Court Opinion

ID: 9595756
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:43:11.648677+00
Date Added: 2024-06-11T18:01:30.884964
License: Public Domain

CAMERON, Justice,
dissenting in part, concurring in part.
I concur in the result the majority ultimately reaches. However, because of my dissent in Baker v. Gardner, 160 Ariz. 98, 770 P.2d 766 (1988), I write separately. In Baker I did not agree with the majority *133that A.R.S. § 33-722 conflicted with A.R.S. § 33-729(A) and § 33-814(E).11 Id. at 105, 770 P.2d at 774. It was my belief then, and now, that any creditor has the right under § 33-722 to elect either to foreclose on the mortgage or to sue on the note. Id. at 105, 770 P.2d at 774. Once the creditor chooses to foreclose, the anti-deficiency statutes apply, and he cannot seek a deficiency judgment. Id.
The majority reiterates the rationale of Baker, noting that if the anti-deficiency statutes include Dynamic, Mid Kansas would be precluded from waiving its security and could not sue on the first note after having foreclosed on the second note. Next, the majority determines whether Dynamic, as a commercial developer, is protected by the anti-deficiency statutes. Noting the statutes’ purpose was to protect “homeowners” from deficiency judgments and to protect consumers who were not sophisticated enough to value property when seeking a loan, the majority includes commercial developers as mortgagors within statutory protection. Commercial developers, however, are business people who are capable of valuing their business enterprises when seeking commercial or construction loans. They are neither unsophisticated consumers nor “homeowners.”
After determining that Dynamic falls within the class of persons protected by the statutes, the majority then notes that the property in question does not fit the statutory language. The majority stated that “commercial residential properties held by the mortgagor for construction and eventual resale as dwellings are not within the definition of properties ‘limited to’ and ‘utilized for’ ... dwellings.” At 129, 804 P.2d at 1317. Commercial developers are generously included as mortgagors covered under the statutes, but excluded due to the type of property they hold. Again, I believe this is wrong. The majority’s interpretation of “dwelling” and “utilized for” means that a commercial developer’s property will never meet the statutory language. By applying the reasoning of my dissent in Baker, we could have more easily and clearly reached the majority’s result, without having to extend empty statutory protection. I believe that the anti-deficiency statutes were not intended to cover commercial developers and, therefore, Mid Kansas has the right to elect to foreclose or to sue on the first note.
I agree with the majority’s ultimate disposition of this case. Mid Kansas should not be allowed to experience a windfall by foreclosing on the second note and later suing on the first note. As the majority points out, Mid Kansas gave a credit bid equal to the amount due on the second note ($101,986) and received improved property worth approximately $550,000-$600,000. They now want to collect the balance due on the first note. By using the doctrine of merger and extinguishment, the majority reached the right result.

. A.R.S. § 33-814(E) is now codified as § 33-814(G).