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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

NATIONAL TAX LIEN REDEMPTION SERVICES L.L.C., et al., 

Plaintiffs/Appellees,

v.

JAMES M. RIVERS, et al., 

Defendants/Appellants.

No. 1 CA-CV 17-0765

Appeal from the Superior Court in Maricopa County

No. CV2012-092032

The Honorable David M. Talamante, Judge

AFFIRMED IN PART; REVERSED IN PART; VACATED IN PART;

REMANDED

COUNSEL

The Hendrix Law Office, Gilbert

By Heather M. Hendrix

Counsel for Plaintiff/Appellee National Tax Lien Redemption Services L.L.C.

Lake & Cobb, P.L.C., Tempe

By Richard L. Cobb, Hank E. Pearson

Counsel for Plaintiff/Appellee Premier Equity Solutions, L.L.C.

Gust Rosenfield, P.L.C., Phoenix

By Scott A. Malm, Mina O’Boyle

Co-Counsel for Plaintiffs/Appellees Geared Equity, L.L.C. and 50780, L.L.C.

FILED 1-8-2019
2

Kevin T. Ahern, P.C., Phoenix

By Kevin T. Ahern

Co-Counsel for Plaintiffs/Appellees Geared Equity, L.L.C. and 50780, L.L.C.

Cochran Law Firm, P.C., Phoenix

By Jerry L. Cochran

Co-Counsel for Defendants/Appellants

Treon & Aguirre, P.L.L.C., Phoenix

By Richard T. Treon

Co-Counsel for Defendants/Appellants

MEMORANDUM DECISION

Presiding Judge Kenton D. Jones delivered the decision of the Court, in 

which Vice Chief Judge Peter B. Swann and Judge David D. Weinzweig

joined.

J O N E S, Judge:

¶1 James Rivers and Richard Treon (collectively, Rivers/Treon) 

appeal the trial court’s orders denying partial summary judgment in their 

favor and later granting summary judgment in favor of National Tax Lien 

Redemption Services L.L.C. (National Tax); Premier Equity Solutions, 

L.L.C. (Premier); and Geared Equity, L.L.C. and 50780, L.L.C. (collectively 

the Lenders). At issue is whether Rivers/Treon have standing to redeem 

tax liens filed against a parcel of real property in Phoenix (the Property)

arising from an interest Rivers/Treon claim to possess in the Property. For 

the following reasons, we hold that Rivers/Treon presented sufficient 

evidence of their alleged interest in the Property to create a genuine issue 

of material fact that precluded entry of summary judgment in Appellees’ 

favor. Accordingly, we affirm in part, reverse in part, vacate the award of 

attorneys’ fees, and remand for further proceedings.
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

3

FACTS AND PROCEDURAL HISTORY

¶2 This is a highly unusual tax lien foreclosure/quiet title case 

that raises procedural, ethical, and public policy concerns.

1 Nonetheless, 

this Court is limited to reviewing the posture of the case presented by the 

parties. See Young v. Bishop, 88 Ariz. 140, 147 (1960). “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.” City of Tempe v. State, 237 Ariz. 360, 362, ¶ 1 n.3 (App. 2015) 

(quoting Bothell v. Two Point Acres, Inc., 192 Ariz. 313, 315, ¶ 2 (App. 1998)).

A. The Sweeneys/Rivers/Treon Interests

¶3 In 1983, Diane Sweeney and her husband, Tom, purchased the 

Property as a residence for Tom’s mother.

2 Three years later, the Sweeneys 

borrowed $120,000 from Rivers. Treon wore several hats in the transaction, 

including attorney for both parties, personal guarantor of repayment, and 

ultimately a lender to the Sweeneys. He drafted the written promissory 

note (the 1986 Note), the recorded deed of trust securing the note, and his 

personal guaranty.

¶4 The relevant documents have been lost, including the original 

and all copies of the 1986 Note and Treon’s personal guaranty. According 

to Treon and the Sweeneys, however, the 1986 Note required the Sweeneys 

to pay taxes on the Property, make monthly interest payments, and repay

the underlying indebtedness within 120 days of written demand.

¶5 In 1987, the Sweeneys were unable to make monthly interest 

payments on the 1986 Note, so Treon began making them pursuant to the 

guaranty. Treon then paid off the principal in its entirety and obtained a 

written assignment (the 1988 Assignment) of Rivers’ rights under the 1986 

Note and Deed of Trust. The 1988 Assignment was not recorded and has

likewise been lost.

 

1 Additional procedural issues are detailed in a related and 

contemporaneously filed decision, Nat’l Tax Lien Redemption Servs. L.L.C. v. 

Sweeney, 1 CA-CV 17-0611 (Ariz. App. Jan. 8, 2019) (mem. decision).

2 Tom quitclaimed his interest in the Property to Diane in 2007 but 

retained responsibility to pay the property taxes and insurance.
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

4

¶6 Shortly thereafter, Treon and the Sweeneys orally agreed to 

change the terms of the original loan. Treon described the new terms as 

follows:

I agreed to forebear enforcing the 120-day payment demand 

provision of the note; the Sweeneys agreed they would pay 

the note off when they were able plus all accrued interest . . . 

Thomas Sweeney’s mother . . . could continue to live in the 

house and the interest owed on the $120,000 note would 

simply accumulate pending one of three possible events. 

First, Thomas and Diane Sweeney would pay off all of the 

accrued interest and the principal; second if [Tom’s mother] 

moved, or third, died, Thomas and Diane Sweeney and I 

would then implement our oral partnership agreement that

provided that the property would then either be sold, or if 

market circumstances were favorable, we would engage in a 

joint venture to develop the property. If the property was 

sold, I would receive the $120,000 plus all accrued interest . . . 

and the Sweeneys and I would then split the net dollars left 

out of the sale price, if any. Or, we would jointly develop the 

property and I would subordinate the Rivers’ Deed of Trust 

for financing in order to build a house, and the payment 

would be the same: I would receive the first $120,000 plus all 

accrued interest and we would divide the net profits equally.

B. Appellees’ Interests

¶7 After Tom failed to pay the taxes on the Property, the 

Maricopa County Treasurer sold the resulting tax liens to National Tax. In 

March 2012, National Tax filed a tax lien foreclosure action against Diane

as the property owner and Rivers as a “beneficiary.” Seven months later,

National Tax obtained judgment against Diane — the effect of which was 

to foreclose her right to redeem the tax liens — and received a treasurer’s 

deed to the Property. In May 2013, National Tax sold the Property to 

Premier, which later intervened in the lawsuit.

¶8 National Tax had neglected to serve Rivers with the 

foreclosure complaint, however, until around eighteen months after

securing a judgment and obtaining title to the Property.

3 Premier sought 

 

3 It is unclear from the record exactly why National Tax waited to 

serve Rivers until after it had already obtained the treasurer’s deed and sold 
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

5

summary judgment on the grounds that Rivers had been served by 

publication. The trial court found National Tax had failed to properly serve 

Rivers, and thus, the 2012 foreclosure judgment did “not operate to 

foreclose [Rivers/Treon’s] redemption rights.”

¶9 The parties then moved into the quiet title phase of litigation. 

Premier amended the complaint to include a quiet title action in February 

2016.4 Premier asserted that Rivers/Treon never had a valid interest in the 

Property, and therefore never had any right to redeem the tax liens.

¶10 Rivers/Treon and Premier filed cross-motions for summary 

judgment in September 2016. In support of its motion, Rivers/Treon 

submitted: (1) declarations from the Sweeneys and Treon describing the 

terms of the oral 1988 Agreement and (2) a 2015 agreement between Treon 

and a special conservator appointed to protect the now-mentally 

incapacitated Rivers, which said that “Treon entered into a separate 

agreement [in 1988] with the Sweeneys” that contained different terms than 

those in the 1986 Note.

¶11 In March and May 2017, the trial court denied Rivers/Treon’s 

motion and entered summary judgment in Premier’s favor. After moving

unsuccessfully for a new trial, Rivers/Treon timely appealed, and we have 

jurisdiction over both orders pursuant to A.R.S. §§ 12-120.21(A)(1)5

and -2101(A)(1). See Bothell, 192 Ariz. at 316, ¶ 7 (holding that although an 

order denying summary judgment is generally not appealable, the court 

may review the order along with one granting summary judgment “to 

avoid piecemeal litigation”) (citing Mealey v. Orlich, 120 Ariz. 321, 322 

 

the Property to Premier. Correspondence in January 2014 between 

Premier’s attorney and its title agency suggests Premier had demanded that 

National Tax “fix the mess,” and thus National Tax’s intention was to serve 

Rivers and attempt to obtain default judgment against his potential interest 

in the Property.

4 In June 2015, eight months before filing the quite title action, Premier 

sent Rivers/Treon a demand for their execution of a quitclaim deed along 

with five dollars as required by Arizona Revised Statutes (A.R.S.) § 12-

1103(B). Rivers/Treon rejected the demand. 

5 Absent material changes from the relevant date, we cite a statute’s 

current version.
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

6

(1978), and State Farm Mut. Auto. Ins. v. Peaton, 168 Ariz. 184, 194 (App. 

1990)).

DISCUSSION

¶12 We review a trial court’s disposition on summary judgment

de novo. Salib v. City of Mesa, 212 Ariz. 446, 450, ¶ 4 (App. 2006) (citing 

Romley v. Arpaio, 202 Ariz. 47, 51, ¶ 12 (App. 2002)). Summary judgment is 

appropriate if no genuine issues of material fact exist and the moving party 

is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(a); Orme Sch. 

v. Reeves, 166 Ariz. 301, 305 (1990).

I. Premier’s Motion for Summary Judgment

¶13 Premier moved for summary judgment on the grounds that: 

(1) Rivers/Treon were required to show documentary evidence that the 

1986 Note existed; (2) even assuming the 1988 Agreement existed, it 

extinguished the 1986 Deed of Trust; (3) the statute of frauds barred 

Rivers/Treon’s rights to redeem the tax liens; (4) the statute of limitations 

barred Rivers/Treon’s rights; (5) Premier and the Lenders were bona fide 

purchasers, and thus, protected from Treon’s unrecorded 1988 interest; and 

(6) no reasonable jury would believe the unrecorded 1986 Note or 1988 

Agreement existed. We discuss each argument in turn. 

A. Rivers/Treon Were Not Required to Provide the Original or 

Copy of the 1986 Note. 

¶14 Appellees rely upon A.R.S. § 47-3309 (governing the 

enforcement of a lost, destroyed, or stolen instrument) to argue 

Rivers/Treon have no interest in the Property because it cannot prove the 

1986 Note ever existed. However, A.R.S. § 47-3309 is contained within

Arizona’s version of the Uniform Commercial Code (UCC), and “the UCC 

does not govern liens on real property.” Steinberger v. McVey, 234 Ariz. 125, 

136, ¶ 43 n.14 (App. 2014). Additionally, this Court has held that, where 

documents tracing a beneficial interest are not available, “affidavits or 

deposition testimony from persons involved in the transfers may suffice as 

evidence of the chain of title.” Id. at ¶ 43.

¶15 Here, Rivers/Treon provided evidence of the existence and 

terms of the 1986 Note in the form of: (1) the 1986 Deed of Trust, which 

references a “Promissory Note dated July 17, 1986” in the amount of 

$120,000; (2) Treon’s declaration and deposition testimony, (3) the 

Sweeneys’ declarations and deposition testimony; and (4) the declaration 

of Rivers’ mother. Viewing that evidence in the light most favorable to the 
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

7

non-prevailing party, we find Rivers/Treon presented sufficient evidence

of the 1986 Note’s existence to create a genuine issue of material fact

requiring resolution by a jury.

B. Competing Arguments Regarding Novation and 

Subrogation Are Dependent Upon Genuine Issues of 

Material Fact.

¶16 Assuming the 1986 Note existed, Appellees argue 

Rivers/Treon have no interest in the Property because the 1986 Deed of 

Trust was extinguished either when (1) Treon paid off the Sweeneys’

$120,000 loan, or (2) Treon and the Sweeneys entered the 1988 Agreement 

to change the loan’s terms, constituting a novation of the 1986 Note. 

Rivers/Treon counter that Treon stepped into the shoes of Rivers via the 

doctrine of subrogation when he paid the loan off and his interest remained

secured by the 1986 Deed of Trust.

¶17 Here, the parties dispute the very existence of the 1986 Note, 

Treon’s payment to Rivers, the 1988 Assignment, and the 1988 Agreement. 

And without conceding their existence, Appellees contest the specific terms 

of the purported agreements as well as the Sweeneys’ and Rivers/Treon’s 

intent to extinguish the 1986 Deed of Trust. Thus, before the trial court can 

rule upon the novation or subrogation arguments, a jury must resolve 

factual disputes regarding the existence, terms, and intent of the 

agreements. See Taser Int’l, Inc. v. Ward, 224 Ariz. 389, 393, ¶ 12 (App. 2010) 

(“Summary judgment is not intended to resolve factual disputes and is 

inappropriate if the court must determine the credibility of witnesses, 

weigh the quality of evidence, or choose among competing inferences.”) 

(citing Orme Sch., 166 Ariz. at 308-09, and State Comp. Fund v. Yellow Cab Co.

of Phx., 197 Ariz. 120, 123, ¶ 11 (App. 1999)). As such, summary judgment 

is not appropriate for the resolution of these issues.

C. The Statute of Frauds and Statute of Limitations Are 

Inapplicable.

¶18 Appellees next argue Rivers/Treon have no enforceable 

interest in the Property because enforcement of the 1988 Agreement is 

barred by the statute of frauds and statute of limitations. Not so. Appellees’

statute of frauds defense fails because they have no interest in the oral 

agreement between the Sweeneys and Treon. See Restatement (Second) of 

Contracts § 144 & cmt. d (1981) (“Only parties to a contract and their 

transferees and successors can take advantage of the Statute of Frauds. As 

against others the unenforceable contract creates the same rights, powers, 
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

8

privileges and immunities as if it were enforceable.”); see also In re Circle K 

Corp., 127 F.3d 904, 908 (9th Cir. 1997) (same) (citations omitted).

¶19 For the same reason, Appellees’ reliance upon the statute of 

limitations fails; the defense is only available to the borrower or one in 

privity, not a third-party tax lien purchaser, grantee of the treasurer’s deed, 

or subsequent lienholders. See Acad. Life Ins. v. Odiorne, 165 Ariz. 188, 190 

(App. 1990) (“The defense of the statute of limitations is a personal privilege 

that a debtor or one in privity may elect to urge or waive. Because this 

defense is personal, . . . a general creditor may not plead the statute of 

limitations on its debtor’s behalf.”) (citing Trujillo v. Trujillo, 75 Ariz. 146, 

148 (1953)); see also Provident Mut. Bldg.-Loan Ass’n v. Schwertner, 15 Ariz. 

517, 518 (1914) (“[The statute of limitations defense] prevents a recovery 

when properly invoked by the debtor. It is a shield and not a sword. It can 

be used for defense, but not for assault.”).

D. Appellees Are Not Bona Fide Purchasers.

¶20 Finally, Appellees argue Rivers/Treon have no interest in the 

Property because the 1988 Agreement was not, by its reported terms,

secured by the 1986 Deed of Trust. To the extent this argument is 

conditioned upon a finding that the 1988 Agreement extinguished the 1986 

Deed of Trust through novation, it is premature. See supra Part I(B).

¶21 A person’s interest in the property need not be publicly

recorded to trigger a right of redemption. Rather, a real property tax lien 

may be redeemed “at any time before judgment is entered,” A.R.S. § 42-

18206, by “[a]ny person who has a legal or equitable claim in the property,” 

A.R.S. § 42-18151(A)(4), without regard to the interest’s recordation. See 

Delo v. GMAC Mortg., L.L.C., 232 Ariz. 133, 135-38, ¶¶ 7-17 (App. 2013) 

(acknowledging a right to redeem a tax lien based upon an unrecorded 

interest); Roberts v. Robert, 215 Ariz. 176, 180, ¶¶ 16-17 (App. 2007) (same). 

The 1988 Agreement, as described by the Sweeneys and Treon, created an 

interest in the Property triggering Rivers/Treon’s rights to redeem. See 

supra ¶ 6. The lack of recordation, like the lack of writing, however 

imprudent, does not subject Appellees’ claims to resolution on summary 

judgment unless National Tax was a bona fide purchaser. See Delo, 232 

Ariz. at 138, ¶ 18.

¶22 “A bona fide purchaser is one who purchases property for 

value and without actual or constructive notice of a prior unrecorded 

interest.” Id. (citing First Am. Title Co. v. Action Acquisitions, L.L.C., 218 Ariz. 

394, 398, ¶ 12 (2008), and Davis v. Kleindienst, 64 Ariz. 251, 258 (1946)). A 
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

9

purchaser is on constructive notice of recorded documents and “of the facts 

a reasonably diligent inquiry would disclose.” Hall v. World Sav. & Loan 

Ass’n, 189 Ariz. 495, 500 (App. 1997) (quoting Maricopa Utils. Co. v. Cline, 60 

Ariz. 209, 214 (1943)). Significantly, if a purchaser relies upon a title 

company to investigate prior claims upon a property, the purchaser “is 

bound by whatever notice the title company had while acting within the 

scope of its authority.” Id. at 501 (citations omitted). This is particularly 

true in the context of a tax lien foreclosure where “the onus is on the 

purchaser to protect its own interests.” PLM Tax Certificate Program 1991-

92, L.P. v. Schweikert, 216 Ariz. 47, 51, ¶ 23 (App. 2007) (citing Suzico, Inc. v. 

Maricopa Cty., 187 Ariz. 269, 272 (App. 1996)). Indeed, “[e]quity favors the 

right to redeem [a real property tax lien] and will not deny the right except 

upon strict compliance with the steps necessary to divest it.” Delo, 232 Ariz. 

at 137, ¶ 12 (quoting Harbel Oil Co. v. Steele, 83 Ariz. 181, 185 (1957)).

¶23 Although National Tax knew or should have known of the 

interests in the Property reflected within the recorded 1986 Deed of Trust, 

National Tax failed to properly serve Rivers/Treon. The record further 

reflects that Premier’s agents, Title Resources Guaranty, L.L.C. and First AZ 

Title Company, knew about the 1986 Deed of Trust and the Rivers/Treon 

connection before Premier purchased the Property, and that Premier had 

actual knowledge of the 1986 Deed of Trust prior to borrowing nearly a 

million dollars from the Lenders. Yet, no effort was made to investigate the 

Rivers/Treon claims or provide them proper notice of the proceedings, and 

Premier continued to develop the Property in the face of potential adverse 

interests. Appellees’ failure to comply with basic service requirements or 

investigate the recorded deed of trust precludes them from claiming the 

protections of a bona fide purchaser.

Rivers/Treon’s Motion for Partial Summary Judgment

¶24 Rivers/Treon argue the trial court erred by denying the 

competing motion for summary judgment. In that motion, Rivers/Treon 

argued there were “no material fact issues as to the terms and conditions of 

the [1988 Agreement]” because the Sweeneys and Treon agreed upon the 

contents of the 1986 Note and the 1988 Agreement, and therefore, “there 

[was] nothing to present to the jury.” Our de novo review of the record, 

however, reveals that although Rivers/Treon characterized the testimony 

as “uncontroverted,” Premier strenuously argued the testimony was 

unsupported by documentary evidence and the credibility of the parties 

was highly questionable — concerns we find to have considerable merit. 

Because “[c]redibility determinations, the weighing of the evidence, and the 

drawing of legitimate inferences from the facts are jury functions,” see Orme 
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

10

Sch., 166 Ariz. at 309 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

255 (1986)), the trial court correctly denied Rivers/Treon’s motion.

III. Attorneys’ Fees

¶25 In two separate orders, the trial court awarded Premier a total 

of $258,930.00 in attorneys’ fees pursuant to A.R.S. § 12-1103(B). That 

statute provides:

If a party, twenty days prior to bringing the action to quiet 

title to real property, requests the person, other than the state, 

holding an apparent adverse interest or right therein to 

execute a quit claim deed thereto, and also tenders to him five 

dollars for execution and delivery of the deed, and if such 

person refuses or neglects to comply, the filing of a disclaimer 

of interest or right shall not avoid the costs and the court may 

allow plaintiff, in addition to the ordinary costs, an attorney’s 

fee to be fixed by the court.

A.R.S. § 12-1103(B). Because we reverse the order granting summary 

judgment, Appellees can no longer be deemed the successful parties and 

the fee awards are vacated.

CONCLUSION

¶26 In sum, the record contains sufficient evidence to create 

genuine issues of material fact regarding the existence and terms of the 1986 

Note, the 1988 Assignment, and the 1988 Agreement. Additionally, none 

of the legal theories identified by Appellees provide grounds for granting 

summary judgment as a matter of law. Accordingly, we reverse the trial 

court’s order granting Appellee’s motion for summary judgment, affirm the 

order denying Rivers/Treon’s motion, and vacate the award of attorneys’ 

fees. As the successful parties on appeal, Rivers/Treon are entitled to 

reasonable costs upon compliance with ARCAP 21(b).

¶27 We stress that nothing within this decision should be 

construed as an opinion upon the ultimate merits of the claims. 

Additionally, as we noted at the beginning of this case, the circumstances 

implicate significant ethical and public policy concerns. Because those

issues were not raised or argued before us, we leave for another day the 

question of whether the alleged agreements might be unenforceable as a 

matter of public policy. Cf. Levine v. Haralson, Miller, Pitt, Feldman & 

McAnally, P.L.C., 244 Ariz. 234, 239, ¶ 19 (App. 2018) (barring the recovery
NATIONAL TAX, et al. v. RIVERS, et al.

Decision of the Court

11

of attorneys’ fees in quantum meruit where the contract for legal services was 

found void as against public policy).