Bmo v. Espiau
1 CA-CV 20-0460
Ariz. Ct. App.Jul 13, 2021Background
- Dorothy Espiau bought a vacant lot in Sedona in 2005 financed by a BMO Harris deed of trust; she died in December 2015.
- Kenneth Espiau was appointed personal representative; he notified BMO of the death in May 2017 but the Estate did not publish the statutory creditor notice or mail the statutorily required warning that claims would be "forever barred."
- Kenneth made mortgage payments through August 2017; BMO issued a notice of default in January 2018 and the property sold at trustee’s sale in June 2018 for ≈ $135,000.
- BMO sued for a deficiency (~$157,500). The superior court denied the Estate’s motion for summary judgment based on the probate nonclaim statute, held a fair-market-value hearing, and adopted BMO’s expert valuation of $220,000.
- The court entered a deficiency judgment, awarded BMO the full requested attorneys’ fees and costs, and denied the Estate’s Rule 60(b) motion to reopen the fee award (counsel missed the objection deadline).
- The Estate appealed; the Court of Appeals affirmed on all issues.
Issues
| Issue | Plaintiff's Argument (BMO) | Defendant's Argument (Estate) | Held |
|---|---|---|---|
| Whether BMO’s deficiency claim was time-barred under the probate nonclaim statute (A.R.S. § 14-3803) | Time limits never began because the Estate failed to give the statutorily required notice that claims would be forever barred, so BMO’s post-death claim is timely | BMO had actual notice of the death in May 2017 and should have presented a claim within the four-month/60-day window, so claim is barred | Affirmed for BMO: statutory time limits did not begin absent the required notice; claim not time-barred |
| Whether the court erred in valuing the property at $220,000 (fair market value under A.R.S. § 33-814(A)) | Lopez’s appraisal ($220,000) used appropriate comparable-sales approach, accounted for development costs, and was reliable | Lopez used inconsistent standards and improperly adjusted for development costs; Estate’s expert ($270,000) was more accurate | Affirmed: trial court properly credited BMO’s expert and did not reweigh conflicting testimony |
| Whether the superior court abused its discretion by denying the Estate’s Rule 60(b) motion to permit an objection to the fee application (excusable neglect) | Estate’s counsel missed the deadline, failed to file the agreed-upon extension, did not timely notify the court or opposing counsel; illness did not demonstrate excusable neglect | Counsel’s illness and understaffing justified relief from judgment | Affirmed: no abuse of discretion; counsel failed to show excusable neglect and fee-objection arguments were waived |
Key Cases Cited
- In re Estate of Barry, 184 Ariz. 506 (App. 1996) (due process requires actual notice of nonclaim statute time limits when limits are not self-executing)
- Kelsey v. Kelsey, 186 Ariz. 49 (App. 1996) (court may rely on expert witness opinion to determine fair market value)
- CSA 13-101 Loop, LLC v. Loop 101, LLC, 233 Ariz. 355 (App. 2013) (court may adopt portions of different witnesses’ evidence and sustain any reasonable result between estimates)
- Desert Palm Surgical Grp., P.L.C. v. Petta, 236 Ariz. 568 (App. 2015) (standard of de novo review for pure legal questions on summary judgment)
- City of Phoenix v. Geyler, 144 Ariz. 323 (1985) (Rule 60(b) review — abuse of discretion standard)
- Continental Lighting & Contracting, Inc. v. Premier Grading & Utilities, LLC, 227 Ariz. 382 (App. 2011) (legal theories not timely presented to trial court are waived)