AZAPP Blog

Huerta v. Superior Court (6/16/2009): Arizona Court of Appeals Division One Holds That a Party Whose Case is Consolidated With Another May Not Exercise a Peremptory Change of Judge if a Party on the Same Side in the Other Case Has Already Exercised a Peremptory Change of Judge.

Petitioner, the son of the decedent in a probate case, exercised a peremptory change of judge pursuant to Rule 42(f)(1), Ariz. R. Civ. P.  In a separate action, Petitioner filed a civil complaint alleging conversion of estate assets.  Over petitioner’s objection, the Superior Court consolidated the probate and civil cases.  Petitioner then sought a change of judge in the consolidated proceeding.  The Superior Court denied the request on the ground that Petitioner had already exercised his “first and only” peremptory challenge as a matter of right.  Petitioner sought special action review.

The Court of Appeals accepted jurisdiction but denied relief and affirmed.  Rule 42(f)(1)(A) provides that “each side” in a superior court action is entitled to one peremptory change of judge.  The rule, however, specifies that “each action, whether single or consolidated, shall be treated as having only two sides” and allows a judge to grant additional peremptory changes of judge only if “two or more parties on [the] side have adverse or hostile interests.”  Because the “adverse or hostile interests” standard was not met, Petitioner’s second peremptory change of judge was properly denied under the plain language of the rule.  Moreover, the rule would prohibit the second peremptory challenge, in the absence of “adverse or hostile interests,” even if the first challenge had been brought by a different party on the same side before the consolidation.

 Presiding Judge Johnsen authored the opinion; Judges Winthrop and Norris concurred.

County of Cochise v Faria.  (6/16/2009):  Arizona Court of Appeals Division Two Clarifies Meaning of A.R.S. § 11-830(A)(2) and Holds that Feed Lot Operations are Not “General Agricultural Uses” Exempt from County Zoning.

Appellants, the Farias, operated a dairy farm in Cochise County on which they built feeding pens in 2006 on land zoned RU-4 (Rural District).  The County claimed that the feeding pens constituted an unauthorized commercial feed lot, in violation of the zoning rules.  After the Farias lost several administrative proceedings (all while continuing to operate the feeding operations), the County invoked its zoning power under A.R.S. § 11-821(B) and sued for an injunction.  The Farias counterclaimed for declaratory relief.  The Superior Court granted summary judgment in favor of the County and enjoined the Farias from using the pens constructed in 2006.  The Farias appealed.

The Court of Appeals affirmed the Superior Court’s decision.  The Farias claimed that the feeding pens were “general agricultural” uses and thus exempt from county zoning ordinances under A.R.S. § 11-830(A)(2).  Applying traditional standards of statutory construction, the Appeals Court noted that the exemption in § 11-830(A)(2) must be considered in pari materia with the provisions of  § 11-821.01(A) specifically requiring counties to designate areas for, among other things, “commercial feed lots.”  Reasoning that the legislature, by virtue of enacting specific provisions for feed lots, could not have intended to include such lots under the category of “general agricultural purposes,” the Court of Appeals held that the County had the power to regulate the feeding pens under § 11-830(A)(2).

Judge Howard authored the opinion in which Chief Judge Pelander and Judge Espinosa concurred.

Aida v. Maricopa County ( 6/11/2009):  Arizona Court of Appeals Division One Holds That a Tax Discrimination Claim May Be Based on the Initial Values Assessed.

Appellees Taxpayers sued Appellant Maricopa County for property tax discrimination in violation of the Uniformity Clause of the Arizona Constitution, which states that “all taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax.”  Ariz. Const. art. 9 § 1.  During the 1995-1996 tax period, the County valued Taxpayers’ properties at 100% of their full cash value while rolling over valuations on similar properties, resulting in valuations less than full cash value.  Taxpayers prevailed on summary judgment.  The court awarded Taxpayers a portion of their requested costs and $30,000 in attorneys’ fees, but denied their expert witness costs.  The County timely appealed the grant of summary judgment, and Taxpayers timely cross-appealed the costs and fees awards.

The Arizona Appeals Court affirmed the summary judgment but vacated and remanded the costs award.  Citing Aileen H. Char Life Interest v. Maricopa County, 208 Ariz. 386, 93 P.3d 486 (2004), the Court first held that tax discrimination applies with respect to initial values assessed by the County, not just final tax values or taxes actually paid.  The Court noted two practical problems with requiring evidence of final tax values to establish tax discrimination: (1) final tax values resolved through administrative appeals are based on evidence from the initial valuation; and (2) if a taxpayer appeals the administrative appeal to the State Board of Equalization, the taxpayer must still use evidence from the initial valuation.  Consequently, evidence surrounding the initial valuation is necessary to demonstrate any tax discrimination.

The Court then held that a reasonable jury could not have found in favor of the County on Taxpayer’s tax discrimination claim.  Discriminatory valuation requires proof that (1) taxing officials acted deliberately and systematically, and (2) their conduct resulted in “greatly disproportionate tax treatment” within a class of property.  The Court held that the County’s conduct was deliberate and systematic, a finding consistent with Aileen Char.  The Court rejected the County’s argument that its conduct was based on a coding mistake, noting that the County did not merely make an appraisal error, but repeatedly applied a wholly different valuation procedure to properties within the same class.  The Court also held that the County’s conduct caused a great inequality – Taxpayers’ property was valued at 100% of its full cash value while the favored properties were valued at only 56% of full cash value.  The fact that only a small percentage of the class was favored was irrelevant to the inequality analysis. 

Finally, the Court affirmed the $30,000 award of attorneys’ fees, holding that the $30,000 statutory limit in A.R.S. 12-348 applied to each judicial level of appeal.  It also affirmed the trial court’s denial of an award of expert witness fees.  It vacated and remanded the costs award, however, because Taxpayers’ were entitled to recover all costs that were not contested.

Presiding Judge Portley authored the opinion; Judges Barker and Gemmill concurred.

Arpaio v. Davis (6/2/09):  Arizona Court of Appeals Division One Affirms that Arizona Supreme Court Rule 123 Governs Requests for Judicial Records and a Presiding Judge May Appoint Another Judge on the Same Court to Perform an Administrative Review of Requested Records.

Sheriff Arpaio’s office sent several judicial records requests to the Maricopa County Superior Court.  The requests were made under Arizona’s Public Records Law and asked for all e-mails, memoranda, notes, and letters to or from various court personnel for the period of time from November 1, 2007, to December 7, 2007.  The requests contained no other limiting criteria.  The Court Administrator denied the requests on multiple grounds:  (1) they should have been made under Supreme Court Rule 123; (2) they lacked sufficient specificity; (3) they would create an undue financial burden and interfere with the court’s operations; and (4) they sought documents that were judicial work product or administrative records, which are not subject to public inspection.  Thereafter, the Sheriff filed a formal Request for Administrative Review.  Judge Norman Davis conducted a review on the merits and upheld the denial of the records request.  This special action followed.

The Arizona Appeals Court affirmed that Rule 123 governs requests for judicial records.  The Court concluded that Rule 123 is consistent with other public records laws in that the rule strikes an appropriate balance between the public’s interest in providing access to court records and the government’s interest in avoiding requests that impose an undue financial burden, are duplicative, or substantially interfere with court operations.  The Court further concluded that Judge Davis properly performed the administrative review because, contrary to the Sheriff’s argument, Judge Davis is not a subordinate employee of the presiding judge; Judge Davis is independently elected and his resulting decision was not subject to approval by the presiding judge.  Lastly, the Court found that Judge Davis did not abuse his discretion in upholding the Maricopa County Superior Court’s refusal to comply with the records request because an excessive amount of the court’s time would have been required to review the thousands of documents that fell within the Sheriff’s overbroad requests.

Judge Orozco authored the opinion; Judges Swann and Norris concurred.

State v. Western Union Financial Services, Inc. (06/03/2009): Arizona Supreme Court Holds That State Lacks In Rem Jurisdiction To Issue Warrants Seizing Money Transfers Sent From Other States to Mexico.

As part of its law enforcement efforts against human smuggling and drug trafficking, the State obtained a warrant for the seizure of person-to-person wire transfers made through Western Union, initiated in twenty-eight states other than Arizona to certain locations in Sonora, Mexico.  The State’s affidavit in support of the warrant application alleged that many of these out-of-state transfers involved funds from racketeering activities in Arizona, although the affidavit did not identify any specific person, property, or transactions.

After an evidentiary hearing, the superior court quashed the warrant, holding that the court lacked jurisdiction to seize transfers from other states to Sonora, that the State failed to show probable cause regarding any particular transfer, and that the warrant violated the Commerce Clause.  The Court of Appeals vacated, holding that because Western Union was subject to general personal jurisdiction in Arizona, “its debts [in the form of electronic credits in its system] can be considered within this state for purposes of in rem jurisdiction.”  Therefore, the appeals court held that the Attorney General could seize transfers that were neither to nor from a person in Arizona.

In a 4-1 decision, the Arizona Supreme Court reversed.  The Court concluded that in rem jurisdiction could only be justified if the property subject to the warrant was present within Arizona.  Thus, the “primary question” was whether “a money transfer sent from a state other than Arizona to a recipient in Sonora, Mexico” is “located within this state for purposes of in rem jurisdiction.”

The State argued that Arizona could seize the out-of-state transfers, relying on the “Harris fiction” “that a debt follows the debtor and is located wherever the debtor can be found.”  See Harris v. Balk, 198 U.S. 215 (1905). The State contended that because Western Union was located in and subject to jurisdiction in Arizona, so were the “debts” or “electronic credits.”

The Court rejected the State’s arguments.  First, the Court distinguished Harris factually, analogizing Western Union to a courier “who has agreed to deliver a package containing cash from Colorado to Mexico.”  Arizona courts could not exercise in rem jurisdiction over the package while it was outside Arizona, even though Western Union is subject to personal jurisdiction in Arizona.  Second, the Court explained that while Harris may have once been useful for determining quasi in rem jurisdiction, it has since been replaced by the “minimum contacts” analysis.  Finally, the Court held that funds from a wire transfer initiated in another state by a non-resident and transmitted to another non-resident in a foreign country were not “present” in Arizona, even though Western Union was subject to general personal jurisdiction in Arizona, and even if the funds allegedly resulted from illegal conduct in Arizona.

Judge Espinosa dissented, reasoning that the electronic credits existed wherever Western Union was located because a recipient could “go to any Western Union station and instantly receive the money.”   He wrote that, as a fact of Western Union’s business, “the funds must be at that location, both conceptually and physically.”  He further argued that because significant parts of the smuggling and drug operations took place in Arizona, Arizona was likely the only state with sufficient contacts to the electronic credits, and thus had the power to exercise in rem jurisdiction over them.

Justice Hurwitz authored the majority opinion in which Chief Justice McGregor, Justice Ryan, and Justice Bales all joined.  Vice-Chief Justice Berch recused herself; Judge Espinosa, sitting by designation, dissented.

King v. Titsworth (6/04/2009):  Division One of the Arizona Court of Appeals Holds That a Request for Attorneys’ Fees Must Be Made in the Pleadings Under Ariz. R. Civ. P. 54(g)(1).

After the Kings filed a complaint against Titsworth for breach of a settlement agreement, Titsworth answered pro per.  His answer did not include a request for attorneys’ fees.  Titsworth subsequently retained counsel, but never moved to amend his answer to include a request for attorneys’ fees.  Titsworth prevailed at trial and filed an application for attorneys’ fees pursuant to Arizona Rule of Civil Procedure 54(g) and A.R.S. § 12-341.01.  The Kings opposed the motion, arguing that Titsworth had failed to include a request for attorneys’ fees in his pleadings, as required by Rule 54(g)(1).  The trial court awarded Titsworth attorneys’ fees and the Kings appealed.

The Arizona Court of Appeals vacated the trial court’s award of fees, holding that pursuant to Rule 54(g)(1), “a claim for attorneys’ fees shall be made in the pleadings.”  The Court cited Rule 7(a), which defines “pleadings” to include a complaint, an answer, a counterclaim, a cross-claim, a third-party complaint, a third-party answer, and a reply.  Because Titsworth’s first claim for attorneys’ fees was made in a motion filed pursuant to Rule 54(g)(2), the trial court erred in awarding him fees. 

Judge Barker authored the opinion, Judges Thompson and Timmer concurred. 

Batty v. Glendale Union High School Dist. No. 205 (6/02/2009): Arizona Court of Appeals Division One Holds that Notice of Claim Against School District Must Be Served on the District Governing Board, Not Superintendent.

Plaintiff filed suit against a school district (“District”) for injuries allegedly resulting from an accident on school grounds.  The District moved for summary judgment, alleging that Plaintiff had failed to comply with A.R.S. § 12-821.01(A) by not serving a notice of claim on the District’s governing board.  The superior court granted summary judgment to the District.  Plaintiff appealed.

Section 12-821.01(A) requires filing a notice of claim against a public entity within 180 days after a cause of action accrues.  Rule 4.1(i), Ariz. R. Civ. P., provides that service on a governmental subdivision of the state is effected by delivery “to the chief executive officer, the secretary, clerk, or recording officer thereof.”  The Arizona Supreme Court has held that a county board of supervisors constitutes the county “chief executive officer” (“CEO”) for purposes of Rule 4.1(i).  Falcon ex rel. Sandoval v. Maricopa County, 213 Ariz. 525, 531 ¶ 34, 144 P.3d 1254, 1260 (2006).

The Court of Appeals affirmed summary judgment for the District.  The Court rejected Plaintiff’s argument that he satisfied § 12-821.02(A) by serving the District superintendent, who Plaintiff claimed was the District’s CEO for purposes of Rule 4.1(i).  The Court held that the decision in Falcon was controlling, and that the District governing board thus constituted the District CEO for purposes of Rule 4.1(i).  The Court also rejected Plaintiff’s argument that Falcon did not apply retroactively, reasoning that the Arizona Supreme Court had applied its ruling retroactively in the Falcon decision itself.     

Presiding Judge Weisberg wrote the opinion; Judges Gemmill and Barker concurred.

Cardi Am. Corp. v. All Am. House & Apartment Movers, L.L.C. (5/26/2009):  Arizona Court of Appeals Division Two Holds That Where a Lease Provides for Its Termination at the Lessor ’s Option on Condemnation of the Property, the Lessee Has No Right to Compensation for the Taking if the Option is Exercised.

Appellant All American leased property owned by Appellee Cardi.  Although the lease was to expire in 2015, it stated:  “Should all or a substantial portion of the premises . . . be taken by eminent domain, then Landlord may elect to, at its sole discretion, terminate this Lease.”  In January 2008, pursuant to a condemnation complaint, an order was entered allowing the State to take possession of the property All American was leasing.  Cardi then mailed a notice to All American terminating the lease.  In the condemnation proceeding, Cardi moved for partial summary judgment against All American based on the termination clause.  The court granted Cardi’s motion, finding that All American had no compensable interest in the property after Cardi exercised its option to terminate the lease.  All American timely appealed. 

The Arizona Appeals Court affirmed.  The Court explained that a tenant generally has a compensable interest in the unexpired term of a lease upon condemnation.  Citing State v. Starzinger, 179 N.W.2d 761 (Iowa 1970), however, the Court also explained that when a lease provision gives the lessor the option of terminating upon condemnation, and that option is exercised, the lessee is barred from sharing in the damages awarded for the condemned property.  Accordingly, the Court held that Cardi’s termination of the lease based on the termination provision extinguished All American’s rights to compensation upon condemnation.

The Court rejected All American’s argument that the termination clause was ineffective and redundant because eminent domain naturally terminates a lease.  The court explained that it must consider all provisions of a lease when ascertaining the parties’ intent, and will not assume that the parties would include an inherently redundant or ineffective clause.          

Presiding Judge Eckerstrom authored the opinion; Judges Brammer and Vasquez concurred.

Jordan v. Hon. Rea/Romine (05/29/2009):  Division One of the Arizona Court of Appeals Holds That a Court May Order an Objecting Parent to Pay Child Support to Cover Private Religious School Tuition After Determining Such a School Placement Is in the Child’s Best Interest.

A father with joint custody of his two children filed a petition to modify child support payments, including a reduction of his obligation to pay tuition for them to attend a private religious school.  A commissioner ruled that Father was required to pay the tuition based on the parents’ pattern and practice of sending their children to private religious school before and after their divorce.  The commissioner found that neither parent could modify the schooling choice without consent of the other or a court order.  Father’s appeal of the commissioner’s ruling is still pending.  Father subsequently filed a petition in family court to enforce the parties’ parenting plan, arguing that the commissioner’s ruling violated the parenting plan’s terms and his constitutional right to direct his children’s education and upbringing .  Judge Rea ruled Father’s favor, reduced Father’s child support obligations, and required Mother to select a different school.  Mother filed a special action petition.  The Arizona Appellate Court accepted jurisdiction.

Division One of the Arizona Court of Appeals vacated the family court’s order.  First, the Court held that a private religious school could not be precluded from consideration solely because it is religious school, reasoning that the parties’ parenting plan provided for mutual cooperation as to the children’s education and religious upbringing and gave neither parent the ability to object to placement in a private religious school.  Second, the Court held that a best interest standard applies when determining a child’s school placement.   The Court identified numerous factors to be considered in making the best interests determination, including those set forth in A.R.S. § 25-403(A).  Finally, the Court held that, notwithstanding a parent’s objection, the superior court may order the objecting parent to participate in paying for private religious school tuition if the court concludes that it is in the best interests of the children to attend such a school.  The Court noted, however, that a superior court can also decline to order these expenses based on the parents’ inability to pay the tuition.

Judge Barker authored the opinion, Judges Weisberg and Gemmill concurred. 

Douglas v. Governing Board of Window Rock (5/28/2009):  Court of Appeals Division One Holds That Acceptance of Rule 68 Offer of Judgment Encompasses Both Individual and Class Claims Unless the Offer Specifies Otherwise.

Plaintiffs sued the Governing Board of Window Rock, both individually and as representatives of a class.  Prior to obtaining class certification, Plaintiffs executed a Rule 68 Offer of Judgment from the Defendant.  Plaintiffs then moved to certify the class, the trial court decreed their motion moot, and this appeal followed.

Division One of the Court of Appeals dismissed Plaintiffs’ appeal for lack of jurisdiction.  The Court found that Plaintiffs were not “aggrieved parties” with standing to appeal because they voluntarily stipulated to the judgment.  The Court of Appeals rejected Plaintiff’s argument that the Rule 68 Offer of Judgment resolved only their individual claims and not their claims as class representatives.  The Court held that a Rule 68 Offer of Judgment encompasses all claims unless the offer specifically says otherwise.

Judge Barker authored the opinion, with Judges Weisberg and Gemmill concurring.

Kline v. Kline (5/21/09):  Court of Appeals Division One Holds That an Award of Spousal Maintenance by Default Judgment is Invalid Under ARFLP 44(G) Where the Pleading Requesting Spousal Maintenance Is Never Served, Unless the Lack of Service Causes No Prejudice.

Wife filed a petition for dissolution of marriage, which she served on Husband.  Wife amended the petition, and for the first time asserted a specific demand for spousal maintenance, but failed to serve Husband with the amended petition.  Thereafter, Wife served a petition for temporary orders, seeking a temporary award of spousal maintenance.  Husband’s counsel appeared at the evidentiary hearing and expressly confirmed his knowledge of the request for spousal maintenance.  Husband failed to respond to Wife’s petitions, Wife filed for entry of a default judgment, and the trial court entered default judgment, including an award for spousal maintenance.  This appeal followed.

The Arizona Appeals Court affirmed both the default award of spousal maintenance and the default judgment.  First, the Court found that while the trial court’s entry of a default judgment ordinarily cannot be appealed, Husband’s appeal could proceed because he challenged the validity of the default judgment under ARFLP 44(G), which is analogous to ARCP 55 (allowing appeals addressing the validity of default judgments). 

Addressing the merits, the Court held that an award of spousal maintenance by default is not valid under ARFLP 44(G) when the specific demand for maintenance is contained in a pleading that was never served, unless the lack of proper service does not prejudice the defaulting party.  The Court concluded that Wife’s first amended petition was the only basis for the spousal maintenance award and that wife had failed to properly serve the amended petition.  Nonetheless, the Court found that Husband was not prejudiced because Husband’s counsel acknowledged at the hearing on Wife’s petition for temporary orders that the first amended petition contained a request for spousal maintenance.  Because Husband had notice that Wife sought spousal maintenance prior to default, he could not benefit from ARFLP 44(G)’s protections.

Judge Swann authored the opinion; Judges Orozco and Irvine concurred.    

Douglas v. Governing Board of Window Rock (5/28/2009):  Court of Appeals Division One Holds That Acceptance of Rule 68 Offer of Judgment Encompasses Both Individual and Class Claims Unless the Offer Specifies Otherwise.

Plaintiffs sued the Governing Board of Window Rock, both individually and as representatives of a class.  Prior to obtaining class certification, Plaintiffs executed a Rule 68 Offer of Judgment from the Defendant.  Plaintiffs then moved to certify the class, the trial court decreed their motion moot, and this appeal followed.

Division One of the Court of Appeals dismissed Plaintiffs’ appeal for lack of jurisdiction.  The Court found that Plaintiffs were not “aggrieved parties” with standing to appeal because they voluntarily stipulated to the judgment.  The Court of Appeals rejected Plaintiff’s argument that the Rule 68 Offer of Judgment resolved only their individual claims and not their claims as class representatives.  The Court held that a Rule 68 Offer of Judgment encompasses all claims unless the offer specifically says otherwise.

Judge Barker authored the opinion, with Judges Weisberg and Gemmill concurring.

Cardi Am. Corp. v. All Am. House & Apartment Movers, L.L.C. (5/26/2009):  Arizona Court of Appeals Division Two Holds That Where a Lease Provides for Its Termination at the Lessor ’s Option on Condemnation of the Property, the Lessee Has No Right to Compensation for the Taking if the Option is Exercised.

Appellant All American leased property owned by Appellee Cardi.  Although the lease was to expire in 2015, it stated:  “Should all or a substantial portion of the premises . . . be taken by eminent domain, then Landlord may elect to, at its sole discretion, terminate this Lease.”  In January 2008, pursuant to a condemnation complaint, an order was entered allowing the State to take possession of the property All American was leasing.  Cardi then mailed a notice to All American terminating the lease.  In the condemnation proceeding, Cardi moved for partial summary judgment against All American based on the termination clause.  The court granted Cardi’s motion, finding that All American had no compensable interest in the property after Cardi exercised its option to terminate the lease.  All American timely appealed. 

The Arizona Appeals Court affirmed.  The Court explained that a tenant generally has a compensable interest in the unexpired term of a lease upon condemnation.  Citing State v. Starzinger, 179 N.W.2d 761 (Iowa 1970), however, the Court also explained that when a lease provision gives the lessor the option of terminating upon condemnation, and that option is exercised, the lessee is barred from sharing in the damages awarded for the condemned property.  Accordingly, the Court held that Cardi’s termination of the lease based on the termination provision extinguished All American’s rights to compensation upon condemnation.

The Court rejected All American’s argument that the termination clause was ineffective and redundant because eminent domain naturally terminates a lease.  The court explained that it must consider all provisions of a lease when ascertaining the parties’ intent, and will not assume that the parties would include an inherently redundant or ineffective clause.          

Presiding Judge Eckerstrom authored the opinion; Judges Brammer and Vasquez concurred.