Foreclosure v. Farmington

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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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 FORECLOSURE EXCESS PROCEEDS LLC, Applicant/Appellant, v. FARMINGTON GLEN HOMEOWNERS ASSOCIATION, et al., Applicants/Appellees. No. 1 CA-CV 19-0296 FILED 2-6-2020 Appeal from the Superior Court in Maricopa County No. CV2018-008898 The Honorable Lindsay P. Abramson, Judge Pro Tempore VACATED AND REMANDED COUNSEL John N. Moore, Attorney at Law, Peoria By John N. Moore Counsel for Applicant/Appellant MEMORANDUM DECISION Presiding Judge Lawrence F. Winthrop delivered the decision of the Court, in which Judge Maria Elena Cruz and Judge David B. Gass joined. FORECLOSURE v. FARMINGTON, et al. Decision of the Court W I N T H R O P, Judge: ¶1 Foreclosure Excess Proceeds, LLC (“Foreclosure”) appeals the superior court’s order approving distribution of funds to Vantage West Credit Union (“Vantage”) from the excess proceeds obtained through the sale of real property owned by Adam and Diana Jaramillo. Because the Jaramillos automatically held their interest in the real property as a homestead exempt from attachment, Vantage’s recorded judgment did not attach as a lien to the homestead property. Accordingly, we vacate the superior court’s ruling and remand for proceedings consistent with this decision. FACTS AND PROCEDURAL HISTORY ¶2 The Jaramillos purchased real property in Arizona and lived in a dwelling located on the property from May 2014 to October 2016. Vantage recorded a judgment against the Jaramillos in 2015 pursuant to Arizona Revised Statutes (“A.R.S.”) section 33-961. ¶3 The Jaramillos filed bankruptcy in Texas in March 2017 and listed a Texas address as their residence. The Jaramillos did not move to avoid any judgment liens during the bankruptcy proceedings. ¶4 After the bankruptcy case closed, a trustee sold their Arizona real property at a trustee’s sale on April 20, 2018, pursuant to the Jaramillos’ deed of trust. The trustee sold the home and made disbursements to the beneficiary under the deed of trust. On June 12, 2018, the Jaramillos signed an agreement with Foreclosure assigning their right, title, and interest in the identifiable cash proceeds from the trustee’s sale to Foreclosure. ¶5 The trustee deposited excess funds from the sale of the Jaramillos’ real property totaling $36,594.82 with the Maricopa County Treasurer and filed a complaint for distribution of excess proceeds. Vantage filed an application for distribution of excess proceeds pursuant to its recorded judgment against the Jaramillos for $33,569.11. Foreclosure also filed an application for excess distribution seeking to collect on behalf of the Jaramillos pursuant to Arizona’s homestead statutes, A.R.S. §§ 33- 1101 to -1153. ¶6 After an evidentiary hearing, the court found that the Arizona homestead exemption did not apply because the Jaramillos “filed their bankruptcy petition with their Texas address” and noted that the Jaramillos did not present any evidence that they resided in Arizona at the time they filed their bankruptcy petition. Presumptively finding that Vantage’s 2 FORECLOSURE v. FARMINGTON, et al. …Original document