Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_11-cv-08157/USCOURTS-azd-3_11-cv-08157-0/pdf.json

Parties Involved:
Federal Deposit Insurance Corporation
Plaintiff
Premier Bank
Plaintiff
Albert Wiseman
Defendant
Emily Wiseman
Defendant

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Federal Deposit Insurance Corporation as 

Receiver for Premier Bank, a Missouri state 

banking corporation 

Plaintiff, 

v. 

Albert Wiseman and Emily Wiseman, 

husband and wife 

Defendants. 

No. CV-11-08157-PCT-GMS

ORDER 

 Pending before the Court is the Motion for Summary Judgment of Plaintiff Federal 

Deposit Insurance Corporation (“the FDIC”). (Doc. 20.) For the reasons discussed below, 

FDIC’s Motion is denied. 

BACKGROUND

 Defendants Albert and Emily Wiseman (“the Wisemans”) are the guarantors of 

two loans entered into by Williams AZ Venture, LLC (“Williams AZ”) with Town Bank 

of Arizona (“Towne Bank”). The first loan is in the original principal amount of 

$9,177.000.00. The second loan is in the original principal amount of $6,750,000.00. 

The two loans were secured by a deed of trust on certain real property of which Towne 

Bank was the beneficiary. As well, the Wisemans, who are the principals of Williams 

AZ, guaranteed both loans at the time they were made. Thereafter the loans, the 

beneficial interest in the deed of trust, and the guaranty were assigned to Premier Bank. 

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After the assignment the Wisemans again guaranteed payment and satisfaction of all 

Williams AZ’s indebtedness to Premier Bank. (Doc. 20 at 4.) 

 Williams AZ subsequently defaulted on the two loans and failed to pay in full the 

principal balance, along with all accrued interest, late fees, and other fees due on the 

maturity date of June 14, 2009. (Id.) 

 On October 15, 2010, the FDIC became the Receiver of Premier Bank. (Id.) The 

FDIC foreclosed on the DOT and held a trustee’s sale on July 20, 2011. (Id.) At the sale, 

the FDIC purchased the Coconino County real property for $493,000. (Id.) The FDIC 

asserts that this is the fair market value of the property on the date of the sale. (Id.) 

 As of July 6, 2012, the deficiency amount owed by the Wisemans, exclusive of 

attorneys’ fees and court costs, was $18,882,071.43. (Id.) It brings this Motion for 

Summary Judgment asserting that it is entitled to a judgment against the Wisemans for 

this amount as a matter of law. The Wisemans filed no response to the FDIC’s Motion. 

 Summary judgment is appropriate if the evidence, viewed in the light most 

favorable to the nonmoving party, demonstrates “that there is no genuine dispute as to 

any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV.

P. 56(a). Substantive law determines which facts are material and “[o]nly disputes over 

facts that might affect the outcome of the suit under the governing law will properly 

preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

248 (1986). “A fact issue is genuine ‘if the evidence is such that a reasonable jury could 

return a verdict for the nonmoving party.’” Villiarimo v. Aloha Island Air, Inc., 281 F.3d 

1054, 1061 (9th Cir. 2002) (quoting Anderson, 477 U.S. at 248). If the moving party 

bears the burden of proof on the issue at trial, it must “establish all of the essential 

elements of the claim or defense for the court to find that [it] is entitled to judgment as a 

matter of law.” E.E.O.C. v. Cal. Micro Devices Corp., 869 F. Supp. 767, 770 (D. Ariz. 

1994). Thus, the moving party must affirmatively demonstrate that no reasonable trier of 

fact could find other than in its favor. S. Cal. Gas. Co. v. City of Santa Ana, 336 F.3d 885, 

888 (9th Cir. 2003). 

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 Under Arizona law, if trust property is sold and the amount recovered is 

insufficient to cover the amount owed, 

an action may be maintained to recover a deficiency judgment against any 

person directly, indirectly or contingently liable on the contract for which 

the trust deed was given as security including any guarantor of or surety for 

the contract and any partner of a trustor or other obligor which is a 

partnership. 

A.R.S. § 33-814 (2012). The amount to be recovered is 

an amount equal to the sum of the total amount owed . . . as of the date of 

the sale, as determined by the court less the fair market value of the trust 

property on the date of the sale as determined by the court or the sale price 

at the trustee’s sale, whichever is higher. 

Id. Therefore, to meet its burden on a motion for summary judgment, the FDIC must 

establish that the Wisemans were liable on the contract for which the trust deed was 

given as security and that the amount of their debt was in excess of either the sales price 

or the property’s fair market value. In order to establish the amount of the deficiency as 

set out by statute, the FDIC must present evidence of the total amount owed by the 

Wisemans as of the date of the sale, as well as the fair market value or the sale price of 

the property. 

 The FDIC has set forth sufficient evidence to meet its burden of showing that the 

Wisemans were liable on the contract for which the trust deed was given as security. It 

has set forth the DOT executed on September 14, 2006 as evidence that the Williams AZ 

loans were secured by the real property in Coconino County. (Doc. 21-4 at 1.) 

Furthermore, it has presented the commercial guarantees entered into by the Wisemans in 

which the Wisemans guaranty “all present and future debt of Williams AZ Venture, 

LLC.” (Docs. 21-18 at 1, 21-19 at 1.) This is sufficient evidence to establish the element 

of the Wisemans’ liability for a deficiency claim under A.R.S. § 33-814. Therefore, the 

FDIC has met its summary judgment burden on this issue, and because the Wisemans 

filed no response, there is no genuine issue of material fact as to it. 

 However, the FDIC has not set forth sufficient evidence to meet its burden as to 

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the amount of the deficiency. As stated above, the deficiency amount is defined by statute 

as the total amount owed on the date of the sale, less the greater of either the sale price or 

the fair market value. In its Motion for Summary Judgment, the FDIC asserts that the 

deficiency amount as of July 6, 2012, was $18,882,071.43. (Doc. 20 at 6.) It attaches to 

its Motion a loan payoff statement setting out the amount owed on principal, interest, 

default interest, and late charges as of July 6, 2012. However, the statement does not 

contain any information on the amount owed by the Wisemans on July 20, 2011. This 

amount is an essential element of the claim for a deficiency judgment under Arizona law. 

Nevertheless, the FDIC may be able to present sufficient evidence establishing this 

element. As such, though it has not met its burden on this motion for summary judgment, 

this Court’s denial will be without prejudice to the motion’s renewal with adequate 

evidence of the amount owed on the date of the sale. 

 Nor has the FDIC presented satisfactory evidence of the fair market value of the 

trust property on the date of the sale. It presents an appraisal of the Coconino property 

conducted on November 22, 2010, valuing the property at $580,000. However, it asserts 

that the $493,000 that it paid for the property on July 20, 2011, nearly nine months after 

the appraisal, was the fair market value at the time of the sale, on no other basis besides 

“the continued decline of the real estate market.” (Id.) 

 As stated above, an essential element of the claim for a deficiency judgment is the 

establishment of the greater of the sale price or the fair market value of the property on 

the date of sale. The FDIC’s self-serving statement that the price it paid was the fair 

market value is not sufficient to satisfy this element. See MidFirst Bank v. Chase, 230 

Ariz. 366, 284 P.3d 877, 880 (Ct. App. 2012) (overturning a grant of summary judgment 

where the trustee only presented evidence of the amount it bid at the sale). 

 The FDIC’s assertion that, despite the $580,000 appraisal in November 2010, the 

lesser price it paid at the sale the next July was the fair market value due to the decline in 

market conditions is insufficient to establish the element of fair market value. The FDIC 

argues that this Court can take judicial notice of the changing market conditions. That is 

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incorrect. “The court may judicially notice a fact that is not subject to reasonable dispute 

because it: 1) is generally known within the trial court’s territorial jurisdiction; or (2) can 

be accurately and readily determined from sources whose accuracy cannot reasonably be 

questioned.” FED. R. EVID. 201. The fact and amount of decline in market conditions in 

Coconino County, Arizona between November 2010 and July 2011 is not such a fact. As 

such, the FDIC has failed to establish the essential element of fair market value. Without 

this element, the Court cannot determine what amount should be deducted from the 

amount owed by the Wisemans on the date of sale—an amount that, as discussed above, 

the FDIC has failed to establish in the first place. 

 The $580,000 appraisal submitted by Plaintiffs, standing alone, may be sufficient 

to establish fair market value. See N. Trust, N.A. v. Kogen, No. 1 CA-CV 11-0549, 2012 

WL 4369668 (Ariz. Ct. App. Sept. 25, 2012) (upholding the trial court’s grant of 

summary judgment where the trustee had conducted an appraisal of the property and then 

paid more than the appraised value at the sale). However, because nine months passed 

between the date of the appraisal and the date of sale, the FDIC bears the burden of 

submitting evidence that the fair market value either stayed the same or declined during 

that period. See A.R.S. 33-814(a) (defining fair market value as the most probable price 

as of the date of the sale “after reasonable exposure in the market under conditions 

requisite to fair sale”). Currently, because the FDIC has requested summary judgment in 

an amount $87,000 more than it would receive if the appraisal amount were the amount 

credited as against the deficiency, the Court denies the FDIC’s Motion. However, 

because the FDIC may be able to provide sufficient evidence that entitles it to judgment 

in the greater amount, the denial is without prejudice to the motion’s renewal with 

appropriate evidentiary foundation. 

CONCLUSION 

 The FDIC has failed to present adequate evidence of either the amount owed by 

the Wisemans on the date of the sale of the trust property or the fair market value of the 

property on the date of sale. As such, its Motion is denied without prejudice to its renewal 

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based on adequate evidence.

IT IS THEREFORE ORDERED that the Motion for Summary Judgment of the 

Federal Deposit Insurance Corporation (Doc. 20) is DENIED WITHOUT 

PREJUDICE. 

 Dated this 31st day of October, 2012. 

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