Rogone v. Sasser ( 2017 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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
JOHN ROGONE, et al., Plaintiffs/Appellants,
v.
ROSIRA SASSER, Defendant/Appellee.
No. 1 CA-CV 16-0293
FILED 3-23-2017
Appeal from the Superior Court in Maricopa County
No. CV2007-015015
The Honorable J. Richard Gama, Judge (Retired)
AFFIRMED, AS MODIFIED, AND REMANDED
COUNSEL
Henman Law Firm PC, Phoenix
By G. Lee Henman, Jr.
Counsel for Plaintiffs/Appellants
Jaburg & Wilk, PC, Phoenix
By Roger L. Cohen, Kathi N. Sandweiss
Counsel for Defendant/Appellee
ROGONE, et al. v. SASSER
Decision of the Court
MEMORANDUM DECISION
Judge Maurice Portley1 delivered the decision of the Court, in which
Presiding Judge Samuel A. Thumma and Chief Judge Michael J. Brown
joined.
P O R T L E Y, Judge:
¶1 John Rogone2 and Jason Rogone, individually and as
successor co-trustees of the Alfredo Correia and Mary F. Correia Trust (the
“Trust”) (collectively “the Rogones”), challenge an amended judgment
granting Rosira Sasser (“Rose”) a homestead exemption on property they
acquired in a sheriff’s sale in 2011, which awarded ten percent post-
judgment interest on the homestead exemption funds. Because we find no
error, we affirm the Fourth Amended Judgment, but modify it to correct the
post-judgment interest award to Rose and remand solely for entry of
judgment reflecting the correct post-judgment interest rate.
FACTUAL3 AND PROCEDURAL BACKGROUND
¶2 The Rogones sued Rose, their mother, in 2004 in California,
naming her as a defendant in her capacity as the then-trustee of the Trust.
Rose completed three property transactions while the suit was pending.
The Rogones prevailed in the California action, domesticated the judgment
in Arizona, and alleged that Rose’s three property transactions were
fraudulent under Arizona’s Uniform Fraudulent Transfer Act, Arizona
Revised Statutes (“A.R.S.”) § 44-1001, et seq. An advisory jury found all
1The Honorable Maurice Portley, Retired Judge of the Court of Appeals,
Division One, has been authorized to sit in this matter pursuant to Article
VI, Section 3 of the Arizona Constitution.
2Although John Rogone had his name legally changed, we use his former
name in this decision.
3We recite those facts relevant to the current appeal, recognizing additional
background can be found in the prior appeal. Rogone v. Correia, 236 Ariz.
43 (App. 2014).
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Decision of the Court
three property transactions were fraudulent transfers and the superior
court adopted the verdict of the advisory jury.
¶3 This appeal involves the property the parties call the “Bronco
Trail Property.” Consistent with the advisory jury’s findings, the court
ordered that property be sold and that the sale proceeds be applied to the
Rogones’ judgment. Shortly after the entry of judgment, but before the
property was sold, Rose moved into the Bronco Trail Property and claimed
it was exempt from collection as her homestead under A.R.S. § 33-1101(A).
¶4 The Rogones purchased the Bronco Trail Property at a
sheriff’s sale on January 6, 2011, and received the sheriff’s deed six months
later. The superior court subsequently denied Rose’s claim for a homestead
exemption on equitable grounds. Rose appealed the ruling and we
reversed, holding that the homestead exemption did not depend on any
equitable factors. Rogone v. Correia, 236 Ariz. 43, 49, ¶ 18 (App. 2014). We
also determined that Rose could “declare a homestead at any time prior to
sale, and may designate the property to which the exemption will apply if
she owns more than one.” Id. at 50, ¶ 19.
¶5 After our mandate issued, which re-vested jurisdiction in the
superior court, Rose submitted a proposed Fourth Amended Judgment that
included the following language:
THE COURT FINDS:
1. Rose is and has been, and at all times from and after
entry of [the Arizona November 2009] Judgment, entitled to
claim a homestead exemption in the Bronco Trail Property.
Upon Sheriff’s Sale and issuance of Sheriff’s Deed to the
Bronco Trail Property, Rose was improperly denied her
homestead exemption.
2. The proceeds from the sale of the Bronco Trail
Property, to the extent of the $150,000 exemption under A.R.S.
§ 33-1101, disbursed to or on behalf of [the Rogones], or to or
on behalf of anyone other than Rose, were improperly
disbursed and must be returned.
THEREFORE, IT IS ORDERED ADJUDGED AND DECREED
that Rose Sasser shall recover from [the Rogones] . . . the
statutory homestead exemption amount of $150,000, plus
interest accruing at the rate of 10% per annum from July 26,
2011 until paid in full . . . .
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The Rogones objected to that proposed judgment on several grounds. They
first claimed that this court “only found it was improper to deny [Rose] a
homestead exemption based on equitable considerations. It did not find
she was entitled to a homestead exemption or provide any instruction on
how it was to be applied, if at all.” They also argued that the ten percent
interest rate was incorrect because the legislature amended the
prejudgment interest statute, A.R.S. § 44-1201, on July 20, 2011—six days
before the date listed above—and changed the default interest rate on
judgments to the prime rate plus one percent. The Rogones later suggested
that further proceedings were necessary to determine whether Rose had
either abandoned the homestead or committed waste between March 2010,
when she first claimed the homestead, and July 2011, when the sheriff’s sale
took place. They also claimed that Rose’s claim was not for a homestead
exemption but for restitution because the Bronco Trail Property had already
been sold.
¶6 The superior court signed Rose’s proposed Fourth Amended
Judgment effective nunc pro tunc to November 24, 2009, over the Rogones’
objections. The Rogones timely appealed. We stayed the appeal to allow
them to obtain a final judgment pursuant to Arizona Rule of Civil
Procedure 54(c), which they did. We have jurisdiction pursuant to A.R.S. §
12-2101(A)(1).
DISCUSSION
I. The Record Supports Rose’s Homestead Exemption Claim.
¶7 The Rogones first challenge the finding that “Rose is and has
been, and at all times, from and after entry of Judgment, entitled to claim a
homestead exemption in the Bronco Trail Property.” We do not disturb a
trial court’s factual findings unless they are clearly erroneous. Ramsey v.
Ariz. Registrar of Contractors, 241 Ariz. 102, 109, ¶ 22 (App. 2016). A finding
of fact is not clearly erroneous if substantial evidence supports it, even if
substantial conflicting evidence exists. Id. (quoting Kocher v. Dep’t of
Revenue of Ariz., 206 Ariz. 480, 482, ¶ 9 (App. 2003)).
¶8 The Rogones contend the court should have conducted an
evidentiary hearing to determine whether Rose “intended to permanently
remove herself from the Bronco Trail Property and thereby abandon her
homestead” under A.R.S. § 33-1104(A)(3). Rose supported her claim with
two affidavits dated December 3, 2009, and March 25, 2010. The Rogones
did not attempt to refute either affidavit and presented no evidence to
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suggest Rose abandoned the property at any time before the 2011 sheriff’s
sale.
¶9 We have already determined that Rose could “declare a
homestead at any time prior to sale.” Rogone, 236 Ariz. at 50, ¶ 20. The
Rogones could have raised their abandonment claim at any time after Rose
declared her homestead, but did not do so until the parties submitted
proposed Fourth Amended Judgment forms in October 2015. By that time,
Rose had been out of the Bronco Trail Property for at least two years as a
result of the sheriff’s sale. If the Rogones desired to raise factual disputes,
such as whether Rose abandoned the property as a challenge to her
homestead, they were required to raise it timely to the superior court and
in response to Rose’s appeal. See PLM Tax Certificate Program 1991-92, L.P.
v. Schweikert, 216 Ariz. 47, 50, ¶ 16 (App. 2007) (“Issues that should have
been raised in a first appeal cannot be raised or considered in a second
appeal.”). Because they did not timely raise the issue to the superior court
and in their first appeal, they have waived the issue in this appeal.
II. The Rogones Had Ample Opportunity to Present Evidence of
Waste.
¶10 The Rogones also contend the court should have conducted
an evidentiary hearing to determine whether Rose had committed waste,
arguing based on a footnote in an unpublished memorandum decision that
waste can serve as an offset to a homestead exemption.4 Assuming without
deciding the legitimacy of the argument, there is no evidence of waste in
the record. Again, Rose has not lived in the Bronco Trail Property since
2011, and the Rogones could have offered evidence of any alleged waste
years ago. Their attempt to raise the issue for the first time after entry of
the Fourth Amended Judgment in 2015 is far too late, and the issue has been
waived. See Schweikert, 216 Ariz. at 50, ¶ 16.
¶11 The Rogones also claim Rose’s homestead exemption became
a restitution claim, and therefore subject to equitable defenses, after we
issued our 2014 opinion in Rose’s appeal, reversing the earlier judgment
denying her a homestead exemption. See Rogone, 236 Ariz. at 49, ¶ 18; see
also Raimey v. Ditsworth, 227 Ariz. 552, 559, ¶ 21 (App. 2011) (“Funds paid
by a judgment debtor to a judgment creditor must be refunded to the debtor
if the judgment has been set aside and ‘justice requires restitution.’”)
(quoting United States v. Morgan, 307 U.S. 183, 197 (1939)). Rose’s
4Monroe v. Gagan, Case No. CV 13-0273, 2015 WL 3917976, at *4 n.4-5, ¶¶
13-14 (App. June 25, 2015).
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homestead exemption, however, automatically attached to her interest in
the “identifiable cash proceeds from the . . . involuntary sale of the
property.” A.R.S. § 33-1101(C). And given that we had already determined
that the homestead exemption is not subject to equitable defenses, Rogone,
236 Ariz. at 49-50, ¶¶ 18-19, there is no basis for the argument and we will
not address it further.
III. The Superior Court Applied an Incorrect Interest Rate to Rose’s
Homestead Exemption.
¶12 The Rogones contend the court erred in awarding Rose ten
percent interest on her homestead exemption from July 26, 2011, forward.
Instead, the Rogones argue that Rose should receive post-judgment interest
at one percent above the federal prime rate under the current A.R.S. § 44-
1201(B), which became effective on July 20, 2011.5 See Metzler v. BCI Coca-
Cola Bottling Co. of Los Angeles, Inc., 235 Ariz. 141, 145, ¶ 15 (2014). Rose
responds that ten percent is the correct rate because the court entered the
Fourth Amended Judgment nunc pro tunc to November 24, 2009.
¶13 Although the Fourth Amended Judgment was entered nunc
pro tunc, Rose was not entitled to claim the proceeds of her homestead
exemption until after the sheriff’s sale and the issuance of the deed. The
Fourth Amended Judgment specifically recognized that her claim did not
arise before 2011, and states that post-judgment interest would begin to
accrue on Rose’s homestead exemption on July 26, 2011, the date the
Rogones acquired the sheriff’s deed after the sale of the property. As a
result, the lesser interest rate in the current version of A.R.S. § 44-1201(B)
applies. And as of July 26, 2011, the federal prime rate was 3.25 percent,
making the correct statutory interest rate on Rose’s homestead exemption
4.25 percent from July 26, 2011 until paid in full. 6 A.R.S. § 44-1201(B).
5 The current A.R.S. § 44-1201(B) states, in relevant part: “Unless specifically
provided for in statute or a different rate is contracted for in writing, interest
on any judgment shall be at the lesser of ten per cent per annum or at a rate
per annum that is equal to one per cent plus the prime rate as published by
the board of governors of the federal reserve system in statistical release
H.15 or any publication that may supersede it on the date that the judgment
is entered.”
6 See Board of Governors of the Federal Reserve System,
https://www.federalreserve.gov/datadownload/Choose.aspx?rel=H15
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Decision of the Court
CONCLUSION
¶14 We affirm the Fourth Amended Judgment, except that we
modify the interest rate on Rose’s post-judgment interest to 4.25 percent
from July 26, 2011, until paid in full. And, as a result, we remand this matter
to the superior court solely for entry of an amended judgment reflecting the
correct post-judgment interest rate for Rose’s homestead exemption.
Finally, given the Rogones’ success on the interest rate, we award them
their costs on appeal upon compliance with Arizona Rule of Civil Appellate
Procedure 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
(confirming the July 26, 2011 prime rate as 3.25 percent) (last viewed March
8, 2017).
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