366 P.3d 583
Ariz. Ct. App.2016Background
- Hoag created three irrevocable charitable remainder unitrusts with spendthrift provisions that barred trust assets from creditors and prevented beneficiaries from assigning or encumbering interests.
- Wells Fargo obtained a default money judgment (≈$2.53M) against Hoag’s revocable trust; Wells Fargo later sued to pierce the charitable trusts, alleging fraudulent concealment and sought declaratory relief invalidating the spendthrift clauses.
- The superior court declared the spendthrift provisions invalid as to Wells Fargo, authorized garnishment/attachment of present and future trust distributions to Hoag, and enjoined efforts to prevent such collections.
- Hoag appealed and moved to stay the judgment without a supersedeas bond under A.R.S. § 12-2108 and Arizona R. Civ. App. P. 7(a)(4), arguing the bond formula yielded a $0 bond because the judgment awarded no damages.
- Wells Fargo argued the bond formula applies only to monetary judgments and, regardless, the court could impose alternative measures (e.g., escrow of distributions or a $360,000 bond) to preserve the judgment’s effectiveness; the superior court stayed without bond.
- The court of appeals accepted special action and framed the dispositive question as whether the statute/rule bond formula precludes a superior court from entering other orders to preserve the status quo or effectiveness of a stayed judgment.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Hoag) | Held |
|---|---|---|---|
| Does A.R.S. § 12-2108 / Rule 7 bond formula prohibit a superior court from entering other orders (e.g., escrow) to preserve the status quo or effectiveness of a stayed judgment? | The statute/rule does not limit the court’s ability to impose alternative measures; it applies only to bond amount, not to other protective orders. | The statute/rule restricts supersedeas requirements so that where formula yields $0 bond, no security or other conditions may be imposed to stay the judgment. | The bond formula does not bar a superior court from entering further orders (in lieu of or in addition to a bond) to preserve the status quo or the judgment’s effectiveness; remanded to consider escrow or other measures. |
Key Cases Cited
- Chartone, Inc. v. Bernini, 207 Ariz. 162 (App. 2004) (discussing statewide importance of issues concerning appellate procedure)
- City Center Executive Plaza, LLC v. Jantzen, 237 Ariz. 37 (App. 2015) (noting A.R.S. § 12-2108 and Rule 7 changed supersedeas bond standards)
- Salt River Sand & Rock Co. v. Dunevant, 222 Ariz. 102 (App. 2009) (discussing preexisting supersedeas standards)
- Gotthelf v. Fickett, 37 Ariz. 322 (1930) (explaining supersedeas stays future proceedings and does not undo past actions of a judgment)
- Monarch Constr. Co. v. Ohio Sch. Facilities Comm’n, 771 N.E.2d 941 (Ohio Misc. 2002) (trial court preserved injunction’s effect by prohibiting actions that would upset status quo despite a stay)
- Cooks v. Fowler, 459 F.2d 1269 (D.C. Cir. 1971) (affirming condition of stay requiring deposit of funds into court registry)
- Tribal Vill. of Akutan v. Hodel, 859 F.2d 662 (9th Cir. 1988) (noting federal rules codify courts’ power to order terms preserving status quo and effectiveness of injunctions)
- Ariz. Podiatry Ass’n v. Dir. of Ins., 101 Ariz. 544 (1966) (discussing concurrent jurisdiction of Arizona appellate courts and writ authority)