VACATE

99A-F125-DEQ · Department of Environmental Quality · 1999-07-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

BACKGROUND On May 19, 1999, Appellant filed a notice of appeal from the denial by the Arizona Department of Environmental Quality (“ADEQ”) on April 22, 1999 of reimbursement of certain expenses claimed by Appellant for corrective action costs. The undersigned notes that documents in the file provided by ADEQ in this matter indicate that the parties have been communicating and negotiating regarding site clean up costs since mid- October, 1997. On June 17, 1999, ADEQ issued a notice informing the parties that a hearing would be held beginning on Friday, July 23, 1999, “to continue for such succeeding days as may be necessary to consider the issues raised in ADEQ’s final determination . . . .” On July 15, 1999, eight days before the scheduled hearing, Appellant filed a motion to continue because it “reasonably believed that this matter would be settled” and, apparently as a result of the wholly unanticipated failure of settlement negotiations, required a continuance of at least 30 days “to allow Appellant sufficient time to prepare for the hearing.” The motion was denied on July 19, 1999. At 4:59 p.m. on July 22, 1999, the day before the scheduled hearing, the Office of Administrative Hearings received via facsimile a “Stipulation and Withdrawal of Hearing Request,” prepared by Appellant’s attorney and signed by both Appellant’s and ADEQ’s attorneys, to the effect that Appellant agreed to withdraw its request for hearing but that ADEQ and Appellant “stipulate and acknowledge that [Appellant] is not waiving its right to submit costs denied in Application LUST No. 0740.01-07 in a separate and subsequent application” or “waiving its rights aside from A.R.S. § 49-1054(C) to obtain its costs and fees for those costs, or to pursue recovery under any and all authority including A.R.S. § 49-1054(C), for any other costs submitted for reimbursement from the SAF.” COMMENTS AND APPLICABLE LAW The parties’ stipulation nullifies the order denying Appellant’s requested continuance and undermines the Office of Administrative Hearings’ power to control its own docket. When this matter was scheduled to be heard on July 23, 1999, no other matters could be scheduled on that date before the administrative law judge assigned to hear the matter, including matters involving parties who, unlike these parties, genuinely desired an opportunity to be heard and to have their disputes resolved. More troubling is the appearance of possible impropriety that could be perceived in ADEQ’s entry into this stipulation. Although “[t]he status of settlement negotiations” is among the factors an administrative law judge may consider in ruling on a motion to continue, see A.A.C. R2-19- 110(A)(5), a motion filed less than fifteen days before a scheduled hearing, like this one, should not be granted absent a showing of good cause, see A.A.C. R2-19-106(C). Nor do the rules require a motion for continuance made in violation of applicable rules, like this one, to be granted simply because it is made pursuant to stipulation. The failure of settlement negotiations does not constitute good cause for failure to prosecute an appeal or to comply with procedural rules. See, e.g., Jepson v. New, 164 Ariz. 265, 270, 792 P.2d 728, 733 (1990) (“[W]here the sole reason given for the failure to prosecute a case is that the parties were engaging in settlement negotiations, good cause has not been shown.”); Flynn v. Cornoyer-Hedrick Architects, 160 Ariz. 187, 189, 772 P.2d 10, 12 (Ct. App. 1988) (Trial court did not abuse its discretion in denying plaintiff’s motion to continue to allow him to engage in additional settlement negotiations and to prepare for trial). The only concession ADEQ received in the stipulation was that Appellant waived any right to pursue costs and fees incurred in pursuing this particular appeal under A.R.S. § 49-1054(C); however, the possibility of any recovery of these costs and fees seems quite remote given Appellant’s legally unreasonable failure to prepare for a duly scheduled hearing. The undersigned notes that Appellant’s attorney was so sure that of a continuance that she scheduled depositions in Nevada on the hearing dates scheduled in this case and another. See Stipulation in Case No. 99A- F-112-DEQ (before Administrative Law Judge Mark Silver). The certain costs of further extended and indefinite delays that will now be incurred by ADEQ, the Office of Administrative Hearings, and the taxpayers of Arizona outweigh the remote risk that Appellant might have recovered the costs of prosecuting this appeal to date. Given Appellant’s admittedly unprepared status, it is not even clear from this record that it has incurred any costs in prosecuting this appeal. The information of record in this matter makes it appear that this stipulation benefits only Appellant, not ADEQ or the taxpayers and citizens of Arizona. In addition, both parties should be aware that the administrative hearing process was not designed to provide for lengthy delays and continuances merely to accommodate the parties’ desire for leisurely preparation for hearing, which were not even commenced until settlement negotiations failed. The Office of Administrative Hearings must schedule hearings to be held within 60 days of the date a party files a notice of appeal, see A.R.S. § 41-1092.05(A)(1), and must provide parties with at least 30 days advance notice of the scheduled hearing date, see A.R.S. § 41- 1092.05(D). As noted above, these parties have been communicating with each other about this matter since November, 1997. Appellant’s belated request for “at least” a 30-day continuance flies in the face of the legislature’s policy, expressed in the statutes cited above, that hearings be scheduled and conducted in this forum expeditiously. Appellant and ADEQ’s stipulation has also nullified the legislative policy expressed in the statutes creating this forum. ORDER Despite the foregoing, in view of the parties’ stipulation and the lack of any other recourse available to the undersigned, IT IS ORDERED vacating the hearing previously scheduled to convene on July 23, 1999 and remanding this matter to the Director of ADEQ with the recommendation that it be dismissed. Done this day, July 23, 1999.

_________________________________ Diane Mihalsky Administrative Law Judge

Copy transmitted by mail this _____ day of July, 1999, to:

Ms. Jacqueline E. Schafer, Director, Department of Environmental Quality 3033 North Central Avenue ATTN: Lavonne Watkins Phoenix, AZ 85012

Cynthia Campbell, Esq., Assistant Attorney General Environmental Enforcement Section Office of the Attorney General 1275 West Washington Phoenix, AZ 85007

Karen E. Errant, Esq. Fennemore Craig, P.C. 3003 N. Central Ave., Suite 2600 Phoenix, AZ 85012-2913

By _______________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826