In re the Matter of: Jean M. MONROE, Plaintiff/Appellee,
ARIZONA ACREAGE LLC, et al., Defendants/Appellants. Boyd Family Partnership and Jean M. Monroe, Plaintiffs/Appellees,
Sunny Lakes Ranchos LLC, et al., Defendants/Appellants.
[Copyrighted Material Omitted]
from the Superior Court in Mohave County, Nos.
S8015CV201400668, S8015CV201400669, The Honorable Lee Frank
Jantzen, Judge. AFFIRMED
Lundberg & Elias, PLLC, Bullhead City, By Tshura-Ann Elias,
Counsel for Plaintiffs/Appellees
& Gubler, P.C., Las Vegas, Nevada, By Matthew L. Johnson,
Russell G. Gubler, Counsel for Defendants/Appellants
Judge Lawrence F. Winthrop delivered the opinion of the
Court, in which Judge Maria Elena Cruz and Chief Judge Samuel
A. Thumma joined.
These consolidated appeals arise from two class action
lawsuits to foreclose on real property in Mohave County,
Arizona. Defendants Arizona Acreage LLC ("AZ
Acreage") and Sunny Lakes Ranchos LLC ("Sunny
Lakes") (collectively "Appellants") appeal the
superior courts denial of their cross-motions for partial
summary judgment and grant of partial summary judgment in
favor of representative plaintiffs Jean M. Monroe and Boyd
Family Partnership (collectively "Appellees").
Co-defendant Leonard Mardian ("Mardian") also
appeals the superior courts grant of judgment on the
pleadings in favor of Appellees. For the following reasons,
we hold: (1) the six-year statute of limitations in Arizona
Revised Statutes ("A.R.S.") section 47-3118(A)
(2019) controls the underlying
debts, the deeds of trust, and the guaranties signed by
Mardian; (2) Appellees had standing to seek foreclosure of
the deeds of trust; (3) the certification of each class
satisfied the requirements for initiating a foreclosure
action as outlined in the deeds of trust; and (4) Nevada
Revised Statutes ("N.R.S.") section 645B.340 did
not apply to bar Appellees claims. We further reject
Appellants arguments concerning issue and claim preclusion.
Because Appellees properly demonstrated they were entitled to
judgment as a matter of law, we affirm the judgments entered.
FACTS AND PROCEDURAL HISTORY
In September 2006, Sunny Lakes executed a promissory note in
favor of multiple lenders in exchange for $5,000,000. Over
one hundred individuals and entities contributed money to the
Sunny Lakes loan, and no lender contributed more than
fourteen percent of the total loan value. The note was
secured by a deed of trust encumbering several acres of
undeveloped land in Mohave County ("Plot A"). In
addition to the note and deed of trust, Mardian executed a
guaranty agreement, promising to repay the loan in the event
Sunny Lakes failed to do so. The execution of the
promissory note was conditioned on Mardian providing a
personal guaranty on the note.
In August 2007, AZ Acreage executed a promissory note in
favor of multiple lenders in exchange for $4,000,000. Over
eighty individuals and entities— many of whom
contributed to the Sunny Lakes loan— contributed money
to the AZ Acreage loan. The loan was secured by a deed of
trust encumbering another plot of undeveloped land in Mohave
County ("Plot B"). No lender contributed more than
twenty-one percent to the total loan value. Mardian also
executed a guaranty agreement as a material condition for
execution of the AZ Acreage loan.
Both Sunny Lakes and AZ Acreage made payments on their
respective notes until July 2008, when both companies stopped
making payments. In late June 2014, believing the statute of
limitations was just days from expiration, Appellees filed
two class action lawsuits to foreclose on Plot A and Plot B
and recover any resulting deficiency. Although many of the
investors contributed money to both promissory notes, some
contributed towards one note but not the other—
resulting in two different classes. Sunny Lakes and Mardian
were named defendants in one lawsuit (the "Boyd
Case"); and AZ Acreage and Mardian were named defendants
in the other lawsuit (the "Monroe Case").
Appellants moved to dismiss each case pursuant to Arizona
Rule of Civil Procedure ("Rule") 12(b)(6), arguing
that the four-year statute of limitations under A.R.S. §
12-544(3) applied and had expired and that Appellees lacked
standing because they did not obtain the requisite fifty-one
percent ("51%") majority agreement outlined in the
deeds of trust to declare a default and bring a judicial
foreclosure action. The superior court denied Appellants
motions and later certified the classes.
Mardian then moved for summary judgment in both cases,
arguing the four-year statute of limitations period in A.R.S.
§ 12-544(3) barred the claim against him for enforcement of
the guaranty contracts. Both sides briefed the issue and
presented oral argument, and the court denied the motions.
Thereafter, Appellees moved for partial summary judgment to:
(1) establish the dollar amount due under each note; (2)
establish that the classes were entitled to payment under the
notes; (3) order a sheriffs sale of Plot A and Plot B; and
(4) establish liability against each defendant for payment of
any deficiency that may arise. Appellants each cross-moved
for summary judgment, again arguing the claims were barred by
a four-year statute of limitations and Appellants had failed
to bring the actions in accordance with the terms of the
deeds of trust and controlling Nevada law. In July 2018, the
court granted the Appellees motions in part— reserving
the issue of Mardians liability to pay a deficiency until
after the properties were sold and a fair market value
hearing could be held. In its Rule 54(b) order, the court
determined Sunny Lakes owed $13,870,277.75 on its promissory
note plus interest, and AZ Acreage owed $10,933,666.62 on its
promissory note plus interest. Sunny Lakes and AZ Acreage
timely appealed the superior courts order in August 2018,
and the appeals were consolidated.
While the first two appeals were pending, Plot A and Plot B
were sold at a sheriffs sale in September 2018. Appellants
and Mardian did not contest the sale price for either
property, and the court vacated the fair market value
hearing. Plot A sold for $80,000, resulting in a deficiency
for Sunny Lakes. Plot B sold for $195,000, resulting in a
deficiency for AZ Acreage.
A week later, Appellees moved for judgment on the pleadings,
arguing Appellants and Mardian admitted all the material
facts in the complaints and failed to show any viable defense
to their claims. Appellants and Mardian opposed the motions.
The court ultimately granted the motions and entered final
Rule 54(c) judgments in favor of Appellees. Mardian appealed
the judgments, and those appeals have been consolidated with
the previous appeals. We have jurisdiction pursuant to A.R.S.
The promissory notes, deeds of trust, and guaranties were all
executed in Nevada and include choice-of-law provisions
designating Nevada law as governing the agreements. We
therefore review the substantive issues according to the laws
of Nevada but apply Arizona law to resolve any procedural
issues. Ross v. Ross, 96 Ariz. 249, 251-52, 393 P.2d
933 (1964) ("Matters respecting the remedy, such as the
bringing of suits, admissibility of evidence, [and] statutes
of limitation, depend upon the law of the place where the
suit is brought.") (internal quotation omitted).
Appellants and Mardian raise three main arguments on appeal:
(1) the Appellees claims are barred by the doctrines of
issue and claim preclusion; (2) the Appellees claims are
governed by a four-year statute of limitations and,
accordingly, are untimely; and (3) the Appellees claims are
barred because they failed to obtain written consent of 51%
of the lenders before ...