from the Superior Court in Maricopa County No. CV2013-009133
The Honorable James T. Blomo, Judge (Retired)
Riddell, LLC, Scottsdale By Martin A. Aronson, Jeffrey D.
Gross Counsel for Plaintiff/Appellant
Law Firm, P.C., Chandler By Robert Grasso, Jr., Kim S.
Alvarado Counsel for Defendant/Appellee
Pacific Legal Foundation, Sacramento, California By James S.
Burling Counsel for Amicus Curiae Pacific Legal Foundation
Judge Samuel A. Thumma delivered the opinion of the Court, in
which Presiding Judge Randall M. Howe and Judge Kenton D.
THUMMA, CHIEF JUDGE:
This appeal arises out of the payment of a development fee,
imposed by a town ordinance, as a condition of securing a
permit to develop land. Plaintiff American Furniture
Warehouse Co. (AFW) appeals from the grant of summary
judgment in favor of defendant Town of Gilbert. AFW argues
that the required payment was an unconstitutional taking and,
alternatively, that AFW was denied a required appeals
hearing. Although the required payment was not
unconstitutional, because AFW has a right to a statutory
exaction appeals hearing, summary judgment is affirmed in
part and vacated in part and this matter is remanded for
further proceedings consistent with this opinion.
AND PROCEDURAL HISTORY
AFW operates regional furniture distribution facilities, each
typically consisting of a building that includes a showroom
(which is open to the public and is used for retail sales), a
warehouse and a mezzanine (including an office and shops to
assemble and repair furniture). AFW decided to develop such a
facility in Gilbert, with a building covering nearly 15 acres
of a 40-acre parcel of land that AFW purchased in early 2013.
The 630, 290 square-foot building includes a 177, 092
square-foot retail showroom (about 28 percent of the
building), a 397, 800 square-foot warehouse and 50-door
loading dock (more than 63 percent), a 49, 798 square-foot
mezzanine (nearly 8 percent) and a 5, 600 square-foot
maintenance area (less than 1 percent).
To obtain development permits, AFW was required to pay
Gilbert various fees, including a traffic signal System
Development Fee (SDF). In 2009, the town adopted the traffic
signal SDF in Gilbert Ordinance 2226, based on projected
traffic patterns and "growth-related costs allocated to
traffic signals." The traffic signal SDF imposes on new
commercial structures different per square foot rates using
"Industrial" or "Other Nonresidential"
categories. The per square foot rates differ significantly:
$1.593 per square foot
$0.570 per square foot
$0.405 per square foot
“To be determined by the Town Engineer. The
Town Engineer will estimate trip generation and
determine the traffic [signal SDF] based on the most
closely aligned category of either: retail, office or
industrial. The [SDF] then is assessed” using
Retail, Office or Industrial rates.
categories are not defined in Ordinance 2226, which also does
not include provisions addressing multiple or mixed uses on a
property. For multiple or mixed uses, Gilbert identifies one
category for the entire project based on "the main
purpose of the building."
Gilbert classified AFW's building as Retail. Applying the
$1.593 per-square-foot Retail rate to the entire 630, 290
square-foot building, Gilbert required AFW to pay more than
$1 million as a traffic signal SDF. Paying under protest, AFW
timely challenged the requirement.
AFW argued the building is Industrial (yielding a lower
traffic signal SDF), because that category more closely
described AFW's development. AFW also argued that
applying the Retail rate was not reasonably related to costs
the development would impose on Gilbert. AFW also requested a
statutory exaction appeals hearing. See Ariz. Rev.
Stat. (A.R.S.) § 9-500.12(A)(1) (2018) (affording property owners
an administrative appeal from "a dedication or exaction
as a condition of granting approval for the use, improvement
or development of real property," unless the dedication
or exaction is "required in a legislative act by the
governing body of a city or town that does not give
discretion" in determining "the nature or extent of
the dedication or exaction").
Gilbert denied AFW's protest, stating land use (not trip
counts, as AFW argued) determines the traffic signal SDF
category; "the main purpose of the building is to sell
furniture and ship furniture to customers," meaning the
Retail category applied and, as a result, the Other
Nonresidential category did not. Concluding that Ordinance
2226 is a legislative act, meaning AFW had no right to
appeal, Gilbert also denied AFW's request for a statutory
exaction administrative appeals hearing. In July 2013, AFW
timely filed this case in superior court. AFW's claims
were resolved in two rounds of summary judgment motions.
The first round addressed AFW's original complaint. AFW
sought to recover the traffic signal SDF paid under protest,
alleging the fee was an unconstitutional exaction or taking
(Counts 1, 3 and 6). AFW also challenged Gilbert's denial
of its request for a statutory exaction administrative
appeals hearing (Counts 2 and 4). After briefing and argument on
competing summary judgment motions, the court ruled in favor
of Gilbert and against AFW on Counts 1, 3 and 6, stating the
traffic signal SDF "is a legislative act that carries a
presumption of validity." Finding the appeal hearing
claims (Counts 2 and 4) should have been filed as a special
action, the court allowed AFW to amend its complaint to seek
special action review.
AFW filed an amended pleading and the parties filed the
second round of competing summary judgment motions, which
addressed those amended Counts seeking special action review.
After briefing and argument, the court ruled in favor of
Gilbert and against AFW. The court found Gilbert's denial
of AFW's "protest is supported by competent evidence
and [the] plain language application of the Town Code"
and "that the denial is not arbitrary, capricious or an
abuse of discretion." Entry of final judgment followed,
see Ariz. R. Civ. P. 54(c), and this court has
jurisdiction over AFW's timely appeal pursuant to Article
6, Section 9, of the Arizona Constitution and A.R.S.
§§ 12-120.21(A)(1) and -2101(A)(1).
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). The court "view[s]
the evidence and reasonable inferences in the light most
favorable to the party opposing the motion," Andrews
v. Blake, 205 Ariz. 236, 240 ¶ 12 (2003), to
determine "whether any genuine issues of material fact
exist," Brookover v. Roberts Enter., Inc., 215
Ariz. 52, 55 ¶ 8 (App. 2007). A ruling granting summary
judgment is reviewed de novo, "both as to whether there
are any genuine issues of material fact and as to whether the
moving party is entitled to judgment as a matter of
law." Greenwood v. State, 217 Ariz. 438, 442
¶ 13 (App. 2008).
AFW Did Not Waive Its Claims Resolved By The First Summary
Gilbert argues AFW waived its right to challenge on appeal
claims that were resolved in the first summary judgment
ruling (Counts 1, 3 and 6) because AFW's amended
complaint did not reassert those claims.In essence, Gilbert is
arguing that AFW was required to do a pointless act (reassert
claims that the superior court had already resolved against
AFW by summary judgment) and that the failure to do so
results in a waiver of AFW's right to challenge the
court's ruling on appeal.
The authority Gilbert cites stands for the proposition that
an amended complaint supersedes the pleading it amends
because "a plaintiff may not pursue two complaints in
the same action." Mohave Concrete and Materials,
Inc. v. Scaramuzzo, 154 Ariz. 28, 30 (App. 1987) (citing
Campbell v. Deddens, 21 Ariz.App. 295, 297 (1974)).
But the fact that only one complaint is operative at any
given time does not mean, as Gilbert asserts, that an amended
pleading causes a prior pleading to disappear. This is
particularly true where dispositive rulings on the merits
resolved claims in the prior complaint. Although scant,
Arizona case law runs counter to Gilbert's argument.
See Harris v. Cochise Health Sys.,215 Ariz. 344,
349 ¶ 15 (App. 2007) (exercising appellate jurisdiction
challenging dismissal of claims asserted in original
complaint but not re-asserted in ...