Evans v. Young

• Decision Date: 20 January 1983
• Docket Number: CA-CIV,Nos. 1,s. 1
• Citation: 135 Ariz. 447,661 P.2d 1148
• Parties: Wilbur EVANS, Plaintiff-Appellee, v. James F.E. YOUNG, and Virginia L. Young, husband and wife; Virgil F. Young, and Stella M. Young, husband and wife; and Elmer Geis, a widower, Defendants-Appellants. Wilbur EVANS, Plaintiff-Appellant, v. James F.E. YOUNG, and Virginia L. Young, husband and wife; Virgil F. Young, and Stella M. Young, husband and wife; and Elmer Geis, a widower, Defendants-Appellees. 5672, 1 5750.
• Court: Arizona Court of Appeals

Page 1148

661 P.2d 1148

135 Ariz. 447

Wilbur EVANS, Plaintiff-Appellee, v. James F.E. YOUNG, and Virginia L. Young, husband and wife; Virgil F. Young, and Stella M. Young, husband and wife; and Elmer Geis, a widower, Defendants-Appellants.

Wilbur EVANS, Plaintiff-Appellant, v. James F.E. YOUNG, and Virginia L. Young, husband and wife; Virgil F. Young, and Stella M. Young, husband and wife; and Elmer Geis, a widower, Defendants-Appellees.

Nos. 1 CA-CIV 5672, 1 CA-CIV 5750.

Court of Appeals of Arizona Division 1, Department D.

Jan. 20, 1983.

Rehearing Denied March 4, 1983.

Review Denied April 5, 1983.

Murphy & Posner by Richard H. Lee and K. Bellamy Brown, Phoenix, for plaintiff/appellee-appellant

Thayer C. Lindauer, P.C. by Thayer C. Lindauer, Phoenix, for defendants/appellants-appellees.

OPINION

HAIRE, Presiding Judge.

The issue in this appeal is whether a judgment lienholder may foreclose against homestead property without following the appraisal procedure enumerated in A.R.S. § 33-1105.

In 1979, Wilbur Evans filed a complaint alleging that he held by assignment several recorded judgments against James and Virginia Young. Evans requested that the trial court determine the validity of his claimed liens upon the Youngs' property, determine the amounts and priority of all liens and claims against that property, and issue a writ of execution directing the sale of the property and subsequent distribution of proceeds. In January 1975, the Youngs had filed a Declaration of Homestead on the property involved which stated that the value, over and above encumbrances, did not exceed $15,000. In July 1979, Mr. Young filed an affidavit in response to Evans' motion for summary judgment which indicated that the equity in the property did not exceed $5,000.

In granting summary judgment for Evans, the trial court found that Evans held several judgments obtained against the Youngs and that each judgment was duly recorded and constituted a valid lien upon the Youngs' property. The court then ordered that special execution issue to the sheriff directing seizure and sale of the property for at least $20,000. The court also directed that proceeds of the sale be disbursed first to the Youngs in the amount of $20,000, then to pay costs and expenses of sale, then to Evans in satisfaction of his liens, and finally to other claimants.

On appeal, the Youngs challenge the propriety of the trial court's order. They contend that their homestead property is protected from general foreclosure by judgment lienholders. The Youngs argue that homestead property is subject to execution and forced sale only after a creditor invokes the appraisal procedure described in A.R.S. § 33-1105. In response, Evans argues that it is only the value of the homestead interest, in the amount of $20,000, ¹ that is protected. Thus, Evans maintains, a foreclosure sale is proper so long as the amount of the homestead interest is preserved for the debtor. He contends that because the Youngs' property is worth more than $20,000, there is value to which the judgment liens attach. In a separate appeal, Evans also contends that the trial court erred in failing to award reasonable attorney's fees.

Evans claims the right to foreclose his judgment lien against homestead property pursuant to A.R.S. § 12-1635(B), a general execution statute. The Youngs claim protection against foreclosure pursuant to the specific statutes relating to homesteads and homestead exemptions. See A.R.S. §§ 33-1101 to 1107. Determining the conflicting rights of these parties first involves reconciling a general statute and a specific statute. The court should harmonize the two statutes if possible. E.g., Arden-Mayfair, Inc. v. State, Department of Liquor Licenses & Control, 123 Ariz. 340, 342, 599 P.2d 793, 795 (1979); Shirley v. Superior Court, 109 Ariz. 510, 513, 513 P.2d 939, 942 (1973), cert. denied, Minyard v. Shirley, 415 U.S. 917, 94 S.Ct. 1415, 39 L.Ed.2d 472 (1974). When the provisions of a general statute conflict with those of a special statute, however, the special statute prevails. E.g., Arden-Mayfair, supra; Peabody Coal Co. v. Navajo County, 117 Ariz. 335, 339, 572 P.2d 797, 801 (1977). With these principles in mind, we proceed to evaluate the conflicting claims asserted by Evans and the Youngs.

A.R.S. § 12-1635(B) provides a supplemental remedy for judgment creditors by authorizing a separate action to foreclose a judgment lien when a general writ of execution has been issued and returned unsatisfied. ² See Walker v. Davies 113 Ariz. 233, 550 P.2d 230 (1976). The homestead statutes do not eliminate this supplemental remedy. Rather, the statutes can be read together so that foreclosure is in fact available to judgment creditors who wish to subject homestead property to execution and forced sale provided the procedures set forth in § 33-1105 are satisfied. A judgment lienholder, as the plaintiff in execution, may initiate this procedure by serving written notice upon the defendant debtor indicating dissatisfaction with the value of homestead property and the appointment of an appraiser to appraise the homestead in his behalf. See A.R.S. § 33-1105(A). Contrary to Evans' assertion, the defendant must appoint an appraiser who meets with plaintiff's appraiser to view the homestead property and determine its value. See A.R.S. § 33-1105(B). If the defendant does not appoint an appraiser, the court appoints a suitable party. See A.R.S. § 33-1106(C). Additionally, the statute accounts for all possible results of this joint appraisal:

(1) If the appraisers determine that the value of the homestead property does not exceed the value of the homestead exemption ($20,000 at the time of this action) over and above all liens and encumbrances, then the property claimed as a homestead is not subject to execution and forced sale. See A.R.S. § 33-1105(C).

(2) If the appraisers determine that the value of the homestead property exceeds the value of the homestead exemption over and above all liens and encumbrances and that the property can be divided, then part of the property, worth the value of the homestead exemption over and above liens and encumbrances, is set aside for defendant, and the remainder is sold under execution. See A.R.S. § 33-1105(D).

(3) If the appraisers determine that the value of the homestead property exceeds the value of the homestead exemption over and above all liens and encumbrances and that the property cannot be divided, then all of the property is sold and the proceeds distributed first, to the defendant in the amount of the homestead exemption, and second, to satisfy the execution. See A.R.S. § 33-1105(E). All bids received must exceed the value of the homestead exemption.

This appraisal procedure achieves the same result as the foreclosure claimed by Evans under A.R.S. § 12-1635(B) by satisfying the judgment lien when the value of the homestead property exceeds the value of the homestead exemption over and above all liens.

Our supreme court discussed the question of whether a judgment lien attaches to the excess value over the amount of the homestead exemption in Union Oil Co. v. Norton-Morgan Commercial Co., 23 Ariz. 236, 202 P. 1077 (1922). In that case, the holder of two judgment liens purchased homestead property at an execution sale. Plaintiff Union Oil, successor-in-interest to the party who filed the homestead declaration, filed suit to quiet title to the property, and the trial court found the judgment liens had validly attached to the homestead property.

In reversing the trial court, the supreme court discussed the relationship between the statute providing for judgment liens (paragraph 3633, Civil Code, 1913, predecessor to A.R.S. § 33-964) and the homestead statutes. The court noted that the homestead statutes are intended to preserve an amount of money equal to the value of the homestead exemption. It then discussed whether the filing of a homestead declaration protects any excess value over the amount of the homestead exemption from judgment liens. The court indicated that the method for determining whether the value of the homestead property exceeds the amount of the exemption is the statutory appraisal procedure (paragraph 3295, Civil Code, 1913, predecessor to A.R.S. § 33-1105).

"This method of determining whether there is an excess value in the land claimed as homestead would apply and have to be pursued whether the lien of an attachment or judgment attached to the excess or not. It is the only method provided by law to reach any excess. It is a proceeding that must take place between the judgment creditor and the judgment debtor while the latter is occupying the land claimed as his homestead." 23 Ariz. at 244, 202 P. at 1080 (emphasis added).

The court noted that the statute did not provide a method for determining whether there is excess value in the homestead property under the precise facts of Union Oil, when the homesteader has disposed of the property. Thus, it continued its analysis of the judgment lien statute and the homestead statutes.

The court in Union Oil recognized the interchangeability of the terms "real property," "land claimed," and "homestead" throughout the homestead statutes and then compared the language of the statute providing for judgment liens (paragraph 3633, Civil Code, predecessor to § 33-964):

"From the time of its docketing ... a judgment becomes a lien for a period of five years from the date of its rendition upon all the real property of the judgment debtor, except such as is or may be exempt from execution, including homesteads: ... Provided, that nothing herein contained shall prevent any person entitled thereto from declaring a homestead on real property as provided by law after the lien herein provided for shall have attached to said real property and from thereafter holding the same as a homestead free and clear of said lien." 23 Ariz. at 245, 202 P. at 1080 (emphasis added).

The court...