Lewis v. Debord

• Decision Date: 06 October 2014
• Docket Number: No. 2 CA–CV 2014–0004.,2 CA–CV 2014–0004.
• Parties: Cecelia M. LEWIS and Randall Lewis, a Married Couple, Plaintiffs/Appellants, v. Ray C. DEBORD and Anne Nelson–Debord, Husband and Wife, Defendants/Appellees.
• Court: Arizona Court of Appeals

236 Ariz. 57

335 P.3d 1136

697 Ariz. Adv. Rep. 19

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.

Court of Appeals of Arizona, Division 2.

Oct. 6, 2014.

Affirmed. Slutes, Sakrison & Rogers, P.C. By James M. Sakrison and Diana L. Kanon–Ustariz and Decker Holland, Snowflake By Joseph E. Holland, Tucson, for Plaintiffs/Appellants.

Gust Rosenfeld P.L.C. By Scott A. Malm and Justin M. Scorza, Phoenix, for Defendants/Appellees.

Judge VÁSQUEZ authored the opinion of the Court, in which Judge HOWARD and Judge MILLER concurred.

OPINION

VÁSQUEZ, 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.

¶ 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

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 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 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.”

¶ 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.

¶ 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...