Oak Creek v. Sedona

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

OAK CREEK HOSPITALITY, LLC, Plaintiff/Appellant,

v.

CITY OF SEDONA; SCOTT JABLOW, in his official capacity as Mayor of
the City of Sedona; Anette Spickard, in her official capacity as City
Manager of the City of Sedona, Defendants/Appellees.

No. 1 CA-CV 25-0135
FILED 11-26-2025

Appeal from the Superior Court in Yavapai County
No. S1300CV202480241
The Honorable Linda Wallace, Judge Pro Tempore

REVERSED AND REMANDED

COUNSEL

Sharf-Norton Center for Constitutional Litigation, Phoenix
By Jonathan Riches
Co-Counsel for Plaintiff/Appellant

Frazier Law PLLC, Scottsdale
By John Thorpe
Co-Counsel for Plaintiff/Appellant

Sims Mackin, LTD., Phoenix
By Kristin M. Mackin
Counsel for Defendants/Appellees
 OAK CREEK v. SEDONA, et al.
Opinion of the Court

OPINION

Presiding Judge Jennifer M. Perkins delivered the opinion of the Court, in
which Vice Chief Judge David D. Weinzweig and Judge Cynthia J. Bailey
joined.

P E R K I N S, Judge:

¶1 Oak Creek Hospitality, LLC (“Oak Creek”) appeals the
superior court’s order dismissing its complaint for declaratory and
injunctive relief against the City of Sedona (“the City”). We hold that the
definition of “vacation rental or short-term rental” in Arizona Revised
Statutes Section 9-500.39 (“the Short-Term Rental Statute”) includes
individual mobile home units. We therefore reverse the superior court’s
order dismissing Oak Creek’s complaint and remand for proceedings
consistent with this opinion.

FACTS AND PROCEDURAL BACKGROUND

¶2 In 2024, Oak Creek purchased a 59-space mobile home park
in Sedona called the Oak Creek Mobilodge, intending to rent out the mobile
homes as short-term rentals. When Oak Creek contacted the City to inquire
about applying for a short-term rental license, the City responded that
“[a]ny homes in a mobile home park are not permitted to be used as
[short-term rentals].”

¶3 Oak Creek sued the City for declaratory and injunctive relief,
arguing the City’s position contradicted the Short-Term Rental Statute,
which prohibits cities and towns from restricting short-term rentals within
their jurisdictions. Oak Creek asked for an order directing the City to permit
Oak Creek to use the Mobilodge for short-term rentals, and for a
declaratory judgment that the City’s policy is unlawful as preempted by the
Short-Term Rental Statute.

¶4 The City moved to dismiss the complaint for failure to state a
claim, arguing that (1) the statutory definition of “short-term rental” does
not apply to a mobile home park, and (2) the preemption doctrine does not
apply because the City’s short-term rental ordinance does not conflict with
the Short-Term Rental Statute. Concurrent with its response to the City’s
motion, Oak Creek moved for summary judgment. The superior court

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Opinion of the Court

summarily granted the City’s motion to dismiss and denied Oak Creek’s
motion for summary judgment as moot.

¶5 Oak Creek timely appealed and we have jurisdiction. A.R.S. §
12-2101(A)(1).

DISCUSSION

¶6 Oak Creek argues the superior court erred by granting the
City’s motion to dismiss because the City’s policy that would cause it not
to grant Oak Creek a short-term rental license is preempted by the
Short-Term Rental Statute. Oak Creek also argues that because the issue is
purely legal, the court should have granted its motion for summary
judgment.

I. Motion to dismiss

¶7 We review de novo a superior court’s grant of a motion to
dismiss for failure to state a claim, Mirchandani v. BMO Harris Bank, N.A.,
235 Ariz. 68, 70, ¶ 7 (App. 2014), whether a state statute preempts a city
regulation, City of Scottsdale v. State, 237 Ariz. 467, 469, ¶ 9 (App. 2015), and
the interpretation of statutory provisions, State ex rel. Ariz. Dep’t of Revenue
v. Capitol Castings, Inc., 207 Ariz. 445, 447, ¶ 9 (2004).

A. The scope of the preemption doctrine

¶8 “To determine whether a local government has been
preempted, a court must find [1] a clear manifestation of legislative intent
to preclude local control and [2] an actual conflict between local regulation
and governing state law.” Coconino Cnty. v. Antco, Inc., 214 Ariz. 82, 90, ¶ 25
(App. 2006) (cleaned up).

¶9 The Short-Term Rental Statute is unambiguous in its
expressed intent to preclude local control. See A.R.S. § 9-500.39(A) (“A city
or town may not prohibit vacation rentals or short-term rentals.”); A.R.S. §
9-500.39(B) (“A city or town may not restrict the use of or regulate vacation
rentals or short-term rentals based on their classification, use or occupancy
except as provided in this section.”). The parties dispute whether the local
regulation and governing state law actually conflict.

¶10 The City contends that no actual conflict exists because its
own ordinance regulating short-term rentals is textually identical to the
statute, and it is merely enforcing the statutory definition of the term

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Opinion of the Court

“short-term rental.” But Oak Creek does not challenge how the ordinance
is written; it challenges how the ordinance is enforced.

¶11 We must therefore determine whether the Short-Term Rental
Statute preempts the City’s ban on short-term rentals of mobile homes in a
mobile home park. This question is justiciable even though Oak Creek has
not yet “suffer[ed] an actual injury” from the City’s policy, because Oak
Creek “has a real and present need to know” whether the City can prevent
it from exercising its right to dispose of its property as it chooses. See Mills
v. Ariz. Bd. of Tech. Registration, 253 Ariz. 415, 424–25, ¶¶ 29–30 (2022); see
also A.R.S. § 12-1831 (“Courts of record within their respective jurisdictions
shall have power to declare rights, status, and other legal relations whether
or not further relief is or could be claimed.”).

B. Actual conflict

¶12 The Short-Term Rental Statute limits the restrictions cities and
towns can place on “vacation rentals” and “short-term rentals.” A.R.S. §
9-500.39(A). The statute defines a “vacation rental” or “short-term rental”
to include “any individually or collectively owned single-family or
one-to-four family house or dwelling unit.” A.R.S. § 9-500.39(L)(4). The City
argues this language refers to one form of land use—the unified use of an
entire parcel of real property for single- or one-to-four-family residential
purposes. Because the Oak Creek Mobilodge’s land use is a 59-space mobile
home park, the City asserts the Mobilodge cannot be a single-family or
one-to-four-family house or dwelling unit. Oak Creek counters that the
statute protects short-term rentals of all mobile homes in a mobile home
park. It assigns a regular meaning to “house or dwelling unit” to include
individual residential structures, stressing that the statute does not
reference parcels, land use, or zoning.

¶13 We must decide whether an individual mobile home qualifies
as a “single-family or one-to-four-family house or dwelling unit” under the
Short-Term Rental Statute.

¶14 “To determine a statute’s meaning, we look first to its text.”
State v. Burbey, 243 Ariz. 145, 147, ¶ 7 (2017). We also “read statutes of the
same subject or general purpose in pari materia.” State Farm Auto. Ins. Co. v.
Orlando, 259 Ariz. 531, 537, ¶ 23 (2025) (cleaned up). Because the Short-Term
Rental Statute does not define the term “house or dwelling unit,” we must
read the statute in pari materia with statutes of the same subject or general
purpose. See id.

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¶15 We begin with a disclaimer in the Short-Term Rental Statute.
Subsection (J) directs that the statute “does not exempt an owner of a
residential rental property, as defined in [Section] 33-1901, from maintaining
[certain information] with the assessor of the county.” A.R.S. § 9-500.39(J)
(emphasis added). The inclusion of a disclaimer for residential rental
property indicates that the statute applies to residential rental property.
Section 33-1901(2) defines “residential rental property” to include a “mobile
home” in a “space rental mobile home park” if the mobile home “is owned
. . . by the owner of the rental space.” Because Oak Creek asserts that it owns
most of the individual mobile homes in the Mobilodge, under Section
33-1901(2), those mobile homes are part of the residential rental property,
to which the statute appears to apply.

¶16 Widening our scope to Title 9 as a whole, we find several
definitions of terms similar to “house or dwelling unit.” A “residential
dwelling unit” is “a building or structure or part of a building or structure
that is used for a home or residence by one or more persons who maintain
a household. It also means a mobile home regardless of ownership of the land.”
A.R.S. § 9-1301(9) (emphasis added). “Housing” is “any structure suitable
for residence by an individual or family.” A.R.S. § 9-441(1). An “accessory
dwelling unit” is “a self-contained living unit that is on the same lot or
parcel as a single-family dwelling.” A.R.S. § 9-461.18(H)(1). Those
definitions plainly refer to the structures themselves, and not to the land on
which the structures sit.

¶17 Finally, the definition of “dwelling unit” in the Mobile Home
Parks Residential Landlord and Tenant Act specifically “excludes real
property used to accommodate a mobile home.” A.R.S. § 33-1409(8). In
other words, the dwelling unit is the mobile home itself, and not the space
on which it sits.

¶18 The aforementioned statutes consistently treat terms like
“house or dwelling unit” to refer to structures, and not to the legal character
of a property’s use. They also consistently refer to mobile homes as
“dwelling units.” We therefore conclude that the phrase “house or dwelling
unit” in the Short-Term Rental Statute’s definition of “short-term rental”
includes individual mobile home units and does not refer to the entire
mobile home park.

¶19 We address the City’s remaining arguments in turn. The City
argues that the explicit inclusion of “any unit or group of units in a
condominium or cooperative” in the definition of short-term rental
suggests the exclusion of homes in mobile home parks or any other variant

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of multiple dwelling units on a property with a single owner. A.R.S. § 9-
500.39(L)(4)(a). But, as we have concluded, a mobile home in a mobile home
park is a “house or dwelling unit” under the statute and thus did not need
to be listed separately. Id. Whereas, units in condominiums and
cooperatives did need to be listed separately because they are typically in
multi-unit structures that may not fall within the “house or dwelling unit”
definition.

¶20 The City also argues that our interpretation would undermine
the statute’s notice provision, requiring the owner of a “short-term rental to
notify all single-family residential properties adjacent to and directly and
diagonally across the street from [it].” A.R.S. § 9-500.39(B)(6). The City
contends that the notice provision would be ineffective for mobile home
short-term rentals because it requires notice to properties neighboring the
mobile home park but not to the neighboring mobile homes which are most
affected. That argument incorrectly assumes that property in the notice
requirement refers to entire parcels. Because the statute uses the terms
“short-term rental” and “short-term rental property” interchangeably, see
e.g., A.R.S. § 9-500.39 (A city may penalize “an owner of a vacation rental or
short-term rental . . . [for] violations related to the same vacation rental or
short-term rental property”), we conclude that “property,” just like
“short-term rental,” refers to individual mobile homes, not entire parcels.
See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal
Texts 170 (2012) (“A word or phrase is presumed to bear the same meaning
throughout a text.”). Therefore, Section 9-500.39(B)(6) requires the owner of
a short-term rental in a mobile home park to notify neighboring mobile
homes, not parcels that neighbor the mobile home park.

¶21 At bottom, under the Short-Term Rental Statute, the City may
not prohibit mobile homes from being used as short-term rentals. See A.R.S.
§ 9-500.39(A). The City may require a mobile home owner to apply for a
permit or license pursuant to Section 9-500.39(B)(5), but may not deny the
application except for the reasons stated in Section 9-500.39(C) (a city may
only deny a permit or license application for enumerated deficiencies in the
application itself).

¶22 Because the City’s position that “[a]ny homes in a mobile
home park are not permitted to be used as [short-term rentals]” conflicts
with the Short-Term Rental Statute, the City’s position is preempted. The
superior court erred by dismissing Oak Creek’s complaint.

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II. Summary judgment

¶23 Oak Creek asks us to direct the superior court to enter
summary judgment in its favor because the issues in this case are purely
legal.

¶24 “An order denying summary judgment is generally not
appealable . . . [but] we may review the order if the denial was based on
purely legal grounds. We review de novo whether a pure question of law
precluded the denial of summary judgment.” BMO Harris Bank N.A. v.
Espiau, 251 Ariz. 588, 590, ¶ 8 (App. 2021) (cleaned up). If appropriate, we
may direct the superior court to enter summary judgment. Ryan v. Napier, 245 Ariz. 54, 62, ¶ 32 (2018). Summary judgment is appropriate “if 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). “[C]ourts have no discretion to grant summary judgment if
the standard is not met.” Orme Sch. v. Reeves, 166 Ariz. 301, 309 n.11 (1990).

¶25 Oak Creek is correct that whether the Short-Term Rental
Statute preempts the City’s policy is a purely legal issue. We thus will
review the court’s denial of summary judgment. Because we have
concluded that the Short-Term Rental Statute preempts the City’s policy,
we vacate the denial of summary judgment. But given the undisputed facts,
Oak Creek is only entitled to partial summary judgment on remand.

¶26 Oak Creek’s complaint requested the following relief:

[A]n order enjoining the City from enforcing the Prohibition
and requiring the City to permit [Oak Creek] to use its
Property for short-term rentals; [and] . . .

[A] declaration that [Oak Creek] may lawfully use the
Property for short-term rentals, and that the Prohibition is
unlawful because it is pre-empted by [Section] 9-500.39.

¶27 Oak Creek is entitled to summary judgment on its claim that
the City’s position—that mobile homes in mobile home parks cannot be
used as short-term rentals—is unlawful. We therefore direct the superior
court to issue:

A declaration that Section 9-500.39 preempts the City from
prohibiting or restricting the use of mobile homes in mobile
home parks as short-term rentals except as provided in that
section.

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A declaration that the City may not prohibit Oak Creek from
using its property for short-term rentals on the basis that it
contains mobile homes in a mobile home park.

An order enjoining the City from prohibiting Oak Creek from
using its property for short-term rentals on the basis that it
contains mobile homes in a mobile home park.

¶28 It is undisputed that Oak Creek did not apply for a short-term
rental license as required by Sedona City Code 5.25.030. The Short-Term
Rental Statute expressly authorizes the City to require Oak Creek to apply
for a permit or license. See A.R.S. § 9-500.39(B)(5). Courts lack the authority
to issue an order circumventing a city’s express statutory authority. Oak
Creek is thus not entitled to its remaining requests for relief at this time.

ATTORNEY FEES

¶29 Oak Creek requests fees and costs under Section 12-341 and
the private attorney general doctrine.

¶30 The private attorney general doctrine “is an equitable rule
which permits courts in their discretion to award attorney’s fees to a party
who has vindicated a right that: 1) benefits a large number of people;
2) requires private enforcement; and 3) is of societal importance.” Dobson v.
State, 233 Ariz. 119, 124, ¶ 18 (2013). The City does not dispute that a fee
award would be appropriate if Oak Creek prevails.

¶31 Oak Creek has succeeded in showing that the City’s
interpretation of the Short-Term Rental Statute violates the statute’s plain
language. A fee award is therefore appropriate. See id. at ¶ 19. We award
Oak Creek its reasonable attorney fees incurred on appeal upon its
compliance with ARCAP 21.

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CONCLUSION

¶32 We reverse the superior court’s order dismissing Oak Creek’s
complaint and remand for proceedings consistent with this opinion.

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

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