Esposito v. Bishop

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

JENNIFER ESPOSITO,
Plaintiff/Appellant,

v.

WILMA BISHOP; TRAVIS LINGENFELTER; BUSTER JOHNSON;
HILDY ANGIUS; RON GOULD; MOHAVE COUNTY; GOLDEN
VALLEY IMPROVEMENT DISTRICT NO. 1,
Defendants/Appellees.

No. 1 CA-CV 24-0533
FILED 04-10-2025

Appeal from the Superior Court in Mohave County
No. S8015CV202300760
The Honorable David Thorn, Judge

AFFIRMED

APPEARANCES

Jennifer Esposito, Kingman
Plaintiff/Appellant

Mohave County Attorney’s Office, Kingman
By Ryan H. Esplin
Counsel for Defendants/Appellees
 ESPOSITO v. BISHOP, et al.
Decision of the Court

MEMORANDUM DECISION

Judge D. Steven Williams delivered the Court’s decision, in which
Presiding Judge Jennifer M. Perkins and Judge James B. Morse Jr. joined.

W I L L I A M S, Judge:

¶1 Jennifer Esposito appeals the grant of summary judgment for
the Mohave County Board of Supervisors, Mohave County, and the Golden
Valley Improvement District No. 1 (collectively “Respondents”). For
reasons that follow, we affirm.

BACKGROUND

¶2 In 1976, the Mohave County Board of Supervisors formed the
Golden Valley Improvement District No. 1 (“GVID”) to provide water
services for “the public convenience, necessity and welfare” of county
residents. Pursuant to A.R.S. § 48-908, the County Board of Supervisors
serves as GVID’s Board of Directors (“the BOD”). GVID is funded from
revenue generated by its water sales.

¶3 It is not clear from the record how many times the BOD
increased water rates between 1976 and 2023. But in May 2023, the BOD
voted to increase water rates after GVID’s annual operation and
maintenance costs exceeded annual revenues for four consecutive years.
The increased rate structure, as it had at least in recent years, charged
different rates for metered customers, standpipe customers within GVID’s
geographical boundaries, and standpipe customers outside of GVID’s
geographical boundaries.

¶4 Esposito owns real property within GVID’s geographical
boundaries, but she is not a GVID customer. Instead, she receives her water
through a commercial delivery service which obtains its water from GVID.
Esposito sued Respondents after the BOD increased water rates. She also
petitioned the superior court for a temporary injunction blocking the
increased rates from taking effect. Among other things, Esposito alleged the
new rate structure increased her water delivery cost by fifty percent.

¶5 The superior court held an evidentiary hearing on Esposito’s
petition for a temporary injunction over two different days (one in June and
one in July), ultimately denying it.

2
 ESPOSITO v. BISHOP, et al.
Decision of the Court

¶6 In November 2023, Respondents moved for summary
judgment. In May 2024, after a change in judicial officers assigned to the
case, the superior court held oral argument on the summary judgment
motion. Esposito asserts that the new judicial officer acknowledged at oral
argument he had not watched the video of the previously held temporary
injunction hearings, nor did he intend to. After taking the matter under
advisement, the court granted summary judgment in favor of Respondents.

¶7 Esposito timely appealed. We have jurisdiction under Article
6, Section 9, of the Arizona Constitution and A.R.S. § 12-2101(A)(1).

DISCUSSION

¶8 On appeal, Esposito argues the superior court erred in three
ways: (1) by failing to determine if the two-day temporary injunction
hearing was handled properly, as well as by failing to review a recording
of that hearing and consider “testimonial evidence” before ruling on the
motion for summary judgment; (2) by concluding that the BOD’s increased
water rates reflected “proportionate shares of the cost of operation,
maintenance, and replacement of a water delivery system” in accordance
with A.R.S. § 48-910; and (3) by holding that the powers of referendum and
initiative are not available to the qualified electors of a county improvement
district.

¶9 Summary judgment is appropriate when “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 superior
court’s grant of summary judgment, viewing the facts and reasonable
inferences in the light most favorable to Esposito as the non-moving party.
Rosenberg v. Sanders, 256 Ariz. 359, 364, ¶ 24 (2023).

I. Video Recording of the Two-Day Temporary Injunction
Hearing

¶10 Esposito first contends the superior court erred by not
reviewing a video recording of the two-day temporary injunction hearing
to determine if the hearing was handled properly. She further argues the
court’s failure to review the recording and consider testimony from that
hearing before ruling on the motion for summary judgment was error.

¶11 When ruling on a motion for summary judgment, a court may
not consider evidence outside the record. See Tilley v. Delci, 220 Ariz. 233,
236, ¶ 10 (App. 2009); Ariz. R. Civ. P. 56(c)(3)(A)(ii), (B)(i)–(ii). Esposito has
not provided us with a transcript of the temporary injunction hearing, and

3
 ESPOSITO v. BISHOP, et al.
Decision of the Court

nothing in the record confirms that a video recording of that hearing exists.
As the appellant, Esposito was responsible to ensure the appellate record
contained all transcripts necessary for us to consider the issues raised.
ARCAP 11(b). She has not. On this record, Esposito has shown no error.

II. Proportionality Under A.R.S. § 48-910(A)(1)

¶12 Esposito next argues the BOD’s rate structure
disproportionately assesses fees to its customers. Section 48-910(A)(1)
authorizes the BOD to set “[u]ser fees that are proportionate shares of the
cost of operation, maintenance and replacement of [the] water delivery
system.” Determining those costs are “highly relevant to setting just and
reasonable rates,” and may result in “different rates for constituent classes
within a single district.” Sun City Home Owners Ass’n v. Ariz. Corp. Comm’n,
252 Ariz. 1, 8, ¶¶ 30–31 (2021); see also Jung v. City of Phoenix, 160 Ariz. 38,
40 (1989) (holding that the city may charge different rates to residents and
nonresidents).

¶13 Record evidence shows that GVID’s operation and
maintenance costs exceeded its revenues by an average of $290,000
annually over the four fiscal years preceding the 2023 meeting. County staff
projected future deficits of about $250,000 annually if the BOD did nothing.
The BOD anticipated “additional revenue [of] about $273,720 per year”
from its increased rates. Esposito did not contest those figures in the
superior court, nor does she contest them on appeal. Instead, she argues
that “[a]ny reasonable person would conclude” the only way for GVID to
proportionately charge user fees is to assess fees “by the gallon, period [sic]”
rather than charging different rates for metered customers compared to
standpipe customers, whether located within GVID’s boundaries or
without.

¶14 Differing classes of users, even within the same district, may
be charged different user fees so long as those fees are not assessed
arbitrarily, unlawfully, or are unsupported by substantial evidence. Sun
City, 252 Ariz. at 8, ¶ 30. The superior court found that “[t]he rate increase
is proportionate to the cost of operating, maintaining, and replacement of
the water delivery system,” and Esposito points us to nothing in the record
to show that the differing user rates were apportioned arbitrarily. Record
evidence supports the court’s finding. Esposito has shown no error.

4
 ESPOSITO v. BISHOP, et al.
Decision of the Court

III. Referendum

¶15 Lastly, Esposito maintains the superior court erred in
concluding that the powers of initiative and referendum are not available
to the qualified electors of a county improvement district.

¶16 The Arizona Constitution reserves the powers of initiative
and referendum “to the qualified electors of every incorporated city, town
and county as to all local, city, town or county matters on which such []
cities, towns or counties are or shall be empowered . . . to legislate.” Ariz.
Const. art. 4, pt. 1, § 1 (8). Though county improvement districts, such as
GVID, are special taxing districts “with the powers of a municipal
corporation,” A.R.S. § 48-906(A), the legislature “d[id] not say that these
districts are municipalities,” Hancock v. McCarroll, 188 Ariz. 492, 496 (App.
1996). Instead, the legislature provided statutory mechanisms to review
county improvement districts and their actions at the exclusion of
referendum. See, e.g., A.R.S. §§ 48-907, -917(A), -923. Moreover, this court
previously held that the framers of the Arizona Constitution “rejected
proposals to extend . . . referendum powers to districts.” Hancock, 188 Ariz.
at 496.

¶17 The water rate increase challenged by Esposito was enacted
by GVID’s BOD, and as such, is not subject to review by referendum.
Consequently, we agree with the superior court that the “powers of
referendum and initiative[] are not available to the qualified electors of a
county improvement district created pursuant” to Title 48 of the Arizona
Revised Statutes.

CONCLUSION

¶18 We affirm.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

5