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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

BMO HARRIS BANK, N.A., as legal successor to M&I MARSHALL & 

ILSLEY BANK, Plaintiff/Appellee,

v.

EMILIE ANNE REID, Personal Representative for the ESTATE OF 

ARTHUR MURRAY REID, THE ESTATE OF ARTHUR MURRAY REID, 

Defendants/Appellants.

No. 1 CA-CV 14-0013

Appeal from the Superior Court in Maricopa County

No. CV2011-019281

The Honorable Michael J. Herrod, Judge

AFFIRMED

COUNSEL

Sacks Tierney P.A., Scottsdale

By Brian E. Ditsch, James W. Armstrong

Counsel for Defendants/Appellants

The Cavanagh Law Firm, P.A., Phoenix

By Philip G. Mitchell, Henry L. Timmerman, William F. Begley

Counsel for Plaintiff/Appellee
BMO v. REID

Decision of the Court

2

MEMORANDUM DECISION

Judge Maurice Portley delivered the decision of the Court, in which 

Presiding Judge Andrew W. Gould and Judge Jon W. Thompson joined.

P O R T L E Y, Judge:

¶1 This is an appeal from a judgment for breach of promissory 

note. The Estate of Arthur Murray Reid and Emilie Reid, the Estate’s 

personal representative (collectively, “the Estate”), contend that the 

superior court erred by finding the Estate liable to BMO Harris Bank, N.A.

(“BMO”) because BMO did not file a notice of claim within two years of

Arthur Reid passing away and, as a result, the nonclaim statute, Arizona 

Revised Statutes (“A.R.S.”) section 14-3803,

1 barred any deficiency 

judgment. Because we find that the Arizona probate provisions are

inapplicable, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 Arthur Reid, a Canadian, bought 16.85 acres of undeveloped 

land in Cave Creek in 2005 as his sole and separate property. He financed 

the purchase by borrowing $2,562,000 from M&I Bank and gave the bank a 

promissory note secured by a deed of trust on the property. According to 

his son-in-law, Arthur planned to build custom and semi-custom homes on 

the property, but “the real estate market collapse halted those plans.” 

Arthur passed away in Phoenix on January 1, 2009.

¶3 Arthur’s widow, Emilie Reid, filed a probate action in 

Alberta, Canada. She was appointed the personal representative pursuant 

to Arthur’s will by the Canadian court in December 2009. Emilie, by her 

lawyers, advised M&I Bank of Arthur’s death. Emilie then filed a proof of 

foreign personal representative in the Maricopa County Superior Court’s

Probate Court and recorded it with the Maricopa County Recorder’s Office

in February 2010. The proof of authority stated that Emilie was filing the 

document to allow her “as the domiciliary foreign Personal Representative 

to exercise, as to assets in this state, all powers of a local Personal 

 

1 We cite to the current version of the statute unless otherwise noted.
BMO v. REID

Decision of the Court

3

Representative.”2 The probate matter continued in Canada, was resolved 

in September 2010, and the estate property was distributed to Emilie.

¶4 The bank, however, continued to send monthly statements 

addressed to Arthur and received monthly payments that were credited 

towards Arthur’s note until August 2011. After giving notice of default on 

August 9, 2011, BMO, as the successor to M&I Bank, filed this lawsuit 

against the Estate for breach of contract. BMO also noticed a trustee’s sale 

and subsequently purchased the Cave Creek property at the trustee’s sale 

with a credit bid of $750,000. The Estate answered the complaint and 

alleged that BMO’s claim was barred because a claim had not been filed 

within two years of Arthur’s death, all the property of the estate had been 

distributed and that any amount from the trustee’s sale would reduce any 

amount due on the note.

¶5 Both parties moved for summary judgment. The Estate

argued that BMO’s claim was barred because BMO had not filed a claim 

against the Estate within two years of Arthur’s death and, as a result, A.R.S. 

§ 14-3803(C) barred the deficiency action. The Estate also argued that 

because BMO had not formally amended its complaint to allege a deficiency 

within ninety days after the trustee’s sale it was precluded from pursuing

its deficiency under A.R.S. § 33-814. BMO, on the other hand, argued it was 

entitled to judgment because the Estate made payments on the note after 

Arthur’s death and breached its obligation by failing to continue to make 

payments on or after August 1, 2011.

¶6 After oral argument, the superior court granted partial 

summary judgment for BMO. The court found that the nonclaim statute 

was inapplicable, the fact that the estate may have been closed did not bar 

recovery against any proceeds of the estate for debts and that the lawsuit 

was timely under existing case law. As a result, the court ruled that the 

Estate was liable to BMO for the deficiency, but that the amount of any 

deficiency would have to be determined after a fair-market-value hearing. 

In lieu of an evidentiary hearing, the parties mediated the fair market value 

of the property and stipulated to its value, which the court approved.

¶7 The Estate subsequently filed two motions for new trial on the 

issue of liability, which were denied. The court then resolved the issue of 

 

2 The proof of authority was the only document filed in In re Arthur Murray 

Reid, PB 2010-000393 (Maricopa Cnty. Sup. Ct. 2010). The language in the 

proof of authority combines the statutory language in A.R.S. §§ 14-4204 and 

-4205.
BMO v. REID

Decision of the Court

4

attorneys’ fees and costs, entered judgment, and the Estate appealed. We 

have jurisdiction under A.R.S. § 12-2101(A)(1).

DISCUSSION

¶8 The Estate challenges the superior court granting summary 

judgment and contends that it erred in interpreting the applicable law. In 

reviewing the ruling, we determine de novo whether any genuine dispute

of material fact exists and whether the trial court properly applied the law. 

Eller Media Co. v. City of Tucson, 198 Ariz. 127, 130, ¶ 4, 7 P.3d 136, 139 (App.

2000). In interpreting a statute, we look first to its language. Canon Sch.

Dist. No. 50 v. W.E.S. Constr. Co., 177 Ariz. 526, 529, 869 P.2d 500, 503 (1994). 

If the statutory language is unambiguous, we give effect to the language 

and do not use other rules of statutory construction in its interpretation. 

Janson v. Christensen, 167 Ariz. 470, 471, 808 P.2d 1222, 1223 (1991). Statutory 

interpretation is an issue of law we review de novo. State Comp. Fund v.

Superior Court, 190 Ariz. 371, 374, 948 P.2d 499, 502 (App. 1997). And we 

can affirm summary judgment on grounds other than those found by the 

court. See Ness v. Western Sec. Life Ins. Co., 174 Ariz. 497, 502, 851 P.2d 122, 

127 (App. 1992).

I.

¶9 The Estate first argues that the superior court erred by 

concluding that A.R.S. § 14-3803(A) did not preclude BMO’s deficiency 

claim. We disagree.

¶10 A promissory note secured by a deed of trust is a contract. See 

National Bank v. Schwartz, 230 Ariz. 310, 312, ¶ 7, 283 P.3d 41, 43 (App. 2012). 

Generally, absent a trustee’s sale, a creditor has six years to bring an action 

on the promissory note. A.R.S. § 12-548(A); see A.R.S. § 33-814(A) (requiring 

that a creditor maintain a lawsuit for any deficiency balance ninety days 

after the trustee’s sale). Here, BMO filed its breach-of-contract lawsuit two 

months after default and notice of default. 

¶11 The Estate contends, however, that BMO’s action is barred 

because BMO had two years after Arthur’s death to file a claim with the 

personal representative or file a lawsuit under the Arizona Probate Code 

because the property was in Arizona. As a result, BMO’s failure to file a 

claim within two years after Arthur’s death bars its action. BMO disputes, 

however, the applicability of Arizona probate law given that the probate 

estate was in Canada, no ancillary action was filed in Arizona, and it was 

never provided with a creditors’ notice under Arizona law.
BMO v. REID

Decision of the Court

5

¶12 We agree with BMO. Even if we assume Chapter 3 of the 

Arizona Probate Code applies, in order to get the protection of Arizona 

law—especially the nonclaim statute—the Estate needed to have done more 

than merely file a proof of authority; the Estate needed to have notified 

BMO, a known creditor, pursuant to Arizona law.

¶13 Under A.R.S. § 14-3801,3 a personal representative must notify 

anyone who could be considered a creditor of the estate, with the 

information about her appointment and address, and to advise the creditors 

that claims against the estate must be filed within either four months, if the 

notice is by publication, or sixty days, if the notice is directly to a known 

creditor. The notice must also tell creditors to file a claim within the longer 

of the above time frames or the creditors’ claim will be forever barred. 

A.R.S. § 14-3801.

 

3 The statute states:

A. Unless notice has already been given under this section, at 

the time of appointment a personal representative shall 

publish a notice to creditors once a week for three 

successive weeks in a newspaper of general circulation in 

the county announcing the appointment and the personal 

representative's address and notifying creditors of the 

estate to present their claims within four months after the 

date of the first publication of the notice or be forever 

barred.

B. A personal representative shall give written notice by mail 

or other delivery to all known creditors, notifying the 

creditors of the personal representative's appointment.

The notice shall also notify all known creditors to present 

the creditor's claim within four months after the published 

notice, if notice is given as provided in subsection A, or 

within sixty days after the mailing or other delivery of the 

notice, whichever is later, or be forever barred. A written 

notice shall be the notice described in subsection A or a 

similar notice.

C. The personal representative is not liable to a creditor or to 

a successor of the decedent for giving or failing to give 

notice under this section.
BMO v. REID

Decision of the Court

6

¶14 If a creditor receives proper notice, whether before or after the 

appointment of a personal representative, the creditor must either file a 

timely written claim with the personal representative or, within the same 

time limits, file a lawsuit against the personal representative for payment 

of the claim. See A.R.S. § 14-3804(1)-(2); In re Estate of Van Der Zee, 228 Ariz. 

257, 259, ¶ 11, 265 P.3d 439, 441 (App. 2011). Moreover, if a creditor does 

not file a timely claim after receiving proper notice, the creditor will be 

barred from collecting the claim two years after the decedent passed away. 

A.R.S. § 14-3803(B); Ray v. Rambaud, 103 Ariz. 186, 190, 438 P.2d 752, 756 

(1968); In re Estate of Barry, 184 Ariz. 506, 508-09, 910 P.2d 657, 659-60 (App. 

1996).

A.

¶15 Here, there is no evidence the Estate provided a notice to 

BMO that if it failed to file a claim with Emilie its claim would be forever 

barred. See A.R.S. § 14-3801(B). The record shows that the Estate mailed 

four letters to the bank in January and February 2009 advising it about 

Arthur’s death and seeking information about the value or balances in his 

checking account, money-market account and two credit cards, whether 

Arthur had any additional credit cards and if he had a safety deposit box, 

and later seeking release of any funds being held in the checking and 

money-market account. The letters did not include any type of notice 

directing BMO to file a claim with Emilie within sixty days, or any other 

time frame, given that the bank was a known creditor. Likewise, the letters 

did not state that failing to file a claim within the applicable time period

would result in BMO’s claim being forever barred. See A.R.S. § 14-3801(B) 

(“The notice shall also notify all known creditors to present the creditor’s 

claim . . . or be forever barred.”).

¶16 Because there is no evidence that the Estate notified BMO that 

it needed to file a claim or its claim (deficiency) would be forever barred, 

even though current, the nonclaim statute, A.R.S. § 14-3803, does not bar 

BMO’s lawsuit. Cf. Ray, 103 Ariz. at 187, 438 P.2d at 753 (noting that the 

personal representative properly published the notice to creditors, but no 

claim was timely presented); In re Estate of Randall, 441 P.2d 153, 154 (Colo. 

1968) (recognizing that the personal representative properly published 

notice to creditors, yet the creditor filed the claim sixteen days late); see also

State Bar of Arizona, Arizona Probate Code Practice Manual, §§ 7.12.1(3), 7.12.6

(5th ed. 2014) (noting that “if notice is published or mailed,” a claim may be 
BMO v. REID

Decision of the Court

7

barred unless properly and timely presented).

4 Consequently, the superior 

court did not err by ruling that the nonclaim statute was inapplicable.

B.

¶17 Equally unpersuasive is the Estate’s argument that BMO, as a 

creditor, could have sought appointment as the local personal 

representative forty-five days after Arthur’s death or after the Canadian 

probate case was closed under A.R.S. §§ 14-3202, -3301(A)(7). Although our 

case law notes that unsecured creditors have successfully sought 

appointment as personal representatives, see, e.g., In re Estate of Stephenson, 

217 Ariz. 284, 285, ¶¶ 3-4, 173 P.3d 448, 449 (App. 2007) (AHCCCS sought 

and was appointed personal representative to recover medical benefits paid 

before the decedent’s death), In re Estate of Zaritsky, 198 Ariz. 599, 601, 

¶¶ 1-3, 12 P.3d 1203, 1205 (App. 2000) (unsecured creditor successfully 

sought informal appointment as personal representative), the Arizona 

Probate Code does not require creditors, secured or unsecured, to file for 

local administration in order to preserve their claim when a foreign

personal representative did not properly notify creditors under Arizona 

law. See generally In re Estate of Stephenson, 217 Ariz. at 287, ¶ 15, 173 P.3d 

at 451 (stating “secured creditors do not have to use probate proceedings to 

enforce any security, even after the appointment of a personal 

representative”).

II.

¶18 The Estate also argues that the court erred by finding that 

BMO was not required to amend its complaint to plead a claim for a 

 

4 The Estate urges us to follow other jurisdictions that have adopted the 

Uniform Probate Code and barred untimely claims with the nonclaim 

provision, especially In re Estate of Ongaro, 998 P.2d 1097 (Colo. 2000) and In 

re Estate of Earls, 262 P.3d 832 (Wash. App. 2011). Neither case supports the 

Estate’s argument given the facts of this case. In Earls, the personal 

representative published notice to the creditors and sent a notice to the 

known creditor by certified mail, but the creditor did not file or present a 

creditor’s claim before the filing period expired and, as a result, was barred 

from pursuing a claim “even where the claim is not yet due.” Earls, 262 

P.3d at 833, 837, ¶¶ 4-5, 21. Similarly, in Ongaro, the decedent’s estate was 

probated locally and, although notice was not given to the bank as a known 

creditor, the estate published a notice to creditors in the local newspaper. 

998 P.2d at 1099. As a result, the bank’s failure to take action within the 

Colorado nonclaim statute barred its claim. Id. 
BMO v. REID

Decision of the Court

8

deficiency judgment within the ninety-day period in A.R.S. § 33-814(A). 

Specifically, the Estate contends that BMO’s complaint failed to provide 

notice that the action was for a deficiency balance. We disagree.

¶19 Section 33-814(A) provides that “within ninety days after the 

date of sale of trust property under a trust deed . . . an action may be 

maintained to recover a deficiency judgment against any person . . . liable 

on the contract for which the trust deed was given as security . . . .” 

Subsection D states that “[i]f no action is maintained for a deficiency 

judgment within the time period prescribed in subsection[] A . . . the 

proceeds of the sale, regardless of amount, shall be deemed to be in full 

satisfaction of the obligation and no right to recover a deficiency in any 

action shall exist.” A.R.S. § 33-814(D). In Valley Nat. Bank of Arizona v. 

Kohlhase, we examined a similar argument, and noted that an action on a 

debt is generally indistinguishable from an action for deficiency even if the 

creditor did not amend the complaint to allege a deficiency after the 

trustee’s sale. 182 Ariz. 436, 439, 897 P.2d 738, 741 (App. 1995). In fact, we 

stated, “[w]hen a creditor initiates an action on a debt before the trustee’s 

sale, the debtor receives early notice that the creditor will pursue the debtor 

if any subsequent trustee’s sale results in a deficiency.” Id.; see Resolution 

Trust Corp. v. Freeway Land Investors, 798 F. Supp. 593 (D. Ariz. 1992) 

(holding that a lawsuit to collect on a promissory note before a trustee’s sale 

is within the ninety day period required under A.R.S. § 33-814 to maintain 

an action for a deficiency balance).5 We also noted in Schwartz that the debt 

and any potential recovery flows from the promissory note. 230 Ariz. at

312-13, ¶¶ 7-9, 283 P.3d at 43-44 (noting that a lawsuit to recover on the 

promissory note, which is the primary source of the debt, is the basis for a 

deficiency action, and the trustee’s sale is ancillary to the collection of the 

debt).

¶20 Here, although BMO’s complaint was an action on the note, 

the evidence in the record clearly reveals that the Estate had notice of the 

trustee’s sale and that BMO was seeking a deficiency balance, i.e., the 

difference between the trustee’s sale price and the outstanding promissory 

note balance. In answering the complaint, the Estate asserted that “[BMO]

has noticed a trustee’s sale with respect to the Property and any amount 

received by [BMO] through the trustee’s sale process, or the fair market 

value of the Property, whichever is greater, will work to reduce any amount 

due on the Note.” Therefore, the superior court did not err by finding that 

 

5 Although the Estate urges us to overrule Kohlhase, we see no reason to 

overrule long-standing precedent. 
BMO v. REID

Decision of the Court

9

A.R.S. § 33-814 did not bar BMO from pursuing a deficiency balance after 

the trustee’s sale.

6

ATTORNEYS’ FEES AND COSTS

¶21 BMO has requested attorneys’ fees incurred in this appeal 

based on the promissory note and A.R.S. § 12-341.01. Because BMO 

prevailed on appeal, we will award BMO reasonable attorney’s fees and 

costs on appeal upon its in compliance with ARCAP 21(c).

CONCLUSION

¶22 Based on the foregoing, we affirm the judgment.

 

6 The Estate also contends that BMO’s service of process on Emilie was 

ineffective because she was no longer the Estate’s personal representative

after the Canadian probate was closed. The argument, however, was not 

first raised to the superior court before or after the answer was filed. As a 

result, we will not consider it for the first time on appeal. See Orfaly v. 

Tucson Symphony Society, 209 Ariz. 260, 265, ¶ 15, 99 P.3d 1030, 1035 (App.

2004) (arguments presented for the first time on appeal are untimely and 

deemed waived); see also Ariz. R. Civ. P. 12(h)(1) (providing that a party 

waives an objection to insufficient service of process when the party does 

not raise it in the answer or first responsive motion).