Lewis v. Debord – 10/6/2014

October 31, 2014

Arizona Court of Appeals Division Two Holds That Where a Subsequent Purchaser Acquires an Interest in a Judgment Debtor’s Real Property After a Judgment Creditor Records a Judgment but Before Attaching an Information Statement, the Resulting Judgment Lien Loses its Priority and the Judgment Creditor Cannot Satisfy His or Her Judgment by Executing on That Property.

In June 2003, Cecelia and Randall Lewis obtained a default money judgment against Karen MacKean and Fred Foust.  Intending to create a lien against real property, the Lewises recorded the judgment in January 2006 in Pima County.  They renewed the judgment lien in June 2008.  A separate information statement did not accompany either the judgment recorded in 2006 nor the renewal recorded in 2008. 

In March 2008, Karen MacKean purchased real property in Pima County.  She then transferred the property to Sonomex, LLC.  In July 2012, Ray Debord and Anne Nelson-Debord purchased the property from Sonomex. 

In August 2012, the Lewises sought judicial foreclosure of the lien or execution of the judgment, naming MacKean, Sonomex, and the Debords as defendants.  The Debords moved for summary judgment, claiming that the Lewises’ failure to record a separate information statement rendered their judgment lien invalid and unenforceable.  The trial court entered summary judgment in favor of the Debord’s and the Lewises timely appealed.

The Arizona Court of Appeals affirmed the trial court’s ruling, holding that the Lewises did not have a valid judgment lien against the property because they failed to record a separate information statement as required by A.R.S. § 33-967(A).  Judgment liens in Arizona are creations of statute and thus require strict statutory compliance.  Under A.R.S. § 33-961(A), the recording of a judgment creates a valid judgment lien as to the judgment creditor’s then-existing or later-acquired real property, regardless of whether an information statement is attached thereto.  Although § 33-961(C) states that the judgment or renewal “shall also be accompanied by an information statement,” it does not condition the validity of the judgment lien on the attachment of the information statement.  The information statement does, however, determine the priority of the judgment lien.  A.R.S. § 33-967(D) clearly provides that the judgment lien has priority once the information statement is attached to the judgment.  Because the Debords acquired their interest in the property before the Lewises recorded the information statement, the Court concluded that the Debords’ interest in the property had priority over the Lewises’ judgment lien and the Lewises could not satisfy their judgment by executing on the property.

Judge Vasquez authored the opinion, which Judges Howard and Miller joined.