Starr Pass Resort Developments, LLC; Starpass Master Home Owners Association; Starr Pass Residential, LLC; Title Security Agency of Arizona; and Starr Pass Redevelopment, LLC, Petitioners,
Hon. Charles Harrington, Judge of the Superior Court of the State of Arizona, in and for the County of Pima, Respondent, and U.S. Bank National Association, as Trustee, successor-in-interest to Bank of America, N.A., as Trustee, successor to Wells Fargo Bank, N.A., as Trustee, for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2006 TFL2, by and through its Special Servicer, CW Capital Asset Management, LLC, Real Party in Interest.
Special Action Proceeding Pima County Cause No. C20117682
Campbell Killin Brittan & Ray LLC, Denver, Colorado By
Bruce E. Rohde and BurnsBarton LLP, Phoenix By C. Christine
Burns Counsel for Petitioners
Stephen J. Gonzalez PC, Tucson By Stephen J. Gonzalez Counsel
for Petitioner Starr Pass Resort Developments LLC
DeConcini McDonald Yetwin & Lacy, Tucson By Jody Corrales
Counsel for Petitioner Starr Pass Residential LLC
Ballard Spahr LLP, Phoenix By Brian Schulman, Dean C. Waldt,
and Craig C. Hoffman Counsel for Real Party in Interest
Eppich authored the opinion of the Court, in which Presiding
Judge Vásquez and Judge Espinosa concurred.
petitioners seek special-action review of the
respondent judge's determination that he lacks authority
to permit a property bond to stay a judgment pending appeal
pursuant to A.R.S. § 12-2108 and Rule 7, ARCAP, and that
any appeal bond must be a cash bond. Because the petitioners
have no remedy by appeal and the issue is of statewide
importance, we accept special-action jurisdiction. See
Pinal County v. Fuller, 798 Ariz. Adv. Rep. 31, ¶ 5
(Ct. App. Aug. 28, 2018) (special-action jurisdiction
appropriate to address issues of statewide importance);
Chula Vista Homeowners Ass'n v. Irwin, 796 Ariz.
Adv. Rep. 49, ¶ 1 (Ct. App. Jul. 27, 2018)
(special-action jurisdiction appropriate when petitioner has
no remedy by appeal); see also Ariz. R. P. Spec.
Act. 1(a). Because the respondent erred as a matter of law,
we grant relief. See Ariz. R. P. Spec. Act. 3(c);
Kohler v. Kohler, 211 Ariz. 106, ¶ 2 (App.
2005) (abuse of discretion includes an error of law).
In August 2017, the respondent judge entered judgment against
the petitioners in the underlying action and in favor of U.S.
Bank National Association, the real party in interest.
Several of the petitioners moved for determination of an
appeal bond pursuant to Rule 7(a), ARCAP. In that motion,
petitioners Starr Pass Master Home Owners Association and
Starr Pass Redevelopments, LLC, requested leave to post a
property bond in lieu of a cash bond. U.S. Bank objected,
arguing in part that property bonds were no longer permitted
after the legislature enacted § 12-2108 in 2011 and our
supreme court modified Rule 7 in response. In a May 2018
under-advisement ruling, the respondent agreed with U.S. Bank
that, due to the "enactment of A.R.S. § 12-2108 and
the amendment of Rule 7 of the Arizona Rules of Appellate
Procedure, this Court . . . no longer has the discretion to
allow Defendants to post a property bond in the form
requested. A cash bond will be required." This petition
for special-action relief followed.
Our legislature enacted § 12-2108 in 2011. 2011 Ariz.
Sess. Laws, ch. 99, § 3. Effective January 2012, the
supreme court amended Rule 7(a)(2) to mirror § 12-2108.
Ariz. Sup. Ct. Order R-11-0019 (Dec. 13, 2011). The issue
presented in this special action is whether, in light of
these changes, a trial court may allow a party to post a
property bond, instead of or in addition to a cash bond, to
stay a judgment while an appeal is pending. The
interpretation of statutes and court rules is a legal
question we review de novo. Bobrow v. Herrod, 239
Ariz. 180, ¶ 7 (App. 2016). We look to the plain
language of the statute or rule as the best indicator of the
drafters' intent. Id.
Before the legislature enacted § 12-2108 and the supreme
court amended Rule 7, this court concluded a trial court
could permit an appellant to post a property bond instead of
a cash bond to stay a judgment pending appeal. Salt River
Sand & Rock Co. v. Dunevant, 222 Ariz. 102,
¶¶ 4, 8 (App. 2009). We relied on the language in
the former version of Rule 7(a)(2) that permitted a trial
court to "fix a different amount" for the bond or
order additional or alternative security or conditions, to
conclude a trial court may reduce the amount of the bond and
allow alternate security. Id. ¶ 8. This court
thus determined the trial court could evaluate whether it was
appropriate to lower the bond amount and allow the appellant
to pledge real property to satisfy that reduced amount.
Id. ¶¶ 4, 8.
Section 12-2108(A) states that "the amount of the bond
that is necessary to stay execution during the course of all
appeals" of a judgment in a civil action "shall be
set as the lesser of" three calculations: the total
damages excluding punitive damages, half the appellant's
net worth, or twenty-five million dollars. The statute
further gives the court authority to increase the bond to
"an amount up to the full amount of the judgment"
if there is "clear and convincing evidence that an
appellant is intentionally dissipating assets outside the
ordinary course of business to avoid payment of a
judgment." § 12-2108(B). Alternatively, a court may
reduce a bond amount upon clear and convincing evidence
"that the appellant is likely to suffer substantial
economic harm if required to post bond in an amount required
under subsection A." § 12-2108(C).
Before the 2012 amendment, ...