Villa De Jardines Ass'n v. Bank

• Decision Date: 22 April 2011
• Docket Number: No. 2 CA–CV 2010–0177.,2 CA–CV 2010–0177.
• Citation: 227 Ariz. 91,606 Ariz. Adv. Rep. 25,253 P.3d 288
• Parties: VILLA DE JARDINES ASSOCIATION, an Arizona nonprofit corporation, Plaintiff/Appellant,v.FLAGSTAR BANK, FSB, a subsidiary of Flagstar Bancorp, a banking association; and Federal National Mortgage Association aka Freddie Mac, a congressionally chartered corporation, Defendants/Appellees.
• Court: Arizona Court of Appeals

227 Ariz. 91

253 P.3d 288

606 Ariz. Adv. Rep. 25

VILLA DE JARDINES ASSOCIATION, an Arizona nonprofit corporation, Plaintiff/Appellant,

v.FLAGSTAR BANK, FSB, a subsidiary of Flagstar Bancorp, a banking association; and Federal National Mortgage Association aka Freddie Mac, a congressionally chartered corporation, Defendants/Appellees.

No. 2 CA–CV 2010–0177.

Court of Appeals of Arizona, Division 2, Department B.

April 22, 2011.

Maxwell & Morgan, P.C. by Charles E. Maxwell, Paul R. Neil, Chad M. Gallacher, and Brian Morgan, Mesa, Attorneys for Plaintiff/Appellant.Ramras Law Offices, P.C. by David N. Ramras, Phoenix, Attorneys for Defendants/Appellees.

OPINION

KELLY, Judge.

¶ 1Appellant/plaintiff Villa de Jardines Association(VJA) appeals the trial court's order granting summary judgment in favor of appellees/defendantsFlagstar Bank, FSB, and Federal National Mortgage Association,¹ also known as Freddie Mac (jointly referred to as the Banks, separately referred to as Flagstar and Freddie Mac, respectively), based on the priority of their liens.VJA also challenges the court's imposition of sanctions against it under Rule 11, Ariz. R. Civ. P., and the denial of its motions for new trial and to reconsider/vacate the judgment.²Additionally, VJA argues the court abused its discretion in denying its request for attorney fees below.Finding no error, we affirm.

Background

¶ 2“On appeal from a grant of summary judgment, we view all facts and reasonable inferences therefrom in the light most favorable to the party against whom judgment was entered.”Bothell v. Two Point Acres, Inc.,192 Ariz. 313, ¶ 2, 965 P.2d 47, 49(App.1998).In 2009, VJA filed a complaint in superior court seeking judicial foreclosure of liens it claimed against nineteen parcels of real property in Pinal County.VJA alleged it was entitled to foreclose because:

The CC & R's [ (Covenants, Conditions and Restrictions) ], Bylaws and Articles of Incorporation of the Plaintiff Association, as well as Arizona statute, provide that all past due amounts owed the Association are secured by a lien against the Property, which was perfected upon recordation of the CC & R's, and also are the personal obligation of the person(s) owning the Property at the time the amounts are assessed against the Property.

VJA also alleged that defendantsCharles Mannino and his wife; Freddie Mac; Desert Hills Bank; Countrywide Home Loans, Inc.; and Flagstar “claim or assert some right, title, interest, estate, or lien in or to the Property ... [and any such right] is subsequent, subordinate and inferior to the rights and lien of the [VJA].”

¶ 3 Desert Hills Bank and Countrywide Home Loans “failed to plead or otherwise defend” against the complaint, and default was entered against them.SeeRule 55(a), Ariz. R. Civ. P.The Banks filed a joint answer in which they requested dismissal of VJA's complaint.³Subsequently, the Banks filed a motion for summary judgment, which the court granted following a hearing.In its judgment, the court found no just reason for delay and directed immediate entry of judgment in accordance with Rule 54(b), Ariz. R. Civ. P.

¶ 4 VJA filed a motion for new trial pursuant to Rule 59(a)(1), (5) and (8), Ariz. R. Civ. P., which it attempted to amend orally to include additional grounds.The trial court denied the motion, and this appeal followed.

Discussion

I.Summary Judgment

¶ 5 VJA argues the trial court“erred as a matter of law” in granting the Banks' motion for summary judgment.“A trial court properly grants summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.”Airfreight Express Ltd. v. Evergreen Air Ctr., Inc.,215 Ariz. 103, ¶ 19, 158 P.3d 232, 239(App.2007).We review de novo the court's determination whether there are genuine issues of material fact and its application of law.Id.

¶ 6The trial court concluded correctly that the material facts here were not disputed.Therefore, the court's grant of summary judgment was proper if it also correctly interpreted and applied the law.Seeid.VJA argues “[t]he lien statute at issue, A.R.S. § 33–1807, favors the Association's foreclosure action.At worst, the statute is subject to differing reasonable interpretations.”We disagree.

¶ 7Section 33–1807(B) provides as follows:

A lien for [planned community association] assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments under this section is prior to all other liens, interests and encumbrances on a unit except:

1.Liens and encumbrances recorded before the recordation of the declaration.

2.A recorded first mortgage on the unit, a seller's interest in a first contract for sale ... on the unit recorded prior to the lien arising ... or a recorded first deed of trust on the unit.

3.Liens for real estate taxes and other governmental assessments or charges against the unit.

In interpreting statutes“our goal is to ‘fulfill the intent of the legislature.’ ”Zamora v. Reinstein,185 Ariz. 272, 275, 915 P.2d 1227, 1230(1996), quotingState v. Williams,175 Ariz. 98, 100, 854 P.2d 131, 133(1993).We first look to the language of the statute and give the words used their plain meaning, unless context demands otherwise.City of Tucson v. Clear Channel Outdoor, Inc.,209 Ariz. 544, ¶ 71, 105 P.3d 1163, 1178(2005).Only if the plain meaning of the statute is unclear will we consider other factors such as legislative history.Hobson v. Mid–Century Ins. Co.,199 Ariz. 525, ¶ 8, 19 P.3d 1241, 1245(App.2001).Further, we construe statutes so as to give effect to the whole and presume that “ ‘the legislature does not include in statutes provisions which are redundant, void, inert, trivial, superfluous or contradictory.’ ”Vega v. Morris,184 Ariz. 461, 463, 910 P.2d 6, 8(1996), quotingVega v. Morris,183 Ariz. 526, 530, 905 P.2d 535, 539(App.1995).

¶ 8 Despite VJA's assertion otherwise, the meaning of § 33–1807 is clear and unambiguous and the record reflects that the trial court based its ruling solely on the statute's provision that assessment liens are superior except to “a recorded first deed of trust on the unit.”§ 33–1807(B)(2).VJA's assertion that a deed of trust can only be a “ ‘first deed of trust’ by being first-in-time ... recorded prior to any other lien interest,” contradicts the statute's plain language.Applying such an interpretation would render § 33–1807(B)(2) superfluous.Because § 33–1807(B)(1) provides priority to all encumbrances recorded prior to assessment liens, there would be no need for the legislature to list separately “first deed[s] of trust,” if they must be recorded first to have priority over assessment liens.

¶ 9 VJA next argues the trial court erred in entering judgment as to all defendants and all parcels listed in the complaint, including those for which the Banks did not hold first deeds of trust.VJA contends the judgment was “overly-broad and improper,” and provided a windfall to the Banks—who had an interest in only seven parcels—because it addressed all nineteen parcels.VJA apparently misunderstands the effect of the court's judgment.The court's summary judgment as to the Banks does not apply to the other defendants.Although the court's order states “the deeds of trust recorded in the office of the County Recorder of Pinal County ... are prior and superior to any lien of [VJA] against [the parcels identified in VJA's complaint,]” this language does not give the Banks any interest in parcels held by other defendants.The order cannot be characterized as a windfall to the Banks because the Banks received no benefit.

¶ 10We disagree that the trial court“overstepped its bounds.”In a confusing argument, VJA maintains the court erred in entering judgment as to all defendants because the Banks had no standing to pursue relief on behalf of third parties and that it never sought to represent any of the other defendants.But, the Banks did not seek relief on behalf of others nor did the judgment grant such relief.The only authority VJA provides in support of its position is Fernandez v. Takata Seat Belts, Inc.,210 Ariz. 138, ¶ 6, 108 P.3d 917, 919(2005).In that case, our supreme court concluded a plaintiff in a class-action lawsuit who had no injury “ ‘fairly traceable to’ ”defendants' conduct had “no standing to bring an individual claim against [the defendants],” and therefore could not represent the class.Id.¶¶ 7, 10.Here, because the Banks never sought to represent any of the other defendants, we find this authority unpersuasive.

¶ 11 To the extent VJA argues the trial court was without authority to enter judgment as to the parcels for which default had been entered, the record does not support this argument.Although VJA had obtained entries of default against Desert Hills and Countrywide, nothing in the record indicates it obtained a judgment against these defendants.Further, VJA was not entitled to default judgments on these claims as a matter of law.Therefore, we cannot say the court erred by referring in its judgment to all parcels described in VJA's complaint, rather than just those addressed by the Banks in their motion for summary judgment.

II.Rule 11 Sanctions

¶ 12 VJA next argues the trial court“erroneously awarded” sanctions under Rule 11, Ariz. R. Civ. P.We review an award of attorney fees under Rule 11 for an abuse of discretion.State v. Shipman,208 Ariz. 474, ¶ 3, 94 P.3d 1169, 1170(App.2004).⁴As VJA correctly points out, whether the basis for awarding fees is proper is an issue of law that we review de novo.Id.;Barrow v. Ariz. Bd. of Regents,158 Ariz. 71, 80, 761 P.2d 145, 154(App.1988).

¶ 13 Rule 11 requires that all pleadings, motions, and papers filed with the court be signed by an attorney of record if the party is represented.The signature serves as...