Prakelt v. Reform ( 2023 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
IMELDA G. PRAKELT, Plaintiff/Appellee,
v.
REFORM PHYSICIANS, LLC, et al., Defendants/Appellants.
No. 1 CA-CV 23-0124
FILED 12-26-2023
Appeal from the Superior Court in Maricopa County
No. CV2020-093333
No. CV2020-094234
The Honorable Rodrick J. Coffey, Judge
AFFIRMED
COUNSEL
Dessaules Law Group, Phoenix
By Jonathan A. Dessaules, F. Robert Connelly
Counsel for Plaintiff/Appellee
Jaburg & Wilk PC, Phoenix
By Roger L. Cohen, Kathi M. Sandweiss
Counsel for Defendant/Appellant
PRAKELT v. REFORM, et al.
Decision of the Court
MEMORANDUM DECISION
Judge Michael S. Catlett delivered the decision of the Court, in which
Presiding Judge David D. Weinzweig and Judge Maria Elena Cruz joined.
C A T L E T T, Judge:
¶1 This appeal turns on the authenticity of the signatures on two
quit claim deeds. Anelime Holding LLC (“Anelime”), Reform Physicians
LLC (“Reform Physicians”), Harinder Takyar (“Takyar”) and his wife
Raman Takyar (collectively the “Takyars”) claim the signatures are
authentic. Imelda G. Prakelt (“Prakelt”) claims they are not. After hearing
testimony and taking evidence during a three-day bench trial, the superior
court agreed with Prakelt that the signatures are not authentic. We affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 Prakelt and Takyar began a romantic relationship in 2012.
The two also worked together—Prakelt provided various services for three
health care companies Takyar controlled. All three of those companies
closed between 2016 and 2017. In November 2019, Prakelt and Takyar
ended their relationship.
¶3 According to the Takyars, Prakelt signed two quit claim deeds
in January 2020, transferring two properties she owned to Reform
Physicians, a company the Takyars own. One of the properties was
Prakelt’s primary residence in Maricopa County (“Maricopa Property”)
and the other was a rental property in Pima County (“Pima Property”).
Reform Physicians later paid off Prakelt’s $311,000 mortgage on the
Maricopa Property. Reform Physicians transferred both properties to
Anelime, another company the Takyars own.
¶4 In May 2020, Prakelt recorded a notice of lis pendens against
both properties and filed two separate quiet title actions against Reform
Physicians, Anelime, and the Takyars, one in Maricopa County and one in
Pima County. Prakelt alleged she had no knowledge of the property
transfers. Anelime filed quiet title counterclaims against Prakelt. The two
cases were eventually consolidated into one action in the Maricopa County
Superior Court.
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¶5 After discovery and motion practice, the superior court held
a three-day bench trial. Prakelt disputed signing either deed or otherwise
intending to transfer either property. Takyar alleged that, in 2012, Reform
Physicians agreed to loan Prakelt $200,000 as her contribution for a
partnership interest in two companies. According to Takyar, Prakelt agreed
to transfer the Pima Property to Reform Physicians for a release of this debt.
¶6 In support, Takyar introduced a Promissory Note (the
“Note”) that Prakelt allegedly signed on October 1, 2012, which a notary
allegedly signed and stamped on October 22, 2012. The Note contained
various inconsistencies. Takyar also produced two K-1 tax forms for the
two businesses, stating Prakelt invested $140,000 in one and $60,000 in the
other. Neither form was signed and there was no evidence either form was
sent to the IRS. Prakelt denied she borrowed the money, had any
knowledge of the Note prior to receiving a copy from Takyar in 2020, or
ever had an ownership interest in either business.
¶7 Takyar also testified that Prakelt agreed to transfer the
Maricopa Property to Reform Physicians in return for paying off Prakelt’s
$311,000 mortgage. Both parties agreed Reform Physicians paid off the
mortgage, but Prakelt testified that Takyar did so to rekindle their
relationship and to thank her for the work she had done for him and his
companies over the years.
¶8 Both deeds contain drafting errors. Takyar testified that
Prakelt personally typed both deeds in his presence. But both deeds
misspell Prakelt’s middle name as “Gutieerrez”—her middle name is
correctly spelled “Gutierrez”—and separately identify her as “Imelda
Prakelt G.,” which is not her legal name. Each deed includes three notary
stamps and notary signatures from Lety Santos (“Santos”), a notary public.
The date above Prakelt’s purported signature on the Pima Property deed is
January 28, 2019, but Santos hand wrote “Date corrected January 30, 2020”
next to it. Santos also stamped and signed the deed in two other locations,
using January 31, 2020 as the date. The Maricopa Property deed also
includes three separate notary signatures, one correcting the date above
Prakelt’s purported signature, but each dated January 31, 2020.
¶9 Santos admitted she did not have Prakelt sign her notary
journal when Prakelt allegedly signed the deeds, and Santos testified she
was unaware she was required to do so. After the validity of Prakelt’s
signature became an issue, Santos drafted, signed, and stamped a
document titled, “Verification Regarding Notarized documents” (the
“Verification”). The Verification states that Prakelt signed the deeds, and it
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contains detailed information about each property. Santos testified that she
drafted the Verification without any prior communication with Takyar and
without possessing the deeds at issue. She also testified she did not know
if the Verification was accurate, and Santos’ employer later prohibited
Santos from notarizing documents for Takyar.
¶10 The superior court found Prakelt’s testimony to be
“significantly more credible than Takyar,” and quieted title on both
properties in Prakelt’s favor. The court recognized there were questions
regarding why Takyar would pay off Prakelt’s mortgage, but it found
“those questions are significantly outweighed by the weaknesses and
inconsistencies in Takyar’s testimony[.]” Specifically, the court found no
reliable financial documentation showing Reform Physicians actually
transferred money to Prakelt or any third-party on her behalf, which was
“highly suspicious since Defendants could have obtained and disclosed
their own bank records.” The court also found the fact that Prakelt’s name
was misspelled in the deeds “significantly undermines Takyar’s claim that
[Prakelt] drafted the Deed.”
¶11 The court further found Santos’ testimony that she was able
to draft the Verification without consulting Takyar or having the deeds in
front of her lacked credibility. Consequently, the court found that Prakelt
is the rightful owner of both properties and awarded her attorneys’ fees
under A.R.S. § 12-1103(B).
¶12 The Takyars, Anelime, and Reform Physicians timely
appealed. We have jurisdiction. See A.R.S. § 12-2101(A)(1).
DISCUSSION
¶13 In an appeal after a bench trial, “we review the evidence in a
light most favorable to sustaining the verdict,” and will accept the superior
court’s factual findings unless clearly erroneous, “giving due regard to the
opportunity of the court to judge the credibility of witnesses.” Castro v.
Ballesteros-Suarez, 222 Ariz. 48, 51 ¶ 11 (App. 2009); Ariz. R. Civ. P. 52(a)(6).
“A finding of fact is not clearly erroneous if substantial evidence supports
it, even if substantial conflicting evidence exists.” Castro, 222 Ariz. at 51–52
¶ 11. Substantial evidence exists if a reasonable person could reach the
same result as the superior court. Id. at 52 ¶ 11. We review any questions
of law de novo. Id. ¶ 12; Ariz. Bd. of Regents v. Phx. Newspapers, Inc., 167 Ariz.
254, 257 (1991).
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I. Quiet Title
¶14 Takyar first argues the superior court erred in granting quiet
title to Prakelt because there is a presumption that Prakelt’s signatures on
the deeds are valid, which, he contends, can only be overcome with clear
and convincing evidence. Thus, according to Takyar, the court should have
ended its inquiry after examining the face of the deeds, and it erred by
making factual findings regarding witness credibility. Prakelt asserts
Takyar waived this argument by failing to raise it below. We conclude the
issue was sufficiently preserved because, in the superior court, both parties
discussed various aspects of presumptions regarding signature
authenticity.
¶15 In arguing that Prakelt’s signature is presumptively
authentic, Takyar relies primarily on A.R.S. § 47-3308(A), located in
Arizona’s Uniform Commercial Code (“UCC”). The UCC provides that,
“[i]n an action with respect to an instrument,” the authenticity of a
signature is admissible unless denied in the pleadings. A.R.S. § 47-3308(A).
If the validity of the signature is contested, the person claiming validity has
the burden of proof, “but the signature is presumed authentic[.]” Id.
¶16 Takyar’s reliance on the UCC’s presumption is misplaced—
the presumption does not apply here because neither deed at issue is an
“instrument.” The UCC defines an “instrument” as a “negotiable
instrument.” A.R.S. § 47-3104(B). And it defines a “negotiable instrument”
as “an unconditional promise to order or pay a fixed amount of money[.]”
A.R.S. § 47-3104(A). The deeds at issue are not negotiable instruments—
they do not contain a promise that Prakelt would pay an amount of money
to any of the defendants or anyone else. Thus, the UCC’s presumption is
inapplicable.
¶17 Takyar also maintains that we should apply a presumption of
validity that can only be overcome by clear and convincing evidence
because the deeds were notarized. We disagree that such a presumption
applies in this case and that clear and convincing evidence is required to
overcome that presumption.
¶18 First, even assuming notarization could result in the
presumption Takyar advocates, such a presumption would only trigger if
the notary complied with the law. See 1A C.J.S. Acknowledgements § 86
(“A proper acknowledgment does not conclusively establish execution of a
deed but is strong proof thereof[.]” (emphasis added)). Here, there was
substantial evidence that Santos did not so comply. Santos admitted she
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did not have Prakelt sign her notary journal when Santos notarized the
deeds. That failure is a violation of A.R.S. § 41-319(A), which required
Santos to include a variety of information in her journal to prove she
witnessed Prakelt’s signatures. Alternatively, § 41-319(B) allows a notary
who personally knows a signer to retain a copy of the notarized documents
in lieu of making a journal entry, but Santos did not claim to have followed
that path. The failure to establish Santos lawfully witnessed Prakelt sign
the deeds removes any presumption that would otherwise follow a notarial
act.
¶19 Second, the evidentiary standard required to defeat a
presumption based on notarization is unclear. Takyar cites no Arizona case
law, nor have we located any, establishing a “clear and convincing
evidence” presumption based on notarization of a deed. Instead, a
notarized signature is presumed valid unless someone comes forward with
contrary evidence. As our supreme court has said, a notary certificate on
an affidavit is presumptive evidence a party swore to the statements
contained therein “so long as [the certificate] stood unimpeached[.]” Lewis
v. State, 32 Ariz. 182, 189 (1927); see also 1A C.J.S. § 76 (“A certificate of
acknowledgement attached to an instrument such as a deed or a mortgage
raises the presumption of due execution, which can be rebutted only after
being weighed against any evidence adduced to show that the subject
instrument was not duly executed.” (emphasis added)). Here, the
signatures on the deeds did not stand unimpeached because Prakelt
disputed their authenticity and produced evidence supporting her claim.
¶20 In any event, the record contained enough evidence to
overcome any presumption. Under Takyar’s version of events, Prakelt
drafted and signed the deeds. But there was sufficient evidence supporting
the superior court’s conclusion otherwise.
¶21 Starting with the issue of how the deeds were created, Takyar
claimed Prakelt typed the deeds. The evidence sufficiently supported the
court’s finding that Prakelt did not create the deeds. Prakelt, for example,
testified she was not involved in drafting either deed. The deeds misspelled
Prakelt’s middle name and referred to “Imelda Prakelt G.,” which is not,
and has never been, Prakelt’s legal name.
¶22 The evidence also sufficiently supported the superior court’s
conclusion that Prakelt did not sign the deeds. Prakelt’s own testimony
supports that finding—Prakelt testified she did not sign the deeds.
Moreover, the notary who allegedly witnessed the signatures could not
produce a notary journal or any other evidence proving Prakelt signed the
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deeds. And the deeds themselves reflected multiple different notary
stamps and multiple execution dates. For example, the deed for the Pima
Property reflected three notary stamps and three execution dates.
¶23 Lacking the kind of evidence a notary would ordinarily
provide, Takyar introduced the Verification to prove Prakelt signed the
deeds. Santos signed the Verification under oath to prove she notarized
Prakelt’s signatures on the two deeds. The Verification states Santos
“personally examined . . . Quit Claim deed signed by Imelda G. Prakelt
regarding property in Maricopa County with Parcel Number 304-74-152 on
January 31st 2020,” and “Quit Claim deed signed by Imelda G. Prakelt
regarding property in Pima County with Parcel Number XXX-XX-XXXX on
January 31st 2020.” Santos claimed she drafted the Verification under
penalty of perjury, but admitted she did not know what “perjury” means.
Santos claimed she did not have any communications with Takyar or
remember reviewing the deeds before she drafted the Verification. But she
did not know how so much detailed information—including accurate
parcel numbers and the identity of a statutory agent—made its way into the
Verification. Santos ultimately admitted she did not know whether the
substance of the Verification was true when she drafted it.
¶24 Then there is the issue of witness credibility. The superior
court heard live testimony from the primary players involved and we have
only a cold record. Thus, “the trial court, not this court, assesses
credibility.” In re U.S. Currency in Amount of $26,980.00, 199 Ariz. 291, 295
¶ 10 (App. 2000). The superior court here concluded that Prakelt was
“significantly more credible than Takyar” because “[m]uch of Takyar’s
testimony simply did not make sense.” The court also found that Takyar
“contradicted his own testimony numerous times during the trial.”
Similarly, the court determined that the testimony Santos provided was not
“the least bit credible.” We defer to these credibility determinations, which
further support the court’s ultimate factual conclusions regarding the
authenticity of the signatures at issue.
¶25 In sum, the record contained sufficient evidence to support
the superior court’s finding that Prakelt did not sign the deeds regardless
of whether a presumption exists, or the quality of evidence needed to
overcome it. See Castro, 222 Ariz. at 51–52 ¶ 11. Because we reach this
conclusion, we need not address whether the deeds’ language was
sufficient to convey the properties from Prakelt to Takyar.
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II. Wrongful Lis Pendens
¶26 Takyar also argues the superior court erred by refusing to find
that Prakelt wrongfully recorded a notice of lis pendens. “A lis pendens
provides constructive notice to prospective purchasers and lenders of a
pending lawsuit that may affect title to real property.” Santa Fe Ridge
Homeowners’ Ass’n v. Bartschi, 219 Ariz. 391, 395 ¶ 11 (App. 2008); A.R.S. §
12-1191(B). A lis pendens is wrongfully recorded only if the action does not
affect title to real property. Santa Fe Ridge Homeowners’ Ass’n, 219 Ariz. at
395 ¶ 11. Here, both parties filed quiet title actions disputing who held title
to the properties. This litigation, therefore, clearly could have affected (and
ultimately did affect) the properties’ titles and, consequently, regardless of
who ultimately prevailed, Prakelt did not wrongfully record the lis pendens.
III. Attorneys’ Fees
¶27 Finally, Takyar maintains the superior court erred by
awarding Prakelt attorneys’ fees because she should not have prevailed on
her quiet title claim. A party may recover attorneys’ fees in a quiet title
action by providing the other party with five dollars and requesting
execution of a quit claim deed twenty days prior to bringing a quiet title
action. A.R.S. § 12-1103(B). Prakelt complied with both statutory
requirements and prevailed in her quiet title action. Thus, the superior
court did not abuse its discretion in granting Prakelt’s request for attorneys’
fees. Charles I. Friedman, P.C. v. Microsoft Corp., 213 Ariz. 344, 350 ¶ 17 (App.
2006) (reviewing an attorneys’ fee award for an abuse of discretion).
ATTORNEYS’ FEES
¶28 Prakelt has also, pursuant to A.R.S. § 12-1103, requested her
attorneys’ fees and costs on appeal. We grant those requests upon Prakelt’s
compliance with Arizona Rule of Civil Appellate Procedure 21. We deny
Anelime’s and Reform Physicians’ requests for attorneys’ fees because
neither prevailed on their quiet title claims.
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CONCLUSION
¶29 We affirm the superior court’s judgment.
AMY M. WOOD • Clerk of the Court
FILED: TM
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