OPINION
¶ 1 Arizona law permits a party to a legal “action affecting title to real property” to file a
lis pendens
with the county recorder. Ariz.Rev.Stat. (“A.R.S.”) § 12-1191(A) (2003 & Supp.2006). The filing provides notice to interested persons that the property is subject to litigation.
¶2 The United States District Court for the District of Arizona has asked us whether a creditor’s action under Arizona’s version of the Uniform Fraudulent Transfer Act (“UFTA”), A.R.S. §§ 44-1001 to -1010 (2003), to void a debtor’s allegedly fraudulеnt transfer of real property and thus make the property available for the payment of a debt or judgment, is an action “affecting title to real property” under the lis pendens statute. We accepted jurisdiction of the certified question because the answer “may be determinative of the cause [ ] pending in the certifying court.” A.R.S. § 12-1861 (2003). Our answer to the question is yes.
¶ 3 The District Court’s certification order details the rеlevant facts. Advantage Capital Corporation (“Advantage”) is a licensed securities brokerage firm. In December 2005, Advantage terminated the employment of Charles Bolton, a registered reprеsentative. Advantage customers later complained to the company that some $649,000 was missing from their accounts. In 2006, Advantage sued Bolton in superior court to recover the missing funds. The suit also named Bolton’s wife and Marian B. Farris, Bolton’s mother, as defendants. Advantage alleged that the sale of the Boltons’ residence to Farris in September 2005 was a fraudulent transfer and sought to void the sale. See A.R.S. § 44-1007(A)(2) (providing for the avоidance of a transfer “to the extent necessary to satisfy [a] creditor’s claim”). At the same time, Advantage filed a lis pendens against the property. See A.R.S. § 12-1191(A). Farris, in turn, filed a suit in superior court seeking removal of the lis pendens and damages. Advantage subsequently removed Farris’s action to the District Court based on diversity jurisdiction.
¶ 4 The District Court’s certified question followed. We have jurisdiction under Article 6, Section 5(6), of the Arizona Constitution and A.R.S. § 12-1861.
¶ 5 We interpret statutes to “give effеct to the legislature’s intent.”
Parrot v. DaimlerChrysler Corp.,
¶ 6 Arizona’s lis pendens statute provides as follows:
In an action affecting title to real property, the plaintiff at the time of filing the complaint, or thereafter, and the defendant at the time of filing the defendant’s pleading when affirmative relief is claimed in such pleading, or thereafter, may file in the office of the recorder of the county in which the рroperty is situated a notice of the pendency of the action or defense.
A.R.S. § 12-1191(A). The crucial question, in determining the propriety of a lis pendens, is whether the underlying action “affect[s] title to real proрerty.” Id.
¶ 7 Arizona’s version of the UFTA provides rights to creditors against debtors who evade their financial responsibilities. Under the UFTA, a creditor is a “person who has a claim.” A.R.S. § 44-1001(3). The UFTA broadly defines the term “claim” to include “a right to payment, whether or not the right is reduced to judgment, ... disputed, undisputed, legal, equitable, secured or unsecured.” A.R.S. § 44-1001(2);
see also Kaufmann v. M & S Unlimited, L.L.C.,
¶ 8 The UFTA does not require a creditor to reduce a claim to a judgment before seeking to void a debtor’s allegedly fraudulent transfer of property. The UFTA allows the levy of execution when a creditor has obtained a judgment, but does not require a judgment before a creditor may seek relief from an allegedly fraudulent transfer, including avoidance. Compare A.R.S. § 44-1007(B) (allowing the levy of execution “if a creditor has obtained a judgment”), with id. § 44-1007(A)(2) (allowing creditor to seek avoidance of a transfer).
¶ 10 This interpretation comports with the intent of both the UFTA and the
Us pendens
statute as demonstrated by the language of these statutes. The UFTA limits a creditor’s rights against property taken by a “good faith transferee who took for value or from any subsequent transferee.” A.R.S. § 44—1008(B)(2). Thus, a subsequent sale by a transferee without a
Us pendens
may cut off the creditor’s right, and the court’s power, to undo the prior transfer.
Tucson Estates, Inc. v. Superior Court (Homeowners’ Ass’n of Tucson Estates),
¶ 11 Farris nevertheless maintains that a valid
Us pendens
requires that a litigant have an “interest” in obtaining the property; consequently, a
Us pendens
is appropriate only when a party sеeks to establish a personal legal claim to the property. As explained above, nothing in A.R.S. § 12-1191(A) so limits a
lis pendens. Cf. Tucson Estates,
¶ 12 The Arizona cases on which Farris relies do not support her contention. For example, Farris cites twо opinions holding that a
Us pendens
is inappropriate after the filing party had forgone the remedy of specific performance of a real estate contract or filed a
Us pendens
in an action on a debt. In
West Pinal Family Health Center, Inc. v. McBryde (Holmes),
the court recognized that a
Us pendens
is crucial to seсuring a party’s right to specific performance, that is, to ensuring that the court could restore title to the rightful owner.
¶ 13 West Pinal Family Health and Mammoth Cave stand for the proposition that a Us pendens is not a tool for a litigant to secure a potential money judgment by tying up a debtor’s real property. On the other hand, an action seeking to void a fraudulent transfer does not implicate this concern because the creditor is not seeking to prevent a debtor from validly liquidаting assets. The avoidance remedy instead seeks to transfer title back to a debtor who has wrongfully disposed of property to avoid creditors.
¶ 14 Farris also asks the Court to consider opinions from оther jurisdictions that she claims support her argument. Farris candidly acknowledges, however, that authorities around the country diverge on this point,
¶ 15 To the extent that Farris urges us to adopt the reasoning of the Massachusetts Court of Appeals and the United States Bankruptcy Court for the Middle District of Florida (applying Florida law) requiring that a creditor wait until he or she has obtained a judgment before filing a
lis pendens,
we decline to do so given thе plain language of Arizona’s statutes.
See In re Cameron,
¶ 16 Other cases offer little support. For example,
Psaki v. Ferrari,
¶ 17 Likewise,
National City Bank, Indiana v. Shortridge,
¶ 18 To be sure, A.R.S. § 12-1191(A) is not a license to litigants to freeze their opponents’ real property and in some cases may be subject to abuse. Indeed, the legislature has recognized as much in A.R.S. § 33-420. Under that statute, one who
causes a document asserting [a] claim to be recorded ... knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is оtherwise invalid is liable to the owner or beneficial title holder of the real property for the sum of not less than five thousand dollars, or for treble the actual damages caused by the recording, whichеver is greater, and reasonable attorney fees and costs of the action.
A.R.S. § 33-420(A).
Further,
[a] person purporting to claim an interest in, or a hen or encumbrance against, real property, who causes a document asserting such claim to be recorded ... knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is guilty of a class 1 misdemeanor.
Id. § 33-420(E). However, because an action under A.R.S. § 44-1007(A)(2) for avoidance plainly affects title to real property, our statutes authorize a creditor to file a lis pendens under the circumstances presented by this case.
¶ 19 Therefore, in answer to the District Court’s certified question, we hold that an action under Arizona’s version of the UFTA seeking to void an allegedly fraudulent transfer of real property is one “affecting title to real property” under A.R.S. § 12-1191(A), the lis pendens statute.
Notes
.
E.g., Sports Shinko Co., v. QK Hotel, LLC,
