Sedona Grand, LLC v. City of Sedona, No. 1 CA–CV 10–0782.

CourtCourt of Appeals of Arizona
Writing for the CourtSWANN
Citation627 Ariz. Adv. Rep. 13,229 Ariz. 37,270 P.3d 864
Decision Date07 February 2012
Docket NumberNo. 1 CA–CV 10–0782.
PartiesSEDONA GRAND, LLC, Plaintiff/Appellant–Cross Appellee, v. CITY OF SEDONA, Defendant/Appellee–Cross Appellant.

229 Ariz. 37
270 P.3d 864
627 Ariz.
Adv. Rep. 13

SEDONA GRAND, LLC, Plaintiff/Appellant–Cross Appellee,
v.
CITY OF SEDONA, Defendant/Appellee–Cross Appellant.

No. 1 CA–CV 10–0782.

Court of Appeals of Arizona, Division 1, Department B.

Feb. 7, 2012.


[270 P.3d 865]

Stephen H. Schwartz, Sedona, Attorney for Plaintiff/Appellant–Cross Appellee.

LaSota & Peters PLC By Jeffrey T. Murray, Kristin M. Mackin, Phoenix, Attorneys for Defendant/Appellee–Cross Appellant.

OPINION
SWANN, Judge.

¶ 1 This case requires us to determine whether a municipal land use ordinance is exempt as a matter of law from the strictures of the Private Property Rights Protection Act, A.R.S. §§ 12–1131 through 12–1138 (the “Act”), whenever the law's stated purpose is to promote public health and safety. We hold that a mere declaration of purpose is insufficient to invoke the exemption, and that a government entity seeking to avoid paying compensation must present evidence that its principal purpose in passing a land use law is one that qualifies for exemption under the Act. We further hold that when a land use law enacted after the effective date of the Act expands the reach of a preexisting restriction, the new law is subject to the Act. In such an instance, the Act applies to those portions of the law that represent more severe restrictions than those in existence as of December 7, 2006.

FACTS AND PROCEDURAL HISTORY 1

¶ 2 The Sedona Land Development Code has prohibited short-term rentals of residential property since 1995 (the “1995 SLDC”). Sedona Grand, LLC (“Appellant”) owns residential property located at 20 Jasper Court in the City of Sedona. The Property, also

[270 P.3d 866]

named “Sedona Grand,” is one of five properties listed as vacation rentals by Red Rock Solutions, LLC. In January 2007, Appellant notified the City that it was using an “Option Agreement” as a “sales tool” to facilitate the sale of its properties “due to the restrictive nature of the City's zoning regulations.” The “Option to Purchase Real Property” (the “Option”) grants the “Buyer the exclusive right to inspect the property” for a set period of time.2 The City responded in February 2007, asserting that use of the Option violated the City's longstanding ban on short-term rentals.

¶ 3 On January 22, 2008, expressing a commitment to maintaining the “small-town character, scenic beauty and natural resources” of the City, the Sedona City Council enacted the “City of Sedona Short–Term Vacation Rental Enforcement Ordinance” (the “Ordinance”), codified at §§ 8–4–1 to 8–4–6 of the Sedona City Code. With a stated intent to promote the aims and goals of the 1995 SLDC ban on short-term rentals in residential districts,3 the Ordinance makes “rentals” of residential property for less than 30 consecutive days to a “transient” a class one misdemeanor punishable by a fine up to $2500, imprisonment, or both. Sedona, Ariz., Code §§ 8–4–4 to 8–4–6.

¶ 4 On February 25, 2008, Sedona Grand served a Notice of Claim pursuant to the Act, asserting that the Ordinance caused it to “suffer[ ] losses and [it] will continue to suffer losses as a result of the reduction of its previously existing rights to use, lease and sell” the Property. Appellant's complaint, filed May 27, 2008, set forth two counts: Interference with Contractual Relations 4 and Condemnation under the Act.

¶ 5 Sedona Grand moved for partial summary judgment or declaratory judgment on three issues: (1) that its existing rights to use and sell the Property were reduced by the Ordinance; (2) that the Ordinance is a land use law; and (3) that it satisfied the requirements of § 12–1134(E) and was therefore entitled to compensation from the City. The City responded and cross-moved for summary judgment, asserting that the Act did not apply because the Ordinance is aimed at the protection of the public's health and safety and is therefore exempt from the Act under § 12–1134(B)(1). The City further argued that the Act could not benefit Sedona Grand because its Options were truly “rentals” prohibited by the SLDC long before the Ordinance was enacted. Because the SLDC already prohibited the Options, the City argued, the Ordinance did not diminish any right that Sedona Grand had not already lost before the effective date of the Act.

¶ 6 The trial court ruled that the Ordinance is a land use law as defined in § 12–1136, but declined to reach the question whether Appellant's use of the Option had been prohibited by preexisting law because (1) it found that the § 12–1134(B)(1) exemption applied, and (2) it concluded “it appears that [the] issue is highly disputed and likely could not be resolved by way of summary judgment.”

¶ 7 Appellant moved for reconsideration and new trial, which the trial court denied. This appeal and cross-appeal timely followed. We have jurisdiction under A.R.S. § 12–2101(A)(1).

STANDARD OF REVIEW

¶ 8 Summary judgment should be granted “if the facts produced in support of the claim or defense have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion advanced by the

[270 P.3d 867]

proponent of the claim or defense.” Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990). Because the issue of statutory interpretation is one of law and not of fact, we review the application and interpretation of statutes and ordinances de novo. In re MH 2007–001236, 220 Ariz. 160, 165, ¶ 15, 204 P.3d 418, 423 (App.2008) (citations omitted).

DISCUSSION

¶ 9 In 2006, Arizona voters passed initiative measure Proposition 207, the Private Property Rights Protection Act. Codified at A.R.S. §§ 12–1131 to 12–1138, the Act requires, among other things, just compensation for diminution in value when “any land use law” enacted after its effective date (and after an owner received an interest in the property) reduces “the existing rights to use, divide, sell or possess private real property.” A.R.S. § 12–1134(A).

¶ 10 Sedona Grand argues on appeal that the trial court erred in granting summary judgment to the City because it failed to hold the City to its burden of proof when it applied the public health and safety exemption under § 12–1134(B)(1).5 In support of its cross-appeal, the City argues that the trial court erred in finding that the Ordinance is a land use law enacted after the Act's effective date.

I. THE ORDINANCE IS A LAND USE LAW AS DEFINED BY THE ACT.

¶ 11 The best and most reliable indicator of the legislature's intent is the statute's own words. See Zamora v. Reinstein, 185 Ariz. 272, 275, 915 P.2d 1227, 1230 (1996). When interpreting a statute, we afford the words their “usual and commonly understood meaning unless the legislature clearly intended a different meaning.” State v. Korzep, 165 Ariz. 490, 493, 799 P.2d 831, 834 (1990). We apply the same principles to the interpretation of a voter-approved initiative.

¶ 12 Under A.R.S. § 12–1136(3), a land use law is “any statute, rule, ordinance, resolution or law enacted by this state or a political subdivision of this state that regulates the use or division of land or any interest in land or that regulates accepted farming or forestry practices.” Only laws or ordinances passed after the effective date of the Act are subject to the just compensation requirement. A.R.S. § 12–1134(B)(7).

A. The Ordinance Marks a Material Change from the SLDC and Therefore Affects Existing Rights to Use, Divide, Sell or Possess Private Real Property.

¶ 13 The Ordinance was enacted after the effective date of the Act. Entitled “Enforcement of Restrictions on Residential Short–Term Vacation Rentals,” the Ordinance provides for...

To continue reading

Request your trial
9 practice notes
  • State v. Fisher Sand & Gravel Co., No. 1 CA-CV 13-0608
    • United States
    • Court of Appeals of Arizona
    • March 3, 2015
    ...interpretation of regulations and statutes, and its application of the law to the facts, de novo. Sedona Grand, L.L.C. v. City of Sedona, 229 Ariz. 37, 40, ¶ 8, 270 P.3d 864, 867 (App. 2012). We apply the same principles of construction when interpreting regulations as we do when construing......
  • Passmore v. McCarver, No. 1 CA-CV 15-0420
    • United States
    • Court of Appeals of Arizona
    • December 30, 2016
    ...added.) We interpret § 12-504(A)'s mandatory- and discretionary-relief provisions de novo. See Sedona Grand, LLC v. City of Sedona, 229 Ariz. 37, 39, ¶ 8 (App. 2012). We review the grant of a motion to dismiss and the denial of discretionary relief under § 12-504(A) for abuse of discretion.......
  • Passmore v. McCarver, No. 1 CA–CV 15–0420
    • United States
    • Court of Appeals of Arizona
    • April 6, 2017
    ...added.) We interpret § 12–504(A)'s mandatory- and discretionary-relief provisions de novo. See Sedona Grand, LLC v. City of Sedona , 229 Ariz. 37, 39, ¶ 8, 270 P.3d 864 (App. 2012). We review the grant of a motion to dismiss and the denial of discretionary relief under § 12–504(A) for abuse......
  • Risas Holdings LLC v. Tackett, No. 1 CA-CV 20-0150
    • United States
    • Court of Appeals of Arizona
    • December 1, 2020
    ...under the subsection.¶19 We review de novo the application and interpretation of A.R.S. § 44-404. See Sedona Grand, LLC v. City of Sedona, 229 Ariz. 37, 40, ¶ 8 (App. 2012). To date, no Arizona state court case has explicitly addressed whetherPage 7 a defendant who successfully defends a cl......
  • Request a trial to view additional results
9 cases
  • State v. Fisher Sand & Gravel Co., No. 1 CA-CV 13-0608
    • United States
    • Court of Appeals of Arizona
    • March 3, 2015
    ...interpretation of regulations and statutes, and its application of the law to the facts, de novo. Sedona Grand, L.L.C. v. City of Sedona, 229 Ariz. 37, 40, ¶ 8, 270 P.3d 864, 867 (App. 2012). We apply the same principles of construction when interpreting regulations as we do when construing......
  • Passmore v. McCarver, No. 1 CA-CV 15-0420
    • United States
    • Court of Appeals of Arizona
    • December 30, 2016
    ...added.) We interpret § 12-504(A)'s mandatory- and discretionary-relief provisions de novo. See Sedona Grand, LLC v. City of Sedona, 229 Ariz. 37, 39, ¶ 8 (App. 2012). We review the grant of a motion to dismiss and the denial of discretionary relief under § 12-504(A) for abuse of discretion.......
  • Passmore v. McCarver, No. 1 CA–CV 15–0420
    • United States
    • Court of Appeals of Arizona
    • April 6, 2017
    ...added.) We interpret § 12–504(A)'s mandatory- and discretionary-relief provisions de novo. See Sedona Grand, LLC v. City of Sedona , 229 Ariz. 37, 39, ¶ 8, 270 P.3d 864 (App. 2012). We review the grant of a motion to dismiss and the denial of discretionary relief under § 12–504(A) for abuse......
  • Risas Holdings LLC v. Tackett, No. 1 CA-CV 20-0150
    • United States
    • Court of Appeals of Arizona
    • December 1, 2020
    ...under the subsection.¶19 We review de novo the application and interpretation of A.R.S. § 44-404. See Sedona Grand, LLC v. City of Sedona, 229 Ariz. 37, 40, ¶ 8 (App. 2012). To date, no Arizona state court case has explicitly addressed whetherPage 7 a defendant who successfully defends a cl......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT