AZAPP Blog

Premiere RV & Mini Storage LLC v. Maricopa County (9/15/2009): Arizona Court of Appeals Division One Holds that a Property “Split” Occurs For Tax Purposes When the Assessor Completes the Process of Identifying and Valuing the Resulting Parcels, Not When a Portion of the Property Is Sold.

When real property is split, Arizona statutes prescribe two different valuation methods for tax purposes, depending on whether the property is split before or after September 30 of the valuation year.  A.R.S. § 42-13302(A), (B).  The statutes, however, do not define when a “split” occurs for such purposes.  The method used may have an effect on the resulting valuation. 

Taxpayer filed a complaint in Tax Court, alleging that the Maricopa County Assessor had applied the wrong valuation method by failing to recognize that a “split” occurred when a portion of the property was sold.  On cross-motions for summary judgment, the Tax Court agreed with the Taxpayer.  The County appealed.

The Court of Appeals reversed and remanded.  It held that a “split” occurs, for purposes of A.R.S. § 42-13302, when the assessor commits the administrative act of identifying and valuing the separate parcels resulting from a sale.  The “split” does not occur at the time of the sale.

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

Arizona ex rel. Arizona Registrar of Contractors v. Johnston ( 8/27/09):  Arizona Court of Appeals Division One Holds that A.R.S. § 32-1138, which States that the Registrar of Contractors “Shall Promptly Enforce” Subrogation Claims, is not a Statute of Limitations 

Frederico Johnston was a licensed contractor.  On April 13, 2005, the Registrar of Contractors (“ROC”) issued a final judgment awarding two of Johnston’s former customers $16,900 in damages to be paid out of the Registrar’s Residential Recovery Fund.  The former customers assigned their judgment to the ROC on June 16, 2005.  Over two years later, on October 22, 2007, the Attorney General, on behalf of the ROC, filed suit against Johnston to enforce its subrogation rights.  The Johnstons filed a motion to dismiss, arguing that A.R.S. § 32-1138 barred the ROC’s claim.  The trial court granted the Johnstons’ motion.  This appeal followed.

The Arizona Appeals Court held that A.R.S. § 32-1138, which requires that “[t]he [ROC] and the attorney general shall promptly enforce all subrogation claims,” is not a statute of limitations.  The Court reasoned that the statute does not contain an express time limitation for the enforcement of the ROC’s subrogation rights, and the term “shall promptly enforce” as used in the statute is not mandatory. 

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

Gaveck v. Arizona State Board of Podiatry Examiners ( 9/1/2009):  Division One of the Arizona Court of Appeals Holds That Due Process Requires a Professional Licensure Board to Provide Notice of the Standard of Care It Will Apply to a Licensee Charged with a Violation.

Alan Gaveck performed surgery on a patient’s toe.  Complications noticed after the surgery necessitated a second surgery.  The toe did not improve, and it was eventually amputated by another doctor. 

The patient complained to the Arizona State Board of Podiatry Examiners.  Gaveck consented to an informal interview before the Board and attended the interview with his counsel.  During the interview, Gaveck’s counsel requested that the complaint be dismissed because the Board had not disclosed the applicable standard of care and had not presented an expert who could be cross-examined.  The Board refused to dismiss the complaint and, after deliberating, concluded that Gaveck had engaged in unprofessional conduct by failing to obtain the patient’s informed consent before the second surgery and failing to recommend that the patient obtain a specialty consultation or second opinion after the operations.  The Superior Court affirmed.

The Court of Appeals acknowledged that a licensure board may rely on its own expertise to establish the standard of care and need not engage an expert to do so.  Nevertheless, the Court held, even when a board relies on its own expertise on the standard of care, due process requires that the licensee receive notice of the standard the board has chosen to apply.  In this case, Gaveck had received notice of the standard of care on the informed consent allegation—informed consent is governed by statute and the Board had cited the statute in its notice to Gaveck.  On the other hand, the Board had not provided Gaveck with notice of “the exact nature of when and how the Board disagreed with his post-operative management of this patient.”  The court affirmed the Board’s conclusion on the informed consent allegation and remanded to the Board for a new informal interview on the other allegation.

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

Qwest Corp. v. City of Chandler ( 8/27/2009): Arizona Court of Appeals Division One Holds That a Pre-Statehood Franchise for Electric Telegraph Service Does Not Exempt Franchise Holder From Paying Relocation Costs for Telephone and Cable Lines That Interfere With a Public Purpose.

As part of its redevelopment of a designated downtown area, the City of Chandler informed Qwest Corporation that Qwest would need to relocate cable and television lines, at Qwest's own expense. Chandler agreed to allow Qwest to relocate the lines while still retaining the right to seek reimbursement from the City. Qwest filed an action against the City seeking declaratory relief and damages, asserting claims for  inverse  condemnation under the Arizona and United States Constitutions, as well as under 42 U.S.C. § 1983. Qwest based its arguments on its status as a successor to telecommunications entities that operated in Arizona before it became a state. Qwest argued that it held a franchise under an 1877 Law permitting franchise holders to construct and maintain telegraph facilities on public roadways in Arizona. The superior court granted summary judgment Qwest’s favor, and the City appealed.

The Arizona Appeals Court reversed, and directed that summary judgment be entered in favor of the City. The Court held that the common law duty requiring utilities to relocate their property from a public way when necessary to make street improvements, at the utility’s own expense, applied to Qwest's franchise. The Court explained that such duties exist unless a statute otherwise provides, or a city has specifically agreed to pay the utility for the relocation. The Court rejected Qwest's arguments that the 1877 law granting the franchise either abrogated the common law rule, predated the common law rule, or that more recent Arizona statutes are inconsistent with the common law rule. The Court also rejected Qwest's argument that the 1877 law granted it an irrevocable contract to use the areas where it had placed its lines. The Court also held that there was no taking, because Qwest's contract under the 1877 Law had not been impaired, since it continued to enjoy its franchise right to operate in the City and never had a permanent right to any given location for its facilities.

Judge Kessler authored the opinion; Judges Norris and Gemmill concurred.