In M&I Marshall & Ilsley Bank v. Mueller, 1 CA-CV 10-0804, the Arizona Court of Appeals said that Arizona’s anti-deficiency statute applies to those who buy land with the intent to occupy the property upon completing building a home even if they do not complete construction and actually occupy the property.  In Mueller, the family bought a lot and borrowed $440,000 from M&I Bank to build a single-family home on the property for their own use.  Months into the construction they abandoned the property after experiencing construction delays and defaulted on the note.  M&I Bank repossessed the property with a non-judicial foreclosure and sought to recover the deficiency.

M&I Bank argued that the debtors were not entitled to protection because the home was never constructed; therefore, the property was not “utilized” for a single-family home.  In Mid Kansas Federal Savings & Loan Association of Wichita v. Dynamic Development Corp., 167 Ariz. 122, 129, 804 P.2d 1310, 1317 (1991), a commercial homebuilder defaulted on a loan during the construction of homes for resale.  The homes had not been fully completed as of the date of the default.  The Arizona Supreme Court held that Arizona’s anti-deficiency statute did not protect the debtor from a deficiency judgment because the property was not “utilized as a dwelling when it is unfinished, has never been lived in, and is being held for sale to its first occupant by the owner who has no intent to ever occupy the property.”  The Appellate Court distinguished the Supreme Court’s decision, holding that when raw land is purchased by the debtor with the intent to personally occupy the property, the anti-deficiency statute applies even if the home is not constructed and the property is not occupied.  However, where the raw land is purchased by the debtor with the intent to never personally occupy the land the anti-deficiency statute does not apply.  The Court held that this framework serves the primary purpose of the anti-deficiency statute which is to protect homeowners from deficiency judgments.  The Court further held that any requirement that a person has to physically inhabit the dwelling creates an artificial line that creates absurd results.  For example, the Court noted that an individual that lived in a home for one day would be entitled to protection, but an individual that has not moved into a newly completed home would not be entitled to protection.

At the Law Firm of William A. Miller we handle this type of claim against the bank. Call us at 602-319-6899 or visit us at 8170 North 86th Place Scottsdale, Arizona 85258.

The bible says those who teach are held to a higher standard & federal prosecutors acknowledged that they made some “honest mistakes” in a high-profile Foreign Corrupt Practices Act case, but disputed in a brief
filed on Sept. 5 that those oversights rose to the level of misconduct.

The government’s filing addressed concerns voiced by U.S. District Judge
Howard Matz in Los Angeles that the government’s “astonishing” and
“troublesome” mishandling of the case might warrant dismissing the indictment
against two former executives of Lindsey Manufacturing Co. who were convicted on
FCPA charges. Defense lawyers moved to dismiss the charges based on prosecutorial
misconduct one day before a May 10 jury verdict went against their clients.

I think the Judge need grant this Motion. If our prosecutors get by with this behavior then what is next? After all those who teach…

Arizona Trial & Business Law

William A. Miller, Esq.

William A. Miller, PLLC

8170 North 86th Place, Suite 208
Scottsdale, Arizona 85258

Under Arizona Senate Bill 1259, we may become the first state to require lenders to prove they have the legal right to foreclose by proving up a list of all owners of the deed of trust, under a bill passed yesterday by our Senate. The law, which is headed to the House after being approved…

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I just finished lunch with one of the smartest and richest guys in Paradise Valley, Arizona. He knows I am writing this post as he teased me about being silent the last few weeks. I told him I was WORKING on legal briefs and I did not have time to blog about the Arizona legal…