Lewis v. Debord and Nelson-Debord , 236 Ariz. 57 ( 2014 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO
CECELIA M. LEWIS AND RANDALL LEWIS,
A MARRIED COUPLE,
Plaintiffs/Appellants,
v.
RAY C. DEBORD AND ANNE NELSON-DEBORD,
HUSBAND AND WIFE,
Defendants/Appellees.
No. 2 CA-CV 2014-0004
Filed October 6, 2014
Appeal from the Superior Court in Pima County
No. C20125400
The Honorable Gus Aragón, Judge
AFFIRMED
COUNSEL
Slutes, Sakrison & Rogers, P.C., Tucson
By James M. Sakrison and Diana L. Kanon-Ustariz
and
Decker Holland, Snowflake
By Joseph E. Holland
Counsel for Plaintiffs/Appellants
Gust Rosenfeld P.L.C., Phoenix
By Scott A. Malm and Justin M. Scorza
Counsel for Defendants/Appellees
LEWIS v. DEBORD
Opinion of the Court
OPINION
Judge Vásquez authored the opinion of the Court, in which Judge
Howard and Judge Miller concurred.
V Á S Q U E Z, Judge:
¶1 In this appeal, Cecelia and Randall Lewis challenge the
trial court’s summary judgment in favor of appellees Ray Debord
and Anne Nelson-Debord in the Lewises’ action to foreclose a
judgment lien against the Debords’ property.1 The court found that,
because the Lewises failed to comply with A.R.S. § 33-967(A), they
did not have a valid judgment lien against the property. For the
reasons that follow, we affirm.
Factual and Procedural Background
¶2 In reviewing a trial court’s grant of summary judgment,
we view the facts in the light most favorable to the party opposing
entry of the judgment. Gorman v. Pima County, 230 Ariz. 506, ¶ 2,
287 P.3d 800, 801 (App. 2012). The relevant facts are undisputed. In
June 2003, the Lewises obtained a default money judgment against
Karen MacKean and Fred Foust. Intending to create a lien against
real property, the Lewises recorded the judgment in January 2006 in
Pima County. They renewed the judgment lien in June 2008.
Neither the judgment recorded in 2006 nor the renewal recorded in
2008 was accompanied by a separate information statement as
required by § 33-967(A).2
¶3 In March 2008, MacKean purchased real property in
Pima County. She then transferred the property to Sonomex, LLC,
for which Foust is the statutory agent. In July 2012, the Debords
purchased the property from Sonomex.
1Randall passed away during the pendency of this appeal.
2TheLewises did not record an information statement until
August 2013.
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Opinion of the Court
¶4 In August 2012, the Lewises sought judicial foreclosure
of the lien or execution of the judgment, naming MacKean,
Sonomex, and the Debords as defendants. The Debords moved for
summary judgment, arguing that the Lewises’ “failure to record a
separate information statement with the Judgment and the Renewal
. . . render[ed] their alleged judgment lien invalid and unenforceable
against the Property.” In response, the Lewises maintained that “the
failure to record an information sheet of this kind does not affect the
validity of the judgment lien, only the priority afforded to the
judgment lien.” After hearing argument, the trial court entered
summary judgment in favor of the Debords.3 This appeal followed.
We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and
12-2101(A)(1).4
3After the trial court entered the final judgment, it issued an
in-chambers ruling suggesting it had done so “prematurely” and
setting a status conference on the matter. However, the Lewises
filed their notice of appeal before the status conference. We
therefore suspended the appeal pursuant to Rule 9.1, Ariz. R. Civ.
App. P., to allow the court to consider whether the judgment was
indeed final. The court ordered that its prior judgment “shall
remain in full force and effect,” and we reinstated the appeal.
4Generally, our jurisdiction “is limited to final judgments
which dispose of all claims and all parties.” Musa v. Adrian, 130
Ariz. 311, 312, 636 P.2d 89, 90 (1981). However, Rule 54(b), Ariz. R.
Civ. P., “allows a trial court to certify finality to a judgment which
disposes of one or more, but not all, of the multiple claims, if the
court determines that there is no just reason for delay and directs the
entry of judgment.” Davis v. Cessna Aircraft Corp., 168 Ariz. 301, 304,
812 P.2d 1119, 1122 (App. 1991). Here, although the judgment
resolves only the Lewises’ claim against the Debords, and the
Debords’ request for attorney fees is still pending, it nevertheless
contains language pursuant to Rule 54(b). We therefore review the
entry of summary judgment in favor of the Debords.
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Opinion of the Court
Discussion
¶5 The Lewises argue “[t]he trial court erred in finding that
the lack of a timely information statement voided an otherwise valid
money judgment lien” and consequently its entry of summary
judgment in favor of the Debords was improper. We review a grant
of summary judgment de novo, determining whether any genuine
issues of material fact exist and whether the trial court properly
applied the law. Ochser v. Funk, 228 Ariz. 365, ¶ 11, 266 P.3d 1061,
1065 (2011). We will affirm a grant of summary judgment if it is
correct for any legal reason. Pi’Ikea, LLC v. Williamson, 234 Ariz. 284,
n.7, 321 P.3d 449, 454 n.7 (App. 2014). We also review de novo
issues of statutory interpretation. Miller v. Hehlen, 209 Ariz. 462, ¶ 5,
104 P.3d 193, 196 (App. 2005).
¶6 “Our primary task in interpreting statutes is to give
effect to the intent of the legislature.” In re Estate of Winn, 214 Ariz.
149, ¶ 8, 150 P.3d 236, 238 (2007). We look first to the plain language
of the statute as the best indicator of that intent and give effect to the
terms according to their commonly accepted meanings. Sierra
Tucson, Inc. v. Pima County, 178 Ariz. 215, 220, 871 P.2d 762, 767
(App. 1994). When the language is clear and unambiguous, we look
no further and apply it as written. City of Tucson v. Clear Channel
Outdoor, Inc., 218 Ariz. 172, ¶ 6, 181 P.3d 219, 225 (App. 2008). But if
the language is unclear or ambiguous, we resort to other methods of
statutory interpretation, including: the statute’s context; spirit and
purpose; subject matter and historical background; and effects and
consequences. Stein v. Sonus USA, Inc., 214 Ariz. 200, ¶ 3, 150 P.3d
773, 774 (App. 2007).
¶7 Judgment liens are creations of statute, Rowe v. Schultz,
131 Ariz. 536, 538, 642 P.2d 881, 883 (App. 1982), and thus require
strict statutory compliance, Sysco Ariz., Inc. v. Hoskins, 235 Ariz. 164,
¶ 8, 330 P.3d 354, 355-56 (App. 2014). We therefore begin our
analysis with A.R.S. § 33-961(A), which sets forth the process for
creating a judgment lien:
A copy of the judgment of a court,
certified by the clerk, shall be filed and
recorded in the office of the county
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Opinion of the Court
recorder in each county where the
judgment creditor desires the judgment to
become a lien upon the real property of the
judgment debtor before the judgment shall
become a lien upon or in any manner affect
or encumber the real property of the
judgment debtor, or any part of the real
property of the judgment debtor.
The certified copy of the judgment must identify: the court, the
action, and the cause number; the date the judgment and the docket
record were entered; the names of the judgment debtor and
judgment creditor; the amount of the judgment; and the name of the
judgment creditor’s attorney. § 33-961(A)(1)-(5).
¶8 Once a judgment has been recorded pursuant to
§ 33-961(A), “the judgment creditor may satisfy the judgment by
executing on any real property” that is then owned or later acquired
by the judgment debtor. Byers v. Wik, 169 Ariz. 215, 218-19, 818 P.2d
200, 203-04 (App. 1991); Sysco Ariz., 235 Ariz. 164, ¶ 6, 330 P.3d at
355; see also A.R.S. § 33-964(A). “The general rule is that once a
judgment lien has attached to the land, it remains until legally
removed.” Freeman v. Wintroath Pumps-Div. of Worthington Corp.,
13 Ariz. App. 182, 184, 475 P.2d 274, 276 (1970).
¶9 Despite the existence of a judgment lien, the judgment
debtor retains “full power to sell . . . or otherwise dispose of” his or
her real property. Id. However, any subsequent purchaser who has
notice of the judgment lien takes the property subject to it. Sysco
Ariz., 235 Ariz. 164, ¶ 6, 330 P.3d at 355; Warren v. Whitehall Income
Fund 86, 170 Ariz. 241, 243-44, 823 P.2d 689, 691-92 (App. 1991); see
also Delo v. GMAC Mortg., L.L.C., 232 Ariz. 133, ¶ 18, 302 P.3d 658,
663 (App. 2013) (purchaser has constructive notice of recorded
documents). Thus, the purpose of § 33-961(A) is to give notice of the
judgment lien to subsequent purchasers and others who may deal
with the judgment debtor’s real property. Freeman, 13 Ariz. App. at
184, 475 P.2d at 276.
¶10 In 1996, our legislature amended the judgment-lien
statutes to require a judgment creditor to attach an information
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Opinion of the Court
statement to the recorded judgment. See 1996 Ariz. Sess. Laws,
ch. 289, §§ 5, 7. Section 33-961(C) now provides that “[a] judgment
or decree or any renewal that requires payment of money shall also
be accompanied by an information statement as prescribed by
§ 33-967.” And, § 33-967(A) states:
In addition to the requirements
prescribed by § 33-961, any judgment or
decree or any renewal that requires the
payment of money and that is recorded on
or after January 1, 1997, shall be attached to
a separate information statement of the
judgment creditor that contains all of the
following information:
1. The correct name and last known
address of each judgment debtor and the
address at which each judgment debtor
received the summons by personal service
or by mail.
2. The name and address of the
judgment creditor.
3. The amount of the judgment or
decree as entered or as most recently
renewed.
4. If the judgment debtor is a natural
person, the judgment debtor’s social
security number, date of birth and driver
license number.
5. Whether a stay of enforcement
has been ordered by the court and the date
the stay expires.
Section 33-967(D) further explains that “[a] judgment or decree or
any renewal that requires the payment of money recorded on or
after January 1, 1997, has as its priority the date of compliance with
subsection A of this section.”
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Opinion of the Court
¶11 The parties agree that the legislature’s purpose in
creating the information-statement requirement was “to help
identify true judgment debtors and protect those who have been
erroneously identified as so.” Senate Fact Sheet, S.B. 1300, 42d Leg.,
2d Reg. Sess. (Ariz. 1996). Presumably, the legislature sought to
accomplish this by requiring judgment creditors to provide
additional information about judgment debtors.
¶12 The Lewises maintain that their failure to attach an
information statement to their recorded judgment and renewal did
not invalidate their judgment lien but merely caused them to lose
their priority.5 They further reason that the term “priority” as used
in § 33-967(D) applies to only competing lienholders and not to
subsequent purchasers. The Lewises also maintain that subsequent
purchasers like the Debords “st[an]d in the shoes of the original
judgment debtors with regard to the judgment lien.” Accordingly,
the Lewises conclude they have a valid judgment lien against the
Debords’ property.
5The Lewises contend “[t]he trial court was bound to follow
valid precedent” contained in Sourcecorp, Inc. v. Norcutt
(Sourcecorp II), 227 Ariz. 463, 258 P.3d 281 (App. 2011). But
Sourcecorp II did not involve the issue presented in this case. In the
factual and procedural history of that opinion, this court referred to
an earlier appeal in which we determined that the plaintiff’s “failure
to attach the money judgment information statement [pursuant to
§§ 33-961(C) and 33-967(A)] did not invalidate its lien.”
Sourcecorp II, 227 Ariz. 463, ¶ 6, 258 P.3d at 283, citing Sourcecorp, Inc.
v. Shill (Sourcecorp I), No. 1 CA-CV 05-0425 (memorandum decision
filed Sept. 26, 2006). Generally, “[m]emorandum decisions shall not
be regarded as precedent nor cited in any court.” Ariz. R. Civ.
App. P. 28(c); see also Calpine Constr. Fin. Co. v. Ariz. Dep’t of Revenue,
221 Ariz. 244, ¶ 24, 211 P.3d 1228, 1233 (App. 2009). Courts similarly
do not treat passing references to previous memorandum decisions
in published opinions as precedent. See Creach v. Angulo, 186 Ariz.
548, 552, 925 P.2d 689, 693 (App. 1996) (court’s statement on
question not involved in case before it is dictum and not binding
precedent).
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LEWIS v. DEBORD
Opinion of the Court
¶13 To address this issue, we first must determine what is
necessary to create a valid judgment lien. Based on the plain
language of § 33-961, the recording of a judgment pursuant to
subsection (A), regardless of whether an information statement is
attached thereto, creates a valid judgment lien as to the judgment
debtor’s then-existing or later-acquired real property. See City of
Tucson, 218 Ariz. 172, ¶ 6, 181 P.3d at 225. Section 33-961(A) states
that a certified copy of the judgment must be filed and recorded in
the appropriate county “before the judgment shall become a lien.”
Despite listing the specific requirements for the certified copy of the
judgment, § 33-961(A) does not require that an information
statement also be attached “before the judgment shall become a
lien.” Likewise, although § 33-961(C) expressly states that the
judgment or renewal “shall also be accompanied by an information
statement,” it does not condition the validity of the judgment lien on
the attachment of the information statement. If the legislature had
intended such a requirement, it easily could have said so. See
Democratic Party of Pima Cnty. v. Ford, 228 Ariz. 545, ¶ 17, 269 P.3d
721, 726 (App. 2012).
¶14 This conclusion is further supported by the plain
language of § 33-964(A), which provides that, “from and after the
time of recording as provided in § 33-961, a judgment shall become a
lien for a period of five years from the date it is given, on all real
property of the judgment debtor . . . in the county in which the
judgment is recorded.” See Bonito Partners, LLC v. City of Flagstaff,
229 Ariz. 75, ¶ 30, 270 P.3d 902, 910 (App. 2012) (statutes relating to
same subject construed together). Similar to § 33-961(A), this statute
focuses on the recording of the judgment as the basis for creating a
judgment lien and does not condition the lien’s validity on the
attachment of an information statement. Thus, even after the 1996
amendment, the principles supporting a judgment creditor’s ability
to satisfy a judgment by executing on a judgment debtor’s real
property and the judgment debtor’s ability to dispose of his or her
property generally still stand. See Byers, 169 Ariz. at 218-19, 818 P.2d
at 203-04; Freeman, 13 Ariz. App. at 184, 475 P.2d at 276.
¶15 We next must determine the consequence for failing to
attach an information statement to a recorded judgment or renewal.
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Opinion of the Court
Based on the plain language of § 33-967(D), we agree with the
Lewises that a judgment creditor’s failure to attach an information
statement affects the priority of the judgment lien.6 See City of
Tucson, 218 Ariz. 172, ¶ 6, 181 P.3d at 225. Section 33-967(D) clearly
specifies that a judgment lien has priority once the information
statement is attached to the judgment. Priority commonly means
“[t]he status of being earlier in time or higher in degree or rank;
6Relying on Department of Revenue v. Southern Union Gas Co.,
119 Ariz. 512, 582 P.2d 158 (1978), the Lewises argue that the
requirement to attach an information statement is directory, rather
than mandatory, notwithstanding the use of the term “shall” in
§§ 33-961(C) and 33-967(A). In Southern Union Gas, our supreme
court addressed “the legal consequence for noncompliance” with a
statute providing that the trial court “shall” hear a case within
ninety days of docketing. 119 Ariz. at 513, 582 P.2d at 159. The
court started with the “general proposition” that “statutes may be
classified as either mandatory or directory.” Id. It recognized that,
when a mandatory statute is not followed, the proceedings to which
it relates are void, while the failure to follow a directory statute has
“no invalidating consequence.” Id. at 513-14, 582 P.2d at 159-60. The
court concluded that the statute, “while couched in obligatory
language,” was directory based on its “effect and consequences” and
that the failure to comply did not require dismissal. Id. at 514, 582
P.2d at 160. The Lewises similarly reason that §§ 33-961(C) and 33-
967(A) are directory and that their failure to attach a timely
information statement did not invalidate their judgment lien.
Although we disagree that the language in the statutes is
directory, we agree with the Lewises’ argument that the failure to
attach an information statement affects a judgment lien’s priority
and not its validity. Unlike the statute at issue in Southern Union
Gas, § 33-967(D) plainly provides the legal consequence for failing to
file a timely information statement—the judgment lien loses its
priority. See City of Tucson, 218 Ariz. 172, ¶ 6, 181 P.3d at 225. Thus,
even though the language in §§ 33-961(C) and 33-967(A) is
mandatory, it is mandatory for the purpose of establishing the
priority, not the validity, of the judgment lien.
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Opinion of the Court
precedence.” Black’s Law Dictionary 1386 (10th ed. 2014); see also
Webster’s Third New Int’l Dictionary 1804 (1971) (defining priority as
“superiority in rank, position, or privilege”). Thus, by introducing
the concept of priority here, the legislature necessarily placed
conditions on the judgment creditor’s ability to reach the judgment
debtor’s real property in which third parties have acquired a
superior interest. Cf. Rowe, 131 Ariz. at 538, 642 P.2d at 883
(“[S]tatutes may expressly or by implication require recording of . . .
conveyances if their priority is to be maintained.”).
¶16 Our conclusion that the failure to attach an information
statement affects a judgment lien’s priority, not validity, is bolstered
by the other provisions of § 33-967. See Bonito Partners, 229 Ariz. 75,
¶ 30, 270 P.3d at 910. Subsection (B) makes clear that the
information statement must include the data prescribed by
subsection (A) only if it is known by or available to the judgment
creditor; if the data is not known, the judgment creditor must
indicate as much in the information statement. And, subsection (C)
provides that, if the judgment creditor fails to include an
information statement with the judgment or any renewal, it may be
amended to include one.7 The facts that all the data need not be
included and that the judgment or renewal may be amended
undercut the argument that the lien is invalid if the information
statement is not attached. See Princess Plaza Partners v. State, 187
Ariz. 214, 222 n.5, 928 P.2d 638, 646 n.5 (App. 1995) (“A ‘voidable’
agreement would be one subject to rescission or ratification whereas
a ‘void’ agreement would be incapable of ratification or
disaffirmance.”); Black’s Law Dictionary 1805 (defining voidable as
“[v]alid until annulled”); cf. State ex rel. Herman v. Mestas, 12 Ariz.
App. 289, 295, 469 P.2d 855, 861 (1970) (contract based on mutual
mistake voidable).
¶17 Nevertheless, we disagree with the Lewises that the
failure to attach an information statement affects the priority of a
judgment lien in relation to only competing lienholders and not
subsequent purchasers. If the legislature wanted to limit the concept
7“Recording an amendment . . . does not affect the
computation of time prescribed by § 33-964.” § 33-967(E).
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Opinion of the Court
of priority in § 33-967(D) to the interests of competing lienholders,
see Black’s Law Dictionary 1386 (also defining priority as “a creditor’s
right to have a claim paid before other creditors of the same debtor
receive payment”), it could have said so, see Democratic Party of Pima
Cnty., 228 Ariz. 545, ¶ 17, 269 P.3d at 726. And, we will not read
such a limitation into the statute. See Haag v. Steinle, 227 Ariz. 212,
¶ 13, 255 P.3d 1016, 1019 (App. 2011) (“Courts will not read into a
statute something that is not within the manifest intent of the
legislature as indicated by the statute itself, nor will the courts
inflate, expand, stretch, or extend a statute to matters not falling
within its express provisions.”). Furthermore, our judgment-lien
statutes require strict compliance. Sysco Ariz., 235 Ariz. 164, ¶ 8, 330
P.3d at 355-56.
¶18 Thus, where a subsequent purchaser acquires an
interest in a judgment debtor’s real property after a judgment
creditor records a judgment but before attaching an information
statement, the resulting judgment lien loses its priority and the
judgment creditor cannot satisfy his or her judgment by executing
on that property. By adding the information-statement requirement
in 1996, our legislature carved out a narrow exception to the general
principle that a subsequent purchaser who has notice of a judgment
lien takes the property subject to it. See Sysco Ariz., 235 Ariz. 164,
¶ 6, 330 P.3d at 355; Warren, 170 Ariz. at 243-44, 823 P.2d at 691-92.
¶19 Here, the Debords acquired their interest in the
property in July 2012. But the Lewises did not attach an information
statement to their recorded judgment until August 2013. Because
the Debords acquired their interest in the property before the
Lewises complied with § 33-967(A), the Debords’ interest in the
property has priority over the Lewises’ judgment lien. Accordingly,
the Lewises cannot satisfy their judgment by executing on the
Debords’ property. The trial court therefore did not err in granting
summary judgment in favor of the Debords. See Ochser, 228 Ariz.
365, ¶ 11, 266 P.3d at 1065; Pi’Ikea, 234 Ariz. 284, n.7, 321 P.3d at 454
n.7.
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Opinion of the Court
Attorney Fees and Costs
¶20 Both parties have requested an award of attorney fees
on appeal pursuant to A.R.S. § 12-341.01. We deny the Lewises’
request because they are not the prevailing party. And, in our
discretion, because the trial court has not yet resolved the Debords’
request for attorney fees incurred before it, we defer resolution of
their request on appeal to the trial court as part of those proceedings.
However, we grant the Debords their costs on appeal, pursuant to
A.R.S. § 12-341, contingent upon their compliance with Rule 21,
Ariz. R. Civ. App. P.
Disposition
¶21 For the foregoing reasons, we affirm the trial court’s
grant of summary judgment in favor of the Debords.
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