Court Opinion

ID: 4456865
Source: CourtListenerOpinion
Date Created: 2019-11-19 15:02:43.029683+00
Date Added: 2024-06-11T14:51:14.323626
License: Public Domain

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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

                  LAURA B. BRAMNICK, Plaintiff/Appellee,

                                         v.

 TREASURER OF MARICOPA COUNTY ARIZONA, Defendant/Appellee.
              ________________________________

   FORECLOSURE ASSISTANCE COMPANY, LLC, Applicant/Appellee,

                                         v.

            DANIEL M. GOTTLIEB, et al., Applicants/Appellants.

                              No. 1 CA-CV 19-0139
                                FILED 11-19-2019

           Appeal from the Superior Court in Maricopa County
                          No. CV2018-052072
           The Honorable Steven K. Holding, Judge Pro Tempore

                                   AFFIRMED

                                    COUNSEL

Harper Law PLC, Gilbert
By Kevin R. Harper
Counsel for Applicants/Appellants Daniel M. Gottlieb and Laura Lazar
               BRAMNICK v. MARICOPA COUNTY, et al.
                      Decision of the Court

                      MEMORANDUM DECISION

Presiding Judge Maria Elena Cruz delivered the decision of the Court, in
which Judge Kent E. Cattani and Chief Judge Peter B. Swann joined.

C R U Z, Judge:

¶1            This case involves competing applications for excess proceeds
from a trustee’s sale of real estate in Maricopa County owned by Martin A.
Grant (“Grant”). For the following reasons, we affirm the superior court’s
order awarding the excess proceeds from the sale to Foreclosure Assistance
Company, LLC (“FAC”).

               FACTUAL AND PROCEDURAL HISTORY

¶2            On February 2, 2018, Trustee Laura B. Bramnick (“Bramnick”)
sold the subject property at a trustee’s sale. Pursuant to Arizona Revised
Statutes (“A.R.S.”) section 33-812(P), Grant then assigned his interest in the
excess proceeds to FAC. After Bramnick distributed proceeds to satisfy the
amounts secured by the deed of trust and the payment of the trustee’s costs
and expenses, $211,029.08 remained. Bramnick filed a civil action pursuant
to A.R.S. § 33-812(C)-(D), deposited the excess proceeds with the county
treasurer, and was discharged from the proceedings. In the civil action,
Bramnick identified two encumbrances on the property: the deed of trust
that had been satisfied through the sale and a lis pendens recorded by Daniel
M. Gottlieb and Laura Lazar (collectively “Appellants”).

¶3            FAC applied for release of the excess proceeds. Appellants
responded in opposition to FAC’s application and applied for the release of
the excess proceeds. No other party claimed an entitlement to the proceeds.

¶4            Later, pursuant to A.R.S. § 33-812(J), FAC moved for a hearing
to determine which application for the excess proceeds had priority. In
January 2019, the superior court held a hearing at which argument was
presented, but no evidence was introduced. Neither party had requested
an evidentiary hearing or otherwise attempted to introduce evidence.
Based on the pleadings and arguments of counsel, the court found that
Appellants had failed to set forth specific facts and evidence supporting
their claim and concluded that FAC had a superior right to the proceeds.

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               BRAMNICK v. MARICOPA COUNTY, et al.
                      Decision of the Court

¶5            Appellants timely appeal.1 We have jurisdiction pursuant to
A.R.S. §§ 12-120.21, -2101(A).

                               DISCUSSION

¶6            Appellants contend that the superior court erred in requiring
them to show “specific facts and evidence supporting [their] position”
under A.R.S. § 33-812(J), when that statute does not so require, and in failing
to hold an evidentiary hearing.

¶7             We review the superior court’s interpretation of a statute de
novo. J.D. v. Hegyi, 236 Ariz. 39, 40, ¶ 5 (2014). We will affirm the superior
court’s decision if it is correct for any reason.2 Rancho Pescado, Inc. v. Nw.
Mut. Life Ins. Co., 140 Ariz. 174, 178 (App. 1984).

¶8             After a trustee’s sale, the trustee may elect to deposit the
proceeds with the county treasurer and commence a civil action in the
county in which the sale occurred. A.R.S. § 33-812(C). Any person with a
“recorded or other legal interest in the property at the time of the sale may
apply for the release of the proceeds by filing an application for distribution
in the civil action that was filed by the trustee.” A.R.S. § 33-812(G).
Appellants are correct in their contention that A.R.S. § 33-812(G) does not
require that an applicant for excess proceeds set forth facts or evidence
supporting their claim. Instead, that requirement attaches to a subsequent
motion for hearing filed pursuant to A.R.S. § 33-812(J). When competing
applications for excess proceeds are pending before the court, and an
applicant files a motion for hearing, § 33-812(J) requires that “[t]he motion
shall set forth the specific facts and evidence that support the applicant’s or
respondent’s position.” Id. To the extent the court relied on § 33-812(J) as

1      FAC has not submitted an answering brief, which we may, in our
discretion, deem a confession of reversible error. McDowell Mountain Ranch
Cmty. Ass’n, Inc. v. Simons, 216 Ariz. 266, 269, ¶ 13 (App. 2007). We decline
to exercise our discretion to do so.

2      Because Appellants have not provided transcripts from the hearing,
we presume the superior court’s reasoning is supported by the record. See
Romero v. Sw. Ambulance, 211 Ariz. 200, 203, ¶ 4 (App. 2005) (noting in the
absence of transcripts, a record is “insufficient for us to meaningfully
review the trial court’s rulings or to overcome the presumption that those
rulings are supported by the record”).

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               BRAMNICK v. MARICOPA COUNTY, et al.
                      Decision of the Court

the basis for denying Appellants’ application for the excess proceeds, the
court erred. However, this does not end the inquiry.

¶9             Even though § 33-812(J) does not require that “specific facts
and evidence supporting the applicant’s position” are stated in an
application or response for the excess proceeds, that statute does require
that if more than one application for the excess proceeds is filed, “the court
shall, hold a hearing to determine entitlement to the proceeds.” The express
language of the statute requires that the court make sufficient inquiry to
determine whether the applicants have a right to receive the excess
proceeds they claim. After FAC filed its application for release of excess
proceeds, Appellants filed a response in opposition combined with an
application for release of excess proceeds of their own. Then, FAC filed a
motion for a hearing “to determine whether [FAC] is entitled to receive
priority over [Appellants].” The court was obligated to hold a hearing upon
receiving competing applications from FAC and Appellants, and
Appellants were required to show the basis for their claim to the excess
proceeds. See Bekelian v. JP Morgan Chase Bank NA, 246 Ariz. 352, 355, ¶ 14
(App. 2019). (“After receiving the application and the response, the
superior court appropriately held a hearing to determine which party was
entitled to the proceeds.”).

¶10          Although Appellants claim that “the parties were not
provided opportunity to introduce evidence supporting their claims,”
FAC’s motion for hearing and the court’s hearing-setting order put
Appellants on notice that: (1) a hearing was set, (2) to determine whether
FAC or Appellants were entitled to receive the excess proceeds, and (3) that
the hearing was for oral argument, not evidentiary in nature. At no time
did Appellants object to the hearing being set for oral argument only, nor
did Appellants request an opportunity to introduce evidence.

¶11            Consistent with its order, the court held a hearing and heard
oral argument regarding the competing claims. In determining Appellants’
claim of right to the proceeds, the court considered their position as stated
at the hearing, in their application, and in the entire court record. In fact,
the court’s record included Appellants’ alleged equitable claim to the excess
proceeds, as well as the facts regarding Appellants’ lis pendens against the
subject property, including the underlying action in federal court. In
addition, Appellants were represented by counsel at that hearing.
Appellants have not identified any additional information the court should
have considered. Nor have they cited to any ruling by the superior court
denying a request to proffer additional information. Whether Appellants
were required to state the facts and evidence supporting their position in

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                BRAMNICK v. MARICOPA COUNTY, et al.
                       Decision of the Court

their response and application, in a motion for hearing, or at the actual
hearing is immaterial here because Appellants—having had notice, a
hearing, and an opportunity to be heard while represented by counsel—
were ultimately unable to establish that at the time of the sale they had a
legal or equitable interest in the property. See BT Capital, LLC v. TD Serv.
Co. of Ariz., 229 Ariz. 299, 301, ¶¶ 12-14 (2012). The court found that
Appellants’ claim was not supported and that FAC had a superior right to
the excess proceeds. We find support in the record for that finding.

¶12             According to A.R.S. § 12-1191(A), a plaintiff in “an action
affecting title to real property” may record a lis pendens as notice of the
action. The lis pendens provides constructive notice to a purchaser or
encumbrancer of the property. A.R.S. § 12-1191(B). The filing of a lis
pendens, however, “[does] not establish the validity of [the plaintiff’s] claim”
and does not confer substantive rights. BT Capital, 229 Ariz. at 301,
¶ 14; see also A.R.S. § 33-420 (imposing penalties against those who
improperly file a lis pendens against real property). The Arizona Supreme
Court’s analysis in BT Capital outlines the interplay between the lis pendens
statute, A.R.S. § 12-1191, and the trustee’s deed statute, A.R.S. § 33-811.
Importantly, a lis pendens does not survive on a trustee’s deed unless the lis
pendens has been deemed to have senior priority over the deed of trust.
A.R.S. § 33-811(E); BT Capital, 229 Ariz. at 301, ¶ 14. Conveyance by a
trustee’s deed “shall be absolute without right of redemption and clear of
all liens, claims or interests that have a priority subordinate to the deed of
trust and shall be subject to all liens, claims or interests that have a priority
senior to the deed of trust.” A.R.S. § 33-811(E). To avoid a trustee’s sale
extinguishing a lis pendens, and thus subordinating the underlying claim to
the deed of trust, the plaintiff may file an injunction prior to the trustee’s
sale. See A.R.S. § 33-811(C); BT Capital, 229 Ariz. at 301, ¶ 10. Otherwise,
challenges to the trustee’s sale—including the provision in A.R.S. § 33-
811(E) extinguishing liens, claims, and interests subordinate to the deed of
trust—are deemed waived. A.R.S. § 33-811(C).

¶13            Here, Appellants did not file for injunctive relief prior to the
trustee’s sale and did not subsequently establish that the lis pendens had
priority over the deed of trust. Thus, the trustee’s sale of the property
extinguished any claims Appellants may have had against the property
prior to its sale. FAC, however, presented the court an assignment of
interest in excess proceeds from Grant issued following the trustee sale,
satisfaction in full of the deed of trust, payment in full of the reasonable
trustee’s fees, and costs for conducting the sale. Other than Appellants’
application, no other claim was made against the excess sale proceeds. As

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              BRAMNICK v. MARICOPA COUNTY, et al.
                     Decision of the Court

such, the court properly determined FAC was entitled to receive excess
proceeds from the trustee’s sale of the property.

                            CONCLUSION

¶14           Because the court held a hearing and fully considered
Appellants’ claim to the excess sale proceeds, we affirm.

                      AMY M. WOOD • Clerk of the Court
                       FILED: AA

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