Stagecoach Trails MHC, L.L.C. v. City of Benson, 295 P.3d 943 (Ariz. 2013)

On March 5, 2013, the Arizona Supreme Court ruled in favor of Stagecoach Trails  (“Stagecoach”) in Stagecoach Trails, L.L.C v. City of Benson.1  Stagecoach sought a permit to install a new home in its manufactured home park after a space became vacant, but was denied by the City of Benson.2 A major issue in the case was whether the individual space, as opposed to the entire park, was a nonconforming use under Arizona Revised Statutes (“A.R.S.”) Section 9-462.02(A).3 Under that Section, a nonconforming use is exempt from complying with certain provisions of the city’s zoning code.4 Because the court found that the entire park is a nonconforming use and exempt from the city’s zoning code, the court held that Stagecoach could install the new home.5

All zoning regulations are subject to A.R.S. Section 9-462.02(A), which ensures that new zoning regulations do not affect existing property or the right to use existing property in the way it was being used at the time the regulation was enacted.6 In 1998, the City of Benson amended Section 16 of the Benson Zoning Regulations.7 The effect of the amendment was to increase the setback and size requirements for individual spaces in manufactured home parks.8 The amendment was to be enforced in degrees, with enforcement primarily applying to new replacement homes installed after 2009.9

When Stagecoach applied for a permit to replace a recently vacated space in its park, it was denied.10 The City required that Stagecoach show that it would comply with Section 16 of the zoning regulation.11 Section 18 of the zoning regulation states that all new buildings must comply with existing regulations when replacing a nonconforming use building.12 Specifically, Stagecoach would have to meet the updated setback requirements and provide two improved parking spaces.13 Stagecoach appealed the denial to the City’s Board of Adjustment (“BOA”), arguing that the entire park was a nonconforming use and that it could replace one home without giving up nonconforming use status.14 The BOA found for the City, determining that the individual space was the nonconforming use.15

After Stagecoach brought a special action suit in the Arizona Superior Court, alleging that amended Section 16 was invalid,16 the city zoning administrator sent a letter to Stagecoach saying that after reconsideration and without applying Section 16, the permit had still been denied.17 When Stagecoach continued its suit, the zoning administrator sent another, nearly identical, letter.18

The trial court found that Stagecoach had exhausted its administrative remedies and was not required to bring the issues raised in the zoning administrator’s two letters in front of the BOA.19  It then ordered the City to issue the permit, characterizing the order as an equitable remedy in the nature of mandamus, and awarded attorney’s fees and costs.20

On appeal, the court of appeals found that the trial court did not have jurisdiction because judicial review of BOA decisions is limited to the record before the Board at the time of its decision.21 Because the trial court had not required Stagecoach to bring the two supplemental letters from the zoning administrator, which outlined additional reasons for the denial, to the BOA, the trial court lacked jurisdiction to rule on those letters.22   This procedural history was important in the Arizona Supreme Court’s classification of the action, and the appropriate form of relief.

The Arizona Supreme Court stated that exhaustion is not required when administrative remedies become futile.23 Accordingly, the Court remanded the case to the court of appeals to determine whether the entire park, or just the individual space in question, constitutes the nonconforming use.24

The Arizona Supreme Court further stated that because this action was an appeal of an administrative decision, it did not constitute an application for mandamus.25  An action qualifies as an application for mandamus when it seeks to compel a government official to perform a non-discretionary action.26 The Court vacated the award of attorney’s fees and costs without prejudice, leaving Stagecoach free to seek the award if it could find a different, applicable statute.27

1 295 P.3d 943 (Ariz. 2013).
2 Id at ¶ 1.
3 Id.
4 Id.
5 Id at ¶ 15.
6 Id at ¶ 4; A.R.S. § 9-462.02(A).
7 Id at ¶ 3.
8 Id.
9 Id.
10 Stagecoach Trails,295 P.3d at ¶ 5.
11 Id.
12 Id.
13 Id.
14 Id at ¶ 6.
15 Id.
16 Id at ¶ 7.
17 Id at ¶ 8.
18 Id at ¶ 10.
19 Id at ¶ 11.
20 Id.
21 Id at ¶ 12.
22 Id.
23 Id at ¶ 16.
24 Id at ¶ 17.
25 Id at ¶ 21.
26 Id at ¶ 19.
27 Id at ¶ 24.

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