Stagecoach Trails MHC, L.L.C. v. City of Benson

• Decision Date: 31 May 2012
• Docket Number: No. 2 CA–CV 2011–0085.,2 CA–CV 2011–0085.
• Citation: 278 P.3d 314,229 Ariz. 536,636 Ariz. Adv. Rep. 14
• Parties: STAGECOACH TRAILS MHC, L.L.C., Plaintiff/Appellee, v. CITY OF BENSON, a municipal corporation; City of Benson Board of Adjustment, a body politic; and Brad Hamilton, Zoning Administrator for the City of Benson, Defendants/Appellants.
• Court: Arizona Court of Appeals

229 Ariz. 536

278 P.3d 314

636 Ariz. Adv. Rep. 14

STAGECOACH TRAILS MHC, L.L.C., Plaintiff/Appellee,

v.CITY OF BENSON, a municipal corporation; City of Benson Board of Adjustment, a body politic; and Brad Hamilton, Zoning Administrator for the City of Benson, Defendants/Appellants.

No. 2 CA–CV 2011–0085.

Court of Appeals of Arizona, Division 2, Department B.

May 31, 2012.

Lewis & Roca, LLP By John C. Hinderaker and Jeffrey L. Sklar, Tucson, Attorneys for Plaintiff/Appellee.

Michael J. Massee, Benson City Attorney, Nogales, and Lasota & Peters, PLC By Jeffrey T. Murray, Phoenix, Attorneys for Defendants/Appellants.

OPINION

ESPINOSA, Judge.

[229 Ariz. 537]¶ 1 In this zoning enforcement action, defendant/appellant City of Benson appeals from the superior court's reversal of the Benson Zoning Administrator's denial of a permit for installation of a mobile home at a manufactured home park owned by plaintiff/appellee Stagecoach Trails MHC. ¹ For the following reasons, we vacate in part, reverse in part, and affirm in part.

Factual Background and Procedural History

¶ 2 The facts essential to the resolution of this appeal are undisputed. We review issues of law de novo. Sw. Soil Remediation, Inc. v. City of Tucson, 201 Ariz. 438, ¶ 12, 36 P.3d 1208, 1212 (App.2001). In 1997, the city amended the Benson Zoning Regulations (B.Z.R.) to introduce, inter alia, extensive changes to § 16, which governs manufactured home parks. The changes included modification of minimum space requirements, including setback requirements, for parks and their internal spaces. The changes became effective in 1998, but the city did not immediately apply these new requirements to parks that had been in operation before the effective date.

¶ 3 In 2003, Jay Kendrick purchased Desert Craft Mobile Home Park, a fifty-unit manufactured home park in Benson. Kendrick renamed the park Stagecoach Trails MHC and began to make improvements, including removing a number of older mobile homes in poor repair and replacing them with newer, often larger ones in better condition. As part of this improvement plan, Stagecoach Trails applied for and was issued permits for thirty-four mobile homes, which were installed in the park between 2003 and 2010. Although none of the park's fifty spaces was large enough to comply with the minimum space requirements of § 16, the city nevertheless issued the required permits.

[229 Ariz. 538]¶ 4 In December 2009, the city notified by letter all manufactured home park operators in Benson, including Stagecoach Trails, that it planned to begin enforcing the minimum space requirements of § 16 against parks it previously had treated as exempt. The city clarified that it would not apply § 16 retroactively to units that already had been installed, but would enforce its provisions in reviewing any future permit applications.

¶ 5 In January 2010, Stagecoach Trails applied for a permit to install a new mobile home on space 27, which recently had become vacant. On January 25, the zoning administrator denied the application, explaining that space 27 did not comply with several requirements of § 16, including setback and paving requirements. The zoning administrator further explained that when a new structure was moved onto space 27, it would be required to conform to all zoning regulations then in force, including § 16.

¶ 6 Stagecoach Trails appealed the denial to the city board of adjustment, arguing it did not need to meet the requirements of § 16 because the mobile home park was a nonconforming use under A.R.S. § 9–462.02 and B.Z.R. § 18. After hearing testimony and argument, a majority of the board voted to deny the appeal.

¶ 7 In May, Stagecoach Trails filed a two-count special-action complaint in the superior court, seeking review of the board of adjustment's decision and challenging the validity of § 16. Specifically, Stagecoach Trails alleged that because the city had not complied with the notice and hearing requirements of A.R.S. § 9–462.04(A)(4) and (5) in adopting § 16, that provision was invalid. It further alleged that even if § 16 were valid, it applied only to newly developed manufactured home parks and could not be applied retroactively to existing parks. The complaint sought a declaratory judgment that § 16 was void,² an order “in the nature of [a] writ of mandamus” directing the zoning administrator to “process and/or grant” the permit application, and an order reversing the board of adjustment's decision and directing the zoning administrator not to apply § 16 in processing the application for space 27.

¶ 8 The parties thereafter filed numerous motions, including cross-motions for summary judgment. Meanwhile, notwithstanding the pending litigation, in July the zoning administrator again reviewed the permit application for space 27, stating in a letter the application had been considered “without regard to the requirements of Section 16 [ (1998) ].” The zoning administrator concluded Stagecoach Trails still was not entitled to a permit because the site plan failed to show space 27 met, inter alia, setback requirements imposed by regulations other than § 16, including the version of that section in effect before 1998. The city then filed a pleading titled, “Suggestion of Mootness as to the Equitable Relief Requested in Count I,” which the superior court denied. In August, the court granted summary judgment in favor of Stagecoach Trails, finding § 16 had been enacted without strict adherence to the notice requirements of § 9–462.04 and was therefore void.

¶ 9 On September 14, Stagecoach Trails filed a supplemental special-action complaint in superior court, alleging that the grounds cited in the July letter were not sufficient to justify the denial of the permit application and requesting that the court direct the zoning administrator to issue the permit. Stagecoach Trails also sought a declaratory judgment “determining the proper application of all provisions of the Zoning Regulations raised by the Zoning Administrator to deny the permit application.”

¶ 10 On September 15, the zoning administrator sent another letter denying the permit application on substantially the same grounds as stated in the July letter, except the September letter included the additional ground that space 27 lacked an improved parking space.³ The September letter also invited Stagecoach Trails to apply for a variance if it could not meet any of the conditions listed. Stagecoach Trails instead filed a second supplemental special-action complaint in superior court on September 23. The court allowed both supplemental complaints as amendments to the original complaint pursuant to Rule 15(d), Ariz. R. Civ. P., based on its determination that it had “continuing jurisdiction” over the dispute.

¶ 11 On December 21, the superior court held an evidentiary hearing. The city argued at the outset “the Court's review is limited to the record that was before the Board of Adjustment” and objected to the hearing. Although the court questioned the need for an evidentiary hearing “on most of the [ ] issues,” it nevertheless went forward with the hearing.

¶ 12 On December 29, the superior court issued a signed minute entry reversing the board of adjustment's decision. It concluded Stagecoach Trails had exhausted its administrative remedies, “as all of the relevant issues considered at the December 21, 2010, hearing were likewise discussed and considered at the ... Board of Adjustment hearings[,] including the ‘grandfather’ issue and its application to the specific facts and circumstances as they relate to the denial of a permit for Space 27.” The court further concluded, “Referral back to the Board of Adjustment would not promote judicial economy and is not necessary as a matter of law ... since this Court has continuing jurisdiction over all issues related to the City's denial of a permit for Space 27.” It also stated, “[T]he City had an obligation to raise all defenses available to it relating to the grandfathering issue at the time of the Board of Adjustment hearings or such defenses or issues are waived on appeal.”

¶ 13 The court affirmed its prior ruling invalidating § 16 and concluded the city was obligated to issue a permit for space 27 because Stagecoach Trails had a “due process right to continue a nonconforming use.” The court granted relief “in the nature of a writ of mandamus,” directing the zoning administrator “to perform his ministerial duty and grant the permit application for Space 27” and awarding Stagecoach Trails attorney fees and costs. The city timely appealed. We have jurisdiction pursuant to A.R.S. §§ 12–120.21(A) and 12–2101(A)(1).

Discussion

Superior Court Jurisdiction

¶ 14 At the outset, the city contends the superior court did not have jurisdiction over the supplemental complaints because the issues Stagecoach Trails raised in response to the July and September letters had not been considered by the board of adjustment. We review de novo the superior court's jurisdiction. Moulton v. Napolitano, 205 Ariz. 506, ¶ 1, 73 P.3d 637, 640 (App.2003).

¶ 15 Section 9–462.01, A.R.S., authorizes municipalities to regulate the use of property through legislative ordinance. A city's zoning administrator is responsible for enforcing zoning ordinances, and its board of adjustment is responsible for hearing appeals from decisions of the zoning administrator. A.R.S. § 9–462(A)(1), (4). Specifically, A.R.S. § 9–462.06(G)(1) requires the board of adjustment to “[h]ear and decide appeals in which it is alleged there is an error in an order, requirement or decision made by the zoning administrator in the enforcement of a zoning ordinance adopted pursuant to this article.” Once the board has rendered a decision, an aggrieved party may obtain appellate review by “fil[ing] a complaint for special action in the superior court to review the ... board decision.” § 9–462.06(K). Pursuant to such review, the superior court is limited to determining whether...