Partners v. Alvarez ( 2016 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
PARTNERS FOR PAYMENT RELIEF DE II, LLC, Plaintiff/Appellee,
v.
SALVADOR I. ALVAREZ, Defendant/Appellant.
No. 1 CA-CV 15-0315
FILED 10-4-2016
Appeal from the Superior Court in Maricopa County
No. CV2015-002296
The Honorable Michael L. Barth, Judge, Pro Tempore
AFFIRMED
COUNSEL
The Law Office of Michelle Ghidotti, Anaheim Hills, CA
By Michelle R. Ghidotti-Gonsalves
Counsel for Plaintiff/Appellee
McCauley Law Offices, PC, Cave Creek
By Daniel J. McCauley, III
Counsel for Defendant/Appellant
MEMORANDUM DECISION
Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge Jon W. Thompson and Judge Samuel A. Thumma joined.
PARTNERS v. ALVAREZ
Decision of the Court
J O H N S E N, Judge:
¶1 Salvador I. Alvarez appeals the superior court's orders
finding him guilty of forcible detainer and denying his motion for new trial.
For the reasons that follow, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 In February 2006, Alvarez entered into a home equity line of
credit agreement secured by a Deed of Trust, Assignment of Rents Security
Agreement and Fixture Filing ("Deed of Trust"), pledging his home as
security for the debt. Over the next several years, the loan and the Deed of
Trust were assigned several times. Eventually, a default was declared and
Partners for Payment Relief DE II, LLC ("PPR") purchased the home at a
trustee's sale.1 After Alvarez failed to vacate the property, PPR filed a
complaint for forcible detainer, and the superior court found Alvarez guilty
of forcible detainer and awarded possession to PPR. Alvarez moved for a
new trial, arguing PPR did not have standing to commence the forcible
detainer action. The superior court denied Alvarez's motion for new trial
and Alvarez timely appealed.
¶3 We have jurisdiction pursuant to Arizona Revised Statutes
("A.R.S.") sections 12-1182 (2016) and -2101(A)(1), (A)(5)(a) (2016).2
DISCUSSION
¶4 "[F]orcible entry and detainer is a statutory proceeding, the
object of which is to provide a summary, speedy and adequate means for
obtaining possession of premises by one entitled to actual possession."
Heywood v. Ziol, 91 Ariz. 309, 311 (1962). We review de novo the superior
court's interpretation of a statute. City of Tucson v. Pima County, 190 Ariz.
385, 386 (App. 1997). We view the evidence and all reasonable inferences
therefrom in the light most favorable to sustaining the judgment and will
affirm if there is any evidence to support the superior court's ruling. Lewis
v. Pleasant Country, Ltd., 173 Ariz. 186, 188 (App. 1992). We review the
1 Although Alvarez contends there are competing claims to
ownership of the debt and the Deed of Trust, he acknowledges PPR bought
the debt secured by the Deed of Trust and is the assignee of the Deed of
Trust.
2 Absent material revision after the relevant date, we cite a statute's
current version.
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PARTNERS v. ALVAREZ
Decision of the Court
superior court's denial of a motion for new trial for an abuse of discretion.
Id.¶5 Alvarez argues PPR could not file for a forcible detainer
because it is a foreign company that has not registered with the Arizona
Corporation Commission as required by A.R.S. § 29-809(A) (2016). Section
29-809(A) provides: "A foreign limited liability company transacting
business in this state shall not maintain an action, suit or proceeding in a
court of this state until it has obtained a certificate of registration to transact
business." PPR admits it is a foreign limited liability company, but argues
it does not need to register because it is not "transacting business" within
the meaning of § 29-809.
¶6 PPR argues its activities in Arizona fall within exemptions to
the registration requirement that are enumerated in § 29-809(E):
(E) Without excluding other activities that may not constitute
transacting business in this state, a foreign limited liability
company is not considered to be transacting business in this
state for the purposes of this chapter solely because it is
carrying on one or more of the following activities in this
state:
* * *
(7) Creating as borrower or lender or acquiring indebtedness,
mortgages or other security interests in real or personal
property.
(8) Securing or collecting debts or enforcing any right in
property securing the debts.
A.R.S. § 29-809(E)(7)-(8) (footnote omitted).
¶7 Alvarez argues the exemptions PPR cites apply to mortgage
lenders and larger financial institutions subject to other regulation, not a
company such as PPR, which he argues is a debt collector, not a mortgage
lender.3
3 Alvarez also relies on the distinction between debt collectors and
mortgage companies to argue that PPR "is doing unregistered debt
collection in our state in contravention of A.R.S. § 6-941(5)." Title 6, Chapter
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PARTNERS v. ALVAREZ
Decision of the Court
¶8 The distinction Alvarez posits, however, is not supported by
the language of the statute. Foreign limited liability companies are exempt
from the registration requirement based not on their size but on the nature
of their activities in Arizona. In the language of the statute, PPR
"acquir[ed]" Alvarez's debt and the Deed of Trust and then "enforce[ed] [a]
right in property securing" the debt by instituting the forcible detainer
action. Because these actions fall within the exemptions enumerated in §
29-809(E) and because Alvarez fails to argue PPR engaged in any other
activities in Arizona, the superior court did not err by allowing PPR to
proceed with the forcible detainer action without registering.
¶9 Alvarez also makes a series of arguments concerning the debt
secured by the Deed of Trust. He argues the debt was charged off or
discharged in an earlier bankruptcy proceeding and that, as a result, PPR
lacked standing to sue for possession. He also argues that multiple entities
claimed ownership of the note. These arguments, however, are not relevant
in a forcible detainer proceeding when the plaintiff has acquired the
property at a trustee's sale. The scope of a forcible detainer is limited by
statute: "On the trial of an action of forcible entry or forcible detainer, the
only issue shall be the right of actual possession and the merits of title shall
not be inquired into." A.R.S. § 12-1177(A) (2016). Alvarez's arguments
concerning the underlying debt go to the "merits of title" and are not
properly considered in a forcible detainer action. See United Effort Plan Tr.
v. Holm, 209 Ariz. 347, 351, ¶ 21 (App. 2004) ("Although the fact of title may
be admitted if incidental to proving a right to possession, the merits of title
cannot be litigated.").
¶10 In granting PPR's claim, the superior court had before it a
copy of the deed PPR had acquired in the trustee's sale. A trustee's deed
"raise[s] the presumption of compliance with the requirements of the deed
of trust" and is conclusive evidence that the trustee's sale satisfied all
statutory requirements. A.R.S. § 33-811(B) (2016). Alvarez concedes that
PPR's trustee's deed is prima facie proof of the company's ownership of the
property. As holder of the trustee's deed, PPR is presumed to hold title to
the property and is entitled to possession. Because Alvarez failed to present
any evidence to rebut the presumption of compliance created by the
9, Article 2 of Arizona Revised Statutes regulates mortgage bankers
operating in Arizona, and requires licensing absent an exemption. See
A.R.S. §§ 6-942 to -943 (2016). Alvarez fails to explain how PPR is a
mortgage banker subject to this regulatory scheme, and in fact, argues PPR
does not meet the statutory definition of mortgage banker.
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PARTNERS v. ALVAREZ
Decision of the Court
trustee's deed, we reject his arguments concerning whether his debt was
charged off or otherwise discharged.
CONCLUSION
¶11 For the foregoing reasons, we affirm the superior court's
orders. As the successful party on appeal, PPR is awarded its costs on
appeal pursuant to A.R.S. § 12-341 (2016), contingent upon compliance with
Arizona Rule of Civil Appellate Procedure 21.4
AMY M. WOOD • Clerk of the Court
FILED: AA
4 We decline to grant Alvarez's request for oral argument in this
matter.
5