ARIZONA BANK & TRUST, an Arizona corporation, Plaintiff/Appellee,
JAMES R. BARRONS TRUST, T-GROUP, LLC, an Arizona limited liability company; CREATIVE REAL ESTATE INVESTMENTS #1, INC., an Arizona corporation; JAMES R. BARRONS and LAURA BARRONS, husband and wife; DANIEL S. WARREN and STACEY L. WARREN, husband and wife; THOMAS J. TIERNEY and PATRICIA TIERNEY, Defendants/Appellants
As Amended August 12, 2015.
Appeal from the Superior Court in Maricopa County. No. CV2010-032706. The Honorable Mark H. Brain, Judge.
For Plaintiff/Appellee: Scott B. Cohen, Scott W. Hulbert, Bradley D. Pack, Engelman Berger PC, Phoenix.
For Defendants/Appellants: Scott H. Zwillinger, Goldman & Zwillinger, PLLC, Scottsdale.
For Amicus Curiae Arizona Bankers Association: William Scott Jenkins, Jr., Charitie L. Hartsig, Naomi E. Thurston, Ryley Carlock & Applewhite, Phoenix.
Presiding Judge Kent E. Cattani delivered the opinion of the Court, in which Judge Margaret H. Downie and Judge Michael J. Brown joined.
Kent E. Cattani, Judge:
¶1 This case addresses whether Arizona Revised Statutes (" A.R.S." ) § 33-814(G), which precludes an action to recover a deficiency on a qualifying residential deed of trust, applies to guarantors in the same manner in which it applies to borrowers. This court previously held that anti-deficiency protections under § 33-814(G) apply to and cannot be waived by borrowers; we left unanswered, however, whether guarantors are protected by § 33-814(G) as well and, if so, whether guarantors can waive that protection. We now hold that, assuming § 33-814(G) applies to guarantors, the protections
afforded under the statute can be prospectively waived. Because the guarantors in this case entered written agreements expressly waiving anti-deficiency protections, we affirm the superior court's grant of summary judgment in favor of the lender.
FACTS AND PROCEDURAL BACKGROUND
¶2 In mid-2005, TDJ Land Investments, LLC (" TDJ" ) purchased several vacant lots of real property (" Subdivision" ). Arizona Bank & Trust (" AZ Bank" ) financed TDJ's purchase and development of the Subdivision with a business loan secured by a promissory note and a blanket construction deed of trust on all lots within the Subdivision. Several individuals and entities (collectively, " Guarantors" ) executed written, unconditional loan guaranties, which expressly waived any protection under anti-deficiency statutes:
Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any " one action" or " anti-deficiency" law or any other law which may prevent [AZ Bank] from bringing any action, including a claim for deficiency, against Guarantor, before or after [AZ Bank's] commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale . . . or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the indebtedness.
¶3 AZ Bank later provided TDJ two additional loans for the construction of specific homes within the Subdivision. Both loans specified that they were secured by the previously-executed guaranties. TDJ defaulted on both of these loans, and Guarantors failed to bring the loans current. AZ Bank foreclosed on the deeds of trust and purchased the loan properties at trustee's sales with credit ...