550 P.3d 1111
Ariz. Ct. App.2024Background
- In 1998, Starr Pass Resort LLC entered into a Development Agreement with Pima County to convey land for park expansion, in exchange for the right to collect an Environmental Enhancement Fee (EEF) from resort guests.
- Over the years, the original developer assigned its rights to Starr Pass Resort Developments, LLC (SPR Developments), and the property was annexed by the City of Tucson via a Pre-Annexation Agreement and Intergovernmental Agreement, but the EEF remained tied to the original agreement.
- In 2006, SPR Developments pledged its rights in the EEF as collateral for a loan; after defaulting, litigation, and receivership, a buyer (WSPB Buyer, LLC) ultimately acquired both the resort and the developer’s rights.
- Pima County paid the EEF to Buyer in accordance with amendments negotiated after the receivership sale, prompting SPR Developments to file suit claiming entitlement to the EEF.
- The trial court converted a motion to dismiss to summary judgment, allowed supplemental memoranda, and granted summary judgment to the defendants, ruling that SPR Developments lost its rights to the EEF in the foreclosure and receivership transfer.
- The appellate court reviewed the conversion process, summary judgment, and attorney fees award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court complied with Rule 12(d) "reasonable opportunity" requirement in converting motion to summary judgment | Conversion required an answer, discovery, and formal statements of fact | Court discretion under Rule 12(d) permits just supplemental briefs, no need for answer/discovery | Court has broad discretion under Rule 12(d); no abuse found |
| Whether SPR Developments retained right to Enhancement Fee after foreclosure and receivership | Enhancement Fee rights were separate from foreclosed collateral and not transferred | Rights to EEF were part of collateral, passed through receivership to Buyer | Enhancement Fee rights were pledged as collateral and transferred |
| Whether procedures regarding supplemental materials and briefing were adequate | Seven pages and no discovery insufficient for material fact development | Procedures reasonable; all material allowed, no surprise or prejudice | Procedures were reasonable and complied with requirements |
| Whether award of attorney fees to Pima County was justified and reasonable | Fee affidavit insufficient, block-billing, excessive with multiple attorneys | All documentation sufficient, block-billing not a basis to deny, no duplication | Fee award affirmed; no prejudice or error shown |
Key Cases Cited
- Duncan v. Scottsdale Med. Imaging, Ltd., 205 Ariz. 306 (applying summary judgment standard in favor of nonmovant)
- Coleman v. City of Mesa, 230 Ariz. 352 (category of documents not outside pleadings for Rule 12(d))
- Grosvenor Holdings, L.C. v. Figueroa, 222 Ariz. 588 (principles of contract interpretation)
- Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148 (use of extrinsic evidence in contract interpretation)
- Schweiger v. China Doll Rest., Inc., 138 Ariz. 183 (standards for attorney fee affidavits)