Wiesel v. Ashcraft

• Decision Date: 12 May 1976
• Docket Number: CA-CIV,No. 2,2
• Citation: 26 Ariz.App. 490,549 P.2d 585
• Parties: Jan WIESEL, an unmarried man, Appellant, v. Homer ASHCRAFT and Ramona D. Ashcraft, husband and wife, R. Mark Woodruff and Kathryn C. Woodruff, husband and wife, Appellees. 2077.
• Court: Arizona Court of Appeals

Page 585

549 P.2d 585

26 Ariz.App. 490

Jan WIESEL, an unmarried man, Appellant, v. Homer ASHCRAFT and Ramona D. Ashcraft, husband and wife, R. Mark Woodruff and Kathryn C. Woodruff, husband and wife, Appellees.

No. 2 CA-CIV 2077.

Court of Appeals of Arizona, Division 2.

May 12, 1976.

Rehearing Denied June 9, 1976.

Review Denied July 13, 1976.

Newkirk & Beren, P.C. by Peter D. Beren, Tucson, for appellant.

Cusick, Watkins, Stewart & Harris by Donald R. Ellermann, Tucson, for appellees.

OPINION

HOWARD, Chief Judge.

Appellant Wiesel filed a complaint in the trial court to set aside the sheriff's sale of his home to appellees. We believe the court below acted correctly when it entered summary judgment for appellees and, therefore, we affirm.

To determine if there is a genuine issue as to any material facts, we must resolve all inferences to be drawn from the evidence in favor of appellant. Rule 56(c), Arizona Rules of Civil Procedure. Dollar A Day Rent a Car Systems, Inc. v. Mountain States Tel. & Tel. Co., 22 Ariz.App. 270, 526 P.2d 1068 (1974). On January 30, 1969, Robert N. Dombrowski and Sandra L. Dombrowski, purchased the real property involved herein, 8951 East Baker Street, Tucson, Arizona, and executed a certain mortgage agreement with Western American Mortgage Company. The mortgage was assigned to the National Savings Bank of the City of Albany on March 4, 1969. On June 30, 1969, Wiesel and his then wife, Betty E. Wiesel, purchased the property from the Dombrowskis and assumed the mortgage agreement. Wiesel made all his mortgage payments to Western American and appellee, Homer Ashcraft, the collection manager for Western American, personally handled Wiesel's collection account as an employee of Western American. Appellee, Mark Woodruff was a licensed real estate salesman employed by Western American as the manager of its Tucson office during the period of time Wiesel was making payments through Western American to the National Savings Bank of the City of Albany, the mortgagee. Western American by and through Ashcraft collected from Wiesel the insurance and taxes due on the subject real property and with Wiesel's funds paid the taxes and insurance.

On July 22, 1972, Wiesel was divorced from his wife and pursuant to the terms of the divorce decree, received a quitclaim deed from his wife dated July 26, 1972. Wiesel defaulted in the payments due under the mortgage and Ashcraft sent a licensed real estate salesman, Robert Ewing, to Wiesel's residence at Wiesel's request to discuss the sale of the property involved. Wiesel did not correct the default and a mortgage foreclosure complaint was filed in the Superior Court of Maricopa County. Wiesel was served with process but did not answer. A default judgment was entered in favor of National Savings Bank of the City of Albany and against Wiesel, and pursuant to the terms of the judgment, the real property was sold at a sheriff's sale on April 30, 1974. Ashcraft and Woodruff purchased the property at the sheriff's sale for $20,501.54, one dollar more than the bid made by the National Savings Bank of the City of Albany. ¹ It is undisputed that the real property has a fair market value of $45,000. Wiesel did not redeem the property within the six-month statutory redemption period and on November 1, 1974, the Pima County Sheriff executed a deed conveying the real property to Ashcraft and Woodruff.

Appellant claims seven points should have weathered the attack of summary judgment and carried the case to the trier of fact. His claims are:

1. A showing that the purchasers paid only 45% Of the fair market value of the property at the sheriff's sale was sufficient to allow the case to go to the trier of fact for final determination.

2. A showing that the purchasers at the sheriff's sale paid only 45% Of the fair market value of the property was sufficient to allow the case to go to the trier of fact for final determination when it was shown that the purchasers were the collection manager and the officer manager of the mortgage company acting as the intermediary between the mortgagor and the mortgagee of the property being sold.

3. The trial court erred in granting the motion for summary judgment because the question of what relationship existed between Ashcraft and real estate salesman Robert Ewing was a genuine issue as to a material fact.

4. The question of whether an agency relationship existed between Wiesel and Ashcraft and Woodruff was a question of fact.

5. The trial court erred in granting appellees' motion for summary judgment because the question of whether there was any mistake, accident, surprise, misconduct, fraud, irregularity, undue advantage or unfairness, constituted a genuine issue as to a material fact.

6. The trial court erred in granting appellees' motion for summary judgment because the question of whether the sales price at the sheriff's sale was inadequate constituted a genuine material factual issue.

7. The record establishes that Wiesel was entitled to a presumption of fraud.

It is well-settled in Arizona that an execution sale may be set aside in the court which issued the process or in an independent action in a court possessing equitable jurisdiction. Nussbaumer v. Superior Court In and For County of Yuma, 107 Ariz. 504, 489 P.2d 843 (1971); Redman v. White, 85 Ariz. 82, 331 P.2d 1096 (1958); see also, 33 C.J.S. Executions §§ 237 and 238. As pointed out in Nussbaumer, citing Johnson v. Jefferson Standard Life Insurance Co., 5 Ariz.App. 587, 429 P.2d 474 (1967), the power of a court to set aside an execution sale naturally arises from the inherent power to control its own process. The motion to set aside the sale is addressed to the sound discretion of the court but, this discretion is not unlimited. In exercising its discretion, the court must base its decision on the pertinent principles of law or equity applicable to the facts and circumstances of the case. Nussbaumer, supra.

Since the case of McCoy v. Brooks, 9 Ariz. 157, 80 P. 365 (1905) the general rule in Arizona dealing with vacation of execution sales because of inadequate bids is that mere inadequacy of price, where the parties stand on an equal footing and there are no confidential relations between them, is not, in and of itself, sufficient to authorize vacation of the sale unless the inadequacy is so gross as to be proof of fraud or shocks the conscience of the court. Nussbaumer, supra; Smith v. Arizona Engineering Co., 21 Ariz. 624, 193 P. 303 (1920).

Appellant's first argument is that the price paid was, as a matter of law, so inadequate that the conscience of the court should have been shocked. Arizona cases are not in support of this view. In McCoy v. Brooks, supra, shares of stock valued at $52,000 were sold for $350. In Citizens' State Bank v. McRoberts, 29 Ariz. 173, 239 P. 1028 (1925), $17,000 worth of property was sold for about $700. In Johnson v. Jefferson Standard Life Insurance Co., supra, property worth $73,000 was sold for $5,000. The disparity between the value and the purchase price paid in those cases was so great as to shock the conscience of the court.

However, in the instance case, 45% Of the agreed valud of the property was paid. The purchase price was one dollar in excess of the amount of the foreclosure judgment. We must note at this point that in the cases cited by appellant, where the disparity of price was great, the court still considered other circumstances to find support for overturning the execution bid. In McCoy v. Brooks, supra, there were sale irregularities. In Citizens' State Bank v. McRoberts, supra, the accommodation maker on a note was not informed of the delinquency of the note prior to the running of the redemption period. And in Blasingame v. Wallace, 32 Ariz. 580, 261 P. 42 (1927), both irregularities and disparity of price were present, the property valued at $15,000 being sold for $597. In Johnson v. Jefferson Standard Life Insurance Co., supra, a mortgagee obtained a foreclosure judgment of $56,228 on property worth $73,000. There, however, the mortgagee was eight minutes late for the sheriff's sale and another judgment creditor bid $5,000 which was accepted by the sheriff. The mortgagee was prepared to bid the amount of its judgment but the sheriff said the property was already sold. The inadequacy of the $5,000 as against $73,000, coupled with the additional facts, were sufficient to set aside that sale.

Appellant cites the case of Smith v. Arizona Engineering Co., supra, for the proposition that inadequacy of the purchase price may be, in and of itself, sufficient reason to justify setting aside the sheriff's sale. The Smith case involved the sale of 248,750 shares of stock for the sum of $558.47, the amount of the judgment executed upon. Although the court in Smith did state the general rule of inadequacy of price, the court confirmed the sale in question. And in the case of McCoy v. Brooks, supra, wherein 347,000 shares of stock valued at $52,000 were sold for $350 it was held that the sheriff's sale failed to comply with A.R.S. Sec. 12--1622(B) which provides that only so much of the personal property as is necessary to satisfy the judgment shall be sold.

Appellant's remaining six points are devoted to attempting to establish the necessary circumstances which, when coupled with inadequacy of price, would give rise to a question of material fact as to the propriety of upholding the sheriff's sale. We believe he has failed on this score. He claims that the fact that the purchasers at the sale were employees of the mortgage-servicing company was sufficient to allow the case to go to the trier of fact. Also, that the parties did not stand on an equal footing as required by McCoy v. Brooks, supra. Ashcraft had been in the real estate business for approximately five years as a collection agent for Western American while Wood ruff, a licensed real estate broker, had been in the real estate business for...