Dmarc 2006-Cd2 v. Bush Realty
1 CA-CV 14-0603
| Ariz. Ct. App. | Dec 13, 2016Background
- In 2005 Empirian and Bush Realty refinanced Arizona apartment property with a $38.5M loan; Samuel Weiss signed a personal Guaranty for $4.8M (signed in New York on signature pages only).
- Borrowers defaulted and trustee’s sale occurred in 2011; DMARC purchased the property for $30.8M; parties stipulated fair market value at sale was $34.35M; DMARC later resold for ≈$36M.
- DMARC sued for a deficiency; after difficulty serving Weiss, the superior court authorized service by certified mail and posting at his residence; Weiss refused personal service and appeared specially to contest jurisdiction and service.
- Superior court granted summary judgment for DMARC on liability (Weiss bound by guaranty) and on damages, awarding $4.15M plus interest (calculated under A.R.S. §33-814(1)).
- Weiss appealed raising: lack of personal jurisdiction, defective service, improper forum, entitlement to summary judgment, insufficiency of damages proof, and alleged double recovery by DMARC.
Issues
| Issue | Plaintiff's Argument (DMARC) | Defendant's Argument (Weiss) | Held |
|---|---|---|---|
| Enforceability of Guaranty / Liability | Weiss signed signature page as "Guarantor" and is bound; no fraud alleged | Weiss didn’t read or receive full guaranty and therefore did not assent | Court: Guaranty is enforceable; failure to read does not excuse; summary judgment for DMARC affirmed |
| Damages calculation / sufficiency of proof | Deficiency = total amount owed ($38.5M) minus FMV at trustee’s sale ($34.35M) = $4.15M per A.R.S. §33-814(1); no principal payments shown | DMARC failed to prove amounts; affidavit evidence insufficient; later resale creates double recovery | Court: Damages properly calculated under statute; promissory-note context required no extra affidavits; later resale irrelevant; award affirmed |
| Personal jurisdiction / forum selection clause | Guaranty contains clear forum-selection/personal-jurisdiction clause for courts in county/state where property located (Arizona); Weiss consented by signing | Weiss contends clause and jurisdiction unreasonable and he lacked sufficient Arizona contacts | Court: Clause binding; alternatively Weiss had sufficient Arizona contacts (guarantee for Arizona property); jurisdiction proper |
| Service of process / alternative forum (forum non conveniens) | Service per guaranty (certified mail to address in guaranty; posting after refusal) and court-authorized methods gave notice; Arizona is proper forum | Service violated rules for out-of-state service; case should be tried in New York for convenience | Court: Service was valid under contractual notice provision and court order; forum non-conveniens denial not an abuse of discretion |
Key Cases Cited
- First Am. Title Ins. Co. v. Johnson Bank, 239 Ariz. 348 (discusses de novo review of summary judgment)
- Pi’Ikea, LLC v. Williamson, 234 Ariz. 284 (contract/guaranty governed by general contract principles)
- Tabler v. Indus. Comm’n, 202 Ariz. 518 (parties’ intent determined by objective evidence, not hidden intent)
- Bender v. Bender, 123 Ariz. 90 (clear and unambiguous contract terms enforced as written)
- Hamada v. Valley Nat. Bank, 27 Ariz. App. 433 (execution of guarantee for Arizona transaction sufficient minimal contact for jurisdiction)