Case Header

Maricopa County Superior Court Case CV2001-006415: public docket details, parties, minute entries, documents, and official source links for Recreation Centers Of Sun City Inc.

Case Number

CV2001-006415

County

Maricopa

Caption

Not captured

Filed

4/16/2001

Case Type

Civil

Judge

Como, Greg

Location

Downtown

Official Court Record

Official Court Record

Parties

Minute Entries

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

01/06/2005

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 01/10/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MICHAEL M GRANT

ORAL ARGUMENT SET

IT IS ORDERED setting oral argument on Plaintiff’s Motion for Summary Judgment for
February 14, 2005 at 9:00 a.m. in this division. Time allotted: 30 minutes.

IT IS FURTHER ORDERED as follows:

Oral argument shall not exceed five minutes for each side. If extended oral argument is
necessary, counsel must so advise the Court no later than four court days prior to the date set for
hearing so that oral argument can be rescheduled.

Any motion or stipulation for continuance must be filed with the Court no later than four
court days prior to the date set for hearing. After that date, no continuances will be granted except
for extraordinary circumstances.

Counsel are advised that if the answering memorandum is not timely filed in accordance
with the Uniform Rules of Practice of the Superior Court, oral argument may be vacated and the
motion will be ruled upon in accordance with Rule IV of the Uniform Rules of Practice.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 01/09/2002
01/07/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
The court has considered the plaintiff’s Rule 7.1(e) motion
for reconsideration.
IT IS ORDERED:
The motion for reconsideration is denied.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 01/25/2002
01/17/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
L. Chapman
Deputy
CV 2001-006415
Docket Code 094
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
IT IS ORDERED setting oral argument on Defendant Recreation
Centers of Sun City, Inc.’s Motion for Attorney’s Fees and
Plaintiff's Motion to Amend Defendant Recreation Center's
Complaint on February 11, 2002 at 11:30 a.m., in this division:
HONORABLE MARK R. SANTANA
JUDGE OF THE SUPERIOR COURT
EAST COURT BUILDING - 4TH FLOOR
COURTROOM 413
101 W JEFFERSON
PHOENIX, ARIZONA 85003-2202
602 506-6849
Allotted time is 30 minutes.
E-Courtroom Policies

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 01/25/2002
01/17/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
L. Chapman
Deputy
CV 2001-006415
Docket Code 094
Page 2
Courtroom 413 is one of the new “e-courtrooms” and provides
state of the art equipment for case presentation. Please note
the following provisions:
1. The e-courtroom does not have a court reporter present.
If you wish to have a court reporter present for the
duration of your trial, you must notify the court at
least 48 hours prior to the beginning of trial.
2. If you do not wish to use the services of a court
reporter,
but
would
like
a
recording
of
your
presentation, please provide the court with an unopened
Fuji Super HG 120 VHS SNG T-120 or equivalent videotape
or an unopened name brand CD-R disk of high quality to
ensure the most reliable record. Tapes and CDs are
available in the Change of Venue sundries store in the
cafeteria.
3. If you would like some pre-trial instruction on using any
of the equipment in this courtroom, please contact the
division at (602) 506-6849.
All equipment will be ready for your use when you arrive in
the court. If for some reason it isn’t, please contact my staff
for assistance. Do not attempt to set up the court equipment by
yourself! In addition, please do not unplug, move, or in any
way alter any of the equipment, microphones, cameras, etc. in
the courtroom.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

01/25/2005

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 01/27/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MICHAEL M GRANT

ORAL ARGUMENT SET

IT IS ORDERED setting oral argument on Plaintiff’s six Motions in Limine for
February 14, 2005 at 9:00 a.m. in this division. Time allotted: 15 minutes.

IT IS FURTHER ORDERED as follows:

Oral argument shall not exceed five minutes for each side. If extended oral argument is
necessary, counsel must so advise the Court no later than four court days prior to the date set for
hearing so that oral argument can be rescheduled.

Any motion or stipulation for continuance must be filed with the Court no later than four
court days prior to the date set for hearing. After that date, no continuances will be granted except
for extraordinary circumstances.

Counsel are advised that if the answering memorandum is not timely filed in accordance
with the Uniform Rules of Practice of the Superior Court, oral argument may be vacated and the
motion will be ruled upon in accordance with Rule IV of the Uniform Rules of Practice.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

02/01/2005

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
B. Navarro

Deputy

FILED: 02/02/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MICHAEL M GRANT

ORAL ARGUMENT SET

IT IS ORDERED setting oral argument on Defendant Recreation Centers of Sun
City, Inc.’s Motion in Limine for February 14, 2005 at 9:00 a.m. (time allotted: 15 minutes),
in this division.

IT IS FURTHER ORDERED as follows:

Oral argument shall not exceed five minutes for each side. If extended oral argument is
necessary, counsel must so advise the Court no later than four court days prior to the date set for
hearing so that oral argument can be rescheduled.

Any motion or stipulation for continuance must be filed with the Court no later than four
court days prior to the date set for hearing. After that date, no continuances will be granted except
for extraordinary circumstances.

Counsel are advised that if the answering memorandum is not timely filed in accordance
with the Uniform Rules of Practice of the Superior Court, oral argument may be vacated and the
motion will be ruled upon in accordance with Rule IV of the Uniform Rules of Practice.

PLEASE NOTE: E-Courtroom Policies

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

02/01/2005

Docket Code 094
Form V000A
Page 2

Courtroom 413 is one of the new “e-courtrooms” and provides state of the art equipment
for case presentation. Please note the following provisions:

The e-courtroom does not have a court reporter present. If you wish to have a court
reporter present for the duration of your matter, you must notify the court at least 48 hours prior
to the beginning of the matter

If you would like some pre-hearing instruction on using any of the equipment in this
courtroom, please contact the division at (602) 506-3541.

All equipment will be ready for your use when you arrive in the court. If for some reason
it isn’t, please contact my staff for assistance. Do not attempt to set up the court equipment by
yourself! In addition, please do not unplug, move, or in any way alter any of the equipment,
microphones, cameras, etc. in the courtroom.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

02/10/2004

Docket Code 028
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
P. Brown/D. Glab

Deputy

FILED: 02/12/2004

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MICHAEL M GRANT

STATUS CONFERENCE SET

IT IS ORDERED setting a telephonic status conference on the Court of Appeals Opinion
for March 16, 2004, at 9:00 a.m. The Court ruled that it was error for this Court to grant a
motion to dismiss finding as a matter of law that the asset was not “substantial”. Is the asset
substantial enough to merit a ratifying vote of the recreation center’s members?

The Court of Appeals also held that this Court should consider Plaintiff’s Motion to
Amend the Complaint.

Three days before the conference counsel will file a joint statement addressing Rule
16(b) 1-18.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 02/13/2002
02/11/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 094
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
11:34 a.m. This is the time set for oral argument on
motions for attorney fees and plaintiff's motion to amend
complaint. Plaintiff is represented telephonically by counsel,
Brian Kehoe. Defendant Recreation Centers of Sun City, Inc. is
represented by counsel, Charles I. Kelhoffer. Defendants Sun
City Water Company, Inc. is represented by counsel, Todd C.
Wiley.
Court Reporter, Sally Stearman, is present.
A record of the proceeding is made by videotape.
Motion to amend is moot.
Motions for attorney fees are argued to the court.
IT IS ORDERED taking this motion under advisement.
12:03 p.m. Hearing concludes.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 02/13/2002
02/11/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 094
Page 2

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 02/15/2002
02/12/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 021
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
IT IS ORDERED nunc pro tunc correcting the 02/11/2002 minute
entry to add thereto:
The motion to amend was rendered moot by the denial of
plaintiff's motion to reconsider (minute entry dated 01/07/2002).
The
minute
entry
should
reflect
that
plaintiff
was
represented telephonically by counsel, Brad K. Keogh.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

02/14/2005

Docket Code 005
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 02/17/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MICHAEL M GRANT

TRIAL MANAGEMENT CONFERENCE AND HEARING ON MOTIONS

8:58 a.m. This is the time set for Trial Management Conference and oral argument on
Plaintiff’s Motion for Summary Judgment and Plaintiff’s and Defendant’s Motions in Limine.
Plaintiff is represented by counsel, Larry K. Udall and William P. Sullivan. Defendant is
represented by counsel, Charles I. Kelhoffer and Charles Cohen.

A record of the proceeding is made by CD/videotape in lieu of a court reporter.

Argument is held.

IT IS ORDERED taking Plaintiff’s Motion for Summary Judgment and the Defendant’s
Cross Motion for Summary Judgment under advisement.

IT IS FURTHER ORDERED continuing this matter to 1:30 p.m. today.

9:49 a.m. Court stands at recess.

1:53 p.m. Court reconvenes with respective counsel present.

A record of the proceeding is made by CD/videotape in lieu of a court reporter.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

02/14/2005

Docket Code 005
Form V000A
Page 2

LATER:

IT IS ORDERED denying Plaintiff’s Motion for Summary Judgment and Defendant’s
Cross-Motion for Summary Judgment. Even though the parties have attempted to compile a
complete record, the Court cannot as a matter of law, at this time state that the conveyance of the
use of the RCSC’s groundwater rights was or was not “any substantial part” of the assets of the
RCSC. The record is still disputed on the total assets and their value. Although the Court
appreciates the necessity of water to maintain the golf courses and the Court understands that the
golf courses are the net asset of the RCSC, this “conveyance” involves a type of exchange of the
use of groundwater for the use of Central Arizona Project (CAP) water. Therefore, the Court
should hear testimony on whether the action of the RCSC in this water agreement was in the
words of the Defendant “insubstantial” or in the words of Plaintiff “substantial”.

When the Court uses the words “water rights”, the Court means the right to “use” the
water.

Argument is held on Motions in Limine.

The Court rules as follows on Plaintiff’s Motions in Limine:

1. Denying the Motion in Limine Re Charles Havranek.

2. Denying in part and granting in part the Motion Re: Water Company and RCSC and
government employees. Mr. Collier, Mr. Gay or Mr. Smith may testify concerning
RCSC accounting issues. Mr. Larson may testify from Az-Am. However, the
testimony of Mr. Jones, Mr. Frank and Mr. Putnam is not considered relevant.

3. Granting the Plaintiff’s Motion Re Gary Smith. The Court will permit one of either
Mr. Collins, Mr. Smith or Mr. Gay to testify on the accounting issue.

4. Granting the Plaintiff’s Motion Re Former Board Members.

5. Granting the Plaintiff’s Motion re Larry Fellows.

6. Granting in part and denying in part the Plaintiff’s Motion Re Specific Exhibits.
Exhibits not identified by RCSC as documents that RCSC plans to use at trial are
therefore not a part of a Motion in Limine. The Motion is denied as to the CPA Audit
Reports, the RCSC Historic Well Depth and Static Water Level Data, the RCSC
Board of Directors June 28, 2001 Motion in Resolution and the Sun City Community
Facilities Agreement. The Motion is granted as to the final report and complete
record of the CAP Task Force and the July 2000 Preliminary Engineers Report and
the Supplemental Report.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

02/14/2005

Docket Code 005
Form V000A
Page 3

IT IS ORDERED denying Defendant’s Motion in Limine. Reasons are set forth on the
record.

Defendant’s proposed findings of fact and conclusions of law will be submitted by
February 22, 2005. Plaintiff may amend or supplement their proposed findings of fact and
conclusions of law by February 22, 2005.

2:34 p.m. Court stands at recess.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 02/22/2002
02/15/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
BRAD K KEOGH
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
TODD C WILEY
RULING OF THE COURT
Defendants’ applications for awards of attorney’s fees
The court has considered the defendants’ applications for
attorney’s fees, the response and reply.
1.
Are defendants eligible for an award of attorney’s
fees?
The court determines that this matter arises out of a
contract action within the meaning of A.R.S. § 12-341.01. The
defendants are eligible for an award of attorney’s fees.
2.
Amount of fees to be awarded
Associated Indemnity v. Warner, 143 Ariz. 567, 694 P.2d
1181 (1985) requires the trial court to examine six factors in
determining whether attorney’s fees should be granted under
A.R.S. § 12-341.01. Id. at 570, 694 P.2d at 1183. The court
will examine these factors below.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 02/22/2002
02/15/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 2
(1)
The merits of the claim or defense presented by the
unsuccessful party – While the plaintiff’s claims were
dismissed pursuant to A.R.C.P. Rule 12(b), the court
finds
that
the
plaintiffs
arguments
were
not
frivolous. But the court also finds that the plain
language of A.R.S. § 45-1001, 45-1006 and 45-1052(2)
as well as other applicable statutes and the water
exchange
contract
were
dispositive
of
most
of
plaintiffs’ claims.
(2)
The litigation could have been avoided or settled –
given the nature of the dispute and the position of
the parties, the court finds that this matter could
not have been avoided or settled.
(3)
Assessing fees against the plaintiff would cause an
extreme hardship – the plaintiffs offered no evidence
that a fee award would impose an extreme hardship.
(4)
The successful party did not prevail on all of the
relief sought – defendants did prevail on all of the
relief sought.
(5)
Novelty of the legal question – the court finds that
the legal question presented was novel, but the
novelty of the question must be weighed against the
plain language of A.R.S § 45-1001, 45-1006 and 45-
1052(2) as well as other Arizona statutes and the
water exchange contract, which were dispositive of
most of plaintiffs claims.
(6)
Whether the claim had been previously adjudicated in
this jurisdiction – the claim appears not to have been
previously adjudicated in this jurisdiction.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 02/22/2002
02/15/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 3
The court finds that four of the six factors, either
totally or in part, support an award of attorney’s fees. The
court determines however, that given that not all of the factors
support an award and that there was at least some duplication in
the defendants pleadings, adjustments to the requested fees
should be made.
IT IS ORDERED:
(1)
Awarding defendant Sun City Water Company attorney’s
fees in the amount of $8,757;
(2)
Awarding defendant Recreation Centers of Sun City
attorney’s fees in the amount of $14,327.
Form of Judgment
The court has considered the defendants’ proposed form of
judgment and the objection thereto.
The objection is sustained in part.
IT IS ORDERED:
(1)
Proposed paragraph 2 of the order shall be deleted
from the form of judgment;
(2)
Defendants shall submit a form of judgment that
reflects
the
awards
of
attorney’s
fees
and
modification.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

02/18/2005

Docket Code 906
Form J000
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
A. Gonzalez

Deputy

FILED: 02/24/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MICHAEL M GRANT

RESPONSE TIME SET

Defendant will respond to Plaintiff’s Motion to Amend Joint Pretrial Statement by
February 23, 2005. This message has been delivered by e-mail this date.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/08/2005

Docket Code 012
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 03/10/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

TRIAL MINUTE ENTRY
DAY ONE

Plaintiff’s exhibits 1 through 8 and 51 and 52 are marked for identification.

Defendants’ exhibits 9 through 49 (No. 50 is not used) are marked for identification.

9:48 a.m. Trial to the Court. Plaintiff is represented by counsel, Larry K. Udall.
Defendants are represented by counsel, Charles I. Kelhoffer and Charles Cohen.

Court Reporter, Janell Rose, is present.

Plaintiff’s Motion to Amend Joint Pretrial Statement is withdrawn.

On stipulation, Plaintiff’s exhibits 1 through 4 and 52 and Defendants’ exhibits 36, 37
and 49 are received in evidence.

Opening statements.

Plaintiff’s case:

Mark Clark is sworn and testifies.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/08/2005

Docket Code 012
Form V000A
Page 2

Plaintiff’s exhibit 5 is received in evidence.

11:10 a.m. Court stands at recess.

11:29 a.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

Mark Clark testifies further.

11:53 a.m. Court stands at recess.

1:26 p.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

Scott Halver is sworn and testifies.

Plaintiff’s exhibit 6 is received in evidence.

2:54 p.m. Court stands at recess.

3:26 p.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

Larry Spitz is sworn and testifies.

4:03 p.m. Court stands at recess until Wednesday, March 9, 2005.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/09/2005

Docket Code 012
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 03/11/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

TRIAL MINUTE ENTRY
DAY TWO

10:01 a.m. Trial to the Court continues from February 8, 2005. Plaintiff is represented
by counsel, Larry K. Udall. Defendants are represented by counsel, Charles I. Kelhoffer and
Charles R. Cohen.

Court Reporter, Janell Rose, is present.

George Fletcher is sworn and testifies.

Plaintiff’s exhibit 7 is received in evidence.

Plaintiff rests subject to rebuttal.

Defendants’ Motion for Rule 50 Judgment is argued.

IT IS ORDERED denying Defendants’ Motion for Rule 50 Judgment. Reasons are set
forth on the record.

Plaintiff’s exhibit 51 is received in evidence.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/09/2005

Docket Code 012
Form V000A
Page 2

11:49 a.m. Court stands at recess.

1:25 p.m. Court reconvenes. Plaintiff is represented by counsel, Larry K. Udall and
William P. Sullivan. Defendants are represented by counsel, Charles I. Kelhoffer and Charles R.
Cohen.

Court Reporter, Janell Rose, is present.

Defendants’ case:

Keith Larson is sworn and testifies.

Defendants’ exhibits 46, 47 and 48 are received in evidence.

2:59 p.m. Court stands at recess.

3:24 p.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

Keith Larson testifies further.

Defendants’ exhibit 17 is received in evidence.

4:43 p.m. Court stands at recess until 9:30 a.m., Tuesday, March 15, 2005.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/15/2005

Docket Code 012
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 03/17/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

TRIAL MINUTE ENTRY
DAY THREE

9:53 a.m. Trial to the Court continues from March 9, 2005. Plaintiff is represented by
counsel, Larry K. Udall and William P. Sullivan. Defendant is represented by counsel, Charles I.
Kelhoffer and Charles R. Cohen.

Court Reporter, Janell Rose, is present.

Keith Larson testifies further.

11:10 a.m. Court stands at recess.

11:35 a.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

Keith Larson testifies further.

Mark Frank is sworn and testifies.

11:56 a.m. Court stands at recess.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/15/2005

Docket Code 012
Form V000A
Page 2

1:37 p.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

Mark Frank testifies further.

Defendant’s exhibit 30 is received in evidence.

2:59 p.m. Court stands at recess.

3:42 p.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

Mark Frank testifies further.

William Collier is sworn and testifies.

Plaintiff moves to Strike and motion is argued to the Court.

IT IS ORDERED denying Plaintiff’s Motion to Strike.

Defendant’s exhibit 9 is received in evidence.

4:44 p.m. Court stands at recess until 9:30 a.m., Wednesday, March 16, 2005.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/16/2004

Docket Code 089
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 03/18/2004

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

TODD C WILEY

ORDER SETTING FIRM TRIAL and TRIAL MANAGEMENT CONFERENCE

9:15 a.m. This is the time set for Status Conference. Plaintiff is represented
telephonically by counsel, Larry K. Udall. Defendant Recreation Centers is represented
telephonically by counsel, Charles I. Kelhoffer. Defendant Sun City Water is represented by
counsel, Todd C. Wiley, appears in person.

A record of the proceeding is made by CD/videotape in lieu of a court reporter.

A discussion is held.

The Court orders as follows:

1. Plaintiff will file a First Amended Complaint by April 1, 2004. Defendants will file
Answers by April 21, 2004.

2. Plaintiff will disclose expert witnesses and opinions by July 1, 2004.

3. Defendants will disclose expert witnesses and opinions by August 1, 2004.

4. Any rebuttal expert witnesses will be disclosed by August 21, 2004.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/16/2004

Docket Code 089
Form V000A
Page 2

5. Non-expert witnesses will be disclosed by August 21, 2004.

6. All discovery, including depositions, will be completed by October 21, 2004.

IT IS ORDERED setting a trial to a jury on March 4, 2005 at 9:30 a.m. before:

HONORABLE JONATHAN H. SCHWARTZ
SUPERIOR COURT OF ARIZONA
EAST COURT BUILDING
101 WEST JEFFERSON
COURTROOM 413 - 4TH FLOOR
PHOENIX, ARIZONA 85003-2202
602 506-3541

THIS IS A FIRM TRIAL SETTING. Trial length: six days to a jury.

IT IS FURTHER ORDERED that a Trial Management Conference (TMC) is set for
February 14, 2005 at 9:00 a.m. in this division. Allotted time: 45 minutes. The TMC shall be
governed by the Trial Management Orders set forth below.

IT IS ORDERED that the Joint Pretrial Statement (JPTS) in accordance with Rule 16(d),
A.R.Civ.P., is due in this division by 5:00 p.m., five (5) judicial days before the Trial
Management Conference (TMC).

IT IS FURTHER ORDERED with the JPTS, Counsel shall deliver to this division, copies
of the following:

A. A jointly-completed time and witness estimate list. (A sample form is incorporated in
this order). The Court will use the list to predict the length of the trial for the jurors and
to direct counsel to follow the trial time limits established. Any time limitation set will be
reasonable presumptive limits subject to modification upon a showing of good cause.
Counsel are reminded, that excluding breaks, a typical jury trial day is approximately
four and a half hours.

B. A joint set of agreed-upon preliminary and final jury instructions. This does not
include Preliminary Civil RAJI or Standard Civil RAJI 1 – 15 which the Court will be
given without request. Unless counsel indicate they will be unable to do so, the proposed
jury instructions will be submitted both in hard copy and on computer disk.

C. Separate sets of requested instructions that have not been agreed upon. These jury
instructions will also be submitted both in hard copy and on computer disk. Please read
Rosen v. Knaub, 175 Ariz. 329, 857 P.2d 381 (1993), and the RAJI Civil 3d Statement of
Purpose and Approach before preparing the request for non-RAJI instructions.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/16/2004

Docket Code 089
Form V000A
Page 3

D. Proposed Findings of Fact and Conclusions of Law, if a request has been or will be
filed. The proposed Findings of Fact and Conclusions of Law will be submitted both in
hard copy and on computer disk. If proposed Findings of Fact and Conclusions of Law
are not received, the request shall be deemed waived.

E. Proposed voir dire questions which the Court may give.

F. In jury trial cases the parties shall jointly prepare a brief summary of the case which
the Court will read to the jury at the commencement of voir dire.

G. The Court encourages use of juror notebooks in appropriate cases. Stipulating the
contents in evidence is necessary. Key exhibits may be included, along with diagrams,
photographs, timelines, non-argumentative summaries of positions of liability and
damages and other information helpful to jurors.

H. Counsel are to identify in/with the memorandum all deposition or other transcribed
testimony that may be offered at trial. The proposed testimony is to be identified by
reference to page and line numbers. Objections, if any, to such testimony, and the
reasons for such objections, are also to be set forth.

I. Any motions in limine shall be filed forty (40) days before the trial and such motions
must meet the test of State v. Superior Court, 108 Ariz. 396, 397, 499 P.2d 152 (1972):
"The primary purpose of a motion in limine is to avoid disclosing to the jury prejudicial
matters which may compel a mistrial." See also, Ariz. Rules of Evidence, Rule 103(c). A
written response to a motion in limine may be filed no later than thirty (30) days before
trial. No replies shall be filed. The Court will decide motions in limine at the trial
management conference. If oral argument is requested, oral argument will be held at the
trial management conference.

J. All dispositive motions must be filed ninety (90) days before trial.

K. The Court will hear and rule upon objections to exhibits at the TMC. The rulings will
be stated on the record. All objections to known exhibits and witnesses must be made
before or during the Trial Management Conference or will be deemed to have been
waived.

IT IS FURTHER ORDERED that counsel, at the TMC, shall be prepared to discuss:

1. Time limits in voir dire, opening statements, examination of witnesses and closing
arguments.

2. Stipulations for the foundation and authenticity of exhibits.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/16/2004

Docket Code 089
Form V000A
Page 4

3. Jury instructions (preliminary and final), juror notebooks (counsel shall bring any
proposed jury notebooks to the conference), mini-opening statements and voir dire.

4. Agreed-upon deposition summaries and excerpts from deposition transcripts and the
editing of videotaped depositions.

5. Narrative summaries with brief excerpts of deposition question and answer testimony
are preferred at trial rather than the reading in of pages of testimony.

6. Use of "short trial" or summary jury trial.

7. Any special scheduling or equipment issues.

8. Status of settlement of the case.

L. COUNSEL WHO WILL BE THE TRIAL LAWYERS ON THE CASE ARE
REQUIRED TO ATTEND THE TRIAL MANAGEMENT CONFERENCE.

M. FAILURE OF TRIAL COUNSEL TO ATTEND THE TRIAL MANAGEMENT
CONFERENCE MAY RESULT IN PERSONAL SANCTIONS.

N. IF THE CASE IS SET FOR A JURY TRIAL, ONE DAY’S JURY FEES WILL BE
ASSESSED UNLESS THE COURT IS NOTIFIED OF SETTLEMENT BEFORE 2:00
P.M. ON THE JUDICIAL DAY BEFORE TRIAL.

E-Courtroom Policies

Courtroom 413 is an E-Courtroom and provides state of the art equipment for case
presentation. E-Courtrooms do not have a court reporter. If you wish to have a court reporter for
your trial, you must notify the division 48 hours prior to the beginning of trial.

There is a $20.00 fee for a copy of a daily recorded proceeding. A person desiring a copy
CD or videotape will fill out a form and pay the applicable fee at the Self Service Center. The fee
receipt will be attached to the form. The form and receipt will be shown to the courtroom clerk
(person creating the CD/videotape) who will prepare the copy in the customary manner.

TIME ESTIMATES FOR TRIAL

CAUSE NUMBER_______________________________________
CASE CAPTION________________________________________
PLAINTIFF'S COUNSEL__________________________________
DEFENDANT'S COUNSEL________________________________

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/16/2004

Docket Code 089
Form V000A
Page 5

(NOTE : Add additional lines as needed for additional parties and or witnesses.)

Opening Statement and Closing Argument

PLAINTIFF'S OPENING STATEMENT

DEFENDANT'S OPENING

PLAINTIFF'S CLOSING

DEFENDANT'S CLOSING

PLAINTIFF'S REBUTTAL

Estimate of time for Witness Examination

PLAINTIFF'S
WITNESSES
DIRECT
EXAMINATION
CROSS
EXAMINATION
REDIRECT
EXAMINATION

DEFENDANT'S
WITNESSES
DIRECT
EXAMINATION
CROSS
EXAMINATION
REDIRECT
EXAMINATION

The foregoing are based on the best estimates of counsel of the time reasonably needed to
complete the necessary examination of the witnesses listed.
__________________________

_______________________
Counsel for Plaintiff

Counsel for Defendant

9:38 a.m. Hearing concludes.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/16/2005

Docket Code 012
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 03/18/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

TRIAL MINUTE ENTRY
DAY FOUR

9:38 a.m. Trial to the Court continues from March 15, 2005. Plaintiff is represented by
counsel, Larry K. Udall. Defendant is represented by counsel, Charles I. Kelhoffer and
Charles R. Cohen.

Court Reporter, Janell Rose, is present.

William Collier testifies further.

John Snyder is sworn and testifies.

Defendant’s exhibit 43 is received in evidence.

Defendant’s exhibit 22 is received in evidence.

Defendant’s exhibit 23 is received in evidence.

Defendant’s exhibits 24, 25 and 26 are reoffered.

Defendant’s exhibit 42 is received in evidence.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/16/2005

Docket Code 012
Form V000A
Page 2

Defendant’s exhibit 41 is received in evidence.

10:58 a.m. Court stands at recess.

11:24 a.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

John Snyder testifies further.

Timothy Gay is sworn and testifies.

Defendant’s exhibit 40 is received in evidence.

11:59 a.m. Court stands at recess.

Defendant’s exhibit 53 is marked for identification.

1:24 p.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

Timothy Gay testifies further.

Defendant’s exhibit 39 is received in evidence.

Charles Havranek is sworn and testifies.

Defendant’s exhibit 53 is received in evidence.

James Kuchler is sworn and testifies.

Defendant’s exhibits 54, 55, 56 and 57 are marked for identification.

2:57 p.m. Court stands at recess.

3:21 p.m. Court reconvenes with respective counsel present.

Court Reporter, Janell Rose, is present.

James Kuchler testifies further.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/16/2005

Docket Code 012
Form V000A
Page 3

Defendant’s exhibits 54, 55, 56 and 57 are received in evidence.

Defendant’s exhibits 15 and 20 are received in evidence.

Defendant’s exhibits 11, 12, 13, 14, 21 and 44 are offered as proof.

Defendant rests.

4:44 p.m. Court stands at recess until 9:30 a.m., Friday, March 18, 2005.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/18/2005

Docket Code 020
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 03/22/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
Larry K Udall

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

TRIAL MINUTE ENTRY
DAY FIVE

9:47 a.m. Trial to the Court continues from March 17, 2005. Plaintiff is represented by
counsel, Larry K. Udall. Defendants are represented by counsel, Charles I. Kelhoffer and
Charles R. Cohen.

Court Reporter, Janell Rose, is present.

Plaintiff’s Rebuttal:

Plaintiff’s exhibit 58 is marked for identification.

Peggy Ullmann is sworn and testifies.

Plaintiff’s exhibit 58 is received in evidence.

Plaintiff’s exhibit 8 is received in evidence.

Plaintiff rests.

Closing arguments.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/18/2005

Docket Code 020
Form V000A
Page 2

IT IS ORDERED taking this matter under advisement.

11:29 a.m. Court adjourns.

There being no further need to retain the exhibits not offered in evidence in the custody of
the Clerk of the Court,

IT IS ORDERED that the Clerk permanently release all exhibits not offered in evidence to
the counsel/party causing them to be marked, or to their written designee. Counsel/party shall have
the right to refile relevant exhibits as needed in support of any appeal. Refiled exhibits must be
accompanied by a Notice of Refiling Exhibits and presented to the Exhibits Room of the Clerk's
Office. The Court's exhibit tag must remain intact on all refiled exhibits.

IT IS FURTHER ORDERED that counsel/party or written designee take immediate
possession of all exhibits referenced above.

ISSUED: Exhibit Release Forms.

FILED: Exhibit Worksheet.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/29/2005

Docket Code 019
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 04/01/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

RULING

STATEMENT OF THE CASE

The Plaintiffs are members of the Recreation Centers of Sun City (“RCSC”). Plaintiffs
bring this action to require a vote of the membership of the RCSC to approve or disapprove an
Agreement for Exchange of CAP Water in Sun City (October 27, 2000, “Exchange Agreement”)
and the accompanying Operating Agreement (July 27, 2001, “Operating Agreement”). The
RCSC executed the agreements without first calling for a vote of its membership. Article VIII
section 7 of the RCSC Articles of Incorporation requires an affirmative vote of a majority of the
membership entitled to vote before the RCSC may “… convey any substantial part of its assets.”
The Court of Appeals in 1 CA –CV 02-0575 has ruled in this case that an asset is conveyed
under the Exchange Agreement. However, the Court of Appeals determined that it was not
capable (on the basis of the record before it) of deciding if the asset conveyed was “substantial”.
This Court will decide “… whether the conveyance here is substantial enough to merit a ratifying
vote of Recreation Centers’ members under the articles of incorporation”. (Court of Appeals
Memorandum Decision, June 12, 2003, p. 11)

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The RCSC entered into an agreement with Sun City Water Company (“Water Company”)
the predecessor to Arizona-American Water Company (“Az-Am”) to exchange the RCSC’s use

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/29/2005

Docket Code 019
Form V000A
Page 2

of its Type II groundwater rights for the use of the Water Company’s Central Arizona Project
(CAP) water. The RCSC used its right to pump groundwater for its eight golf courses. The
Exchange Agreement stated that the CAP water would be used on the same eight golf courses.
Subsection G states “This Agreement is intended to 1) provide CAP water to golf courses to
replace their use of groundwater thereby preserving groundwater supplies under Sun City and
benefiting the entire community;…”.

Az-Am’s Keith Larson testified that Az-Am would benefit from the exchange because
the RCSC would no longer be pumping 4189 acre feet of groundwater. Therefore, Az-Am
would have contributed to the preservation of groundwater. Mark Frank from the Arizona
Department of Water Resources (AWDR) explained that Az-Am has a limit of the amount of
groundwater it may pump. This limit is called a conservation requirement and is quantified as a
Gallons Per Capita Per Day (GPCD) limit. Mr. Frank stated that the Exchange Agreement
would not permit Az-Am to pump an additional 4189 acre feet of groundwater. Instead the net
effect will be to save 4189 acre feet of groundwater that would otherwise have been pumped by
RCSC.

RCSC did not lease or sell its right to use groundwater to the Water Company in the
Exchange Agreement. The Agreement states, “Nothing in this Agreement shall be construed to
limit the Association’s legal right to pump groundwater pursuant to its permits if Water
Company is unable to deliver the amounts of CAP water anticipated by this Agreement”
(paragraph 9, page 7 of the Agreement). Scott Halver, an appraiser, testified for Plaintiffs that
the value of the 4189 acre feet of the Type II groundwater rights exchanged in October, 2000,
was $4,660,000. Mr. Halver used a sales appr/oach. He compared other bulk sales of
groundwater rights in arms-length transactions. The Court gave less weight to his opinion
because the exchange in this case was not a sale or lease.

The Court concludes that the specific conveyance in this unique case did not involve
conveying a substantial part of its assets. The purpose of Article VIII section 7 is to provide for
a vote of the membership before a substantial part of the assets are conveyed. This Court infers
that the use of the words “substantial part of its assets” is intended to prevent any significant
diminution in the assets of the RCSC without a vote of the membership. In this case the value of
the assets of RCSC were not diminished. The right to use groundwater on golf courses was
conveyed in exchange for the right to use CAP water on the golf courses. The practical effect of
the exchange is that RCSC lost nothing. The RCSC golf courses will be watered. The RSCS is
protected if the Water Company cannot deliver CAP water. Therefore the Court assigns no value
to the trade of the RCSC’s right to use groundwater to water golf courses for the right to use
CAP water on the same golf courses. The testimony from witnesses Mark Clark and John
Snyder (the golf course management experts) did not conclude that there were any significant
differences between CAP water and groundwater on golf courses.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

03/29/2005

Docket Code 019
Form V000A
Page 3

Defendants have prevailed on a matter that arises out of contract, the RCSC Articles of
Incorporation. Defendants will submit a form of judgment, application for attorney fees, and
statement of taxable costs by April 19, 2005. Plaint iffs may respond by May 3, 2005.
Defendants may reply by May 13, 2005.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 04/08/2002
04/04/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 005
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
LARRY K UDALL
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
TODD C WILEY
MINUTE ENTRY
3:14 p.m. In chambers. This is the time set for status
conference. Plaintiff is represented by counsel, Larry K. Udall.
Defendant Recreation Centers of Sun City, Inc. is represented
telephonically by counsel, Charles I. Kelhoffer. Defendant Sun
City Water Company, Inc. is represented telephonically by
counsel, Todd C. Wiley.
A record of the proceeding is made by videotape in lieu of a
court reporter.
A discussion is held regarding the previous judgment. Mr.
Wiley is to submit a new form of judgment for the court's
signature on April 5, 2002. The new form of judgment will be
signed and filed April 5, 2002.
3:25 p.m. Hearing concludes.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

04/27/2005

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 04/28/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MICHAEL M GRANT

ORAL ARGUMENT SET

IT IS ORDERED setting oral argument on Defendant Recreation’s Request for Attorney’s
Fees/Judgment for June 3, 2005, at 9:00 a.m. in this division. Time allotted: 30 minutes.

IT IS FURTHER ORDERED as follows:

Oral argument shall not exceed five minutes for each side. If extended oral argument is
necessary, counsel must so advise the Court no later than four court days prior to the date set for
hearing so that oral argument can be rescheduled.

Any motion or stipulation for continuance must be filed with the Court no later than four
court days prior to the date set for hearing. After that date, no continuances will be granted except
for extraordinary circumstances.

Counsel are advised that if the answering memorandum is not timely filed in accordance
with the Uniform Rules of Practice of the Superior Court, oral argument may be vacated and the
motion will be ruled upon in accordance with Rule IV of the Uniform Rules of Practice.

Michael K. Jeanes, Clerk of Court
*** Electronically Filed ***
05/08/2009 8:00 AM
SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
CV 2001-006415
05/07/2009
Docket Code 019
Form J000
Page 1
CLERK OF THE COURT
COMMISSIONER MITCH MICHKOWSKI
E. Gonzales
Deputy
SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL
v.
RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
FINANCIAL SERVICES-CCC
BOND FOR COSTS ON APPEAL – EXONERATED/RELEASED
In conjunction with the filing of a Notice of Appeal, a cash bond in the amount of
$500.00 was posted pursuant to Rule 10, Arizona Rules of Civil Appellate Procedure. The
appeal has been terminated, the Superior Court has not issued orders for the disposition of the
bond and the bond remains under the control of the Clerk of the Court.
Under the circumstances, on the Court’s own Motion,
IT IS ORDERED that the cash bond previously posted be exonerated/released to the
party who posted it unless the Court receives an objection on or before May 29, 2009.
May 7, 2009
/s/ COMMISSIONER MITCH MICHKOWSKI
Date
Court Commissioner
The application of the /s/ designation satisfies the Court’s approval and signature of this minute
entry.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

05/18/2005

Docket Code 005
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 05/23/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MINUTE ENTRY

2:19 p.m. In chambers. Plaintiff is represented telephonically by counsel, Larry K.
Udall. Defendant is represented telephonically by counsel, Charles I. Kelhoffer.

A record of the proceeding is made by CD/videotape in lieu of a court reporter.

The Court informs the lawyers of unsigned items received by the Court in the mail.

IT IS ORDERED forwarding copies of two anonymous letters received by the Court in
the last 30 days to both counsel. The Court expresses its concern that no party in this case
attempt to communicate with the Court ex parte. One of the letters refers specifically to a matter
pending before the Court on June 3, 2005.

IT IS FURTHER ORDERED that the letters will be filed in the Court file.

2:42 p.m. Hearing concludes.

Cc: Larry K. Udall /w enclosures; Charles Kelhoffer /w enclosures

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

06/03/2005

Docket Code 005
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
W. Bobrowski

Deputy

FILED: 06/10/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

CHARLES R COHEN

HEARING HELD

8:59 a.m. This is the time set for Oral Argument on Defendant’s Request for Attorneys’
Fees. Plaintiffs are represented by counsel, Larry K. Udall. Defendant is represented by
counsel, Charles I. Kelhoffer and Charles R. Cohen.

Court Reporter, Amy Prellwitz-Fuller, is present.

Arguments are heard.

IT IS ORDERED taking this matter under advisement.

9:46 a.m. Hearing concludes.

LATER:

This matter having been taken under advisement.

IT IS ORDERED denying the application for an award of attorneys’ fees of the
Defendant.

IT IS FURTHER ORDERED that each party bear their own attorneys’ fees.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

06/03/2005

Docket Code 005
Form V000A
Page 2

IT IS FURTHER ORDERED that the Plaintiffs pay the taxable costs of $2,530.00. The
Court is not awarding the $140.00 filing fee at the Court of Appeals because the Defendant was
not successful in all respects on the Plaintiffs’ appeal.

IT IS FURTHER ORDERED that Defendant file a new form of judgment that includes
the findings of fact and conclusions of law set forth in the Court’s minute entry of March 29,
2005. Defendant will file the form of judgment by June 24, 2005. Before filing the form of
judgment, Defendant will submit the form to counsel for Plaintiffs to determine if it may be
approved as to form.

The Court has applied the factors set forth in Associated Indemnity v. Warner, 143 Ariz.
567, 694 P. 2d 1181 (1985). The Court finds that the unsuccessful party, the Plaintiffs had a
position with merit. The Court of Appeals has decided in this case that the exchange of
underground water by the Defendant to the Water Company was a “conveyance” under the terms
of the Defendant’s Articles of Incorporation. The remaining issue for this Court was to
determine whether a substantial portion of the assets of the Defendant had been conveyed in the
exchange when the Defendant exchanged rights to underground water for rights to use CAP
water (Central Arizona Project) with the Water Company. Plaintiffs’ position taken technically
has merit. It is beyond cavil that in Arizona the right to pump the amount of water exchanged in
this transaction has substantial value. This Court adopted what it considered a more practical
approach and viewed the transaction in its entirety. When viewed under the totality of the facts
this Court determined that no diminution in the assets of the Defendant had occurred by the
exchange. This finding does not mean that the Court found Plaintiffs’ position to be without
merit. Instead this Court stated on the record that both positions have substantial merit.
Therefore the first factor in Associated Indemnity v. Warner argues against an award of
attorneys’ fees for Defendant.

The second factor is whether the litigation could have been avoided. Plaintiffs assert that
if Defendant would have permitted a vote of the membership the lawsuit would have been
dismissed. Plaintiffs’ position in this regard is not adopted by the Court. Defendant had every
right to oppose an election under their reasonable interpretation of the Articles of Incorporation.
Although most cases can be settled, since this case involves the voting rights of as many as forty
thousand members of the Defendant association it is not as easily settled as other
contract/commercial matters. The Court concludes that the litigation could not have been
avoided. Each side had a legitimate concern. Eventually both the Court of Appeals and this
Court acting as a trier of fact had to make decisions before this controversy could be resolved.
Both the Court of Appeals and this Court were writing on a fairly clean slate. There is not a lot
of law in this sort of situation. The second factor also argues against an award of attorneys’ fees
for Defendant.

The third factor is whether assessing fees against the unsuccessful party would cause an
undue hardship. Defendant effectively argues that if fees are assessed they must be assessed

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

06/03/2005

Docket Code 005
Form V000A
Page 3

jointly and severally against all individual Plaintiffs who chose to become litigants in this matter.
Therefore an award of fees in the range of $180,000.00 (the approximate amount requested by
Defendant) could be collected against any one Plaintiff. Although the Court has not been
provided with any tax returns or financial statements for any of the individual Plaintiffs or the
former Plaintiff, the Sun City Taxpayers Association (SCTA), Defendant argued in response that
the median annual income of Sun City residents is $25,000.00. If the Defendant were to obtain a
judgment of joint and several liability for approximately $180,000.00 in attorneys’ fees and
Defendant were to execute the judgment as the law permits against any individual Plaintiff, the
Court determines that an economic hardship would be caused.

The Court however is aware that unlike the circumstances in Associated Indemnity v.
Warner, (where the party seeking attorneys’ fees was an insurance company bringing a
declaratory judgment action on coverage against their insured) the party seeking attorneys’ fees
in this case is a non-profit corporation. This corporation exists for the purpose of operating
recreation facilities in the Sun City communities. The Defendant obtains its funds only from
billing dues to approximately forty thousand resident members. These members have had to
incur an expense of approximately $180,000.00 to litigate this case. The Court balances this
expense when considering the extreme financial hardship that would occur to an individual
Plaintiff if a judgment for a significant amount of attorneys’ fees were executed against that
Plaintiff. The Court still concludes that the association representing a much larger group of
residents is able to bear the burden of this litigation. Since the litigation was not brought without
merit it is not unreasonable for the association to pay its own attorneys’ fees.

The fourth factor is whether the prevailing party prevailed as to all relief sought.
Ultimately, the Defendant prevailed. The key question was whether the Defendant was required
to hold an election of its membership to approve the Exchange Agreement. This Court’s
decision was in favor of the Defendant’s position that it was not required to seek a vote of its
membership pursuant to the Articles of Incorporation. However, during the course of the
litigation the Judge previously on the case granted the Defendant’s motion to dismiss. When
Plaintiffs appealed, the Court of Appeals reversed the motion to dismiss upholding most of Judge
Santana’s reasoning but reversing as to the lower Court’s holding that no “conveyance” had
occurred in the Exchange Agreement. Therefore on appeal the Plaintiffs had been temporarily
successful. This factor however still weighs in favor of the Defendant.

The fifth factor is whether an award of attorneys’ fees would discourage other claimants
from pursuing legitimate claims. An award of approximately $180,000.00 in attorneys’ fees that
could be executed against any one complaining member of the recreation association could very
well chill another member from bringing a future action on a legitimate claim. As stated above
this Court has found that Plaintiffs had a legitimate basis upon which to bring their complaint for
declaratory judgment. Case law did not exist simply clarifying the legal questions involved in
this matter. This was a novel area of law. No Court had interpreted language similar to the
subject language in the articles of incorporation at issue here. Therefore this is not a situation
where claimant stubbornly pursued a claim with very little basis and placed upon the Defendant

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

06/03/2005

Docket Code 005
Form V000A
Page 4

the burden of having to defeat that claim. Although the Defendant did bear the burden of
litigating and defeating the Plaintiffs’ claim, this case falls in the category of claims that must be
brought.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 06/13/2002
06/12/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
LARRY K UDALL
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
The court has considered plaintiff’s motion for new trial,
the responses and replies.
IT IS ORDERED:
The motion for new trial is denied.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 07/16/2001
07/13/2001
CLERK OF THE COURT
FORM V000A
HONORABLE COLLEEN MCNALLY
K. Ballard
Deputy
CV 2001-006415
Docket Code 094
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
BRAD K KEOGH
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
TODD C WILEY
ORAL ARGUMENT SET
IT IS ORDERED setting this matter for oral argument on (1)
Defendant Sun City Water Company, Inc.’s motion to dismiss and
(2) Defendant Recreation Centers of Sun City, Inc.’s motion to
dismiss on Monday, September 10, 2001 at 9:30 a.m. in this
division, Central Court Building, 201 West Jefferson, 7th Floor,
Courtroom 702, Phoenix, Arizona.
The proceeding will take place in the Superior Court’s new
“e-courtroom”. A record of the proceedings may be made by
videotape in lieu of a court reporter. Should you want an
unofficial copy of the proceedings, the parties or counsel may
give the Court a blank, previously unused videotape at least
fifteen (15) minutes before the trial and a copy will be made at
no cost. A specific type of videotape must be used for this
system in order to ensure the most reliable record: Maxell or
Fuji Super HG 120 (VHS) (SNG T-120) or equivalent. If the
proceedings last for more than one day, a new tape must be

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 07/16/2001
07/13/2001
CLERK OF THE COURT
FORM V000A
HONORABLE COLLEEN MCNALLY
K. Ballard
Deputy
CV 2001-006415
Docket Code 094
Page 2
provided each day. For the convenience of the parties, the store
in the courthouse cafeteria sells the appropriate videotape. The
Court can also provide a digital log, if the party provides an
unused CD-R.
Should an official transcript be required, you may request
that the Court prepare it. The party ordering the transcript
must pay for it. With this new technology, a court reporter is
likely not required and the parties are encouraged to experience
the Court's video recording system before requesting a court
reporter. If a court reporter is required, the Court must
receive a written request at least 48 hours before the
commencement of the proceeding. Failure to timely request a
court reporter will be deemed consent to proceed without a court
reporter.
Oral argument shall not exceed five minutes for each side.
If extended oral argument is necessary, counsel must so advise
the Court no later than four court days prior to the date set
for hearing so that oral argument can be rescheduled.
Any motion or stipulation for continuance must be filed
with the Court no later than four court days prior to the date
set for hearing. After that date, no continuances will be
granted except for extraordinary circumstances.
All memoranda and affidavits regarding the motion must be
filed and copies lodged with this division no later than four
court days prior to the date set for hearing.
COUNSEL ARE HEREBY DIRECTED TO PROVIDE THE COURT WITH
COPIES OF ALL CASES AND STATUTES CITED IN MEMORANDA AND
PLEADINGS, WHICH THEY WANT THE JUDGE TO READ AND CONSIDER,
CONCERNING THE MOTION(S) TO BE RULED ON, INCLUDING ARIZONA CASES
AND STATUTES.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 07/16/2001
07/13/2001
CLERK OF THE COURT
FORM V000A
HONORABLE COLLEEN MCNALLY
K. Ballard
Deputy
CV 2001-006415
Docket Code 094
Page 3
Counsel are advised that if the answering memorandum is not
timely filed in accordance Arizona Rules of Civil Procedure,
oral argument may be vacated and the motion will be ruled upon
in accordance with Rule 7.1(b), A.R.C.P.
IF ANY ISSUES IN THE MOTION RELATE TO DISCOVERY PROBLEMS,
COUNSEL SHALL CONFER TO ATTEMPT TO RESOLVE THEIR DIFFERENCES OR
TO REDUCE THE AREAS OF DISPUTE. COUNSEL ARE REMINDED THAT THE
COURT WILL LIKELY IMPOSE SANCTIONS AGAINST THE LOSING PARTY IN
ACCORDANCE WITH RULE 37(a)(4), RULES OF CIVIL PROCEDURE.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 08/09/2002
08/07/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 056
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
LARRY K UDALL
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
IT IS ORDERED setting telephonic Status Conference on
defendant Recreation Centers of Sun City, Inc.'s form of
judgment on August 12, 2002 at 2:00 p.m. in this division:
HONORABLE MARK R. SANTANA
JUDGE OF THE SUPERIOR COURT
EAST COURT BUILDING - 4TH FLOOR
COURTROOM 413
101 W JEFFERSON
PHOENIX AZ 85003-2202
602 506-6849
Allotted time is 30 minutes. The parties are to supply the
court with their direct phone numbers. The court will initiate
the phone call.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

08/10/2005

Docket Code 094
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 08/12/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

ORAL ARGUMENT SET

IT IS ORDERED setting oral argument on Plaintiff’s Motion for New Trial for
September 6, 2005, at 4:00 p.m. in this division. Time allotted: 30 minutes.

IT IS FURTHER ORDERED as follows:

Oral argument shall not exceed five minutes for each side. If extended oral argument is
necessary, counsel must so advise the Court no later than four court days prior to the date set for
hearing so that oral argument can be rescheduled.

Any motion or stipulation for continuance must be filed with the Court no later than four
court days prior to the date set for hearing. After that date, no continuances will be granted except
for extraordinary circumstances.

Counsel are advised that if the answering memorandum is not timely filed in accordance
with the Uniform Rules of Practice of the Superior Court, oral argument may be vacated and the
motion will be ruled upon in accordance with Rule IV of the Uniform Rules of Practice.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 08/19/2002
08/12/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 005
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
WILLIAM P SULLIVAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
TODD C WILEY
MINUTE ENTRY
2:00 p.m. In chambers. This is the time set for telephonic
conference. Plaintiff is represented by counsel, William P.
Sullivan. Defendant Recreation Centers is represented by counsel,
Charles I. Kelhoffer. Defendant Sun City Water is represented by
counsel, Todd C. Wiley.
A record of the proceeding is made by videotape in lieu of a
court reporter.
A discussion is held.
2:03 p.m. Hearing concludes.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 08/19/2002
08/15/2002
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 023
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
LARRY K UDALL
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
Pursuant to the August 12, 2002 telephonic conference,
IT IS ORDERED denying plaintiff's motion for new trial, all
in accordance with formal written Order signed by the court on
August 15, 2002 and entered (filed) by the clerk on August 15,
2002.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 08/29/2001
08/28/2001
CLERK OF THE COURT
FORM V066A
HON. EDWARD O. BURKE
M. MINKOW
Deputy
CV 2001-006415
Docket Code 066
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
CASE REASSIGNMENT - CIVIL PRESIDING JUDGE
This case was previously assigned to the Honorable COLLEEN
MCNALLY. A Notice of Change of Judge has been filed by
DEFENDANT. The case was transferred to the Presiding Civil
Judge for reassignment.
IT IS ORDERED that this case be assigned to Civil Calendar
CVJ10,
the
Honorable
MARK
R.
SANTANA,
for
all
further
proceedings. If any objections to the Notice of Change of Judge
are filed, the noticed judge retains jurisdiction to hear and
decide the objections. Any objections must be filed and a copy
delivered to the noticed judge within twenty days of the date of
this order.
PENDING: DEFENDANTS' MOTIONS TO DISMISS.
cc: JUDGE SANTANA

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 09/10/2001
09/05/2001
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
Y. Mesa
Deputy
CV 2001-006415
Docket Code 094
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
IT IS ORDERED setting oral argument for Defendant's motion
to dismiss on October 1, 2001 at 10:15 a.m. in this division:
HONORABLE MARK R. SANTANA
JUDGE OF THE SUPERIOR COURT
EAST COURT BUILDING - 4TH FLOOR
COURTROOM 413
101 W JEFFERSON
PHOENIX, ARIZONA 85003-2202
602 506-6849
Allotted time is 30 minutes.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

09/06/2005

Docket Code 020
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 09/08/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

MATTER UNDER ADVISEMENT

4:05 p.m. This is the time set for oral argument on Motion for New Trial. Plaintiff is
represented by counsel, Larry K. Udall. Defendant is represented by counsel, Charles I.
Kelhoffer.

A record of the proceeding is made by CD/videotape in lieu of a court reporter.

Argument is held.

IT IS ORDERED taking this matter under advisement.

4:48 p.m. Hearing concludes.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY

CV 2001-006415

09/07/2005

Docket Code 019
Form V000A
Page 1

CLERK OF THE COURT
HON. JONATHAN H. SCHWARTZ
D. Glab

Deputy

FILED: 09/13/2005

SUN CITY TAXPAYERS ASSOCIATION INC,
et al.
LARRY K UDALL

v.

RECREATION CENTERS OF SUN CITY INC,
et al.
CHARLES I KELHOFFER

RULING

This matter having been taken under advisement,

IT IS ORDERED denying Plaintiff’s Motion for New Trial. After considering the
arguments in the Motion for New Trial, the Response and the Reply the Court determines that
the reasons set forth in this Court’s June 3, 2005, minute entry are affirmed as the basis for the
Court’s initial ruling in favor of Defendant in the case. The June 3, 2005, minute entry also
forms the basis for denying Plaintiff’s Motion for New Trial.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 09/18/2001
09/14/2001
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
Y. Mesa
Deputy
CV 2001-006415
Docket Code 064
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
IT IS ORDERED, on oral stipulation of the parties, vacating
the Defendant’s motion to dismiss set for October 1, 2001 and
resetting this matter to November 16, 2001 at 9:00 a.m. in this
division.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 11/21/2001
11/16/2001
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 005
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
9:38 a.m. This is the time set for oral argument on
defendants' motion to dismiss. Plaintiff is represented by
counsel, Jeffrey C. Zimmerman and Brad K. Keogh. Defendants are
represented by counsel, Todd C. Wiley and Jeffrey A. Bernick.
A record of the proceeding is made by videotape in lieu of
a court reporter.
Motion is argued.
IT IS ORDERED taking this matter under advisement.
10:22 a.m. Hearing concludes.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 11/21/2001
11/19/2001
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 1
FILED: _________________
SUN CITY TAXPAYERS ASSOCIATION
INC, et al.
JEFFREY C ZIMMERMAN
v.
RECREATION CENTERS OF SUN CITY
INC, et al.
CHARLES I KELHOFFER
MICHAEL M GRANT
MINUTE ENTRY
The court has considered the defendants' motions to dismiss,
the response, the replies and the supplemental memorandum in
support of defendant Recreation Center of Sun City Inc.’s motion
to dismiss.
Standing
Before addressing the merits of the plaintiffs’ claims, the
initial issue of standing must be resolved.
Sun City Taxpayers Association Inc. – In order to have
standing, the Sun City Taxpayers Association Inc. (Association)
must
allege
an
injury
to
itself
or
that
its
members’
associational ties have been affected. Sun City Taxpayers’
Association v. Citizens Utility Company, 847 F.Supp.281, 284 (D.
Conn. 1994). The Association has not urged either position and
the pleadings do not suggest such injuries.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 11/21/2001
11/19/2001
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 2
Moreover,
an
association
cannot
assert
representative
standing on behalf of its members where the association seeks
damages as opposed to requesting only declaratory or injunctive
relief. Id. at 285. In this case, plaintiff Association is
seeking consequential damages on behalf of its individual
members. These damages allegedly result from anticipated
increases in utility rates if the water pipeline is constructed.
Such damages, if they exist, are individual to its members and
cannot be asserted by the Association. Id.
Finally, the Association does not allege that it has an
“interest” in the Agreement for Exchange of CAP Water in Sun City
(“the Agreement”). There is nothing in the record that would
support the conclusion that it has such an interest. The
plaintiff must demonstrate that a substantive right has been
impacted: There must be an effect on his rights, status or legal
relations. A.R.S. § 12-1832; Dail v. City of Phoenix, 128 Ariz.
199, 624 P.2d 877 (App. 1980). No such impact has been
demonstrated.
The court concludes that the Association does not have
standing to bring this lawsuit.
Individual Plaintiffs – The individual plaintiffs also lack
standing. The possibility that the plaintiffs may sustain a
utility rate increase because of the signing of the Agreement
does not create standing to bring a declaratory judgment action.
See Morris v. Fleming, 128 Ariz. 271, 273, 625 P.2d 334, 336
(App. 1981). At present, the plaintiffs not sustained any
damages from the Agreement. They have not been affected by the
Agreement as required by A.R.S. § 12-1832.
The individual plaintiffs do not have standing to bring a
declaratory judgment action.

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 11/21/2001
11/19/2001
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 3
A.R.S. § 10-3304
The court finds that the Board of Directors for the
defendant Recreation Center of Sun City Inc (RCSC) did pass a
resolution approving and ratifying the Agreement.
It is undisputed that the RCSC is a non-profit corporation.
In order to challenge this non-profit corporate action, the
individual plaintiffs must meet the provisions of A.R.S. § 10-
3304, which requires that at least ten percent of the membership
or fifty members of the corporation file the claim.
At best, there are only fourteen plaintiffs in this
litigation. Moreover, the plaintiffs have not established that
they represent ten percent of the membership of the RCSC.
The court finds that the plaintiffs do not meet the
requirements of A.R.S. § 10-3304.
Transfer of Water Rights
Plaintiffs argue that the execution of the Agreement
resulted in the RCSC violating Article VIII, Section 7 of its
articles of incorporation because Article VII prohibits the RCSC
from “conveying “assets” in excess $50,000 without obtaining the
approval of the membership. But the Agreement clearly sets forth
that the Agreement does not transfer or in any way impair the
vested water rights of RCSC. See Agreement, ¶9. Indeed, the
Agreement could not contain such a transfer because Arizona law
specifically prohibits such a transfer. A.R.S. § 45-1052(2).
Rather, the Agreement is a water exchange contract authorized by
A.R.S § 45-1001. A.R.S. § 45-1006, which specifically provides
that vested water rights are not affected by water exchange
agreements, is implicitly incorporated into the Agreement. See
Huskie v. Ames Brothers Motor and Supply Co. Inc., 167 Ariz. 383,
389, 807 P.2d 1119, 1125 (App. 1990).

SUPERIOR COURT OF ARIZONA *** FILED ***
MARICOPA COUNTY 11/21/2001
11/19/2001
CLERK OF THE COURT
FORM V000A
HONORABLE MARK R. SANTANA
D. Glab
Deputy
CV 2001-006415
Docket Code 019
Page 4
The agreement reflects a water-for-water exchange which does
not convey any rights other than the ability to use water when
exchanged. While the Agreement does limit the ability of RCSC to
pump groundwater for a given period of time, the Agreement merely
substitutes the CAP water for RCSE’s diminishing groundwater, at
a twenty per cent savings. A relinquishment, conveyance or
transfer of RCSC’s groundwater rights does not occur. There is no
adverse impact on RCSC’s ability to provide water. CAP water
becomes
unavailable,
RCSC
can
resume
groundwater
pumping
immediately. Agreement, ¶9. An agreement to exchange water for
water, while limiting the ability to pump groundwater during the
agreement's existence, does not constitute a conveyance of water
rights.
Corporate Indebtedness
In their response, the plaintiffs do not seriously contest
the defendant RCSC’s argument that the Agreement does not create
and indebtedness in violation of Article X of the RCSC articles
of incorporation. The court finds that the transfer does not
violate Article X since it is essentially the exchange of one
indebtedness
for
another.

Citrus
Grower’s
Development
Association Inc. v. Salt River Valley Water Users’ Association,
34 Ariz 105, 125, 268 P. 773, 780 (1928).
IT IS ORDERED:
The motions to dismiss are granted.

Documents