NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

FARID MAHMOODI, Plaintiff/Appellant,

v.

ARIZONA DEPARTMENT OF TRANSPORTATION, Defendant/Appellee.

No. 1 CA-CV 20-0056

Appeal from the Superior Court in Maricopa County

No. LC2018-000487-001

The Honorable Douglas Gerlach, Judge Retired

AFFIRMED

COUNSEL

Lorona Mead PLC, Phoenix

By Jess A. Lorona

Counsel for Plaintiff/Appellant

Arizona Attorney General's Office, Phoenix

By Savita I. Kasturi

Counsel for Defendant/Appellee

FILED 12-17-2020
MAHMOODI v. ADOT

Decision of the Court

2

MEMORANDUM DECISION

Presiding Judge James B. Morse Jr. delivered the decision of the Court, in 

which Judge Maria Elena Cruz and Judge Paul J. McMurdie joined.

M O R S E, Judge:

¶1 This is an administrative appeal regarding the unlicensed 

sale of used cars. Farid Mahmoodi appeals from the superior court's order

affirming the civil penalties imposed upon him by the Arizona Department 

of Transportation ("ADOT"). We conclude Mahmoodi waived his claim 

that the relevant statute was void for vagueness.

FACTS AND PROCEDURAL BACKGROUND

The Corporations, Sales, and Citations

¶2 Mahmoodi is, individually, an authorized wholesale motor 

vehicle dealer. He is the sole shareholder and managing member of two 

Delaware corporations: AAFM and YSA. AAFM, based in Tucson, holds a 

used motor vehicle dealer license. AAFM is authorized to sell used cars as 

long as the regulatory and statutory requirements are met. See A.R.S. § 28-

4334(A).

1 All persons in the business of selling motor vehicles in Arizona 

must be properly licensed. Id. A "wholesale motor vehicle dealer" license 

authorizes the licensee to sell used motor vehicles only to other licensed 

motor vehicle dealers. A.R.S. § 28-4301(36). A "used motor vehicle dealer"

license is required for a person who "buys, sells, auctions, exchanges or 

offers or attempts to negotiate a sale or exchange of an interest in, or who is 

engaged in the business of selling, seven or more used motor vehicles in a 

continuous twelve month period." A.R.S. § 28-4301(34). Licensed dealers 

must have a satisfactory sales lot open during specific hours, keep records 

on each vehicle via the "deal jacket," disclose warranty information to the 

purchaser, and collect sales tax. See, e.g., A.R.S. §§ 28-4403(A), -4405, -4407, 

and -4409.

¶3 Mahmoodi's other corporation, YSA, is a low volume

transportation business somewhat similar to Uber with an address at a mail 

box store in Casa Grande. AAFM purchased inexpensive cars at auction 

1 Absent material revisions, we cite a statute's current version.
MAHMOODI v. ADOT

Decision of the Court

3

and regularly "gifted" the cars to YSA as an "investment." Even though YSA 

does not have a used car dealer license, it sold 37 of those used cars in the 

pertinent 12-month period. The parties eventually stipulated that the 

statutory allowance permitted six of those sales. See A.R.S. § 28-4301(34). 

The cars were sold "as is" and without emissions tests. No sales tax was 

paid on the transfer from AAFM to YSA. Nor did anyone pay sales tax on 

the subsequent sales to the public based on Mahmoodi's claim that the sales 

were between two private parties. Mahmoodi stated he bought the cars at 

auction for $200-300 and, if he could not make them roadworthy

inexpensively, he quickly transferred the cars to YSA for sale. 

¶4 After an investigation, YSA was cited by ADOT for selling 

without a used motor vehicle dealer license. See A.R.S. § 28-4301(34).

ADOT sent Mahmoodi a cease and desist letter and sought fines of $1,000 

for each unauthorized sale as well as the unpaid sales tax. See A.R.S. § 28-

4501(A). ADOT requested a hearing in front of an Administrative Law 

Judge ("ALJ") to rule on its proposed civil sanctions.

The First Administrative Hearing: August 2017

¶5 At the first hearing, both Mahmoodi and the investigator 

testified. ADOT introduced into evidence the titles to the cars showing 

Mahmoodi's signature. Mahmoodi's first defense was that YSA was not a 

"person" subject to A.R.S. § 28-4301(21). He presented no case law to 

support his theory but argued it was "common sense."

¶6 Mahmoodi's second defense was that YSA was not acting as 

a used car dealer, but was a transportation company liquidating its assets 

to remain solvent. The ALJ held that YSA was a "person" for purposes of 

the statute, citing Whipple v. Indus. Comm'n, 59 Ariz. 1, 5-7 (1942) and A.R.S. 

§ 10-140(37) (defining corporation). It further found the statute does not 

provide an exception for companies liquidating assets.

The Second Administrative Hearing: October 2018

¶7 After Mahmoodi moved for rehearing, a second 

administrative hearing was held for a de novo review on whether YSA was 

a transportation business and whether the 31 cars were acquired incident

to YSA's business under the exception found in A.R.S. § 28-4301(21). That 

section states a "Motor vehicle dealer" is 

a new motor vehicle dealer, a used motor vehicle dealer, a 

public consignment auction dealer, a broker or a wholesale 

motor vehicle auction dealer, excluding a person who comes 
MAHMOODI v. ADOT

Decision of the Court

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into possession of a motor vehicle as an incident to the person's 

regular business and who sells, auctions or exchanges the 

motor vehicle.

Id. (emphasis added).

¶8 The ALJ found YSA was a transportation company but it did 

not acquire the 31 cars as incidental to its business. At the time of this 

hearing, YSA's two or three independent contractor drivers used their 

independently-owned vehicles and made less than $6,000 annually. Yet 

each month, between October 2016 and March 2017, AAFM gifted YSA 

between 2 and 9 cars.

¶9 Mahmoodi's answers at the hearing were evasive and 

unresponsive. The ALJ concluded Mahmoodi "from the outset, [] intended 

to sell [the cars] to generate some cash flow for [YSA]." Mahmoodi was 

deemed not credible regarding his explanations for how acquiring the cars

was "incident" to YSA's business. For that reason, the ALJ found the 

exception in A.R.S. § 28-4301(21) did not apply. Mahmoodi was fined 

$31,000, and ordered to pay the sales tax on each vehicle sold over the 

statutorily allowed six sales. See A.R.S. § 28-4501.

The Superior Court Appeal

¶10 Mahmoodi appealed to the superior court. He raised two 

claims in his briefing – the ALJ's legal error in interpreting the statutes, and 

a due process void-for-vagueness claim.

¶11 After a review of the administrative record, the superior court 

affirmed ADOT's imposition of civil penalties. It concluded: (1) sufficient 

evidence supported ADOT's decision and (2) Mahmoodi waived his voidfor-vagueness argument by failing to raise it during the October 2018

hearing. Mahmoodi timely appealed to this Court pursuant to A.R.S. § 12-

913.

DISCUSSION

¶12 On appeal, Mahmoodi does not question the sufficiency of the 

evidence. Instead, Mahmoodi's only issue on appeal is his claim that the 

superior court erred in finding he waived his void-for-vagueness argument 

by not raising it during the October 2018 administrative hearing.

¶13 An administrative agency's decision will be affirmed unless it 

is "contrary to law, is not supported by substantial evidence, is arbitrary 
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and capricious or is an abuse of discretion." A.R.S. § 12-910(E). We 

independently determine disputed questions of law but will "not disturb 

an agency's factual findings that the evidence substantially supports." JH2K 

I LLC v. Ariz. Dep't of Health Servs., 246 Ariz. 307, 310, ¶ 8 (App. 2019). On 

appeal, we view the evidence in the light most favorable to upholding the 

award. See Hackworth v. Indus. Comm'n, 229 Ariz. 339, 341, ¶ 2 (App. 2012). 

¶14 Mahmoodi did not raise a void-for-vagueness argument at 

the August 2017 hearing or his subsequent request for rehearing. In fact,

the ALJ confirmed with Mahmoodi there were no other issues for the 

hearing beyond Mahmoodi's arguments that "a corporation is not a person"

and the sales were part of a corporate asset liquidation. The best that can 

be said for Mahmoodi is that during the August 2017 hearing he said, once,

"I thought I was entitled to due process and equal protection." Just a few 

lines later, he clarified that he believed there was an equal protection

problem because he was being charged as an individual even though he 

acted as a corporate officer at the time. He never mentioned or alluded to 

a void-for-vagueness argument.

¶15 Before the October 2018 administrative hearing, the parties 

stipulated that the only issue on rehearing was whether the incidental 

exception applied to YSA. No mention of a void-for-vagueness defense was 

made. That stipulation regarding the limitation of the hearing's scope was 

confirmed at least twice by the ALJ. The ALJ confirmed the issues at the

beginning of the second hearing and asked if any other issues remained at 

the end of the hearing. Mahmoodi responded no, and said there was 

nothing further to add to the record.

¶16 The parties then filed briefs with the Maricopa County 

Superior Court. During briefing to the superior court, Mahmoodi first 

raised the void-for-vagueness claim. Mahmoodi had not noticed a claim of 

unconstitutionality to the Attorney General or others as required by A.R.S.

§ 12-1841. After reviewing the record, the superior court affirmed the ALJ's

decision and found Mahmoodi waived his void-for-vagueness claim on 

appeal. The superior court stated, "[n]either Mahmoodi's opening brief nor 

his reply brief identify any source in the record establishing the void for 

vagueness contention was presented to the [second] ALJ who heard the 

case, and the decision's failure to address the issue suggests it was not 

presented." We agree with the superior court that Mahmoodi did not raise 

the issue. See Neal v. City of Kingman, 169 Ariz. 133, 136 (1991) (noting that 

"failure to raise an issue at an administrative hearing" waives the issue).
MAHMOODI v. ADOT

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¶17 On appeal, Mahmoodi acknowledges that he never explicitly 

claimed a "due process" violation, but asserts that the constitutional issue 

was raised when he raised the "obvious confusion about the term 'incident'

. . ." in the statute, and the ALJ and Mahmoodi's counsel "acknowledged the 

confusion on the record . . . ." 

¶18 Our reading of that transcript does not match Mahmoodi's 

description. Rather than expressing confusion, the ALJ was attempting to 

elicit Mahmoodi's view of what "incidental" meant. The ALJ acknowledged

a lack of pertinent case law on the statute but the discussion never reached 

the issue of the constitutionality of the statute. We must view the evidence 

in the light most favorable to upholding the decision. Hackworth, 229 Ariz. 

at 341, ¶ 2. In this light, Mahmoodi's argument before the ALJ that the 

statutory language was confusing, whether or not the ALJ agreed, was 

insufficient to raise a void-for-vagueness due process constitutional claim. 

See State v. McDermott, 208 Ariz. 332, 336, ¶ 13 (App. 2004) ("A statute is not 

void for vagueness because it fails to explicitly define a term or because it 

can be interpreted in more than one way."); see also DeGroot v. Ariz. Racing 

Comm'n, 141 Ariz. 331, 339-40 (App. 1984) (finding waiver where one due

process claim raised on appeal was not raised before the racing commission

even though another due process claim had been presented). 

¶19 Accordingly, we affirm the superior court's determination 

that Mahmoodi waived his void-for-vagueness argument by failing to raise 

it during the October 2018 hearing.

¶20 Moreover, even if we reached Mahmoodi's void-forvagueness argument, we would reject it. A statute is not void for vagueness 

simply because it does not define its terms. McDermott, 208 Ariz. at 336, ¶ 

13. "Rather, a statute is void for vagueness if it does not give a person of 

'ordinary intelligence a reasonable opportunity to know what is prohibited 

and fails to contain explicit standards of application to prevent arbitrary 

and discriminatory enforcement.'" Franklin v. Clemett, 240 Ariz. 587, 595, ¶ 

24 (App. 2016) (quoting State v. Poshka, 210 Ariz. 218, 220, ¶ 5 (App. 2005)).

The person challenging a statute has the burden of proof. In re Maricopa 

Cnty. Juv. Action No. JT9065297, 181 Ariz. 69, 81 (App. 1994). 

¶21 Mahmoodi claimed that the words "incident" and "person"

were not only undefined by Title 28, but were unconstitutionally vague.

The same section of Title 28 includes "person" and "incident to" in the 

phrase "excluding a person who comes into possession of a motor vehicle 

as an incident to the person's regular business[.]" See A.R.S. § 28-4301(21).

Absent statutory definitions, courts generally give words their ordinary 
MAHMOODI v. ADOT

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meanings. State v. Cox, 217 Ariz. 353, 356, ¶ 20 (2007). Mere ignorance of 

the scope of a law or its application does not excuse a person's 

noncompliance. See State v. Soltero, 205 Ariz. 378, 380, ¶¶ 7-8 (App. 2003). 

Statutes are not unconstitutionally vague even where they are susceptible 

to different interpretations. State v. Putzi, 223 Ariz. 578, 579, ¶ 4 (App. 2010).

For assistance in defining a term, we may refer to an established and widely 

used dictionary. See State v. Mahaney, 193 Ariz. 566, 568, ¶ 12 (App. 1999). 

¶22 Black's Law Dictionary defines incidental as "[s]ubordinate to 

something of greater importance; having a minor role[.]" Incidental, Black's 

Law Dictionary (11th ed. 2019). This definition is consistent with the 

statutory language of A.R.S. § 28-4301(21). To acquire a vehicle "incident to 

a regular business" speaks of a vehicle's acquisition as a byproduct of the 

business or ancillary to it. We reject Mahmoodi's argument that "incidental" 

is unconstitutionally vague because a person of ordinary intelligence can 

understand the difference between regular business and activities 

incidental to that business.

¶23 Mahmoodi's vagueness claim as to "person" is meritless. Our 

Legislature has defined "person" to include a "natural person," a 

"corporation," and when used "to designate the violator or offender of any 

law, it includes corporation, partnership or any association of persons." 

A.R.S. § 1-215(28).

¶24 For the above-stated reasons, we do not find either term 

unconstitutionally vague.

CONCLUSION

¶25 We affirm. As the prevailing party, ADOT is awarded costs 

on appeal upon compliance with ARCAP 21.