Stagecoach Trails MHC, L.L.C. v. City of Benson

SUPREME COURT OF ARIZONA
En Banc
STAGECOACH TRAILS MHC, L.L.C., ) Arizona Supreme Court
) No. CV-12-0241-PR
Plaintiff/Appellee, )
) Court of Appeals
v. ) Division Two
) No. 2 CA-CV 11-0085
CITY OF BENSON, a municipal )
corporation; CITY OF BENSON ) Cochise County
BOARD OF ADJUSTMENT, a body ) Superior Court
politic; and BRAD HAMILTON, ) No. CV-201000395
Zoning Administrator for the )
City of Benson, )
)
Defendants/Appellants. ) O P I N I O N
)
__________________________________)
Appeal from the Superior Court in Cochise County
The Honorable Stephen M. Desens, Judge
The Honorable Wallace R. Hoggatt, Judge
VACATED
________________________________________________________________
Opinion of the Court of Appeals Division Two
229 Ariz. 536, 278 P.3d 314 (2012)
VACATED AND REMANDED
________________________________________________________________
LEWIS AND ROCA LLP Tucson
By John C. Hinderaker
Kimberly A. Demarchi
Jeffrey L. Sklar
Attorneys for Stagecoach Trails MHC, L.L.C.
SIMS MURRAY Phoenix
By Jeffrey T. Murray
Kristin M. Mackin
Attorneys for City of Benson, City of Benson Board of
Adjustment, and Brad Hamilton
LEAGUE OF ARIZONA CITIES AND TOWNS Phoenix
By Joni L. Hoffman
and
SORENSEN LAW, PLLC Phoenix
By Lesli Sorensen
Attorneys for Amicus Curiae League of Arizona Cities and Towns
________________________________________________________________
B A L E S, Vice Chief Justice
¶1 This case involves Stagecoach Trails MHC, L.L.C.’s
quest for a permit to install a new home in its manufactured
home park after a space became vacant. A key issue is whether
the entire park, or only an individual space therein, is a
nonconforming use, exempt under A.R.S. § 9-462.02(A) from
complying with provisions of the City of Benson’s zoning code.
The trial court ruled that the entire park is a nonconforming
use, but the court of appeals declined to address that issue,
ruling that the trial court lacked jurisdiction over certain
claims because they had not been administratively exhausted.
¶2 We hold that the trial court properly exercised
jurisdiction. Accordingly, we vacate the opinion of the court
of appeals and remand to that court to consider, among any other
issues, whether the park as a whole or an individual space is
the nonconforming use. We also hold that Stagecoach is not
entitled to an award of attorney fees under A.R.S. § 12-2030
because this is not a mandamus action.
2
I.
¶3 Stagecoach operates a 50-space manufactured home park
in Benson. In 1998, the City amended § 16 of the Benson Zoning
Regulations to increase the size and setback requirements for
spaces within manufactured home parks. The City did not
initially apply the amendments to existing parks, but it
notified park operators in 2009 that it would begin enforcing
the requirements when individual homes were replaced.
¶4 Municipal zoning regulations are subject to A.R.S.
§ 9-462.02(A), which provides that “[n]othing in [such
regulations] shall affect existing property or the right to its
continued use for the purpose used at the time the . . .
regulation takes effect, nor to any reasonable repairs or
alterations in buildings or property used for such existing
purpose.” The right to continue a nonconforming use, however,
does not authorize a different use inconsistent with zoning
regulations. Outdoor Sys., Inc. v. City of Mesa, 169 Ariz. 301,
308, 819 P.2d 44, 51 (1991); Patricia E. Salkin, 2 American Law
of Zoning § 12.36 (5th ed. 2012).
¶5 In January 2010, Stagecoach applied for a permit to
install a manufactured home on space 27 after the space became
vacant. The City’s zoning administrator denied the application,
asking Stagecoach to show that the home would comply with
amended § 16 because, under § 18 of the City’s zoning
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regulations, a new building must conform to existing regulations
when it replaces a building that was a nonconforming use. The
zoning administrator directed Stagecoach to show, among other
things, that the new manufactured home would meet setback
requirements applicable to lots in an R-3 District and have two
improved parking spaces. (Apart from § 16, the City’s zoning
code in § 7 identifies requirements for areas designated as R-3
Residential Districts.)
¶6 Stagecoach appealed the permit denial to the City’s
Board of Adjustment (“BOA”), arguing that the entire park is a
nonconforming use under § 9-462.02(A) and that it was entitled
to replace an individual home without relinquishing the
nonconforming-use status. Rejecting this argument, the BOA
agreed with the City that the particular space was the
nonconforming use and affirmed the zoning administrator’s denial
of the permit.
¶7 Stagecoach then filed a two-count special action in
superior court. Count I asked the court to declare the amended
§ 16 invalid, to direct the zoning administrator to process or
grant the permit without applying that section, and to award
Stagecoach its attorney fees and costs under § 12-2030. Count
II appealed the BOA’s decision under A.R.S. § 9-462.06(K),
arguing that even if the amendments to § 16 were valid, the
regulation did not apply because the park was a nonconforming
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use under § 9-462.02(A) and § 18 of the Benson zoning
regulations.
¶8 After Stagecoach sued, the City acknowledged that the
amendments to § 16 had not been properly adopted. The zoning
administrator then sent Stagecoach a letter in July 2010 stating
that the permit application had been reconsidered without regard
to the amended § 16 and was being denied because the site plan
did not, among other things, show that space 27 would conform to
the setback requirements for the R-3 District.
¶9 The City filed a motion asking the trial court to
declare Count I moot because, regardless of the validity of the
amended § 16, the City would not issue the permit. The court
denied the motion and, instead, granted partial summary judgment
to Stagecoach, ruling that the 1998 amendments to § 16 were
void. Stagecoach then filed a supplemental special action
complaint challenging the reasons for denial outlined in the
City’s July 2010 letter and asking the court to direct the
zoning administrator to issue the permit.
¶10 The City issued another letter to Stagecoach in
September 2010, again explaining that space 27 did not comply
with the City’s zoning requirements for an R-3 District. With
regard to the denial of the permit, the September 2010 letter
was identical to the January 2010 letter except the September
letter (1) did not refer to size requirements for individual
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spaces imposed by the amended § 16, (2) explained how R-3
setback requirements should be measured, and (3) required
Stagecoach to identify one improved parking space instead of
two. Stagecoach filed a second supplemental special action
complaint challenging the permit denial in the September 2010
letter.
¶11 The trial court denied the City’s motions to dismiss
the supplemental special action complaints. It ruled that the
BOA had considered not only the application of amended § 16, but
also whether Stagecoach had a right to place a new manufactured
home on space 27 as a nonconforming use. Accordingly, the trial
court ruled that Stagecoach had properly exhausted its
administrative remedies and was not required to bring the issues
raised in the zoning administrator’s two additional letters
before the BOA. The court ordered the City to issue the permit,
characterizing the order as equitable relief in the nature of
mandamus, and awarded attorney fees and costs to Stagecoach.
¶12 The City appealed. The court of appeals reversed the
trial court’s denial of the City’s motion to dismiss the two
supplemental special action claims, its grant of mandamus
relief, and its award of attorney fees. Stagecoach Trails MHC,
L.L.C. v. City of Benson, 229 Ariz. 536, 543 ¶ 27, 278 P.3d 314,
321 (App. 2012). Noting that judicial review of BOA decisions
is limited to the record before the board at the time of its
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decision, see A.R.S. § 9-462.06(K), the court of appeals stated
that the BOA had not considered whether space 27 would have been
a legal use before the adoption of the amended § 16.
Stagecoach, 229 Ariz. at 539-40 ¶¶ 15, 17-18, 278 P.3d at 317-
18. It therefore held that the trial court did not have
jurisdiction to consider the letters of July and September 2010
outlining additional reasons for denying the permit because
those issues had not been administratively exhausted under § 9-
462.06. Id. at 540-41 ¶ 19, 287 P.3d at 318-19. Because
Stagecoach had not obtained relief in the nature of mandamus,
the court of appeals also held that the trial court erred in
granting mandamus relief and awarding attorney fees under A.R.S.
§ 12-2030. Id. at 542 ¶¶ 23-24, 287 P.2d at 320.
¶13 We granted Stagecoach’s petition for review to address
the exhaustion requirement and the recovery of fees under
§ 12-2030. We have jurisdiction under Article 6, Section 5(3)
of the Arizona Constitution and A.R.S. § 12–120.24.
II.
¶14 A party must exhaust available administrative remedies
“before appealing to the courts.” Minor v. Cochise Cnty., 125
Ariz. 170, 172, 608 P.2d 309, 311 (1980). Consistent with this
principle, trial courts generally lack jurisdiction to review
challenges to a zoning administrator’s decision that have not
been appealed to the board of adjustment. See, e.g., Neal v.
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City of Kingman, 169 Ariz. 133, 136, 817 P.2d 937, 940 (1991)
(holding that under § 9-462.06, a trial court can only review
claims litigated before the board of adjustment and may not
review additional claims not raised before the board); Sw. Soil
Remediation, Inc. v. City of Tucson, 201 Ariz. 438, 442 ¶ 16, 36
P.3d 1208, 1212 (App. 2001) (holding that trial court lacked
jurisdiction over claims in supplemental complaint seeking to
challenge zoning administrator’s decision without first
appealing to board of adjustment). The court of appeals relied
on this rule to conclude that the trial court lacked
jurisdiction to review the zoning administrator’s denial of a
permit in the July and September 2010 letters. Stagecoach, 229
Ariz. at 540 ¶¶ 17-18, 278 P.3d at 318.
¶15 We agree with the trial court that Stagecoach was not
required to appeal again to the BOA after the zoning
administrator reaffirmed his earlier denial of a permit. The
parties, although differing on many issues, have consistently
recognized that a key issue is whether the entire park or
instead an individual space is the nonconforming use.
Stagecoach has never argued that the new manufactured home on
space 27 will comply with the R-3 setback requirements or any
requirement for improved parking spaces. Instead, Stagecoach
has argued that these requirements do not apply because the
entire park is the nonconforming use and replacing individual
8
manufactured homes within the park is merely a continuation of
the existing use that does not alter the park’s nonconforming
status. In contrast, the City argues that, because the
individual space is the nonconforming use, placing a new home on
the space is a different use that must satisfy current zoning
requirements. The City has not argued, however, that if the
park is the nonconforming use, replacing an individual home
would alter the use and subject the park, and each space, to
current zoning regulations.
¶16 Stagecoach raised the nonconforming-use issue before
the BOA in April 2010, but the BOA agreed with the City that the
individual space, not the entire park, was the nonconforming
use, and therefore setbacks and other requirements could be
imposed when a home is replaced. Stagecoach challenged this
determination in the trial court. After recognizing that the
amendments to § 16 were invalid, the City reaffirmed its denial
of a permit on the theory that, because the space was the
nonconforming use, the R-3 District requirements apply to the
installation of a new manufactured home. No purpose would have
been served by requiring Stagecoach to appeal the July and
September 2010 letters to the BOA, which had already rejected
Stagecoach’s arguments that space 27 was not subject to these
requirements. Exhaustion is not required when the pursuit of
administrative remedies would be futile. See Minor, 125 Ariz.
9at 173, 608 P.2d at 312; Estate of Bohn v. Waddell, 174 Ariz.
239, 248, 848 P.2d 324, 333 (App. 1992).
¶17 In these circumstances, the trial court properly
exercised jurisdiction over Stagecoach’s initial and
supplemental special-action claims. Accordingly, we remand the
case to the court of appeals to address whether Stagecoach’s
entire park or only each space is entitled to nonconforming-use
status. Our remand does not preclude the court of appeals from
addressing other issues, not decided here, properly raised by
the City in appealing from the trial court’s judgment or by
Stagecoach in responding to the appeal.
III.
¶18 We turn to the award of attorney fees under § 12-2030.
This statute requires a court to award fees to a party that
“prevails by an adjudication on the merits in a civil action
brought by the party . . . to compel a state officer or any
officer of any political subdivision of this state to perform an
act imposed by law as a duty on the officer.” Fees are
awardable under § 12-2030 in actions that either seek relief in
the nature of mandamus or are statutorily designated as mandamus
actions. See A.R.S. § 19-121.03(A) (authorizing mandamus action
to compel election officer to certify ballot measure);
Fleischman v. Protect Our City, 214 Ariz. 406, 410 ¶ 26, 153
P.3d 1035, 1039 (2007) (holding § 12-2030 does not authorize fee
10
award in action under § 19-121.03(B) challenging officer’s
completed certification).
¶19 An action is in the nature of mandamus if it seeks to
compel a public official to perform a non-discretionary duty
imposed by law. Sears v. Hull, 192 Ariz. 65, 68 ¶ 11, 961 P.2d
1013, 1016 (1998); see also Marbury v. Madison, 5 U.S. 137, 169
(1803) (discussing nature of mandamus); A.R.S. § 12-2021
(authorizing writ of mandamus to compel “performance of an act
which the law specially imposes as a duty resulting from an
office, trust or station”). An application for mandamus,
however, is not a substitute for an appeal challenging an
administrative decision, which instead proceeds through a
statutory appeal or an action for writ of certiorari. See
A.R.S. § 12-2001; Rosenberg v. Ariz. Bd. of Regents, 118 Ariz.
489, 493, 578 P.2d 168, 172 (1978).
¶20 Stagecoach alleged two counts in its special action
complaints. Count II sought review of the BOA’s decision
pursuant to § 9-462.06(K), but that statute does not authorize a
mandamus action or relief in the nature of mandamus and thus
cannot support a fee award under § 12-2030. Count I sought a
declaratory judgment invalidating the amendments to § 16 and a
determination that the zoning administrator had not properly
applied the zoning regulations in denying a permit. Count I
also sought “mandamus” directing the zoning administrator to
11
process the application or issue the permit notwithstanding the
reasons for denial noted in his letters.
¶21 Although Stagecoach styled its claim in Count I as one
for mandamus, the action does not seek relief in the nature of
mandamus. Stagecoach does not challenge an officer’s failure to
act, but instead contends he either misapplied or misinterpreted
the regulations. Cf. Fleischman, 214 Ariz. at 410 ¶ 26, 153
P.3d at 1039 (holding fees not awardable under § 12-2030 in
action challenging legality of clerk’s certification of ballot
measure). The zoning administrator complied with his legal duty
by considering and acting on Stagecoach’s permit application.
That Stagecoach challenged the denial does not mean the zoning
administrator failed “to perform an act imposed by law.” A.R.S.
§ 12-2030(A); see also id. § 12-2021.
¶22 That Stagecoach might ultimately prevail, and the
trial court’s order that the City issue a permit for space 27
might be upheld, does not suffice to make this a mandamus
action. Cf. Pedersen v. Bennett, 230 Ariz. 556, 560 ¶ 21, 288
P.3d 760, 764 (2012) (holding § 12-2030 did not require fee
award when plaintiffs ultimately prevailed in action to compel
Secretary of State to accept initiative petitions but legal
duties were only clarified through litigation itself). A
conclusion that an action is one for mandamus merely because a
court ultimately orders compliance with its ruling would
12
effectively eliminate the well-recognized distinction between
mandamus and actions seeking review of administrative actions.
It also would extend the mandatory fee award provisions of
§ 12-2030 to many contexts in which the legislature apparently
intended to apply the fee-award provisions (and limitations) of
A.R.S. § 12-348 (authorizing fee awards in certain cases for
prevailing parties against the state or cities, towns, or
counties).
¶23 Our conclusion also comports with other court of
appeals’ decisions holding that a challenge to a city’s denial
of a zoning permit is not an action in the nature of mandamus.
See Circle K Convenience Stores, Inc. v. City of Phoenix, 178
Ariz. 102, 103, 870 P.2d 1198, 1199 (App. 1993); U.S. Parking
Sys. v. City of Phoenix, 160 Ariz. 210, 213, 772 P.2d 33, 36
(App. 1989). We disapprove of Motel 6 Operating Ltd.
Partnership v. City of Flagstaff, 195 Ariz. 569, 572 ¶ 17, 991
P.2d 272, 275 (App. 1999), insofar as that decision suggests
that fees are awardable under § 12-2030 merely because a party
prevails in challenging a city’s denial of a zoning permit.
¶24 Because this is not a mandamus action, Stagecoach is
not entitled to fees under § 12-2030. Our decision vacating the
trial court’s award of fees under this statute is without
prejudice to Stagecoach seeking, or the City opposing, an award
of fees under other statutes if Stagecoach ultimately prevails.
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We deny Stagecoach’s request for an award of fees under
§ 12-2030 for the proceedings before this Court.
IV.
¶25 For the reasons stated, we vacate the opinion of the
court of appeals and remand to that court to consider whether
the park as a whole or an individual space is entitled to
nonconforming-use status and other relevant, unaddressed issues
raised in the City’s appeal from the trial court’s judgment.
__________________________________
Scott Bales, Vice Chief Justice
CONCURRING:
__________________________________
Rebecca White Berch, Chief Justice
__________________________________
A. John Pelander, Justice
__________________________________
Robert M. Brutinel, Justice
__________________________________
Ann A. Scott Timmer, Justice
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