Opinion ID: 1129544
Heading Depth: 2
Heading Rank: 4

Heading: Authority on Legislative Intent

Text: Authority supports our conclusion that the legislative objective in adopting anti-deficiency statutes such as ours is inconsistent with permitting the creditor to waive the security and bring an action on the note. Cases from California are of particular interest as Arizona has adopted much of its redemption and mortgage statutes from that state. Skousen v. L.J. Development Co., Inc., 134 Ariz. 289, 292 n. 5, 655 P.2d 1341, 1344 n. 5 (Ct.App. 1982). Our anti-deficiency statutes are similar to Cal. Code Civ.Proc. § 580b [5] California adopted § 580b in 1933 in response to the Great Depression. See Winklemen v. Sides, 31 Cal. App.2d 387, 408, 88 P.2d 147, 158 (1939). The history of the legislation is described in Cornelison v. Kornbluth, 15 Cal.3d 590, 542 P.2d 981, 988-90, 125 Cal. Rptr. 557, 564-66 (1975), which notes that California's single-action statute preceded 1900, while the anti-deficiency statutes, like Arizona's, were adopted much later. See also Barbieri v. Ramelli, 84 Cal. 154, 23 P. 1086 (1890). We considered the California anti-deficiency statute in Catchpole v. Narramore, 102 Ariz. 248, 428 P.2d 105 (1967). In Catchpole, the holder of a note given for the deferred balance of the purchase price of California residential property brought a debt action in Arizona against the note's maker. The case arose before passage of A.R.S. §§ 33-729(A) and 33-814(E), when Arizona law permitted a deficiency judgment where the security is not sufficient to satisfy the debt. 102 Ariz. at 250, 428 P.2d at 107. However, the Arizona maker claimed that Cal. Code Civ.Proc. § 580b precluded such an action. The words of the California statute, like the subsequently enacted Arizona statutes, only prohibited a deficiency judgment after forced sale of property. The note holder in Catchpole advanced essentially the same arguments as the majority of our court of appeals here. The holder contended that the California statute was procedural, directed only to the holder's remedy after sale, and therefore did not prohibit waiving the security and maintaining an action for the debt. We held, however, that California's statute was substantive and designed to destroy the creditor's right to a money judgment. The creditor/seller could not recoup the balance due on the purchase price of real property. The statute does not simply govern applicable procedures; it obliterates the debtor's [personal] liability. Id. at 250-51, 428 P.2d at 107-08 (emphasis added). Our interpretation of the California law's objective conforms with later California cases. See, e.g., Spangler v. Memel, 7 Cal.3d 603, 498 P.2d 1055, 102 Cal. Rptr. 807 (1972). Dealing with a similar statute, the North Carolina Supreme Court reached the same conclusion regarding the objective of its legislature. See Ross Realty v. First Citizens Bank & Trust, 296 N.C. 366, 370, 250 S.E.2d 271, 273 (1979). [6] We believe that these cases from California and North Carolina, interpreting statutes like ours, provide clear insight to the objective of Arizona's statute. We have neither found, nor have the parties cited us to, authority supporting a different conclusion on legislative intent or objective.