author: WINTHROP, Presiding Judge:

text:
    IN RE the Matter of the ESTATE OF: Lucille F. SIBLEY, Decedent.
    John S. Mashler, et al., Petitioners/Appellees, v. Ernest F. Mashler, Respondent/Appellant.
    No. 1 CA-CV 17-0369
    Court of Appeals of Arizona, Division 1.
    Filed July 26, 2018
    Jaburg & Wilk, P.C., Phoenix, By Kathi M. Sandweiss, Roger L. Cohen, Co-Counsel for Petitioners/Appellees
    Deason Garner Law Firm, Yuma, By Adam D. Hansen, Co-Counsel for Petitioners/Appellees
    Dickinson Wright, PLLC, Phoenix, By Michael J. Plati, Counsel for Respondent/Appellant
    Presiding Judge Lawrence F. Winthrop delivered the opinion of the Court, in which Judge Jennifer B. Campbell and Judge Paul J. McMurdie joined.
   WINTHROP, Presiding Judge:

¶ 1 Ernest F. Mashler ("Ernest") appeals from the superior court's judgment denying his petition to partition certain real property ("Farmland") and approving the restatement of his mother's trust.

¶ 2 We address in this opinion whether precatory language in a will directed to a personal representative or executor rather than devisees creates an enforceable instruction. We hold that, read with the other provisions of a will, precatory language may create an enforceable directive rather than a discretionary request. Additionally, we conclude that the trial court erred in approving a restatement of the decedent's trust, permitting the trustees to "decant" an otherwise irrevocable trust. We hold that, pursuant to Arizona Revised Statutes ("A.R.S.") section 14-10819(A) , a trustee has discretion to decant-the authority to appoint or distribute trust property to a new or different existing trust with terms that differ from those of the original trust-only when the trust instrument expressly provides.

¶ 3 Accordingly, we affirm the court's denial of Ernest's petition to partition the Farmland but vacate the court's order approving restatement of the trust.

FACTS AND PROCEDURAL HISTORY

¶ 4 In 1986, Lucille F. Sibley ("Lucille") and her husband, Phillip R. Sibley ("Phil"), created the Phil R. Sibley & Lucille F. Sibley Trust (the "Trust"), which became irrevocable upon their deaths. Lucille and Phil had one child together, Patricia Sibley Knott, and Lucille had three children by a prior marriage, Ernest, Christine Wolleson ("Christine"), and John Mashler ("John").

¶ 5 When Phil died in 2004, Lucille's separate property and her share of the community property were allocated to "Trust A." When Lucille died in 2015, the Trust directed that the remaining principal and income of Trust A be distributed pursuant to the terms of Lucille's Last Will and Testament (the "Will").

¶ 6 The Will directed that:

[A]ll liquid assets of Trust "A" shall be divided into three equal shares and distributed free of trust to: [Ernest, Christine, and John,] or their issue per stirpes. It is my desire that the real property ( [F]armland) which is part of Trust "A" ... be held in further trust and that the income of such [F]armland, after the payment of expenses to keep it in trust, be divided equally among [Ernest, Christine, and John,] or their issue per stirpes. Unless required to satisfy the administration of my estate ... I desire that the [F]armland not be sold until my youngest great-grandchild reaches the age of twenty-one . At such time, the proceeds of which would be distributed equally to [Ernest, Christine, and John,] or their issue per stirpes.

(Emphasis added.)

¶ 7 Upon Lucille's death, John applied to superior court for the informal probate of the Will and appointment of a personal representative. The court appointed John as personal representative. John and Christine were the remaining co-trustees of the Trust.

¶ 8 Approximately one year later, John petitioned the superior court to approve the exercise of his and Christine's power, pursuant to A.R.S. § 14-10819, to restate the terms of the Trust. He asserted that the Trust "was outdated and lacked modern administrative provisions." Christine later joined the action. Ernest objected to their petition and filed his own petition seeking to partition the Farmland.

¶ 9 After a hearing on both petitions, the superior court entered a judgment (1) denying Ernest's petition to partition the Farmland and (2) approving John and Christine's restatement of the Trust. Ernest timely appealed from the judgment, and we have jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution, A.R.S. §§ 12-120.21(A)(1), and -2101(A)(9).

ANALYSIS

I. Statute of Limitations

¶ 10 As a preliminary matter, John and Christine argue that Ernest was barred from contesting the validity of the Trust by A.R.S. § 14-10604(A). That statute provides, in relevant part, that "[a] person may commence a judicial proceeding to contest the validity of a trust that was revocable at the settlor's death within ... [o]ne year after the settlor's death." A.R.S. § 14-10604(A)(1) (emphasis added). Here, the Trust became irrevocable upon Phil's and Lucille's deaths. Therefore, § 14-10604, which applies to revocable trusts, did not preclude Ernest from contesting the validity of the Trust.

¶ 11 John and Christine additionally argue that A.R.S. § 14-3306 also prohibits Ernest from contesting the Trust. Section 14-3306 prohibits an heir "from commencing a formal testacy proceeding to contest the probate of the will after four months have elapsed" following receipt of information regarding informal probate of a will. A.R.S. § 14-3306(B). John and Christine's brief, however, fails to explain how this statute applies to bar Ernest's petition to partition the Farmland or his objection to John and Christine's petition to restate the Trust. See ARCAP 13(a)(7) (requiring "supporting reasons for each contention" with citations to legal authorities). Accordingly, they have waived this argument on appeal. See Polanco v. Indus. Comm'n , 214 Ariz. 489, 491 n.2, ¶ 6, 154 P.3d 391, 393 (App. 2007) (explaining that a party who fails to develop and support an argument waives that issue on appeal). Further, Ernest did not commence a formal testacy proceeding to contest the probate of the Will; simply stated, § 14-3306 does not apply.

II. Construction of the Will

¶ 12 In appealing the denial of his motion to partition the Farmland, Ernest first argues the superior court improperly interpreted the Will "as directing that the Farmland be held in trust."

¶ 13 The "cardinal rule" of will construction is to ascertain the intent of the testator from the words of the will. See Newhall v. McGill , 69 Ariz. 259, 262, 212 P.2d 764 (1949). On appeal, we review any legal issues raised de novo , and apply "the appropriate legal standard to the facts found" by the superior court. In re Estate of Shumway , 198 Ariz. 323, 326, ¶ 9, 9 P.3d 1062, 1065 (2000). "[W]e do not reweigh conflicting evidence" but rather "examine the record only to determine whether substantial evidence exists" to support the court's ruling. In re Estate of Pouser , 193 Ariz. 574, 579, ¶ 13, 975 P.2d 704, 709 (1999).

¶ 14 Lucille's intent regarding the disposition of her "liquid assets" is easily ascertained from the language of the Will. She stated that the assets "shall be divided into three equal shares and distributed free of trust" to Ernest, Christine, and John. Her intent regarding the Farmland was expressed differently. She indicated that it was her "desire" that the Farmland "be held in further trust and that the income of such [F]armland, after the payment of expenses to keep it in trust, be divided equally among" Ernest, Christine, and John. She further expressed her "desire" that the Farmland not be sold until her youngest great-grandchild turned twenty-one.

¶ 15 The phrase "I desire" is "precatory," which means "requesting, recommending, or expressing a desire rather than a command." Precatory , Black's Law Dictionary (10th ed. 2014). A precatory trust is "[a] trust that the law will recognize to carry out the wishes of the testator or grantor even though the statement in question is in the nature of an entreaty or recommendation rather than a command." Precatory trust , Black's Law Dictionary (10th ed. 2014). The issue we must resolve is whether Lucille's words placed the Farmland in the Trust.

¶ 16 More than seventy-seven years ago, the Arizona Supreme Court addressed the effect of precatory language in a will. The court interpreted a will that provided:

It is my wish, though this is not a restriction or a limitation upon the use and enjoyment of the legacies and bequests herein made, that my estate, after the payment of my debts, the cash bequests and expenses of administration, shall be kept among the descendants of my late father and mother.

In re Hayward's Estate , 57 Ariz. 51, 58, 110 P.2d 956 (1941). Our supreme court concluded that this language constituted "a recommendation or request directed to legatees and devisees" rather than a command. Id. at 60, 110 P.2d 956. In reaching this conclusion, however, the court acknowledged "many cases" in which precatory language is properly "construed as dispositive." Id. at 58, 110 P.2d 956. The court cited with approval a California case holding that "[w]here the words are used to describe a disposition of property, that is, where they are directed to the executor or to the law, and not to a devisee or legatee, the authorities are uniform that the word ['desire'] is sufficient to declare a disposition of the property." Id. at 59, 110 P.2d 956 (quoting In re Tooley's Estate , 170 Cal. 164, 149 P. 574, 575 (1915) ).

¶ 17 Several years later in Newhall v. McGill , our supreme court explained how a court should determine whether precatory language creates a trust:

[I]n order that a trust may arise from the use of precatory words, the court must be satisfied, from the words themselves, taken in connection with all the other terms of the disposition, that the testator's intention to create an express trust was as full, complete, settled, and sure as though he had given the property to hold upon a trust declared in the ordinary manner.

69 Ariz. at 263, 212 P.2d 764 (citing Fields v. Fields , 139 Or. 41, 3 P.2d 771, 773-74 (Or. 1931) ); see In re Conness' Estate , 73 Ariz. 216, 218-19, 240 P.2d 176 (1952) (concluding that "for the education of" was a precatory phrase that did not create a trust, but was instead "only an expression of a wish or desire on the part of the testator to the legatees as to how they should use the bequest"); see also In re Rowlands' Estate , 73 Ariz. 337, 340, 241 P.2d 781 (1952) ("Precatory words directed to an executor indicate a trust while the same words to a devisee do not") (citing Newhall , 69 Ariz. 259, 212 P.2d 764 ).

¶ 18 After carefully reading the language of the Will, we conclude that the evidence supports the superior court's finding that, Lucille's words regarding the disposition of the Farmland, examined with the other terms of the Will, reflect her intent to hold the Farmland in further trust. Her words "it is my desire" are not directed to her devisees but to the personal representative of her estate. Unlike the testator in Hayward's Estate , Lucille did not include qualifying language stating that her desire should not be construed as "a restriction or limitation." And, most importantly, the Will reflects Lucille's intent to dispose of her "liquid assets" separately and differently from the Farmland. She expressly directed that her liquid assets be distributed "free of trust." If Lucille wanted the same disposition for the Farmland, she would have so stated. Instead, she addressed the Farmland separately and expressed her will that it be held in "further trust."

¶ 19 On appeal, Ernest argues that the superior court's ruling contradicts the testimony of Stephen Shadle, the attorney who drafted the Will. Although it is true that Shadle testified that the word "desire" was precatory and not obligatory, his testimony was contradicted by a letter he sent following Lucille's death that stated, "I think the time for closing the Trust and selling is about ten years out," and that he needed "to get great grandchildren birth dates nailed down to get the exact date." The letter suggests Shadle's pre-litigation understanding that the Farmland should be held in "further trust." It is not for this Court to reweigh conflicting evidence. See In re Estate of Pouser , 193 Ariz. at 579, ¶ 13, 975 P.2d 704.

¶ 20 We conclude that the language of the Will supports the superior court's finding that Lucille intended the Farmland to be held in trust until her youngest great-grandchild, alive at the time of Lucille's death, reaches the age of twenty-one. Accordingly, we affirm the court's denial of Ernest's petition to partition the Farmland.

III. Restatement of the Trust

¶ 21 Ernest next argues that the superior court erred in approving John and Christine's restatement of the Trust pursuant to A.R.S. § 14-10819. He asserts that the power to appoint under § 14-10819 arises only when "the trustee has 'discretion' with respect to trust asset or income distributions," and that the Trust here did not provide such discretion. We agree.

¶ 22 Section 14-10819 provides, in part:

Unless the terms of the trust instrument expressly provide otherwise, a trustee who has the discretion under the terms of a testamentary instrument or irrevocable inter vivos agreement to make distributions , regardless of whether a standard is provided in the trust instrument to or for the benefit of a beneficiary of the trust, may exercise without prior court approval the trustee's discretion by appointing part or all of the trust property in favor of a trustee of another trust.

A.R.S. § 14-10819(A) (emphasis added).

¶ 23 Section 14-10819(A) grants a trustee the power to "decant" an irrevocable trust under certain conditions. As explained by the Uniform Law Commission, decanting refers to "the distribution of assets from one trust into a second trust, like wine is decanted from the bottle to another vessel." A trustee with decanting power has "authority to amend an unamendable trust, in the sense that he or she may distribute the trust property to a second trust with terms that differ from those of the original trust." Morse v. Kraft , 466 Mass. 92, 992 N.E.2d 1021, 1024 (2013) (citation omitted).

¶ 24 The rationale behind decanting is that "if a trustee has discretion to distribute trust property to or for the benefit of a beneficiary, the trustee in effect has a limited power of appointment in favor of the beneficiary and thereby can appoint the property to a new or existing trust for the benefit of that beneficiary." Alan S. Halperin, Zoey F. Orol, Modern Variations on an Ancient Theme: Fundamental Changes in Trust Law-Part II , N.Y. St. B.J. 25, 26 (March/April 2017). Thus, it is a trustee's discretionary authority to make distributions in favor of a beneficiary that provides the premise for decanting. See William R. Culp, Jr., Briani Bennett Mellen, Trust Decanting: An Overview and Introduction to Creative Planning Opportunities , 45 Real Prop. Tr. & Est. L.J. 1 37-38 (2010). Based on this rationale, Arizona's statute, like those of other states, requires that a trustee have the power to make discretionary distributions for the benefit of a beneficiary under the terms of the original trust. See A.R.S. § 14-10819(A) ; see also Ferri v. Powell-Ferri , 476 Mass. 651, 72 N.E.3d 541, 553-54 n.12 (2017) (citing decanting statutes from twenty-seven states).

¶ 25 We have reviewed the Trust here and find no evidence that John and Christine, as trustees, have discretion to make distributions for the benefit of the beneficiaries, who include themselves. Prior to Lucille's death, the trustees had discretion to distribute principal for the benefit of Lucille's "maintenance, support, health and well being." Upon Lucille's death, the trustees had discretion to draw upon the principal to cover any funeral expenses and death taxes. However, the Trust provides no authority for the trustees to make discretionary distributions for the benefit of the beneficiaries following Lucille's death.

¶ 26 John and Christine cite Article IV(B) of the Trust, which provides that, upon Lucille's death, the trustees:

[S]hall distribute the then remaining principal and undistributed income to or hold the same for the benefit of such person or persons or the estate of [Lucille] in such amounts and proportions, for such estates and interests, and outright, or upon such terms, trusts, conditions and limitations as [Lucille] shall appoint by a Will referring specifically to this power of appointment.

This provision directs John and Christine to distribute or hold the Trust principal and income in compliance with Lucille's Will. It does not grant John and Christine discretion over the distribution of principal or income.

¶ 27 Alternatively, John and Christine argue "that the discretionary power need not come directly from the testamentary instruments themselves." We disagree. Section 14-10819 expressly requires that the trustee's discretion come from "the terms of a testamentary instrument or irrevocable inter vivos agreement." A.R.S. § 14-10819(A).

¶ 28 Because the Trust does not grant John and Christine the discretion to make distributions for the benefit of the beneficiaries, they did not have the authority to restate the Trust pursuant to § 14-10819. Accordingly, we vacate that portion of the superior court's judgment. The original Trust remains in effect. If the parties wish to modify the Trust going forward, they must follow the appropriate statutory procedure. See A.R.S. § 14-10410.

IV. Attorneys' Fees

¶ 29 John and Christine request an award of attorneys' fees on appeal pursuant to A.R.S. § 14-11004, which provides:

A. A trustee ... is entitled to reimbursement from the trust for that person's reasonable fees, expenses and disbursement, including attorney fees and costs, that arise out of and that relate to the good faith defense or prosecution of a judicial ... proceeding involving the administration of the trust, regardless of whether the defense or prosecution is successful.
B. A court ... may order that a party's reasonable fees, expenses and disbursements pursuant to subsection A be paid by any other party or the trust that is the subject of the judicial proceeding.

A.R.S. § 14-11004. We grant John and Christine's request for an award of reasonable attorneys' fees and costs on appeal to be paid by the Trust pursuant to § 14-11004(A) but deny their request for fees against Ernest personally pursuant to § 14-11004(B).

CONCLUSION

¶ 30 For the foregoing reasons, we affirm the superior court's denial of Ernest's petition to partition the Farmland but vacate the court's approval of the restated trust. We award John and Christine their reasonable attorneys' fees and costs on appeal upon their timely compliance with Arizona Rule of Civil Appellate Procedure 21.

      We cite the current versions of all applicable statutes as no revisions material to this opinion have since occurred.

      Patricia Sibley Knott is not a party to this appeal.

      The Missouri Court of Appeals recently articulated the rule set forth in Newhall . See Day v. Hupp , 528 S.W.3d 400, 414 (Mo. Ct. App. 2017) (reasoning that a trust will arise from the use of precatory words only if the court is "satisfied from the words themselves, considered in connection with all the other terms of the disposition, that the grantor's intention to create a trust was as complete and certain as if she had given the property to hold in a trust declared in the ordinary manner").

      Ernest's petition also asserted that Lucille's testamentary power of appointment violated the rule against perpetuities set forth in A.R.S. § 14-2901(A), because she directed that the Farmland not be sold until her youngest great-grandchild reached the age of twenty-one. The superior court found that the language of the Will could "be construed to apply to the youngest great-grandchild then living at the time of Lucille's death." Ernest has not challenged this ruling on appeal. Accordingly, we do not review the superior court's finding.

      The Uniform Trust Decanting Act, A Summary , http://www.uniformlaws.org/shared/docs/trustdecanting/UTDA% 20-% 20Summary.pdf

      The Uniform Trust Decanting Act likewise authorizes decanting only when the trust confers discretionary distribution powers. See Uniform Trust Decanting Act , §§ 11, 12 ( Unif. Law Comm'n 2015).


source: Caselaw Access Project

author: McMURDIE, Judge:

license: Public Domain

text:
    Bogdan DABROWSKI, et al., Plaintiffs/Counter-Defendants/Appellants/Cross-Appellees, v. David C. BARTLETT, Defendant/Counter-Claimant/Appellee/Cross-Appellant.
    No. 1 CA-CV 17-0380
    Court of Appeals of Arizona, Division 1.
    FILED May 7, 2019
    MacQueen & Gottlieb PLC, Phoenix, By Benjamin L. Gottlieb (argued), Patrick R. MacQueen, Counsel for Plaintiffs/Counter-Defendants/Appellants/Cross-Appellees
    Radix Law, PLC, Scottsdale, By Donald R. Alvarez, Counsel for Defendant/Counter-Claimant/Appellee/Cross-Appellant
    Judge Paul J. McMurdie delivered the opinion of the Court, in which Presiding Judge Jennifer B. Campbell and Judge Kent E. Cattani joined.
   McMURDIE, Judge:

¶1 Bogdan and Jolanta Dabrowski appeal from a judgment granting David C. Bartlett a private way of necessity ("private condemnation") over the Dabrowskis' property. Bartlett cross-appeals, contending he was entitled to either express easement rights or an easement by implied way of necessity. For the reasons set forth below, we hold that: (1) an unactivated easement is subject to a merger; (2) a common law easement by implied way of necessity does not exist if the severance of the parcel did not cause the lot to lack a reasonable outlet; (3) unity of ownership for a merger may occur even if the parties are technically different; (4) in a private condemnation action, a finding that a more reasonable route exists through the subject property constitutes "bad faith, oppression, or abuse of power" under Solana Land Co. v. Murphey , 69 Ariz. 117, 125, 210 P.2d 593 (1949), precluding the condemnor from condemning its selected route; and (5) a private condemnation judgment must be satisfied before a final order of condemnation can issue and an easement recorded. Accordingly, we affirm the judgment on the easement claims and remand for the court to determine the route, scope, and cost of the private condemnation.

FACTS AND PROCEDURAL BACKGROUND

¶2 The parties dispute whether Bartlett should have access to his five-acre lot in Cave Creek over the Dabrowskis' adjacent lot. Both lots were part of a larger parcel that was split into three lots in 1999, then identified as Parcels A, B, and C. In 2002, Parcel A was divided into three separate lots of approximately five acres each, which include the lots now owned by the Dabrowskis ("Lot 1") and Bartlett ("Lot 2") (collectively the "Lots").

¶3 Until 2007, Rockaway Hills Drive (the "access road") was the only road on the land.

On March 2, 2000, Jack Lewis, the owner of Parcels A and B, declared an easement that reached Lot 2 through Lot 1 (the "2000 Express Easement") and then sold the Lots in Parcel A.

¶4 In April 2001, Lewis conveyed Parcel B to Andrew C. Jacob in his capacity as trustee of the ACJ [Andrew C. Jacob] Declaration of Trust ("Jacob Trust"). On September 18, 2001, Lewis reacquired the Lots via a trustee's sale.

¶5 On September 18, 2002, the Town of Cave Creek approved a lot split ("2002 Lot Split"), which established the Lots as they currently appear. The survey that accompanied the 2002 Lot Split was prepared for Jacob and reflected an ingress, egress, and utility easement over Parcel B for the benefit of Lot 1, similar to the 2000 Express Easement, but did not extend to Lot 2. The month after the 2002 Lot Split was approved, Lewis conveyed Lots 1 and 2 to Jacob and his wife.

¶6 Cave Creek approved a second lot split of Parcel A on April 11, 2003, based on a separate survey ("2003 Lot Split") also prepared for Jacob. The 2003 Lot Split was recorded on April 12, 2003. The survey, depicted below, showed an easement over Parcel B reaching the midpoint of the eastern border of the Lots and did not encumber Lot 1 for the benefit of Lot 2.

¶7 The next month, Jacob and his wife sold the Lots to Bartlett ("Jacob-Bartlett conveyance"). In 2005, Bartlett conveyed Lot 1 to Michael Hiltner and Julie Mahon but retained Lot 2 in his capacity as a trustee of the JoshuaBleu Trust ("Bartlett-Hiltner conveyance"). Bartlett did not record an express easement in connection with the conveyance. The Jacob Trust sold Parcel B to Bryan Anderson in June 2005.

¶8 In 2007, Hiltner completed construction of a house and driveway located on Lot 1. Anderson began construction of his house on Parcel B in 2006, which was completed in 2014. The Dabrowskis acquired the house and property comprising Lot 1 via a trustee's sale in January 2012. A dispute arose shortly thereafter between the Dabrowskis and Bartlett regarding Bartlett's access to Lot 2, leading to the Dabrowskis filing suit to quiet title in 2013. Bartlett counterclaimed, alleging that he was entitled to an implied way of necessity, an implied easement of necessity, or in the alternative, a private condemnation across Lot 1. Bartlett later added a counterclaim alleging that he had express access rights via the 2000 Express Easement. At the time of trial, the land appeared as follows:

¶9 The superior court granted summary judgment to the Dabrowskis on Bartlett's express easement claim, finding that the 2000 Express Easement had terminated by a merger. The parties proceeded to a bench trial on the remaining claims. Following the trial, the court ruled that:

[T]he 2003 Lot Split did not create a valid easement, there is no express easement, and there is no implied easement at this time over the Dabrowski property in favor of the Bartlett lot. The court further finds there is no other adequate alternative access to Bartlett's property. Accordingly, [Arizona Revised Statutes ("A.R.S.") section] 12-1202 allows a [private condemnation] under the circumstances presented in this case.

The court allowed Bartlett to "select the route location and nature of the [private condemnation] ensuring the greatest amount of deference to the privacy and concerns of the Dabrowskis," ordered Bartlett to "compensate the Dabrowskis for the easement over their property," and requested simultaneous briefing regarding the values of the available routes, stating that it could not "provide a value based upon the testimony provided at the hearing."

¶10 In the post-trial briefing, the Dabrowskis submitted affidavits from a real estate appraiser, their trial expert, and Bogdan Dabrowski. They sought compensation ranging from $96,000 to $433,250 depending on Bartlett's choice of route. Bartlett objected, contending the affidavits had not been disclosed or offered at trial. The court overruled his objection and determined compensation for three potential routes as follows:

"Graham #1" Easement = $37,200
"Graham #2" Easement = $36,000
"Slyder" Easement = $96,250

The considerably higher value assigned to the Slyder Easement reflected the increased burden the easement posed on the Dabrowskis' property. On Bartlett's motion for reconsideration, the court allowed him to present rebuttal evidence concerning value but affirmed its compensation determinations.

¶11 Bartlett submitted a proposed form of judgment. The Dabrowskis objected to the proposed judgment and asked the court to order Bartlett to compensate them when the easement was recorded, and to impose several new requirements on Bartlett, including: (1) indemnifying them for any liability resulting from construction; (2) repairing and maintaining their driveway following construction; (3) preserving unspoiled nature beyond 20 feet of the easement width; and (4) requiring Bartlett and his successors and assignees to equally share in future costs of the maintenance and repair of the shared roadway. The court rejected the Dabrowskis' requests and entered a partial final judgment ordering Bartlett to choose either the Graham #2 or Slyder Easement and to compensate the Dabrowskis before "constructing a roadway ... or by June 1, 2017, whichever is earliest." The judgment is silent on the timing of the recording. The court also ordered the parties to bear their attorney's fees and costs, ruling that Bartlett's statement of costs was untimely.

¶12 The Dabrowskis timely appealed, and Bartlett timely cross-appealed.

DISCUSSION

A. We Have Appellate Jurisdiction Over Some of the Claims Raised by the Parties and We Exercise Special Action Jurisdiction to Decide the Remaining Claims.

¶13 Although neither party has raised the issue, we have an independent obligation to determine whether we have appellate jurisdiction, Robinson v. Kay , 225 Ariz. 191, 192, ¶ 4, 236 P.3d 418, 419 (App. 2010), and we must dismiss an appeal over which we lack jurisdiction, Davis v. Cessna Aircraft Corp. , 168 Ariz. 301, 304, 812 P.2d 1119, 1121 (App. 1991). Because "[p]ublic policy is against deciding cases piecemeal," our jurisdiction over appeals generally is "limited to final judgments which dispose of all claims and all parties." Musa v. Adrian , 130 Ariz. 311, 312, 636 P.2d 89, 90 (1981) ; see also A.R.S. § 12-2101. However, Arizona Rule of Civil Procedure 54(b) permits the superior court to enter an appealable final judgment on fewer than all claims in a case, Garza v. Swift Transp. Co. , 222 Ariz. 281, 284, ¶ 13, 213 P.3d 1008, 1011 (2009), when the judgment "dispose[s] of at least one separate claim of a multi-claim action," Davis , 168 Ariz. at 304, 812 P.2d at 1121. We review de novo whether the superior court has appropriately certified a judgment as final and appealable under Rule 54(b). Davis , 168 Ariz. at 304, 812 P.2d at 1121.

¶14 Here, the superior court included language from Rule 54(b) in the judgment, indicating portions of the judgment were not final but did not note which parts. The parties appealed and briefed the judgment in its entirety. "Certification under Rule 54(b), however, 'does not give this court jurisdiction to decide an appeal if the judgment in fact is not final, i.e., did not dispose of at least one separate claim of a multi-claim action.' " Grand v. Nacchio , 214 Ariz. 9, 16, ¶ 17, 147 P.3d 763, 770 (App. 2006) (quoting Davis , 168 Ariz. at 304, 812 P.2d at 1121 ). "[A] claim is separable from others remaining to be adjudicated when the nature of the claim already determined is 'such that no appellate court would have to decide the same issues more than once even if there are subsequent appeals.' " Cont'l Cas. v. Superior Court , 130 Ariz. 189, 191, 635 P.2d 174, 176 (1981) (quoting Curtiss-Wright Corp. v. Gen. Elec. Co. , 446 U.S. 1, 8, 100 S.Ct. 1460, 64 L.Ed.2d 1 (1980) ). Here, the quiet title action and the private condemnation action are severable. The judgment regarding the Dabrowskis' quiet title action and Bartlett's claims of an equitable interest through Lot 1 are final. Thus, we have appellate jurisdiction to review the quiet-title judgment.

¶15 Conversely, Bartlett's cross-claim for a private condemnation is not final. The final route has not yet been determined, the Dabrowskis have not been compensated, and the court has not entered the final order of condemnation. Therefore, we do not have appellate jurisdiction over those claims. See Nacchio , 214 Ariz. at 16, ¶ 17, 147 P.3d at 770. However, when parties mistakenly raise issues from a non-appealable order, we have the discretion to sua sponte accept special action jurisdiction and consider the merits of the claims. See State v. Bayardi , 230 Ariz. 195, 197-98, ¶ 7, 281 P.3d 1063, 1065-66 (App. 2012) (appeal treated as a special action when parties appealed from a superior court minute entry); Danielson v. Evans , 201 Ariz. 401, 411, ¶ 35, 36 P.3d 749, 759 (App. 2001) (after finding appellate jurisdiction lacking, court sua sponte accepted special action jurisdiction); see also A.R.S. § 12-120.21(A)(4) ; Ariz. R.P. Spec. Act. 1(a). We accept special action jurisdiction here because the parties have fully briefed and argued the issues, the superior court has ruled on the claims, and the non-final issues would likely be raised on appeal after a final judgment. We also accept special action jurisdiction because the judge's order raises questions of first impression-which are particularly appropriate for special action review-concerning the application of Article 2, § 17 of the Arizona Constitution and A.R.S. § 12-1126(B). See Chartone, Inc. v. Bernini , 207 Ariz. 162, 165-66, ¶¶ 8-9, 83 P.3d 1103, 1106-07 (App. 2004).

B. In the Quiet Title Action, the Court Did Not Abuse Its Discretion by Finding the Dabrowskis Proved That There Was Not an Easement Over Their Property-Either Express or Implied.

¶16 The Dabrowskis initially brought an action for quiet title under A.R.S. § 12-1101(A) :

An action to determine and quiet title to real property may be brought by any one having or claiming an interest therein, whether in or out of possession, against any person ... when such person ... claims an estate or interest in the real property which is adverse to the party bringing the action.

Bartlett's counterclaim asserted that he was entitled to either (1) an express easement; (2) an easement of implied necessity; or (3) an implied easement by way of necessity.

¶17 We review a grant of summary judgment de novo , viewing the facts in the light most favorable to the non-moving party. BMO Harris Bank, N.A. v. Wildwood Creek Ranch, LLC , 236 Ariz. 363, 365, ¶ 7, 340 P.3d 1071, 1073 (2015). For issues resolved at trial, we consider the evidence presented in the light most favorable to upholding the court's rulings. Town of Marana v. Pima County , 230 Ariz. 142, 152, ¶ 46, 281 P.3d 1010, 1020 (App. 2012). But we review the court's conclusions of law de novo and may draw legal conclusions from facts found or inferred from the judgment. FL Receivables Tr. 2002-A v. Ariz. Mills, L.L.C. , 230 Ariz. 160, 166, ¶ 24, 281 P.3d 1028, 1034 (App. 2012) ;

In re Estate of Musgrove , 144 Ariz. 168, 170, 696 P.2d 720, 722 (App. 1985). To the extent the superior court's decision was based on an interpretation and application of the law, we review its decision de novo . Freeman v. Sorchych , 226 Ariz. 242, 247, ¶ 11, 245 P.3d 927, 932 (App. 2011).

1. The Court Did Not Err by Finding the 2000 Express Easement Terminated as to the Lots.

¶18 Bartlett claims the court erred by finding he did not have an express easement through Lot 1 via the 2000 Express Easement. The superior court determined that the 2000 Express Easement merged when the Lots came under common ownership between 2001 and 2003. Specifically, the superior court found that the Lots were under common ownership on three occasions: (1) under Lewis in 2001; (2) under Jacob in 2002; and (3) under Bartlett from 2003 until he sold Lot 1.

¶19 Merger applies, and an easement terminates, when one party obtains both the greater and the lesser interest in the same property without any intermediate interests in other hands. Flood Control Dist. of Maricopa County v. Paloma Inv. Ltd. P'ship , 230 Ariz. 29, 41, ¶ 39, 279 P.3d 1191, 1203 (App. 2012). In such cases, the lesser interest is extinguished. Id.

¶20 While Bartlett recognizes the general proposition, he argues that an express easement is not "activated" until the parcels are severed, and-as to portion of the easement granting Lot 2 access through Lot 1-the express easement did not merge because the Lots were not commonly owned at any time after the Bartlett-Hiltner conveyance that severed the parcels. He cites no authority, however, for the proposition that easements that have not been activated are not subject to a merger, and we decline to so hold.

¶21 As there is no Arizona authority directly on point, we look to the Restatement (Third) of Property (Servitudes) ("Restatement (Third)"). See Paxson v. Glovitz , 203 Ariz. 63, 67, ¶ 21, n.3, 50 P.3d 420, 424, n.3 (App. 2002) ("In the absence of contrary precedent, Arizona courts look to the Restatement."). The Restatement (Third) does not exempt easements that have not been activated by separate ownership from the merger. The comments instead provide that merger applies "when the burdens and benefits are united in a single person, or group of persons" because "the servitude ceases to serve any function" and "no one else has an interest in enforcing the servitude." Restatement (Third) § 7.5 cmt. a.

¶22 The benefits and burdens of the 2000 Express Easement were unified during the three periods in which the superior court found common ownership. The fact that those benefits and burdens were later severed in subsequent conveyances did not by itself activate or recreate the easement. See Restatement (Third) § 7.5 cmt. b ("A subsequent conveyance of the property that results in separate ownership of the previously dominant and servient estates raises the question whether the parties can re-create the servitude that previously existed on the property without complying with the requirements set forth in Chapter 2. Under the rule stated in this section they cannot."). Indeed, an express easement could not have been reestablished without a writing that complied with the statute of frauds. A.R.S. § 44-101(6) (statute of frauds applies to "an agreement ... for the sale of real property or an interest therein"); Owens v. M.E. Schepp Ltd. P'ship , 218 Ariz. 222, 228, ¶ 24, 182 P.3d 664, 670 (2008) ("The statute of frauds enacts a clear legislative prohibition against enforcement of an oral agreement for the conveyance of land."); Restatement (Third) § 2.7.

¶23 Because Bartlett admitted he did not record any document creating an easement from the Bartlett-Hiltner conveyance, we conclude that the superior court correctly granted summary judgment on Bartlett's express easement claim because Lot 2 did not have access via an express easement through Lot 1.

2. The Court Did Not Abuse Its Discretion by Finding Bartlett Was Not Entitled to an Implied Easement of Necessity Through Lot 1.

¶24 Lot 2 also does not have an implied easement of necessity through Lot 1. An implied easement of necessity requires:

(1) a single tract of land arranged in a manner where one portion of the land derives a benefit from the other; (2) unity of ownership; (3) severance of the land into two or more parcels; (4) long, continued, obvious use of the subservient land, to a degree which shows permanency-by the dominate land-prior to the severance; and (5) the use of the claimed easement must be essential to the beneficial enjoyment of the dominate land. See Porter v. Griffith , 25 Ariz. App. 300, 302, 543 P.2d 138, 140 (1975).

¶25 When the Lots were severed in 2005, no road connected Lot 1 to Lot 2, nor did Lot 1 have a connection to the access road on Parcel B. See supra ¶ 3, Figure 1. Thus, Bartlett failed to show that at the time of the Bartlett-Hiltner conveyance there was a long, continued, and obvious use of Lot 1 for the benefit of Lot 2.

3. The Court Did Not Abuse Its Discretion by Finding Bartlett Was Not Entitled to an Easement by Implied Way of Necessity Through Lot 1.

¶26 Bartlett contends that the Bartlett-Hiltner conveyance caused his lot to become landlocked, resulting in an easement by implied way of necessity. "Under the common law, where land is sold that has no outlet, the vendor by implication of the law grants ingress and egress over the parcel to which he retains ownership, enabling the purchaser to have access to his property." Bickel v. Hansen , 169 Ariz. 371, 374, 819 P.2d 957, 960 (App. 1991). The doctrine derives from the presumption that when a party conveys the property, it conveys "whatever is necessary for the beneficial use of that property and retains whatever is necessary for the beneficial use of the land he still possesses." Id.

¶27 Under the common law, to obtain an easement by implied way of necessity through Lot 1, Bartlett was required to prove: (1) both properties were under common ownership; (2) the properties were then severed; (3) there is no reasonable or adequate outlet for one of the properties; and (4) the need for reasonable access through the severed property existed at the time of severance. See Coll. Book Ctrs., Inc. v. Carefree Foothills Homeowners' Ass'n , 225 Ariz. 533, 541, ¶ 30, 241 P.3d 897, 905 (App. 2010) ; Bickel , 169 Ariz. at 374, 819 P.2d at 960. If an implied way of necessity exists, it may survive through multiple conveyances and is not affected by use or the lack thereof. Bickel , 169 Ariz. at 375, 819 P.2d at 961. As explained below, Bartlett failed to prove that he was entitled to the common law easement by implied way of necessity because he was unable to show that it was the severance of the Lots that caused his property to lack an adequate outlet.

i. At the Time of Severance, the Lots Did Not Have an Express Easement Through Parcel B.

¶28 Bartlett argues that at the time of Bartlett-Hiltner conveyance, he had an express easement from Lot 1 through Parcel B to the access road-as evidenced by the 2000 Express Easement-giving the Lots a reasonable outlet and therefore the severance of the Lots caused his lot to lack an outlet. The Dabrowskis contend that the Lots' access through Parcel B terminated through merger when Jacob owned the Lots and Parcel B concurrently in 2002. Bartlett maintains that there was no unity of ownership because Jacob, as trustee for the Jacob Trust, owned Parcel B, while Jacob and his wife jointly owned the Lots.

¶29 In 2000, Lewis-the then owner of the Lots and Parcel B-recorded an express easement, providing access from Lot 1 through Parcel B to the access road. See supra ¶ 3, Figure 2. In March 2000, Jacob, as trustee of the Jacob Trust, purchased Parcel B. Jacob and his wife then purchased the Lots in December 2002. Before Jacob and his wife purchased the Lots, Allan Gray prepared a lot survey for Jacob showing the Lots' access through Parcel B, but not following the 2000 Express Easement. Jacob applied for and received certification for the 2002 Lot Split, and it was recorded. The month before selling the Lots to Bartlett, Jacob obtained another lot survey from Gray. Jacob again applied to the Town of Cave Creek to certify the 2003 Lot Split, which was done, and the 2003 Lot Split was recorded. See supra ¶ 6, Figure 3.

¶30 Arizona courts have not addressed the concept of merger relating to the unity of ownership when the parties involved share interests but are technically different. In this case, two technically different owners were involved: Jacob Trust owned Parcel B while Jacob and his wife owned the Lots. Other jurisdictions, however, have applied a control test to establish unity of ownership. See Cosmopolitan Nat'l Bank v. Chicago Title & Tr. Co. , 7 Ill.2d 471, 131 N.E.2d 4 (1955) ; Houston Bellaire, Ltd. v. TCP LB Portfolio I, L.P. , 981 S.W.2d 916 (Tex. App. 1998).

¶31 In Houston Bellaire , the court, looking to Cosmopolitan , concluded that although "the ownership of the two lots was technically different, ... '[t]here was, in effect, common ownership of both properties sufficient to indicate the ability to arrange and adapt the property in a manner sufficient to satisfy rules of property in the establishment of easement by implication.' " Houston Bellaire , 981 S.W.2d at 920-21 (quoting Cosmopolitan , 131 N.E.2d at 7 ). The court concluded that the parties "with the power to arrange and adapt the properties" did arrange matters in a way that created an implied easement. Id.

¶32 As an owner of the Lots and the trustee of the trust that owned Parcel B, the evidence shows Jacob had the power to arrange and adapt the properties. First, Jacob commissioned the 2002 Lot Split when Parcel B was owned by Jacob Trust. Jacob and his wife purchased the Lots after the Town of Cave Creek approved the lot split, and the survey was recorded. Next, Ian Cordwell, the Director of Planning and the Zoning Administrator for the Town of Cave Creek, testified that Jacob applied for a building permit for Lot 2 on March 11, 2003. The town would not approve a building permit unless the owner of the property could show that each lot had access from a dedicated public right of way to the parcel itself. At the time of Jacob's application for the building permit, he indicated that Lot 2 lacked access. Subsequently, Jacob again commissioned Gray to create the 2003 Lot Split, which provided access to Lot 2 without burdening Lot 1. Jacob then applied for the lot split, which was approved and recorded. Cordwell, who accepted both lot splits, testified that he believed the 2003 Lot Split was intended to establish an access point for Lot 2 through Parcel B and served as a replacement to the 2002 Lot Split.

¶33 Jacob obtained and recorded lot splits that depicted access to the Lots through various access points in Parcel B immediately preceding Lewis's sale to Jacob and Jacob's sale to Bartlett. The 2002 and 2003 Lot Splits demonstrated that Jacob, as the trustee, exercised the control over Parcel B required to situate the land in a manner that benefited the Lots when Jacob and his wife purchased the Lots, and again as the seller of the Lots. As the Lots' seller, Jacob arranged access through Parcel B in a manner that was beneficial to the Lots, but detrimental to Parcel B, because of the proximity of the shared driveway to the location of the proposed home on Parcel B. Such control is sufficient to conclude that there was unity of ownership over the Lots and Parcel B. We conclude that Jacob's concurrent ownership extinguished any express easement that existed on Parcel B concerning the Lots. There was approximately a quarter mile between Lot 1's eastern boundary and the access road, for which the Lots did not have legal access-via an express easement-at the time of the Jacob-Bartlett conveyance. See supra, ¶ 3, Figure 1. Accordingly, the Lots did not have an express easement through Parcel B at the time of severance.

ii. Bartlett Failed to Show Sufficient Evidence of the Need for Reasonable Access at the Time of the Bartlett-Hiltner Conveyance.

¶34 Without legal access, Bartlett was required to show that at the time of the Bartlett-Hiltner conveyance he lacked reasonable access to his property. Bartlett argues that Lot 2 does not have-and never has had-access through Parcel B. However, as noted above, immediately before selling the Lots to Bartlett, Jacob applied for a building permit concerning Lot 2 and recorded the 2003 Lot Split. The 2003 Lot Split was recorded before the Jacob-Bartlett conveyance and was listed as an exception in Bartlett's title report for the Jacob-Bartlett conveyance.

¶35 Michael Johnson, Bartlett's and Hiltner's architectural designer, testified that the 2003 Lot Split was provided to him when he began designing the Bartlett and Hiltner homes in 2006. He testified that there were "a lot of different discussions because of the confusion" of the two access points. Johnson stated that at some point Bartlett and Hiltner agreed to follow the entrance point through Lot 1 to cut costs and create less disturbance by sharing a driveway and utility site. With that plan, most of the disturbance fell on Lot 1, allowing Bartlett to build the larger home he wanted on Lot 2. Johnson also recalled that he wanted the driveway to conform with the 2003 Lot Split, but Bartlett refused. Ultimately, Johnson testified that Bartlett and Hiltner could not reach an agreement, and Hiltner built his driveway and home without Bartlett's assistance.

¶36 Although Bartlett asserted that he has always understood access to Lot 2 would be through Lot 1, he could not point to a recorded document to support that understanding. Bartlett insists that it was both his and Hiltner's intent that the shared driveway would follow the 2000 Express Easement. However, the completed Lot 1 driveway does not conform with the 2000 Express Easement; instead, it follows the 2002 Lot Split. Moreover, Bartlett failed to record an express easement granting access for Lot 2 through Lot 1 at the time of the Bartlett-Hiltner conveyance, although he stated that access through Lot 1 was the parties' intent. Bartlett, a mortgage broker at the time, failed to disclose his need for access through Lot 1 in the seller property disclosure statement, which he provided in connection with the Bartlett-Hiltner conveyance. The placement of the driveway and Bartlett's subsequent actions in connection with the Bartlett-Hiltner conveyance do not support Bartlett's contention that Lot 2's access was intended through the 2000 Express Easement.

¶37 There is conflicting evidence in the record regarding the intended access point for the Lots at the time of the Jacob-Bartlett conveyance. The superior court weighed the credibility of the witnesses along with the other evidence and concluded there was no implied way of necessity between the Lots. Given that the 2003 Lot Split indicates a reasonable access point for both lots, the superior court did not abuse its discretion by finding Bartlett failed to establish that Lot 2 lacked reasonable access in 2005 at the time of the severance. See Coll. Book , 225 Ariz. at 542, ¶ 32, 241 P.3d at 906 (failing to present evidence to establish a lack of an outlet at the time of severance prevents a party from prevailing in an action for an implied way of necessity). We defer to the superior court's resolution of the evidence presented. FL Receivables Tr. , 230 Ariz. at 166, ¶ 24, 281 P.3d at 1034.

4. The Dabrowskis Prevailed in the Quiet Title Action.

¶38 The Dabrowskis prevailed in the quiet title action because they proved title to the property and that Bartlett had neither an express or implied easement over the Lot 1. Therefore, the Dabrowskis contend the superior court erred by not awarding their attorney's fees and costs under A.R.S. §§ 12-1103(B) and 12-341.01(A). We review the court's decision declining to award fees for an abuse of discretion. Vicari v. Lake Havasu City , 222 Ariz. 218, 224, ¶ 23, 213 P.3d 367, 373 (App. 2009).

¶39 Because the Dabrowskis did not correctly request fees under A.R.S. § 12-341.01(A), the superior court did not abuse its discretion by refusing to award them. See Ariz. R. Civ. P. 54(g)(1) ("A claim for attorney's fees must be made in the pleadings or in a Rule 12 motion filed before the movant's responsive pleading."); Klesla v. Wittenberg , 240 Ariz. 438, 441, ¶ 13, n.2, 380 P.3d 677, 680 n.2 (App. 2016) ("Contractual attorneys' fees must be pleaded and proved like any other contract claim, as part of the proponent's case in chief.").

¶40 However, the superior court found that Bartlett was the prevailing party in the quiet title action because "[he] is entitled to an easement created by private condemnation." The court erred. The Dabrowskis originally sued for quiet title. The court concluded that Bartlett did not have a legal interest in Lot 1; thus, the Dabrowskis prevailed in the quiet title action. The Dabrowskis also requested attorney's fees under A.R.S. § 12-1103(B) and complied with the statutory requirements for such an award. Accordingly, we vacate the superior court's conclusion that Bartlett was the prevailing party and remand for the court to enter judgment for the Dabrowskis in the quiet title action, and-in the court's discretion-it may award attorney's fees under A.R.S. § 12-1103(B). See also Scottsdale Mem'l Health Sys., Inc. v. Clark , 164 Ariz. 211, 215, 791 P.2d 1094, 1098 (App. 1990) ("[T]he trial court may consider the same factors that are considered in determining whether to award attorney's fees pursuant to A.R.S. section 12-341.01.").

C. The Court's Ruling that Bartlett Proved the Private Condemnation is Supported by the Evidence.

¶41 "Arizona law permits a landowner to engage in private condemnation when land 'is so situated with respect to the land of another that it is necessary for its proper use and enjoyment to have and maintain a way of necessity.' " Siemsen v. Davis , 196 Ariz. 411, 414, ¶ 9, 998 P.2d 1084, 1088 (App. 2000) (quoting A.R.S. § 12-1202(A) ). "A landowner seeking to condemn a private way of necessity over the lands of another must show a 'reasonable necessity' for the taking." Id.

¶42 With respect to the private condemnation action, the Dabrowskis claim the court erred by: (1) awarding Bartlett private condemnation through Lot 1; (2) finding that the Slyder easement was a viable easement choice; (3) failing to award the Dabrowskis additional compensation for the private condemnation; (4) not requiring that the one-time payment for the private condemnation be paid when the easement is recorded; and (5) not imposing additional conditions on Bartlett in connection with the private condemnation.

1. The Court Did Not Abuse Its Discretion by Determining Bartlett is Entitled to a Private Condemnation.

¶43 The Dabrowskis argue that Bartlett is not entitled to private condemnation because the superior court erred by concluding that the 2003 Lot Split did not constitute an express easement, and the existence of the alternative route precludes Bartlett from seeking a private condemnation through their lot. We do not need to decide whether the 2003 Lot Split evidences a valid easement because the mere fact that an alternate legal outlet is available to Bartlett does not, as a matter of law, preclude him from condemning a way over Lot 1. See Solana, 69 Ariz. 117, 125, 210 P.2d 593 (1949) ("[T]he condemnor need not show an absolute necessity for the taking, a reasonable necessity being sufficient.").

¶44 When determining whether a reasonable necessity exists, the court looks to whether the proponent of the private condemnation has an alternative legal route that is both adequate and reasonable. See, e.g. , Tobias v. Dailey , 196 Ariz. 418, 422, ¶ 14, 998 P.2d 1091, 1095 (App. 2000). Because there is sufficient evidence in the record to support the superior court's conclusion that "[t]here is no other adequate alternative access" to Lot 2, the court did not abuse its discretion by ordering a private condemnation.

¶45 The route on the 2003 Lot Split may have been reasonable and adequate at the time of the Jacob-Bartlett conveyance. However, subsequent events show that it may no longer be a reasonable alternative. Anderson testified that at the time he purchased Parcel B, the land only contained the access road and a well. After acquiring Parcel B, Anderson constructed a home, and the access road now leads to his driveway and garage. The Town of Cave Creek requires a road or driveway that services more than one single-family residence to be 16 feet wide with shoulders on each side that are at least two feet wide. To obtain a building permit from the Town of Cave Creek, Bartlett needs a 20-foot-wide easement for the entirety of the easement through the Anderson property. The Anderson driveway is currently 11-12 feet wide and some portions of the driveway have no shoulder at all. Anderson's utilities are on the west side of the driveway, and there is solid rock to the east. In short, the current specifications of the driveway do not comply with the Rural/Metro Fire Department standards for a roadway servicing more than one residence. Civil engineer Christopher Wilson testified that the amount of disturbance that would result from building the road following the 2003 Lot Split would leave approximately 90 square feet available for the actual home on Bartlett's lot.

¶46 These facts support the superior court's finding that there is no other adequate and reasonable alternative access to Lot 2 and its conclusion that Bartlett is entitled to a private condemnation.

i. Bartlett is Not Required to Seek Alternative Routes.

¶47 The Dabrowskis argue that Bartlett is not entitled to a private condemnation because Bartlett failed to establish both that "the Town of Cave Creek would not allow Bartlett to build a roadway to the west or south of Bartlett's Lot" and that he "could not obtain an easement to the west or south of his Lot." Thus, the Dabrowskis contend, Bartlett failed to show a reasonable necessity for the taking. The Dabrowskis do not offer legal authority for this contention. Bartlett was not obligated to explore alternative outlets for which he did not have legal access. See Solana , 69 Ariz. at 125, 210 P.2d 593 ("There is no merit to defendants' contention that [the statute permitting residents to petition to establish a highway], gives to plaintiff an appropriate and expedient method of obtaining a means of ingress and egress to its property by petitioning the board of supervisors for the establishment of a county highway.... [P]roviding for condemnation at the instance of a private party the framers of our constitution as well as the legislature affirmatively rejected such a contention."). The court found that Bartlett's potential legal access was inadequate, and thus correctly granted him a private condemnation through Lot 1.

ii. The Evidence Does Not Show that Bartlett Voluntarily Landlocked Lot 2.

¶48 Finally, the Dabrowskis maintain Bartlett is not entitled to private condemnation because Bartlett voluntarily landlocked himself. For support, they cite to Gulotta v. Triano , 125 Ariz. 144, 608 P.2d 81 (App. 1980). In Gulotta , the owners severed their land into parcels, leaving the plot they intended to keep landlocked. Id. at 145, 608 P.2d at 82. The owners testified that the buyers would not have completed the sale with a permanent easement. Id. The owners entered into a contract with the buyers for a temporary easement through the property, which would terminate at the earlier of two years or upon the completion of a new road. Id. After completion of the road, the owners sought private condemnation through a neighboring parcel, which would grant them access to the new road. Id. The owners claimed they were landlocked, or alternatively, that even if the easement had not terminated, the access through the sellers' land was "so inadequate as to make the private right-of-way they seek reasonably necessary." Id. This court denied the private condemnation, stating:

It is obvious from the terms of the agreement for the sale of the delicatessen property that [the owners] appreciated the danger of losing access to the property they retained. Whether they terminated or merely limited their right of ingress and egress in order to complete that sale, they did so voluntarily without first obtaining an alternative access way. The necessity, if any, for a right-of-way across defendants' property was created by their own voluntary act. For that reason alone they are not entitled to the extraordinary remedy afforded by § 12-1202.

Id.

¶49 The Dabrowskis contend Bartlett "successfully maximized the marketability for the Dabrowski Lot and reaped the financial benefits of a higher purchase price ($440,000), only to thereafter invoke the protections of A.R.S. § 12-1202." They point to the fact that Bartlett did not disclose his need for an easement in the seller property disclosure statement when conveying Lot 1 to Hiltner. But unlike Gulotta , there is no evidence that Bartlett appreciated the danger of losing his access or voluntarily relinquished access to seek a private condemnation from the Dabrowskis. This is especially true because the 2003 Lot Split indicated a way to the access road through Parcel B. Therefore, we cannot say that the superior court abused its discretion by awarding Bartlett a private condemnation.

2. The Superior Court Must Ultimately Determine the Route of a Private Condemnation.

¶50 The Dabrowskis argue that the court erred by allowing Bartlett to choose among three routes and ordering him to "select the route location and nature of the private way of necessity ensuring the greatest amount of deference to the privacy and concerns of the Dabrowskis." After a court determines that a reasonable necessity exists, "the condemnor makes the initial selection and in the absence of bad faith, oppression or abuse of power its selection of route will be upheld by the courts." Solana , 69 Ariz. at 125, 210 P.2d 593.

¶51 Our courts have not opined on what constitutes "bad faith, oppression, or abuse of power" in a private condemnation action. In cases of private condemnation, the parties have competing interests, and ultimately it is for the court to settle such differences. See also Siemsen , 196 Ariz. at 417, ¶ 25, 998 P.2d at 1090 ("Such lawsuits, as we have indicated, engage strong competing interests and values. To resolve them calls for delicate judgment and a close consideration of all applicable facts."). We hold that absent an agreement, the condemnee may present evidence to the court-including evidence regarding the feasibility, cost, and other relevant details of a specified route-showing that under the circumstances, a more reasonable route exists. If the court determines that the condemnee's suggested route is more reasonable, the condemnee will have made a sufficient showing of bad faith, oppression, or abuse of power. Accord A.R.S. § 12-1115(A) (eminent domain statute) ("Where land is required for public use, the state ... may survey and locate the land, but it shall be located in the manner which will be most compatible with the greatest public good and the least private injury."); Queen Creek Summit, LLC v. Davis , 219 Ariz. 576, 580, ¶ 19, 201 P.3d 537, 541 (App. 2008) (condemnor in eminent domain action must show that it balanced the "greatest public good" and the "least private injury" when choosing the location, and condemnee can rebut the showing by establishing that the selection is "unnecessarily injurious").

3. The Judgment Must be Satisfied Before a Final Order of Condemnation is Issued and the Easement Recorded.

¶52 The Dabrowskis raise several issues relating to the court's order concerning the route, timing of the payment, and terms of the private condemnation. The order provided Bartlett with two options and directed that payment be made before a specified date or before construction on the road begins, "whichever is earliest." The parties dispute whether the taking occurs at the time of judgment, payment, recording, or construction of the roadway.

¶53 Our constitution is clear: "No private property shall be taken or damaged for public or private use without just compensation having first been made, paid into court for the owner [or] secured by bond as may be fixed by the court ...." Ariz. Const. art. 2, § 17 (emphasis added); see also A.R.S. § 12-1124 (in an eminent domain proceeding, the court "shall set aside and annul the entire proceeding[ ]" when the condemnee is unable to collect payment). "When the final judgment has been satisfied ... the court shall make a final order of condemnation, describing the property condemned and the purposes of the condemnation." A.R.S. § 12-1126(A). "The title to the land does not vest in the [condemnor] until 'the final order of condemnation' is made by the court ...." State ex rel. Morrison v. Helm , 86 Ariz. 275, 280, 345 P.2d 202 (1959) (quoting Pool v. Butler , 141 Cal. 46, 74 P. 444, 446 (1903) ).

¶54 A court's final judgment of condemnation must include the route, decided by the court if contested, and the amount of compensation for that route. The valuation of the property is determined as the value at the time of the taking. See City of Scottsdale v. CGP-Aberdeen, L.L.C. , 217 Ariz. 626, 634, ¶ 36, 177 P.3d 1198, 1206 (App. 2008) ("[W]hen the condemnee offers evidence of a gap in time between the summons date and the date of the taking during which the value of the property increased, the court must determine the date of the taking and whether the value of the property on that date is the same as the value provided for in the statute.").

¶55 Only after the judgment is satisfied, and the court issues the final order of condemnation, can the condemnor record "[a] copy of the order ... in the office of the county recorder of the county ... in which the property is located, and thereupon the property described shall vest in [the condemnor] for the purposes therein specified." A.R.S. § 12-1126(B). Accordingly, Bartlett has no rights to the land until after he compensates the Dabrowskis.

¶56 Finally, concerning the parties' contributions for maintenance, "the owners of the easement have the shared duty to repair and maintain the easement." Freeman , 226 Ariz. at 247, ¶ 13, 245 P.3d at 932. The parties should work together to agree upon terms for the final order that will minimize future litigation. To the extent that the parties cannot agree on the details of the private condemnation, Freeman addresses the parties' rights to contribution when neither the document creating the easement nor a separate agreement between the parties specifies otherwise. See id. at 250-51, ¶ 24, 245 P.3d at 935-36.

ATTORNEY'S FEES AND COSTS ON APPEAL

¶57 Both sides request costs and attorney's fees incurred in this appeal and cross-appeal under A.R.S. §§ 12-1103(B) and 12-341.01(A). Although we affirmed the superior court's judgment entitling Bartlett to a private condemnation, we denied relief on Bartlett's cross-appeal and reversed the court's determination of the prevailing party in the quiet title action. Therefore, neither party was entirely successful, and we decline to award fees or costs to either party.

CONCLUSION

¶58 We affirm the superior court's judgment that Bartlett is not entitled to a common law easement, but reverse and remand for the entry of judgment in favor of the Dabrowskis in the quiet title action. Accordingly, we vacate the denial of the Dabrowskis' request for attorney's fees, and remand for the court to reconsider the award of attorney's fees to the Dabrowskis as the prevailing parties. We affirm the superior court's determination that Bartlett is entitled to a private condemnation but vacate the portion of the order concerning the route, compensation, terms, and scope, and remand for further proceedings consistent with this opinion.

      Because neither party raised the issue of whether granting a common law easement by implied way of necessity is proper under Article 2, § 17 of the Arizona Constitution and the legislature's prescribed remedy for landlocked property in A.R.S. § 12-1202, we assume without deciding that a conveyance that causes a property to become landlocked may be entitled to an easement by implied way of necessity.

      A.R.S. § 12-1103(B) provides:
      If a party, twenty days prior to bringing the action to quiet title to real property, requests the person, other than the state, holding an apparent adverse interest or right therein to execute a quit claim deed thereto, and also tenders to him five dollars for execution and delivery of the deed, and if such person refuses or neglects to comply, the filing of a disclaimer of interest or right shall not avoid the costs and the court may allow plaintiff, in addition to the ordinary costs, an attorney's fee to be fixed by the court.

      Bartlett appeals the court's allowance of post-trial evidence to determine the property's value. We decline to address the issue because the "taking" has not yet occurred and upon remand the court may admit additional evidence.


author: JONES, Judge:

text:
    MENO'S CONSTRUCTION, L.L.C.* * * *, Petitioner/Employer,
    AIG Insurance Company* * * *, Petitioner/Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent,
    Victor M. Reyes, Respondent Employee,
    The Younger Brothers Group, Inc.*; Genaro's Framing Construction, L.L.C. * * *, Respondent Employers,
    CopperPoint Indemnity Insurance Company*; Travelers Insurance Company* * *, Respondent Carriers,
    Roberto Carlos Navarro Padilla* *; Juan Estopellan* * * * *, Respondent Uninsured Employers,
    Special Fund Division/No Insurance Section* *, * * * * *, Respondent Party in Interest.
    Special Fund Division/No Insurance Section* *, * * * * *, Petitioner/Party in Interest, v. The Industrial Commission of Arizona, Respondent,
    Victor M. Reyes, Respondent Employee,
    The Younger Brothers Group, Inc.*, Genaro's Framing Construction, L.L.C. * * *, Meno's Construction, L.L.C.* * * *, Respondent Employers,
    CopperPoint Indeminty Insurance Company*, Travelers Insurance Company* * *, AIG Insurance Company* * * *, Respondent Carriers,
    Roberto Carlos Navarro Padilla* *, Juan Estopellan* * * * *, Respondent Uninsured Employers.
    No. 1 CA-IC 18-0041 1 CA-IC 18-0042 (Consolidated)
    Court of Appeals of Arizona, Division 1.
    FILED May 9, 2019
    Jardine Baker Hickman & Houston P.L.L.C., Phoenix, By Stephen C. Baker, Counsel for Petitioner Employer Meno's Construction, L.L.C. and Petitioner, Carrier AIG Insurance Co.
    Industrial Commission of Arizona, Phoenix, By Gaetano J. Testini, Counsel for Respondent
    Taylor & Associates P.L.L.C., Phoenix, By Javier C. Grajeda, Counsel for Respondent Employee
    CopperPoint Mutual Insurance Company, Phoenix, By Mark A. Kendall, Counsel for Respondent Employer The Younger Brothers Group, Inc. and Respondent Carrier CopperPoint Indemnity Insurance Co.
    Hendrickson & Palmer, P.C., Phoenix, By Adam P. Palmer, Counsel for Respondent Employer Navarro Padilla
    Hoffman Kelley Lopez, L.L.P, Scottsdale, By Michelle D. Lopez, Counsel for Respondent Employer/Carrier Genaro's Framing Construction L.L.C.
    Lundmark Barberich La Mont & Salvin, P.C., Phoenix, By Kirk A. Barberich, Danielle Vukonich, Counsel for Petitioner Party in Interest Special Fund Division/No Insurance, Section
    Judge Kenton D. Jones delivered the Opinion of the Court, in which Presiding Judge James B. Morse Jr. and Judge Jon W. Thompson joined.
   JONES, Judge:

¶1 In this consolidated statutory special action, Meno's Construction, L.L.C. and AIG Insurance Co. (collectively, MC) and the Special Fund Division/No Insurance Section (the Fund) challenge an Industrial Commission of Arizona (ICA) decision finding MC and Juan Estopellan were Victor Reyes's employers at the time of his December 2015 industrial injury. We affirm the factual findings and conclusions of the administrative law judge (ALJ) with respect to those employers. We also hold that an ALJ is required to evaluate the liability of each contractor and subcontractor made a party to a workers' compensation claim. Because the ALJ did not do so in this case, we set aside the award.

FACTS AND PROCEDURAL HISTORY

¶2 In 2012, Taylor Morrison contracted with Younger Brothers Group, L.L.C. (YB) to complete the framing for various new home construction and lot improvement projects in and around Phoenix, including at Lot 31 of a housing development in Gilbert. That contract required YB to provide supervision, labor, materials, and services necessary to complete the work and provided that "no such subcontracting shall relieve Younger Brothers from its obligations under th[e] agreement."

¶3 YB subcontracted the framing work on Lot 31 to a second framing contractor, Genaro's Framing Construction, L.L.C. (GFC). Pursuant to the independent contractor agreement, YB would provide general guidelines and framing materials for each job, but GFC was responsible for supplying the labor and tools, carrying workers' compensation insurance for employees, and controlling the day-to-day operations of the jobsite. YB did not return to the jobsite until it was completed, and then only to inspect the work and approve payment. Because GFC did not employ any actual framers, it subcontracted the Lot 31 job to a third framing contractor, MC, under similar terms.

¶4 In 2015, MC assigned responsibility for completing the framing on Lot 31 to Estopellan, as it occasionally did when Estopellan sought additional work. At the time, Estopellan was also employed as a foreman for YB and responsible for supervising various projects including one near Lot 31. Nonetheless, Estopellan sometimes accepted other jobs through his own sole proprietorship. MC did not provide tools, materials, or labor; did not require any proof Estopellan maintained workers' compensation insurance; and did not direct or supervise Estopellan's work. As with YB and GFC, MC did not pay for a job until it had inspected and approved the work.

¶5 Estopellan immediately hired Roberto Navarro to help with Lot 31, as was Estopellan's practice when working side jobs, and paid Navarro a lump sum for the job via personal check. Estopellan then directed workers to Navarro, who provided the day-to-day instruction and supervision. The framing crew received safety training and t-shirts from GFC.

¶6 Reyes, the injured worker, met Navarro and Estopellan in September 2015 when he arrived on a construction site looking for work. Reyes immediately began to work with the two men, first as an assistant, and then as a framer, at various locations. Over the next few months, Navarro told Reyes when and where to work and paid him weekly via cash or personal check. However, Navarro received a written budget and instructions from Estopellan, who would visit the jobsites in a YB truck, deliver tools and materials, and supervise the work.

¶7 On December 21, 2015, Reyes injured his hip and wrist after falling from a ladder while working at Lot 31. Navarro notified Estopellan, as he did with all issues that arose at a jobsite. Estopellan then reported the injury to MC, as MC had requested, and directed Reyes to the specific clinic MC preferred. Ultimately, YB inspected and approved the framing on Lot 31 but never paid Estopellan directly for any work on that project.

¶8 Reyes reported his injury to the ICA, which resulted in consolidated claims against five potential employers - Navarro, Estopellan, MC, GFC, and YB - and their insurers, all of whom denied liability for the claim. Because neither Navarro nor Estopellan had workers' compensation insurance, the Fund was also joined in the action. See Ariz. Rev. Stat. (A.R.S.) §§ 23-907, -1065 (governing the creation of and expenditures from a special fund to compensate employees whose employers fail to secure required workers' compensation insurance).

¶9 After a three-day hearing, the ICA issued a consolidated decision in which the ALJ found Estopellan had employed both Navarro and Reyes to work on Lot 31 and MC maintained control over the project. Therefore, the ALJ concluded that Estopellan was Reyes's direct employer, MC was Reyes's statutory employer, and both were responsible for payment of Reyes's workers' compensation claim. The ALJ made no findings regarding GFC's or YB's status or liability. The ICA decision was affirmed upon review. MC and the Fund separately petitioned for special action review of the ICA's award and decision upon review, and the cases were consolidated for our review. We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(2), 23-951(A), and Arizona Rule of Procedure for Special Actions 10.

DISCUSSION

I. Estopellan Was Reyes's Employer.

¶10 The Fund argues Estopellan was not an employer subject to the Workers' Compensation Act as defined in A.R.S. § 23-902(A). We will not disturb the ALJ's factual findings unless clearly erroneous and will affirm so long as the findings were properly made and support the award. A.R.S. § 23-951(B) ; Jenkins v. Indus. Comm'n , 77 Ariz. 377, 386, 272 P.2d 601 (1954) (citing Todaro v. Gardner , 72 Ariz. 87, 91, 231 P.2d 435 (1951) ). "A finding of fact is not clearly erroneous if substantial evidence supports it, even if substantial conflicting evidence exists." Ramsey v. Ariz. Registrar of Contractors , 241 Ariz. 102, 109, ¶ 22, 384 P.3d 316, 323 (App. 2016) (quoting Kocher v. Dep't of Revenue of Ariz. , 206 Ariz. 480, 482, ¶ 9, 80 P.3d 287, 289 (App. 2003) ). However, Estopellan's status as an employer is a conclusion of law subject to de novo review. Faraghar v. Indus. Comm'n , 184 Ariz. 528, 531, 911 P.2d 534, 537 (App. 1995) (citing Cent. Mgmt. Co. v. Indus. Comm'n , 162 Ariz. 187, 189, 781 P.2d 1374, 1376 (App. 1989), and Anton v. Indus. Comm'n , 141 Ariz. 566, 569, 688 P.2d 192, 195 (App. 1984) ).

¶11 The Fund contends Estopellan was not an employer required to maintain workers' compensation insurance because he did not have a "hiring plan" or "own and operate a complex framing company." But the Workers' Compensation Act does not require a formal hiring process or complex operations. See Putz v. Indus. Comm'n , 203 Ariz. 146, 151, ¶¶ 25-26, 51 P.3d 979, 984 (App. 2002) (explaining there is no bright-line rule for determining when a self-employed employer is subject to the Act). Instead, an employer is subject to the Workers' Compensation Act "when he employs at least one employee in the regular course of his business." Donahue v. Indus. Comm'n , 178 Ariz. 173, 179, 871 P.2d 720, 726 (App. 1993) ; see also A.R.S. § 23-902(A) (defining an employer subject to the Act to include "every person who employs any workers or operatives regularly employed in the same business or establishment under contract of hire" and defining "regularly employed" to mean "all employments, whether continuous throughout the year, or for only a portion of the year, in the usual trade, business, profession or occupation of an employer").

¶12 The ALJ found that "Estopellan was operating a side business known as Juan Estopellan Construction, which includ[ed] framing, at the time of [Reyes]'s injury and that he hired Roberto Navarro to run the injury jobsite, to hire men to perform the work, and to oversee the work being performed." This finding is supported by the record and justifies the conclusion that Estopellan employed at least one employee in the regular course of his business as a sole proprietor. Accordingly, we find no error in the ALJ's findings and conclusion that Estopellan was an employer subject to the Act.

II. All Employers Are Jointly Responsible for Payment of an Injured Worker's Claim.

¶13 The Fund argues the ICA erred in holding Estopellan and MC jointly responsible for Reyes's injuries. In advancing this position, the Fund relies entirely upon a single line in U.S. Fidelity & Guaranty Co. v. Industrial Commission , 42 Ariz. 422, 434, 26 P.2d 1012 (1933), stating that the statutory employer has "a primary and not a secondary liability for compensation" of an injured worker's claim.

¶14 U.S. Fidelity does not support the Fund's contention that Estopellan is less liable than other employers. There, the court affirmed the ICA's award holding both the direct and statutory employers jointly and severally liable for the injured worker's claim. Id. at 435, 26 P.2d 1012. The line upon which the Fund relies stands only as a rejection of the statutory employer's argument that its liability is secondary to that of the direct employer. See id . Indeed, our supreme court later clarified:

Where two or more persons are employers of the same employee engaged, as here, for the common benefit of both, and so found and determined by the proper tribunal, their liability is joint and common. The liability of one employer is not secondary to the other. Both are primarily liable.

Ocean Accident & Guar. Corp. v. U.S. Fid. & Guar. Co. , 63 Ariz. 352, 362-63, 162 P.2d 609 (1945) (citations omitted). Accordingly, the ICA correctly found that all of Reyes's employers were jointly responsible for the claim.

III. The ALJ Must Evaluate the Liability of Each Contractor and Subcontractor Named in the Action.

¶15 MC and the Fund argue the ALJ erred by failing to consider whether YB and GFC were also subject to liability for payment of Reyes's workers' compensation claim as statutory employers under A.R.S. § 23-902(B). Pursuant to this section:

When an employer procures work to be done for the employer by a contractor over whose work the employer retains supervision or control, and the work is a part or process in the trade or business of the employer, then the contractor[ ] and the contractor's employees, and any subcontractor and the subcontractor's employees, are, within the meaning of this section, employees of the original employer.

Id. Thus, a so-called statutory employer "is required to provide workmen's compensation [insurance] for its remote employees, just as is required of direct employers." Young v. Envtl. Air Prods., Inc. , 136 Ariz. 158, 161, 665 P.2d 40, 43 (1983) (citing A.R.S. § 23-902(A) ); see also U.S. Fid. , 42 Ariz. at 435, 26 P.2d 1012. The statutory employer provisions exist to prevent unscrupulous employers from evading responsibility under the Act "through the aid of various dummy intermediaries." Grabe v. Indus. Comm'n , 38 Ariz. 322, 328, 299 P. 1031 (1931) ; see also Basurto v. Utah Constr. & Mining Co. , 15 Ariz. App. 35, 41, 485 P.2d 859 (1971) (explaining that the purpose of imposing liability upon the statutory employer is "to prevent evasion of the Act by an employer through the device of subcontracting its regular operations and thereby avoiding direct employment relations with the workers and making them dependent on their immediate employer for compensation") (quoting Jamison v. Westinghouse Elec. Corp. , 375 F.2d 465, 468 (3d Cir. 1967) ).

¶16 Appellants do not dispute the ALJ's finding that MC was a statutory employer but argue that this conclusion does not foreclose consideration of YB's and GFC's liability. Whether an employee may have multiple statutory employers under the Workers' Compensation Act requires us to interpret and apply statutes, a task we undertake de novo . Buehler v. Retzer ex rel. Indus. Comm'n , 227 Ariz. 520, 521, ¶ 4, 260 P.3d 1085, 1086 (App. 2011) (citing Baker v. Dolphin Beach Rental & Mgmt., L.L.C. , 224 Ariz. 523, 524, ¶ 6, 233 P.3d 636, 637 (App. 2010) ). "Our goal in statutory interpretation is to effectuate the legislature's intent." SolarCity Corp. v. Ariz. Dep't of Revenue , 243 Ariz. 477, 480, ¶ 8, 413 P.3d 678, 681 (2018) (citing State ex rel. Dep't of Econ. Sec. v. Pandola , 243 Ariz. 418, 419, ¶ 6, 408 P.3d 1254, 1255 (2018) ). "The best indicator of that intent is the statute's plain language, ... and when that language is unambiguous, we apply it without resorting to secondary statutory interpretation principles." Id. Although the Act should be construed liberally in favor of protecting the employee, "[t]he court may 'not impose burdens and liabilities which are not within the terms or spirit' of the Act." Putz , 203 Ariz. at 150-51, ¶ 24, 51 P.3d at 983-84 (citing Ocean Accident & Guar. Corp. v. Indus. Comm'n , 32 Ariz. 265, 271-72, 257 P. 641 (1927), and then quoting Bergstresser v. Indus. Comm'n , 13 Ariz. App. 91, 93, 474 P.2d 450 (1970) ).

¶17 The Workers' Compensation Act defines the statutory employer in terms of the nature of the work procured and the level of supervision or control retained over the work. See A.R.S. § 23-902(B) ; Young , 136 Ariz. at 161, 665 P.2d at 43. The plain language of the Act does not limit the classification to a single link in a chain of contractors and subcontractors. See Faraghar , 184 Ariz. at 532, 911 P.2d at 540 ("Nothing in [ A.R.S. § 23-902(B) ] suggests that the original employer's responsibility is exclusive , or that the independent contractor is thereby relieved of liability for benefits."); Hamrick v. Indus. Comm'n , 15 Ariz. App. 277, 279, 488 P.2d 482 (App. 1971) ("[A] determination by an award that a workman is an employee of a subcontractor does not preclude a subsequent determination that this same workman is an employee of the original contractor."). Rather, the Act explicitly contemplates an umbrella of liability under the statutory employer that covers "the contractor[ ] and the contractor's employees, and any subcontractor and the subcontractor's employees" if the criteria set forth in A.R.S. § 23-902(B) are met. A.R.S. § 23-902(B) ; see also Basurto , 15 Ariz. App. at 41, 485 P.2d 859 (announcing "the general rule of thumb ... that the [statutory employer] statute covers all situations in which work is accomplished which this employer, or employers in a similar business, would ordinarily do through employees") (citation omitted).

¶18 The broad language of the statute is consistent with the overriding purpose of the Workers' Compensation Act: to protect the employee. Young , 136 Ariz. at 163, 665 P.2d at 45 (quoting U.S. Fid. , 42 Ariz. at 430, 26 P.2d 1012 ); see also Putz , 203 Ariz. at 150-51, ¶ 24, 51 P.3d at 983-84 (describing the Act's purpose to "hav[e] industry bear its share of the burden of human injury as a cost of doing business") (citing Ocean Accident , 32 Ariz. at 271-72, 257 P. 641 ). We accomplish this goal by liberally construing the Act to impose liability for payment of benefits, which includes spreading the cost of injury amongst all those who retain supervision and control over work that is part of their business. See Young , 136 Ariz. at 163, 665 P.2d at 45 (citing U.S. Fid. , 42 Ariz. at 430, 26 P.2d 1012 ). This goal is not met, however, when an employer retains a level of control over its remote employees but is relieved of responsibility for their industrial accidents.

¶19 YB nonetheless urges this Court to adopt the "first responsible contractor" rule, which designates "the lowest insured party on the chain to be the singular statutory employer." We decline to do so. Nothing within Arizona's Workers' Compensation Act supports such a rule, and the jurisdictions that have adopted it have done so under statutory schemes that, unlike Arizona's, impose liability for workers' compensation claims upon a statutory employer only if the direct employer is un- or underinsured. See, e.g. , Minnaugh v. Topper & Griggs, Inc. , 69 A.D.2d 965, 416 N.Y.S.2d 348 (1979) ; Peck v. Delaware Cty. Bd. of Prison Inspectors , 572 Pa. 249, 814 A.2d 185 (2002) ; Brogno v. W & J Assocs., Ltd. , 698 A.2d 191 (R.I. 1997). Adopting the first responsible contractor rule would also create a disincentive for employers to secure workers' compensation insurance to cover remote employees, which is entirely inconsistent with the obligations imposed by A.R.S. § 23-902(B).

¶20 The Act requires the ALJ to evaluate the liability of each contractor and subcontractor made a party to a workers' compensation proceeding under A.R.S. § 23-902(B). The ALJ erred in failing to do so here. Because the record contains conflicting evidence regarding the level of supervision and control YB and GFC retained over MC, Estopellan, Reyes, and Lot 31, we cannot resolve the question as a matter of law. See Home Ins. v. Indus. Comm'n , 123 Ariz. 348, 350, 599 P.2d 801, 803 (1979) (describing several non-exclusive factors to consider when determining whether a person or entity is a statutory employer).

CONCLUSION

¶21 The ICA's decision and award are set aside.

      We view the evidence adduced at the hearing in the light most favorable to upholding the ICA's findings and award. See Polanco v. Indus. Comm'n , 214 Ariz. 489, 490-91, ¶ 2, 154 P.3d 391, 392-93 (App. 2007) (quoting Roberts v. Indus. Comm'n , 162 Ariz. 108, 110, 781 P.2d 586, 588 (1989) ).

      Absent material changes from the relevant date, we cite the current version of rules and statutes.

      Although contractors and subcontractors may choose to require indemnification via the terms of their contracts, the indemnification provisions do not control over the rights and duties prescribed by the Workers' Compensation Act. See U.S. Fid. , 42 Ariz. at 434-35, 26 P.2d 1012 (holding the statutory employer responsible for compensating the injured employee notwithstanding an indemnification clause in the contract between the statutory and direct employers).


author: MORSE, Judge:

text:
    Mark MURRO, Plaintiff/Appellant, v. ARIZONA DEPARTMENT OF HEALTH SERVICES, Defendant/Appellee.
    No. 1 CA-CV 18-0471
    Court of Appeals of Arizona, Division 1.
    FILED June 11, 2019
    Thomas W. Dean, Attorney at Law, Phoenix, By Thomas W. Dean, Counsel for Plaintiff/Appellant
    Sherman & Howard, L.L.C., Phoenix, By Gregory W. Falls, Matthew A. Hesketh, Counsel for Defendant/Appellee
    Presiding Judge James B. Morse Jr. delivered the opinion of the Court, in which Judge Jon W. Thompson and Vice Chief Judge Peter B. Swann joined.
   MORSE, Judge:

¶1 A conviction for a felony violation of a state controlled substance law can be a bar to becoming a dispensary agent under the Arizona Medical Marijuana Act ("AMMA"). In Arizona, preparatory offenses are distinct from, but defined by, a substantive offense. We consider whether a conviction for solicitation to commit possession of a dangerous drug for sale is a violation of a state controlled substance law. Affirming the superior court's judgment, we hold that it is.

FACTS AND PROCEDURAL HISTORY

¶2 In June 2009, Mark Murro pled guilty to solicitation to commit possession of a dangerous drug for sale. The court suspended sentence and imposed probation, from which Murro was discharged in November 2011. In 2010, voters enacted the AMMA, which authorizes the Department of Health Services ("DHS") to approve a person to become a dispensary agent.

State v. Gear , 239 Ariz. 343, 344, ¶ 2, 372 P.3d 287, 288 (2016) ; Ariz. Rev. Stat. ("A.R.S.") § 36-2804.01. In 2017, Murro applied for a dispensary agent registry identification card. In his application, Murro stated that he had not been convicted of an "excluded felony offense," and subsequently was approved for a dispensary agent registry identification card. After a few months, DHS discovered his conviction for solicitation to commit possession of a dangerous drug for sale. DHS sent Murro a Notice of Intent to Revoke Dispensary Agent's Registry Identification Card and Notice of Right to Request Administrative Hearing. The Notice alleged that Murro was convicted of an excluded felony offense and had knowingly violated the AMMA by submitting false information in his application and acting as a dispensary agent when he was not qualified to do so.

¶3 Murro requested a hearing with an Administrative Law Judge ("ALJ"), and the ALJ upheld DHS's decision to revoke Murro's identification card. Murro appealed to the Director of DHS ("Director"), who adopted the ALJ's findings of fact and conclusions of law with minor revisions and revoked Murro's identification card. Murro appealed to the superior court, which affirmed the Director's decision. We have jurisdiction pursuant to A.R.S. §§ 12-913 and -2101(A)(1).

DISCUSSION

¶4 We will uphold the Director's decision unless it is "contrary to law, is not supported by substantial evidence, is arbitrary and capricious or is an abuse of discretion." A.R.S. § 12-910(E). Statutory interpretation is a question of law that we review de novo. Id .; see also Compassionate Care Dispensary, Inc. v. Arizona Dep't of Health Services , 244 Ariz. 205, 211, ¶ 17, 418 P.3d 978, 984 (App. 2018). "[W]hen considering the voters' intent in enacting the AMMA, our task is to apply the law they have written." Parsons v. Arizona Dep't of Health Services , 242 Ariz. 320, 324, ¶ 15, 395 P.3d 709, 713 (App. 2017) (internal quotation marks omitted).

¶5 A person convicted of an "excluded felony offense" is barred from becoming a medical marijuana dispensary agent under the AMMA, and DHS must revoke the identification card of a dispensary agent who is convicted of an excluded felony offense. A.R.S. §§ 36-2804.01(D), -2815(A). An excluded felony offense includes a felony "violation of a state or federal controlled substance law," with certain exceptions that do not apply here. A.R.S. § 36-2801(7)(b). The question is whether solicitation to commit possession of a dangerous drug for sale is a "violation of a state ... controlled substance law."

¶6 Solicitation, like Arizona's other inchoate offenses, does not inherently deal with any particular subject matter. See A.R.S. §§ 13-1001 (attempt); 13-1002 (solicitation); 13-1003 (conspiracy); 13-1004 (facilitation). Instead, solicitation is defined by the underlying offense, such that the elements of solicitation require proof that a person acted "with the intent to promote or facilitate the commission" of the underlying offense, and the classification of the underlying offense determines the classification of the solicitation offense. A.R.S. § 13-1002(A), (B). Because the crime of solicitation does not exist without incorporating other laws, solicitation is a law whose character or type depends wholly on the underlying substantive offense.

¶7 For that reason, the law which Murro violated-solicitation to commit possession of a dangerous drug for sale-is a controlled substance law. Its status as an inchoate crime does not change the subject matter of the law that was violated, and Murro's conviction was for an "excluded felony offense" as defined in A.R.S. § 36-2801.

¶8 Murro urges us to distinguish between completed and inchoate offenses. He argues that "solicitation" is part of a separate class of crimes, and therefore cannot be a controlled substance law. As support, he cites the general proposition that "[p]reparatory offenses are separate and distinct from substantive offenses."

State v. Tellez , 165 Ariz. 381, 383, 799 P.2d 1, 3 (App. 1989). In Tellez , however, the only question before the court was whether solicitation was "a violation of any provision of this section." 165 Ariz. at 382-83, 799 P.2d at 2-3 ; A.R.S. § 13-3408 (prohibiting knowing possession, use, or manufacture of a narcotic drug). And Tellez only held that solicitation was not a violation of A.R.S. § 13-3408 because it was not one of the specific offenses listed in that section. Tellez , 165 Ariz. at 382-83, 799 P.2d at 2-3.

¶9 The statutory language at issue in this case does not support the conclusion that solicitation cannot be a controlled substance law. In contrast to Tellez , the relevant definition of "excluded felony offense" does not reference a specific statute, section, or chapter of the Arizona statutes and refers much more generally to the broad category of any "controlled substance law." A.R.S. § 36-2801(7). The separate and distinct nature of a solicitation offense does not change our conclusion that solicitation to commit possession of a dangerous drug for sale is a violation of a controlled substance law.

¶10 Murro also cites Coronado-Durazo v. I.N.S. , 123 F.3d 1322 (9th Cir. 1997). But unlike here, the federal statute at issue in that case provided "that any alien who is convicted of 'a violation of (or a conspiracy or attempt to violate) any law or regulation ... relating to a controlled substance' may be deported." Id. at 1324 (alteration in original) (quoting 8 U.S.C. § 1251(a)(2)(B)(i) ). The court cited Tellez for the proposition that "solicitation is a generic offense under Arizona law," and noted that the language in the statute's parenthetical "limits convictions for generic crimes that may result in deportation to conspiracy and attempt. Simply put, solicitation is not on the list." Id. at 1325 (citing Tellez , 165 Ariz. at 383, 799 P.2d at 3 ). Because the statute expressly included only conspiracy and attempt, the court found that "the plain language" of the federal statute did not extend to other inchoate offenses such as solicitation. Id.

¶11 Even if Coronado-Durazo correctly interprets federal law, its analysis is inapplicable to this case. Unlike the federal statute at issue in Coronado-Durazo , Arizona statute does not define "excluded felony offense" to include or exclude generic offenses, but includes any violation of federal or state "controlled substance law." A.R.S. § 36-2801(7). Because solicitation is defined by reference to the subject matter of the underlying offense, the crime of solicitation to commit a controlled substance offense is a violation of a controlled substance law.

¶12 Murro also argues that the superior court erred in finding that he knowingly violated the AMMA because he "did not have a conviction for an excluded felony offense at [the] time that he applied to be a dispensary agent or while he worked as a dispensary agent." Because his conviction was for an excluded felony offense, we reject this argument.

CONCLUSION

¶13 Because solicitation to commit possession of a dangerous drug for sale is a violation of Arizona's controlled substance law, Murro was convicted of an excluded felony offense. We therefore affirm the superior court's judgment.

      The exceptions are offenses whose sentence was completed ten or more years earlier and offenses that would be immune under A.R.S. § 36-2811, had it been effective at the time of the offense. A.R.S. § 36-2801(7)(b).

      But see Peters v. Ashcroft , 383 F.3d 302, 306-08 (5th Cir. 2004) (disagreeing with Coronado-Durazo's analysis and holding that an Arizona conviction for solicitation to transport marijuana for sale "on its face constitutes a violation of a law 'relating to a controlled substance' "); Mizrahi v. Gonzales , 492 F.3d 156, 163 (2d Cir. 2007) (following Peters and holding that solicitation to commit a drug crime was a deportable offense under federal law).