IN THE

SUPREME COURT OF THE STATE OF ARIZONA

IN RE: TODD MICHAEL MCLAUCHLAN,

Debtor.

No. CV-21-0095-CQ

Filed January 27, 2022

Certified Question from the

United States Bankruptcy Court for the District of Arizona

No. 0:19-bk-11236-PS

QUESTION ANSWERED

COUNSEL:

Kenneth E. Moyer (argued), Law Office of Kenneth E. Moyer, PLLC, Lake 

Havasu City, Attorney for Todd McLauchlan

James L. Ugalde (argued), Jennings Haug Keleher McLeod, L.L.P., Phoenix, 

Attorneys for Pacific Western Bank

JUSTICE BOLICK authored the opinion of the Court, in which CHIEF 

JUSTICE BRUTINEL, VICE CHIEF JUSTICE TIMMER, and JUSTICES

LOPEZ, BEENE, MONTGOMERY, and KING joined.

JUSTICE BOLICK, opinion of the Court:

¶1 The United States Bankruptcy Court for the District of 

Arizona certified to us the following question: Does a recorded judgment 

lien attach to homestead property where the judgment debtor has equity in 

excess of the amount exempt under Arizona law? Our answer is yes.
IN RE: TODD MICHAEL MCLAUCHLAN

Opinion of the Court

2

BACKGROUND

¶2 In 2015, Pacific Western Bank (“PWB”) obtained a California 

judgment against Todd McLauchlan that was later domesticated and 

recorded in Arizona. In 2019, McLauchlan filed a Chapter 7 Bankruptcy 

petition. In his Schedule of Assets and Liabilities, McLauchlan identified 

an ownership interest in a residence, valued at approximately $530,000, and 

disclosed that another creditor held a note and deed of trust secured by the 

residence in the amount of $376,677. McLauchlan also claimed the statutory

$150,000 homestead exemption in the residence with no objection from the 

trustee or any creditor.

¶3 PWB filed a proof of claim on December 6, 2019, asserting a 

claim for $668,482.14. Of that amount, $552,497.05 was secured by the 

recorded judgment lien, and $115,985.09 was unsecured. In July 2020, 

McLauchlan received his Chapter 7 discharge. The Order of Discharge 

stated that “a creditor with a lien may enforce a claim against debtors’ 

property subject to that lien unless the lien was avoided or eliminated.” 

PWB asserted that its judgment lien survived the discharge.

¶4 Following his discharge in bankruptcy, McLauchlan sold the 

residence. To allow the sale to close, McLauchlan and PWB entered into an 

“Escrow Agreement in Lieu of Foreclosure.” McLauchlan subsequently 

closed the sale in August 2020 for $625,500, realizing a $206,852.58 profit 

after paying costs of the sale and consensual liens. Thus, McLauchlan

realized $56,852.58 in excess of the $150,000 homestead exemption.

¶5 PWB then filed a motion in the bankruptcy court seeking a 

determination that McLauchlan’s bankruptcy discharge did not affect 

PWB’s interest in the residence secured by its recorded judgment.

McLauchlan objected, arguing that under A.R.S. § 33-964(B), judgment liens 

do not attach to homestead property. The bankruptcy court then certified 

this question to us. Agreeing that no prior decision of this Court had 

addressed this question and that clarification is warranted, we agreed to 

answer the question. See A.R.S. § 12-1861; Ariz. R. Sup. Ct. 27.
IN RE: TODD MICHAEL MCLAUCHLAN

Opinion of the Court

3

DISCUSSION

¶6 The question is one of statutory construction. “Our task in 

statutory construction is to effectuate the text if it is clear and 

unambiguous.” BSI Holdings, LLC v. Ariz. Dep’t of Transp., 244 Ariz. 17, 19 

¶ 9 (2018). We resort to secondary interpretation tools only if the statutory 

language is ambiguous. See State v. Burbey, 243 Ariz. 145, 147 ¶ 7 (2017). 

“Words in statutes should be read in context in determining their 

meaning.” Stambaugh v. Killian, 242 Ariz. 508, 509 ¶ 7 (2017). In doing so, 

we seek to give meaning to every provision, so that none is rendered 

superfluous. City of Tucson v. Clear Channel Outdoor, Inc., 209 Ariz. 544, 552 

¶ 31 (2005).

¶7 We begin with the homestead exemption statute, A.R.S.

§ 33-1101 (2004). It provides a $150,000 exemption from attachment, 

execution, and forced sale for, among other things, a “person’s interest in 

real property in one compact body upon which exists a dwelling house in 

which the person resides.” § 33-1101(A)–(A)(1) (2004). The statute states 

that the “exemption in identifiable cash proceeds continues for eighteen 

months after the date of the sale of the property or until the person 

establishes a new homestead with the proceeds.” § 33-1101(C) (2004). It 

further provides that a person or married couple may hold only one 

homestead exemption. § 33-1101(B)–(C) (2004).

¶8 The language of the homestead exemption makes its purpose 

clear: individuals whose property is subject to foreclosure are not rendered

homeless. See, e.g., Ferguson v. Roberts, 64 Ariz. 357, 361 (1946) (“The chief 

object of these laws is to shelter the family . . . .”). Nothing in the statute 

suggests an aim to shield proceeds in excess of the exemption from 

creditors, nor to confer any financial benefits upon debtors beyond the 

exemption.

¶9 Nonetheless, before 2007, a judgment lien did not attach to 

homestead property. See, e.g., Union Oil Co. of Ariz. v. Norton Morgan Com. 

Co., 23 Ariz. 236, 245–47 (1922); Evans v. Young, 135 Ariz. 447, 452–53 (App. 

1983). At that time, A.R.S. § 33-964(A) (1999) provided that a judgment 

would become a lien on a debtor’s real property “except real property 

exempt from execution.” Before it was amended in 2007, § 33-964(B) (1999) 

stated, “A recorded judgment shall not become a lien upon any homestead 
IN RE: TODD MICHAEL MCLAUCHLAN

Opinion of the Court

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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.”

¶10 But that language was amended in 2007 to read: “Except as 

provided in § 33-1103, 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.” § 33-964(B) (2007).

¶11 Following the statutory arrow to § 33-1103, as amended in 

2007, we find that “[t]he homestead provided for in § 33-1101, subsection A 

is exempt from process and from sale under a judgment or lien, except: . . . 

[t]o the extent that a judgment or other lien may be satisfied from the equity 

of the debtor exceeding the homestead exemption.” § 33-1103(A), (A)(4) 

(2007).

¶12 PWB takes a plain-meaning approach to the question. The 

legislature in 2007, it contends, made a major change to § 33-964(B) when it 

added the preface, “[e]xcept as provided in § 33-1103.” That statute, in turn, 

provides an exception to the homestead shield when “a judgment or other 

lien may be satisfied from the equity of the debtor exceeding the homestead 

exemption.” § 33-1103(A)(4) (2007). The circumstances here, PWB urges, 

fit within that exception.

¶13 We agree with PWB that the plain language of the statutes 

encompasses judgment liens that may be applied against property sale 

proceeds in excess of the homestead exemption. Adding the prefatory 

language to § 33-964(B) (2007) clearly effected a substantive change in the 

law, creating an exception that did not previously exist to an otherwise 

generally applicable law. Within that exception, § 33-1103(A)(4) (2007) 

speaks precisely to the application of a judgment lien to proceeds in excess 

of the homestead exemption.

¶14 McLauchlan counters with a different reading of the amended 

statutes, backed by legislative history and caselaw. He notes that legislative 

history from the 2007 amendments suggests that their purpose was to add 

a new exception for child and spousal support liens in § 33-1103(A)(3)

(2007). That view is reflected in a federal bankruptcy court opinion that 

construed Arizona law, In re Rand, 400 B.R. 749, 754 (Bankr. D. Ariz. 2008) 
IN RE: TODD MICHAEL MCLAUCHLAN

Opinion of the Court

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(“Thus it is logical to conclude that the exception in § 33-964(B) was added 

to avoid any conflict with this new exception to the homestead statute, so 

that there would be no doubt that a judgment lien could be created against 

homestead property when the judgment is for child support or spousal 

maintenance arrearages.”).

¶15 We cannot agree with In re Rand. Legislative history is not a 

substitute for clear legislative language, and as we have noted, supra ¶ 6,

we do not consider such history unless the language is ambiguous. See BSI 

Holdings, LLC, 244 Ariz. at 19 ¶ 9. As amended, § 33-964 (2007) provides an 

exception for § 33-1103 (2007) in its entirety. An express exception renders 

inoperative the language to which the exception is directed as to the 

circumstances encompassed within the exception. Cf. Antonin Scalia & 

Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 184 (2012)

(“[T]he general/specific canon does not mean that the existence of a 

contradictory specific provision voids the general provision. Only its 

application to cases covered by the specific provision is suspended; it 

continues to govern all other cases.”). Were the exception limited to child 

and spousal support, as McLauchlan contends, the amended statute would 

only have referenced that new exception in § 33-1103(A)(3) (2007). Absent 

the essential predicate of ambiguity, we cannot rewrite a statute based on 

the surmise that the legislature meant to draft it a different way. See Lewis 

v. Debord, 238 Ariz. 28, 31–32 ¶ 11 (2015) (“It is not the function of the courts 

to rewrite statutes.” (quoting Orca Commc’ns Unlimited, LLC v. Noder, 236 

Ariz. 180, 182 ¶ 11 (2014))). McLauchlan’s argument renders the prefatory 

language of § 33-964(B) (2007) superfluous, a reading we cannot credit. See

supra ¶ 6; Clear Channel Outdoor, Inc., 209 Ariz. at 552 ¶ 31. 

¶16 For that reason, we also disapprove similar verbiage in Pacific 

Western Bank v. Castleton, 246 Ariz. 108, 110–11 ¶¶ 11–14 (App. 2018), which 

relied largely on In re Rand. In Castleton, the court of appeals stated that 

§ 33-964 “establishes the general rule that a recorded judgment does not 

become a lien on homestead property.” Id. at 111 ¶ 11. Although that is 

correct, the new prefatory language in the 2007 amendment created an 

exception that, by virtue of its reference to § 33-1103 (2007), included 

recovery against sale proceeds in excess of the homestead exemption. The 

court acknowledged that “§ 33-1103(A)(4) enables a creditor to satisfy a 

judgment from property that is subject to a homestead,” but “only by 

following the forced sale procedure in § 33-1105.” Id. ¶ 14.
IN RE: TODD MICHAEL MCLAUCHLAN

Opinion of the Court

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¶17 We perceive no reason to treat proceeds in excess of the 

homestead exemption from a voluntary sale differently than proceeds from 

a forced sale. Section 33-1103(A)(4) (2007) makes no such distinction, 

stating categorically that “a judgment or other lien may be satisfied from 

the equity of the debtor exceeding the homestead exemption.” Neither 

§ 33-964 nor § 33-1103 make any reference to the forced sale procedure of 

§ 33-1105.

¶18 Moreover, the homestead exemption statute itself treats both 

voluntary and forced sales the same for purposes of cash proceeds from sale 

of the property. See § 33-1101(C) (2004) (“The homestead exemption, not 

exceeding [$150,000], automatically attaches to the person’s interest in 

identifiable cash proceeds from the voluntary or involuntary sale of the 

property.” (emphasis added)). McLauchlan’s argument that the statutes 

shield his property from a judgment lien would effectively increase the 

amount of the homestead exemption to include surplus revenues from a 

voluntary sale above $150,000. As noted previously, see supra ¶ 7, § 33-1101 

clearly limits the benefit to a single homestead exemption not exceeding 

$150,000 per person or married couple. Were we to allow McLauchlan to 

shield such proceeds against a judgment lien, it would create a windfall 

inconsistent with the statutory scheme.

¶19 Finally, McLauchlan contends amendments to § 33-964 

enacted in 2021, which clearly entitle judgment creditors to recover from 

proceeds in excess of the homestead exemption and establish procedures 

for doing so, demonstrate that the earlier version of the statute did not allow 

such recovery. No such intent is manifest. The legislature may have 

intended to merely clarify the law, or to legislatively overrule judicial 

interpretations of the prior statutory language. Regardless, it is our job to 

construe the statutory language that was in effect at the time of the actions 

at issue here. Barnhart v. Sigmon Coal Co., 534 U.S. 438, 461 (2002) (noting it 

is the role of courts to interpret statutes); see also E.C. Garcia & Co. v. Ariz. 

State Dep’t of Revenue, 178 Ariz. 510, 517 (App. 1993) (“The proposition that 

one legislature can declare what an earlier legislature intended is a doubtful 

one. It is the language of the statute which governs, and the unexpressed 

intent of the legislature has no application.”). That said, the new 2021

amendments to the statutes are commendable for providing greater clarity 

going forward.
IN RE: TODD MICHAEL MCLAUCHLAN

Opinion of the Court

7

CONCLUSION

¶20 We answer the question presented by the bankruptcy court in 

the affirmative. PWB requests attorney fees for the proceeding in this Court

pursuant to A.R.S. § 12-341.01(A), but given the uncertainty of the law that 

prompted the certified question, we exercise our discretion to deny them.