NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

FORECLOSURE EXCESS PROCEEDS LLC, Applicant/Appellant,

v.

FARMINGTON GLEN HOMEOWNERS ASSOCIATION, et al., 

Applicants/Appellees.

No. 1 CA-CV 19-0296

Appeal from the Superior Court in Maricopa County

No. CV2018-008898

The Honorable Lindsay P. Abramson, Judge Pro Tempore

VACATED AND REMANDED

COUNSEL

John N. Moore, Attorney at Law, Peoria

By John N. Moore

Counsel for Applicant/Appellant

MEMORANDUM DECISION

Presiding Judge Lawrence F. Winthrop delivered the decision of the Court, 

in which Judge Maria Elena Cruz and Judge David B. Gass joined.

FILED 2-6-2020
FORECLOSURE v. FARMINGTON, et al.

Decision of the Court

2

W I N T H R O P, Judge:

¶1 Foreclosure Excess Proceeds, LLC (“Foreclosure”) appeals the 

superior court’s order approving distribution of funds to Vantage West 

Credit Union (“Vantage”) from the excess proceeds obtained through the 

sale of real property owned by Adam and Diana Jaramillo. Because the 

Jaramillos automatically held their interest in the real property as a 

homestead exempt from attachment, Vantage’s recorded judgment did not 

attach as a lien to the homestead property. Accordingly, we vacate the 

superior court’s ruling and remand for proceedings consistent with this 

decision.

FACTS AND PROCEDURAL HISTORY

¶2 The Jaramillos purchased real property in Arizona and lived 

in a dwelling located on the property from May 2014 to October 2016. 

Vantage recorded a judgment against the Jaramillos in 2015 pursuant to 

Arizona Revised Statutes (“A.R.S.”) section 33-961.

¶3 The Jaramillos filed bankruptcy in Texas in March 2017 and 

listed a Texas address as their residence. The Jaramillos did not move to 

avoid any judgment liens during the bankruptcy proceedings.

¶4 After the bankruptcy case closed, a trustee sold their Arizona 

real property at a trustee’s sale on April 20, 2018, pursuant to the Jaramillos’ 

deed of trust. The trustee sold the home and made disbursements to the 

beneficiary under the deed of trust. On June 12, 2018, the Jaramillos signed 

an agreement with Foreclosure assigning their right, title, and interest in 

the identifiable cash proceeds from the trustee’s sale to Foreclosure.

¶5 The trustee deposited excess funds from the sale of the 

Jaramillos’ real property totaling $36,594.82 with the Maricopa County 

Treasurer and filed a complaint for distribution of excess proceeds. 

Vantage filed an application for distribution of excess proceeds pursuant to 

its recorded judgment against the Jaramillos for $33,569.11. Foreclosure 

also filed an application for excess distribution seeking to collect on behalf 

of the Jaramillos pursuant to Arizona’s homestead statutes, A.R.S. §§ 33-

1101 to -1153.

¶6 After an evidentiary hearing, the court found that the Arizona 

homestead exemption did not apply because the Jaramillos “filed their 

bankruptcy petition with their Texas address” and noted that the Jaramillos 

did not present any evidence that they resided in Arizona at the time they 

filed their bankruptcy petition. Presumptively finding that Vantage’s 
FORECLOSURE v. FARMINGTON, et al.

Decision of the Court

3

recorded judgment became a lien on the Jaramillos’ real property pursuant 

to A.R.S. § 33-964, Arizona’s judgment lien statute, the court also noted that

the Jaramillos did not move to avoid Vantage’s recorded judgment lien in 

bankruptcy. The court thus found that Vantage had a superior claim to the 

excess proceeds under Arizona’s priority distribution statute, A.R.S. 

§ 33-812. The court ultimately approved distribution of $21,421.37 to 

Vantage and $15,113.45 to another entity.

1

¶7 Foreclosure timely appealed, and we have jurisdiction 

pursuant to A.R.S. § 12-2101(A)(1).2

ANALYSIS

¶8 This appeal requires us to analyze Arizona’s homestead 

exemption and judgment lien statutes. We review questions of statutory 

interpretation de novo. Rogone v. Correia, 236 Ariz. 43, 49, ¶ 17 (App. 2014). 

We look to the statutes’ language as the best indicator of legislative intent. 

Id. When the statutory language is clear, Arizona courts must follow it. 

Jackson v. Phoenixflight Prods., Inc., 145 Ariz. 242, 245 (1985).

¶9 We liberally construe the homestead exemption statutes. Pac.

W. Bank v. Castleton, 246 Ariz. 108, 110, ¶ 7 (App. 2018). When analyzing

the relationship between the homestead exemption and judgment lien 

statutes, we keep in mind that the homestead exemption statutes are 

1 Pursuant to stipulation, the court approved distribution to 

Farmington Glen Homeowners Association (“Farmington”), which had 

also filed an application for distribution of excess proceeds. In its Opening 

Brief, Foreclosure does not challenge Farmington’s receipt of the amount of 

excess proceeds related to its claim, stating that Farmington had priority 

distribution status as a homeowners’ association under A.R.S. § 33-812. 

Foreclosure further advises that Farmington has already received its 

portion of the excess proceeds. Accordingly, our decision addresses solely 

the remaining portion of excess proceeds and its distribution as between 

Vantage and Foreclosure.

2 Despite being served with the notice of appeal and subsequent 

orders of this court concerning the deadline for filing an answering brief, 

neither Vantage nor Farmington filed an answering brief. We could 

consider the failure to file an answering brief to constitute a confession of 

error; however, in our discretion we address the merits of the appeal. See 

Summers Grp., Inc. v. Tempe Mech., LLC, 231 Ariz. 571, 573, ¶ 7 n.6 (App. 

2013).
FORECLOSURE v. FARMINGTON, et al.

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“intended to preserve an amount of money equal to the value of the 

homestead exemption.” Evans v. Young, 135 Ariz. 447, 450 (App. 1983)

(citing Union Oil Co. v. Norton-Morgan Commercial Co., 23 Ariz. 236, 242

(1922)); see also In re Elia, 198 B.R. 588, 600 (Bankr. D. Ariz. 1996) 

(“[A]mendments to the homestead exemption statutes reinforce the

individual’s right to a homestead exemption, now in most cases 

automatically, to preserve the individual’s ‘nest egg’ in the property.”).

I. Arizona Homestead Exemption Applies to Identifiable Cash 

Proceeds

¶10 Foreclosure argues the Arizona homestead exemption 

applied automatically to the real property the Jaramillos owned and lived 

in, and applied to the identifiable cash proceeds from the sale of that

property.

¶11 Arizona’s homestead exemption statute provides that “[a]ny 

person the age of eighteen or over, married or single, who resides within 

the state may hold as a homestead exempt from attachment . . . not 

exceeding one hundred fifty thousand dollars in value . . . [t]he person’s 

interest in real property . . . upon which exists a dwelling house in which 

the person resides.” A.R.S. § 33-1101(A)(1). The homestead exemption 

exists “by operation of law and no written claim or recording is required.” 

A.R.S. § 33-1102(A).

¶12 The Jaramillos lived in the real property owned by them from 

2014 to 2016 and filed their bankruptcy petition in 2017. Subject to certain

exceptions not applicable here, by operation of law the Jaramillos

automatically held their interest in the real property as a homestead exempt 

from attachment. A.R.S. §§ 33-1101(A)(1), -1102(A). That the Jaramillos 

listed their Texas address on their bankruptcy petition is inapposite. 

Residency in the property itself when filing a bankruptcy petition is not a 

prerequisite to establishing a homestead exemption. A.R.S. § 33-1101(A); 

In re Calderon, 507 B.R. 724, 730 (B.A.P. 9th Cir. 2014) (finding “continued 

occupancy of the residence” is not a prerequisite “to be entitled to claim a 

homestead exemption in the residence”).

¶13 Arizona’s homestead exemption statute provides that the 

homestead exemption “automatically attaches to the person’s interest in 

identifiable cash proceeds from the voluntary or involuntary sale of the 

property. The homestead exemption in identifiable cash proceeds 

continues for eighteen months after the date of the sale of the property

. . . .” A.R.S. § 33-1101(C). Moreover, the statute permits a claimant to 
FORECLOSURE v. FARMINGTON, et al.

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5

remove from the residence or even the state of Arizona for up to two years 

without such action constituting abandonment of the exemption. A.R.S. 

§ 33-1104(A)(3). Accordingly, when the trustee sold their home, the

Jaramillos maintained a continuing exemption in the identifiable cash 

proceeds for eighteen months from the date of the sale. A.R.S. § 33-1101(C); 

see In re Smith, 515 B.R. 755, 761 (Bankr. D. Ariz. 2014) (finding no residency 

requirement for A.R.S. § 33-1101(C)). Foreclosure, their assignee, timely 

applied for distribution of the identifiable cash proceeds before the eighteen

months expired. The homestead exemption therefore applies.

II. A Recorded Judgment Does Not Attach as a Lien to Homestead 

Property

¶14 Foreclosure next argues that a recorded judgment on real 

property does not create a lien on homestead property; thus, Vantage 

cannot claim the remaining excess proceeds pursuant to its judicial lien.

The superior court found that because the Jaramillos did not file motions in 

bankruptcy court to avoid Vantage’s judicial lien, they did not avoid 

Vantage’s lien and thus Vantage had a superior claim to the excess proceeds

pursuant to A.R.S. § 33-812.

¶15 The statute relevant to Vantage’s judicial lien states that a 

judgment recorded pursuant to A.R.S. § 33-961 shall become a judgment

lien “on all real property of the judgment debtor except real property exempt 

from execution, including homestead property.” A.R.S. § 33-964(A) (emphasis 

added). Further, except for consensual liens, “a recorded judgment shall 

not become a lien on any homestead property. Any person entitled to a 

homestead on real property as provided by law holds the homestead 

property free and clear of the judgment lien.” A.R.S. § 33-964(B). Here, 

contrary to the superior court’s presumptive finding, Vantage’s recorded 

judgment did not become a lien on the Jaramillos’ homestead property. 

A.R.S. § 33-964(A)-(B); see also Pac. W. Bank, 246 Ariz. at 112, ¶ 21

(concluding that a judgment never attached as a lien to the property

owners’ home). Accordingly, the Jaramillos did not need to move in their 

bankruptcy case to avoid a “non-existent lien” on their homestead 

property. In re Rand, 400 B.R. 749, 755 (Bankr. D. Ariz. 2008) (stating debtors 

in bankruptcy do not need to move to avoid non-existent liens on 

homestead properties).

¶16 Because Vantage’s recorded judgment did not become a lien

on the real property, Vantage had no claim to the excess proceeds as a 

lienholder under A.R.S. § 33-812. Foreclosure, however, as the Jaramillos’ 

assignee, was entitled to any remaining excess proceeds pursuant to A.R.S. 
FORECLOSURE v. FARMINGTON, et al.

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6

§ 33-812(A)(5) (directing that, after payment in full to all higher priority 

status entities, “payment shall be made to the trustor”).

CONCLUSION

¶17 Based on the foregoing, we vacate the superior court’s order

and remand for proceedings consistent with this decision. We award 

Foreclosure its costs on appeal, subject to compliance with ARCAP 21.