Bt Capital, LLC v. Td Service Co.
228 Ariz. 188
Ariz. Ct. App.2011Background
- PCF loaned money to RCS Chandler, secured by a deed of trust, with PCF as beneficiary and TD as trustee.
- RCS defaulted, and TD was appointed as trustee to conduct a non-judicial trustee sale of the Property.
- Notice of trustee's sale was issued January 11, 2008, published, and posted; sale delayed by RCS's bankruptcy.
- The 2009 sale occurred June 15, with TD as bidding agent for PCF; PCF opened at $1,000,000; BT bid $1,000,001 and was announced winner; BT deposited $10,000.
- The next day BT tendered the balance; TD refused to accept and voided the sale due to a miscommunication of bid instructions; BT contested in court.
- Trial court granted TD/PCF motions to dismiss; on appeal BT argued procedural defects were waived; court treated as summary judgment and reversed, remanding to address gross adequacy of the bid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a trustee may void a completed sale without timely § 33-811(C) objections | BT argues no; lack of timely objections does not authorize voiding | TD/PCF rely on strict statutory compliance to void the sale | Yes; trustee cannot void after bidding completes absent proper authority |
| Whether procedural irregularities can void a sale when § 33-811(C) objections were waived | BT contends irregularities may be grounds for setting aside | TD/PCF argue waiver bars remedy | No; waiver does not permit voiding after completion; remedy limited to other grounds on remand |
| Whether gross inadequacy of the bid price can justify setting aside the sale | BT can challenge outcome if price grossly inadequate | PCF argues bid reflects value and opening bid was controlled by PCF | Remanded; issue exists to be determined with fair market value evidence |
| Whether PCF/TD are entitled to fees on appeal or on remand | BT seeks no fee issue; PCF seeks fees if prevailing | TD/PCF seek fees under § 12-341.01 | Attorneys’ fees on appeal denied to TD/PCF; fees on remand reserved for merits |
| Effect of injunction/Rule 65 on appealability and mootness | BT argues ongoing relief could be granted despite sale | PCF argues sale mootness | Appeal not moot; remand may yield damages if BT prevails |
Key Cases Cited
- Krohn, 203 Ariz. 205 (Ariz. 2002) (gross inadequacy may justify setting aside a sale under Restatement guidance)
- Patton v. First Fed. Sav. & Loan Ass'n of Phoenix, 118 Ariz. 473 (Ariz. 1978) (strict compliance required; objections must be timely)
- CNL Hotels & Resorts, Inc. v. Maricopa County, 226 Ariz. 155 (Ariz. Ct. App. 2010) (statutes interpreted to give effect to legislative intent)
- Vinson v. Marton & Assocs., 159 Ariz. 1 (Ariz. Ct. App. 1988) (appealability when higher bid arises; damages as remedy possible)
- V. Krohn Restatement guidance cited in Arizona, — (—) (Restatement guidance on inadequacy and equity in foreclosure)
- Udall v. T.D. Escrow Servs., Inc., 159 Wash.2d 903 (Wash. 2007) (recognizes that bid announcements and contract formation at sale impact remedies)