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.

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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

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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.

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at 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

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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

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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

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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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