480 Motors v. Phoenix

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE 480 MOTORS, L.L.C., an Arizona limited liability company, ) ) ) Plaintiff/Appellant, ) ) v. ) ) CITY OF PHOENIX, ) ) Defendant/Appellee. ) ) __________________________________) DIVISION ONE FILED: 06/05/2012 RUTH A. WILLINGHAM, CLERK BY: sls No. 1 CA-CV 11-0410 DEPARTMENT C MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV 2009-031635 The Honorable John Christian Rea, Judge AFFIRMED Baker & Baker By Thomas M. Baker Attorneys for Plaintiff/Appellant Phoenix Udall Shumway & Lyons P.L.C. By Bradley D. Gardner David R. Schwartz Attorneys for Defendant/Appellee Mesa D O W N I E, Judge ¶1 480 (individually, Motors, 480 L.L.C., Motors and and Alexis Alexis, but J., L.L.C., collectively, Appellants ) challenge the dismissal of their complaint against the City of (collectively, Phoenix the and City ). multiple For the fictitious following defendants reasons, we affirm. FACTS AND PROCEDURAL HISTORY ¶2 480 Motors was licensed to operate a pawnshop on Cave Creek Road in Phoenix. 1 In December 2007, 480 Motors applied to the Maricopa County Sheriff s Office ( MCSO ) to transfer its pawnbroker license to an Indian intermediate commercial ( C-2 ). School Road location zoned Alexis purchased the Indian School property contingent on the license transfer. See A.R.S. § 44-1627(C) (pawnbroker license cannot be sold or transferred without the approval of the sheriff or the sheriff s designee ). MCSO approved the transfer. 480 Motors began operating its pawnshop business at the Indian School location on December 13, 2007. ¶3 On June 5, 2008, the City notified Appellants that the pawnshop violated City Zoning Ordinance ( Ordinance ) 623. That ordinance allows a pawnshop to operate in a C-2 zone if it has a 1 Pawnbrokers are licensed by the sheriff of the county in which the person regularly conducts business. Ariz. Rev. Stat. ( A.R.S. ) § 44-1627(A). Pawnbrokers must obtain a separate license for each pawnshop owned by that pawnbroker. Id. § 44-1627(B); see also id. § 44-1621(11) (a pawnshop is the location or premises at which a pawnbroker is licensed to regularly conduct the pawnbroker s business ). 2 use permit and is located more than 500 feet from a residential area. Appellants did not obtain a use permit, and the Indian School pawnshop Appellants were was within warned 500 that feet they of a faced residential civil and area. criminal penalties if they did not cure the violation by July 10, 2008. ¶4 the On June 20, 2008, Appellants filed a complaint against City in CV 2008-014507 ( Complaint #1 ). They sought declaratory and injunctive relief and argued that Ordinance 623 violated Arizona s Constitution and Arizona Revised Statutes ( A.R.S. ) section 9-462.01(C) because it set more restrictive zoning requirements for pawnbrokers than for similarly situated businesses. 2 The City moved to dismiss, and the superior court dismissed Complaint #1 with prejudice, concluding it was barred by the statute of limitations. ¶5 On July 28, 2008, Alexis applied for a use permit and a variance for the Indian School pawnshop. administrator denied the request, Adjustment ( Board ) affirmed. and the The City s zoning City s Board of In January 2009, the City issued a citation to Alexis for violating Ordinance 623. ¶6 In February 2009, 480 Motors filed a special action complaint in LC 2009-000089 ( Complaint #2 ) against the City, 2 Section 9-462.01 allows municipalities to establish zoning districts and regulations. Subsection C mandates that zoning requirements be uniformly applied within districts, but allows for additional requirements for conditional uses. 3 the Board, and the Board s members in their official capacities. See A.R.S. decisions § of 9-462.06(K). the reversed because: standard of zoning (1) The than were alleged that the Board should be to a different businesses administrator Appellants compliance complaint operating and held similar without restriction in a C-2 district, 3 (2) the findings were not supported by the evidence, (3) the decisions were contrary to the rulings for other conferred a special pawnshops to the similarly situated status/benefit detriment of pawnshops upon locally national owned and chain independent pawnshops, (4) the decisions were contrary to City ordinances, state law, and the Board s own prior rulings, and (5) the hearing process denied Appellants their due process and equal protection rights. Complaint #2 further alleged that the City failed to appeal any of the rulings dealing with similarly situated businesses contesting the and that legitimacy respondents of were Appellants estopped use permit from and variance requests and had waived any arguments in opposition to their application. 3 Those businesses were secondhand dealers, check cashing businesses, and payday loan businesses. During the proceedings before the zoning administrator and Board, Appellants also compared their business to two national chain pawnshops and four other pawnshops that were reportedly granted use permits and variances. 4 ¶7 The superior court stayed proceedings on the citation pending review of Complaint #2. To support their claim that the City arbitrarily decides which pawnbrokers receive[] a variance or special use permit, Appellants moved to supplement the record to include findings of fact from another pawnbroker s successful application for a use permit and variance. The City opposed the motion, and the superior court denied it. briefing and argument, the court concluded that After sufficient evidence supported the denial of Appellants requests and ruled that the Board had not acted arbitrarily or capriciously. It dismissed Complaint #2 and lifted the stay. ¶8 the In July 2010, the pawnshop closed. zoning violation and paid a fine. Alexis admitted Appellants filed CV2009-031635 ( Complaint #3 ) against the City, alleging that it routinely granted variances for pawnbrokers to operate within 500 feet of residential districts, that the City failed to appeal a single decision of the zoning administrator or Board granting a variance, since 1992. 4 A.R.S. § and that 21 Appellants claimed 9-462.01(C); that the variances had been granted the City s actions violated City, through the Board, wrongfully denied their application; and that Appellants lost business opportunities, revenue, 4 and goodwill as a result. Appellants filed their original complaint in the third action on October 6, 2009. The first amended complaint, filed October 4, 2010, is the subject of this appeal. 5 Appellants sought a writ of mandamus directing the City to issue a use permit and variance, as well as monetary damages. ¶9 The City moved to dismiss, arguing Complaints #1, #2, and #3 were premised on the same facts and events and were brought by the same Plaintiffs against the same Defendants. After briefing and argument, the superior court ruled that Complaint #3 was barred under the doctrine of claim preclusion, stating: With minor exceptions, the First Amended Complaint in this case is identical to the Complaint in CV 2008-014507 up to paragraph XVVI. The allegation in that paragraph was raised in LC 2009-000089. The only difference between the first two actions initiated by [Appellants] and this action is that [Appellants] served a Notice of Claim prior to filing this action seeking monetary damages. That is not new evidence. The factual allegations supporting [Appellants ] alleged right to monetary recovery are the same as in the previous two cases, both of which were decided adversely to the [Appellants]. The court dismissed Complaint #3 with prejudice. Appellants timely to appealed. We have jurisdiction pursuant A.R.S. § 12-1201(B). DISCUSSION ¶10 de novo. Claim preclusion is a question of law that we review Pettit v. Pettit, 218 Ariz. 529, 531, ¶ 4, 189 P.3d 1102, 1104 (App. 2008) (citation omitted). [A] final judgment on the merits in a prior suit involving the same parties or 6 their privies bars a second suit based on the same claim. Airfreight Express Ltd. v. Evergreen Air Ctr., Inc., 215 Ariz. 103, 108, ¶ omitted). matters 12, If that 158 the were P.3d same claim actually decided is precluded. 232, 237 is decided (App. involved or that 2007) (citation relitigation could have of been W. Cable v. Indus. Comm'n, 144 Ariz. 514, 518, 698 P.2d 759, 763 (App. 1985) (citation omitted). ¶11 We rely on the same evidence test in assessing claim preclusion. Pettit, 218 Ariz. at 532, ¶ 8, 189 P.3d at 1105. A later action is barred if no additional evidence is needed to prevail in [earlier]. the [later] action than that needed in the Phx. Newspapers, Inc. v. Dep t of Corr., 188 Ariz. 237, 240, 934 P.2d 801, 804 (App. 1997) (citations omitted). ¶12 Complaint #3 mentions for the first time the Planning and Development Department s role in the administrative process and alleges that numerous variances were granted to pawnshops operating within question becomes 500 feet whether of residential such additional districts. claims The permitted Appellants to recast their claims under new theories. See Phx. Newspapers, 188 Ariz. at 241, 934 P.2d at 805 (explaining that the same evidence test allows litigants to implicat[e] somewhat different facts and recast their claims under new theories ). We agree with the superior court that they did not. 7 ¶13 The basis of Complaint #3 was Appellants claim that the City condoned the practice policy custom and/or procedure of its Board of Adjustment to arbitrarily pick and choose who will receive a variance to operate a pawnshop within 500 feet of a residential district. This same claim was asserted in Complaint #2, which alleged that the zoning administrator and Board decisions discretion, and were arbitrary, that the City capricious, and failed appeal approvals for similarly situated pawnshops. to an abuse of variance In Complaint #1 and #2, Appellants also cited specific examples of variances granted to similarly situated pawnbrokers and businesses. ¶14 Complaint #3 offers more specificity about the variances approved for other pawn businesses located within 500 feet of residential districts. For example, it specifies that 21 such variances have been granted since 1992, with half being approved after 2008. Complaint #3 also alleges that the City s Planning and Development Department testified under oath that Appellants failed to meet the criteria for a variance. details, though, merely support Appellants consistent Such claim that the City granted variances to other pawnshops, even though they did not fit the criteria set forth in A.R.S. § 9-462.06 and/or Ordinance 307. 5 The additional facts were not necessary 5 In dismissing Complaint #2, the trial court noted and rejected Appellants claim that it was denied a variance and 8 to establish the claims in Complaint #3. Indeed, those claims could have been supported by the factual allegations contained in the earlier complaints. See E.C. Garcia & Co., Inc. v. Ariz. Dep t of Revenue, 178 Ariz. 510, 520, 875 P.2d 169, 179 (App. 1993) ( Two causes of action which arise out of the same transaction or occurrence are not the same for purposes of res judicata if proof of different or additional facts will be required to establish them. ). ¶15 Complaint #3 also alleged that the City wrongfully denied a variance, but this claim was decided on the merits against Appellants in the special action proceeding. To the extent Complaint of the zoning requirements, Complaint #1, which was #3 dismissed challenged that on issue the was statute constitutionality raised of in limitations grounds. Dismissal of a claim on statute of limitations grounds is a final judgment on the merits for purposes of claim preclusion. See Montano v. Browning, 202 Ariz. 544, 546, ¶ 4, 48 P.3d 494, 496 (App. 2002) (citations omitted) ( [C]laims that are clearly brought outside the relevant limitations period are conclusively barred. ); see also In re Marino, 181 F.3d 1142, 1144 (9th Cir. 1999) (citations omitted) ( [F]or res judicata purposes a special use permit despite the Board having granted similarly situated pawnbrokers special use permits and variances. 9 dismissal on statute of limitations grounds can be treated as a dismissal on the merits. ); Jordan v. Kan. City, 929 S.W.2d 882, 886 (Mo. Ct. App. 1996) (citations omitted) ( A trial court s dismissal of an action on the basis of the statute of limitations is a final adjudication on the merits for purposes of res judicata. ). ¶16 We Appellants dismissed improperly reject because different. claim the that relief Complaint #3 available was [wa]s As the City correctly notes, Complaint #2 sought special action (formerly known as mandamus) relief in the form of an order reversing the denial of the use permit and variance. Complaint #3 also requested a writ of mandamus directing the City to issue the use permit and variance. Appellants cite no authority for the proposition that their request for monetary damages in Complaint #3, based on the very same conduct alleged in the previous preclusion. 160 P.3d actions, was sufficient to avoid claim See Cullum v. Cullum, 215 Ariz. 352, 355 n.5, ¶ 14, 231, 235 n.5 (App. 2007) (appellate courts do not consider arguments posited without authority). ¶17 Both appeal. We parties deny successful party. § 12-341.01(C). substantive legal request Appellants attorneys request, as fees and they costs on not the are The City requests fees pursuant to A.R.S. Although claims, we we disagree cannot 10 with conclude Appellants their appeal constitutes harassment, is groundless and is not made in good faith. See A.R.S. City s fee request. § 12-341.01(C). We therefore deny the As the successful party on appeal, though, the City is awarded its appellate costs upon compliance with ARCAP 21. See id. § 12-342. CONCLUSION ¶18 The judgment of the superior court is affirmed. /s/ MARGARET H. DOWNIE, Judge CONCURRING: /s/ MICHAEL J. BROWN, Presiding Judge /s/ ANN A. SCOTT TIMMER, Judge 11

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