Turf Paradise, Inc. v. Arizona Racing Com'n
| Decision Date | 13 April 1989 |
| Docket Number | No. 2,CA-CV,2 |
| Citation | 772 P.2d 595,160 Ariz. 241 |
| Parties | TURF PARADISE, INC., an Arizona corporation, Plaintiff/Appellant, v. ARIZONA RACING COMMISSION, an agency of the State of Arizona, Arizona Department of Racing, an agency of the State of Arizona, and the State of Arizona, Defendants/Appellees. 89-0011. |
| Court | Arizona Court of Appeals |
Appellant Turf Paradise, Inc. appeals from a superior court judgment affirming a decision of appellee Arizona Racing Commission. Turf Paradise contends the Commission had no authority to issue its horse racing permit subject to the condition that Turf Paradise not require any person entering the restricted area of its grounds to sign a waiver of liability agreement. Turf Paradise also contends the Commission acted arbitrarily and capriciously in granting it a one-year permit rather than a three-year permit. In addition, it argues that the Commission's hearing procedures were unfair and violated due process. We affirm.
In December 1986, Turf Paradise filed an application to renew its then three-year permit that was due to expire in mid-1987. In April 1987, the Commission voted to hold a hearing on the application. That hearing was held before a Department of Racing hearing officer on May 1, 1987. The hearing officer recommended that Turf Paradise be issued a permit once it met the statutory requirements. The hearing officer's findings noted that Turf Paradise did not then have a liability insurance policy in effect but that Turf Paradise had indicated it would require a waiver agreement from all persons seeking to enter the backside of the track when it did obtain a policy. The hearing officer recommended that the waiver agreement proposal be studied further and that its effect on the state's liability exposure be examined. The Acting Director of the Department then recommended that Turf Paradise be granted a one-year permit conditioned on the requirement that no one sign a waiver agreement. That recommendation was adopted by the Commission at its meeting on May 12, 1987.
After Turf Paradise requested a rehearing, a new hearing was held before a different hearing officer on July 30, 1987. That hearing officer recommended that the Department and the Commission consider the best interests of racing in Arizona and that the permit include a condition of no waivers. The hearing officer also stated: "Without specifically recommending that a three year permit be granted, IT IS RECOMMENDED that the Director and the Commission consider the consensus of the witnesses called by Counsel for Turf Paradise, Inc., testifying that a longer permit is helpful to them in preparing for racing meets in Arizona." The Acting Director again recommended that the Commission issue a one-year permit conditioned upon the absence of a waiver requirement. The Commission voted to issue just such a permit on August 25, 1987.
Turf Paradise sought judicial review in superior court shortly thereafter. This appeal followed the trial court's affirmance of the Commission's decision. We note, pursuant to a motion to supplement the record, that in June 1988, the Commission voted to renew Turf Paradise's permit for a period of three years and that no conditions were imposed upon that permit. Despite the fact that the permit upon which this appeal is brought has expired, however, we exercise our discretion to determine the issues raised. Seeley v. State, 134 Ariz. 263, 655 P.2d 803 (App.1982). The questions are such that they are likely to recur. Fraternal Order of Police Lodge 2 v. Phoenix Employee Relations Board, 133 Ariz. 126, 650 P.2d 428 (1982). In addition, a one-year permit is of such relatively short duration that appellate review may be thwarted, as in this case, by expiration of the permit if the doctrine of mootness is applied. Maricopa County Health Department v. Harmon, 156 Ariz. 161, 750 P.2d 1364 (App.1987).
Turf Paradise contends the Commission abused its discretion in granting it a one-year permit rather than the three-year permit it requested. It argues initially that the decision was inconsistent with the past practice of granting three-year permits and that the Commission acted arbitrarily by failing to articulate a substantial reason for the change. A.R.S. § 5-108(D) provides that "permits shall be renewed for successive periods of not more than three years...." From 1949 until the current statute was amended in 1982, horse racing permits were issued for periods of one year. 1949 Ariz.Sess.Laws, ch. 61, § 6; 1982 Ariz.Sess.Laws, ch. 310, § 7. Turf Paradise was previously issued a three-year permit in mid-1984 that expired in mid-1987. Because the 1982 amendment permitting three-year permits did not become effective until September 30, 1982, Turf Paradise could not have had a three-year permit before it obtained its 1984-87 permit. Thus, the record does not support its claim that the Commission's decision was a departure from its own past practices.
Turf Paradise next contends that the Commission, in voting to issue a one-year permit, relied upon "post hoc rationales" which were arbitrary and not sup ported by substantial evidence. A.R.S. § 5-108(D) provides that permits may be renewed for a period "of not more than three years" (emphasis added). That language indicates a legislative intent that the Racing Commission determine whether it will grant a one-year, two-year or three-year permit. We must, therefore, determine whether there was substantial evidence to support the Commission's decision to issue a one-year permit to Turf Paradise. DeGroot v. Arizona Racing Commission, 141 Ariz. 331, 686 P.2d 1301 (App.1984).
The record shows that the Commission was concerned both about its communications with Turf Paradise as well as Turf Paradise's claims of difficulty in obtaining insurance coverage that had resulted in its proposal to require waivers. The Commission was also concerned about the state's exposure to liability because of testimony at the original hearing that the state is always joined as a party whenever Turf Paradise is sued for negligence. In addition, the record indicates that one of the commissioners who voted at the August meeting was newly appointed, and comments were made at the time of the Commission's first vote that one or more of the commissioners were new to the job. We find substantial evidence to support the Commission's decision to issue a one-year permit.
Turf Paradise also contends that the Commission had no authority to issue a permit conditioned upon its not requiring everyone entering the backside of its track to sign a waiver of liability agreement. As Turf Paradise notes, A.R.S. § 5-104, which authorizes the Commission to approve permits, does not specifically authorize the imposition of conditions upon a permit. As a result, it argues that the Commission has authority only to grant or deny a permit and that it cannot impose conditions upon its permits requiring a permittee to perform an act unless a statute or regulation specifically requires the permittee to perform it. We note that the condition imposed by the Commission does not require Turf Paradise to perform an act. Instead, it prohibits it from utilizing waivers.
Turf Paradise contends it was improper for the Commission to make the permit conditional absent an express statutory or regulatory authorization for such a condition. In support of that contention, Turf Paradise has cited Arizona Downs v. Turf Paradise, Inc., 140 Ariz. 438, 682 P.2d 443 (App.1984). In that case, Turf Paradise argued that the Commission had properly imposed, as a condition on a permit issued to Arizona Downs, a requirement that it pay Turf Paradise a specific percentage of the annual maintenance expenses for Turf Paradise's premises. Because that requirement ignored an existing contract between Arizona Downs and Turf Paradise that required Arizona Downs to pay a smaller sum to cover maintenance expenses and because there was no indication that the track was not being adequately maintained as required by the applicable regulation, the court held that the Commission's order was arbitrary and capricious and that it violated Arizona Downs' contractual rights.
Although no regulation is involved in this case, a statutory authorization does apply. The Commission is authorized, inter alia, to refuse to renew a permit upon a showing that the applicant "[h]as entered into any contract or contracts which will not further the best interests of racing or be in the public interest...." A.R.S. § 5-108(A)(1)(i ). Although Turf Paradise had not yet procured its liability insurance policy at the time...
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...or one which is likely to recur even though the question is presented in a moot case."); see also Turf Paradise, Inc. v. Ariz. Racing Comm'n, 160 Ariz. 241, 242, 772 P.2d 595, 596 (App.1989)("one-year permit is of such relatively short duration that appellate review may be thwarted ..."). H......