Court Opinion

ID: 4358750
Source: CourtListenerOpinion
Date Created: 2019-01-15 15:01:24.537499+00
Date Added: 2024-06-11T14:32:04.366695
License: Public Domain

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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

               JOHNSON UTILITIES LLC, Plaintiff/Appellant,

                                         v.

     ARIZONA CORPORATION COMMISSION, Defendant/Appellee.
                ________________________________
        SWING FIRST GOLF, LLC, Real Party in Interest/Appellee.

                              No. 1 CA-CV 18-0170
                                FILED 1-15-2019

            Appeal from the Superior Court in Maricopa County
                         No. LC2017-000135-001
                 The Honorable Patricia Ann Starr, Judge

                                   AFFIRMED

                                     COUNSEL

Fredenberg Beams, Phoenix
By Christian C.M. Beams
Co-Counsel for Plaintiff/Appellant

Crockett Law Group PLLC, Phoenix
By Jeffrey W. Crockett
Co-Counsel for Plaintiff/Appellant

Arizona Corporation Commission, Phoenix
By Andy M. Kvesic, Robin R. Mitchell, Maureen A. Scott, M. Regina
Huerta
Counsel for Defendant/Appellee
Craig A. Marks PLC, Phoenix
By Craig A. Marks
Counsel for Real Party in Interest/Appellee

                       MEMORANDUM DECISION

Judge Lawrence F. Winthrop delivered the decision of the Court, in which
Presiding Judge Jennifer M. Perkins and Judge Jon W. Thompson joined.

W I N T H R O P, Judge:

¶1            Johnson Utilities LLC (“Johnson”) appeals the superior
court’s orders (1) dismissing Johnson’s appeal of Decision No. 75616 of the
Arizona Corporation Commission (“the Commission”), which denied
Johnson’s motion to dismiss a complaint filed by Swing First Golf, LLC
(“Swing First”), and (2) denying Johnson’s motion for new trial. For the
following reasons, we affirm.

                 FACTS AND PROCEDURAL HISTORY

¶2           Swing First owns and operates the Johnson Ranch Golf
Course in Pinal County. Johnson provides water and sewer utility services
in the San Tan Valley. For many years, Swing First has purchased effluent
from Johnson as a means of irrigating its golf course.1

¶3           Since 2008, Swing First and Johnson have been involved in
several disputes, and Swing First has filed three separate complaints
against Johnson with the Commission. The subject matter of each
complaint has involved the sale and delivery of effluent.

¶4           In January 2016, Swing First filed its most recent complaint
with the Commission, alleging in part that (1) Johnson had unilaterally
decided to discontinue providing effluent to Swing First and other effluent
customers, (2) Johnson had failed to seek prior Commission approval

1       Effluent is “water that has been collected in a sanitary sewer for
subsequent treatment in a facility that is regulated pursuant to title 49,
chapter 2. [See Ariz. Rev. Stat. (“A.R.S.”) §§ 49-201 to -391.] Such water
remains effluent until it acquires the characteristics of groundwater or
surface water.” A.R.S. § 45-101(4) (footnote omitted). According to Swing
First, Johnson delivers Class A+ reclaimed water, the highest grade that can
be used for irrigation purposes.

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                       Decision of the Court

before discontinuing its tariffed effluent service, and (3) such actions were
unlawful and not in the public interest. Johnson moved to dismiss the
complaint, arguing in part that (1) the claims alleged in Swing First’s
complaint were barred by the doctrine of res judicata and (2) the
Commission lacked jurisdiction to direct Johnson on how to use its effluent.

¶5            After extensive briefing, a procedural conference conducted
by an administrative law judge (“ALJ”), and consideration of the ALJ’s
recommended opinion and order, the Commission issued Decision No.
75616 denying the motion to dismiss and ordering further proceedings
related to the issues raised in Swing First’s complaint. The Commission’s
order concluded in part that (1) Swing First’s claims were not barred by res
judicata and (2) the Commission had jurisdiction over both Johnson and the
subject matter of the complaint. Johnson’s motion for rehearing was
deemed denied by operation of law.

¶6            In September 2016, Johnson filed a complaint in superior
court both as an appeal of Decision No. 75616 and as a special action. The
Commission’s answer raised jurisdictional issues, and after briefing and
oral argument, the court took the question of its jurisdiction under
advisement. In October 2017, the court dismissed the appeal, concluding it
did not have jurisdiction over the matter, either as an administrative or
statutory appeal, and declining to exercise special action jurisdiction. Later,
the court denied Johnson’s motion for new trial. See Ariz. R. Civ. P. 59.

¶7              Although Johnson’s motion for new trial might be more
properly characterized as a motion for reconsideration, see Ariz. R. Civ. P.
7.1(e), that characterization does not, on this record, affect the timeliness of
Johnson’s appeal to this court, see Munger Chadwick, P.L.C. v. Farwest Dev. &
Constr. of the Sw., LLC, 235 Ariz. 125, 126, ¶¶ 3-4 (App. 2014). Accordingly,
we have jurisdiction over Johnson’s timely appeal. See A.R.S. § 12-913 (“The
final decision, order, judgment or decree of the superior court entered in an
action to review a decision of an administrative agency may be appealed to
the supreme court.”); see also State v. Chopra, 241 Ariz. 353, 355, ¶ 8 (App.
2016) (concluding that A.R.S. § 12-2101(A)(1) grants this court appellate
jurisdiction over the superior court’s final judgment in a special action);
accord State v. Bayardi, 230 Ariz. 195, 201, ¶¶ 24-26 (App. 2012) (Thompson,
J., concurring).

                                 ANALYSIS

¶8          Johnson argues that the statutes providing for judicial review
of Commission orders do not limit review to final actions, and the superior

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                       Decision of the Court

court (1) erred in determining Decision No. 75616 was not a final order
under the review provisions of the Administrative Procedures Act, see
A.R.S. §§ 12-901 to -914, and therefore constituted a non-appealable
interlocutory order; (2) erred in determining that Decision No. 75616 was
not appealable under A.R.S. § 40-254; and (3) abused its discretion by
declining jurisdiction over Johnson’s interlocutory appeal.

       I.     Standards of Review

¶9              We review de novo questions of law, including the superior
court’s dismissal for lack of jurisdiction. See Coombs v. Maricopa Cty. Special
Health Care Dist., 241 Ariz. 320, 321, ¶ 5 (App. 2016); In re Marriage of
Crawford, 180 Ariz. 324, 326 (App. 1994). We will affirm the superior court’s
ruling if it is legally correct for any reason. See State v. Espinoza, 229 Ariz.
421, 424, ¶ 15 (App. 2012); Dube v. Likins, 216 Ariz. 406, 417 n.3, ¶ 36 (App.
2007). As a general rule, “[a]n order denying a motion to dismiss is an
interlocutory, nonappealable order.” Qwest Corp. v. Kelly, 204 Ariz. 25, 27,
¶ 3 (App. 2002) (citation omitted); accord N. Propane Gas Co. v. Kipps, 127
Ariz. 522, 525 (1980) (“[T]he proper procedure for appellate review of a
motion to dismiss is through a petition for special action.”).

¶10            We review for an abuse of discretion the superior court’s
order declining to accept special action jurisdiction. See Stapert v. Ariz. Bd.
of Psychologist Exam’rs, 210 Ariz. 177, 182, ¶ 22 (App. 2005). “An abuse of
discretion occurs where the court’s reasons for its actions are ‘clearly
untenable, legally incorrect, or amount to a denial of justice.’” Bowen Prods.,
Inc. v. French, 231 Ariz. 424, 427, ¶ 9 (App. 2013) (citation omitted). The
exercise of special action jurisdiction is rarely appropriate to review the
denial of a motion to dismiss. Citizen Publ’g Co. v. Miller, 210 Ariz. 513, 516,
¶ 7 (2005).

       II.    Johnson’s Administrative Appeal

¶11            Under A.R.S. § 12-905(A), “[j]urisdiction to review final
administrative decisions is vested in the superior court.” To the extent a
question exists whether Decision No. 75616 may be construed as a final
decision of the Commission, the superior court concluded, and we agree,
that the denial of Johnson’s motion to dismiss constitutes an interlocutory
order not normally subject to immediate appeal. See generally In re Merle’s
Inc., 481 F.2d 1016, 1018 (9th Cir. 1973) (“An interlocutory order or decree
is one which does not finally determine a cause of action but only decides
some intervening matter pertaining to the cause, and which requires further
steps to be taken in order to enable the court to adjudicate the cause on the

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              JOHNSON UTILITIES v. ACC/SWING FIRST
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merits.” (citations omitted)). Decision No. 75616 decided only Johnson’s
preliminary motion to dismiss and ordered the Commission’s Hearing
Division to conduct further proceedings related to the issues raised in
Swing First’s complaint. Those proceedings will allow for the development
of a full factual record that will benefit both the parties and the courts.
Moreover, Decision No. 75616 also effectively required the parties to
maintain the status quo until the Commission issues a final order regarding
the underlying issues in Swing First’s complaint.

¶12            Under A.R.S. § 12-901(2), “unless the context otherwise
requires,” an “’[a]dministrative decision’ or ‘decision’ means any decision,
order or determination of an administrative agency that is rendered in a
case, that affects the legal rights, duties or privileges of persons and that
terminates the proceeding before the administrative agency.” (Emphasis added.)
Even assuming arguendo that Decision No. 75616 might be construed as
affecting the parties’ legal rights, duties, or privileges, that decision does
not terminate the proceeding before the administrative agency. Instead, it
simply means the parties will have a hearing before the Commission.
Accordingly, the superior court did not err in determining that Decision
No. 75616 is not a final administrative order from which Johnson may
appeal.

       III.   Johnson’s Statutory Appeal Under A.R.S. § 40-254

¶13           Johnson argues that, even if Decision No. 75616 is not a final
order or decision, the superior court nonetheless had jurisdiction to
consider the decision under A.R.S. § 40-254, the Commission’s own review
statute, which Johnson maintains permits interlocutory appeals because the
statute contains no express limitation on the appealability of interlocutory
orders. As applicable, § 40-254(A) provides in part as follows:

               Except as provided in § 40-254.01 [which addresses
       orders relating to rate making or rate design], any party in
       interest, or the attorney general on behalf of the state, being
       dissatisfied with an order or decision of the commission, may
       within thirty days after a rehearing is denied or granted, and
       not afterwards, commence an action in the superior court in
       the county in which the commission has its office, against the
       commission as defendant, to vacate, set aside, affirm in part,
       reverse in part or remand with instructions to the commission
       such order or decision on the ground that the valuation, rate,
       joint rate, toll, fare, charge or finding, rule, classification or
       schedule, practice, demand, requirement, act or service

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               JOHNSON UTILITIES v. ACC/SWING FIRST
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       provided in the order or decision is unlawful, or that any rule,
       practice, act or service provided in the order is unreasonable.

¶14            The superior court found that, although Decision No. 75616
was an “order” of the Commission, it was still an interlocutory order, and
further, “Johnson’s appeal was not within the purview of A.R.S. § 40-
254(A)” because it did not involve a “valuation, rate, toll, fare, charge or
finding, rule, classification or schedule, practice, demand, requirement, act
or service.” In other words, the court concluded that the list provided in
subsection (A), although extensive, was designed to address the substantive
merits, and should not be read broadly to include “a decision finding that
the Commission has jurisdiction, and denying Johnson’s motion to dismiss
the proceeding.” The court therefore concluded “the interlocutory order of
the Commission is not reviewable under A.R.S. § 40-254(A).”

¶15           We agree with the superior court that nothing in A.R.S. § 40-
254(A) expressly expands the superior court’s authorized statutory review
to include interlocutory orders, which are generally only reviewable
through discretionary special action review, and we decline to broadly
interpret § 40-254(A) as including interlocutory appeals. See generally
Woodward v. Ariz. Corp. Comm’n, 1 CA-CV 15-0825, 2016 WL 6595889, at *2,
¶ 6 (Ariz. App. Nov. 8, 2016) (mem. decision) (recognizing that compliance
with A.R.S. § 40-253 is a precursor to filing for review under § 40-254, and
suggesting the language and statutory placement of § 40-253(A) supports
that review under § 40-254(A) is restricted to final orders or decisions of the
Commission); cf. Kunkle Transfer & Storage Co. v. Superior Court, 22 Ariz.
App. 315, 318 (1974) (“Nor can the courts presume to review Commission
actions where the Commission has not made a final determination.”).

       IV.    Special Action Jurisdiction

¶16           Johnson also argues the superior court abused its discretion
in declining to accept special action jurisdiction.

¶17           Courts generally “do not favor accepting special action
jurisdiction to review the propriety of interlocutory orders and pretrial
rulings.” Piner v. Superior Court, 192 Ariz. 182, 184, ¶ 8 (1998) (citation
omitted). A court should accept special action jurisdiction only in
“extraordinary circumstances,” and not when there is an equally plain,
speedy, and adequate remedy by appeal. Stapert, 210 Ariz. at 182, ¶ 21;
Ariz. R.P. Spec. Act. 1(a). An appeal after administrative remedies have
been exhausted is an adequate remedy by appeal. See Stapert, 210 Ariz. at
182, ¶ 24.

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              JOHNSON UTILITIES v. ACC/SWING FIRST
                      Decision of the Court

¶18           In this case, there has been no hearing or final decision on the
underlying merits of Swing First’s complaint, and the issues raised before
the Commission involve not only questions of law, but questions of fact that
require a fully developed record. See Piner, 192 Ariz. at 185, ¶ 10; Mullet v.
Miller, 168 Ariz. 594, 595 (App. 1991). Moreover, although Johnson
characterizes Swing First’s complaint as a mere breach of contract action,
Swing First’s allegations appear to implicate matters beyond the simple
question of whether a contract between the parties has been breached —
matters potentially within the Commission’s jurisdiction. Further, the
superior court correctly concluded that Johnson has an adequate remedy
by appeal after administrative remedies have been exhausted. Finally,
Johnson has not shown this matter is of statewide importance or that special
action jurisdiction is warranted to protect an important public interest, see
Ingram v. Shumway, 164 Ariz. 514, 516 (1990), or that, on this record, the
Commission has committed a plain and obvious error by denying the
motion to dismiss, see Chopra, 241 Ariz. at 355-56, ¶¶ 10-11, and is clearly
proceeding without or in excess of its jurisdiction or legal authority, see
Ariz. R.P. Spec. Act. 3(b). Accordingly, Johnson has not shown that this
case presents an exception to the general rule that the exercise of special
action jurisdiction is rarely appropriate to review the denial of a motion to
dismiss. See Citizen Publ’g Co., 210 Ariz. at 516, ¶ 7; Qwest Corp., 204 Ariz.
at 27, ¶ 3.

       V.     Attorneys’ Fees on Appeal

¶19          Johnson requests an award of costs and attorneys’ fees on
appeal pursuant to A.R.S. § 12-348. Even assuming arguendo that Johnson
would be eligible for fees under § 12-348(A)(2), Johnson is not the prevailing
party, and we deny its request.

                              CONCLUSION

¶20          We affirm the superior court’s orders dismissing Johnson’s
appeal of Decision No. 75616 and denying Johnson’s motion for new trial.

                          AMY M. WOOD • Clerk of the Court
                          FILED: AA

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