Town of Paradise Valley v. Gulf Leisure Corp., 1

Decision Date26 October 1976
Docket NumberNo. 1,CA-CIV,1
Citation557 P.2d 532,27 Ariz.App. 600
PartiesTOWN OF PARADISE VALLEY, a Municipal Corporation, Appellant, v. GULF LEISURE CORPORATION, Glen Wiltsey, and Midland National Bank, Appellees. 3304.
CourtArizona Court of Appeals
OPINION

NELSON, Judge.

This is an appeal from a summary judgment granting the appellees declaratory and injunctive relief against the appellant regarding its purported arbitrary and capricious refusal to extend a 'Special Use Permit'. The trial court declared the appellant's actions void ab initio and unconstitutional and ordered the appellant to allow the appellees to continue construction of a 148-suite resort hotel.

The issues presented here are six-fold:

1. Were the actions taken and the reasons denominated by the appellant in refusing extension of the Special Use Permit arbitrary and capricious?

2. Did the appellees have a vested right in the property prohibiting the alleged arbitrary and capricious denial of the extension request and warranting the injunctive relief given by the trial court?

3. Were there material issues of fact preventing the trial court from extending the original Building Permits by summary judgment?

4. Were the appellees required to exhaust their administrative remedies prior to seeking judicial relief? 5. Was the trial court precluded by A.R.S. § 12-1802 from granting injunctive relief against the appellant, a municipality?

6. Did the trial court properly award the appellees costs against the appellant?

The real property in controversy consists of 18.844 acres located on the southeast corner of Scottsdale Road and Jackrabbit Road in the Town of Paradise Valley, Arizona. On January 11, 1973, the appellant, the Town of Paradise Valley, issued to S. N. Pickard a 'Special Use Permit' authorizing the development of the property as a resort hotel consisting of 148 three-room suites. The controversial portion of the permit reads as follows:

'7. Building permits for the development of the resort hotel which is referred to in this Special Use Permit shall be taken out within one year from the date hereof and construction completed within two years from date of this Special Use Permit. Failure to comply with these dates shall automatically invalidate this Special Use Permit and the same shall be of no further force and effect. PROVIDED, HOWEVER, the owner of said real property shall have the right to apply to the Town Council for an extension of said Use Permit prior to the expiration thereof.'

In reliance upon the issuance of this permit, Gulf Leisure Corporation (appellee), acting by and through its president and majority stockholder, Glen Earl Wiltsey (appellee), exercised an option procured in 1971 and purchased the property from S. N. Pickard. To finance the purchase and the intended hotel construction, Gulf and Wiltsey obtained two loans totaling $1,332,000 1 from Midland National Bank (appellee). On April 2, 1973 and November 8, 1973, deeds of trust were executed to secure the loans, with Gulf conveying the property to USLIFE Title Company of Arizona for the benefit of Midland.

The deeds of trust granted Midland the following powers as beneficiary:

'Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: Make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel, and pay his reasonable fees.' (Emphasis added)

On July 5, 1973, the Special Use Permit was slightly amended, changing the ownership name to Gulf and authorizing development according to a new site plan. Pursuant to the dictates of the Use Permit, Gulf on January 8, 1974 procured the appropriate Building Permits. Section 1411 of the Paradise Valley Zoning Ordinance (March 4, 1974), which pertains to building permits, states:

'Section 1411 Limitation:

A permit under which no work is commenced within six (6) months after issuance shall expire by limitation.'

'Work' was therefore required to be begun by July 8, 1974. The record is clear that actual construction of the physical facility had not been started by July 8, 1974, but it is uncertain whether any other 'work' was initiated during the six month period.

Nevertheless, the factual portrait is vivid that as of December 23, 1974, Gulf and Wiltsey were in serious financial straits due to the energy crisis and a recession and the actual commencement of construction of the physical facility of the resort had not been commenced. Moreover, Gulf and Wiltsey had already expended the following preparatory sum of $1,448,200:

                (1) Purchase of land     $1,100,000
                (2) Architectural fees      260,000
                (3) Feasibility studies      25,000
                (4) Overhead expenses        50,000
                (5) Building permits          5,200
                (6) Clearing of land          8,000
                

With it conclusive that Gulf and Wiltsey would be unable to complete construction of the resort within the two-year period, as required by the Use Permit, Midland's attorney, proceeding upon what he construed as authority in the deeds of trust and the Use Permit itself, filed an application with the Paradise Valley Town Council on December 23, 1974, requesting an extension of the Use Permit.

Over Midland's attorney's objection, however, the Council forwarded the extension application to the Paradise Valley Planning and Zoning Commission. On January 21, 1975, the Commission denied the request. The three bases for the denial were:

(1) Since the original Use Permit had expired on January 11, 1975, or ten days earlier, the Use Permit was 'dead' and could not be extended.

(2) Since Midland was only the 'equitable' owner of the property and not the 'legal' owner, and since it was the only party requesting the extension, not Gulf or Wiltsey, it did not have 'standing' to make the request.

(3) Since the land comprised only 18.844 acres, which satisfied the 15-acre minimum of old Section 1101(k) of the Paradise Valley Zoning Ordinance when the original Use Permit was issued and since the new minimum as of March 4, 1974, was 20 acres, the extension could not be granted because the acreage failed to meet the new minimum.

At the time of this Commission meeting, Wiltsey had already commenced bankruptcy proceedings and therefore all further matters regarding the property were held in abeyance until April 16, 1975. On that date, the Honorable Vincent D. Maggiore, Judge of Federal Bankruptcy Court for the District of Arizona, found that Midland, Gulf and Wiltsey had expended approximately $1,500,000 in reliance upon the Use Permit to construct the resort hotel, which the judge believed to be a reasonable use of the property. Judge Maggiore then ordered the triumvirate to 'pursue every available administrative and legal remedy to obtain an extension of the Special Use Permit.'

Accordingly, Midland's and Gulf's counsel appeared before the Paradise Valley Town Council on April 24, 1975, and renewed the December 23, 1974 extension request. The Town Council denied the request, apparently on the same three grounds upon which the Commission based its denial. It was suggested, however, by Mayor Tribken of the Council that the trio either seek a variance and then a New Special Use Permit or buy additional acreage to satisfy the 20-acre minimum and then apply for a new permit.

Midland, Gulf and Wiltsey disagreed with the Council's decision and with Mayor Tribken's suggestion and filed a special action and declaratory judgment complaint in the Maricopa County Superior Court seeking equitable relief to force the appellant to allow construction to continue under the Use Permit and the appurtenant building permits. In granting summary judgment for the appellees, the trial court held that the denial of the extension was 'unconstitutional and void ab initio' and ordered the appellant to allow construction of the resort in accordance with the previously issued permits. It is from this judgment the appellant is appealing. 2

REFUSAL OF USE PERMIT EXTENSION REQUEST

At the outset, it must be noted for purposes of our discussion that no distinction is drawn between 'special use permit', 'variance', 'rezoning', 'amendment', or 'building permit' with regard to Paradise Valley. All these terms, while technically different in vaious circumstances, 101 C.J.S. Zoning §§ 268--275, have no real significance, at least as to their generally accepted usage, to the manner Paradise Valley zones its community. Paradise Valley zones its entire area R--43 (residential with one-acre lots) and allows variations to this singular zoning through the utilization of 'special use permits', 'amendments' or 'variances'. In effect, Paradise Valley through these devices re-zones its area to accommodate new uses. We will treat all these terms synonymously. (See 101 C.J.S. Zoning §§ 274--275).

Judicial power to inquire into, review or set aside municipal zoning ordinances, variances, or special use permits is subject to definite historical limitations arising from the nature of zoning as administrative and...

To continue reading

Request your trial
34 cases
  • Bohn v. Waddell
    • United States
    • Arizona Tax Court
    • April 6, 1990
    ... ... , 732 P.2d 1013 (App.1987); Belco Petroleum Corp. v. State Bd. of Equalization, 587 P.2d 204 ... Town of Paradise Valley v. Gulf Leisure Corp., 27 ... ...
  • Relay Imp. Ass'n v. Sycamore Realty Co., Inc.
    • United States
    • Court of Special Appeals of Maryland
    • September 1, 1994
    ... ... Mortimer v. Howard Research & Dev. Corp., 83 Md.App. 432, 441, 575 A.2d 750, cert ... 481, 287 A.2d 242 (1972); Town of Berwyn Heights v. Rogers, 228 Md. 271, 179 ... See, e.g., Town of Paradise Valley v. Gulf Leisure Corp., 27 Ariz.App. 600, ... ...
  • Estate of Bohn v. Waddell
    • United States
    • Arizona Court of Appeals
    • September 29, 1992
    ... ... Univar Corp. v. City of Phoenix, 122 Ariz. 220, 223, 594 P.2d ... rejected a similar argument in Valley Vendors Corp. v. City of Phoenix, 126 Ariz. 491, ...         The tax court cites Town of Paradise Valley v. Golf Leisure Corp., 27 ... ...
  • Neal v. City of Kingman
    • United States
    • Arizona Court of Appeals
    • October 30, 1990
    ... ... permit and incurred considerable expense, Town of Paradise Valley v. Gulf Leisure Corp., 27 ... ...
  • Request a trial to view additional results
27 books & journal articles
  • Case List
    • United States
    • Bargaining for Development Case List
    • July 19, 2003
    ...N.H. 438, 388 A.2d 940 (1978) Town of Orangetown v. Magee , 665 N.E.2d 1061 (N.Y. 1996) Town of Paradise Valley v. Gulf Leisure Corp. , 27 Ariz. App. 600, 557 P.2d 532 (1976) Town of Plaistow v. Nadeau , 493 A.2d 1158 (N.H. 1985) Town of Stephens City v. Russell , 241 Va. 160, 399 S.E.2d 81......
  • § 5.3.1 Actual or Justiciable Controversy.
    • United States
    • State Bar of Arizona Civil Remedies Chapter 5 Declaratory Judgments (§ 5.1.1 to § 5.6.3)
    • Invalid date
    ...v. McDowell Mountain Irrigation & Drainage District, 107 Ariz. 117, 483 P.2d 532 (1971); Town of Paradise Valley v. Gulf Leisure Corp., 27 Ariz. App. 600, 606-607, 557 P.2d 532, 538-39 (1976); City of Douglas v. City of Sierra Vista, 21 Ariz. App. 71, 515 P.2d 896 (1973). Finally, the defen......
  • Appendix A Table of Authorities
    • United States
    • State Bar of Arizona Land Use Law Appendix A Table of Authorities
    • Invalid date
    ...Ariz. 108, 634 P.2d 396 (App. 1981)................................................. 6-14Town of Paradise Valley v. Gulf Leisure Corp., 27 Ariz.App. 600, 557 P.2d 532 (1976) ........................................................................................................... 1-4, 2-8,......
  • APPENDIX A: TABLE OF AUTHORITIES
    • United States
    • State Bar of Arizona Land Use Law (2021 Ed.) Appendix A Table of Authorities
    • Invalid date
    ...2021 WL 1099043 (App. 2021).......................................................12-12 Town of Paradise Valley v. Gulf Leisure Corp., 27 Ariz.App. 600, 557 P.2d 532 (1976) ................................................................................................................1-5, 2......
  • 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