Arizona Court of Appeals Division One holds that the term “equipment” under Equipment Dealers Act includes only machines related to farming and agriculture.

A distributor of chlorination machines used in the water treatment industry entered into a distribution agreement with a manufacturer of chlorination machines.  After the manufacturer terminated the distribution agreement without cause, the distributor sued, claiming that Arizona’s Equipment Dealers Act, A.R.S. §§ 44-6701 to 44-6709, barred “equipment” suppliers from terminating “dealer agreements” without cause.  The Superior Court granted summary judgment in favor of the manufacturer and the distributor appealed.

The Court of Appeals affirmed, holding that the term “equipment” in the Act includes “only machines related to farming and agriculture.”  The appeal turned on whether the chlorination machines qualified as “equipment” under the Act.  The Act defines “equipment” as “machines designed for or adapted and used for agriculture, livestock, grazing, light industrial and utility purposes.”  A.R.S. § 44-6701(2).  The distributor argued that the chlorination machines were “machines designed for . . . light industrial and utility purposes” because the chlorination machines are used in various “light industries” and by water and electricity utilities.  Rejecting the distributor’s construction, the Court concluded that the term “equipment” was ambiguous and, applying various canons of statutory interpretation, reasoned that the legislature intended the Act to protect only those agreements relating to equipment used in farming and agriculture.  The Court noted that the enumerated examples of uses of “equipment”—agriculture, livestock, and grazing—pertained only to farming and agriculture.  In addition, legislative history, including testimony and debate referenced in committee hearing minutes, demonstrated that the legislation was enacted to deal with issues specifically affecting the farming equipment industry.

Judge Howe authored the unanimous opinion; Judges Cattani and Thumma concurred.