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

• Decision Date: 19 July 2013
• Docket Number: No. 2 CA–CV 2011–0085.,2 CA–CV 2011–0085.
• Citation: 232 Ariz. 562,665 Ariz. Adv. Rep. 18,307 P.3d 989
• 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

232 Ariz. 562

307 P.3d 989

665 Ariz. Adv. Rep. 18

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.

July 19, 2013.

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

Michael J. Massee, Benson City Attorney, Nogales, and Sims Murray Ltd. by Jeffrey T. Murray and Kristin M. Mackin, Phoenix, Attorneys for Defendants/Appellants.

OPINION

ESPINOSA, Judge.

¶ 1 The Arizona Supreme Court has remanded this zoning-enforcement case for this court to determine whether a mobile-home park as a whole, or only its individual constituent spaces, can be considered a nonconforming use under A.R.S. § 9–462.02(A). Stagecoach Trails MHC, L.L.C. v. City of Benson, 231 Ariz. 366, ¶ 17, 295 P.3d 943, 947 (2013). We have done so and conclude, as a matter of law, that a mobile-home park in its entirety is entitled to nonconforming-use status. But because the record is insufficient to determine whether the mobile-home park in this case was a nonconforming use, we remand this matter to the superior court for further proceedings.

Background

¶ 2 A complete factual background is provided in our supreme court's opinion. Stagecoach Trails, 231 Ariz. 366, ¶¶ 3–13, 295 P.3d at 944–46. We restate only those facts that are relevant to the issues before us.

¶ 3 In 1998, the City of Benson amended § 16 of its zoning regulations to increase the setback and minimum-size requirements for spaces within Benson mobile-home parks. Initially, the City did not apply the requirements of the amended regulations to parks that were already operating. Between 2003 and 2010, the City granted the Stagecoach Trails mobile-home park (Stagecoach) permits to replace thirty-four of its mobile homes with newer, often larger models that did not comply with applicable setback requirements. Then, in late 2009, the City notified mobile-home park operators, including Stagecoach, that it would begin applying the amended version of § 16 when individual homes were replaced and that any future permit applications would be evaluated under the requirements of that section.

¶ 4 In January 2010, the City denied Stagecoach's application for a permit to install a new and larger mobile home on one of its spaces (space 27). In the denial letter, the City's zoning administrator explained that before the permit could be granted, Stagecoach would have to show, among other things, that the applicable setback requirements would not be violated. Stagecoach appealed the permit denial to the Benson Board of Adjustment, arguing that the entire park is a nonconforming use under § 9–462.02(A) and that it was therefore entitled to replace individual homes without relinquishing nonconforming-use status and being required to comply with the zoning requirements then in force. The board of adjustment rejected this argument and affirmed, agreeing with the zoning administrator that the mobile-home park's constituent spaces individually were nonconforming uses.

¶ 5 Stagecoach filed a special-action complaint in superior court, appealing the board of adjustment decision and seeking invalidation of the amended § 16. Based in part on the City's concession that it had not strictly complied with statutory notice requirements when adopting the amendment to § 16, the court invalidated that section. The City then sent two additional letters to Stagecoach, one in July and one in September, again denying the permit application for space 27 and explaining that even without regard to the now invalidated § 16, the space's new site plan violated various other provisions of the zoning regulations. The superior court retained jurisdiction over the case and held an evidentiary hearing, after which it reversed the board of adjustment's ruling and ordered the City to issue a permit for the mobile home on space 27.

¶ 6 The City appealed, and we affirmed in part and reversed in part, concluding, inter alia, that Stagecoach had failed to exhaust its administrative remedies because it never had presented to the board of adjustment the issue of whether the mobile home on space 27 violated zoning regulations left in force after § 16 was invalidated. Stagecoach Trails MHC, L.L.C. v. City of Benson, 229 Ariz. 536, ¶ 19, 278 P.3d 314, 318–19 (App.2012). We reasoned that the superior court's jurisdiction had ended with the invalidation of amended § 16 and it was necessary for the board of adjustment to address whether space 27 would have been a nonconforming use with respect to the provisions left in force after the invalidation. Id. ¶ 7 Our supreme court granted review and vacated this court's decision,¹ concluding that Stagecoach was not required to exhaust its administrative remedies because returning to the board of adjustment would have been futile, and holding that the superior court, therefore, had properly retained jurisdiction over the matter. Stagecoach Trails, 231 Ariz. 366, ¶¶ 16–17, 25, 295 P.3d at 946, 948. The supreme court remanded the case for this court to consider whether a mobile-home park as a whole, or an individual space within the park, is properly considered a nonconforming use, and any other “relevant, unaddressed issues.” Id. ¶ 25. We do so now.

Discussion

¶ 8 When a use of property predates the adoption of a zoning regulation prohibiting it, such use is known as a legal nonconforming use and is entitled to certain constitutional and statutory protections. Rotter v. Coconino Cnty., 169 Ariz. 269, 271, 818 P.2d 704, 706 (1991); see also§ 9–462.02(A). As such, a zoning regulation may not be applied retroactively to extinguish a preexisting use of property “for the purpose used at the time the ordinance or regulation takes effect”; nor may a regulation affect the owner's right to make “any reasonable repairs or alterations in buildings or property used for such existing purpose,” unless the municipality purchases or condemns the property. § 9–462.02(A). Courts interpret these protections narrowly, however, because nonconforming uses are not favored by the law and “should be eliminated or reduced to conformity as quickly as possible”; but such elimination may be accomplished only “within the limits of fairness and justice.” Rotter, 169 Ariz. at 272, 275, 818 P.2d at 707, 710;accord Outdoor Sys., Inc. v. City of Mesa, 169 Ariz. 301, 307, 819 P.2d 44, 50 (1991); Gannett Outdoor Co. of Ariz. v. City of Mesa, 159 Ariz. 459, 461, 768 P.2d 191, 193 (App.1989).

¶ 9 In this case, our supreme court has noted that “a key issue is whether the entire park or instead an individual space is the nonconforming use.” Stagecoach Trails, 231 Ariz. 366, ¶ 15, 295 P.3d at 946. Stagecoach contends that the park as a whole is the nonconforming use and that replacing individual homes within the park does not constitute a change in use and therefore would not extinguish nonconforming-use rights. The City, on the other hand, argues that each individual space is a separate nonconforming use and that replacing a mobile home changes the use of that space such that it must conform to current zoning requirements. In the proceedings below, the board of adjustment agreed with the City that the individual space constitutes the nonconforming use, whereas the superior court concluded it was the mobile-home park as a whole. This issue is one of law, which we review de novo. See City of Tucson v. Whiteco Metrocom, Inc., 194 Ariz. 390, ¶ 25, 983 P.2d 759, 766 (App.1999).

¶ 10 Relying principally on Outdoor Systems, Inc., 169 Ariz. 301, 819 P.2d 44, and Eddins v. City of Lewiston, 150 Idaho 30, 244 P.3d 174, 180 (2010), Stagecoach argues that a mobile-home park as a whole constitutes the nonconforming use. In Outdoor Systems, our supreme court considered whether “existing property,” as that term is used in § 9–462.02, related to individual nonconforming billboards or to the entire parcel on which they were located. 169 Ariz. at 309–10, 819 P.2d at 52–53. Although the court noted that its interpretation was rooted in the policy disfavoring nonconforming uses, it held that because the challenged ordinances sought to regulate the billboards as part of the entire development site upon which they were located, the statutory term “ ‘existing property’ consists of the entirety of the nonconforming parcel, meaning the billboard plus the surrounding property.” Id.

¶ 11 In Eddins, 150 Idaho 30, 244 P.3d 174, a dual-purpose manufactured-home and recreational-vehicle park was a legal use that preexisted an ordinance prohibiting recreational vehicles from being located in manufactured-home parks. Id. at 176. When one of the park's tenants sought to replace an existing recreational vehicle with a newer one, the owner of the park applied for the requisite permit, which the city denied under the ordinance. Id. The court rejected the city's argument that the park owner's right to continue a nonconforming use “attaches only to the recreational vehicles that were on the property at the time the ordinance was passed.” Id. at 179. The court held that because “[t]he fundamental or primary use of [the] real property—both before and after the ordinance was passed—was to rent spaces for both manufactured homes and recreational vehicles,” the park owner was entitled to continue that use of his property, even to the extent of replacing an existing recreational vehicle with a new one. Id.

¶ 12 The City, citing the principle that legal protections must be construed narrowly against the continuation of nonconforming uses, see City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, ¶ 24, 181 P.3d 219, 228 (App.2008), counters that such a construction favors treating the individual spaces within the park as separate uses. The City further argues that...