Ray and Lindsay v. Gilbert
1 CA-CV 20-0443
| Ariz. Ct. App. | May 4, 2021Background
- In 2005 Greater Phoenix Income Properties (GPI) and the Town of Gilbert executed a recorded development reimbursement agreement: Town would construct public improvements and GPI would reimburse ~ $760,000; a lien secured payment and the agreement bound successors.
- The agreement was authorized under A.R.S. § 9-500.05 and contained a prevailing-party attorney-fees clause.
- Ray and Lindsay, LLC (R&L) purchased the Property in December 2016. About 13 months later R&L asked the Town to reduce the reimbursement amount and release the lien.
- R&L sued, arguing the reimbursement was actually an involuntary assessment under A.R.S. § 9-243 that abated after ten years because the Property remained undeveloped.
- The superior court granted the Town judgment on the pleadings and awarded attorney fees; R&L appealed and the court of appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the reimbursement obligation is an involuntary assessment under A.R.S. § 9-243 (subject to 10-year abatement) | R&L: The agreement is effectively an § 9-243 assessment that abated after ten years of nondevelopment. | Town: The obligation is a voluntary, negotiated development agreement under § 9-500.05 that binds successors and is not subject to § 9-243's abatement. | Court: Held it is a development agreement under § 9-500.05, not an § 9-243 assessment; the ten-year abatement does not apply. |
| Whether the Town may recover attorney fees | R&L: Challenges the superior court’s authority to award fees. | Town: Prevailing party in a contract action; fees authorized by A.R.S. § 12-341.01 and the agreement’s fee clause. | Court: Affirmed award of reasonable attorney fees to Town under § 12-341.01 and the contract clause. |
Key Cases Cited
- Muscat by Berman v. Creative Innervisions LLC, 244 Ariz. 194 (App. 2017) (standard for accepting complaint allegations on judgment-on-pleadings review)
- J.D. v. Hegyi, 236 Ariz. 39 (2014) (primary goal of statutory interpretation is to effect legislative intent expressed in plain language)
- Premier Physicians Grp., PLLC v. Navarro, 240 Ariz. 193 (2016) (statutory plain-language interpretation governs)
- State ex rel. Fox v. New Phoenix Auto Auction, Ltd., 185 Ariz. 302 (App. 1996) (use of technical statutory terms indicates legislative intent)
- Achen-Gardener, Inc. v. Superior Ct., 173 Ariz. 48 (1992) (limits on municipal authority in development agreements where state law imposes mandatory duties)
- Bennett Blum, M.D., Inc. v. Cowan, 235 Ariz. 204 (2014) (review of court's authority to award attorney fees and interpretation of § 12-341.01)
- McDowell Mountain Ranch Cmty. Ass'n v. Simons, 216 Ariz. 266 (App. 2007) (contractual attorney-fees provisions enforceable)
