS, ch. 405, §§ 1-47, defined as a fuel source other than gasoline or a combination using no more than 30% petroleum. ARIZ. REV.STAT. ("A.R.S.") § 1-215(4)(Supp.2002). In response, Timothy and Tanya Moulton, Kathleen Kassmann, Frank and Janet Kassmann, Mark and Mary Katherine Clary, John and Sharon Sirovy, and Conde and Alice Sluga (collectively "the Plaintiffs") purchased and modified automobiles with the expectation of these benefits. After the Legislature repealed some of these benefits and modified others, see 2000 ARIZ. SESS. LAWS, 7th Sp. Sess., ch. 1, §§ 1-41, the Plaintiffs filed suit in superior court against several state officials and agencies (collectively "the State"), alleging bad faith, breach of contract and various violations of their constitutional rights, and seeking declaratory and injunctive relief as well as damages and sanctions. In response to the State's motion, the court dismissed all of the claims against the State, citing a lack of jurisdiction because the Plaintiffs had failed to exhaust their administrative remedies before the Arizona Department of Revenue ("ADOR"). See Hamilton v. State, 186 Ariz. 590, 593, 925 P.2d 731, 734 (App.1996). On their appeal, we review de novo the Plaintiffs' challenge to the judgment based on their analysis of the superior court's jurisdiction and the doctrine of the exhaustion of remedies. Samaritan Health Sys. v. Ariz. Health Care Cost Containment Sys. Admin., 198 Ariz. 533, 536 ¶ 13, 11 P.3d 1072, 1075 (App.2000).
¶ 2 Governor Jane Dee Hull signed the Forty-Fourth Arizona Legislature's Senate Bill 1504 on April 28, 2000 (the "April Law"). See 2000 ARIZ. SESS. LAWS, ch. 405. The April Law had many facets, primary of which was a financial incentive for Arizona taxpayers to purchase or modify automobiles to operate on alternative fuels. It also provided cash grants from the Clean Air Fund, see A.R.S. § 41-1516(A)(eff.Apr.28, 2000), "to persons for purchasing alternative fuel vehicles, converting conventionally fueled vehicles to operate on an alternative fuel or retrofitting alternative fuel vehicles." A.R.S. § 41-1516(D)(eff.Apr.28, 2000). These cash grants were equivalent to the available income-tax credit, but they were possible only as long as sufficient money remained in the Fund. A.R.S. § 41-1516(G)(2)(eff.Apr.28, 2000). The available tax credits under the April Law depended on the type of vehicle.1
¶ 3 The April Law provided other benefits to Arizona taxpayers with alternative-fuel vehicles. For example, drivers of such vehicles were permitted to utilize the high-occupancy-vehicle ("HOV") lanes on Arizona highways with only one passenger instead of two or more. 2000 ARIZ. SESS. LAWS, ch. 405, 12(E), as codified at A.R.S. §§ 28-737, 28-2416(E) (eff.Apr.28, 2000). Those driving alternative-fuel vehicles were also permitted to use designated car-pool parking spots. A.R.S. § 28-877 (eff.Apr.28, 2000). Additionally, special license plates and stickers were available to qualifying vehicles, A.R.S. § 28-2416(B)(eff.Apr.28, 2000), and vehicle owners only had to pay a registration fee once. A.R.S. § 28-2003(A)(3)(b)(eff.Apr.28, 2000).
¶ 4 All of the Plaintiffs except the Clarys claimed to have purchased new vehicles that they converted to potential alternative fuel use; the Clarys converted a vehicle that they already owned. All of the Plaintiffs applied for benefits under the program prior to December 1, 2000, and all of them except the Sirovys received some tax credits for their vehicles pursuant to the program. The Sirovys were denied tax credits because they did not take possession of their vehicle until after December 1, 2000.
¶ 5 Confusion arose, however, when the Arizona Legislature passed a law in December 2000 amending the April Law ("the December Law"). See 2000 ARIZ. SESS. LAWS, 7th Sp. Sess., ch. 1. One major change in this new law affected the tax credits. Per the December Law, the tax credits received under the program could be recaptured by the State if the participants did not comply with some additional requirements, such as:
(1) the taxpayer must have had possession of the vehicle before December 1, 2000;
(2) the taxpayer could not transfer the vehicle's title for 36 months after receipt of the credit;
(3) the taxpayer was required to keep the vehicle registered in Arizona for 36 months after receipt of the credit;
(4) the taxpayer was required to demonstrate actual use of alternative fuel to power the vehicle, with different requirements depending on the type of alternative fuel used, and
(5) the vehicle was required to meet certain emission requirements.
A.R.S. § 43-1086(E)(Supp.2002). However, the December Law also afforded ADOR the power to "relieve a taxpayer of requirements prescribed under subsection E" if the ADOR director found that the taxpayer had acted in good faith and intended to provide power for the vehicle primarily with alternative fuel, and that fairness warranted relief. A.R.S. § 43-1086(F)(Supp.2002).
¶ 6 The Plaintiffs who received tax credits, i.e., all of the Plaintiffs but the Sirovys, received their credits after the December Law took effect. Although none of the Plaintiffs challenged the amount of the credits, some of them successfully applied for relief from certain requirements of subsection E. The Plaintiffs took no other action with ADOR, instead filing notices of claim with various named State agencies and officers, which claims were denied. See A.R.S. § 12-821.01 (Supp. 2002). The Plaintiffs then collectively filed a complaint in the superior court.
¶ 7 As a preliminary matter, we address the Plaintiffs' challenge to the State's use of an affidavit from Anthony Forschino in support of its motion to dismiss. Forschino served as Assistant Director of the now-defunct Office of Alternative Fuel Recovery and, at the time of the drafting of the affidavit, as an ADOR Tax Policy Administrator. In his affidavit, he avowed that he was familiar with all of the Plaintiffs' filings with both offices. The Plaintiffs characterize the affidavit as "undisclosed hearsay" and insist that it presented a jurisdictional question that should have been a matter for trial or at least an evidentiary hearing.
¶ 8 The superior court did not err in considering the affidavit. When "jurisdictional fact issues are not intertwined with fact issues raised by a plaintiff's claim on the merits, the resolution of those jurisdictional fact issues is for the trial court." Swichtenberg v. Brimer, 171 Ariz. 77, 82, 828 P.2d 1218, 1223 (App.1991). The jurisdictional fact in this case is whether the Plaintiffs had exhausted their administrative remedies; the merits of their claims concern whether they are entitled to more benefits than those that they received. Thus, the court properly considered these factual matters, and, in so doing, it "may consider affidavits, depositions and exhibits, and does not thereby convert a motion to dismiss for lack of jurisdiction to one for summary judgment." Id. Additionally, the court had the discretion to determine whether an evidentiary hearing was necessary, Gatecliff v. Great Republic Life Ins. Co., 154 Ariz. 502, 506, 744 P.2d 29, 33 (App. 1987), and we find no abuse of its discretion in deciding that one was not required. Therefore, we proceed to analyze the superior court's ruling, viewing the record in the light most favorable to upholding that ruling, inferring any necessary findings reasonably supported by the evidence, and keeping in mind that the burden of demonstrating jurisdiction lies with the Plaintiffs. Swichtenberg, 171 Ariz. at 82,828 P.2d at 1223.
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