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Bekelian v. JP Morgan Chase Bank NA

Court of Appeals of Arizona, First Division

March 19, 2019

KEVORK BEKELIAN, et al., Applicants/Appellants,
v.
JP MORGAN CHASE BANK NA, Claimant/Appellee.

          Appeal from the Superior Court in Maricopa County No. CV2017-000467 The Honorable Lindsay P. Abramson, Judge Pro Tempore

          LaBenz Law PLLC, Sedona By Julie A. LaBenz Counsel for Applicants/Appellants

          Tiffany & Bosco P.A., Phoenix By Leonard J. McDonald, Jr., Michael F. Bosco Counsel for Claimant/Appellee

          Presiding Judge Paul J. McMurdie delivered the opinion of the Court, in which Judge Randall M. Howe and Judge Jennifer B. Campbell joined.

          OPINION

          McMURDIE, JUDGE:

         ¶1 Kevork and Christiane Bekelian appeal the superior court's order releasing the excess proceeds from a trustee's sale to JP Morgan Chase Bank NA ("Chase Bank"). We hold if a junior claimant files an application for excess proceeds resulting from a trustee's sale, and the superior court has reason to know a senior claimant may exist, the court may not issue an order releasing the proceeds until at least 180 days from the date the complaint is filed. See Ariz. Rev. Stat. ("A.R.S.") § 33-812(G), (J). In so holding, we reject the argument that A.R.S. § 33-812(J) imposes a 180-day deadline for applying for excess proceeds. Accordingly, we affirm.

         FACTS AND PROCEDURAL BACKGROUND

         ¶2 The Bekelians owned real property in Scottsdale. In 2003 and 2007, they executed deeds of trust against the property. Chase Bank is the beneficiary of the 2007 deed of trust. In November 2016, a trustee sold the property at a trustee's sale for $375, 100 based on the 2003 deed of trust. After satisfaction of the debt owed to the foreclosing beneficiary and payment of the trustee's attorney's fees and costs, excess proceeds totaling $167, 031.42 remained. At the time of the trustee's sale, Chase Bank's principal payoff balance was $220, 000.

         ¶3 On January 9, 2017, the trustee deposited the excess proceeds with the county treasurer, filed a civil complaint, and was discharged from the proceedings. See A.R.S. § 33-812(C), (D). On July 10, 2017, the Bekelians applied for release of the excess proceeds. See A.R.S. § 33-812(G). Approximately three weeks later, Chase Bank filed a response and separately applied for release of the excess proceeds, arguing that as the second lien holder it was entitled to the excess proceeds. In response, the Bekelians argued Chase Bank's application was untimely.

         ¶4 Chase Bank moved for entry of judgment. The parties stipulated to material facts, including that the complaint identified Chase Bank's second lien as having priority over the Bekelians' interest. The superior court awarded Chase Bank the excess proceeds, finding it timely responded to the Bekelians' application and had a superior claim to the proceeds. The Bekelians appealed, and we have jurisdiction under A.R.S. § 12-2101(A)(1).

         DISCUSSION

         ¶5 The Bekelians argue the superior court erred by releasing the excess proceeds to Chase Bank. They contend A.R.S. § 33-812(J) establishes a 180-day deadline for applying for excess proceeds and any response. Accordingly, they argue they timely filed their application, while Chase Bank untimely filed its application and response. Therefore, the court should have awarded the Bekelians the excess proceeds. The text of A.R.S. § 33-812, however, does not support the argument.

         ¶6 Statutory interpretation presents a question of law, which we review de novo. In re Estate of Bradley, 244 Ariz. 431, 432, ¶ 7 (App. 2018). Our primary goal when interpreting a statute is to give effect to the legislature's intent. J.D. v. Hegyi, 236 Ariz. 39, 40, ¶ 6 (2014). "If a statute's language is clear and unambiguous, it is the best indicator of that intent, and we apply it as written without resorting to other methods of statutory interpretation." State v. Kemmish, 244 Ariz. 314, 316, ¶ 10 (App. 2018). "When possible, we seek to harmonize statutory provisions and avoid interpretations that result in contradictory provisions." Premiere Physicians Grp., PLLC v. Navarro, 240 Ariz. 193, 195, ¶ 9 (2016); see also State v. Seyrafi, 201 Ariz. 147, 150, ¶ 14 (App. 2001) (statutory provisions must be "construed in context with related provisions and in light of their place in the statutory scheme"). "We presume the legislature did not intend to write a statute that contains a void, meaningless, or futile provision," and when possible, we interpret a statute to give meaning to every word or phrase. State v. Pitts, 178 Ariz. 405, 407 (1994).

         ¶[7 After a property is sold at a trustee's sale, A.R.S. § 33-812(A) "governs the trustee's application of the sale proceeds and specifies the order of priority to be given." PNC Bank v. Cabinetry by Karman, Inc.,230 Ariz. 363, 365, ¶ 7 (App. 2012). "Rather than distribute the funds, the trustee may elect to deposit the balance of the proceeds with the county treasurer and commence a civil action." Id. (citing A.R.S. § 33-812(C)-(D)). In a complaint commencing a civil action, the trustee must include a "narrative description of the liens and encumbrances [on the property], including an analysis of the apparent priority of potential claimants." Id. (citing A.R.S. § 33-812(D)(4)). Once the trustee fulfills the obligations outlined in A.R.S. § 33-812, including mailing a copy of the complaint to any "person known by ...


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