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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE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 

## A RIZONA 

## C OURT OF 

## A PPEALS

D IVISION O NE

FARID MAHMOODI
, Plaintiff /Appell ant ,

v.

ARIZONA DEPARTMENT OF TRANSPORTATION
, Defendant /Appell ee

.
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

/Appell ant

Arizona Attorney General ' s Office, Phoenix By Savita I. Kasturi C ounsel for Defendant

/Appell ee FILED 12-17-2020MAHMOODI 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 Mahmood i 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.

FACT S 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 co rporations : AAFM and YSA. A A FM, 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 A rizona
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(3 6 ). A " used motor vehicle dealer " license is required for a person who " buy s , sell s , auction s , exchang es or offer s or attempt s 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(3 4 ). 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,

an d

- 4409

. ¶3 Mahmoodi ' s other corporation
, YSA
, is a low volume transportation business somewhat similar to Uber with an address at a m ail b ox s tore 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 t he statutory allowance permitted six of those sales. Se e A.R.S. § 28

- 4301(3 4). The cars were sold "as is" and without emissions tests

. No sales tax was paid on the transfer from AAFM to YSA. N or 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

w ithout a used motor vehicle dealer l icense

. See A.R.S. § 28

- 4301 ( 3 4 )

. ADOT sent Mahmoodi a cease and d esist letter and sought fine s 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 t he 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(2 1 ). 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 YS A 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

- 14 0 (37) (defining corporation). It further found the statute does not provide an exception for companies liquidat ing assets.

The Secon d 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(2 1 ). That section states a " Motor vehicle dealer " is

a new motor vehicle dealer, a used motor vehicl e dealer, a public consignment auction dealer, a broker or a wholesale motor vehicle auction dealer, excluding a person who comesMAHMOODI v. ADOT Decision of the Court

4 into possession of a motor vehicle as an incident to the person ' s regular business and who sells, auctions or exchanges the

mo tor 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

e ach month, b etween October 2016 and March 2017 , AAFM gifted YSA between 2 and 9 cars.

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

unre sponsive. 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

- 4 301 (2 1 ) 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 affir med ADOT ' s imposition of civil penalties

. It concluded : (1) sufficient evidence support ed ADOT ' s decision and (2) Mahmoodi waived his void

for

- vagueness argument by failing to raise it during the October 2018 hearing

. Mahmoodi tim e ly appeal ed to this C ourt 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

s uperior court erred in finding h e waived his void

- for

- v agueness argument by not raising it during the October 201 8 administrative hearing

. ¶13 An administrative agency ' s decision will be affirmed unless it is " contrary to law, is not supported by substantial evidence, is arbitraryMAHMOODI v. ADOT Decision of the Court

5 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 (A pp. 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 wer e 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
act ed a s a corporate officer at the time. He never mentioned or alluded to

a void

- for

- vagueness argument

. ¶15 B efore the October 201 8 administrative hearing
, t he 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 brief s with the Maricopa County Superior Court. During briefing to the superior court, Mahmoodi first raised the void

- for

- vagueness claim. Mahmoodi had not notice d a claim of unconstitutionality to the Attorney General or others as required by A

. R

. S

. § 12

- 1 8 41. After reviewing the record, the superior court affirm ed the ALJ ' s decision and found Mahmoodi waived his void

- for

- vagueness claim on appeal

. The superior court stated
, " [n] either Mahmoodi ' s o pening brief nor his reply brief identify any source in the record est ablishing 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 t he superior court that Mahmoodi d id 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 Decision of the Court

6 ¶17 On appeal, Mahmoodi acknowledges that he never explicitly claimed a " due process " violation, but asserts that t he 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 confus ion , t he ALJ was attempting to elicit Mahmoodi 's view of what " incidental " meant. The ALJ acknowledge d a lack of pertinent case law on the statute but the discussion never reached the issue of the constitutionality of the statute. We must v iew 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 w as confusing
, whether or not the ALJ agreed
, wa s 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, 33 9

- 40 (App. 1984) (finding waiver where one due process claim raised on appeal w as not raised before the racing comm ission even though an other due process claim had been presented )

. ¶19 Accordingly, w e 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 Moreo ver , even if we reached Mahmoodi ' s void

- for

vagueness 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 per son 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) (quot ing 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 word s " incident " and " person "

w ere 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(2 1 ). Absent statutory definitions, courts generally give words their ordinaryMAHMOODI v. ADOT Decision of the Court

7 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 p erson ' 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 assist ance 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 ( 2 1)

. 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 bu siness

. ¶23 Mahmoodi's vagueness claim a s to " person " is meritless . O ur Legislature has defined " person " to include a "natural person," a "corporation
, " and w hen used " to designate the violator or offender of any law, it includes corporation, partnership or a ny 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 W e affirm. As the prevailing party, ADOT is awarded c osts on appeal upon compliance with ARCAP 21.