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Michael K Jeanes, Clerk of Court

*** Electronically Filed ***
S. Bagnall, Deputy
4/15/2015 4:42:00 PM
Filing ID 6537688

TIMOTHY H. BARNES, P.C.

428 East Thunderbird Road, #150
Phoenix, Arizona 85022
(602) 492-1528 Direct
(602) 331-0731 Facsimile
tim@thbpc.com
Timothy H. Barnes (SBN 003373)
Attorney for Plaintiffs/Counterdefendants

SUPERIOR COURT OF MARICOPA COUNTY, ARIZONA

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LINDA W. SWAIN, an individual; and EILEEN

T. BRESLIN, an individual,

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Plaintiffs
vs.

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BIXBY VILLAGE GOLF COURSE, INC., a

California corporation; HIRO INVESTMENT,
LLC, an Arizona limited liability company;
NECTAR INVESTMENT, LLC, an Arizona
limited liability company; KWANG CO., LLC, an
Arizona limited liability company; AHWATUKEE
GOLF PROPERTIES, LLC, an Arizona limited
liability company,
Defendants.
_______________________________________
BIXBY VILLAGE GOLF COURSE, INC., a
California corporation; HIRO INVESTMENT,
LLC, an Arizona limited liability company;
NECTAR INVESTMENT, LLC, an Arizona
limited liability company; KWANG CO., LLC, an
Arizona limited liability company; AHWATUKEE
GOLF PROPERTIES, LLC, an Arizona limited
liability company,
Counterplaintiffs,

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vs.

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LINDA W. SWAIN, an individual; and EILEEN

R. BRESLIN, an individual,

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Case No. CV2014-051035

Counterdefendants.

MOTION FOR
PARTIAL SUMMARY
JUDGMENT (COUNTERCLAIM)
(Oral Argument Requested)

(Assigned Hon. John R. Hannah, Jr.)

Linda W. Swain and Eileen R. Breslin (collectively, Counterdefendants) move this

Court for an Order granting them partial summary judgment dismissing the Counterclaim

filed by Counterclaimants Bixby Village Golf Course, Inc., Hiro Investment, LLC, Nectar

Investment, LLC and Kwang Co., LLC (collectively, Owner Counterclaimants) and

Ahwatukee Golf Properties, LLC (Counterclaimant AGP) (collectively, all of the counter-

claimants shall be referred to as the Counterclaimants) against Counterdefendants because

there are no genuine issues of material fact and Counterdefendants are entitled to judgment

as a matter of law regarding the declaratory relief sought in the Counterclaim. This Motion

is made pursuant to Rule 56, Arizona Rules of Civil Procedure, and is supported by the

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concurrently filed Statement of Facts in Support of Partial Motion for Summary Judgment

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(Counterclaim) (SOF), the Declaration of Linda W. Swain, the Declaration of Eileen T.

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Breslin and the below Memorandum of Points and Authorities.

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Memorandum of Points and Authorities

I.

Introduction

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This matter involves restrictions recorded against the Ahwatukee Lakes Golf Course

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in Phoenix, Arizona. The original Deed Restriction (the Lakes Deed Restriction) was

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recorded in 1986, subsequently amended in 1987 and 1988; and then further amended in 1992

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by the Declaration of Covenants, Conditions and Restrictions (the 1992 CC&Rs). The

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Counterdefendants are homeowners of residences within the geographic area of Benefitted

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Persons as defined in the 1992 CC&Rs. Owner Counterclaimants are the fee owners of the

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Lakes Deed Restriction.

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Counterclaimants to manage and operate the Ahwatukee Lakes Golf Course.

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Counterdefendants have brought this action against Counterclaimants to enforce the 1992

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CC&Rs. The Counterclaimants have collectively filed a Counterclaim seeking declaratory

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relief regarding the interpretation of the 1992 CC&Rs. This Motion seeks the dismissal of

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the Counterclaim because the facts needed to resolve this Motion are undisputed and the

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Counterclaimants are not entitled as a matter of law to the declaratory relief sought in the

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Counterclaim.

Counterclaimant AGP entered into a lease with Owner

II.

Factual Background

On October 16, 1986, Chicago Title Agency of Arizona, Inc. (the Declarant), as the

sole owner in trust for the benefit of The Presley Companies (Developer) of the 18 hole

executive golf course known as Ahwatukee Lakes Golf Course, caused to be recorded in a

deed restriction (the Lakes Deed Restriction) covering the Ahwatukee Lakes Golf Course,

the legal description of which was attached to the Deed Restriction. SOF, 1.

The substance of the Lakes Deed Restriction stated as follows:

Chicago Title Agency of Arizona, Inc., an Arizona corporation, as owner in

trust of the real property situated in the County of Maricopa, State of
Arizona, described in Exhibit A attached hereto and incorporated herein by
reference, hereby makes this deed restriction pursuant to A.R.S. 42-125.01,
restricting the use of said property to use as a golf course, facilities and
improvements related thereto, for ten (10) years. This restriction constitutes
a covenant between the county assessor and the owner of subject real
property and is not for the benefit of the surrounding properties or any third
party. This restriction may be amended, revoked or extended for any time
at the discretion of the then owner of the property, subject to the provisions
of A.R.S. 42-125.01.

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SOF, 2.
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On September 11, 1987, the Declarant caused to be recorded an amendment (the 1987
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Amended Lakes Deed Restriction) to the Lakes Deed Restriction extending the term of the
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deed restriction for one (1) additional year. SOF, 3. On December 27, 1988, the Declarant
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caused to be recorded an amendment (the 1988 Amended Lakes Deed Restriction) to the
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Lakes Deed Restriction extending the term of the deed restriction for five (5) additional years.
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SOF, 4
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On November 13, 1992, the Declarant caused to be recorded a Declaration of

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Covenants, Conditions, Restrictions and Easements (regarding, in addition to other real

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property, the Ahwatukee Lakes Golf Course. SOF, 5.

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Recital D of the 1992 CC&Rs states they are for the benefit of present and future
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owners of the Property, as well as for the benefit of any other owner of property located
within the Ahwatukee master planned community as defined on Exhibit B attached hereto.
SOF, 7. Recital E of the 1992 CC&Rs states, in pertinent part, By this Declaration,

Declarant desires to amend and restate the Lakes Deed Restriction . . . SOF, 8. Recital F

of the 1992 CC&Rs states that by recording the document, the Declarant intends to comply

with the requirements and obtain the benefits of A.R.S. 42-146 regarding the valuation and

taxation of golf courses. SOF, 9.

Paragraph 1 of the 1992 CC&Rs states, in pertinent part, This Declaration shall

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constitute an amendment to the Lakes Deed Restriction . . . SOF, 10.

Paragraph 2 of the 1992 CC&Rs sets out the use restrictions for the subject real

property which, the Declarant specifically states, is benefit of those persons or classes of

persons described in Recital D above (hereafter, Benefitted Persons). Paragraph 2 goes on

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to state that [t]he Property shall be used for no purposes other than golf courses and such

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improvements and . . . uses as are reasonably related to, convenient for or in furtherance of

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golf course use or the accommodation of golf course patrons and guests . . .. SOF, 11.

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Pursuant to paragraph 6 of the 1992 CC&Rs, the term of the covenants, conditions and

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restrictions therein shall be appurtenant to and run with the land and shall be binding upon

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all present and future owners, occupants and users of the Property or any portion thereof and

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all persons claiming an interest in and to the Property in perpetuity. SOF, 12. Paragraph

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6 of the 1992 CC&Rs also provides that if the Declarant or Developer determines that there

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has been a material change in conditions or circumstances affecting the Property . . . Declarant

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or Developer may petition the Maricopa County Superior Court . . . for modification of this

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Declaration. SOF, 13.

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Paragraph 4 of the 1992 CC&Rs states they may be enforced by, among others,

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Benefitted Persons in the event of a breach, default or violation of the 1992 CC&Rs. SOF,

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14.

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Paragraph 10 (Amendment) of the 1992 CC&Rs states as follows:

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(b)
Except as provided in subparagraph (a) above, this Declaration may be
amended only by recording in the official records of Maricopa County, Arizona,
an Amendment approved by the Declarant and the Developer (or their
successors and assigns) and not less than fifty-one percent (51%) of the other
Benefitted Persons.

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SOF, 15.

On June 15, 2006, Owner Counterclaimants took fee title to the Ahwatukee Lakes Golf

Course. SOF, 16. Owner Counterclaimants took fee title to the Ahwatukee Lakes Golf

Course by Special Warranty Deed which expressly stated the deed was subject to any and

all covenants, conditions, restrictions, easements, encumbrances, liens and other matters of

record. SOF, 17. Also on June 15, 2006, Owner Counterclaimants entered into a Lease

Agreement with Counterclaimant AGP, which Counterclaimant AGP agreed to diligently and

efficiently manage, maintain and operate the Ahwatukee Lakes Golf Course and the

Ahwatukee Country Club. SOF, 19.

No lawsuit or petition has been filed by the Declarant or the Developer identified in

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the 1992 CC&Rs seeking to modify the 1992 CC&Rs due to a material change in conditions

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or circumstances affecting the Ahwatukee Lakes Golf Course. SOF, 25. Nor have the

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Declarant and the Developer identified in the 1992 CC&Rs and fifty-one percent (51%) of

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the persons residing in the Ahwatukee master planned community as defined in Exhibit B

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to the 1992 CC&Rs not voted to modify the 1992 CC&Rs. SOF, 26.

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III.

Legal Argument

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1.

Counterclaimants Counterclaim 26 seeks declaratory relief regarding three

issues related to the 1992 CC&Rs

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The Counterclaim requests the following declaratory relief:

26. Counterplaintiffs request this Court to declare the rights of the parties under the
[1992 CC&Rs] and declare:

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a) the [Ahwatukee Lakes Golf Course] need not be run as a golf course or
any commercial enterprise but is permitted to revert to its natural state;

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b) the [1992 CC&Rs] may be modified by:

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1) a Maricopa County Superior Court or any other court or adjudicative

body of competent jurisdiction upon a finding that there has been a
material change in conditions or circumstances affecting the
[Ahwatukee Lakes Golf Course]; or
2) a recording in the official records of Maricopa County, Arizona, an
Amendment approved by the Declarant and the Developer (or their
successors and assigns) and not less than fifty-one percent (51%) of
the other Benefitted Persons.

While the declaratory relief sought in Counterclaim 26(a) raises a justiciable controversy,

Counterdefendants are entitled to summary judgment on that claim; and Counterclaimants

have no definite interest in the issues they raise in the declaratory relief requests (which are

not actual disputes for which declaratory relief is available) sought in Counterclaim 26(b)

and therefore no legal right to declaratory relief.

2.

Arizonas declaratory relief requirements

In Arizona, declaratory relief is governed by Uniform Declaratory Judgments Act in

A.R.S. 12-1831, et seq. Declaratory relief is a statutory remedy where courts of record

have power to declare rights, status, and other legal relations whether or not further relief is

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or could be claimed. A.R.S. 12-1831; Canyon del Rio Investors, L.L.C. v. City of Flagstaff,

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227 Ariz. 336, 341, 258 P.3d 154, 159 (App. 2011). Arizonas statutory scheme states its

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purpose is to settle and afford relief from uncertainty and insecurity with respect to rights,

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status and other legal relations . . . A.R.S. 12-1842

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A declaratory action provides a means by which rights and obligations may be

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adjudicated in actions involving an actual, or justiciable, controversy. Elkins v. Vana, 25

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Ariz. App. 122, 126, 541 P.2d 585, 589 (1975). For a justiciable controversy under

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Arizona's declaratory judgment statutes there must be (i) an actual controversy, (ii) a plaintiff

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with a real stake in the outcome and (iii) a defendant with a position adverse to the plaintiffs

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and the ability to adversely affect the plaintiff. Arizona Civil Remedies (Third Ed. 2011), Vol.

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One, Declaratory Judgments, pg. 5.14. See also Board of Supervisors of Maricopa County v.

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Woodall, 120 Ariz. 379, 380, 586 P.2d 628, 629 (Ariz., 1978) Lake Havasu Resort, Inc. v.

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Commercial Loan Ins. Corp., 139 Ariz. 369, 377, 678 P.2d 950, 958 (App. 1983); and Morton

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v. Pacific Const. Co., 36 Ariz. 97, 102, 283 P. 281, 282 (1929) (the question must be real,

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and not theoretical). Essentially, the dispute giving rise to a declaratory judgment action

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must be an actual, existing dispute based on an existing state of facts rather than a factual

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scenario which may or may not arise in the future. Moore v. Bolin, 70 Ariz. 354, 357, 220

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P.2d 850, 852 (1950); American Federation of State, County and Muni. Employees, AFL-

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CIO, Council 97 v. Lewis, 165 Ariz. 149, 152, 797 P.2d 6, 9 (App. 1990).

3.

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Counterclaimants are not entitled to the declaratory relief sought in

Counterclaim 26(a) as a matter of law because Counterclaimants requested
interpretation is not supported by 1992 CC&Rs

A.

The 1992 CC&Rs is a restrictive covenant and contract, binding the

Counterclaimants to its terms

Covenants, conditions and restrictions such as the 1992 CC&Rs constitute a covenant

running with the land forming a contract between the owners of the common areas and the

individual lot owners. Divizio v. Kewin Enterprises, Inc., 136 Ariz. 476, 481, 666 P.2d 1085,

1090 (App. 1983); Ahwatukee Custom Estates Management Assoc. v. Turner, 196 Ariz. 631,

634, 2 P.3d 1276, 1279 (App. 2000) (CC&Rs constitute a contract between subdivisions

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property owners as a whole and individual lot owners); and A.R.S. 33-416. 1 The 1992

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CC&Rs state that they run with the land and shall be binding upon all present and future

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owners. SOF, 12. Moreover, the Special Warranty Deed transferring the Ahwatukee Golf

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Course to Counterclaimant specifically stated title was warranted subject to any and all

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restrictive covenants, conditions and restrictions, easements, encumbrances, liens and other

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matters of record. SOF, 17. Thus, by accepting a deed to the Ahwatukee Lakes Golf

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Course, Counterclaimant became bound by the restrictions recorded against the Ahwatukee

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Lakes Golf Course as effectively as if they had each executed the instrument. Murphey v.

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Gray, 84 Ariz. 299, 305, 327 P.2d 751, 755 (1950); Pinetop Lakes Ass'n v. Hatch 135 Ariz.

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196, 198, 659 P.2d 1341, 1343 (App., 1983).

B.

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The terms of the 1992 CC&Rs are interpreted to give effect to the intention
of the parties ascertained from its language

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With the 1992 CC&Rs constituting a contract between Counterclaimant and

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Counterdefendants as Benefitted Persons 2 , the interpretation of the 1992 CC&Rs is a

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question of law, not a question of fact. Powell v. Washburn, 211 Ariz. 553, 555, 125 P.3d
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373, 375 (2006); Arizona Biltmore Estates Association v. Tezak, 177 Ariz. 1030, 1031, 868
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The record of a grant, deed or instrument in writing authorized or required to be recorded,

which has been duly acknowledged and recorded in the proper county, shall be notice to all
persons of the existence of such grant, deed or instrument, but a mortgage of real property may
be recorded and constructive notice and the contents thereof given as provided in 33-415.
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SOF, 21-24.

P.2d 1030, 448 (App. 1994). In Arizona, restrictive covenants are construed according to the

intention of the parties to the instrument. Powell v. Washburn, at Ariz. 556, at P.3d 376. The

intent of the parties and the object of the deed or restriction should govern, giving the

instrument a just and fair interpretation. Id. The Arizona Supreme Court expanded on what

should be considered in interpreting restrictive covenants:

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Arizona's rule that courts should enforce the intent of the parties to a restrictive
covenant in the absence of ambiguity reaches back to the 1930s. In Ainsworth
v. Elder, this Court adopted an intent-based analysis (without calling it such)
when it stated that courts should consider not only the strict and technical
meaning of the particular words of restriction, but also the surrounding
circumstances, the general purpose of the restrictions, and the manner in which
they have been interpreted by the property owners.
Id. (Emphasis supplied).

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The Arizona Supreme Court stated in Powell v. Washburn that it accepted review of

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the Arizona Court of Appeals decision because of the widespread use of restrictive covenants

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in planned communities and the accompanying need for a clear statement of how to interpret

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such covenant. Id. at Ariz. 555, at P.3d 375. The Supreme Court observed the traditional

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rule in Arizona has been that when a restrictive covenant is unambiguous, it is enforced so as

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to give effect to the intent of the parties. Id. at Ariz. 556, at P.3d 376. However, the Supreme

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Court noted that some Arizona courts have also posited a countervailing principle of

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interpreting restrictive covenants when a court perceives that a restrictive covenant is

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ambiguous or does not specifically prohibit a particular use of the property, and a number of

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opinions state that a court must strictly construe the terms of the restrictive covenant in favor

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of the free use of land and against the restriction. Id.

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The Supreme Court noted the function of the law is to ascertain and give effect to the

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likely intentions and legitimate expectations of the parties who create servitudes, as it does

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with respect to other contractual arrangements. Id. at Ariz. 556, at P.3d 376. To support its

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conclusion, the Court cites to the Restatement (Third) of Property (Servitudes), Introductory

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Note to ch. 4, at 494 (2000). The Restatement recommends the following for interpretation

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of restrictive covenants:
[a] servitude should be interpreted to give effect to the intention of the parties
ascertained from the language used in the instrument, or the circumstances

surrounding creation of the servitude, and to carry out the purpose for which it
was created.

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Id. at Ariz. 557, at P.3d 377. The Supreme Court noted the Restatement recommendation for
interpreting restrictive covenants is consistent with its holding for interpretation of contracts
in Taylor v. State Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 153, 854 P.2d 1134, 1139 (1993)
(When interpreting a contract ... it is fundamental that a court attempt to ascertain and give
effect to the intention of the parties at the time the contract was made if at all possible.). Id.
at Ariz. 556, at P.3d 376
Based on the similarity to how Arizona interprets contracts, the Arizona Supreme

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Court adopted the Restatement rule that a servitude should be interpreted to give effect to the
intention of the parties ascertained from the language used in the instrument, or the
circumstances surrounding creation of the servitude, and to carry out the purpose for which it
was created. Id. at Ariz. 557, at P.3d 377.
C.

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The intent of the parties in adopting the 1992 CC&Rs was to meet the
requirements of Arizonas golf course valuation and taxation statutory
scheme

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Because the 1992 CC&Rs state those restrictive covenants amend and restate the

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Lakes Deed Restriction the parties intention must begin with the Lakes Deed Restriction

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enacted in 1986. That original deed restriction stated this deed restriction [is made] pursuant

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to A.R.S. 42-125.01, restricting the use of said property to use as a golf course, facilities

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and improvements related thereto, for ten (10) years. 3 The Lakes Deed Restriction stated

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that it constitutes a covenant between the county assessor and the owner of the subject real

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property; and specifically stated it was not for the benefit of the surrounding properties or

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any third party.

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The Lakes Deed Restriction was amended by the 1987 Amended Lakes Deed

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Restriction extending the deed restriction an additional one year; and amended a second time

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This statute was part of Arizonas statutory scheme for the valuation and taxation of golf
courses. A.R.S. 42-125.01 was later renumbered by the Legislature to be A.R.S. 42-146. In
1997, A.R.S. 42-146 was repealed and its substance was moved to A.R.S. 42-13151, et seq.
as Arizonas valuation and taxation of golf courses.
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by the 1988 Amended Lakes Deed Restriction extending the deed restriction an additional

five years. Then, in 1992, the Lakes Deed Restriction was amended a third time by the 1992

CC&Rs. That amendment specifically stated, By recording this Declaration, the Declarant

intends to comply with the requirements and obtain the benefits of Arizona Revised Statutes

Section 42-146[4] regarding the valuation and taxation of golf courses. Furthermore, the

1992 CC&Rs declared they were for the mutual benefit of Declarant (Chicago Trust), the

Developer (The Presley Companies) and all present and future owners or users of such

portions of the Property as remain subject to this Declaration; . . . and any other owner of

property located within the Ahwatukee master planned community.

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From the creation of the Lakes Deed Restriction, the Declarant required the

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Ahwatukee Lakes Golf Course be used only as a golf course pursuant to A.R.S. 42-125.01.

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That statute (and A.R.S. 42-146 referenced in the 1986 and 1992 deed restrictions) is part

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of Arizonas valuation and taxation of golf course statutes. The Declarant originally stated

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the Lakes Deed Restriction constitutes a covenant between the county assessor and the owner

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of subject real property. This provision alone underscores that Arizonas golf course

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valuation and taxation statutory scheme was the core basis for the Lakes Deed Restriction.

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Plainly, the intent of the Declarant as the party who created the Lakes Deed Restriction and

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the object of that deed restriction was that the Ahwatukee Lakes Golf Course meet the

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requirements of Arizonas valuation and taxation of golf course statutes. Each amendment to

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the Lakes Deed Restriction from 1986 through 1992 definitely state the original intent and

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object of the deed restriction remained the same.

D.

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Recording the Lakes Deed Restriction restricting the property to a golf

course, was necessary to assure the Ahwatukee Lakes Golf Course
complied with Arizonas golf course valuation and taxation statutory
scheme

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[I]n recognition of the importance of [their] open space and economic benefits,

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Arizona affords golf courses special valuation and tax treatment. A.R.S. 42-13152. In order

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to receive the special golf course valuation and tax treatment,

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See footnote 3.

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the owner of a golf course shall record a deed restriction with the county
recorder and file a copy of the restriction with the county assessor, restricting
the property to use as a golf course for at least ten years. The deed restriction
must be refiled as necessary to ensure that the deed restriction always applies
for at least ten years.
A.R.S. 42-13154. The definition of a golf course is set out in A.R.S. 42-13151:
golf course means substantially undeveloped land, including amenities such
as landscaping, irrigation systems, paths and golf greens and tees, that may be
used for golfing or golfing practice by the public or by members and guests of
a private club

If a golf course meets the statutory definition of A.R.S. 42-13151, the discounted valuation
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is based on a statutory per acre valuation amount (A.R.S. 42-13151(C)) and a formula to
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determine and annually adjust the improvement value of the golf course. A.R.S. 4213151(D). The latter value is based, in part, on the number of actual rounds of golf played

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during the most recent twelve months ending on July 31. Id.
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Arizonas golf course valuation and taxation statutes was considered in PhxAz LP v.

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Maricopa County, 192 Ariz. 490, 967 P.2d 1026 (App. 1998). In that decision, the Arizona
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Court of Appeals interpreted the meaning of golf course as used in A.R.S. 42-146 in

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determining whether the special valuation method under that statute applied in establishing
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the tax rate on two particular golf courses. In the PhxAz LP case, developers obtained zoning
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for golf courses in two planned areas and requested the Maricopa County Assessor value each
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golf course as a golf course as that phrase is defined in A.R.S. 42-146(G) for purposes of

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determining the tax rate. The Maricopa County Assessor found because the golf courses were
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still under construction they did not meet the A.R.S. 42-146(G) definition of golf course

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and were not entitled to the special valuation method. After the State Board of Equalization
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agreed with Maricopa County Assessor, the developer tax payers appealed to the Maricopa
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County Superior Court Tax Court, who ruled in favor of the developer tax payers. The county
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then appealed to the Arizona Court of Appeals.

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In overturning the trial courts ruling the Arizona Court of Appeals focused on the
definition of golf course in A.R.S. 42-146(G). That statute provided:
As used in this section, golf course means substantially undeveloped land,
including amenities such as landscaping, irrigation systems, paths and golf

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greens and tees, which may be used for golfing and golfing practice by the
public or by members and guests of a private club but not including commercial
golf practice ranges operated exclusive of golf courses valued under this section,
clubhouses, pro shops, restaurants or similar buildings as associated with the
golf course which are generally used by the public or by members and guests
entitled to use the golf course.5

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Id. at Ariz. 494, at P.2d 1030. Judge Ryan stated, [t]he essence of a golf course under

subsection G is that it be substantially undeveloped land . . . [that] may be used for golfing

or golfing practice by the public or members and guests of a private club. The Court of

Appeals concluded if the golf courses could not be used for golfing or golfing practice by

the public or by members and guests of a private club, the golf courses did not qualify as

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golf courses under A.R.S. 42-146. Id.

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In evaluating the statutory definition of a golf course, Judge Ryan indicated he found

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it difficult to conceive that the legislature would have made the applicability of a special

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valuation method with such significant consequences as provided in A.R.S. 42-146(A) turn

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on an unspecified degree of probability that a parcel of property would be committed to use

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for golfing or golfing practice at an unspecified point in the future. Id. Judge Ryan

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succinctly concluded, Thus, the tax benefit is appropriately only applied to an operational

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golf course. Id. at Ariz. 496, at P.3d 1032.

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E.

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Because the Declarant intended the Ahwatukee Lakes Golf Course would
comply with Arizonas golf course valuation and taxation statutes, the
1992 CC&Rs require it be operated as a golf course so that it can be
presently used for golfing and golfing practice

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Because (i) the 1992 CC&Rs are to be interpreted to give effect to the intention and

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object of the party who drafted those restrictive covenants, (ii) the party who drafted the Lakes

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Deed Restriction and each amendment, including the 1992 CC&Rs, intended the Ahwatukee

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Lakes Golf Course was to be (in perpetuity) in compliance with the Arizonas golf course

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valuation and taxation statutory scheme, (iii) compliance with the Arizonas golf course

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valuation and taxation statutory scheme requires that a golf course is an operational golf

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While the format of the definition of golf course in A.R.S. 42-13151 is slightly different,
the substance of the two definitions are identical.
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course, (iv) the availability of the special treatment under the Arizonas golf course valuation

and taxation statutory scheme requires golf be played on the Ahwatukee Lakes Golf Course

during the preceding twelve months and (vi) the interpretation of restrictive covenants is a

legal (not factual) issue,, Counterclaimants requested declaratory relief that the [Ahwatukee

Lakes Golf Course] need not be run as a golf course or any commercial enterprise but is

permitted to revert to its natural state is not consistent with the intent and object of the

Declarant in drafting the 1992 CC&Rs. As such, the declaratory relief sought in Counterclaim

26(a) must be denied as a matter of law.

4.

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The declaratory relief sought in Counterclaim 26(b) does not raise justiciable
controversies for which declaratory relief can be granted
A party is not entitled to declaratory relief without first establishing there is a

justiciable controversy for the court to declare the rights, status and legal relations of the
parties to the dispute. Therefore, the dispute must be an existing dispute, not a theoretical
dispute. In the case of the declaratory relief sought in Counterclaim 26(b), there are no
actual disputes for the Court to resolve. Rather, Counterclaimants identify rights belonging
exclusively to third parties (i.e. either the Declarant, the Developer or 51% of the Benefitted
Persons), but which rights those third parties have not sought to exercise. Consequently,
Counterclaimants are not entitled to the declaratory relief sought Counterclaim 26(b).
The Counterclaim ( 17 and 24) refers to 6 and 10(b) in the 1992 Conditions,
Covenants and Restrictions which allow those restrictive covenants to be amended one of two
different ways. Under 6, the 1992 Conditions, Covenants and Restrictions provides:
The covenants, conditions, restrictions and easements set forth herein shall be
appurtenant to and run with the land and shall be binding upon all present and
future owners, occupants and users of the Property or any portion thereof and
all persons claiming an interest in and to the Property in perpetuity; provided,
however, that if Declarant or Developer (including their successors or assigns)
determines that there has been a material change in conditions or circumstances
affecting the Property or the covenants, conditions, restrictions and easements
set forth herein, Declarant or Developer may petition the Maricopa county
Superior Court or any other court or adjudicative body of competent jurisdiction
for modification of this Declaration.
(Emphasis added).

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Based on the above provision, the 1992 Conditions, Covenants and Restrictions may

be changed by both the Declarant and the Developer based on material change in conditions

or circumstances. The Declarant is Chicago Title Agency of Arizona, Inc. SOF, 1. The

Developer is The Presley Companies. Id. Counterclaimants are neither a Declarant nor the

Developer. Moreover, there is no pending action by the Declarant or Developer seeking a

change in the 1992 Declaration. SOF, 24. Without a pending action requesting such

changes (which can only be brought by entities other than Defendants), Defendants

nonetheless request declaratory relief which meets none of the three requirements for

declaratory relief.

10

First, Counterclaimants cannot demonstrate there is an actual controversy because

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there is no lawsuit pending. Second, because Counterclaimants are neither the Declarant nor

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the Developer, Counterclaimants have no stake in the outcome for which they seek

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declaratory relief based on 6, the 1992 Conditions, Covenants and Restrictions. In addition,

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third, Counterdefendants are not in a position to adversely affect Counterclaimants. In other

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words, because the relief described in 6, the 1992 Conditions, Covenants and Restrictions

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is available to only the Declarant and Developer, the declaratory relief requested in 26(b)(1)

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of the Counterclaim is not an appropriate basis for declaratory relief.

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Counterclaimants also request declaratory relief based on 10(b) of the 1992

Conditions, Covenants and Restrictions, which states,

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this Declaration may be amended only by recording in the official records of

Maricopa County, Arizona, an Amendment approved by the Declarant and the
Developer (or their successors and assigns) and not less than fifty-one percent
(51%) of the other Benefitted Persons.

23

Despite, first, their lack of position to approve any proposed amendment to the 1992

24

Conditions, Covenants and Restrictions and despite, second, the complete lack of any

25

evidence that the Declarant, the Developer and not less than 51% of the other Benefitted

26

Persons have voted to amend the restrictive covenants, Defendants nonetheless request the

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Court to declare that the 1992 Conditions, Covenants and Restrictions may be modified by

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10(b) of the restrictive covenants. Declaratory relief is based on an existing state of facts

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21

involving an actual controversy. No amendment to the 1992 Conditions, Covenants and

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Restriction may occur pursuant to 10(b) without the Declarant and Developer having first

approved an amendment to the restrictive covenants, which has been approved by a vote of

not less than 51% of the other Benefitted Persons.

Since the Defendants request for declaratory relief in Counterclaim 26(b)(1) and (2)

do not meet the three requirements for declaratory relief, those two grounds seeking

declaratory relief are not based on an existing state of facts between two parties authorized to

the relief described in 6 and 10(b) of the 1992 Conditions, Covenants and Restriction. As

such, the Court should neither entertain nor adjudicate the Counterclaimants speculative

request for declaratory relief. Irrespective of the Courts desire to pursue Defendants request

10

for declaratory relief, it is far too speculative to adjudicate now since it is brought by a party

11

without a real stake, is not ripe and is not based on existing facts.

12

IV.

Conclusion

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For all the reasons set forth herein, Counterdefendants respectfully urge the Court to

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grant their Motion for Partial Summary Judgment (Counterclaim) by finding there are no

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genuine issues of material fact, finding Counterdefendants are entitled to judgment as a matter

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of law and dismissing the Counterclaim seeking declaratory relief to which Counterclaimants

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are not entitled.

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Dated this 15th day of April, 2015.

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TIMOTHY H. BARNES, P.C.

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By /s/ Timothy H. Barnes (SBN 003373)

Timothy H. Barnes
Attorney for Plaintiffs/Counterdefendants

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26
27
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Original e-filed, e-served and mailed

this 15th day of April, 2015, to:
Daniel D. Maynard
Maynard Cronin Erickson Curran & Reiter, PLC
3200 N. Central Ave., Suite 1800
Phoenix, Arizona 85012
Attorneys for Defendants/Counterplaintiffs
/s/ Carol J. Clark

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