                    SUPREME COURT OF ARIZONA
                             En Banc

CNL HOTELS AND RESORTS, INC., a   )   Arizona Supreme Court
Maryland corporation; and         )   No. CV-11-0072-PR
MARRIOTT DESERT RIDGE RESORT,     )
LLC, a Delaware limited           )   Court of Appeals
liability company,                )   Division One
                                  )   No. 1 CA-TX 09-0003
           Plaintiffs/Appellants, )
                                  )   Arizona Tax Court
                 v.               )   Nos. TX2007-000057
                                  )        TX2007-000177
MARICOPA COUNTY, a political      )        (Consolidated)
subdivision of the State of       )
Arizona,                          )
                                  )        O P I N I O N
              Defendant/Appellee. )
                                  )
__________________________________)


                Appeal from the Arizona Tax Court
 The Honorable Dean M. Fink, Judge and Thomas Dunevant, Retired
                              Judge

                      VACATED AND REMANDED
________________________________________________________________

          Opinion of the Court of Appeals Division One
               226 Ariz. 155, 244 P.3d 592 (2010)

                             VACATED
________________________________________________________________


BALLARD SPAHR LLP                                           Phoenix
     By   Brian W. LaCorte
          Joseph A. Kanefield

And

GALLAGHER & KENNEDY, P.A.                                Phoenix
     By   Mark A. Fuller
          James G. Busby, Jr.
Attorneys for CNL Hotels and Resorts Inc and Marriott Desert
Ridge Resort LLC
HELM LIVESAY & KYLE LTD                                                Tempe
     By   Roberta S. Livesay
          Raushanah Daniels
Attorneys for Maricopa County

LASOTA & PETERS, PLC                                      Phoenix
     By   Donald M. Peters
          Kristin M. Mackin
Attorneys for Amicus Curiae Arizona Association of School
Business Officials

GUST ROSENFELD P.L.C.                                     Phoenix
     By   David A. Pennartz
Attorney for Amicus Curiae Paradise Valley Unified School
District No. 69

JONES SKELTON & HOCHULI, P.L.C.                          Phoenix
     By   Timothy J. Bojanowski
Attorney for Amici Curiae Rodger Dahozy, Philip S. Leiendecker,
Chris Mazon, Darlene Adler, Linda Durr, Keith E. Russell, Cammy
Darris, William Staples, Paul Larkin, Felipe A. Fuentes, Jr.,
Pamela J. Pearsall, and Joe Wehrle

THOMAS C. HORNE, ARIZONA ATTORNEY GENERAL                Phoenix
     By   Paula S. Bickett, Chief Counsel, Civil Appeals
          Daniel P. Schaack, Assistant Attorney General
Attorney for Amicus Curiae State of Arizona
________________________________________________________________

B R U T I N E L, Justice

¶1            Improvements on land leased from the state qualify for

a reduced ad valorem tax rate if they “become the property of

the . . . state . . . on termination of the leasehold interest

in the property.”       A.R.S. § 42-12009(A)(1)(a) (2009).           We hold

that   this    provision   applies   when,   at   the   time   of   taxation,

improvements exist on the land that, under the terms of the

lease, would become the state’s property upon lease termination.



                                     2 
                                               I.

¶2            In 1993, the predecessor-in-interest to CNL Hotels and

Resorts Inc. (“CNL”) entered into two ninety-nine year leases of

state trust land to build the Desert Ridge Resort and Spa and

adjacent golf course.                The leases provide that the property “may

only   be     used      for    the     construction,        operation,      maintenance,

renovation and/or reconstruction of a hotel or other similar

resort      facility.”              Although      CNL    owns     all   structures    and

improvements         on   the        land,   at     lease    termination,      CNL   must

“surrender peaceable possession of the [p]remises,” including

the improvements, and quitclaim to the state “any right, title

or interest in the leasehold.”                    During each lease term, CNL has

the    right      “to     remove       or    demolish       all    or   any   part    of”

improvements         on       the     property       without      any   obligation    to

reconstruct them.

¶3            After the leases were entered into, the legislature

created a property tax classification (“Class Nine”) in which

property is taxed at a rate of one percent, significantly lower

than   that    generally            applicable      to   commercial     property.     See

A.R.S. §§ 42-12001, -12009 (defining Class One and Class Nine

properties); A.R.S. §§ 42-15001, -15009 (prescribing lower tax

rate for Class Nine than for Class One).                            From 2003 through

2006, the tax years at issue here, Maricopa County classified

the      Desert       Ridge          improvements        under      Class     One,   the

                                               3 
classification applicable to general commercial property, and

taxed CNL accordingly.

¶4          CNL appealed the County’s 2006 tax assessment to the

State      Board     of      Equalization,       requesting      Class       Nine

classification.      The Board denied the request, concluding that

the improvements would not “unequivocally become the property of

the state” when the leases ended.            CNL then filed a declaratory

judgment action in the tax court.            The County moved for summary

judgment, arguing that Class Nine did not apply because CNL had

the unqualified right to remove or destroy improvements during

the lease term.      Neither the County’s motion nor CNL’s response

addressed    whether       Desert   Ridge   is   used   primarily      for   the

purposes    described      in   § 42-12009(A)(1)(b)     (the    “primary     use

requirement”) or the appropriate tax classification of the golf

course.      See    § 42-12001(9)     (including     golf     course   property

within    Class    One);    § 42-12002(1)(d)     (including     golf     courses

within Class Two).         The tax court granted summary judgment for

the County based on CNL’s failure to meet the requirements of

§ 42-12009(A)(1)(a).

¶5          The court of appeals reversed and directed the tax

court to instead enter summary judgment for CNL.                 CNL Hotels &

Resorts, Inc. v. Maricopa Cnty., 226 Ariz. 155, 164 ¶ 41, 244

P.3d 592, 601 (App. 2010).            It held “that § 42-12009 requires

the existence of a demonstrable reversionary interest at the

                                       4 
time of taxation,” id. at 160 ¶ 19, 244 P.3d at 597, and that

the CNL leases meet this requirement, id. at 162 ¶ 29, 244 P.3d

at 599.      It further concluded that the evidence in the record

supported the tax court’s “finding” that CNL meets the primary

use requirement.       Id. at 163 ¶ 35, 244 P.3d at 600.                     Moreover,

the court of appeals held that the County had waived review on

the primary use issue by not cross-appealing.                           Id. at 163-64

¶¶ 37-38,    244    P.3d     at    600-01.        The   court    also    rejected   the

County’s argument that CNL was not entitled to seek relief for

back taxes under A.R.S. § 42-16251(3), the “error correction”

statute.     Id. at 162-63 ¶¶ 30-33, 244 P.3d at 599-600.

¶6           We    granted    review      to      address   issues      of   statewide

importance    concerning          the   interpretation      of   the     property   tax

statutes.

                                          II.

                                           A.

¶7           The first issue involves the proper interpretation of

§ 42-12009(A)(1)(a), which applies Class Nine to:

     1. Improvements that are located on federal, state,
     county or municipal property and owned by the lessee of
     the property if:

          a. The improvements become the property of the
             federal, state, county or municipal owner of
             the property on termination of the leasehold
             interest in the property.

          b. Both the improvements and the property are
             used primarily for athletic, recreational,

                                             5 
                             entertainment,    artistic,                                   cultural         or
                             convention activities.
 

¶8                           To qualify for Class Nine tax status, improvements on

government                          land                must        become        the    governmental        landowner’s

property                     on         the           lease’s         termination.           The     parties     dispute,

however, whether Class Nine applies to improvements that may no

longer exist at the end of a lease, although they will become

the government’s property if they do.                                                        CNL asserts, and the

court of appeals held, that sub-paragraph (a) requires only that

the           taxed              improvement                       will   become        government       property     if   it

exists upon lease termination.                                               See CNL Hotels, 226 Ariz. at 160

¶ 18, 244 P.3d at 597 (requiring tax assessment to focus “on the

present                  existence                       of    a    demonstrable         reversionary       interest”).1

The County, however, argues that the Class Nine statute also

requires proof the improvement will in fact exist at the end of

the lease.

¶9                           Both             readings              are   consistent        with     the    language       of

§ 42-12009(A)(1)(a); the statute does not specify whether Class

Nine status requires certainty that the government lessor will

receive                     now-existing                           improvements          when      the     lease      later

terminates.                                Because             § 42-12009(A)(1)(a)              is   subject     to    “two

                                                            
1
 The parties and courts below use the term “reversionary
interest” to describe the sub-paragraph (a) requirement of
future ownership, but this terminology is technically inaccurate
because the government could not hold a “reversionary” interest
in improvements it did not previously own.
                                                                             6 
plausible interpretations,” it is ambiguous.                              Hayes v. Cont’l

Ins.    Co.,        178   Ariz.   264,     268,       872        P.2d   668,       672    (1994).

Accordingly,         we    must   interpret          the    statute     in     light       of   its

“context, subject matter, and historical background; its effects

and consequences; and its spirit and purpose.”                           Id.

¶10            We    conclude     that     CNL’s       interpretation          is        the    more

reasonable one.             Section 42-12009 is a property tax statute.

Our property tax laws generally do not assign immutable tax

classifications; instead, property taxes are assessed annually.

See A.R.S. § 42-13051 (requiring tax assessor to yearly list

property and assess its value for purposes of the tax roll).

Because a property’s appropriate classification is reevaluated

each    year    the       property    is    taxed,          § 42-12009        is     reasonably

interpreted          as   contemplating         that        tax     classifications             will

consider the circumstances at the time of taxation.                                Speculating

about    hypothetical           future     events          is    unnecessary.             If     the

government landowner’s right to receive the improvement at the

termination         of    the   lease,     in    fact,          terminates,     so       will   the

taxpayer’s entitlement to Class Nine status.

¶11            The         County’s         interpretation                also            creates

administrative difficulties.                Tax assessors would be required to

scrutinize each lease, covenant, contract, and statute governing

the leasehold to determine whether a future contingency could

prevent the lessor from actually receiving the improvement.                                      See

                                                7 
Killebrew v. Indus. Comm’n of Ariz., 65 Ariz. 163, 168, 176 P.2d

925,    928    (1947)      (considering             “difficulties             in     the    practical

operation      of    the    law”        to    discern           correct       interpretation        of

statutory      text).            The    County’s              position       would    also       likely

require tax assessors to inquire into rebuilding requirements in

the event of natural or manmade disasters such as fire, flood,

earthquake, war, or terrorist attack.

¶12           The     County’s          rationale             for    its     interpretation          is

equally       unpersuasive.              It    contends             that     unless        the   state

actually      receives      the        improvement            taxed    under       § 42-12009,      it

will    not    receive       sufficient         economic              value    to     justify       the

lessee’s tax benefit.             We disagree.

¶13           The County characterizes the state’s future ownership

as     consideration        for    the        one        percent       tax    rate     the       lessee

receives.       But neither § 42-12009 nor the property tax scheme

generally evinces any legislative intent to require taxpayers to

compensate the government when they benefit from favorable tax

rates.        And    in    any    event,       it        was    not    unreasonable          for    the

legislature to determine that reducing property taxes for Class

Nine    would       benefit      the     state           by    encouraging         the      lease    of

government land and spurring development.                              See Ariz. Const. art.

10, §§ 1-11 (prescribing management of state trust lands); see

also Turken v. Gordon, 223 Ariz. 342, 348 ¶ 23, 349 ¶ 29, 224

P.3d 158, 164, 165 (2010) (acknowledging that city council could

                                                    8 
reasonably conclude increased tax base benefits public).

¶14          In   contrast,   the   court        of   appeals’       and    CNL’s

interpretation of subsection (A)(1)(a) avoids these analytical

and administrative pitfalls.         Similarly, it comports with the

state’s duty to responsibly manage trust land.

¶15          Reading § 42-12009(A)(1)(a) to require only that, at

the time of taxation, an improvement exist on the land that,

under the terms of the lease, would become the property of the

government landowner at the lease’s termination results in a

statute that is easy to apply and understand.                  Tax assessors

would be faced with a manageable task, consistent with their

statutorily defined duties.         See § 42-13051 (describing duties

of county tax assessors as determining names of owners and cash

value   of   properties).      Their        inquiry   would   be    limited    to

examining each tax year what exists on the land and determining

whether the government landowner at that time has the right to

own any improvements upon termination of the lease.

¶16          Applying this interpretation, CNL has satisfied § 42-

12009(A)(1)(a)’s     future   ownership       requirement.         Desert   Ridge

sits on state trust land.       Upon the termination of each lease,

CNL must quitclaim the premises, including any improvements, to

the state.




                                       9 
                                          B.

¶17            The County also argues that the court of appeals erred

in ordering summary judgment in favor of CNL because no evidence

was presented to show CNL met the primary use requirements of

§ 42-12009(A)(1)(b).            The County’s motion for summary judgment

had specifically reserved the right to litigate that issue, and

the County asks that we vacate the court of appeals’ opinion,

allowing it to litigate whether Desert Ridge is used primarily

for “athletic, recreational, entertainment, artistic, cultural

or convention activities.”           § 42-12009(A)(1)(b).

¶18            In granting the County’s motion for summary judgment,

the tax court stated that CNL met the primary use requirement,

but did not explain this assertion or cite any authority or

evidence supporting it.             The court of appeals interpreted the

tax court’s statement as a finding establishing primary use even

though this issue had neither been briefed nor argued in the tax

court.

¶19            “[I]t is incorrect to direct entry of summary judgment

on issues not raised by the movant in the trial court and on

which    the    parties    have    therefore    not   had   an   opportunity   to

marshal and present evidence.”             City of Phoenix v. Yarnell, 184

Ariz.    310,     320,    909     P.2d   377,   387   (1995).      The   County,

therefore, is entitled to fully litigate this issue in the tax

court on remand.

                                          10 
¶20           The court of appeals also erred in concluding that the

County was required to file a cross-appeal on the primary use

issue.       CNL Hotels, 226 Ariz. at 163-64 ¶ 37, 244 P.3d at 600-

01.     Arizona’s long-settled rule is that “if [an] appellee in

its   brief     seeks       only    to    support          or     defend      and       uphold   the

judgment      of     the    lower    court         from     which       the    opposing       party

appeals, a cross-appeal is not necessary.”                               Maricopa Cnty. v.

Corp. Comm’n, 79 Ariz. 307, 310, 289 P.2d 183, 185 (1955).                                         A

cross-appeal is required only if the appellee seeks “to attack

[the]    judgment      with     a    view         of     either    enlarging            his   rights

thereunder      or    lessening       the         rights    of     his     adversary.”           Id.

(internal      quotations       omitted).                Merely    seeking         to    support   a

lower court’s judgment for reasons not relied upon by it “is not

attempting to enlarge [an appellee’s] own rights or lessen those

of    [an]     adversary,”          and       a     cross       appeal        is    unnecessary.

Santanello v. Cooper, 106 Ariz. 262, 265, 475 P.2d 246, 249

(1970);      see     also    Ariz.       R.       Civ.    App.     P.    1,    13,      State    Bar

Committee Note.            As a prevailing party not seeking to expand its

own rights, the County was not required to file a cross-appeal.

                                                  C.

¶21           We also granted review on the County’s claim that the

Desert       Ridge     golf        course         property        should       be       classified

separately from the resort property because golf course property

is listed as belonging to Class One or Class Two under §§ 42-

                                                  11 
12001(9) and 42-12002(1)(d).            Rather than decide this issue, we

leave it to the tax court to address in the first instance when

it considers the primary use of the Desert Ridge property for

purposes of § 42-12009(A)(1)(b).

                                            D.

¶22         Finally, we address the County’s argument that CNL was

not    entitled   to     relief    under      the      error    correction       statute.

Section    42-16251(3)     authorizes         correction       of     “any   mistake   in

assessing or collecting property taxes” when the error is caused

by any circumstance listed in subsections (3)(a) through (3)(e).

The County maintains that the court of appeals wrongly concluded

that the statute applies to the kind of “errors” CNL alleged.

¶23         Subsection (3)(b) includes “[a]n incorrect designation

or    description   of    the     use   or       occupancy     of     property    or   its

classification.”        The court of appeals correctly concluded that

because Desert Ridge had been wrongly categorized under Class

One, CNL could avail itself of the error correction statute.

CNL Hotels, 226 Ariz. at 162 ¶ 30, 255 P.3d at 599.

¶24         The County, however, contends that subsection (3)(e)

bars CNL’s recovery.            Subsection (e) states that error exists

when “a valuation or legal classification [of property] is based

on an error that is exclusively factual in nature or due to a

specific    legal      restriction      .    .     .     and   that    is    objectively

verifiable    without      the     exercise         of    discretion,        opinion   or

                                            12 
judgment.”     The County argues that CNL cannot qualify for relief

under     subsection       (3)(e)     because       meeting        the     primary       use

requirement        for    Class     Nine     involves      factual       determinations

subject to discretion, opinion, or judgment.                       But even assuming

arguendo    that     the    County     is     correct      about   subsection        3(e),

nothing in § 42-16251 suggests that a taxpayer’s inability to

seek relief under one subsection bars relief under another.

                                            III.

¶25          For    the    foregoing       reasons,       we   vacate     the    court    of

appeals’    opinion       and     remand    the    case    to   the      tax    court    for

further proceedings consistent with this opinion.                         We deny CNL’s

request for attorney fees, without prejudice to CNL requesting

the tax court to award it fees for this stage of proceedings if

it prevails on remand.              See Ariz. R. Civ. App. P. 21(c); Leo

Eisenberg & Co. v. Payson, 162 Ariz. 529, 535, 785 P.2d 49, 55

(1989).



                                   _____________________________________
                                   Robert M. Brutinel, Justice

CONCURRING:


_____________________________________
Rebecca White Berch, Chief Justice



_____________________________________
Scott Bales, Vice Chief Justice

                                             13 
_____________________________________
A. John Pelander, Justice


_____________________________________*




                                                            
*
Before his resignation on June 27, 2012, as a result of his
appointment to the United States Court of Appeals for the Ninth
Circuit, Justice Andrew D. Hurwitz participated in this case,
including oral argument, and concurred in this opinion’s
reasoning and result.


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