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Paradigm DKD Group, LLC v. Pima County Assessor

Court of Appeals of Arizona, Second Division

March 29, 2019

Paradigm DKD Group, LLC, a Nevada limited liability company, dba Paradigm Tax Group; Eastpoint 22nd Market Place, LLC, an Arizona limited liability company; and Thomas Francis Naifeh, a married man in his sole and separate, individual capacity and as a taxpayer representative, Plaintiffs/Appellees,
Pima County Assessor, Department of Pima County; and Bill Staples, Pima County Assessor, Defendants/Appellants.

         Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court

          Appeal from the Superior Court in Pima County No. C20141150 The Honorable D. Douglas Metcalf, Judge

          Rusing Lopez & Lizardi PLLC, Tucson By J. William Brammer, Jr., Michael J. Rusing, and Ricardo E. Robinson Bours Counsel for Plaintiffs/Appellees

          Mesch, Clark & Rothschild PC, Tucson By Gary J. Cohen and Paul A. Loucks Counsel for Defendants/Appellants

          Chief Judge Eckerstrom authored the opinion of the Court, in which Presiding Judge Eppich and Judge Espinosa concurred.



         ¶1 Appellants Pima County Assessor and Bill Staples, Pima County Assessor (collectively, "the Assessor") assert the trial court erred in awarding attorney fees and costs to the appellees, Paradigm DKD Group, LLC, Eastpoint 22nd Market Place, LLC, and Thomas Francis Naifeh (collectively, "Paradigm") upon finding Paradigm substantially prevailed in its special action seeking public records pursuant to A.R.S. §§ 42-11009(A)(2) and 39-121.02. For the following reasons, we vacate the judgment below and remand for further proceedings consistent with this opinion.

         Factual and Procedural Background

         ¶2 "We view the facts in the light most favorable to upholding the trial court's ruling." Hammoudeh v. Jada, 222 Ariz. 570, ¶ 2 (App. 2009). The facts in this matter are largely undisputed. The Assessor annually identifies, lists, and values all taxable property within Pima County. The Assessor then notifies parties related to each Pima County parcel of its valuation, typically no later than March 1 of each year. Taxpayer challenges are due sixty days after the Assessor issues notices of valuation. To facilitate such challenges, A.R.S. § 42-11009(A)(1) obligates the Assessor to provide taxpayers with rapid access to information relating to notices of valuation and assessment "in the media and format in which they are maintained."

         ¶3 In February 2014, Paradigm requested under § 42-11009 public records used to value property for purposes of ad valorem taxation, including "current values for 2014, intranet notice valuations, including notes, assessor cost models (intranet and internet versions) for tax year 2015, and valuation data and notes for 2015," as well as information regarding software necessary to read and review the data. The Assessor responded by directing Paradigm to the Assessor's public website.[1] Paradigm then filed a special action to compel the Assessor to disclose the data.[2]

         ¶4 After a hearing, the trial court ordered the Assessor to "produce all information he maintains concerning the valuation of property, including all information on the Assessor's intranet site that is accessible by his staff . . . in the media and format in which they are maintained and in a way that is readable and usable by [Paradigm]," including any necessary source codes ("April 2014 Order"). This ruling "significantly expanded"[3] the scope of Paradigm's original records request. The court denied without prejudice Paradigm's request for fees, reasoning that "it [was] premature to determine who the prevailing party [was]" at that point.

         ¶5 The Assessor moved to amend the trial court's April 2014 Order, arguing the ruling required it to disclose more data than was statutorily required by § 42-11009.[4] In the alternative, the Assessor requested either a new trial or that the court make findings of fact and conclusions of law pursuant to Rule 52(a), Ariz. R. Civ. P. The court subsequently held an evidentiary hearing to determine "whether the Assessor had produced the records responsive to [Paradigm's] public records request."[5]

         ¶6 In October 2014, the trial court ruled the Assessor's search for records in response to Paradigm's request was reasonable, Paradigm had not shown the Assessor withheld records responsive to the request, and the Assessor had "promptly provided the records [Paradigm] sought, given the volume of the records sought." The court found "the Assessor has attempted to search for, copy, and produce the records sought by [Paradigm] in good faith and within a reasonable period of time, given the volume of the records sought." The court also held Paradigm was not entitled to attorney fees.

         ¶7 Paradigm filed a motion for reconsideration of the trial court's October 2014 ruling, arguing it was entitled to fees and costs because the lawsuit was necessary to compel disclosure and because some data remained undisclosed or had been disclosed in unacceptable file formats. The court ordered the parties to meet and confer in an attempt to resolve the outstanding factual issues. On May 18, 2015, the parties filed a joint report, which outlined their continued disagreements regarding which files, if any, the Assessor was still obligated to disclose in order to comply with the court's April 2014 Order. After a status conference, the court appointed a special master to make factual findings as to the parties' continued disputes over what data had been disclosed.

         ¶8 The special master filed his Report in October 2016, and, in March 2017, the trial court adopted the Report's factual findings in full. The following findings are relevant to this appeal: On March 21, 2014, the Assessor provided Paradigm with a hard drive containing the source code for the Cost Construction System (CCS), used by the Assessor to value property, as well as the CCS databases in .bak format, notice of value data, and the Assessment Data Set. However, because of an error by the Assessor's information technology department, the CCS program was inoperable until June 23, 2014.[6] On June 3, 2014, the Assessor disclosed redacted photographs and parcel notes; it disclosed a privilege log of the redactions on June 10, 2014. By late March 2015, the Assessor had added new information to its public website, including approximately 525 new data fields relating to property valuation. The special master concluded that by March 20, 2015, all the data the trial court ordered the Assessor to disclose in its April 2014 Order was available on the Assessor's public website, with the exception of the programming used to generate its Mass. Appraisal Systems ("MAS source code").[7] The special master's Report also reflects that throughout much of the litigation, the Assessor was updating its "robust public website" to improve public access to records related to parcel valuation data, as well as developing a public terminal at the Assessor's office. Finally, the Report stated that the Assessor "expended substantial time and resources complying with the Court's order, considering the voluminous records required to be disclosed," that his production was timely "given the technical challenges involved," and that "the substantive production of valuation and assessment data fields has been in good faith."

         ¶9 In its ruling adopting the special master's Report, the trial court expressly agreed with the Report's observation that:

To date, after years of litigation, there has been and there is likely no feasible method for the Court or the Special Master to determine whether the Assessor has produced and listed all data and information maintained by the Assessor "related to the valuation" to the level of certainty that Paradigm demands.

         Over Paradigm's objection, the court adopted the special master's findings in full, including that "the Assessor . . . produced all of the records." The court further ruled the special master's factual findings were "more detailed and expansive" than its own October 2014 ruling denying fees and costs, and ...

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