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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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


            GRAND HOLDINGS LLC, et al., Plaintiffs/Appellants,

                                         v.

                    CITY OF PEORIA, Defendant/Appellee.

                              No. 1 CA-CV 19-0379
                                FILED 2-13-2020


            Appeal from the Superior Court in Maricopa County
                         No. LC2018-000492-001
               The Honorable Timothy J. Thomason, Judge

                                   AFFIRMED


                                    COUNSEL

Jennings, Haug & Cunningham, LLP, Phoenix
By Julianne C. Wheeler, James L. Csontos
Counsel for Plaintiffs/Appellants

Office of the City Attorney, City of Peoria, Peoria
By Amanda Christine Sheridan
Counsel for Defendant/Appellee
                  GRAND HOLDINGS, et al. v. PEORIA
                       Decision of the Court



                      MEMORANDUM DECISION

Judge Maria Elena Cruz delivered the decision of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge David B. Gass joined.


C R U Z, Judge:

¶1            Grand Holdings, LLC and Grand Holdings, Inc. (collectively
“Appellants”) challenge the superior court’s denial of relief in a special
action brought against Appellee City of Peoria (“Peoria”) stemming from
an abatement order requiring demolition of a building located on
Appellants’ property. Appellants contend, as they did below, that they did
not receive due process in a hearing before Peoria’s Board of Building Code
Appeals (the “Board”). We affirm.

           FACTUAL AND PROCEDURAL BACKGROUND

¶2            Appellants own a large vacant building in Peoria. Peoria
issued a “Notice and Order to Abate Violation of Code” on August 15, 2018
(the “Order”) finding that the building was “unfit for human occupancy”
and requiring Appellants to apply for a demolition permit by September
27, 2018, and complete demolition by November 22, 2018.

¶3            Appellants challenged the Order before the Board. The Board
held a hearing at which Grand Holdings member Ron Hassid appeared.
According to the Board’s minutes, Peoria’s Neighborhood & Human
Services Manager, Jack Stroud, showed the Board a “case history and
inspection findings” PowerPoint presentation based on a February 2018
report prepared by Willdan, a third-party company that had inspected the
property with Hassid present. The Willdan report said the building “has
been abandoned for several years and has not been maintained” and that
its condition “lends to a blighting problem and adversely affects public
health and safety.” The report recommended “[i]mmediate action,” stating
it was “apparent the issues . . . have not been taken seriously by the property
owner in the past.”

¶4            While Hassid agreed the building “need[ed] electrical,
plumbing, HVAC, and a fire sprinkler system,” he said Appellants were
“actively trying to lease or sell the building for the last 10 years” and were
“looking for the right tenant to lease [the] property and improve it.” Hassid



                                      2
                  GRAND HOLDINGS, et al. v. PEORIA
                       Decision of the Court

also offered a structural engineer’s report on the building, which the Board
declined to consider because Appellants “did not [timely] submit the report
. . . for proper distribution to the board members.”

¶5            The Board issued a written decision upholding the Order on
December 4, 2018, and required Appellants to obtain a demolition permit
by January 4, 2019. Appellants filed a special action complaint in superior
court and moved to stay the Order, contending the Board had deprived
them of due process. They requested a de novo trial, alleging Peoria
withheld relevant documents and acted “as both the prosecutor and the
adjudicator.”

¶6             Peoria responded to Appellants’ motion to stay with
affidavits from Stroud and several other Peoria employees, a copy of the
Willdan report, and a copy of the PowerPoint presentation. Appellants did
not object to these submissions, instead arguing the Board deprived them
of due process at the hearing because the Board:

      (1) relied on the PowerPoint presentation but heard no
      testimony from “the witness who conducted the inspection
      and wrote the [Willdan] report,”

      (2) did not create or provide a transcript of the hearing, and

      (3) did not issue written findings of fact and conclusions of
      law.

Appellants also contended the proceedings lacked due process because
they had no way to seek court review outside of a discretionary special
action.

¶7             Following briefing and oral argument, the superior court
accepted jurisdiction but denied relief, finding Appellants were “treated
fairly and the ruling of the Board was not arbitrary.” It further concluded
that the evidence before the Board “fully supported the conclusion that the
Building is a threat to public safety” and “supported the conclusion that the
most reasonable way to address the problem was demolition.”

¶8            Appellants timely appealed following the entry of final
judgment. We have jurisdiction under Arizona Revised Statutes (“A.R.S.”)
section 12-2101(A)(1). State v. Chopra, 241 Ariz. 353, 355, ¶ 8 (App. 2016).




                                     3
                   GRAND HOLDINGS, et al. v. PEORIA
                        Decision of the Court

                                DISCUSSION

¶9           To prevail on a special action complaint, a plaintiff must
demonstrate:

       (1) “the defendant has failed to exercise discretion which he
       has a duty to exercise; or to perform a duty required by law
       as to which he has no discretion;”

       (2) “the defendant has proceeded or is threatening to proceed
       without or in excess of jurisdiction or legal authority;” or

       (3) a “determination was arbitrary and capricious or an abuse
       of discretion.”

Ariz. R.P. Spec. Act. (“RPSA”) 3. We conduct a bifurcated review on appeal
from a superior court ruling on a special action, determining first whether
the superior court accepted jurisdiction. Stapert v. Ariz. Bd. of Psychologist
Exam’rs, 210 Ariz. 177, 182, ¶ 22 (App. 2005). The superior court did so in
this case. We, therefore, review its merits decision for an abuse of discretion
but review questions of law de novo. Ottaway v. Smith, 210 Ariz. 490, 492,
¶ 5 (App. 2005).

I.     Due Process

¶10           “Due process is a fundamental constitutional guarantee; its
purpose is to protect persons and property rights from the arbitrary action
of government or public officials.” Wallace v. Shields, 175 Ariz. 166, 174
(App. 1992). It is a flexible doctrine, calling for “such procedural protection
as the particular situation demands.” Samiuddin v. Nothwehr, 243 Ariz. 204,
211, ¶ 20 (2017) (quoting Mathews v. Eldridge, 424 U.S. 319, 334 (1976)). The
fundamental requirement of due process is the opportunity to be heard at
a meaningful time and in a meaningful manner. Id.

¶11           In resolving a due process challenge, courts must consider:

       (1) the private interests affected;

       (2) the risk of an erroneous deprivation of such interest
       through the procedures used, and the probable value, if any,
       of additional or substitute procedural safeguards; and

       (3) the government’s interest, including the function involved
       and the fiscal and administrative burdens that the additional
       or substitute procedural requirement would entail.


                                       4
                   GRAND HOLDINGS, et al. v. PEORIA
                        Decision of the Court

State ex rel. Dep’t of Econ. Sec. v. Torres, 245 Ariz. 554, 560, ¶ 23 (App. 2018)
(quoting Mathews, 424 U.S. at 335). We review whether Appellants received
due process de novo. Jeff D. v. Dep’t of Child Safety, 239 Ariz. 205, 207, ¶ 6
(App. 2016).

       A.     Private Interests Affected

¶12           Appellants plainly have an interest in the building. See
Mervyn’s, Inc. v. Superior Court In & For Maricopa Cty., 144 Ariz. 297, 300
(1985) (“It is beyond question that any procedure which deprives an
individual of a property interest must satisfy due process.”). Appellants
contend their interest is “immense,” arguing this case is similar to an
eminent domain case under either A.R.S. § 12-1111 or A.R.S. § 33-1905,
which applies to residential “slum properties.” But Peoria does not seek to
take any portion of Appellants’ land; it instead seeks to exercise its power
to “[d]efine nuisances and abate them” and “[c]ompel the owner of any
unwholesome or nauseous house or place to clean, abate or remove it.”
A.R.S. § 9-276(16), (19). As such, Appellants’ interest, though significant, is
not as strong as it would be in an eminent domain case.

       B.     Risk of Erroneous Deprivation

¶13            Appellants contend the risk of erroneous deprivation is
“incredibly high” because the Board did not make a record of the hearing
or provide written findings of fact or conclusions of law. Appellants argue
the hearing record “must be complete enough to reflect a basis for the
board’s decision so as to enable a meaningful judicial review.” See Schmitz
v. Ariz. State Bd. of Dental Exam’rs, 141 Ariz. 37, 40-41 (App. 1984). Schmitz
involved an appeal from an administrative agency under A.R.S. § 12-901,
et. seq., which does not apply to Peoria or the Board. See A.R.S. § 12-901(1)
(“Except as provided in section 33-1905, administrative agency or agency
does not include . . . any political subdivision or municipal corporation or
any agency of a political subdivision or municipal corporation.”). Indeed,
Peoria was not required to make a verbatim transcript of the hearing. See
A.R.S. § 38-431.01(B) (“All public bodies shall provide for the taking of
written minutes or a recording of all their meetings, including executive
sessions.”) (emphasis added). The Board instead generated hearing
minutes, which Peoria filed in superior court. Further, Appellants had the
ability to record the hearing and create a transcript at their own expense.
See A.R.S. § 38-431.01(F).

¶14           Appellants also argue the Board was obligated to make
“findings of basic facts.” Civil Serv. Comm’n of City of Tucson v. Livingston,



                                       5
                  GRAND HOLDINGS, et al. v. PEORIA
                       Decision of the Court

22 Ariz. App. 183, 188-89 (1974). In that particular case, however, the
applicable rules required such findings. See id. at 188 (“Rule 12, [section]
4(d) of the Rules and Regulations of the Civil Service Commission provides
that the decision of the Commission ‘. . . shall consist of written findings of
fact and its order for the disposition of the case.’”). Appellants cite no such
rules applicable to hearings before the Board. Absent any such rule, a
finding of the ultimate fact—that there were adequate grounds to support
the Order—is sufficient. Cox v. Pima Cty. Law Enf’t Merit Sys. Council, 25
Ariz. App. 349, 350 (1975). Moreover, Appellants offer no argument to
suggest these procedural requirements would reduce the risk of error in the
hearing process. Instead, they argue the requirements would make
appellate review easier.

       C.     Peoria’s Interest

¶15            Appellants broadly contend they “cannot fathom how
providing findings of fact and conclusions of law, allowing [Appellants] to
present evidence or allowing for cross-examination of adverse witnesses
who develop testimony used at the hearing would burden [Peoria] moving
forward.” Converting Board hearings into full-blown trials with subpoena
power, compelled witness testimony, and cross-examination would
significantly increase Peoria’s burden. See Mathews, 424 U.S. at 348. The
government and the public have an interest “in conserving scarce fiscal and
administrative resources . . . that must be weighed. At some point [the cost
may outweigh] the benefit of an additional safeguard to the individual
affected by the administrative action and to society in terms of increased
assurance . . . .” See id. Appellants do not show how the benefits of their
proposed numerous additional procedures would offset that increased
burden.

II.    The Deuel Factors Do Not Apply

¶16          Appellants also rely on Deuel v. Arizona State School for the Deaf
& Blind, where this court identified seven factors “required for a valid due-
process hearing” in a public employment termination case:

       1.    adequate written notice of the specific grounds for
       termination;

       2.     disclosure of the evidence supporting termination,
       including the names and nature of the testimony of adverse
       witnesses;




                                      6
                   GRAND HOLDINGS, et al. v. PEORIA
                        Decision of the Court

       3.     the opportunity to confront and cross-examine
       available adverse witnesses;

       4.    the opportunity to be heard in person and present
       evidence;

       5.     the opportunity to be represented by counsel;

       6.     a fair-minded and impartial decision maker; and

       7.    a written statement by the fact-finders as to the
       evidence relied upon and the reasons for the determination
       made.

165 Ariz. 524, 527 (App. 1990) (internal citations and quotation marks
omitted). Appellants contend five of these factors are absent in this case but
cite no caselaw applying the factors outside of the public employment
context.

¶17            As noted above, due process varies depending on the setting,
and we do not apply an inflexible set of factors to all possible situations.
Dep’t of Child Safety v. Beene, 235 Ariz. 300, 305, ¶ 11 (App. 2014); see also In
re MH-2008-000867, 225 Ariz. 178, 182, ¶ 12 (2010) (“’[D]ue process,’ unlike
some legal rules, is not a technical conception with a fixed content unrelated
to time, place and circumstances.”) (quoting Mathews, 424 U.S. at 334).
Nonetheless, Appellants’ Deuel arguments merit brief discussion.

       A.     Disclosure of the Evidence

¶18            We begin with their contention that Peoria did not timely
disclose its intent to rely on the Willdan report at the hearing. Appellants,
through Hassid, were present for the Willdan inspection and
acknowledged they had received and reviewed a copy of the report in their
application to appeal the Order. Indeed, one of the stated reasons for
appealing was they “strongly disagree[d]” with the Willdan report. Even
assuming Peoria was obligated to formally disclose its intent to rely on the
Willdan report, Appellants have not demonstrated either lack of
knowledge or surprise, or identified any prejudice resulting from the
introduction of the report at the hearing.

       B.     Opportunity to Confront and Cross-Examine Witnesses

¶19           Appellants also contend they were denied the opportunity to
call and cross-examine the Willdan report’s author. They do not contend,



                                       7
                   GRAND HOLDINGS, et al. v. PEORIA
                        Decision of the Court

however, that they raised this issue before the Board. In any event,
confrontation and cross-examination “are not rights universally applicable
to all hearings.” Wolff v. McDonnell, 418 U.S. 539, 567 (1974); Beene, 235 Ariz.
at 305, ¶ 11. Appellants’ citation to an article discussing hearing procedures
before the Office of Administrative Hearings—which this hearing was
not—is not persuasive.

¶20            Similarly, Appellants’ reliance on Application of Levine, 97
Ariz. 88 (1964) is misplaced. There, the Arizona Supreme Court reaffirmed
that a state bar applicant denied admission on character and fitness
grounds has the right “to produce witnesses and evidence on his own
behalf and, if there are accusers and adverse witnesses, to be confronted by
and to examine them.” Id. at 91-92. In contrast, Appellants here were not
“excluded by state action from a business, profession or occupation” as
Levine was. Id. at 91. Additionally, Appellants could have requested the
presence of a Willdan representative at the hearing to ask any relevant
questions but failed to do so.

       C.     Opportunity to Present Evidence

¶21           Appellants also broadly contend the Board did not allow
them to present evidence, but they only cite the Board’s refusal to consider
their structural engineer’s report. Significantly, they cite no authority to
suggest the Board’s requirement that Appellants timely provide documents
to the Board in advance of a hearing is unreasonable or violates due process.
And as noted above, Appellants, through Hassid, appeared and spoke at
the hearing.

       D.     Fair-Minded and Impartial Decisionmaker

¶22           Appellants also contend the Board was not a fair-minded and
impartial decisionmaker because one Peoria employee served as an
assistant to both the Board and the city’s Development and Engineering
Department. See Horne v. Polk, 242 Ariz. 226, 231, ¶ 16 (2017) (“At minimum,
in the context of a regulatory agency adjudication, a process that involves
the same official as both an advocate and the ultimate administrative
decisionmaker creates an appearance of potential bias.”). In contrast, this
Peoria employee was not a Board member, and Appellants do not contend
she took part in the Board’s decision to uphold the Order.




                                       8
                   GRAND HOLDINGS, et al. v. PEORIA
                        Decision of the Court

       E.     Written Statement of the Evidence Relied Upon and the
              Reasons for the Decision

¶23           Appellants also contend the Board’s lack of written findings
of fact and conclusions of law violates due process, again citing Livingston.
As noted above, Livingston is distinguishable because, unlike here, the
factfinder in that case was required by administrative rule to make such
findings. Livingston, 22 Ariz. App. at 188.

¶24             In summary, Appellants do not dispute that (1) Hassid was
present for the Willdan inspection; (2) they were served with the Order; (3)
they received the Willdan report in advance of the Board hearing; and (4)
they had the opportunity to, and did, present objections and arguments to
the Board. We thus conclude, as the superior court did, that Appellants
received due process in connection with the Board hearing. See People ex
rel. Babbitt v. Herndon, 119 Ariz. 454, 457 (1978) (“All that is necessary is that
the procedure be tailored in light of the governmental and private interests
that are involved, to insure that appellee is given a meaningful opportunity
to present his case.”).

III.   The Board’s Decision Was Not Arbitrary or Capricious

¶25          Finally, Appellants contend the Board’s decision upholding
the Order was arbitrary and capricious, reiterating their argument that the
Board did not prepare or provide a transcript. See RPSA 3(c). We have
previously addressed and rejected that argument.

¶26           Appellants also contend the Order improperly relied on the
International Property Maintenance Code (“IPMC”) as adopted by Peoria,
which Appellants contend only applies to occupied structures. No such
limitation appears in the IPMC. See Peoria City Code § 18-4(A) (adopting
the 2015 IPMC); IPMC § 101.2 (“The provisions of this code shall apply to
all existing residential and nonresidential structures and all existing
premises.”).

¶27           Appellants also contend the sections of the IPMC on which
Peoria relied “allow for repair,” citing IPMC § 107.2(4)’s requirement that a
notice of violation shall include “a correction order allowing a reasonable
time to make the repairs and improvements required to bring the dwelling
unit or structure into compliance.” Appellants did not raise this argument
below, and we generally do not consider arguments raised for the first time
on appeal. K.B. v. State Farm Fire & Cas. Co., 189 Ariz. 263, 268 (App. 1997).
Nonetheless, the IPMC also authorizes code officials to order the
demolition of a structure if it is “so deteriorated or dilapidated or has


                                        9
                  GRAND HOLDINGS, et al. v. PEORIA
                       Decision of the Court

become so out of repair as to be dangerous, unsafe, insanitary or otherwise
unfit for human habitation or occupancy.” IPMC § 110.1. The Willdan
report contains ample evidence to support the superior court’s finding that
“the condition of the Building is, to put it mildly, horrible” and that it was
“very unsafe.”

¶28           Appellants also argue the Board failed to comply with A.R.S.
§ 9-500.21, which sets forth procedures for hearing and determining civil
offenses. They do not show, however, that any of the code violations cited
in the Order constitute a civil offense. The superior court did not abuse its
discretion in finding the Board’s order was not arbitrary or capricious.
Ottaway, 210 Ariz. at 492, ¶ 5.

IV.    Attorneys’ Fees and Costs on Appeal

¶29           Appellants request its attorneys’ fees and costs incurred in
this appeal under several statutes, each of which allows a successful party
to recover fees or costs in certain circumstances. A.R.S. §§ 9-832(1), 12-341,
12-342, 12-348(A), 12-2030(A). Appellants are not the successful parties;
accordingly, we deny their request.

                              CONCLUSION

¶30            We affirm the superior court’s judgment. Peoria may recover
its taxable costs incurred in this appeal upon compliance with Arizona Rule
of Civil Appellate Procedure 21.




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




                                       10
