Town of Paradise Valley v. Gulf Leisure Corp.

557 P.2d 532, 27 Ariz. App. 600, 1976 Ariz. App. LEXIS 676
CourtCourt of Appeals of Arizona
DecidedOctober 26, 1976
Docket1 CA-CIV 3304
StatusPublished
Cited by36 cases

This text of 557 P.2d 532 (Town of Paradise Valley v. Gulf Leisure Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Town of Paradise Valley v. Gulf Leisure Corp., 557 P.2d 532, 27 Ariz. App. 600, 1976 Ariz. App. LEXIS 676 (Ark. Ct. App. 1976).

Opinion

OPINION

NELSON, Judge.

This is an appeal from a summary judgment granting the appellees declaratory and injunctive relief against the appellant regarding its purported arbitrary and capricious refusal to extend a “Special Use Permit”. The trial court declared the appellant’s actions void ab initio and unconstitutional and ordered the appellant to allow the appellees to continue construction of a 148-suite resort hotel.

The issues presented here are six-fold:

1. Were the actions taken and the reasons denominated by the appellant in refusing extension of the Special Use Permit arbitrary and capricious ?

2. Did the appellees have a vested right in the property prohibiting the alleged arbitrary and capricious denial of the extension request and warranting the injunctive relief given by the trial court?

3. Were there material issues of fact preventing the trial court from extending the original Building Permits by summary judgment?

4. Were the appellees required to exhaust their administrative remedies prior to seeking judicial relief?

*603 5. Was the trial court precluded by A. R.S. § 12-1802 from granting injunctive relief against the appellant, a municipality?

6. Did the trial court properly award the appellees costs against the appellant?

The real property in controversy consists of 18.844 acres located on the southeast corner of Scottsdale Road and Jackrabbit Road in the Town of Paradise Valley, Arizona. On January 11, 1973, the appellant, the Town of Paradise Valley, issued to S. N. Pickard a “Special Use Permit” authorizing the development of the property as a resort hotel consisting of 148 three-room suites. The controversial portion of the permit reads as follows:

“7. Building permits for the development of the resort hotel which is referred to in this Special Use Permit shall be taken out within one year from the date hereof and construction completed within two years from date of this Special Use Permit. Failure to comply with these dates shall automatically invalidate this Special Use Permit and the same shall be of no further force and effect. PROVIDED, HOWEVER, the owner of said real property shall have the right to apply to the Town Council for an extension of said Use Permit prior to the expiration thereof.”

In reliance upon the issuance of this permit, Gulf Leisure Corporation (appel-lee), acting by and through its president and majority stockholder, Glen Earl Wilt-sey (appellee), exercised an option procured in 1971 and purchased the property from S. N. Pickard. To finance the purchase and the intended hotel construction, Gulf and Wiltsey obtained two loans totaling $1,332,000 1 from Midland National Bank (appellee). On April 2, 1973 and November 8, 1973, deeds of trust were executed to secure the loans,- with Gulf conveying the property to USLIFE Title Company of Arizona for the benefit of Midland.

The deeds of trust granted Midland the following powers as beneficiary:

“Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee-, pay, purchase, contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel, and pay his reasonable fees.” (Emphasis added)

On July 5, 1973, the Special Use Permit was slightly amended, changing the ownership name to Gulf and authorizing development according to a new site plan. Pursuant to the dictates of the Use Permit, Gulf on January 8, 1974 procured the appropriate Building Permits. Section 1411 of the Paradise Valley Zoning Ordinance (March 4, 1974), which pertains to building permits, states:

“Section 1411 Limitation:
A permit under which no work is commenced within six (6) months after issuance shall expire by limitation.”

“Work” was therefore required to be begun by July 8, 1974. The record is clear that actual construction of the physical facility had not been started by July 8, 1974, but it 4 is uncertain whether any other *604 “work” was initiated during the six month period.

Nevertheless, the factual portrait is Vivid that as of December 23, 1974, Gulf and Wiltsey were in serious financial straits due to the energy crisis and a recession and the actual commencement of construction of the physical facility of the resort had not been commenced. Moreover, Gulf and Wiltsey had already expended the following preparatory sum of $1,448,200:

(1) Purchase of land $1,100,000
(2) Architectural fees 260,000
(3) Feasibility studies 25,000
(4) Overhead expenses 50,000
(5) Building permits 5,200
(6) Clearing of land 8,000

With it conclusive that Gulf and Wiltsey would be unable to complete construction of the resort within the two-year period, as required by the Use Permit, Midland’s attorney, proceeding upon what he construed as authority in the deeds of trust and the Use Permit itself, filed an application with the Paradise Valley Town Council on December 23, 1974, requesting an extension of the Use Permit.

Over Midland’s attorney’s objection, however, the Council forwarded the extension application to the Paradise Valley Planning and Zoning Commission. On January 21, 1975, the Commission denied the request. The three bases for the denial were:

(1) Since the original Use Permit had expired on January 11, 1975, or ten days earlier, the Use Permit was “dead” and could not be extended.
(2) Since Midland was only the “equitable” owner of the property and not the “legal” owner, and since it was the only party requesting the extension, not Gulf or Wiltsey, it did not have “standing” to make the request.
(3) Since the land comprised onfy 18.844 acres, which satisfied the 15-acre minimum of old Section 1101(k) of the Paradise Valley Zoning Ordinance when the original Use Permit was issued and since the new minimum as of March 4, 1974, was 20 acres, the extension could not be granted because the acreage failed to meet the new minimum.

At the time of this Commission meeting, Wiltsey had already commenced bankruptcy proceedings and therefore all further matters regarding the property were held in abeyance until April 16, 1975. On that date, the Honorable Vincent D.

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Bluebook (online)
557 P.2d 532, 27 Ariz. App. 600, 1976 Ariz. App. LEXIS 676, Counsel Stack Legal Research, https://law.counselstack.com/opinion/town-of-paradise-valley-v-gulf-leisure-corp-arizctapp-1976.