OPINION
This is an appeal from a judgment ordering the Commissioner of the Arizona State Real Estate Department (Commissioner), as fiduciary of the Real Estate Recovery Fund (Fund), to pay a certain sum of money from the Fund to Patrick Chaffin and Virginia Chaffin.
FACTS
Arizona real estate licensees Kenneth and Bonnie Thompson acted as agents and brokers in the sale of a parcel of real property from George and Delfina Leon to Patrick and Virginia Chaffin in 1978. The Chaffins paid $7,000.00 for the parcel. Kenneth Thompson died in 1980 and a personal representative for his estate was appointed in 1984.
Based upon alleged misrepresentations made by both of the Thompsons or by Kenneth Thompson individually, the Chaf-fins sued the Thompsons and the Leons in 1982 for rescission and/or damages resulting from the sale. The Chaffins’ counsel notified the Commissioner of that lawsuit by letter dated August 30, 1982. Thereafter, the Chaffins stipulated to dismiss the Leons from the action with prejudice. In 1985, the Chaffins, Bonnie Thompson and Kenneth Thompson’s personal representative entered into a stipulated judgment dismissing Bonnie Thompson from the action with prejudice and holding the estate of Kenneth Thompson liable to the Chaffins for $7,000.00 plus interest. The judgment was filed on September 27, 1985.
Based upon the stipulated judgment against Kenneth Thompson’s estate, in 1988 the Chaffins filed an application with the court for payment from the Fund pursuant to A.R.S. § 32-2188. The Commissioner opposed the application because of the Chaffins' failure to satisfy the requirements of A.R.S. § 32-2188(C), and notified the court of its right to relitigate material issues pursuant to A.R.S. § 32-2188(E). The Chaffins filed a reply with supporting affidavits in an effort to satisfy the prerequisites contained in A.R.S. § 32-2188(C).
Without holding an evidentiary hearing, the trial court granted the Chaffins’ application and ordered the Commissioner to pay them $7,000.00 plus interest, and attorney’s fees in the amount of $2,716.26 from the Fund. The Commissioner filed a motion to reconsider, which was denied after telephonic oral argument.
The Commissioner argues that the trial court erred in failing to hold an evidentiary hearing on the Chaffins’ application for recovery from the Fund. We agree and therefore we reverse.
DISCUSSION
The interpretation of an Arizona statute, such as A.R.S. § 32-2188, involves the resolution of legal rather than factual issues.
Arizona State Board of Accountancy v. Keebler,
A.R.S. § 32-2188 must be construed liberally, as it was intended by the legislature, to provide a means for the supervision and regulation of the real estate
APPLICATION OF A.R.S. § 32-2188
A.R.S. § 32-2186 authorizes and directs the Commissioner to establish the Fund, from which persons aggrieved by acts, representations, transactions or conduct of licensed brokers or salesmen which violate Arizona real estate licensure laws or regulations, may recover their actual damages plus reasonable attorneys’ fees up to $15,-000.00.
A.R.S. § 32-2188, as amended in 1986 1 , provides the procedure for recovery from the Fund. Specifically, after recovering a judgment against a broker or salesman for acts in violation of the Arizona real estate licensure laws or regulations, the aggrieved party must file a verified claim with the court in which the judgment was obtained, seeking an order directing payment from the Fund. A.R.S. § 32-2188(B). The aggrieved person must provide written notice to the Commissioner as well as to the judgment debtor of the application for payment from the Fund. 2 A.R.S. § 32-2188(B).
The Commissioner and the judgment debtor have thirty-five days tó file written responses after service of the application. A.R.S. § 32-2188(B). After such time, “[t]hé court shall ... set the matter for hearing on petition of the applicant.” A.R.S. § 32-2188(B).
According to A.R.S. § 32-2188(C), the court shall proceed on the application in a “summary manner.” This phrase has been interpreted by the Arizona courts to mean that the court must proceed on the application without delay or formality and in a short, concise and immediate proceeding.
Arizona Real Estate Department v. Arizona Land Title and Trust Co.,
Subsection C of A.R.S. § 32-2188 provides that, “upon the hearing” of the application, the aggrieved person is required to show that he or she:
1. is not the spouse of the judgment debtor or the personal representative of such spouse;
2. has complied with all requirements of A.R.S. § 32-2188 (the notice requirement of subsection A may be waived by the Commissioner);
3. has obtained a judgment against the judgment debtor for acts committed in violation of the laws or regulations governing his/her conduct as a Real Estate Department licensee and that all bonding companies which issued surety bonds to the judgment debtor and all other necessary parties were joined as parties in that action;
4. has obtained an unsatisfied writ of execution;
5. has conducted a judgment debtor examination; and
6. has made all reasonable searches and inquiries in an effort to satisfy the judgment from the judgment debtor’s property, to no avail.
The court may waive the requirements regarding efforts to satisfy the judgment from the debtor’s property if the aggrieved person satisfies the court that it is not practicable to comply. A.R.S. § 32-2188(D).
Prior to the 1986 amendment of A.R.S. § 32-2188(E), if the Commissioner did not intervene in the underlying action against the licensee, the Commissioner was
The Commissioner’s role in proceedings against the Fund was greatly broadened by the 1986 amendment to A.R.S. § 32-2188(E). The 1986 amendment added the following language to A.R.S. § 32-2188(E):
The commissioner may defend any such action on behalf of the real estate recovery fund and has recourse to all appropriate means of defense and review, including the examination of witnesses and the right to relitigate any material and relevant issues in the proceedings against the real estate recovery fund which were determined in the underlying action on which the judgment in favor of the applicant was based. If the judgment in favor of the applicant was by default, stipulation, or consent, ... the applicant has the burden of proving that the cause of action against the licensee was for a violation of the provisions of this chapter or the rules promulgated pursuant to this chapter____ The commissioner is not bound by any prior compromise stipulation of the judgment debtor.
It is evident from A.R.S. § 32-2188(E), as amended, that it is no longer necessary for the Commissioner to intervene in the underlying lawsuit in order to challenge issues material to recovery from the Fund. The Commissioner now has the right to relitigate any relevant and material issues in order to adequately protect the Fund, regardless of the Commissioner’s involvement in the underlying lawsuit. The underlying judgment is still res judicata as between the applicant and the licensee however, as subsection E also specifically provides that relitigation of such issues does not affect the conclusiveness of the judgment against those parties.
The Chaffins contend that their application to the Fund should be governed by Arizona law as it existed prior to the 1986 amendment of A.R.S. § 32-2188. As the Commissioner did not intervene in the underlying action in this case, the Chaffins argue that under prior Arizona law, the Commissioner cannot now challenge the fact of licensee liability or the amount in the Chaffins’ action against the Fund. The Chaffins base this argument on the fact that they obtained their judgment against Thompson in September 1985, and A.R.S. § 32-2188 was not amended to broaden the Commissioner’s right to defend the Fund until 1986. This argument is in error.
It is true that a statutory amendment cannot be retroactively applied to defeat a vested right.
State v. Levasseur,
A vested right as used in this context has been specifically defined in Arizona law. In
State v. Estes Corp.,
‘[0]ne which is absolute, complete, and unconditional to the exercise of which no obstacle exists, and which is immediate and perfect in itself not dependent upon a contingency.’ Hutton v. Autoridad Sobre Hogares de la Capital,78 F.Supp. 988 (D.C. Puerto Rico 1948). A ‘vested right’ is an immediate fixed right to present or future enjoyment where the interest does not depend upon a period or an event that is uncertain. (Citations omitted).
See Steinfeld v. Nielsen,
When they obtained their stipulated judgment against Kenneth Thompson in 1985, the Chaffins’ recovery from the Fund was contingent upon the filing of an application with the court in which they had obtained that judgment, and upon a sufficient showing of the prerequisites of recovery contained in A.R.S. § 32-2188(C). Thus, recovery from the Fund pursuant to A.R.S. § 32-2188, even as it existed prior to its amendment in 1986, was not automatic when the applicants obtained the underlying judgment. Without a vested right to recover from the Fund, the 1986 amendment to A.R.S. § 32-2188, which expanded the Commissioner’s right to defend the Fund, can be applied to the Chaffins’ 1988 application for recovery.
Following briefing, appellees filed as a supplemental citation
Wilson v. Arizona Registrar of Contractors,
The statute [A.R.S. § 32-1136(B)] expressly requires the entry of a judgment against the contractor before the injured person can even apply for payment from the recovery fund, much less actually receive payment. Therefore, the pertinent date for recovery of any payment from the fund, whether damages or attorney’s fees, is the date the judgment was entered against the contractor.
Because the judgment against Berg was entered after the effective date of the statutory amendment that limited recovery of attorney’s fees to cases appealed to superior court, the Wilsons were not entitled to recover attorney’s fees from the contractors’ fund.
Id.
at 619,
We conclude, therefore, that the date of filing a statutorily proper verified claim with the trial court is the date that the legislature intended that Chaffins have a “vested” right against the Fund. Until the valid claim was filed with the court the right was merely an inchoate right. It is a contingent right depending on the filing of a proper claim for the right to vest. Here, Chaffins filed their claim on July 7, 1988, well after the amendments to A.R.S. § 32-2188 took effect. Thus, we agree in part with Wilson but disagree with its holding that the judgment date vests a right in the judgment creditor against the Fund.
For purposes of this appeal then, in order to determine whether the trial court properly granted the Chaffins’ application for recovery from the Fund, we will apply A.R.S. § 32-2188 as it was amended in 1986.
The trial court did not conduct a hearing on the Chaffins’ application for recovery from the Fund. The Commissioner contends that this was error because the hearing was necessary in order for the Chaffins to establish the prerequisites for recovery pursuant to A.R.S. § 32-2188(C) and in order for the Commissioner to relitigate material issues and to otherwise adequately defend the Fund. We agree.
A.R.S. § 32-2188(E) specifically provides that the Commissioner may, in defense of the Fund, relitigate any material, relevant issues which were determined in the underlying action. Further, according to subsection E, the Commissioner is not bound by the stipulated judgment entered into by the Chaffins, Bonnie Thompson and Kenneth Thompson’s personal representative. In the instant matter, then, A.R.S. § 32-2188 specifically provides that the Commissioner has the right to vigorously defend the Fund, and may force the examination of witnesses and litigation of entire issues which were never fully examined in the trial court due to the stipulated nature of the judgment.
Despite the Commissioner’s right to relit-igate, stated in subsection E, subsection B specifically provides that the court shall set the application for a hearing “on petition of the applicant.” Therefore, A.R.S. § 32-2188 seems to contain conflicting provisions regarding whether a hearing must be conducted on an application for recovery from the Fund. Subsection B seems to indicate that a hearing shall be held if requested by the applicant, while the requirements of subsection E seem to necessitate a hearing in almost every case in order for the Commissioner to exercise the right to fully defend the Fund, regardless of whether a hearing is requested by the applicant.
It is well established that if certain portions of a statute appear to be in conflict, they must be harmonized if possible in order to give full effect to the statute.
Weitekamp v. Fireman’s Fund Ins. Co.,
Upon review of other state statutes on the subject, we discovered that the California Real Estate Recovery Program statutes are identical to the Arizona recovery fund statutes in pertinent respects, and therefore decisions interpreting those statutes provide some guidance. Like A.R.S. § 32-2188(B), Cal.Bus. & Prof.Code § 10472.1 provides that after the Commissioner and the judgment debtor have had a chance to respond to the application for payment from the Real Estate Recovery Fund, the court shall “set the matter for hearing upon the petition of the claimant”.
3
Further, like A.R.S. § 32-2188(E), Cal.Bus. & Prof.Code § 10473 provides that the Commissioner has the right to vigorously defend the Fund by relitigating issues, examining witnesses, etc.
4
Like A.R.S.
Thus, California statutes contain the same apparent conflict found in A.R.S. § 32-2188 in that the Commissioner may vigorously defend the Fund by relitigating pertinent issues decided in the underlying action, examining witnesses, etc., but the right to request a hearing in which to conduct such a defense seems to belong solely to the applicant.
This apparent conflict regarding entitlement to a hearing on an application to the Fund was recently resolved in California in the case of
In re Armstrong,
The Department contended on appeal that the trial court misapplied CaLBus. & Prof.Code § 10473 when it ordered payment from the Fund without granting the Department’s request for an evidentiary hearing. On appeal the court agreed and reversed the trial court’s order and remanded the matter for a full evidentiary hearing on the question of whether Armstrong was entitled to recovery from the Fund.
Despite the language contained in Cal. Bus. & Prof.Code § 10472.1 indicating that a hearing shall be held on the matter “upon the petition of the claimant," the appellate court held that due to the broad powers granted to the Commissioner in § 10473 to defend the Fund, it was evident that the legislature clearly contemplated a full evi-dentiary hearing on the application for recovery against the Fund.
As previously discussed, A.R.S. § 32-2188(E) grants the same broad powers to the Commissioner to defend the Fund as does Cal.Bus. & Prof.Code § 10473. Like the court in Armstrong, we believe that in granting such powers to the Commissioner, the Arizona Legislature contemplated a full evidentiary hearing on applications for Fund recovery to enable the Commissioner to adequately defend the Fund. Without such a hearing, the Commissioner would be without a forum to relitigate pertinent issues which were decided by the underlying judgment.
We also believe that like Cal.Bus. & Prof. Code § 10473, the language of A.R.S. § 32-2188(E) clearly indicates a legislative determination that an evidentiary hearing
A.R.S. § 32-2188(C) similarly demonstrates that a hearing would be appropriate in most instances. Specifically, A.R.S. § 32-2188(C) provides that in order to recover from the Fund, the applicant must “show” that several prerequisites concerning the underlying cause of action, the judgment, and efforts to satisfy that judgment have been satisfied. Cal.Bus. & Prof. Code § 10471, 10472 and 10473 mandate a showing of similar prerequisites in order to recover from the California Fund. In
Buc-cella v. Mayo,
We find that an applicant may successfully establish the prerequisites by affidavits based upon personal knowledge, containing competent evidence and submitted with the application. In
Arizona Real Estate Department v. Arizona Land Title and Trust Co.,
If that “showing” of the statutory prerequisites by affidavits is disputed by the Commissioner, however, as in the instant case, an evidentiary hearing would be necessary. At that hearing, the applicant would be required to show, by competent evidence, all of the requirements of A.R.S. §§ 32-2188(B) and (C) regarding the underlying judgment and the efforts to satisfy that judgment, unless a showing of certain of these requirements was waived by the court in accordance with A.R.S. § 32-2188(D).
The Chaffins further argue that the Commissioner waived his right to request an evidentiary hearing because he failed to request such a hearing at the trial level. This argument is in error. The Commissioner requested relitigation of all material and relevant issues at the trial level and that request was denied. Therefore, Commissioner cannot be held to have waived any of his rights and duty to defend the Fund.
n This matter is hereby remanded to the trial court for an evidentiary hearing on the Chaffins’ application for recovery from the Fund.
Notes
. A.R.S. § 32-2X88 was rewritten by amendment in X989, but in this appeal we are called upon to interpret that statute only as it existed from 1985-1988.
. The judgment debtor is an important party because if application for the payment from the Fund is granted in any amount, the judgment debtor's real estate broker’s license is automatically revoked and is not reinstated until the Fund has received repayment in full, plus interest at the rate of six percent per year. A.R.S. § 32-2188(F).
. Cal.Bus. & Prof.Code § 10472.1 provides, in pertinent part:
(a) The commissioner and the judgment debt- or shall each have 30 days after being served with the application in which to file a written response. The court shall thereafter set the matter for hearing upon the petition of the claimant____
(b) At the hearing, the claimant shall be required to establish compliance with the requirements of Section 10471.
. Cal.Bus. & Prof.Code § 10473 provides, in pertinent part:
Whenever the court proceeds upon an application under Section 10472, it shall order payment out of the Recovery Account only upon a determination that the aggrieved party has a valid cause of action within the purview of Section 10471, and has complied with Section 10472.
The commissioner may defend any such action on behalf of the Recovery Account and shall have recourse to all appropriate means of defense and review, including examination of witnesses and the right to relitigate any issues material and relevant in the proceeding against the Recovery Account which were determined in the underlying action on which the judgment in favor of the applicant was based. If the judgment in favor of the applicant was by default, stipulation, [or] consent, ... the applicant shall have the burden of proving that the cause of action against thelicensee was for fraud, misrepresentation, deceit, or conversion of trust binds. ******
... The commissioner shall not be bound by any compromise or stipulation of the judgment debtor.
(Added by Stats. 1985, c. 690, § 3, operative January 1, 1987.)