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Pawn 1st, LLC v. City of Phoenix - 1/31/2013

Arizona Court of Appeals Division One Holds That Any Taxpayer of a Municipality Has Standing to Challenge a Decision of the Municipality’s Legislative Body or Board in a Statutory Special Action in Superior Court under A.R.S. § 9-462.06(K).

William Jachimek filed an application with the City of Phoenix for a permit and zoning variance to operate a pawn business.  A hearing officer denied the application.  Jachimek appealed to the City’s Board of Adjustment, which approved the application.  Pawn 1st, LLC, a pawnbroker with three locations within the City, objected to Jachimek’s application throughout the proceedings and filed a statutory special action in the superior court under A.R.S. § 9-462.06(K) after the Board granted the application.  The superior court granted Jachimek’s motion for summary judgment, concluding that Pawn 1st did not have standing to bring the action because it had no special damages resulting from the variance.

The Court of Appeals reversed, holding that any taxpayer of a municipality has standing under § 9-462.06(K) to challenge a decision by a board of the municipality.  Section 9-462.06(K) provides in part:  “A person aggrieved by a decision of the legislative body or board or a taxpayer, officer or department of the municipality affected by a decision of the legislative body or board may . . . file a complaint for special action in the superior court to review the . . . decision.” 

The Court first noted that this statute establishes two classes that can file a complaint:  (1) “a person aggrieved by a decision,” and (2) “a taxpayer, officer or department of the municipality affected by the decision.”  The City argued that only a “taxpayer . . . affected” by the decision fell within the second class, and that a taxpayer thus had to show pecuniary loss to establish standing.  The Court rejected this argument, applying the “last antecedent rule,” which “requires that a qualifying phrase be applied to the word or phrase immediately preceding as long as there is no contrary intent indicated.”  In this case, the qualifier “affected” modifies “municipality” only, and not “taxpayer.”  Moreover, the City’s suggested interpretation that a “taxpayer” must be “affected” by a decision in order to challenge it in court would not provide an additional basis for a challenge than that already provided by the statute to a “person aggrieved” by the decision.

The Court also rejected two arguments raised by Jachimek.  First, the Court did not find persuasive a case applying the common law and not interpreting § 9-462.06(K).  Second, it dismissed Jachimek’s argument that allowing any taxpayer to challenge a municipal decision in court “would result in undesirable consequences, including a high volume of ‘low quality litigation,’” saying such arguments were best presented to the legislature.

Judge Hall authored opinion; Judges Swann and Thumma concurred.

Posted by: Kathy O'Meara

Posted On: 2/28/2013