Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-01428/USCOURTS-azd-2_12-cv-01428-0/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Bank of America, N.A., 

Plaintiff, 

vs.

CBS Properties LLC; Mighty Bum LLC;

Chircus Investments LP; Adam Bronfman;

Nelson Neal Stone; Jeffrey Chircus, 

Defendants. 

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CV 12-01428-PHX-FJM

ORDER

We have before us defendants' motion for determination of fair market value (doc. 9).

Plaintiff did not respond, and the time for responding has expired.

In 2008, defendants CBS Properties, Chircus Investments, and Mighty Bum executed

promissory notes to plaintiff concerning two loans ("Loan 1" and "Loan 2"). Chircus

Investments, Mighty Bum, Bronfman, Stone, and Chircus signed as guarantors. According

to plaintiff, defendants defaulted in 2011. The two properties securing the loans were sold

at Trustee's Sales for $1,300,000 and $787,501 respectively. Plaintiff filed this action on July

2, 2012, asserting four counts: (1) deficiency action against CBS Properties, Chircus

Investments, and Mighty Bum for Loan-1; (2) deficiency action against CBS Properties,

Chircus Investments, and Mighty Bum for Loan-1; (3) breach of contract against guarantors

Chircus Investments, Mighty Bum, Bronfman, Stone, and Chircus for Loan-1; and (4) breach

of contract against guarantors Chircus Investments, Mighty Bum, Bronfman, Stone, and

Case 2:12-cv-01428-FJM Document 13 Filed 08/24/12 Page 1 of 2
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Chircus for Loan-2. Plaintiff calculates the deficiency balance due on Loan-1 as

$659,879.37, and the deficiency balance due on Loan-2 as $1,254,762.06. Defendants ask

us to set a hearing to determine the fair market value of the properties sold by plaintiff.

Under Arizona law, a judgment-debtor may request the court to hold a hearing to

determine the fair market value of a property sold at a Trustee's Sale. A.R.S. § 12-1566(C);

see also id. § 33-814(A) ("A written application for determination of the fair market value

of the real property may be filed by a judgment debtor with the court in the action for a

deficiency judgment or in any other action on the contract which has been maintained.").

After fair market value is determined, the court issues an order "crediting the amount due on

the judgment with the greater of the sales price or the fair market value of the real property."

Id. § 33-814(A).

Plaintiff does not oppose defendants' request. However, unless and until plaintiff

establishes that it is entitled to a deficiency judgment from these defendants, holding a fair

market hearing is premature. See id. (action for deficiency judgment lies against "any person

directly, indirectly or contingently liable on the contract"). If plaintiff establishes via

summary judgment practice that it is entitled to a deficiency judgment, a hearing could be

set at that point to determine the fair market value of the property. If an issue of material fact

remains that precludes summary judgment, then we may be able to address both the issue of

liability and fair market value at trial. And if defendants establish that plaintiff is not entitled

to a deficiency judgment, then a fair market value hearing is not needed. In sum, there is no

need at this early juncture in the litigation to set and hold a fair market value hearing.

IT IS ORDERED DENYING defendants' motion for determination of fair market

value (doc. 9). We will address whether and when a fair market value hearing should be

scheduled after there has been a finding regarding liability.

DATED this 24th day of August, 2012.

Case 2:12-cv-01428-FJM Document 13 Filed 08/24/12 Page 2 of 2