Contreras Farms v. Phoenix ( 2019 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
CONTRERAS FARMS LIMITED LLC, Plaintiff/Appellant,
v.
CITY OF PHOENIX, et al., Defendants/Appellees.
No. 1 CA-CV 18-0553
FILED 10-29-2019
Appeal from the Superior Court in Maricopa County
No. LC 2015-000267-001
The Honorable Connie Contes, Judge
AFFIRMED
COUNSEL
Gillespie, Shields, Goldfarb, Taylor & Houk, Phoenix
By Kristina B. Reeves, April Maxwell
Counsel for Plaintiff/Appellant
Burch & Cracchiolo PA, Phoenix
By Daryl Manhart, Andrew Abraham, Casey S. Blais
Co-Counsel for Defendants/Appellees
Phoenix City Attorney’s Office, Phoenix
By Brad Holm
Co-Counsel for Defendants/Appellees
CONTRERAS FARMS v. PHOENIX, et al.
Opinion of the Court
OPINION
Presiding Judge Michael J. Brown delivered the opinion of the Court, in
which Judge Kenton D. Jones and Judge Lawrence F. Winthrop joined.
B R O W N, Judge:
¶1 Contreras Farms Limited, LLC (“CFL”) appeals the superior
court’s order finding that under state law CFL was not entitled to
administratively appeal a requirement to construct a water main pursuant
to Phoenix City Code § 37–33(a). For the following reasons, we affirm.
BACKGROUND
¶2 Arizona law, by statute, gives property owners the right to an
administrative appeal when a city or town requires “a[n] exaction as a
condition of granting approval for the use, improvement or development
of real property.” A.R.S. § 9-500.12(A)(1).1 The right to pursue such an
appeal, however, “does not apply to a[n] . . . exaction required in a
legislative act by the governing body of a city or town that does not give
discretion to the administrative agency or official to determine the
[exaction’s] nature or extent.” A.R.S. § 9-500.12(A)(1). In this case, we
address the interplay between § 9-500.12 and a specific mandate in Phoenix
City Code § 37–33(a) that requires developers to “furnish and install . . . all
1 The word “exaction” is not defined under § 9-500.12, but it has been
broadly described as a land-use decision that “condition[s] approval of
development on the dedication of property to public use.” City of Monterey
v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 702 (1999); see also Land-
Use Exaction, Black’s Law Dictionary (10th ed. 2009) (“A requirement
imposed by a local government that a developer dedicate real property for
a public facility or pay a fee to mitigate the impacts of the project, as a
condition of receiving a discretionary land-use approval.”). The City does
not dispute that its decision requiring CFL to construct a water main
constitutes an exaction. Thus, our analysis does not depend on the precise
meaning of the term; instead, we address only whether CFL was entitled to
appeal, pursuant to § 9-500.12, the City’s requirement that CFL construct a
water main.
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CONTRERAS FARMS v. PHOENIX, et al.
Opinion of the Court
water mains . . . within the boundary of the development as well as the
streets bounding the entire development.”
¶3 The material facts relevant to this issue are undisputed. Near
the end of 2013, Entellus, Inc., a civil engineering firm, submitted plans to
the City of Phoenix Planning & Development Department (“Department”)
on CFL’s behalf to build a charter school at 4275 West Baseline Road (the
“Property”), located at the southeast corner of the 43rd Avenue and
Baseline intersection.2 As relevant here, the Department responded that
there were no issues as to the existing 12-inch water main along Baseline
Road but that under “City Code 37–33 . . . [a] 12-inch main extension will
be required to be installed from Baseline to the south property line” along
43rd Avenue. Shortly thereafter, CFL started construction of the charter
school project.
¶4 Meanwhile, Entellus filed a technical appeal with the Water
Services Technical Appeals Committee (“Committee”) requesting that “the
requirement to install a [] 12 [inch] water main extension in 43rd Avenue be
deleted.” Entellus explained that (1) an existing water main was
operational in the original alignment of 43rd Ave; (2) the City’s water
system was already operating “very robustly in the vicinity of the school
site”; and (3) because the school would be connecting to the water main on
Baseline, it would not use or benefit from the required main along 43rd
Avenue. The Committee denied the technical appeal “on the basis that
[§ 37–33] requires all projects to install water mains along each of its project’s
boundaries within paved public streets.” (Emphasis added.)
¶5 Entellus contacted the Committee, asking what the next level
of appeal would be. The Committee informed Entellus that § 37–33 could
not be waived, but CFL could attempt to “demonstrate how the intent of
the Code was already met,” and the Director “may modify or interpret the
code in a way that agrees with your rationale.” The Committee noted,
however, it would be difficult to show that deleting the required water
main extension would fit within the Code’s intent because “the City Code
is pretty clear when requiring that all developments bound their site[s] with
2 The City of Phoenix (“City”) relocated a portion of 43rd Avenue
sometime before December 2013 such that the centerline of the 43rd Avenue
right-of-way located south of Baseline Road was now aligned with the
centerline of the 43rd Avenue right-of-way lying north of Baseline Road.
The realignment resulted in a traditional four-corner intersection.
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Opinion of the Court
water.” (Emphasis added.) CFL did not appeal the Committee’s decision
and proceeded with constructing the 43rd Avenue water main.
¶6 In March 2015, CFL sent the City a demand letter requesting
an exaction appeal under A.R.S. § 9-500.12(A)(1) to challenge the City’s
decision to require installation of the 43rd Avenue water main. The City
denied CFL’s request, stating that “[t]he requirement [CFL] wishes to
appeal is mandated by the City Code and therefore not subject to the appeal
process described in A.R.S. § 9-500.12.” CFL filed a complaint for special
action in the superior court seeking declaratory relief and damages. The
court granted summary judgment in favor of the City, concluding that “[§]
37–33 . . . is generally applicable, giving no discretion to the City to deviate
from its City-wide mandate for construction in furtherance of its master
water grid system.” The court also awarded attorneys’ fees and costs to the
City. This timely appeal followed.
DISCUSSION
¶7 CFL argues the superior court erred in granting summary
judgment because it should have been given the opportunity to challenge
the City’s water main requirement through an exaction appeal as
contemplated by § 9-500.12. Summary judgment is proper when the
moving party “shows that there is no genuine dispute as to any material
fact and the moving party is entitled to judgment as a matter of law.” Ariz.
R. Civ. P. 56(a). We review de novo the court’s grant of summary judgment,
Ochser v. Funk, 228 Ariz. 365, 369, ¶ 11 (2011), as well as the interpretation
of statutes and ordinances, City of Tempe v. Outdoor Sys., Inc., 201 Ariz. 106,
109, ¶ 7 (App. 2001).
¶8 The City required CFL to construct a water main as a
condition of approving CFL’s proposed construction of a charter school.
Thus, CFL had the right to challenge that requirement by pursuing an
exaction appeal with the City unless the water main requirement was (1)
included in a legislative act, and (2) did not give the City’s officials
discretion in determining the nature or extent of the required water main.
See A.R.S. § 9-500.12(A)(1); Am. Furniture Warehouse Co. v. Town of Gilbert,
245 Ariz. 156, 164, ¶ 30 (App. 2018).
¶9 Neither party disputes that § 37–33(a) constitutes a legislative
act as required by the first part of § 9-500.12(A)(1)‘s exception. Home
Builders Ass’n of Cent. Ariz. v. City of Apache Junction, 198 Ariz. 493, 496, ¶ 7
(App. 2000) (stating the adoption of an ordinance “is a legislative act that
carries a presumption of validity”). But the second part of the statute
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Opinion of the Court
requires interpretation of the City’s municipal code to determine whether
the City has discretion in deciding whether, or to what extent, the water
main requirement will be imposed. See A.R.S. § 9-500.12(A)(1). We
interpret § 37–33(a) using the “same rules and principles governing the
construction of statutes” with the primary goal of “ascertain[ing] and
giv[ing] effect to the intent of the law-making body.” Abbot v. City of Tempe,
129 Ariz. 273, 275 (App. 1981). We first look to the plain language of the
provision and read it in the context of the ordinance as a whole “for
guidance and [to ensure we] give effect to all of the provisions involved.”
Stambaugh v. Killian, 242 Ariz. 508, 509, ¶ 7 (2017). If the ordinance is
“subject to only one reasonable interpretation, we apply it without further
analysis.” Wade v. Ariz. St. Ret. Sys., 241 Ariz. 559, 561, ¶ 10 (2017).
¶10 CFL argues the City has discretion to waive or modify the
exaction because § 37–33(a) requires developers to have their plans
approved by the Planning and Development Director, but it does not
“mandate that a city official must require a developer to construct a water
main.” Thus, CFL contends the Director may properly approve
development plans that do not include construction of water mains.
¶11 In relevant part, § 37–33(a) provides:
In . . . all other developments, other than a single residence on
a single lot, where the City is to provide water service, the
developer shall furnish and install in accordance with plans
approved by the Planning and Development Director all water
mains . . . within the boundary of the development as well as the
streets bounding the entire development . . . . In addition, the
developer shall furnish and install all off-site water mains as
necessary to complete a looped connection to existing City
mains as determined by the Planning and Development
Department. All water lines are to be constructed to conform
with the City’s water distribution master grid system, and are
to be constructed as a general area improvement whether
they do, or do not, directly service the property being
developed.
(Emphasis added.) In adopting this language, the city council mandated
that (except for a single residence on a single lot), developers must install
water mains for streets bounding the development even if the water main
will not “directly service the property being developed.” See Phx. City Code
§ 37–33(a); see also Phx. City Code § 1–2 (“The word ‘shall’ is mandatory and
the word ‘may’ is permissive.”).
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Opinion of the Court
¶12 The city council also mandated that developers have the plans
for installing the water mains approved by the Department. The logical
purpose for this requirement is to ensure their plans meet acceptable
engineering standards and conform with the City’s water distribution
master grid system. Although the Department can certainly disapprove
plans that do not conform to those technical requirements, § 37–33(a) does
not grant the Department discretion to determine that installation of a water
main bounding the development is not necessary and thereby waive the
city council’s legislative mandate. In comparison, the Code plainly
provides the Department discretion regarding off-site water mains because
developers are only required to “furnish and install” these mains “as
necessary to complete a looped connection . . . as determined by the Planning
and Development Department.” See Phx. City Code § 37–33(a) (emphasis
added); see also Comm. For Pres. of Established Neighborhoods v. Riffel, 213 Ariz.
247, 249–50, ¶ 8 (App. 2006) (“[W]e assume that when the legislature uses
different language within a statutory scheme, it does so with the intent of
ascribing different meanings and consequences to that language.”); cf. Am.
Furniture Warehouse, 245 Ariz. at 164, ¶ 31 (concluding the town’s
imposition of a fee “necessarily involve[d] discretion” because the amount
of the fee was determined by the property’s categorization, but the
ordinance “[did] not define the categories or provide guidance in
determining which category to use”). As it relates to CFL’s request for an
exaction hearing, § 37–33(a) is subject to only one reasonable
interpretation—an owner seeking to develop property must install water
mains along each street that bounds the proposed development.
¶13 CFL argues nonetheless that the City’s determination that a
12-inch main was necessary involved a “pure exercise of discretion”
because the “City could have ordered a 10-inch, 8-inch, 6-inch, 4-inch or any
other size” water main. Similarly, CFL argues that “[t]he selection of both
the starting point and ending point” of the water main involved discretion.
As the City notes, however, CFL has waived these arguments by failing to
raise them in the superior court. See Englert v. Carondelet Health Network,
199 Ariz. 21, 26, ¶ 13 (App. 2000) (stating “we generally do not consider
issues, even constitutional issues, raised for the first time on appeal”). The
only issue properly before us is whether CFL is entitled to an exaction
appeal hearing based on the requirement that it install a water main along
43rd Avenue. We further note that CFL never requested an exaction
hearing based on the size or length of the water main; it only challenged
whether the water main had to be installed. Thus, we decline to address
whether a party may be entitled to an exaction appeal based on the specific
technical requirements for installing a water main.
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CONTRERAS FARMS v. PHOENIX, et al.
Opinion of the Court
¶14 CFL further contends that if § 37–33(a) does not allow for the
exercise of discretion, then it is legally invalid because it conflicts with two
statutes, A.R.S. §§ 9-463.05 and 15-189.01, that CFL contends place limits on
development fees. But CFL fails to cite any authority supporting the notion
that a uniformly applied requirement to construct a water main could
qualify as a development fee. And the statute authorizing the imposition
of development fees, A.R.S. § 9-463.05, contains no language suggesting
that it applies to these facts.
¶15 Nor are we persuaded that § 37–33(a) conflicts with the plain
language in either cited statute. See also Outdoor Sys., 201 Ariz. at 110, ¶ 11(explaining that our goal in construing the interplay between state statutes
and ordinances is to avoid finding a conflict). The only possible relevance
of § 9-463.05 to this case is subsection (B)(11), which contemplates that a
municipality may require construction of certain facilities “as a condition of
development approval,” and in such a scenario, the municipality “shall
provide a credit toward the payment of a development fee.” CFL has not
identified any portion of the record indicating the City required it to pay a
water development fee and that CFL constructed the water main with the
expectation of a credit towards the fee.
¶16 Finally, § 15-189.01(A) states that “[c]harter schools shall be
classified the same as public schools . . . for the purposes of . . . site plan fees
and development fees.” The statute’s plain language does not exempt
public charter schools from paying development fees or building
infrastructure when required by city or town ordinances. See Kyrene Sch.
Dist. No. 28 v. City of Chandler, 150 Ariz. 240, 243–44 (App. 1986) (concluding
a “water system development fee” and a “wastewater system development
fee” were development “fees” and not taxes; therefore, the school district
was not immune from paying them). Additionally, CFL’s reliance on
Apache Junction for the proposition that municipalities cannot impose
development fees upon public schools is misplaced. In that case, we held
that a city could not impose development fees upon residential
developments for the purpose of public-school financing. 198 Ariz. at 500,
501, ¶¶ 19, 21. Apache Junction is therefore irrelevant to the resolution of the
issue in this case.
¶17 In sum, we hold that the water main requirement at issue here
is a legislative act that does not afford a city official or agency discretion to
determine its nature or extent; therefore, CFL was not entitled to an exaction
appeal under A.R.S. § 9-500.12(A)(1). Given this holding, we need not
address the other arguments raised by the parties.
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Opinion of the Court
CONCLUSION
¶18 We affirm the superior court’s order granting summary
judgment and the related award of attorneys’ fees and costs in favor of the
City. The City requests attorneys’ fees incurred in connection with this
appeal pursuant to A.R.S. § 9-500.12(H), which states that the superior court
has the “authority to award reasonable attorney fees incurred in the
[administrative exaction] appeal and trial pursuant to this section to the
prevailing party.” Because nothing in that language authorizes this court
to award attorneys’ fees, we deny the City’s request.
AMY M. WOOD • Clerk of the Court
FILED: JT
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