Court Opinion

ID: 4292849
Source: CourtListenerOpinion
Date Created: 2018-07-10 18:02:33.655151+00
Date Added: 2024-06-11T14:38:22.782124
License: Public Domain

IN THE
            ARIZONA COURT OF APPEALS
                             DIVISION ONE

                  R. L. WHITMER, Plaintiff/Appellant,

                                   v.

       HILTON CASITAS HOMEOWNERS ASSOCIATION, et al.,
                      Defendants/Appellees.

                           No. 1 CA-CV 17-0543
                             FILED 7-10-2018

          Appeal from the Superior Court in Maricopa County
                         No. CV2016-055080
              The Honorable Aimee L. Anderson, Judge

                    REVERSED AND REMANDED

                               COUNSEL

R.L. Whitmer, Scottsdale
Plaintiff/Appellant

Shaw & Lines LLC, Phoenix
By Augustus H. Shaw IV, Patrick J. Whelan
Counsel for Defendants/Appellees
                  WHITMER v. HILTON CASITAS, et al.
                        Opinion of the Court

                                  OPINION

Judge Kent E. Cattani delivered the opinion of the Court, in which
Presiding Judge James B. Morse Jr. and Judge Lawrence F. Winthrop joined.

C A T T A N I, Judge:

¶1            R.L. Whitmer appeals from the superior court’s judgment
dismissing his complaint against Hilton Casitas Homeowners Association
(“Hilton Casitas”) for lack of subject matter jurisdiction. Whitmer’s
complaint sought to enforce a final decision resulting from a prior
administrative dispute resolution proceeding, part of a process to
adjudicate disputes between an owner and a homeowners’ association
concerning compliance with condominium documents and governing
statutes. See Ariz. Rev. Stat. (“A.R.S.”) §§ 32-2199 to -2199.05. Given the
statutory directive that such decisions are “enforceable through contempt
of court proceedings,” A.R.S. § 32-2199.02(B), and absent any authority
establishing that the administrative tribunal itself has jurisdiction to enforce
such orders by contempt or otherwise, we hold that the superior court has
subject matter jurisdiction to do so. Accordingly, and for reasons that
follow, we reverse the dismissal and remand for further proceedings.

             FACTS AND PROCEDURAL BACKGROUND

¶2              Hilton Casitas is the homeowners’ association for a property
in Scottsdale subject to Arizona’s laws governing condominiums. See
A.R.S. tit. 33, ch. 9. Whitmer is a residence owner and a member of Hilton
Casitas.

¶3            In 2014, Whitmer filed an administrative petition alleging that
Hilton Casitas had violated statutory provisions governing procedures for
adopting or amending a budget (specifically, that Hilton Casitas had
overspent on legal fees without receiving owners’ approval of the
increase).1 See A.R.S. § 33-1243(D). The dispute went to a hearing before an

1     As relevant here, Arizona law allows administrative adjudication of
disputes between an owner and a homeowners’ association concerning
compliance with condominium documents or the statutes governing
condominiums. See A.R.S. §§ 32-2199 to -2199.05; see also A.R.S. §§ 41-2198

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                  WHITMER v. HILTON CASITAS, et al.
                        Opinion of the Court

administrative law judge (“ALJ”) in the Office of Administrative Hearings
(“OAH”), and the ALJ issued a decision in Whitmer’s favor concluding that
Hilton Casitas had failed to comply with the statutory provision for
amending its budget, and ordered Hilton Casitas to “fully comply with the
[statutory requirement] in the future.” Hilton Casitas did not seek judicial
review, see A.R.S. § 32-2199.02(B), and the ALJ’s order became final.

¶4            Two years later, Whitmer filed this complaint in superior
court alleging that Hilton Casitas had failed to comply with the ALJ’s order
and seeking enforcement of the decision by contempt. Hilton Casitas
answered, then moved to dismiss for (as relevant here) lack of subject
matter jurisdiction. See Ariz. R. Civ. P. 12(b)(1). Whitmer opposed the
motion and included as an exhibit an informational article from OAH,
which included the following statement explaining OAH’s view that the
superior court was the proper forum for enforcement proceedings:

      If the petition item has been decided by a court or previously
      has been addressed in a hearing before the OAH, it cannot be
      revisited. OAH has no authority for contempt proceedings or
      enforcement of prior decisions. However, failure by a party
      to comply with a decision issued by the OAH may result in
      the other party seeking enforcement of the Administrative
      Law Judge’s decision through a contempt of court proceeding
      in Superior Court.

After full briefing, the superior court granted the motion to dismiss,
reasoning that the court’s jurisdiction was limited to judicial review of the
ALJ’s ruling (not at issue here) and did not include authority to consider an
action to enforce an administrative order by contempt. The court
acknowledged the statutory provision stating that the ALJ’s order “is
enforceable through contempt of court proceedings,” see A.R.S. § 32-
2199.02(B), but concluded that the proper forum for such contempt
proceedings “is the Administrative Courts, not the Superior Court.”

to -2198.05 (2014). The relevant statutory provisions have been renumbered
(and redirected from the Department of Fire, Building and Life Safety to the
Department of Real Estate) since the time Whitmer filed his petition. See
2016 Ariz. Sess. Laws ch. 128, §§ 30–35 (52d Leg., 2d Reg. Sess.). We cite to
the current version of the statutes because the provisions material to this
decision were not substantively changed. Compare A.R.S. §§ 32-2199 to -
2199.05, with A.R.S. §§ 41-2198 to -2198.05 (2014).

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                   WHITMER v. HILTON CASITAS, et al.
                         Opinion of the Court

¶5            Whitmer then emailed OAH, noting the court’s ruling and
requesting information regarding where to file his contempt complaint. In
response, OAH’s acting director stated that “there is nothing in OAH’s
enabling statutes (ARS § 41-1092 et. seq.), that would enable OAH to
enforce its own decisions through contempt proceedings that it would
hold.” Whitmer then filed a timely motion for reconsideration in superior
court, attaching as exhibits his correspondence with OAH. After the
superior court denied reconsideration, Whitmer filed a motion for new trial,
which the court also denied.

¶6           The superior court awarded attorney’s fees to Hilton Casitas
and entered a final judgment dismissing the case. Whitmer timely
appealed, and we have jurisdiction under A.R.S. § 12-2101(A)(1).2

                                DISCUSSION

I.     Dismissal for Lack of Subject Matter Jurisdiction.

¶7            Whitmer challenges the superior court’s determination that it
lacked subject matter jurisdiction to consider his complaint. As there are
no jurisdictional facts in dispute, we review the court’s ruling de novo.
Falcone Bros. & Assocs. v. City of Tucson, 240 Ariz. 482, 487, ¶ 10 (App. 2016).

¶8             Hilton Casitas argues, and the court agreed, that the superior
court lacked subject matter jurisdiction to consider contempt of the ALJ’s
order, and that OAH itself was the only proper forum for a proceeding to
enforce a prior OAH decision under § 32-2199.02(B). But the superior court
is a court of general jurisdiction and has “original jurisdiction of . . . [c]ases
and proceedings in which exclusive jurisdiction is not vested by law in
another court.” Ariz. Const. art. 6, § 14(1); see also id. § 14(11) (original
jurisdiction of “[s]pecial cases and proceedings not otherwise provided for,
and such other jurisdiction as may be provided by law”); A.R.S. § 12-123(A).
And Hilton Casitas has presented no authority establishing that OAH has
authority to enforce its ALJ’s decision through contempt proceedings,
much less that OAH has exclusive jurisdiction to do so.

2       Although “[t]his court lacks jurisdiction over an appeal from a civil
contempt adjudication,” State ex rel. Dep’t of Econ. Sec. v. Burton, 205 Ariz.
27, 30, ¶ 18 (App. 2003), the issue here is whether the superior court
properly concluded that it lacked subject matter jurisdiction to hear the
request for a contempt finding. See, e.g., Falcone Bros. & Assocs., Inc. v. City
of Tucson, 240 Ariz. 482, 487, ¶ 10 (App. 2016); Church of Isaiah 58 Project of
Ariz., Inc. v. La Paz County, 233 Ariz. 460, 462–63, ¶ 9 (App. 2013).

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                   WHITMER v. HILTON CASITAS, et al.
                         Opinion of the Court

¶9           The administrative dispute resolution process at issue here—
which produced the ALJ decision Whitmer seeks to enforce—refers
contested cases for adjudication before OAH, pursuant to OAH’s
procedures. A.R.S. §§ 32-2199, -2199.01(D). The ALJ hearing the case “may
order any party to abide by the statute [or] condominium documents . . .
and may levy a civil penalty on the basis of each violation.” A.R.S. § 32-
2199.02(A). The ALJ’s final order is subject to judicial review if a party
properly and timely appeals it. See A.R.S. §§ 32-2199.02(B), 41-1092.08(H),
12-901 to -914. Otherwise, the ALJ’s order binds the parties and “is
enforceable through contempt of court proceedings.” A.R.S. § 32-
2199.02(B).

¶10            Hilton Casitas urges that § 32-2199.02(B) grants OAH
exclusive jurisdiction to enforce the ALJ’s order by contempt. Hilton
Casitas suggests that because § 32-2199.02(B) references A.R.S. § 41-1092.08
(which provides for an appeal to the superior court in accordance with the
provisions governing judicial review of administrative decisions, see A.R.S.
§§ 12-901 to -914), the superior court’s jurisdiction with regard to the ALJ’s
order is limited to providing judicial review in its appellate capacity. But §
32-2199.02(B) expressly allows for both judicial review and enforcement:
“The order issued by the administrative law judge is enforceable through
contempt of court proceedings and is subject to judicial review as prescribed
by § 41-1092.08.” (Emphasis added.) And, with regard to enforcement, §
32-2199.02(B) contemplates enforcing the ALJ’s order through contempt of
court proceedings; the statute does not reference contempt of “the office” or
“the department.” Compare A.R.S. § 40-424(A) (describing penalties for
“contempt of commission” based on failure to comply with Arizona
Corporation Commission orders, rules, or requirements).

¶11           Unlike the courts, which have inherent contempt power, see
Owen v. City Court, 123 Ariz. 267, 268 (1979), an agency only has the powers
delegated to it by the Legislature. Facilitec, Inc. v. Hibbs, 206 Ariz. 486, 488,
¶ 10 (2003). OAH’s statutory authority extends to adjudicating “contested
cases” (proceedings in which a party’s legal rights or duties are determined
by an agency after an administrative hearing, see A.R.S. § 41-1001(5)) and
“appealable agency actions” (actions other than contested cases in which an
agency determines a party’s legal rights or duties, see A.R.S. § 41-1092(3)).
See A.R.S. § 41-1092.02(A). A contempt proceeding of this nature—seeking
enforcement of the parties’ legal rights or duties that were previously
determined by the final decision in a prior administrative proceeding—
does not fit the definition of either an appealable agency action or a
contested case. See also A.R.S. § 32-2199.01(A) (providing for administrative
dispute resolution “concerning violations of condominium documents . . .

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                  WHITMER v. HILTON CASITAS, et al.
                        Opinion of the Court

or violations of the statutes that regulate condominiums,” not violations of
previously issued administrative orders).

¶12            And OAH’s mandate does not include enforcement authority
generally, much less contempt powers. See generally A.R.S. §§ 41-1092 to -
1092.12. For example, although OAH’s enabling statutes grant the ALJ
authority to subpoena witnesses, the ALJ must apply to the superior court
to enforce the subpoena—including by contempt—should the witness fail
to comply. See A.R.S. §§ 41-1092.07(C), 12-2211; see also A.R.S. §§ 41-
1062(A)(4), 12-2212(B) (noting that an officer presiding over a contested case
may issue subpoenas and, should the witness subpoenaed fail to comply,
the officer may apply to the superior court, which “shall thereupon proceed
as though such failure had occurred in an action pending before it”). And
although not dispositive, OAH’s position in documents provided by
Whitmer to the superior court similarly reflects OAH’s understanding that
it lacks statutory authorization or capacity to hold contempt proceedings.

¶13             Hilton Casitas argues that the regulations governing OAH’s
prehearing and hearing procedures provide a mechanism for OAH to
conduct contempt of court proceedings. The regulation on which Hilton
Casitas relies, however, is a catch-all provision for procedural rules, not a
substantive grant of authority to conduct enforcement proceedings. See
A.A.C. R2-19-102(C) (“If a procedure is not provided by statute or these
rules, an administrative law judge may issue an order using the Arizona
Rules of Civil Procedure and related local rules of guidance.”); see also
generally A.A.C. tit. 2, ch. 19, art. 1 (setting forth procedural rules for OAH
proceedings). And even if that regulation purported to expand OAH’s
statutory grant of authority, it cannot do so. See Ariz. Health Care Cost
Containment Sys. v. Bentley, 187 Ariz. 229, 232 (App. 1996) (“The scope of an
agency’s power is measured by statute and may not be expanded by agency
fiat.”) (citation omitted).

¶14          We recognize a certain dissonance in the superior court
conducting proceedings to consider a party’s refusal to follow an order
issued by a separate administrative forum. But the statutory schemes
governing several administrative bodies allow the superior court to act as a
forum for such contempt proceedings. See A.R.S. §§ 41-1092.07(C), 12-2211
(allowing an OAH ALJ to subpoena witnesses and apply to the superior
court to enforce the subpoena, including by contempt); A.R.S. §§ 41-
1062(A)(4), 12-2212(B) (allowing an administrative officer conducting a
contested case to apply to the superior court to remedy a witness’s
noncompliance with a subpoena “as though such failure had occurred in an
action pending before [the court]”); see also A.R.S. § 32-148 (authorizing an

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                  WHITMER v. HILTON CASITAS, et al.
                        Opinion of the Court

administrative board to certify a person who refuses to obey its subpoena
“to the superior court in the county in which service was made for contempt
proceedings”); A.R.S. § 23-677 (authorizing an administrative department
to apply to the superior court in the case of “contumacy or refusal of a
person to obey a subpoena,” upon which the court “shall issue” an order to
comply, and failure to so comply “may be punished by the court as a
contempt thereof”); A.R.S. § 44-3134(A) (same authorization for a different
commission), (B) (authorizing “the superior court in Maricopa county [to]
exercise its contempt powers” on application of the commission for a
person’s willful noncompliance with a nondisclosure order in a subpoena).

¶15           Accordingly, the superior court erred by concluding that
OAH had jurisdiction to enforce the ALJ’s order by contempt, much less
exclusive jurisdiction (assuming OAH qualifies as “another court”)
depriving the superior court of original jurisdiction to consider Whitmer’s
enforcement action. See Ariz. Const. art. 6, § 14(1); see also A.R.S. § 12-864
(describing civil contempts to include failure to obey the superior court’s
order as well as “all other contempts not specifically embraced within this
article”). We therefore reverse the judgment of dismissal and remand for
further proceedings.

II.    Attorney’s Fees in Superior Court.

¶16           Whitmer also challenges the superior court’s award of
attorney’s fees in favor of Hilton Casitas. The basis for the award is unclear.
The judgment reflects an award to Hilton Casitas as the prevailing party,
but Hilton Casitas’ application for fees only urged an award as a sanction
under A.R.S. §§ 12-349 and -350 or under Arizona Rule of Civil Procedure
11. The superior court made no findings under § 12-350 as required to
support an award under § 12-349, and the record shows no indication that
Hilton Casitas complied with the procedural prerequisites for an award
under Rule 11(c). Given our disposition reversing dismissal, however, we
vacate the award and do not further address the issue of fees in superior
court.

III.   Attorney’s Fees and/or Sanctions on Appeal.

¶17          Hilton Casitas requests an award of attorney’s fees incurred
on appeal, but cites only ARCAP 21 without stating a substantive basis for
the award. For that reason, see ARCAP 21(a)(2), and given that Hilton
Casitas did not prevail on appeal, we decline its request for attorney’s fees.

¶18       Whitmer requests that we impose sanctions on Hilton Casitas
under ARCAP 25. In an exercise of our discretion, we decline to do so. As

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                 WHITMER v. HILTON CASITAS, et al.
                       Opinion of the Court

the prevailing party, however, Whitmer is entitled to costs on appeal upon
compliance with ARCAP 21.

                              CONCLUSION

¶19          For the foregoing reasons, we reverse the judgment of
dismissal and remand for further proceedings. In light of this disposition,
we vacate the superior court’s award of attorney’s fees.

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

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