McA Financial Group, Ltd. v. Enterprise Bank & Trust
236 Ariz. 490
| Ariz. Ct. App. | 2014Background
- Enterprise Bank loaned $4,182,000 to Americana Nogales, LLC; after alleged default Enterprise sought appointment of a receiver and sued for monetary relief.
- The superior court appointed “Robert Itkin of MCA Financial Group, Ltd.” as receiver; Itkin signed the oath as an individual and later left MCA for another firm.
- MCA (a vendor/firm that billed Enterprise for services, including Itkin’s work) submitted invoices which Enterprise paid; MCA continued providing services after Itkin’s departure but stopped billing for his time.
- Enterprise objected to the receiver’s report and moved to disgorge fees paid to MCA as excessive; MCA was not joined or served as a defendant but entered a special appearance and requested an evidentiary hearing.
- The trial court ordered MCA to disgorge $118,185.93, concluding MCA had not properly executed duties; MCA appealed, arguing lack of personal jurisdiction and denial of due process.
Issues
| Issue | Enterprise’s Argument | MCA’s Argument | Held |
|---|---|---|---|
| Whether the trial court had personal jurisdiction to order disgorgement against MCA (a non‑party vendor) | The receiver was functionally tied to MCA; agency/relationship and MCA’s billing/collection practices brought MCA within court control over receivership fees | MCA was never served or joined and the receiver was appointed to Itkin personally; denying process to MCA violated due process | Court held it lacked personal jurisdiction over MCA and vacated disgorgement order |
| Whether the order directing a third party to pay receivership funds was appealable | The order affected substantial rights in a receivership and was a final order in a special proceeding | Same — MCA appealed as an aggrieved non‑party | Court found it had appellate jurisdiction under A.R.S. § 12‑2101(A)(4) |
| Whether the appointment language made MCA the receiver (supporting court control over MCA) | Appointment language and ancillary acts (bond, fee schedule, MCA billing) supported treating MCA as bound by the receivership order | The appointment and oath identify Itkin individually; appointment did not name MCA as receiver; evidence contradicted treating MCA as receiver | Court concluded the record did not support finding MCA was appointed receiver; that factual finding was clearly erroneous |
| Whether an agency relationship alone can substitute for service of process to confer jurisdiction | Agency could bind MCA to court oversight of compensation because MCA acted as receiver’s firm | Agency allegations cannot replace the constitutional requirement of service of process and notice to a non‑party | Court rejected agency‑based jurisdiction without service; due process requires notice and opportunity to be heard |
Key Cases Cited
- Heinig v. Hudman, 177 Ariz. 66 (App. 1993) (non‑party cannot be subjected to judgment without opportunity to contest liability)
- Spudnuts, Inc. v. Lane, 139 Ariz. 35 (App. 1984) (amendments adding defendants require proper service to confer jurisdiction)
- In re Prescott State Bank, 36 Ariz. 419 (1930) (orders directing payment from receivership are final and appealable)
- Johnson v. Superior Court, 68 Ariz. 68 (1948) (allowing or disallowing claims against receivership is final action in a special proceeding)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) (limits on jurisdiction must comport with due process principles)