Justia Arizona Supreme Court Opinion Summaries

The case involves the State of Arizona and the Foothills Reserve Master Owners Association (HOA) regarding the condemnation of easements in a master-planned community. The community, consisting of 590 homes, had easements in common areas owned by the HOA. These easements allowed homeowners to use the common areas and restricted their development. The State condemned these easements to construct the Loop 202 South Mountain Freeway, compensating the HOA $6.5 million for the common areas. The HOA, representing the homeowners, sought additional compensation for the reduction in home values due to the freeway's proximity.The Superior Court in Maricopa County ruled in favor of the HOA, allowing them to pursue proximity damages. The court awarded the HOA $18 million, including $6 million for the easements' value and $12 million for proximity damages, pending the State's appeal. The Court of Appeals reversed this decision, stating that proximity damages under A.R.S. § 12-1122(A)(2) are only available when the condemned property is a physical parcel of land, not easements.The Supreme Court of Arizona reviewed the case to determine if A.R.S. § 12-1122(A)(2) allows for proximity damages when appurtenant easements are condemned. The court concluded that the statute does authorize such damages. The court reasoned that appurtenant easements are part of the dominant estate and that the homeowners' properties, including the easements, constitute a "larger parcel." Therefore, the homeowners are entitled to severance damages for the reduction in property values due to the freeway's proximity. The Supreme Court vacated the Court of Appeals' opinion and affirmed the Superior Court's judgment, allowing the HOA to receive the $12 million in proximity damages. View "STATE v FOOTHILLS RESERVE MASTERS ASSOCIATION, INC." on Justia Law

Mesquite Power, LLC owns the Mesquite Power Plant, which operates under a Power Purchase Agreement (PPA) guaranteeing specific electrical capacity to buyers in exchange for fixed payments. For the 2019 tax year, the Arizona Department of Revenue (ADOR) valued the plant at $196,870,000 using a cost-based approach as mandated by A.R.S. § 42-14156. Mesquite challenged this valuation in tax court, arguing that it exceeded the market value of the property, which they claimed was $105,000,000 based on the income approach, excluding income from the PPA.The Arizona Tax Court ruled partially in favor of Mesquite, determining that the PPA was a non-taxable, intangible asset and should not be included in the property valuation. However, the court allowed for the possibility that cash flows from the PPA could be considered in the valuation. At trial, Mesquite's expert valued the property at $105,000,000 using the income approach without the PPA, while ADOR's expert valued it at $432,000,000, including the PPA income. The tax court sided with Mesquite, setting the value at $105,000,000. ADOR appealed.The Arizona Court of Appeals reversed the tax court's decision, holding that the PPA must be considered in the property valuation as it enhances the value of the plant. The court emphasized that any competent appraisal must reflect the property's current usage, which includes the PPA.The Arizona Supreme Court reviewed the case and concluded that income from the PPA may be considered under the income approach if it is relevant to the property's income derivable as a power plant. The court also clarified that A.R.S. § 42-11054(C)(1) does not mandate the consideration of the PPA under the "current usage" requirement. The Supreme Court reversed the tax court's judgment and remanded the case for further proceedings, allowing both parties to offer new valuations consistent with this opinion. The Court of Appeals' opinion was vacated. View "MESQUITE v. ADOR" on Justia Law

In Arizona, condominium unit owners Jie Cao and Haining Xia challenged the forced sale of their unit by their condominium association (the “Association”) following the dissolution of the condominium. The Association, which had been given power to sell under the Arizona Condominium Act, sold the unit to PFP Dorsey Investments, a company that had previously acquired the majority of units in the condominium.The Supreme Court of the State of Arizona held that the Arizona Condominium Act, which authorized the sale, did not violate the eminent domain provision of the Arizona Constitution. The court stated that the Act was incorporated into the condominium declaration, to which the owners had agreed. However, the court also held that in these circumstances, the Act required the sale of all property, rather than individual units as occurred in this case.The court noted that the Association's power to sell derived from the condominium declaration that all unit owners had signed. Thus, the Act didn't effect a taking of the owners' property. As such, the forced sale of the owners’ unit alone rather than as part of a sale of all common elements and units of the condominium was impermissible under the Act.The court vacated the court of appeals’ decision and remanded the case to the trial court for further proceedings consistent with its opinion. The court also granted the owners reasonable attorney fees for amounts expended to enforce the Declaration, excluding those attributable to the unsuccessful eminent domain claims. View "CAO v PFP DORSEY" on Justia Law

In this case, Steven and Mary Drummond, who resided in their 2017 Tiffin Allegro motor home, filed for Chapter 7 bankruptcy and claimed that their motor home was subject to the homestead exemption as a "mobile home" under Arizona law. The trustee objected, arguing that the Drummonds' motor home was not a mobile home under Arizona law. The United States Bankruptcy Court for the District of Arizona certified the question to the Supreme Court of the State of Arizona: “Whether a motor home in which a person over 18 years of age resides qualifies as a mobile home for the purpose of claiming an Arizona homestead exemption pursuant to A.R.S. § 33-1101(A)(3).” The Supreme Court of the State of Arizona held that a motor home does not qualify for an exemption under A.R.S. § 33-1101(A)(3). The court reasoned that the statutory context of A.R.S. § 33-1101(A)(3) suggests that a "mobile home" under the statute describes a dwelling that is not intended to be moved once placed and physically attached to property. Thus, a "motor home" is not a "mobile home" under the homestead statute because it is readily movable and not anchored to land. View "In re: DRUMMOND" on Justia Law

In this case, the Supreme Court of Arizona affirmed a lower court's decision involving a dispute over a 135 square foot piece of land between two neighboring property owners, the Becks and the Nevilles. The Becks had landscaped their property and mistakenly installed decorative pavers outside their actual property line, encroaching on the Nevilles' land. The Nevilles claimed ownership of this disputed land based on the doctrine of "boundary by acquiescence" and "adverse possession."The Court held that Arizona law recognizes a cause of action for boundary by acquiescence. To succeed in such a claim, a claimant must prove by clear and convincing evidence that: (1) they occupied or possessed the property up to a clearly defined line, (2) the adjoining landowners mutually acquiesced to that line as the dividing line between their properties, (3) they continuously acquiesced for ten years, and (4) the actual boundary was uncertain or disputed.The Court also held that occasionally parking a car partially on an adjoining landowner’s property is insufficient to establish the open and notorious element of an adverse possession claim.In this instance, the Court found that the Nevilles failed to provide sufficient evidence to satisfy the elements of either boundary by acquiescence or adverse possession. Consequently, the Court affirmed the trial court's decision that the Becks were the rightful owners of the disputed land. View "BECK v NEVILLE" on Justia Law

The Supreme Court disagreed with the lower courts' dismissal of Appellants' complaint against Maricopa County for appeal of an administrative action and the final judgment on the County's counterclaim, holding that the plain meaning of Ariz. Rev. Stat. 12-904(A) did not bar jurisdiction.Maricopa County's Planning and Development Department fined Appellants for violations of the county zoning ordinance, and the decision was affirmed. Appellants filed a complaint against the County requesting declaratory relief and alleging due process violations. The County filed a motion to dismiss, arguing that the trial court lacked jurisdiction because the complaint was deficient. The trial court denied the motion and allowed Appellants to file an amended complaint. Thereafter, Appellants brought an amended complaint seeking judicial review of the administrative decision. The County asserted a counterclaim seeking to enforce the fine. The trial court ruled the complaint failed to comply with Ariz. Rev. Stat. 12-904(A), and therefore, Appellants failed timely to file a "notice of appeal." The court of appeals affirmed. The Supreme Court vacated the court of appeals and reversed the trial court, holding that Appellants' complaint complied with section 12-904(A)'s three jurisdictional requirements that the timely filing's substance provide notice of the appeal, identify the decision being appealed, and state the issues argued on appeal. View "Shea v. Maricopa County" on Justia Law

The Supreme Court held that Jorge Othon, who purchased property from Victalina Carreon but never recorded the deed with the county recorder, may not collaterally challenge a default judgment entered in a separate tax lien foreclosure action.The property Othon purchased was encumbered by delinquent property taxes. Advanced Property Tax Liens, Inc. (APTL) purchased a tax lien on the property and then filed a tax lien foreclosure action against Carreon. The trial court entered default judgment against Carreon. APTL then filed this quiet title action seeking to establish its title to the property. Othon filed an answer and counterclaim requesting that the trial court determine that the default judgment in the foreclosure action was void due to invalid service on Carreon, and declare that title to the property vested in Othon. The trial court granted summary judgment for Othon. The Supreme Court reversed, holding that Othon could not, in this quiet title action, collaterally attack the default judgment entered in the foreclosure action. View "Advanced Property Tax Liens, Inc. v. Othon" on Justia Law

In this case concerning the meaning and application of a standard title insurance policy exclusion (Exclusion 3(a)) designed to cover any defects, encumbrances, or adverse claims created or suffered by the insured in the context of construction lending, holding that this Court's opinion in First American Title Insurance Co. v. Action Acquisitions, LLC, 218 Ariz. 394 (2008), sets forth the proper interpretation and application Exclusion 3(a).In its underlying rulings, the trial court invoked Action Acquisitions to interpret Exclusion 3(a) in the construction lending context. The court of appeals reversed, instead applying the bright-line rule articulated in BB Syndication Services, Inc. v. First American Title Insurance Co., 780 F.3d 825 (7th Cir. 2015). The Supreme Court reversed in part and vacated the judgment in part, holding (1) this Court adopts Action Acquisitions' causation test for Exclusion 3(a)'s applicability; and (2) the court of appeals erred in applying the BB Syndication approach. View "Fidelity National Title Insurance Co. v. Osborn III Partners, LLC" on Justia Law

The Supreme Court held that the Town of Marana violated Ariz. Rev. Stat. 9-463.05 by assigning the entire cost of upgraded and expanded wastewater treatment facilities to future homeowners through development impact fees.\Applying the Home Builders Ass'n of Central Ariz. v. City of Scottsdale, 187 Ariz. 479 (1997), the court ruled that the development impact fees bore a presumption of validity and that section 9-463.05 was satisfied because the development fees resulted in a beneficial use to the development. The court of appeals affirmed. The Supreme Court vacated the judgment of the court of appeals and reversed the trial court, holding (1) in applying section 9-463.05 as amended, the court of appeals erroneously applied from City of Scottsdale a presumption of validity to the Town's assessment of development fees; and (2) the Town violated section 9-463.05 by making future development bear 100 percent of the cost of acquiring the wastewater treatment facility and bearing nearly all of the cost of upgrading, modernizing, and improving the facility. View "Southern Ariz. Home Builders Ass'n v. Town of Marana" on Justia Law

The Supreme Court held that public policy prohibits an agreement between a builder-vendor and a homebuyer to disclaim and waive the warranty of workmanship and habitability implied in every contract entered into between the buyer-vendor and homebuyer and to replace it with an express warranty.Plaintiff entered into a preprinted purchase agreement with M & RC II, LLC to buy a home that M & RC II's affiliate, Scott Homes Development Company, would build. Plaintiff later sued M & RC II and Scott Homes (together, Defendants) for breach of the implied warranty of workmanship and habitability. Defendant moved for summary judgment on the ground that Plaintiff had waived the implied warranty per the purchase agreement. The trial court granted summary judgment for Defendant. The court of appeals reversed. The Supreme Court affirmed, holding that the public policy underlying the implied warranty of workmanship and habitability clearly outweighed enforcement of the waiver of that warranty in the purchase agreement. View "Zambrano v. M & RC II LLC" on Justia Law