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Contreras Farms Limited LLC v. City of Phoenix

Court of Appeals of Arizona, First Division

October 29, 2019

CITY OF PHOENIX, et al., Defendants/Appellees.

          Appeal from the Superior Court in Maricopa County No. LC 2015-000267-001 The Honorable Connie Contes, Judge

          Gillespie, Shields, Goldfarb, Taylor & Houk, Phoenix By Kristina B. Reeves, April Maxwell Counsel for Plaintiff/Appellant

          Burch & Cracchiolo PA, Phoenix By Daryl Manhart, Andrew Abraham, Casey S. Blais Co-Counsel for Defendants/Appellees

          Phoenix City Attorney's Office, Phoenix By Brad Holm Co-Counsel for Defendants/Appellees

          Presiding Judge Michael J. Brown delivered the opinion of the Court, in which Judge Kenton D. Jones and Judge Lawrence F. Winthrop joined.


          BROWN, JUDGE

         ¶1 Contreras Farms Limited, LLC ("CFL") appeals the superior court's order finding that under state law CFL was not entitled to administratively appeal a requirement to construct a water main pursuant to Phoenix City Code § 37-33(a). For the following reasons, we affirm.


         ¶2 Arizona law, by statute, gives property owners the right to an administrative appeal when a city or town requires "a[n] exaction as a condition of granting approval for the use, improvement or development of real property." A.R.S. § 9-500.12(A)(1).[1] The right to pursue such an appeal, however, "does not apply to a[n] . . . exaction required in a legislative act by the governing body of a city or town that does not give discretion to the administrative agency or official to determine the [exaction's] nature or extent." A.R.S. § 9-500.12(A)(1). In this case, we address the interplay between § 9-500.12 and a specific mandate in Phoenix City Code § 37-33(a) that requires developers to "furnish and install . . . all water mains . . . within the boundary of the development as well as the streets bounding the entire development."

         ¶3 The material facts relevant to this issue are undisputed. Near the end of 2013, Entellus, Inc., a civil engineering firm, submitted plans to the City of Phoenix Planning & Development Department ("Department") on CFL's behalf to build a charter school at 4275 West Baseline Road (the "Property"), located at the southeast corner of the 43rd Avenue and Baseline intersection.[2] As relevant here, the Department responded that there were no issues as to the existing 12-inch water main along Baseline Road but that under "City Code 37-33 . . . [a] 12-inch main extension will be required to be installed from Baseline to the south property line" along 43rd Avenue. Shortly thereafter, CFL started construction of the charter school project.

         ¶4 Meanwhile, Entellus filed a technical appeal with the Water Services Technical Appeals Committee ("Committee") requesting that "the requirement to install a [] 12 [inch] water main extension in 43rd Avenue be deleted." Entellus explained that (1) an existing water main was operational in the original alignment of 43rd Ave; (2) the City's water system was already operating "very robustly in the vicinity of the school site"; and (3) because the school would be connecting to the water main on Baseline, it would not use or benefit from the required main along 43rd Avenue. The Committee denied the technical appeal "on the basis that [§ 37-33] requires all projects to install water mains along each of its project's boundaries within paved public streets." (Emphasis added.)

         ¶5 Entellus contacted the Committee, asking what the next level of appeal would be. The Committee informed Entellus that § 37-33 could not be waived, but CFL could attempt to "demonstrate how the intent of the Code was already met," and the Director "may modify or interpret the code in a way that agrees with your rationale." The Committee noted, however, it would be difficult to show that deleting the required water main extension would fit within the Code's intent because "the City Code is pretty clear when requiring that all developments bound their site[s] with water." (Emphasis added.) CFL did not appeal the Committee's decision and proceeded with constructing the 43rd Avenue water main.

         ¶6 In March 2015, CFL sent the City a demand letter requesting an exaction appeal under A.R.S. § 9-500.12(A)(1) to challenge the City's decision to require installation of the 43rd Avenue water main. The City denied CFL's request, stating that "[t]he requirement [CFL] wishes to appeal is mandated by the City Code and therefore not subject to the appeal process described in A.R.S. § 9-500.12." CFL filed a complaint for special action in the superior court seeking declaratory relief and damages. The court granted summary judgment in favor of the City, concluding that "[§] 37-33 . . . is generally applicable, giving no discretion to the City to deviate from its City-wide ...

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