from the Superior Court in Maricopa County No. CV2016-016455
The Honorable Dawn M. Bergin, Judge.
Fredenberg Beams LLC, Phoenix By Daniel E. Fredenberg,
Christian C.M. Beams Counsel for Plaintiffs/Appellants
Rosenfeld PLC, Phoenix By Scott A. Malm, Mina C. O'Boyle
Counsel for Defendants/Appellees
Maria Elena Cruz delivered the opinion of the Court, in which
Presiding Judge Jennifer B. Campbell and Judge Diane M.
Pacific Western Bank and Coastline Re Holdings Corp.
(collectively, "PWB") appeal from the superior
court's entry of a preliminary injunction enjoining the
sale of a home owned by the Castleton Revocable Trust (the
"Castleton Trust"). Because a judgment creditor may
not attach a judgment lien to homestead property, but instead
may execute on its judgment only by way of a forced sale of
the property under Arizona Revised Statutes
("A.R.S.") § 33-1105, we affirm the superior
court's preliminary injunction.
AND PROCEDURAL HISTORY
In 2002, Berislav and Djurdjica Sepic purchased a home in
Mesa (the "Home") to use as their primary
residence. In 2007, they borrowed $937, 500 from Washington
Mutual Bank, secured by a deed of trust on the Home. The deed
of trust was later assigned to Chase Bank.
In a separate transaction, the Sepics borrowed money to
purchase an apartment complex in Phoenix. That loan was later
assigned to PWB. After the Sepics stopped paying on the
apartment loan, PWB sued them for breach of contract and
obtained a default judgment for $5.2 million (the
"Judgment"). PWB recorded the Judgment in 2011,
then timely renewed it.
After losing their apartment complex to foreclosure, the
Sepics defaulted on the loan secured by their Home. At their
request, Chase approved a short sale of the Home. As part of
the short sale process, the Sepics conveyed the Home to the
Fairbrook Revocable Family Trust ("Fairbrook
Trust"). A few weeks later, in February 2013, the
Fairbrook Trust sold the Home to the Castleton Trust for
$535, 000. Meanwhile, the Judgment remained unpaid.
More than three years after the sale, PWB sued the Castleton
Trust, seeking declaratory relief and to quiet title,
asserting that the Judgment remained an enforceable lien
against the Home. PWB obtained a writ of general execution,
and the Maricopa County Sheriff noticed a sale of the Home.
The Castleton Trust then moved to enjoin the sale.
Following an evidentiary hearing, the superior court entered
findings of fact and conclusions of law and a preliminary
injunction enjoining the sale. PWB timely appeals, and we
have jurisdiction pursuant A.R.S. § 12-2101(A)(5)(b).
Because the grant of a preliminary injunction rests within
the sound discretion of the superior court, we review its
decision for an abuse of discretion. See Fin. Assocs.,
Inc. v. Hub Properties, Inc.,143 Ariz. 543, 545 (App.
1984). This appeal, however, requires us to analyze the
intersection of Arizona's judgment lien and homestead
statutes. See A.R.S. §§ 33-961 -964
(judgment liens on real property), 33-1101 to -1105
(homesteads and homestead exemption). We review this question
of law de novo. See Rogone v. Correia,236 Ariz. 43,
49, ¶ 17 (App. 2014). We construe the ...