Wright v. Pandora

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

TIMOTHY R. WRIGHT, Plaintiff/Appellee,

v.

PANDORA HOLDINGS LLC, et al., Defendants/Appellants.

No. 1 CA-CV 21-0203
FILED 3-3-2022

Appeal from the Superior Court in Maricopa County
No. CV2013-015412
The Honorable Susan G. White, Judge Pro Tempore (Retired)

AFFIRMED

COUNSEL

Dorsey & Whitney LLP, Phoenix
By Isaac M. Gabriel
Counsel for Plaintiff/Appellee

Law Office of Timothy M. Collier, PLLC, Scottsdale
By Timothy M. Collier, William A. Weber
Counsel for Defendants/Appellants
 WRIGHT v. PANDORA, et al.
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Maria Elena Cruz delivered the decision of the Court, in
which Judge Samuel A. Thumma and Judge Michael J. Brown joined.

C R U Z, Judge:

¶1 Ahmad Wali Mailatyar (“Mailatyar”), his wife Edyta
Mailatyar, and Pandora Holdings LLC (collectively, “Judgment Debtors”)
appeal the superior court’s order denying their motion to compel
satisfaction of a judgment entered against them in 2017 in favor of Timothy
R. Wright. For the following reasons, we affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 In 2013, Wright filed a complaint in superior court alleging
that Mailatyar, while working as Wright’s accountant, took title to three of
Wright’s rental properties and breached an agreement to re-convey the
properties to Wright. After a trial, the court entered judgment in favor of
Wright, quieting title to the three properties and awarding damages and
attorneys’ fees and costs in the amount of $262,295.26 plus interest.

¶3 Wright proceeded with enforcing the judgment against
Judgment Debtors with multiple writs of garnishment and execution. In
2018, the sheriff’s office held a sale of Judgment Debtors’ property in New
River (“New River property”). It was sold to Wright for a judgment credit
bid of $50,000, subject to senior liens. The $50,000 was credited against the
judgment indebtedness. Judgment Debtors then redeemed the New River
Property by paying $50,000 pursuant to Arizona Revised Statutes (“A.R.S.”)
§ 12-1282.

¶4 Wright executed on the New River Property again in 2019,
and at a sheriff’s sale, it was sold to him for a credit bid of $75,000, subject
to senior liens and encumbrances, including a $231,601.11 deed of trust.
Judgment Debtors were credited $75,000 against the judgment
indebtedness, but they did not redeem the New River Property.

¶5 Also in 2019, Wright executed on Judgment Debtors’ property
in Scottsdale (“Scottsdale property”). At a sheriff’s sale, the Scottsdale
property was sold to Wright for a credit bid of $88,000, subject to senior
liens and encumbrances, including a $391,646.59 deed of trust. Judgment

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Debtors were credited $88,000 against the judgment indebtedness and did
not redeem.

¶6 Less than two months after each of the 2019 sheriff’s sales, and
during the applicable redemption periods, Wright assigned his sheriff’s
certificates upon sale for the properties to Casa Calasa, LLC. After the
assignments, Wright retained no interest in the two properties, and when
the redemption periods expired, the sheriff’s deeds to both properties
issued to Casa Calasa, LLC. Wright did not receive any proceeds when the
properties were sold by Casa Calasa, LLC, in the fall of 2020.

¶7 In 2020, Judgment Debtors filed a motion to compel
satisfaction of the judgment, or in the alternative, to set aside the sheriff’s
sales. After briefing, the superior court denied the motion. In February
2021, the court entered its judgment and awarded Wright attorneys’ fees
and costs. Judgment Debtors filed a notice of appeal from the February
2021 judgment in March 2021. In April 2021, Judgment Debtors filed a
motion to set aside the judgment and for reconsideration in the superior
court. They withdrew their motion for reconsideration, and in May 2021
filed an amended motion to set aside the judgment. The superior court
denied the motion to set aside the judgment. Judgment Debtors did not file
a notice of appeal from that ruling or amend their notice of appeal.

¶8 We have jurisdiction over Judgment Debtors’ appeal from the
February 2021 judgment pursuant to A.R.S. § 12-2101(A)(2).

DISCUSSION

I. Jurisdiction

¶9 As a preliminary matter, Wright argues that we lack
jurisdiction over this appeal because Judgment Debtors’ notice of appeal
states that the appeal relates only to the superior court’s February 2021
judgment, which awarded Wright attorneys’ fees and costs. We consider
the February 2021 judgment to be the final order in the post-judgment
proceedings encompassing the court’s previous December 2020 under
advisement ruling. Cf. A.R.S. § 12-2102(A). The February 2021 judgment
references the December 2020 ruling, which is in the form of an unsigned
minute entry and was not appealable. See Arizona Rule of Civil Procedure
(“Rule”) 58(b)(1). Thus, we have jurisdiction over Judgment Debtors’
appeal from the February 2021 judgment encompassing the December 2020
ruling pursuant to A.R.S. § 12-2101(A)(2).

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¶10 We do not, however, have jurisdiction to consider the
superior court’s ruling on Judgment Debtors’ Rule 60(b) motion to set aside
the judgment. See China Doll Rest., Inc. v. Schweiger, 119 Ariz. 315, 316-17
(App. 1978) (Court of Appeals acquires no jurisdiction to determine the
propriety of the superior court’s action when the action occurs after the
notice of appeal was filed). The superior court’s signed judgment
encompassing its June 2021 minute entry ruling on the motion to set aside
was entered in July 2021, after Judgment Debtors filed their notice of
appeal. And, as Judgment Debtors acknowledge in their reply brief, they
did not amend their notice of appeal or file another notice of appeal
regarding that ruling. To the extent Judgment Debtors make arguments
relating to that ruling we do not consider them.

II. Satisfaction of Judgment

¶11 The issue properly before this court is whether the superior
court abused its discretion by denying Judgment Debtors’ motion to compel
satisfaction of the judgment or in the alternative, to set aside the sheriff’s
sales. We review the superior court’s denial of a motion to compel
satisfaction of a judgment for an abuse of discretion. Bingman v. City of
Dillingham, 376 P.3d 1245, 1247 (Alaska 2016); cf. Flores v. Huppenthal, 789
F.3d 994, 1000-01 (9th Cir. 2015) (abuse of discretion standard of review
applies to district court’s decision whether to relieve a party from final
judgment if the judgment has been satisfied pursuant to Fed. R. Civ. P.
60(b)(5)). “A court abuses its discretion if it commits an error of law in
reaching a discretionary conclusion, it reaches a conclusion without
considering the evidence, it commits some other substantial error of law,”
or its findings are not supported by substantial evidence. Flying Diamond
Airpark, LLC v. Meienberg, 215 Ariz. 44, 50, ¶ 27 (App. 2007).

¶12 After a judgment has been satisfied in full, “[t]he prevailing
party shall file a satisfaction of judgment in the superior court within forty
days . . . .” A.R.S. § 12-1567(A). If the prevailing party fails to do so, “the
opposing party may file a motion to compel satisfaction of the judgment.”
A.R.S. § 12-1567(B). The opposing party “shall include with the motion to
compel satisfaction of the judgment an affidavit that evidences proof of
payment.” Id. The superior court “may hold a hearing on the motion to
compel satisfaction of the judgment.” A.R.S. § 12-1567(C) (emphasis
added).

¶13 “A satisfaction of judgment is the discharge of an obligation
by payment of the amount due . . . .” W.F. Conelly Constr. Co. v. L. Harvey
Concrete, Inc., 162 Ariz. 574, 576 (App. 1989). Judgment debtors bear the

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burden of demonstrating full satisfaction of the damages they owed. Brown
v. Valley Nat’l Bank of Ariz., 26 Ariz. App. 538, 541 (1976).

¶14 Judgment Debtors argue they were entitled to “fair market
value credit” towards the judgment rather than credit for the amount of
Wright’s credit bids at the sheriff’s sales.

¶15 The superior court found that Judgment Debtors failed to
meet their burden of demonstrating full satisfaction of the damages they
owed under the judgment because (1) they failed to file with the court the
affidavit required by A.R.S. § 12-1567(B), and (2) “the basis provided to
calculate Judgment Debtors’ claim in [their] motion is flawed both in law
and in fact.” The court rejected Judgment Debtors’ argument that Wright
was required to credit them with the equitable value of the property sold to
him at the sheriff’s sales rather than with the actual amount of his credit
bids, noting that “Judgment Debtors’ method of calculation to include
‘equity’ value is set forth with scant to no basis in applicable law to support
their claim.”

¶16 Judgment Debtors cite A.R.S. § 33-814(A) and MidFirst Bank v.
Chase, 230 Ariz. 366 (App. 2012) in support of their argument. Section 33-
814(A) is inapplicable. It concerns deficiency judgments after the
foreclosure of property under a deed of trust (property sold at a trustee’s
sale), not property sold at a sheriff’s sale pursuant to a writ of execution.
See A.R.S. § 33-814(A) (“[W]ithin ninety days after the date of sale of trust
property under a trust deed pursuant to § 33-807, an action may be
maintained to recover a deficiency judgment against any person . . . liable
on the contract for which the trust deed was given as security . . . .”).
Likewise, MidFirst Bank is inapposite. In MidFirst Bank, we held that, by its
terms, A.R.S. § 33-814(A) requires the superior court to determine the fair
market value of property before a deficiency judgment may be awarded
after a trustee’s sale. 230 Ariz. at 368, ¶ 7.

¶17 Judgment Debtors have shown no abuse of discretion. They
provide no legal support for the proposition that Arizona law provides “fair
market value” protection as to property sold at a sheriff’s sale under a writ
of execution. Arizona law provides no such protection. See Title 12, Article
3, “Execution of Judgments,” A.R.S. §§ 12-1551 to -1567. Only judgment
debtors “against whom a judgment has been entered pursuant to § 33-725
(foreclosure of a mortgage or deed of trust) or 33-814 (deficiency actions
after foreclosure on property under deed of trust) may, not later than thirty
days after sale of real property,” apply to the superior court for a
determination of the fair market value of property. A.R.S. § 12-1566(C).

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Nor did Judgment Debtors provide the affidavit required by A.R.S. § 12-
1567(B). The superior court properly denied Judgment Debtors’ motion to
compel satisfaction of judgment because they failed to meet their burden
under A.R.S. § 12-1567.

III. Sheriff’s Sales

¶18 Judgment Debtors next argue the sheriff’s sales should be set
aside because the properties were sold at a “grossly inadequate price, in
tandem with [Wright]’s irregular conduct.” According to Judgment
Debtors, Wright “was able to secure a profit that well exceeded the value of
the judgment from two sales of properties he received from [Judgment
Debtors], yet the judgment remains unsatisfied.”

¶19 The superior court may set aside a sheriff’s sale if “the
purchase price received at the sheriff’s sale [was] so inadequate as to shock
the conscience of the court,” or if the price is merely inadequate but other
“additional circumstances or matters of equity” justify setting aside the
sale. Mason v. Wilson, 116 Ariz. 255, 257 (App. 1977). “It is the general policy
of the law to sustain judicial and execution sales whenever it can be done
without violating principle or doing injustice.” Young Mines Co. v.
Sevringhaus, 38 Ariz. 160, 164 (1931). A motion to set aside a sheriff’s sale is
left to the sound discretion of the superior court, and we review the
superior court’s decision whether to set aside the sale for an abuse of
discretion. Johnson v. Jefferson Standard Life Ins. Co., 5 Ariz. App. 587, 588-89
(1967).

¶20 Here, Judgment Debtors waited for more than a year to
challenge any aspect of the second sheriff’s sale of the New River Property,
and waited nearly a year to raise concerns about the sheriff’s sale of the
Scottsdale property. Wright’s credit bids for the New River property were
$50,000 and $75,000. His credit bid for the Scottsdale property was $88,000.
Both properties had substantial liens against them at the time of the sheriff’s
sales—the New River property was encumbered by a $231,601.11 deed of
trust and the Scottsdale property was encumbered by a $391,646.59 deed of
trust. Moreover, there is no evidence in the record that Wright profited
substantially or received any proceeds when the properties were sold. We
find no abuse of discretion.

IV. Attorneys’ Fees

¶21 Wright requests attorneys’ fees and costs pursuant to A.R.S.
§§ 12-341.01, -349. As the prevailing party, Wright is entitled to costs and

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in our discretion, we award him reasonable attorneys’ fees upon
compliance with ARCAP 21.

CONCLUSION

¶22 For the foregoing reasons, we affirm.

AMY M. WOOD • Clerk of the Court
FILED: AA

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