If you want to learn about foreclosures under Arizona’s Anti-Deficiency Laws, watch our video powerpoint presentation. The video covers all the basics, including terminology, what constitutes qualifying property and how the Anti-Deficiency Statutes apply in both types of foreclosures.
On April 22, 2010, a Maricopa County Superior Court jury unanimously awarded the firm’s clients $912,500 in a fraud case against the sellers of a Peoria, Arizona business. Kent Berk tried the case on behalf of the clients, the buyers of the business.
After doing extensive investigation, the clients, John and Margaret Durma, signed a contract to buy The Curve on Peoria bar and restaurant for $375,000. The records provided by the seller appeared valid and confirmed that the business was making $160,000 in profit per year. But, after taking over the operations of the business, it had losses each month. The Durmas suspected the seller of wrongdoing and investigated further. After filing their lawsuit, the Durmas discovered that the seller had created a second (false) set of financial records and that the business actually had losses each year that the seller owned it, all contrary to the seller’s repeated representations before the sale.
At trial, Kent Berk, on behalf of the Durmas, presented claims for fraud, consumer fraud, bad faith, negligent misrepresentation and breach of contract. Before the case went to the jury, the Judge granted the Durmas judgment as a matter of law on their breach of contract and negligent misrepresentation claims, and found that the seller was prohibited from pursuing any claims for the balance of the purchase price.
The jury unanimously found in favor of the Durmas on their remaining claims – fraud, consumer fraud and bad faith, and unanimously awarded the Durmas $241,000 in economic damages, $196,500 in emotional distress damages and $475,000 in punitive damages.
Governor Brewer repealed the changes to the anti-deficiency statute that were set to go into effect on September 30, 2009. The much debated changes would have required the borrower under a deed of trust whose property was sold at a trustee’s sale to have demonstrated, among other things, that the borrower “used” the property for six consecutive months in order to qualify for the protection of the anti-deficiency statute.
At least for the time-being, the current anti-deficiency statutes will stay in effect. We have drafted a simple summary of the current law.
In Horton v. Hartsook, et al., the Hortons brought suit to, among other things, stop Hartsook and several other owners from leasing their condominiums in Rainbow Cove, Pinetop Lakeside, Arizona on a short-term basis to vacationers. Horton claimed that short-term vacation leases were prohibited by the covenants, conditions and restrictions for the development.
Berk & Moskowitz defended the Hortons’ claims on behalf of the owners. The Navajo County, Arizona Superior Court ruled in favor of the owners and found that short-term vacation leasing was allowed. The Hortons appealed. The Arizona Court of Appeals affirmed the trial court’s ruling. The Court of Appeals concluded that the covenants were clear and unambiguous and that short-term vacation leasing was allowed in Rainbow Cove.
Read the Rainbow Cove Decision.
The Arizona Court of Appeals has ruled, for the first time in an Arizona published opinion, that an appraiser hired by a lender owes a duty to the buyer/borrower in that transaction.
In its Unanimous Decision issued April 30, 2009, the Court focused on the reality that the buyer would likely never hire a separate appraiser. For that and several other reasons, the appraiser owes a legal duty of care to the buyer/borrower. Daphne Reaume of Berk & Moskowitz, P.C. argued the appeal for the buyer/borrower.
The case opens the door for buyers to sue appraisers even when the appraiser was hired by the lender. Visit our separate website, AppraiserNegligence.com for more information.
The issue on appeal involved an option to purchase under a residential lease and whether it had been timely exercised. The Arizona Court of Appeals affirmed the trial court’s decision in favor of Berk & Moskowitz’ client
Berk & Moskowitz, P.C. represented the seller of a home under an option to purchase given to the tenant/buyer. The trial court found in favor of the seller, finding that option contracts are strictly construed and that the buyer did not timely and properly exercise the option contract. The buyer appealed. The Arizona Court of Appeals affirmed the trial court decision for the sellers.
Read the Court’s Memorandum Decision.
After trial, Superior Court Judge Paul A.Katz found that the firm’s clients were not liable on a commercial lease. The landlord tried to hold the tenant’s owners liable for the lease based on theories of alter ego and piercing the corporate veil. Download the Decision.
The issue on appeal was one involving the construction of a commercial lease. In favor of Berk & Moskowitz’ client, the tenant, the Arizona Court of Appeals reversed the trial court’s decision.
The tenant hired Berk & Moskowitz after the trial court had ruled that the tenant did not have the right to cancel a commercial office lease. Berk & Moskowitz filed an appeal for the tenant. The Arizona Court of Appeals reversed the trial court, interpreted the lease as a matter of law and found that the tenant did have the right to cancel the lease. The tenant recovered its security deposit, costs, attorneys’ fees and interest.
Read the Court’s Memorandum Decision.
Judge Helene Abrams found in favor of Berk & Moskowitz, P.C.’s client, the sellers of three investment properties, and ruled that the buyer had breached the contracts. The trial court found that the sellers were entitled to recover only the earnest money actually deposited into escrow. The Court of Appeals partially reversed and found the buyers liable for the full amount of earnest money as liquidated damages. Read the Superior Court Ruling and Court of Appeals Decision
In this case, the firm’s client purchased a home in North Scottsdale. Unbeknownst to her, the home had been used by the sellers to breed and kennel large numbers of dogs over several years. Upon moving into the home, the buyer’s daughter and grandson had severe allergic reactions. They subsequently discovered that the home was used to breed dogs, but that fact was not disclosed before the sale.
Berk & Moskowitz, P.C. filed a lawsuit in Maricopa County, Arizona Superior Court against the sellers and their agent, Century 21. After trial, Judge Peter Reinstein found in favor of the buyer and assessed 95% of the fault to Century 21 for not disclosing the history of the home. The Judge awarded the seller full diminution in value caused by the prior use. Read the Ruling.