Two individuals obtained a property in Fountain Hills, Arizona. When one of the property owners experienced financial issues, she conveyed her interest in the property to the other owner’s husband through a warranty deed so that the husband could obtain a conventional loan for the property and then add her back to the title after the transaction. In the interim, she engaged with the husband and wife owners as a real estate agent to list the property but only listed the husband and wife owners as having ownership or financial interest on various documents. Separately, the now-prior owner was deposed in her divorce proceedings and stated that she had no ownership in the property and that she had walked away and left the property to the husband and wife owners. When the property was finally sold, the prior owner filed a lis pendens, claiming 50% interest in the property.
An interpleader action was filed by the attorneys holding the property in trust. The husband and wife owners moved for summary judgment. During the summary judgment proceedings, the prior owner submitted a declaration to “explain” her deposition testimony. The trial court found that the substance of the declaration contradicted the substance of the deposition testimony and thus excluded the declaration as a sham affidavit. As a result, the trial court ruled in favor of the husband and wife owners, finding that the prior owner had clearly conveyed her interest in the property and admitted doing so at her divorce deposition.
The Court of Appeals affirmed the trial court’s ruling. The Court clarified the sham affidavit rule, explaining that an affidavit or declaration that contradicts the party’s prior sworn testimony cannot be used to defeat summary judgment. It found that nothing precludes the doctrine from applying to testimony from different litigation. Because the doctrine applied to the prior owner’s divorce testimony, and because her declaration contradicted her prior testimony, her declaration was properly excluded as a sham affidavit by the trial court.
Based on the exclusion of the sham affidavit, the prior owner’s testimony that she knew she had no ownership or interest in the property, and other various deficiencies in her evidentiary offerings and the record, the Court was unpersuaded by the prior owner’s remaining arguments and counterclaims.
Judge Howe delivered the opinion in which Judge Thumma and Judge Swann joined.
Posted by: Payslie Bowman