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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL 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

COMPASS BANK, an Alabama corporation, 

Plaintiff/Appellee, 

v.

ROBERT HAMILTON BENNETT, SR. and MARILYN JO BENNETT, 

husband and wife; ROBERT HAMILTON BENNETT AND MARILYN JO 

BENNETT FAMILY TRUST, 

Defendants/Appellants. 

No. 1 CA-CV 14-0850 

Appeal from the Superior Court in Maricopa County 

No. CV2011-012854 

The Honorable J. Richard Gama, Judge 

AFFIRMED 

COUNSEL 

Berens, Kozub, Kloberdanz & Blonstein, PLC, Scottsdale 

By Daniel L. Kloberdanz, William A. Kozub 

Counsel for Defendants/Appellants

Engelman Berger, P.C., Phoenix 

By Scott B. Cohen, Bradley D. Pack 

Counsel for Plaintiff/Appellee
COMPASS v. BENNETT 

Decision of the Court 

2

MEMORANDUM DECISION 

Judge Samuel A. Thumma delivered the decision of the Court, in which 

Presiding Judge Kent E. Cattani and Judge Randall M. Howe joined. 

T H U M M A, Judge: 

¶1 Robert Hamilton and Marilyn Jo Bennett, husband and wife, 

(the Bennetts) and the Robert Hamilton Bennett and Marilyn Jo Bennett 

Family Trust (the Bennett Trust) appeal from the grant of summary 

judgment in favor of plaintiff Compass Bank. The Bennetts and the Bennett 

Trust (collectively Defendants) claim Compass was precluded from suing 

to collect on its note without first taking action to waive its security interest 

(a deed of trust) against a house. Because the superior court did not err, the 

judgment is affirmed. 

FACTS1 AND PROCEDURAL HISTORY

¶2 In 2007, the Bennett Trust purchased a house in Paradise 

Valley for $3.15 million. To fund the purchase, the Bennett Trust made a 

down payment of $850,000 and borrowed $1.9 million from Bank of 

America, while the sellers provided a $400,000 carryback loan. The house 

was the Bennetts’ primary residence. 

¶3 In 2009, the Bennetts repaid the $400,000 carryback loan. Later 

in 2009, the Defendants then obtained a second-position $1 million home 

equity loan from Compass. The home equity loan transaction included a 

security agreement and a second-position deed of trust against the house, 

both of which were signed by Defendants. No portion of the home equity 

loan was used to build any structure or improvement on the property or to 

repay the $400,000 carryback loan. 

¶4 Defendants subsequently defaulted on their loan repayment 

obligations. Compass then accelerated the amount due under the $1 million 

home equity loan, which remained unpaid. 

 

1 Although the superior court resolved cross-motions for summary 

judgment based largely on stipulated facts, this court “view[s] the evidence 

and reasonable inferences in the light most favorable to” Defendants.

Andrews v. Blake, 205 Ariz. 236, 240 ¶ 12 (2003). 
COMPASS v. BENNETT 

Decision of the Court 

3

¶5 At some point before Compass filed this lawsuit, Bank of 

America noticed a non-judicial trustee’s sale on the first-position $1.9 

million loan. In early June 2011, after receiving notice of the trustee’s sale 

but before the actual trustee’s sale, Compass filed this lawsuit against 

Defendants, seeking to enforce the security agreement for the secondposition $1 million home equity loan. Compass did not expressly waive its 

rights under the second-position deed of trust that secured the $1 million 

home equity loan at any time before the trustee’s sale on the first-position 

Bank of America loan. 

¶6 At the trustee’s sale on the first-position loan held in late June 

2011, the house sold to Bank of America for its credit bid. The trustee’s sale 

extinguished Compass’ second-position deed of trust that secured the $1 

million home equity loan, and several weeks later, Compass served 

Defendants in this case to collect on its loan. 

¶7 Following discovery, Defendants moved for summary 

judgment, arguing Compass had an obligation to expressly waive its rights 

under the second-position deed of trust before suing on the security 

agreement and that the failure to do so barred this lawsuit. Compass argued

it was not required to expressly waive its rights under the second-position 

deed of trust before suing on the security agreement and cross-moved for 

summary judgment based on Defendants’ admitted failure to repay the $1 

million home equity loan.

¶8 After briefing and oral argument, the superior court denied 

Defendants’ motion for summary judgment and granted Compass’ crossmotion for summary judgment. Although noting “[a] lender must ‘forego’ 

enforcement of the rights it possesses to foreclose on its deed of trust” when 

it sues on its non-purchase-money note, the court concluded “[t]he 

predicate act [for such a waiver] is simply failing to exercise these rights.” 

Because Compass had failed to exercise its rights under the second-position 

deed of trust, and because the trustee’s sale on the first-position loan had 

extinguished those rights, the court entered judgment in favor of Compass 

and against Defendants on the $1 million home equity loan. The court also 

awarded Compass interest, taxable costs and attorneys’ fees. 
COMPASS v. BENNETT 

Decision of the Court 

4

¶9 This court has jurisdiction over Defendants’ timely appeal 

pursuant to Arizona Revised Statutes (A.R.S.) sections 12-120.21(A)(4) and 

-2101(A)(1) (2016).2

DISCUSSION 

¶10 Summary judgment is proper “if the moving party shows that 

there is no genuine dispute as to any material fact and the moving party is 

entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). This court 

reviews the entry of summary judgment de novo, to determine “whether 

any genuine issues of material fact exist,” Brookover v. Roberts Enter., Inc., 

215 Ariz. 52, 55 ¶ 8 (App. 2007), and will affirm the entry of summary 

judgment if it is correct for any reason, Hawkins v. State, 183 Ariz. 100, 103 

(App. 1995). 

I. The Waiver Argument Is Not Supported By Arizona Law. 

¶11 Defendants’ argument turns on the applicability and meaning 

of the following sentence: “[w]here the creditor can obtain a deficiency 

judgment he can also elect to waive the security under A.R.S. § 33-722 

[under a deed of trust] and sue on the note.” Baker v. Gardner, 160 Ariz. 98, 

107 (1988) (supplemental opinion). Generally, “[w]aiver is either the 

express, voluntary, intentional relinquishment of a known right or such 

conduct as warrants an inference of such an intentional relinquishment.”

Russo v. Barger, 239 Ariz. 100, 103 ¶ 12 (App. 2016) (citing Am. Cont’l Life Ins. 

Co. v. Ranier Constr. Co. Inc., 125 Ariz. 53, 55 (1980)). Baker did not specify or 

discuss what was required to “elect to waive the security” in this context. 

¶12 Baker consists of an opinion and a supplemental opinion. The 

Baker opinion held that, for a purchase-money mortgage on a single-family 

home secured by a note and a deed of trust (called the “security device”), 

“the holder of the note and security device may not, by waiving the security 

and bringing an action on the note, hold the maker liable for the entire 

unpaid balance.” 160 Ariz. at 104. In granting reconsideration, the Baker

supplemental opinion sought “to clarify and, hopefully, obviate any 

confusion” about the scope of the original opinion. Id. at 106. In doing so, 

the supplemental opinion concluded with the following three sentences: 

[1] Where the creditor chooses nonjudicial foreclosure, he cannot obtain a 

deficiency judgment if the collateral is within 

 

2 Absent material revisions after the relevant dates, statutes and rules cited 

refer to the current version unless otherwise indicated. 
COMPASS v. BENNETT 

Decision of the Court 

5

the class protected by the deed of trust antideficiency statute. [2] Where, however, the 

creditor chooses judicial foreclosure, he can 

obtain a deficiency judgment in all cases except 

those involving purchase money loans on the 

type of real property that the mortgage 

foreclosure statute describes. [3] Therefore, 

where the creditor can obtain a deficiency 

judgment he can also elect to waive the security 

under A.R.S. § 33-722 and sue on the note. 

160 Ariz. at 107. Here, the first sentence does not apply because the parties 

agree the anti-deficiency statute does not apply. Similarly, the second 

sentence does not apply because Compass did not seek judicial foreclosure 

and the home equity loan was not a purchase-money loan. The third 

sentence, however, describes the facts of this case.3

¶13 Construing the third sentence, Defendants cite dictionary 

definitions and federal cases interpreting of the terms “sale,” “waive” and 

“elect” in different contexts that they argue support their position. But 

suggesting possible meanings of these terms in other contexts does not 

resolve how Baker used them in this sentence. And Defendants cite no 

Arizona case construing this third sentence in a way that supports their 

position. Nor have Defendants shown that Compass was required to do 

something other than what it did in suing on the note. Nothing in the record 

suggests that Compass was involved in any way with the trustee’s sale on 

the first-position loan. Moreover, Compass’ rights in the second-position 

deed of trust were extinguished by the trustee’s sale on the first-position 

loan, which occurred before Defendants were served in this lawsuit. 

¶14 Defendants argue that Compass was required to do 

something affirmative and permanent to properly waive its security (like 

recording a signed release of its deed of trust). But Defendants conceded at 

oral argument before this court that, had Compass waited to sue on the note 

until the day after the trustee’s sale on the first-position deed of trust, such 

a delay would have constituted a proper waiver. In essence, Defendants 

 

3 Compass repeatedly refers to this third sentence as dicta. As noted more 

than 20 years ago, the supplemental opinion in Baker “was obviously 

intended to be a guide for future conduct. Therefore, this court must follow 

the direction given by the supreme court.” Resolution Tr. Co. v. Segel, 173 

Ariz. 42, 44 (App. 1992). Accordingly, this court assumes without deciding 

that the third sentence applies in this case. 
COMPASS v. BENNETT 

Decision of the Court 

6

argue that Compass sued a few weeks too early but, had it waited to sue 

until after the trustee’s sale on the first position, there would have been no 

issue. Defendants, however, provide no authority for this dichotomy. On 

this record, Defendants have not shown the superior court erred in 

concluding that Compass’ conduct constituted a waiver of its rights under 

the deed of trust. See Russo, 239 Ariz. at 103 ¶ 12.

II. Arizona Case Law Cited By The Parties Support The Entry Of 

Summary Judgment In Favor Of Compass.

¶15 The Bennetts argue Baker, Resolution Trust Co. v. Segel, 173 

Ariz. 42 (App. 1992) and Wells Fargo Credit Corp. v. Tolliver, 183 Ariz. 343 

(App. 1995) require a creditor to do something affirmative and final -- such 

as recording an express release of the deed of trust -- to waive the security 

interest and then sue on the note. These cases, however, show the contrary. 

¶16 In Baker, the homeowners of a single-family home defaulted 

on their senior and junior purchase-money loans. 160 Ariz. at 99. The senior 

lender noticed a trustee’s sale; “[b]efore the sale, the [junior lenders] 

brought this action to recover the unpaid balance of the promissory note. 

They did not exercise their rights under the second trust deed.” Id. Baker 

characterized this conduct by the junior lenders –- identical in relevant part 

to Compass’ conduct here -- as a waiver. Indeed, although addressing the 

scope of the anti-deficiency statute that has no application here, Baker stated 

that the junior lenders, as “holder of the note and security device[,] may 

not, by waiving the security and bringing an action on the note,” then seek 

to evade the force of the anti-deficiency statute. Id. at 104. Applying this 

Baker analysis here, by suing on the note and not exercising rights under the 

second-position deed of trust, Compass waived the security in the deed of 

trust. 

¶17 In Segel, the homeowners defaulted on their senior and junior 

loans. 173 Ariz. at 43. A senior lender noticed trustee’s sales; before the sale, 

the junior lender sued the homeowner to recover the unpaid balance of the 

promissory note. 173 Ariz. at 43. The homeowner argued that “because the 

senior lender[] had noticed trustee’s sales, and [the junior lender] had notice 

of the proceedings and an opportunity to join the proceedings, [the junior 

lender] should be prohibited under [the anti-deficiency statute] from 

bringing an action on the notes.” Id. at 45. Segel rejected that argument, 

holding the junior lender’s election of remedies was not affected by the 

actions of the senior lender, specifically noting that “the trustee’s sales 

noticed by the senior lender did not constitute a choice by [the junior 

lender] to exercise its non-judicial foreclosure rights.” Id. at 46. Applying 
COMPASS v. BENNETT 

Decision of the Court 

7

the Segel analysis here, Bank of America’s action in noticing and concluding 

the trustee’s sale on the first-position loan, without Compass‘ participation 

and at a time when Compass was suing on the second-position note, did 

not constitute an exercise of Compass’ right to a trustee’s sale or a waiver 

of Compass’ right to sue on the second-position note. See id.

¶18 Tolliver involved the non-judicial foreclosure of an apartment 

complex. 183 Ariz. at 345. The primary focus of Tolliver interprets A.R.S. § 

12-1566(F), which does not apply here.4 Accordingly, Tolliver does not 

address the issue to be resolved in this case. Other aspects of Tolliver, 

however, are instructive. In that case, the junior lender sued on the note 

after the completion of the senior lender’s trustee’s sale and without the 

junior lender releasing its lien before the trustee’s sale by the senior lender. 

Id. at 344-45. Tolliver held that the completed trustee’s sale by the senior 

lender, without the junior lender releasing its lien, did not constitute an 

election of remedies, meaning the junior lender was still able to sue on the 

note. Id. at 348-49. The junior lender in Tolliver did not have to do anything 

affirmative to make the election, and in fact was able to wait and see 

whether the trustee’s sale would produce enough money to satisfy the lien. 

Id. Applying Tolliver here, even if Compass had waited to sue on the secondposition note until after the completion of the trustee’s sale on the firstposition loan, it would not have waived its rights under the note. Moreover, 

Compass sued Defendants before the completion of the trustee’s sale, 

meaning it clearly was not precluded from suing on the note. 

¶19 Because Arizona law does not require Compass to 

affirmatively and expressly release its deed of trust to “elect to waive the 

security” as a prerequisite to suing on the note, summary judgment in favor 

of Compass was proper.5

 

4 Both parties concede that A.R.S. § 12-1566, addressing execution on 

judgments for debts secured by real property, does not apply to this case, 

where the issue is how a creditor may enforce a repayment obligation in 

seeking to a judgment. Indeed, Tolliver interpreted A.R.S. § 12-1566 to apply 

“only when a deed of trust has been foreclosed and the creditor has obtained 

or can obtain a deficiency judgment.” 183 Ariz. at 346.

5 Given this conclusion, this court need not address the parties’ other 

arguments presented on appeal, including Compass’ argument that A.R.S. 

§ 33-722 requires only an election of remedies when both actions are 

pending simultaneously.
COMPASS v. BENNETT 

Decision of the Court 

8

III. Attorneys’ Fees And Costs On Appeal.

¶20 Both parties request attorneys’ fees and costs incurred on 

appeal. Because Defendants are not the successful parties, their request is 

denied. Compass requests fees based on the language of the security 

agreement and A.R.S. § 12-341.01. Because Compass is the successful party 

on appeal, it is awarded reasonable attorneys’ fees on appeal pursuant to 

the security agreement, and awarded its taxable costs on appeal, contingent 

upon compliance with Arizona Rule of Civil Appellate Procedure 21. See 

Chase Bank of Ariz. v. Acosta, 179 Ariz. 563, 575 (App. 1994). 

CONCLUSION

¶21 The judgment in favor of Compass is affirmed.