Pointe Resorts, Inc. v. Culbertson

• Decision Date: 13 September 1988
• Docket Number: No. CV-87-0362-AP,CV-87-0362-AP
• Citation: 158 Ariz. 137,761 P.2d 1041
• Parties: The POINTE RESORTS, INC., an Arizona corporation; and Gosnell Development Corporation, an Arizona corporation, Appellees/Cross-Appellants, v. Donna CULBERTSON, in her official capacity as Clerk of the City of Phoenix; Alex Cordova, in his official capacity as Deputy Clerk of the City of Phoenix; and The City of Phoenix, a body politic, Appellees, and Ruth Hamilton, Charles M. Monroe, and Dora Quesada, Appellants/Cross-Appellees.
• Court: Arizona Supreme Court

Page 1041

761 P.2d 1041

158 Ariz. 137

The POINTE RESORTS, INC., an Arizona corporation; and Gosnell Development Corporation, an Arizona corporation, Appellees/Cross-Appellants, v. Donna CULBERTSON, in her official capacity as Clerk of the City of Phoenix; Alex Cordova, in his official capacity as Deputy Clerk of the City of Phoenix; and The City of Phoenix, a body politic, Appellees and Ruth Hamilton, Charles M. Monroe, and Dora Quesada, Appellants/Cross-Appellees.

No. CV-87-0362-AP.

Supreme Court of Arizona.

Sept. 13, 1988.

Gammage & Burnham by Grady Gammage, Jr., Richard K. Mahrle and Karen L. Schroeder, Phoenix, for Pointe Resorts and Gosnell Development.

Roderick G. McDougall, Phoenix City Atty. by Larry F. Felix, Asst. City Atty., Phoenix, for City of Phoenix, Culbertson and Cordova.

Cox and Cox by Z. Simpson Cox and Alfred S. Cox and Fujii, Shaw, Yen, Hobson & Pilch by Robert E. Yen and William R. Hobson, Phoenix, for Hamilton, Monroe and Quesada.

MOELLER, Justice.

JURISDICTION

Appellants Ruth Hamilton, Dora Quesada and Charles Monroe (Hamilton) appeal from a final judgment entered in Maricopa County Superior Court in favor of The Pointe Resorts, Inc., and Gosnell Development Corporation (Gosnell). The trial court ruled that Proposition 100, an initiative measure, effective January 14, 1987, which prevents the Phoenix City Council from disposing of city mountain preserve land without voter approval, did not affect an earlier land-trade leaseback transaction between Gosnell and the City of Phoenix (City). Hamilton had also sought, by referendum, to submit the challenged transaction to a vote of the people. The city clerk found the referendum petition signatures to be insufficient, and the trial court ruled that Hamilton's attempt to challenge that finding was untimely. Hamilton appealed both rulings directly to this court. Gosnell filed an alternative cross-appeal challenging the trial court's ruling that the method the City used to permit withdrawal of referendum petition signatures was invalid. No stay of the judgment was sought or entered. The agreement between Gosnell and the City has been fully executed pending appeal. Gosnell has constructed the contemplated golf course on some of the land involved.

We have jurisdiction of this direct appeal pursuant to A.R.S. §§ 19-122(C) (Supp.1987) and 19-141(C). We affirm.

FACTS

At a special election in November 1985, Phoenix voters adopted Proposition 115, relating to the City of Phoenix Mountain Preserves. The adoption of the measure added Chapter 26 to the City Charter. Section 2 of Chapter 26 provides:

In no event shall any real property within any City Mountain Preserve be sold, traded or otherwise alienated, redesignated or deleted from the Mountain Preserve except by approval of a majority of the electors voting thereon, provided that Mountain Preserve property may be traded if such trade is approved by the Council by ordinance prior to January 1, 1989 in accordance with the provisions set forth in this Chapter.

On March 26, 1986, in accordance with this newly adopted Proposition, the Phoenix City Council passed Ordinance No. S16367 (the ordinance) authorizing the city manager or his designee "to enter into an agreement and execute necessary documents to effect a trade of 29 acres of City-owned land located at the southeast edge of South Mountain Park ... for 34 acres of land owned by Gosnell Development Corporation." The ordinance was conditioned on the requirement that Gosnell would then donate the twenty-nine The same day that the council adopted the ordinance, Hamilton took out a petition to suspend its operation until it was put to a vote of the electorate of the City of Phoenix. Referendum, R-1-86. The city clerk's office informed Hamilton that she had thirty days from March 26, 1986, to file a sufficient number of qualified signatures, in this case 8,306, to prevent the ordinance from taking effect. Additionally, the clerk stated that if she found the signatures filed within the initial thirty-day period to be insufficient, Hamilton would have ten days after the declaration of insufficiency to file supplemental signatures pursuant to § 12-116 of the Phoenix City Code.

                [158 Ariz. 139] acres back to the City and the City would execute a thirty-five-year lease granting Gosnell the right to use the land for five holes of a public golf course.  The lease would also give Gosnell an option to renew for another thirty-five years.  As we have previously had occasion to note, no form of lease was attached to the ordinance, no rental payments were specified in the ordinance itself, and no legal descriptions were given for the lands involved.   Hamilton v. Superior Court, 154 Ariz. 109, 110, 741 P.2d 242, 243 (1987)
                

On April 24, 1986, Hamilton filed petitions containing more than 13,000 signatures. The city clerk determined that only 7,101 signatures were valid and, on May 22, 1986, issued a certificate of insufficiency. Following the procedures set forth in § 12-116, Hamilton then filed an additional 6,084 signatures within the specified ten days. After reviewing these additional signatures, the city clerk certified that there were a sufficient number of valid signatures to place the matter on the ballot.

Meanwhile, upon learning that the supplemental filing provisions of § 12-116 of the City Code were being utilized in an attempt to save the referendum drive, Gosnell filed suit in Superior Court on May 23, 1986, seeking to have declared invalid (1) the form of the referendum petition, (2) Phoenix City Code Art. IV, § 12-116, which permitted the supplemental filing of referendum petitions, and (3) the signatures on some of the referendum petitions. On June 16, 1986, Hamilton filed an answer to the Gosnell suit and, by cross-claim against the City, sought, for the first time, to challenge the city clerk's certificate of insufficiency of May 22, 1986.

On June 25, 1986, in a formal judgment containing Rule 54(b) language, the trial court ruled that Phoenix City Code Art. IV, § 12-116 violated the Arizona Constitution, A.R.S. § 19-142, and Chapter XVI of the Phoenix City Charter. On December 15, 1987, this court affirmed the judgment, agreeing with the trial court that § 12-116 was in conflict with Chapter XVI of the Phoenix City Charter. See The Pointe Resorts, Inc. v. Culbertson, 156 Ariz. 158, 750 P.2d 1361 (1987).

On March 26, 1986, the same day on which Hamilton took out referendum petition R-1-86, she also took out a petition to initiate an amendment to the Phoenix City Charter. The initiative amendment (Proposition 100) would close the "window" which permitted the Phoenix City Council to approve trades of Mountain Preserve land without voter approval until January 1, 1989. Hamilton, 154 Ariz. at 110, 741 P.2d at 243.

Hamilton's efforts were successful and the Phoenix city clerk's office certified the initiative petition's signatures as sufficient. On December 9, 1986, the Phoenix electors overwhelmingly approved the proposition which provided:

AN INITIATIVE MEASURE TO PREVENT SALE, TRADE, ALIENATION, REDESIGNATION, LEASE OR OTHER DELETION OR REMOVAL OF ANY CITY MOUNTAIN PRESERVE LAND WITHOUT APPROVAL OF A MAJORITY OF ELECTORS VOTING THEREON.

Notwithstanding any other provision of the Charter of the City of Phoenix, no land within any City Mountain Preserve, as that term is defined in Chapter 26 of the Charter of the City of Phoenix, shall be sold, traded, alienated, redesignated, leased or otherwise deleted or removed from the Mountain Preserve except by Id.

[158 Ariz. 140] approval of a majority of electors voting thereon.

The initiated charter amendment became law on January 14, 1987. Thereafter, Hamilton filed a supplemental answer and cross-claim in Gosnell's superior court case contending that the adoption of the initiative prevented the City from executing Ordinance S16367. Hamilton asked the court to dismiss Gosnell's case and to declare that the City was prohibited from leasing or conveying any Mountain Preserve property to Gosnell except upon approval of a majority of Phoenix electors.

Cross-motions for summary judgment were filed. On April 7, 1987, the superior court granted Gosnell's motion for summary judgment and denied Hamilton's, holding that Proposition 100 had no effect on the trade-leaseback arrangement authorized by Ordinance No. S16367. Hamilton filed a petition for special action in this court seeking to prohibit the execution of the trade-leaseback agreements. This court accepted jurisdiction of the special action and, in a 3-2 decision, vacated the trial court's summary judgment and remanded the matter to the trial court to determine the status of the transaction between Gosnell and the City as of January 14, 1987. In its opinion, this court directed the trial court to take evidence and determine whether:

[O]n the effective date of the 1987 initiative, an agreement had been reached so that, legally or equitably, GDC (Gosnell) could have required the City to proceed with the trade-leaseback. If so, the 1987 initiative could not undo that which had been done. If no such agreement had been reached, the 1987 initiative prevents consummation absent approval by the electorate.

Id. at 112, 741 P.2d at 245.

On remand, the trial court gave all parties an opportunity to submit additional evidence relative to the status of the transaction as of January 14, 1987. After considering all of the evidence, the trial court made detailed findings of fact and concluded that the trade-leaseback transaction was complete prior to January 14, 1987. The trial court also declared the referendum petitions invalid because of improper wording and rejected Hamilton's cross-claim challenge to the city clerk's certificate of insufficiency as untimely. Also incorporated into the trial court's final judgment was a ruling in favor of Hamilton holding that the method used by the City to permit withdrawal of referendum petition...