Court Opinion

ID: 4555290
Source: CourtListenerOpinion
Date Created: 2020-08-13 16:01:44.783808+00
Date Added: 2024-06-11T13:20:45.677446
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

                 ALICIA A. PADRON, Defendant/Appellant.
                                v.

                  MARICOPOLY, LLC, Intervenor/Appellee

                             No. 1 CA-CV 19-0670
                               FILED 8-13-2020

            Appeal from the Maricopa County Superior Court
                          No. CV2017-090836
            The Honorable Stephen P. Lynch, Commissioner

      AFFIRMED IN PART, REVERSED IN PART, REMANDED

                                   COUNSEL

Windtberg & Zdancewicz, PLC, Tempe
By Marc Windtberg & Michael J. Zdancewicz
Counsel for Defendant/Appellant

Law Offices of Kyle A. Kinney, PLLC, Scottsdale
By Kyle A. Kinney
Counsel for Intervenor/Appellee
                        PADRON v. MARICOPOLY
                          Decision of the Court

                        MEMORANDUM DECISION

Judge Jennifer M. Perkins delivered the decision of the Court, in which
Presiding Judge David D. Weinzweig and Judge James B. Morse Jr. joined.

P E R K I N S, Judge:

¶1           Alicia A. Padron appeals from the superior court’s order
allowing Maricopoly, LLC to intervene in a foreclosure action against her
and awarding excess proceeds from the sale of the foreclosed property to
Maricopoly. We affirm the superior court’s grant of intervenor status to
Maricopoly, but reverse the award of excess proceeds to Maricopoly and
remand for an evidentiary hearing.

           FACTUAL AND PROCEDURAL BACKGROUND

¶2           Cypress Landing Community Association, Inc. (“Cypress”)
foreclosed on Padron’s property (“Property”) because she failed to pay
Homeowner’s Association dues. The superior court granted judgment to
Cypress and authorized a Sheriff’s sale.

¶3            Maricopoly won the Property at the Sheriff’s sale with a bid
of $81,000.00. A total of $67,921.56 remained after satisfaction of Cypress’s
judgment. The Sheriff deposited these excess proceeds with the superior
court. Padron moved the superior court to give her the excess proceeds.

¶4            Maricopoly moved to intervene, arguing that the excess
proceeds should be disbursed to the senior lienholder, Ocwen Loan
Servicing, under A.R.S. section 33-727(B). Maricopoly claimed it was a real
party in interest because Ocwen’s encumbrance impacted the Property’s
value. The Arizona Home Foreclosure Prevention Funding Corporation
(“Junior Lienholder”), initially opposed Maricopoly’s motion to intervene,
arguing Maricopoly did not have grounds to intervene and that the excess
proceeds should instead be distributed to the junior lienholders and then
Padron if any proceeds remained. Padron did not oppose Maricopoly’s
motion to intervene. Junior Lienholder later withdrew its opposition to
intervention and application for excess proceeds, and the superior court
granted Maricopoly’s motion to intervene as unopposed.

¶5           Maricopoly then filed its own application for the excess
proceeds, arguing Padron entered an agreement assigning her right to the

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                        PADRON v. MARICOPOLY
                          Decision of the Court

excess proceeds to Maricopoly. The parties fully briefed their requests and
the court held argument on the excess proceeds issue.

¶6            The superior court granted Maricopoly’s request for the
excess proceeds based on Padron’s written assignment to Maricopoly. The
court noted that its ruling did “not preclude Ms. Padron from filing a
separate action against Maricopoly for claims made during oral argument
of fraudulent involvement.” Within two days of the court’s ruling,
Maricopoly obtained the funds. Padron timely appealed.

                               DISCUSSION

¶7           Padron argues the superior court erred by (1) granting
Maricopoly’s motion to intervene, and (2) awarding the excess proceeds to
Maricopoly.

I.     Maricopoly’s Intervenor Status

¶8           Padron argues Maricopoly did not properly serve Padron and
that Maricopoly had no valid basis to intervene. We review whether an
intervenor established a right to intervene under Arizona Rule of Civil
Procedure 24(a) de novo, but review the grant of permissive intervention
under Rule 24(b) for an abuse of discretion. Dowling v. Stapley, 221 Ariz. 251,
269, ¶ 57 (App. 2009).

¶9             The superior court did not state whether it granted
Maricopoly’s motion to intervene as of right or permissively—it simply
granted it “as unopposed.” After Junior Lienholder withdrew its
opposition, no party—including Padron—opposed intervention. Nor did
Padron raise any challenges to Maricopoly’s intervention or service when
she filed her written response to Maricopoly’s application for excess
proceeds. Padron raised issues with Maricopoly’s intervention for the first
time at oral argument on the competing applications for excess proceeds.

¶10           A court may permit intervention by a party who “has a claim
or defense that shares with the main action a common question of law or
fact[,]” so long as granting intervention would not “unduly delay or
prejudice the adjudication of the original parties’ rights.” Ariz. R. Civ. P.
24(b)(2)–(3).

¶11           The record contains sufficient evidence that Padron and
Maricopoly entered into agreements concerning their relative interests in
the property, including their rights to the excess proceeds at issue here. The
record does not reflect that intervention would have caused undue delay or

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                         PADRON v. MARICOPOLY
                           Decision of the Court

prejudice to the original parties’ rights. Padron’s written response to
Maricopoly’s fee application—her first filing after Maricopoly intervened—
focused solely on the enforceability of her written assignment with
Maricopoly and did not challenge Maricopoly’s intervention or service.

¶12           Moreover, Maricopoly already received the excess proceeds
and is a necessary party for adjudicating Padron’s arguments on the
validity of her written assignment to Maricopoly. Padron therefore needs
Maricopoly to remain as a party to obtain any relief. We find no error.

II.    Award of Excess Proceeds to Maricopoly

¶13            Padron argues the superior court erroneously ignored her
later purchase contract with Maricopoly, which superseded the initial
written assignment. In the alternative, she argues the superior court erred
by failing to hold an evidentiary hearing on the enforceability of her written
assignment. We review issues of law and statutory interpretation de novo.
Bank of Am., N.A. v. Felco Bus. Servs., Inc. 401(K) Profit Sharing Plan, 243 Ariz.
150, 154, ¶ 11 (App. 2017). We review the superior court’s decision on
whether to hold an evidentiary hearing for an abuse of discretion. See
Moulton v. Napolitano, 205 Ariz. 506, 511, ¶ 8 (2003).

¶14            Excess proceeds from a Sheriff’s sale “shall be paid [to other
liens] in their order . . . and if there are no other liens the balance shall be
paid to the mortgagor.” A.R.S. § 33-727(B). Here, Padron and Maricopoly
were ultimately the only parties to seek the excess proceeds. The superior
court distributed the proceeds to Maricopoly because Padron executed a
written assignment of her rights to the excess proceeds to Maricopoly.

¶15            The parties disputed the facts surrounding the written
assignment. Padron twice requested an evidentiary hearing to raise
arguments on mutual mistake, unilateral mistake, absence of consideration,
duress, statute of frauds, and negligent misrepresentation. While the parties
do not directly dispute the facts surrounding the later purchase agreement,
they dispute whether the purchase agreement superseded the written
assignment and whether the purchase agreement itself affected Padron’s
right to the excess proceeds. See Dunn v. FastMed Urgent Care PC, 245 Ariz.
35, 39, ¶ 15 (App. 2018) (quoting Darner Motor Sales, Inc. v. Universal
Underwriter’s Ins. Co., 140 Ariz. 383, 393 (1984)) (explaining that courts
should look to “surrounding circumstances, including negotiation, prior
understandings, subsequent conduct and the like . . . to determine the
parties’ intent with regard to integration of [an] agreement”). Because the
superior court did not take testimony or evidence regarding these issues,

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                       PADRON v. MARICOPOLY
                         Decision of the Court

but nevertheless rested its decision on the disputed assignment, the
superior court erred by failing to hold an evidentiary hearing. See Robertson
v. Alling, 237 Ariz. 345, 347, ¶ 8 (2015) (applying the summary judgment
standard of review when the superior court “effectively granted summary
judgment regarding the existence, terms, and enforceability of the parties’
settlement agreement”). We therefore reverse and remand to the superior
court for fact-finding on the contract formation and enforcement issues
Padron raises.

III.   Attorney’s Fees on Appeal

¶16           Both parties request an award of attorney’s fees under A.R.S.
§ 12-341.01, and Maricopoly requests them in the alternative under § 12-
349. An award of attorney’s fees in an action arising out of contract under §
12-341.01 is permissive, not mandatory. Manicom v. CitiMortgage, Inc., 236
Ariz. 153, 162, ¶ 38 (2014). An award is mandatory if the other party brings
or defends a claim without substantial justification; brings or defends a
claim solely or primarily for delay or harassment; unreasonably expands or
delays the proceeding; or engages in abuse of discovery. A.R.S. § 12-349.

¶17           Within our discretion, we decline to award fees under A.R.S.
§ 12-341.01. We further deny Maricopoly’s request under § 12-349 as it has
not shown that it is entitled to a mandatory award under that statute.

                              CONCLUSION

¶18         We affirm the superior court’s order allowing Maricopoly to
intervene. We reverse the award of excess proceeds to Maricopoly and
remand for an evidentiary hearing on the contract issues identified in this
decision.

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

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