Kibbey Decision,” Established the Prin- Territory from 1905 to Ciple That “Water Belongs to the Land” and 1909

annual Franchise Seminar in February. Christina also spoke Arizona court stops HOAs from abusive practice Newsletter at the A.B.A. Forum on Franchising’s Annual Forum held in SPRING 2012 personal Maryland in October 2011 on “The Perils of Third Parties In a recent case handled by Gust Rosenfeld, the Arizona Court not supportable on any legitimate ground. Its arguments are spe- Selling or Servicing Your Brand: Broker, Area Representative of Appeals reminded Home Owners Associations (HOAs) that cious, legally and logically unsound, and are so contrived as to be and Area Developer Programs.” there are limits to their powers. Until little more than sophistry.” Sarah C. Smith is a new member of the Maricopa County recently, HOAs would foreclose their lien The court held that the HOA’s lawyers Bar Association, Board of Directors. securing relatively small amounts, then had a duty to inform the court commis- Timothy A. Stratton was recently appointed to serve on argue that the foreclosure extinguished sioner handling the HOA default judgment NOTES the City of Scottsdale Board of Adjustments. The Board of JUDG E KIBBEY VITAL the first deed of trust securing the home- hearing about the controlling statute, even Kent E. Cammack, Christopher M. McNichol, Sean P. Adjustments hears and decides zoning and code variances. owner’s typically much larger home loan. if the statute was adverse to their position. O’Brien and Madeleine C. Wanslee hosted the Creditors’ Richard H. Whitney has been honored, along with Bert Arizona’s statutes are clear on lien The court of appeals found the actions of TO TERRITORY, STATE Rights Seminar, “What’s Hot in 2012” in January. Getz and Newton (Betty) Rosenzweig, as founders of the status: an HOA lien holds super priority the HOA’s lawyers offensive, joining the Tom Chauncey II and Christopher M. McNichol were Arizona Community Foundation (ACF). In 1978, Dick headed status except against certain liens includ- lower court in referring the matter to the Founding Member’s Ties to Centennial featured in Commercial Executive Magazine as “Leaders in Real the study committee formed by five large banks to explore start- ing “A recorded first mortgage on the state bar for disciplinary consideration. E s t at e L aw.” ing the organization, and, as a young lawyer, performed the legal unit … or a recorded first deed of trust on This case should put an end to bullying James T. Giel presented on “Elections Dos and Don’ts” to work to establish it. He went on to be the Chair for five years, the unit,” A.R.S. § 33-1807(B), (empha- tactics of HOAs, at least in this particular Trailblazing attorney. at the age of 71, leaving behind a firm foot- school district officials at an elections seminar in Phoenix. following Mr. Getz in that role. ACF now consists of more than sis added). Despite such clear language, type of situation. The case also reminds Sage jurist. Territorial print in Arizona’s history. Martin T. Jones spoke at the National Conference of the 500 component funds with total assets in excess of $500 million. HOAs had continued to push the limits lawyers and clients that they have a duty to governor. Joseph Henry Environmental Information Association on March 24 in San on their power. play by the rules of the court or else face Kibbey was all of these Diego on “Legal Issues: Hydraulic Fracturing.” Marty presented Super Lawyers THE ‘KIBBEY’ DECISION: The Arizona Court of Appeals ruled the consequences. and more. We are most locally to the Maricopa County Association of Paralegals in We are pleased to announce that ten of our lawyers have against the HOA in Cypress on Sunland proud of his contributions LANDMARK CASE ON March on “Renewable Energy vs. Fossil Fuels.” been selected for inclusion on the 2012 Southwest Super Lawyers Homeowners Ass’n v. Orlandini because it to the history of early WATER RIGHTS James W. Kaucher was selected for inclusion in the 2012 list. Each year, no more than 5 percent of the lawyers in found that a fraud was perpetrated on the lower court by the HOA Scott A. Malm | 602.257.7481 | [email protected] Arizona and of his service edition of The Best Lawyers in America® in the practice area of Arizona and New Mexico receive this honor. Those selected, by through its lawyers. The court stated, “The HOA’s interpretations Scott practices in the area of real estate litigation and commercial to his private practice The Wormser case involved a dispute in Professional Malpractice Law. practice area, are: Appellate: Charles W. Wirken. Bankruptcy of the statute and the covenants, conditions and restrictions are disputes. clients in his role as a which the Salt River Valley Canal Company Jennifer N. MacLennan presented at The Arizona School & Creditor/Debtor Rights: Sean P. O’Brien and Madeleine C. founding partner of was accused of considering water from Boards Association’s Spring Legal Conference in March on Wanslee. Business Litigation: Richard A. Segal. Estate Planning Gust Rosenfeld. the Salt River as corporate property and “School Board’s Role in Hiring.” & Probate: Richard H. Whitney. Insurance Coverage: Peter Kibbey served as delivering it in times of drought to custom- Andrew J. McGuire presented on development impact fee Collins, Jr. Real Estate: Timothy W. Barton; Gerald L. Jacobs; Phoenix Office Tucson Office This newsletter is published twice a year by the law firm of Gust Rosenfeld P.L.C. as a service to our clients and friends. It is intended to provide general Associate Justice of ers with ownership interest in the com- topics in October 2011, before the following groups: Growth Scott A. Malm; and Christopher M. McNichol. One E. Washington St., Ste. 1600 One S. Church Ave., Ste. 1900 information only, not advice on specific legal questions. Portions may be re- the Arizona Territorial pany—in preference to customers who had & Infrastructure Consortium; Government Finance Officers of In addition, associate Mingyi Kang has been selected to Phoenix, Arizona 85004-2553 Tucson, Arizona 85701-1627 produced with attribution. For change of address, additional copies, or a com- Supreme Court from historically used the water. Arizona Budget Forum; and the Urban Land Institute Arizona. Southwest Rising Stars as one of the top up-and-coming real Telephone: 602.257.7422 Telephone: 520.628.7070 plimentary subscription, contact our receptionist. We invite your comments. 1889 to 1893 and as The ruling, which became known as the Christina M. Noyes and John L. Hay hosted our firm’s estate attorneys in Arizona and New Mexico for 2012. Facsimile: 602.254.4878 Facsimile: 520.624.3849 SPRING 2012, ISSUE NO. 61 © 2012 Gust Rosenfeld P.L.C. www.gustlaw.com Governor of the Arizona “Kibbey Decision,” established the prin- Territory from 1905 to ciple that “water belongs to the land” and 1909. His legal career is could not be used as “floating” property to prsrtt s d most remembered for his be divided by decision of the canal compa- Changes To Notarizing Documents u.s. postage efforts in the area of water ny. Water rights were thus linked to parcels paid law. of land and not to the owner of land. As a At the behest of the Arizona Secretary of State, last year the Arizona Legislature added Phoenix, AZ Although he had been result of the decision, the role of the canal some new requirements to the laws regulating notaries public. One new provision of Permit No. 2659 a governor, he preferred company became that of a delivery agent: particular significance deals with the integration of the notary certificate with the main to be known as Judge Arizona Territorial Governor and Gust Rosenfeld founding member water was allocated to the various tracts document. Joseph Henry Kibbey. of land based upon the principle of prior One e. washington st., suite 1600 Kibbey. His decision Now, a separate notarial certificate attached to a document must contain a description phoenix, arizona 85004-2553 in the case of Wormser appropriation. of the document. This description should include, at a minimum, the title or type of the et al v. Salt River Canal confirmation of the second term until The decision was not appealed and document, the document date, the number of pages of the document, and the names of return service requested Company, Case No. 708 (1892), set an after Roosevelt left office, and succeeding the canal companies instead attempted to any additional document signers other than the person whose signature was notarized. important precedent in the territory that President William Taft appointed ignore the Kibbey Decision. It was later While this requirement may be designed to address the perceived misuse of free- continues to the present. Richard Sloan instead. Kibbey stepped upheld by the Arizona Territorial Supreme standing notary pages, it also may create practical issues in creating and organizing President Theodore Roosevelt down as governor on May 1, 1909. Court and became the basis for a decision complete documents, particularly ones with multiple signers at different locations. appointed Judge Kibbey Governor of the Judge Kibbey returned to private legal which settled water rights in the Salt River Arizona Territory on February 27, 1905, practice and served as counsel for the Salt Valley in anticipation of the completion of Christopher M. McNichol | 602.257.7496 renominating him for a second term on River Valley Water Users’ Association, part Roosevelt Dam. [email protected] December 16, 1908. Mining interests of today’s Salt River Project (SRP). Judge Chris practices in the area of real estate transactions and litigation. and other political opponents delayed Kibbey died in Phoenix on June 14, 1924, SEE KIBBEY ON PAGE 2

Americans with Disabilities act - Page 3 • Etymology Corner - Page 4 PAGE 5 SPRING 2012 NEWSLETTER Making a house a dwelling - Page 4 • PERSONAL Notes - Page 5 • HOAs - Page 6 Gust Rosenfeld: A LEGACY OF EXPERTISE lived in (by anyone) for it to be considered a dwelling under this Growing to Meet KIBBEY 20 YEARS LATER: Do you have to dwell FROM PAGE 1 IN WATER RIGHTS, PUBLIC statute. the Needs of Arizona to make a house a Highlighting the practical and perhaps inequitable effect of and Our Clients & SCHOOL LAW, PUBLIC CHANGES TO THE AMERICANS WITH this proposition, consider the quite different liability exposure FINANCE DISABILITIES ACT dwelling? of two otherwise identical borrowers under home construction With Judge Kibbey’s loans, where one house was finished and lived in (perhaps even experience in water rights Judge Kibbey left a legacy that continues to The statement that “we are all one accident away from disabil- (regrets to the Washington man with a boa constrictor or the When mortgage debt exceeds the fair market value of a for just a short period), and the other was not. The former would and governmental issues, this day within Gust Rosenfeld and through- ity” is an apt one. More than 50 million Americans – 18% of our Missouri woman with a pet monkey both claiming their pet property sold at a foreclosure auction, the shortfall created by not be personally liable for the loan, while the latter would. Gust Rosenfeld’s early work out Arizona. The firm’s practice areas in public population – have disabilities. The original 1990 Americans with as service animals). Entities must allow service animals to ac- the unpaid loan balance is called a “deficiency.” However, in facts similar to those of the unfortunate borrower centered on public law and finance and in water law are a testament to that Disabilities Act (ADA) attempted to deal with accommodations for company people with disabilities in all areas where the general In general, a borrower is personally liable to the lender for described above, a recent Arizona Court of Appeals case held public finance, two practice legacy. Throughout our history, just as with the the disabled. public is allowed. Staff can only ask a) whether the animal is a the full balance of the loan, including any deficiency after that the individual borrower’s “intent” to dwell in the not-quite- areas which today continue to creation of the Salt River Valley Water Users’ Congress passed substantial changes to the ADA in 2010 with service animal required because of a disability and b) what task foreclosure. In certain situations, however, Arizona’s “anti- finished foreclosed house was sufficient to avoid liability for the provide core services to our Association, Gust Rosenfeld has been instrumen- changes effective on March 15, 2011, or March 15, 2012, including: the animal has been trained to perform. Staff cannot ask about deficiency” statutes shield borrowers from such liability. deficiency. President Teddy Roosevelt commemorates the opening of tal in creating precedent for financing municipal 1) Ticket sales – Public and private venues are now required to the person’s disability or require any medical documentation. Several elements come into play in determining whether the Although it may be a result that reflects more the policy clients. Roosevelt Dam. and public projects that are vital to Arizona’s sell tickets for wheelchair accessible seats and non-accessible 5) Hotel reservation policies – Reservation staff is required to borrower is protected. In broad strokes, a borrower escapes than the letter of the statutes, and perhaps also meshing with Over the years, Gust Rosenfeld development. seats in the same manner. Tickets must be sold during the identify accessible features in guest room door width and avail- personal liability for a deficiency following a non-judicial the realities of the lender’s initial underwriting of the loan, the has grown to meet the ever- DROUGHTS AND FLOODS Upon Kibbey’s death, Gust Rosenfeld’s water same hours and through the same methods of purchase. Ac- ability of roll-in showers and other hotel amenities. trustee’s sale foreclosure if: 1) the property is 2-1/2 acres or less; decision does raise a host of thorny issues about the boundaries expanding needs of Arizona expertise was carried forward by attorneys cessible seating is for people a) with mobility disability, b) who, 6) 2010 ADA standards for access designs – As of March 15, 2012, 2) the property is limited to and utilized for either a single one- of the always subjective element of intent. and our clients, including While living in the Arizona Territory, John L. Gust and Scott Norviel. John Gust–the because of their disability, cannot sit in a straight-back chair, or all new construction and alterations must use the 2010 Stan- family or a single two-family dwelling; and 3) the loan was used Stayed tuned. The Arizona Supreme Court, or perhaps the these practice areas: Judge Kibbey had experienced both prolonged first of three generations of Gusts associated with c) whose service animal cannot fit under a non-accessible seat dards. Some noticeable changes in the 2010 Standards include to purchase that property itself, i.e., not to buy other property. Arizona Legislature, may yet speak again on this issue. droughts and devastating floods. our firm–represented the water users’ association or lie safely in the aisle. Venues cannot charge higher prices for a) added technical requirements for children, b) required Defining “dwelling” is key. A few years ago, the Arizona Alternative Dispute In February 1891, the Salt River flood washed as it continued to build, control and conserve the accessible seats than non-accessible seats in the same seating visible and audible alarms, and c) an increase in the amount of Supreme Court stated that a house being built by a commercial Christopher M. McNichol | 602.257.7496 Resolution out the railroad bridge at Tempe and caused Salt River’s abundant water. section. accessible public entrances to 60% up from the 50% under the borrower for ultimate resale to its first resident was not a [email protected] damage in Phoenix as far north as Jefferson First Kibbey and then John Gust guided the 2) Access – Use of wheelchairs and other manual or power-drive 1991 Standards (e.g., if a store has four entrances, then three dwelling within the protected ambit. A broad proposition Chris practices in the area of real estate transactions and Bankruptcy and Creditors’ Street. The flood was followed by a drought that financing for the construction of the dams that mobility devices must be allowed in all areas where the general must be accessible under the 2010 Standards). could be extracted from the case that a house must actually be litigation. Rights killed livestock, forced a third of the farmland formed Apache, Canyon and Saguaro Lakes public is allowed. in the Salt River valley out of cultivation, and below Roosevelt Dam. 3) Communication – Entities must implement effective commu- This serves as a brief overview of the 2010 ADA changes. Please Business/Corporate Law caused many residents in the area to abandon Gust was hired by local banks to review and nication policies (auxiliary aids and services) for persons of low visit the ADA website www.ada.gov for more information. their homes. Commercial Finance approve bonds issued by municipal corporations vision or who are hard of hearing. To control flood waters and provide water in in Arizona. He combined his expertise with the 4) Service animals – Only dogs, or miniature horses, trained to Christopher M. McNichol | 602.257.7496 | [email protected] times of drought, construction of a storage dam Education Law firm’s knowledge of water law to form, advise perform tasks for a person with a disability are recognized Chris practices in the area of real estate transactions and litigation. was proposed on the Salt River; a suitable site and act as the bond attorney to finance almost Environmental Law was located as early as 1889. There was, however, all of Arizona’s irrigation, drainage and electrical no source of funds within the territory to finance districts. Franchises and Franchising the estimated $2 million to $5 million in con- Gust Rosenfeld continues as bond counsel struction costs. Attorney profile: Insurance for many of these same districts. Gust Rosenfeld In 1902, the Newlands Reclamation Act served as bond counsel for the Central Arizona Intellectual Property addressed the financing of construction costs, but Water Conservation District’s financing of ‘Plan Fred H. Rosenfeld the act also required the involvement of a second 6,’ the Arizona share of the Central Arizona State Historian Knows Best Labor and Employment party that would be capable of repaying the loan. Fred H. Rosenfeld, a second rights case in front of the United States Arizona Project (CAP), which is to the financing of the In response to this requirement, Kibbey generation lawyer, started his career Supreme Court in 1970 and acting as Betty Reid, in an article entitled “Solving the puzzle of Litigation CAP what the water users were to the financing helped form the Salt River Valley Water Users’ of the Roosevelt Dam and the lower dams on the with our firm in 1964 in the area special counsel for the Arizona House Arizona’s name” in the February 14, 2012, edition of The Association. Members of the association took Natural Resources Salt River. of governmental law, with a special of Representatives during impeachment Arizona Republic, Special Centennial Section, provided an mortgages on the land to be irrigated when emphasis on municipal finance and hearings concerning the Arizona entertaining discussion of possible alternative derivations of Public Finance Roosevelt Dam was completed in order to pay Shiela B. Schmidt | 602.257.7990 legislative matters. Corporation Commission in 1964. the name “Arizona” from the Desert People’s dialect for “small back the United States for the cost of Roosevelt [email protected] He is now the senior partner in our Fred earned his bachelor’s degree in stream” to Basque for “good oak tree”. In my search, I found Public and School Law Dam. Shiela practices in the areas of water law and bond department, working on all types 1959 and his law degree in 1961 from one not mentioned: the Spanish interpretation of “Arizuma,” As attorney for the water users’ association, of municipal finance—tasks, he notes, the University of Arizona. Before joining an Aztec word meaning “silver bearing.” However, I’ll go with Real Estate governmental law. Kibbey wrote the Articles of Incorporation; the that are “just as hard to arrange for a our firm, he was in private practice in the Marshall Trimble and the Tohono O’odham “Ali-Shonak” – Taxation articles balanced the interests of the Salt River Fred H. Rosenfeld | 602.257.7413 small town’s public park as they are for Phoenix area. “place of small springs.” He is our official state historian! Valley’s existing and future residents. The articles [email protected] a multimillion dollar water system in Fred and his wife, Marilyn, currently Trusts and Estates and the association served as a model for other Fred practices in the areas of governmental law, Phoenix.” reside in Phoenix. They have three Richard B. Hood | 602.257.7470 | [email protected] federal water projects and later became what we public finance and municipal finance. Highlights in Fred’s career include children, Ann, Bill and Lisa, all of whom Rick, our etymologist, practices in the areas of commercial now know as SRP. arguing—and winning—a voting live in Phoenix. law and commercial litigation.

PAGE 2 SPRING 2012 NEWSLETTER PAGE 3 SPRING 2012 NEWSLETTER PAGE 4 SPRING 2012 NEWSLETTER Gust Rosenfeld: A LEGACY OF EXPERTISE lived in (by anyone) for it to be considered a dwelling under this Growing to Meet KIBBEY 20 YEARS LATER: Do you have to dwell FROM PAGE 1 IN WATER RIGHTS, PUBLIC statute. the Needs of Arizona to make a house a Highlighting the practical and perhaps inequitable effect of and Our Clients & SCHOOL LAW, PUBLIC CHANGES TO THE AMERICANS WITH this proposition, consider the quite different liability exposure FINANCE DISABILITIES ACT dwelling? of two otherwise identical borrowers under home construction With Judge Kibbey’s loans, where one house was finished and lived in (perhaps even experience in water rights Judge Kibbey left a legacy that continues to The statement that “we are all one accident away from disabil- (regrets to the Washington man with a boa constrictor or the When mortgage debt exceeds the fair market value of a for just a short period), and the other was not. The former would and governmental issues, this day within Gust Rosenfeld and through- ity” is an apt one. More than 50 million Americans – 18% of our Missouri woman with a pet monkey both claiming their pet property sold at a foreclosure auction, the shortfall created by not be personally liable for the loan, while the latter would. Gust Rosenfeld’s early work out Arizona. The firm’s practice areas in public population – have disabilities. The original 1990 Americans with as service animals). Entities must allow service animals to ac- the unpaid loan balance is called a “deficiency.” However, in facts similar to those of the unfortunate borrower centered on public law and finance and in water law are a testament to that Disabilities Act (ADA) attempted to deal with accommodations for company people with disabilities in all areas where the general In general, a borrower is personally liable to the lender for described above, a recent Arizona Court of Appeals case held public finance, two practice legacy. Throughout our history, just as with the the disabled. public is allowed. Staff can only ask a) whether the animal is a the full balance of the loan, including any deficiency after that the individual borrower’s “intent” to dwell in the not-quite- areas which today continue to creation of the Salt River Valley Water Users’ Congress passed substantial changes to the ADA in 2010 with service animal required because of a disability and b) what task foreclosure. In certain situations, however, Arizona’s “anti- finished foreclosed house was sufficient to avoid liability for the provide core services to our Association, Gust Rosenfeld has been instrumen- changes effective on March 15, 2011, or March 15, 2012, including: the animal has been trained to perform. Staff cannot ask about deficiency” statutes shield borrowers from such liability. deficiency. President Teddy Roosevelt commemorates the opening of tal in creating precedent for financing municipal 1) Ticket sales – Public and private venues are now required to the person’s disability or require any medical documentation. Several elements come into play in determining whether the Although it may be a result that reflects more the policy clients. Roosevelt Dam. and public projects that are vital to Arizona’s sell tickets for wheelchair accessible seats and non-accessible 5) Hotel reservation policies – Reservation staff is required to borrower is protected. In broad strokes, a borrower escapes than the letter of the statutes, and perhaps also meshing with Over the years, Gust Rosenfeld development. seats in the same manner. Tickets must be sold during the identify accessible features in guest room door width and avail- personal liability for a deficiency following a non-judicial the realities of the lender’s initial underwriting of the loan, the has grown to meet the ever- DROUGHTS AND FLOODS Upon Kibbey’s death, Gust Rosenfeld’s water same hours and through the same methods of purchase. Ac- ability of roll-in showers and other hotel amenities. trustee’s sale foreclosure if: 1) the property is 2-1/2 acres or less; decision does raise a host of thorny issues about the boundaries expanding needs of Arizona expertise was carried forward by attorneys cessible seating is for people a) with mobility disability, b) who, 6) 2010 ADA standards for access designs – As of March 15, 2012, 2) the property is limited to and utilized for either a single one- of the always subjective element of intent. and our clients, including While living in the Arizona Territory, John L. Gust and Scott Norviel. John Gust–the because of their disability, cannot sit in a straight-back chair, or all new construction and alterations must use the 2010 Stan- family or a single two-family dwelling; and 3) the loan was used Stayed tuned. The Arizona Supreme Court, or perhaps the these practice areas: Judge Kibbey had experienced both prolonged first of three generations of Gusts associated with c) whose service animal cannot fit under a non-accessible seat dards. Some noticeable changes in the 2010 Standards include to purchase that property itself, i.e., not to buy other property. Arizona Legislature, may yet speak again on this issue. droughts and devastating floods. our firm–represented the water users’ association or lie safely in the aisle. Venues cannot charge higher prices for a) added technical requirements for children, b) required Defining “dwelling” is key. A few years ago, the Arizona Alternative Dispute In February 1891, the Salt River flood washed as it continued to build, control and conserve the accessible seats than non-accessible seats in the same seating visible and audible alarms, and c) an increase in the amount of Supreme Court stated that a house being built by a commercial Christopher M. McNichol | 602.257.7496 Resolution out the railroad bridge at Tempe and caused Salt River’s abundant water. section. accessible public entrances to 60% up from the 50% under the borrower for ultimate resale to its first resident was not a [email protected] damage in Phoenix as far north as Jefferson First Kibbey and then John Gust guided the 2) Access – Use of wheelchairs and other manual or power-drive 1991 Standards (e.g., if a store has four entrances, then three dwelling within the protected ambit. A broad proposition Chris practices in the area of real estate transactions and Bankruptcy and Creditors’ Street. The flood was followed by a drought that financing for the construction of the dams that mobility devices must be allowed in all areas where the general must be accessible under the 2010 Standards). could be extracted from the case that a house must actually be litigation. Rights killed livestock, forced a third of the farmland formed Apache, Canyon and Saguaro Lakes public is allowed. in the Salt River valley out of cultivation, and below Roosevelt Dam. 3) Communication – Entities must implement effective commu- This serves as a brief overview of the 2010 ADA changes. Please Business/Corporate Law caused many residents in the area to abandon Gust was hired by local banks to review and nication policies (auxiliary aids and services) for persons of low visit the ADA website www.ada.gov for more information. their homes. Commercial Finance approve bonds issued by municipal corporations vision or who are hard of hearing. To control flood waters and provide water in in Arizona. He combined his expertise with the 4) Service animals – Only dogs, or miniature horses, trained to Christopher M. McNichol | 602.257.7496 | [email protected] times of drought, construction of a storage dam Education Law firm’s knowledge of water law to form, advise perform tasks for a person with a disability are recognized Chris practices in the area of real estate transactions and litigation. was proposed on the Salt River; a suitable site and act as the bond attorney to finance almost Environmental Law was located as early as 1889. There was, however, all of Arizona’s irrigation, drainage and electrical no source of funds within the territory to finance districts. Franchises and Franchising the estimated $2 million to $5 million in con- Gust Rosenfeld continues as bond counsel struction costs. Attorney profile: Insurance for many of these same districts. Gust Rosenfeld In 1902, the Newlands Reclamation Act served as bond counsel for the Central Arizona Intellectual Property addressed the financing of construction costs, but Water Conservation District’s financing of ‘Plan Fred H. Rosenfeld the act also required the involvement of a second 6,’ the Arizona share of the Central Arizona State Historian Knows Best Labor and Employment party that would be capable of repaying the loan. Fred H. Rosenfeld, a second rights case in front of the United States Arizona Project (CAP), which is to the financing of the In response to this requirement, Kibbey generation lawyer, started his career Supreme Court in 1970 and acting as Betty Reid, in an article entitled “Solving the puzzle of Litigation CAP what the water users were to the financing helped form the Salt River Valley Water Users’ of the Roosevelt Dam and the lower dams on the with our firm in 1964 in the area special counsel for the Arizona House Arizona’s name” in the February 14, 2012, edition of The Association. Members of the association took Natural Resources Salt River. of governmental law, with a special of Representatives during impeachment Arizona Republic, Special Centennial Section, provided an mortgages on the land to be irrigated when emphasis on municipal finance and hearings concerning the Arizona entertaining discussion of possible alternative derivations of Public Finance Roosevelt Dam was completed in order to pay Shiela B. Schmidt | 602.257.7990 legislative matters. Corporation Commission in 1964. the name “Arizona” from the Desert People’s dialect for “small back the United States for the cost of Roosevelt [email protected] He is now the senior partner in our Fred earned his bachelor’s degree in stream” to Basque for “good oak tree”. In my search, I found Public and School Law Dam. Shiela practices in the areas of water law and bond department, working on all types 1959 and his law degree in 1961 from one not mentioned: the Spanish interpretation of “Arizuma,” As attorney for the water users’ association, of municipal finance—tasks, he notes, the University of Arizona. Before joining an Aztec word meaning “silver bearing.” However, I’ll go with Real Estate governmental law. Kibbey wrote the Articles of Incorporation; the that are “just as hard to arrange for a our firm, he was in private practice in the Marshall Trimble and the Tohono O’odham “Ali-Shonak” – Taxation articles balanced the interests of the Salt River Fred H. Rosenfeld | 602.257.7413 small town’s public park as they are for Phoenix area. “place of small springs.” He is our official state historian! Valley’s existing and future residents. The articles [email protected] a multimillion dollar water system in Fred and his wife, Marilyn, currently Trusts and Estates and the association served as a model for other Fred practices in the areas of governmental law, Phoenix.” reside in Phoenix. They have three Richard B. Hood | 602.257.7470 | [email protected] federal water projects and later became what we public finance and municipal finance. Highlights in Fred’s career include children, Ann, Bill and Lisa, all of whom Rick, our etymologist, practices in the areas of commercial now know as SRP. arguing—and winning—a voting live in Phoenix. law and commercial litigation.

PAGE 2 SPRING 2012 NEWSLETTER PAGE 3 SPRING 2012 NEWSLETTER PAGE 4 SPRING 2012 NEWSLETTER annual Franchise Seminar in February. Christina also spoke Arizona court stops HOAs from abusive practice Newsletter at the A.B.A. Forum on Franchising’s Annual Forum held in SPRING 2012 personal Maryland in October 2011 on “The Perils of Third Parties In a recent case handled by Gust Rosenfeld, the Arizona Court not supportable on any legitimate ground. Its arguments are spe- Selling or Servicing Your Brand: Broker, Area Representative of Appeals reminded Home Owners Associations (HOAs) that cious, legally and logically unsound, and are so contrived as to be and Area Developer Programs.” there are limits to their powers. Until little more than sophistry.” Sarah C. Smith is a new member of the Maricopa County recently, HOAs would foreclose their lien The court held that the HOA’s lawyers Bar Association, Board of Directors. securing relatively small amounts, then had a duty to inform the court commis- Timothy A. Stratton was recently appointed to serve on argue that the foreclosure extinguished sioner handling the HOA default judgment NOTES the City of Scottsdale Board of Adjustments. The Board of JUDG E KIBBEY VITAL the first deed of trust securing the home- hearing about the controlling statute, even Kent E. Cammack, Christopher M. McNichol, Sean P. Adjustments hears and decides zoning and code variances. owner’s typically much larger home loan. if the statute was adverse to their position. O’Brien and Madeleine C. Wanslee hosted the Creditors’ Richard H. Whitney has been honored, along with Bert Arizona’s statutes are clear on lien The court of appeals found the actions of TO TERRITORY, STATE Rights Seminar, “What’s Hot in 2012” in January. Getz and Newton (Betty) Rosenzweig, as founders of the status: an HOA lien holds super priority the HOA’s lawyers offensive, joining the Tom Chauncey II and Christopher M. McNichol were Arizona Community Foundation (ACF). In 1978, Dick headed status except against certain liens includ- lower court in referring the matter to the Founding Member’s Ties to Centennial featured in Commercial Executive Magazine as “Leaders in Real the study committee formed by five large banks to explore start- ing “A recorded first mortgage on the state bar for disciplinary consideration. E s t at e L aw.” ing the organization, and, as a young lawyer, performed the legal unit … or a recorded first deed of trust on This case should put an end to bullying James T. Giel presented on “Elections Dos and Don’ts” to work to establish it. He went on to be the Chair for five years, the unit,” A.R.S. § 33-1807(B), (empha- tactics of HOAs, at least in this particular Trailblazing attorney. at the age of 71, leaving behind a firm foot- school district officials at an elections seminar in Phoenix. following Mr. Getz in that role. ACF now consists of more than sis added). Despite such clear language, type of situation. The case also reminds Sage jurist. Territorial print in Arizona’s history. Martin T. Jones spoke at the National Conference of the 500 component funds with total assets in excess of $500 million. HOAs had continued to push the limits lawyers and clients that they have a duty to governor. Joseph Henry Environmental Information Association on March 24 in San on their power. play by the rules of the court or else face Kibbey was all of these Diego on “Legal Issues: Hydraulic Fracturing.” Marty presented Super Lawyers THE ‘KIBBEY’ DECISION: The Arizona Court of Appeals ruled the consequences. and more. We are most locally to the Maricopa County Association of Paralegals in We are pleased to announce that ten of our lawyers have against the HOA in Cypress on Sunland proud of his contributions LANDMARK CASE ON March on “Renewable Energy vs. Fossil Fuels.” been selected for inclusion on the 2012 Southwest Super Lawyers Homeowners Ass’n v. Orlandini because it to the history of early WATER RIGHTS James W. Kaucher was selected for inclusion in the 2012 list. Each year, no more than 5 percent of the lawyers in found that a fraud was perpetrated on the lower court by the HOA Scott A. Malm | 602.257.7481 | [email protected] Arizona and of his service edition of The Best Lawyers in America® in the practice area of Arizona and New Mexico receive this honor. Those selected, by through its lawyers. The court stated, “The HOA’s interpretations Scott practices in the area of real estate litigation and commercial to his private practice The Wormser case involved a dispute in Professional Malpractice Law. practice area, are: Appellate: Charles W. Wirken. Bankruptcy of the statute and the covenants, conditions and restrictions are disputes. clients in his role as a which the Salt River Valley Canal Company Jennifer N. MacLennan presented at The Arizona School & Creditor/Debtor Rights: Sean P. O’Brien and Madeleine C. founding partner of was accused of considering water from Boards Association’s Spring Legal Conference in March on Wanslee. Business Litigation: Richard A. Segal. Estate Planning Gust Rosenfeld. the Salt River as corporate property and “School Board’s Role in Hiring.” & Probate: Richard H. Whitney. Insurance Coverage: Peter Kibbey served as delivering it in times of drought to custom- Andrew J. McGuire presented on development impact fee Collins, Jr. Real Estate: Timothy W. Barton; Gerald L. Jacobs; Phoenix Office Tucson Office This newsletter is published twice a year by the law firm of Gust Rosenfeld P.L.C. as a service to our clients and friends. It is intended to provide general Associate Justice of ers with ownership interest in the com- topics in October 2011, before the following groups: Growth Scott A. Malm; and Christopher M. McNichol. One E. Washington St., Ste. 1600 One S. Church Ave., Ste. 1900 information only, not advice on specific legal questions. Portions may be re- the Arizona Territorial pany—in preference to customers who had & Infrastructure Consortium; Government Finance Officers of In addition, associate Mingyi Kang has been selected to Phoenix, Arizona 85004-2553 Tucson, Arizona 85701-1627 produced with attribution. For change of address, additional copies, or a com- Supreme Court from historically used the water. Arizona Budget Forum; and the Urban Land Institute Arizona. Southwest Rising Stars as one of the top up-and-coming real Telephone: 602.257.7422 Telephone: 520.628.7070 plimentary subscription, contact our receptionist. We invite your comments. 1889 to 1893 and as The ruling, which became known as the Christina M. Noyes and John L. Hay hosted our firm’s estate attorneys in Arizona and New Mexico for 2012. Facsimile: 602.254.4878 Facsimile: 520.624.3849 SPRING 2012, ISSUE NO. 61 © 2012 Gust Rosenfeld P.L.C. www.gustlaw.com Governor of the Arizona “Kibbey Decision,” established the prin- Territory from 1905 to ciple that “water belongs to the land” and 1909. His legal career is could not be used as “floating” property to prsrtt s d most remembered for his be divided by decision of the canal compa- Changes To Notarizing Documents u.s. postage efforts in the area of water ny. Water rights were thus linked to parcels paid law. of land and not to the owner of land. As a At the behest of the Arizona Secretary of State, last year the Arizona Legislature added Phoenix, AZ Although he had been result of the decision, the role of the canal some new requirements to the laws regulating notaries public. One new provision of Permit No. 2659 a governor, he preferred company became that of a delivery agent: particular significance deals with the integration of the notary certificate with the main to be known as Judge Arizona Territorial Governor and Gust Rosenfeld founding member water was allocated to the various tracts document. Joseph Henry Kibbey. of land based upon the principle of prior One e. washington st., suite 1600 Kibbey. His decision Now, a separate notarial certificate attached to a document must contain a description phoenix, arizona 85004-2553 in the case of Wormser appropriation. of the document. This description should include, at a minimum, the title or type of the et al v. Salt River Canal confirmation of the second term until The decision was not appealed and document, the document date, the number of pages of the document, and the names of return service requested Company, Case No. 708 (1892), set an after Roosevelt left office, and succeeding the canal companies instead attempted to any additional document signers other than the person whose signature was notarized. important precedent in the territory that President William Taft appointed ignore the Kibbey Decision. It was later While this requirement may be designed to address the perceived misuse of free- continues to the present. Richard Sloan instead. Kibbey stepped upheld by the Arizona Territorial Supreme standing notary pages, it also may create practical issues in creating and organizing President Theodore Roosevelt down as governor on May 1, 1909. Court and became the basis for a decision complete documents, particularly ones with multiple signers at different locations. appointed Judge Kibbey Governor of the Judge Kibbey returned to private legal which settled water rights in the Salt River Arizona Territory on February 27, 1905, practice and served as counsel for the Salt Valley in anticipation of the completion of Christopher M. McNichol | 602.257.7496 renominating him for a second term on River Valley Water Users’ Association, part Roosevelt Dam. [email protected] December 16, 1908. Mining interests of today’s Salt River Project (SRP). Judge Chris practices in the area of real estate transactions and litigation. and other political opponents delayed Kibbey died in Phoenix on June 14, 1924, SEE KIBBEY ON PAGE 2

Americans with Disabilities act - Page 3 • Etymology Corner - Page 4 PAGE 5 SPRING 2012 NEWSLETTER Making a house a dwelling - Page 4 • PERSONAL Notes - Page 5 • HOAs - Page 6 annual Franchise Seminar in February. Christina also spoke Arizona court stops HOAs from abusive practice Newsletter at the A.B.A. Forum on Franchising’s Annual Forum held in SPRING 2012 personal Maryland in October 2011 on “The Perils of Third Parties In a recent case handled by Gust Rosenfeld, the Arizona Court not supportable on any legitimate ground. Its arguments are spe- Selling or Servicing Your Brand: Broker, Area Representative of Appeals reminded Home Owners Associations (HOAs) that cious, legally and logically unsound, and are so contrived as to be and Area Developer Programs.” there are limits to their powers. Until little more than sophistry.” Sarah C. Smith is a new member of the Maricopa County recently, HOAs would foreclose their lien The court held that the HOA’s lawyers Bar Association, Board of Directors. securing relatively small amounts, then had a duty to inform the court commis- Timothy A. Stratton was recently appointed to serve on argue that the foreclosure extinguished sioner handling the HOA default judgment NOTES the City of Scottsdale Board of Adjustments. The Board of JUDG E KIBBEY VITAL the first deed of trust securing the home- hearing about the controlling statute, even Kent E. Cammack, Christopher M. McNichol, Sean P. Adjustments hears and decides zoning and code variances. owner’s typically much larger home loan. if the statute was adverse to their position. O’Brien and Madeleine C. Wanslee hosted the Creditors’ Richard H. Whitney has been honored, along with Bert Arizona’s statutes are clear on lien The court of appeals found the actions of TO TERRITORY, STATE Rights Seminar, “What’s Hot in 2012” in January. Getz and Newton (Betty) Rosenzweig, as founders of the status: an HOA lien holds super priority the HOA’s lawyers offensive, joining the Tom Chauncey II and Christopher M. McNichol were Arizona Community Foundation (ACF). In 1978, Dick headed status except against certain liens includ- lower court in referring the matter to the Founding Member’s Ties to Centennial featured in Commercial Executive Magazine as “Leaders in Real the study committee formed by five large banks to explore start- ing “A recorded first mortgage on the state bar for disciplinary consideration. E s t at e L aw.” ing the organization, and, as a young lawyer, performed the legal unit … or a recorded first deed of trust on This case should put an end to bullying James T. Giel presented on “Elections Dos and Don’ts” to work to establish it. He went on to be the Chair for five years, the unit,” A.R.S. § 33-1807(B), (empha- tactics of HOAs, at least in this particular Trailblazing attorney. at the age of 71, leaving behind a firm foot- school district officials at an elections seminar in Phoenix. following Mr. Getz in that role. ACF now consists of more than sis added). Despite such clear language, type of situation. The case also reminds Sage jurist. Territorial print in Arizona’s history. Martin T. Jones spoke at the National Conference of the 500 component funds with total assets in excess of $500 million. HOAs had continued to push the limits lawyers and clients that they have a duty to governor. Joseph Henry Environmental Information Association on March 24 in San on their power. play by the rules of the court or else face Kibbey was all of these Diego on “Legal Issues: Hydraulic Fracturing.” Marty presented Super Lawyers THE ‘KIBBEY’ DECISION: The Arizona Court of Appeals ruled the consequences. and more. We are most locally to the Maricopa County Association of Paralegals in We are pleased to announce that ten of our lawyers have against the HOA in Cypress on Sunland proud of his contributions LANDMARK CASE ON March on “Renewable Energy vs. Fossil Fuels.” been selected for inclusion on the 2012 Southwest Super Lawyers Homeowners Ass’n v. Orlandini because it to the history of early WATER RIGHTS James W. Kaucher was selected for inclusion in the 2012 list. Each year, no more than 5 percent of the lawyers in found that a fraud was perpetrated on the lower court by the HOA Scott A. Malm | 602.257.7481 | [email protected] Arizona and of his service edition of The Best Lawyers in America® in the practice area of Arizona and New Mexico receive this honor. Those selected, by through its lawyers. The court stated, “The HOA’s interpretations Scott practices in the area of real estate litigation and commercial to his private practice The Wormser case involved a dispute in Professional Malpractice Law. practice area, are: Appellate: Charles W. Wirken. Bankruptcy of the statute and the covenants, conditions and restrictions are disputes. clients in his role as a which the Salt River Valley Canal Company Jennifer N. MacLennan presented at The Arizona School & Creditor/Debtor Rights: Sean P. O’Brien and Madeleine C. founding partner of was accused of considering water from Boards Association’s Spring Legal Conference in March on Wanslee. Business Litigation: Richard A. Segal. Estate Planning Gust Rosenfeld. the Salt River as corporate property and “School Board’s Role in Hiring.” & Probate: Richard H. Whitney. Insurance Coverage: Peter Kibbey served as delivering it in times of drought to custom- Andrew J. McGuire presented on development impact fee Collins, Jr. Real Estate: Timothy W. Barton; Gerald L. Jacobs; Phoenix Office Tucson Office This newsletter is published twice a year by the law firm of Gust Rosenfeld P.L.C. as a service to our clients and friends. It is intended to provide general Associate Justice of ers with ownership interest in the com- topics in October 2011, before the following groups: Growth Scott A. Malm; and Christopher M. McNichol. One E. Washington St., Ste. 1600 One S. Church Ave., Ste. 1900 information only, not advice on specific legal questions. Portions may be re- the Arizona Territorial pany—in preference to customers who had & Infrastructure Consortium; Government Finance Officers of In addition, associate Mingyi Kang has been selected to Phoenix, Arizona 85004-2553 Tucson, Arizona 85701-1627 produced with attribution. For change of address, additional copies, or a com- Supreme Court from historically used the water. Arizona Budget Forum; and the Urban Land Institute Arizona. Southwest Rising Stars as one of the top up-and-coming real Telephone: 602.257.7422 Telephone: 520.628.7070 plimentary subscription, contact our receptionist. We invite your comments. 1889 to 1893 and as The ruling, which became known as the Christina M. Noyes and John L. Hay hosted our firm’s estate attorneys in Arizona and New Mexico for 2012. Facsimile: 602.254.4878 Facsimile: 520.624.3849 SPRING 2012, ISSUE NO. 61 © 2012 Gust Rosenfeld P.L.C. www.gustlaw.com Governor of the Arizona “Kibbey Decision,” established the prin- Territory from 1905 to ciple that “water belongs to the land” and 1909. His legal career is could not be used as “floating” property to prsrtt s d most remembered for his be divided by decision of the canal compa- Changes To Notarizing Documents u.s. postage efforts in the area of water ny. Water rights were thus linked to parcels paid law. of land and not to the owner of land. As a At the behest of the Arizona Secretary of State, last year the Arizona Legislature added Phoenix, AZ Although he had been result of the decision, the role of the canal some new requirements to the laws regulating notaries public. One new provision of Permit No. 2659 a governor, he preferred company became that of a delivery agent: particular significance deals with the integration of the notary certificate with the main to be known as Judge Arizona Territorial Governor and Gust Rosenfeld founding member water was allocated to the various tracts document. Joseph Henry Kibbey. of land based upon the principle of prior One e. washington st., suite 1600 Kibbey. His decision Now, a separate notarial certificate attached to a document must contain a description phoenix, arizona 85004-2553 in the case of Wormser appropriation. of the document. This description should include, at a minimum, the title or type of the et al v. Salt River Canal confirmation of the second term until The decision was not appealed and document, the document date, the number of pages of the document, and the names of return service requested Company, Case No. 708 (1892), set an after Roosevelt left office, and succeeding the canal companies instead attempted to any additional document signers other than the person whose signature was notarized. important precedent in the territory that President William Taft appointed ignore the Kibbey Decision. It was later While this requirement may be designed to address the perceived misuse of free- continues to the present. Richard Sloan instead. Kibbey stepped upheld by the Arizona Territorial Supreme standing notary pages, it also may create practical issues in creating and organizing President Theodore Roosevelt down as governor on May 1, 1909. Court and became the basis for a decision complete documents, particularly ones with multiple signers at different locations. appointed Judge Kibbey Governor of the Judge Kibbey returned to private legal which settled water rights in the Salt River Arizona Territory on February 27, 1905, practice and served as counsel for the Salt Valley in anticipation of the completion of Christopher M. McNichol | 602.257.7496 renominating him for a second term on River Valley Water Users’ Association, part Roosevelt Dam. [email protected] December 16, 1908. Mining interests of today’s Salt River Project (SRP). Judge Chris practices in the area of real estate transactions and litigation. and other political opponents delayed Kibbey died in Phoenix on June 14, 1924, SEE KIBBEY ON PAGE 2

Americans with Disabilities act - Page 3 • Etymology Corner - Page 4 PAGE 5 SPRING 2012 NEWSLETTER Making a house a dwelling - Page 4 • PERSONAL Notes - Page 5 • HOAs - Page 6