MacCollum v. Perkinson

underlying judgment such time judgment underlying in the action be- final or non- against insured becomes final. comes remaining are re- issues appealable. The policy Another issue addressed Amfac appeals for resolution manded to the court date on the impact involves the of the accrual considering the all haste appropriate lawyer relationship and between years this case has been before many appeals’ adopted the court client. We courts. rationale: If hold a cause of action we were to MOELLER, J., V.C.J., ZLAKET, and litigation accrues at legal malpractice concur. judgment conduct or initial the time by a argued to and decided This case was damage has the time the rather Art. justices. Ariz. Const. panel of three See irremedial, constant- become a client would VI, § second-guess attorney his ly required to legal other and would be forced to obtain MARTONE, J., did himself and recused attorney’s handling of the opinions on the participate determination Nothing more case. could be destructive CORCORAN, matter; J., participate did not attorney-client relationship. [to] the matter. the determination Miller, Corp. Dist. v. Amfac 797-98

Similarly, faith claims an accrual rule bad bring an action requires the insured judgment final would

before the becomes while, his force an insured to sue carrier time, depend on the carrier the same 913 P.2d 1097 represent appeal of his zealously him at the M.D., MacCOLLUM, Plaintiff- M.S. third-party relationship claim. The between Cross-Appellee, Appellant, claim, parties, nature of the and judicial efficiency combine militate favor required of a rule that the insured not Perkin John PERKINSON and Verna W. damages are final and irrevoca- sue until wife; Douglas son, E. husband and

ble. Smith, Doe and Jane husband Smith judgment public policy wife, Sound Defendants-Appellees, convince us to follow the final ac Regester, Regester L. and Joan Charles third-party crual rule. hold that wife; Defendants- husband claim at the bad faith failure-to-settle accrues Cross-Appellants. Appellees, underlying final time the action becomes Taylor’s Accordingly, bad non-appealable. 1No. CA-CV against faith claim State Farm accrued Arizona, Appeals Court final; 1984, when the excess verdict became 1, Department Division C. thus, timely the 1985 bad faith action applicable two-year limit. filed within the March 13, 1996. As Corrected March

CONCLUSION portion court of approve opinion finding that an action for appeals’ governed faith failure to settle

bad period in two-year of limitations statute portion § 12-542. We vacate that opinion addressing the accrual claim’s third-party that a bad faith date and hold claim not accrue until refusal to settle

Grant, Williams, Dangerfield, Lake P.C. & Williams, Danger- Mark L. Richard C. Phoenix, field, Appellees Smith. Westover, Anderson, O’Connor, Cavanagh, Beshears, by KiUingsworth & P.A. Richard Lorenzen, Phoenix, Appellees/Cross- M. for Regester. Appellants

OPINION

TOCI, Judge. appeal

The issue raised first only spouse’s signature on whether one partnership note of trust suffi- and deed community. We cient to the marital bind community conclude that because the marital only personal property interest in nership the marital acquire proper- in real “an interest ty” acquires prop- real when the signature erty. spouse’s on a partnership note and of trust suffi- community. cient to bind the marital The second issue raised whether mo- denying trial court erred MaeCollum’s complaint his to tion for leave to amend state, claims, among for relief other claim for of the securities fraud statutes. violation proposed We conclude that MacCollum’s amended stated a claim relief theory alleged, including on all theories by promissory Reges- note executed “security” Enterprises ter/PST the securities fraud statutes. The denying therefore erred the motion leave amend.

I. FACTS AND PROCEDURAL

BACKGROUND MacCollum, M.D., June M.S. Offering received a Private Memorandum (“POM”) Reges- L. from defendant Charles The offered inter- ter. POM “investment ests” note. invested purchase prop- funds were to be used to lease, development, Ac- erty and resale. POM, cording the investors were invested, principal interest on the receive the by principal, Office of Tellier John and “bonus interest” The Law John R. Tellier, Phoenix, Hammond, lease, property. refinancing Natoli & or sale R. Hammond, Tobler, Phoenix, Although promisso- P.C. Phil B. the POM stated that the secured, ry might it also might MacCollum. not be Appellant/Cross-Appellee foreclosure, default, Fur- prevent Regester that in To Lou stated the event investors Inc., Co., company rights prop- niture controlled could “enforce their deed of erty [Regester] Regester, purchased the note and and other of Borrower assets assignment their Mac- trust and obtained to recover investment.” M.S. (“Mac- pur- Collum, Regester Plan bank’s financed M.D. Limited Pension interest. Plan”) Bank and deed chase of the Arizona responded Collum POM Bank. $100,000 Valley delivering a amount of trust a loan from National check proceeded Regester. Regester Lou Furniture Co. then 30 or August with a trustee’s sale on September year, Reges- of the same purchased at which Enterprises ter/PST extinguished investors’ This partners Its L. Re- formed. were Charles securing payment hen second of trust gester, Holdings, and PST both of had whom promissory their notes. fifty percent partnership. a Plan note Holdings, partnership, Alleging that the MacCollum PST was Perkinson, its due date November composed Douglas paid of John E. was on W. Smith, seeking filed a Anthony Regester L. Tominac. MacCoUum recovery promissory note.2 The writing, informed in- under the then the investors Plan, note cluding part- that the defendants’ answers asserted MacCollum actually “equity investment” that was nership purchase property would in Mesa. was sold, not to until the was paid Enterprises Regester/PST part- After the leased, con- The defendants or refinanced. nership purchased the Mesa Re- that, tended none of these events because $100,- gester prepared promissory note for occurred, they liability. had Plan, payable to the MacCollum the is- attempted Both to narrow parties a “Junior Deed of Trust.” The entire partial sues for trial. MacCollum moved unpaid principal balance of note was judgment. Asserting the de- paid summary on or November 1991. before note, “Register/PST on he re- had defaulted The maker the note was fendants quested unpaid on the Enterprises.” Although Regester, judgment Perkin- note for note, son, Smith, principal against signed balance and interest Tominac spouses. partners’ Defendants signed by any spous- defendants and their was not summary judgment, contending Reges- moved The deed trust identified es. Enterprises that the marital were partners’ as the trustor. The communities ter/PST investors, Plan, promissory obligations. including for the the MacCollum liable the beneficiaries.1 were granted It The trial court both motions. Although Regester promissory held note evidenced had earlier notified the Thus, the purchase partnership. debt—a writing investors that the obligated because the due part Mesa be financed in was would passed. from date on note had The trial court partnership, funds the balance with concluded, Sav- purchase partner- under Meritor price consisted Investors, ings Canyon Regester/PST Enterprises Bank v. Camelback ship loan. bor- (D.Ariz.1991), $1,250,000 joinder F.Supp. 455 approximately rowed spouses required by Ariz.Rev.Stat. Bank the loan both was Arizona and secured with (“A.R.S.”) 25-214(0 Ann. section property. the Mesa first deed trust on that, partners’ pay unable to the Ari- The court ruled because The was spouses promissory executed fell due in had not zona Bank when the loan June note, result, partners’ marital communities were As a the Arizona Bank threat- 1988. obligations. legal for the MacCollum note action. liable ened The Plan was on Janu- Although of trust 2. MacCollum terminated the second deed was executed ary promissory dis- and its note was November it was not recorded until on May MacCollum. tributed to court, relying on Meritor summary judgment motions Before agreed defendants Savings, to file a argued, MacCoilum moved acquisition involving the generally was one complaint. He second amended sought assert additional claims based encumbrance court, joinder of the according to the trial theory that his note was subject required to partners’ spouses later denied the motion and court denied liability for respective Af- their communities MacCollum’s motion for reconsideration. disagree. recently entered, judgment We summary MacCoi- transaction. ter rejected Bank plead- argument a similar Chase motion on the lum filed a Acosta, 563, 880 P.2d granted. The court ings, the court Arizona v. which judgment on the entered against defendants

favor of MacCoilum and that, Acosta, in absence of we held even Tominac, Perkinson, Regester, Smith joinder by non-partner spouse, against their marital communities. but not held liable ner’s could be This appeal followed. resulting partnership’s debt from conducted estate transaction princi- partnership. a number of We stated II. DISCUSSION First, ples applicable are here. the partner partnership property in interest of Liability of Marital Communities A. 572, personalty. P.2d at 1118. is Id. at 880 presented is The first issue whether A.R.S. community acquire a If funds are used to requires signature the of the section 25-214 interest, partnership is “commu- that interest non-partner spouse partnership promis aon Second, nity property.” Id. be- personal subject sory and of trust to the community spe- has interest in cause the community liability in marital for a default partner property, cific the partnership question such instruments. Because this is spouse partnership is entitled to deal with statutory interpretation, review it de non-partner consent of the assets without the 204, State, 201, novo. Blum v. 171 Ariz. 829 Third, spouse. exception Id. the real estate 1247, 1250(App.1992). P.2d 25-214(0(1) apply to a section “does spouse’s partnership simple the interest for community is general, property ha realty, personalty.” it is reason that but ble for incurred for the benefit the debts Thus, Acosta, Id. we concluded that be- 25-215(D) (1991). § A community. A.R.S. community spe- interest in cause the community presumption in of a obli favor assets, “acquire cific it partnership gation spouse “when either incurs a arises property” or dispose or encumber real when during marriage debt for the the benefit with its assets. Id. partnership deals community.” United Bank Ariz. partner’s ability of a to deal The issue 198, 191, 1012, Allyn, P.2d v. 167 Ariz. 805 property community- free of partnership presumption 1019 This must be joinder requirement was dealt with our convincing clear and evidence overcome Weast, supreme Cummings v. 72 separate obligation of that the debt is the (1951). There, 93, Ariz. 439 231 P.2d spouses. Id. court stated: in- generally spouses community personal property is Additionally, although When retains, partnership, community in a as be- rights to bind the vested equal have involved, spouses its character not bind tween property, certain transactions will community subject join community spouses unless both powers governing and primary § in- duties 25-214. These the transaction. A.R.S. itself, which includes the acquisition, partnership “[a]ny for the clude transaction proper partners acts of inter sese. Such disposition of an interest or encumbrance subject pri- “[a]ny transaction of property” and mary charge any liabilities to which the indemnity suretyship.” A.R.S. guaranty, 25-214(0(1), (2). subjected, partnership may be § 184 Reeves, v. 166 Sch. its federal decisions. Orme power partnership

and the and 304, 1000, 301, 1003 predominates ... 802 P.2d members over the assets Ariz. meaning Ta- any Accordingly, to the rights over which members we turn community may regard have in of Acosta. light and Bell in tum same. Bell, general partners Tatum and (citation 98-99, omit- Id. at 281 P.2d at 443 partnership guaranteed (a ted). (1989) inter- partner’s 29-226 A.R.S. partnership de- by real When personal property). est loan, judicially fore- on the the bank faulted Consequently, such brought suit for closed on subject management personalty at deficiency. at P.2d 170 Ariz. join- spouse and control of either without claimed, among other The defendants 25-214; see also der of other. deficiency could things, any Massabni, Corp. v. Nationwide Resources against the marital communi- not be collected (App. 134 Ariz. general partners. ties 1982). Relying on Consolidated P.2d at Roof- First Defendants nonetheless claim Grimm, ing Supply & Co. Tatum Center Interstate Bank v. and Bell (App.1984), P.2d 457 we held Assoc., (App. 170 Ariz. 25-214(0(2) language section plain of A.R.S. 1991), Savings, controlling. are Meritor spouses execute requires that both must They assert that these cases stand community.3 bind the guaranty order to plain language A.R.S. proposition considering and Ta- whether Acosta Without 25-214(C) spous- section mandates that both reconcilable, Acosta, Bell see are tum join involving real es- es 880 P.2d at 1122-23 community. in the marital tate order to bind J., Grant, J., dis- (Weisberg, concurring, Savings reject argument. We Meritor is senting), Tatum and Bell we find that erroneously decided. Tatum and Bell guar- a distinguishable because concerned distinguishable. anty present case does not. while Savings, general partnership In a Meritor Here, partners signed a property. real defaulted on a note a loan binding repay F.Supp. Dis- 783 at 456. United States in- Plan. The loan was to the MacCollum held the District of Arizona trict Court for purchase and was later secured tended general part- communities of marital 29-226, property. A.R.S. real Under section liable the deficien- ners could not be held for in this a partners’ interest judgment cy after the foreclosure sale an personal property interest rather court property. The district requirement in real language of section 25- relied on the A.R.S. 25-214(0(1), section both of A.R.S. 214(C) opinion in Tatum and this court’s ... sign “any transaction for the spouses Bell. in property,” of an interest encumbrance Acosta, Meri- rejected holding of we com- apply; partners’ Savings. P.2d 179 Ariz. at 572 n. 880 tor signature munities can be held liable on the Savings n. The court Meritor at 1118 only partner. The trial there- court erroneously to stand read Tatum and Bell entering summary fore erred that, joinder absent proposition marital communities were that defendants’ partner could not bind partner’s spouse, not liable the MacCollum note. community through the activities the marital Ta- partnership. F.Supp. 783 at 457. Complaint B. Motion to Amend proposi- not stand for this tum Bell does Furthermore, ques- a MacCollum next contends that because this is tion. law, denying his motion to are to follow court erred second tion of state we not bound marital, Bell, community. Tatum and We it made no difference that bind found that signed guaranty binding spouse a a P.2d at 1389. Ariz. 821 1.70 nership guaranty attempting to opposed to a Registration 1. Securities Violations complaint. his review the denial amend a clear pleading of a motion to amend for second proposed Two of the Count Romero, 141 v. abuse of discretion. Hall complaint alleges violations amended 120, 124, (App.1984). 685 P.2d Ariz. statute, section registration Á.R.S. securities Misapplication of the law can constitute (1994). explic The statute does 44-1841 City Gey- v. abuse of discretion. Phoenix for its grant private action itly a cause ler, 323, 329, 1073, 1079 144 Ariz. 697 P.2d Nevertheless, 44-1841 is a section violation. (1985). To if the trial court determine of the racke offense a violation predicate in denying its discretion the amend- abused 13-2314(A) statute, teering section ment, presume alleged in the facts we laws, (1989). racketeering spe Because the v. are Maldonado true. 13-2301(D)(4)(s) (1989), cifically pro section Co., 165, 629 Transp. Pac. 129 Ariz. Southern action, think it private cause vide (App.1981). P.2d 1001 implicit private cause of action exists of section 44-1841. for violation 15(a), Rule Arizona Rules of Civil Procedure, provides party that a amend security pur The definition any pleadings his once as matter course registration is broad. It poses of the statute responsive pleading time is served. before 44-1801(22) “any note.” A.R.S. includes that, party may pleading his After amend Supreme The Arizona Court (Supp.1995). only by leave of the court. Ariz.R.Civ.P. 211, 213, Tober, 173 Ariz. held State 15(a). discretionary, Leave amend (1992), that, purposes P.2d Ct., liberally granted. Superior Owen v. 44-1842, “securi 44-1841 and A.R.S. sections ques ty” note unless means specifically exempted the securities tion Amendments un permitted will be 212-13, 841 P.2d at 207-08. statutes. delay less court in the re finds undue conclusion, reject reaching faith, prejudice, futility quest, bad undue judicial wheth ed various tests determine Bishop Dep’t v. State the amendment. Id. The court er note is Corrections, sold the defen cumstances, pleading leave amend registration unless the statutes the securities granted underlying facts “[i]f should be the by exempted A.R.S. section 44-1843 upon ... be a or circumstances relied (1994) (1994), or or 44-1843.01 the transac proper subject Spitz v. & of relief.” Bache exempted by tion A.R.S. section 44-1844 was Inc., 530, 531, 365, 366 Co. 122 Ariz. 596 P.2d (1994). (1979). generally Denial of leave amend Tober, Consequently, of discretion where the amendment the note in abuse legal theory. registration its merely security, seeks to add new this case is a Dep’t Safety, required, exempted by it of Walls v. Arizona Public unless one the of 591, 597, 1217, Here, (App. exemption trial statutes. the court 1991). exempt note to under A.R.S. found the 44-1843(A)(10). The concluded section factual The trial court determined by a that because the note was secured deed the new MacCol- basis existed for theories trust, exemption. fell within that We of complaint. Finding the lum’s amended disagree. security, note the trial court dis- was 44r- Additionally, Revised Statute section the securities claims. Arizona missed 1843(A)(10) inapplicable to case. That court concluded that transaction loan, by exemption applies ... secured nothing “[n]otes a commercial thus was but disagree. trust fiduciary mortgage or deed of estate raising duties. mortgage together if ... proposed MacCollum’s sec- ... the entire We conclude that thereby allege a for is sold or of- claim all notes ... secured ond amended did unit____” § alleged, as a A.R.S. 44- including all a vio- fered sale relief on theories 1843(A)(10). Here, although the transaction lation of securities laws. fraud defines a secu- eventually by junior of The securities statute secured deed trust, regis- do the rity in even terms than broader part the trust deed was security The definition as it and sold to the tration statutes. was offered registration by the purposes of is limited MacCollum Plan. The POM stated 44- statutory of section language prop- no interest investors would have 1801(22) statutory exemp- specified erty and the promissory might note statute, however, might tions. securities fraud not be secured. includes of even those securities the sale Additionally, securing MacCol- require- exempted registration are appears lum an after- Plan note to have been adopting such ments. A.R.S. thought. finally promissory note Unlike the definition, however, legislature a broad defendants, by sample executed remedy for provide a broad did not intend to promissory note to the did not attached POM v. Ernst & all fraud. Reves securities See language contain that the note was to 949, 56, 945, Young, 110 S.Ct. 494 U.S. Furthermore, by a deed trust. secured has been left to 108 L.Ed.2d 47 It although Plan its the MacCollum delivered myriad of courts to decide which of the 27, 1986, check on June the transaction the cover- financial transactions come within Regis- transferring Id. age of fraud statute. the securities securing the note Partnership ter/PST formalisms, by legal are “[W]e not bound partner- did until much later. The not occur economies of the instead take account ship acquired the Mesa on Novem- investigation.” Id. transactions under 5,1986; ber note and deed specific judi- courts relied on more our have trust executed extremely security than the cial definitions Plan MacCollum were dated November provided by AR.S. section 44- securing 1986. The deed trust the Mac- 1801(22). Dobras, Rose v. See May Plan note was not recorded until Collum years almost two after the MacCol- statutory Because Arizona’s definition $100,000 Re- lum to defendant paid Plan security “substantially to the defini- similar gester. Act of tions found in the Securities 1933 and partner- note While the executed 1934[,] Exchange Act of [fed- the Securities ship ultimately a deed secured interpretations eral are often looked to trust, obtaining a trust the whim deed of Rose, Division guidance.” Two bring does not borrower adopted this court the United States Su- exemption. Simply put, the Mac- within the test, preme Court’s announced SEC Plan was not offered and did Collum Co., Howey W.J. U.S. S.Ct. purchase of trust. (1946), determining 90 L.Ed. 1244 wheth- Therefore, ruling in that the court erred security. The Supreme is a er an instrument theory security legally was ins- MacCollum’s held, however, that the How- Court since upportable exemption the because of applied ey test is not to be when the instru- 44-1810(A)(10). AR.S. section is a Reves v. Ernst & ment involved note. 64, at 110 950. Young, 494 U.S. S.Ct. at 2. Fraud Securities Reves, Instead, adopted the the 65, “family Id. at 110 resemblance” test. pro Count Three of MacCollum’s at 951. S.Ct. alleges posed second amended securities, Tober, Supreme left fraud sale of a violation of the Arizona Court in the open question offense the whether Reves should AR.S. section 44-1991 This applied 44-1991. 173 predicate private act for cause of action be to A.R.S. section is a a 13-2301(D)(4)(r). 5, 208 n. For racketeering. Ariz. at n. 841 P.2d at 5. AR.S. 213 reasons, determining we that should analysis The the several believe Reves whether security applied meaning of “se- question note in a under this to determine First, curity” used section 44-1991. before is different from that which we statute Reves, States Su- registration we followed the United above under statutes.

187 Howey preme money a investment. Court test to define the to finance substantial meaning purpose profit from the security MacCollum’s section 44- under A.R.S. Rose, through on investment the interest See 1991. 128 at 624 at Ariz. potential bonus interest Second, leading 889. factors federal lease, refinancing, property— or sale judicial place gloss courts to a on ex- Thus, “equity kicker.” this the so-called tremely security broad definition of naturally “most as transaction is conceived present civil fraud claims are when con- enterprise an in a business rather investment interpretation sider of section 44-1991. purely commercial or consumer Reves, 60-61, 494 U.S. at 110 S.Ct. at Cf. Id. at at 110 S.Ct. 952-53. transaction.” Finally, ap- the restrictions plication of sections 44-1841 and 44-1842 The second Reves factor involves the ex- Tober rejection that led to the court’s plan amination of the of distribution of the case, judicial present not in this tests are an instrument to determine if it is instrument interpretation which involves trading specula- which there is common statutory security definition of con- broad Id. at Offering tion. at 952. S.Ct. tained section 44-1991. selling segment public to a broad required requi- is all that is to establish the Because the federal statute defines securi trading” Id. site “common an instrument. note,” the Reves test be ty “any to include 68,110 citing Landreth Tim- at at 953. S.Ct. gins presumption a note that Landreth, ber Co. v. 471 U.S. security. Id. at at 951. S.Ct. This (stock (1985) S.Ct. L.Ed.2d presumption only by can be rebutted show closely corporation held not traded on ing strong that note bears resemblance exchange “security”). to be The held defen- (in four terms of the factors identified dants assert MacCollum note was Reves) judicially to an item on the crafted single payee, issued to a and thus was not list of instruments intended trading.” available for “common While com- Id. regulated security. as a at issue, trading mon dispositive family at S.Ct. 950. Included in this of non- from this reasonable inference record notes, security financing notes are “consumer to a the POM marketed limited mortgage, notes secured home notes number of investors.4 factor assets, a lien on a or its business points the conclusion that customer, reflecting notes to a bank family MacCollum Plan note resembles assignment short term notes secured an POM states that the are securities that notes Here, begin presumption with a that we pursuant private offering being are offered to question security note and the in exam- exemptions. think it reasonable for a ine the Reves factors to determine if prospective the POM investor to take at its presumption is overcome. Under first word. factor, Reves parties, the motivation of the fourth Reves factor involves parties profit The both intended to exami- Regester’s was to nation to if purpose transaction. raise determine beneficiaries, appear to 4. The POM states that number of investors is all be health provides providers. “limited” the record no hint to as care meaning language. deed of this of trust by factor, the Second Circuit test followed any risk-reducing such blance” there (later scheme, Supreme adopted United States regulatory that existence of another Reves), in note to finance Act un- the Amfac application renders of the Securities Court risk-reducing clearly related necessary. factor the mall is We find the construction of to not deemed be suggest family that the note is that are case, observed, this and on remand “Nowhere is there cause we remand 433. The court plead is entitled to the alterna- parties dealing MacCollum any indication that were Furthermore, 8(e), Rule Arizona Rules of Civil Id. tive under securities.” Procedure, nature of his that, “family the redundant resem- court noted

189 uncollater and nonmembers enti to its members point. He is claims is not fatal at this payable on demand. recovery promissory unpatented an property than real other Regester argues she should have Joan that or attorneys’ mining claim a lease less there been awarded fees because year. upon was no rational basis which MaeCollum against her indi- could have asserted claim indem- guaranty, Any 2. true, Assuming she has

vidually. this to be nity suretyship. or fees that she incurred demonstrated opinion concerned Our Tatum and Bell and marital commu- above what her husband (C)(2) By only of this statute. subsection of discre- nity incurred. We find no abuse contrast, v. Acos- opinion in Bank our Chase in denying tion her fees. ta, (App.1994), P.2d (C)(1).5 In Acosta only concerned subsection Appeal Attorneys’ Fees on D. (C)(1) not fore- that subsection we held fees, attorneys’ request for MacCollum’s community of a to marital close recourse pursuant paragraph of the six deficiency a note general partner for the note, pending compliance with granted acquisition real securing partnership’s 21(c), Appellate Rule Arizona Rules of Civil 571-73, Id. at at Procedure. holding and its agree I of Acosta not, I do application this case. III. CONCLUSION unnec- portions of Acosta that endorse those erred in find- We hold that trial court validity of and Tatum essarily question the ing joinder non-partner spouses see at P.2d at Bell. See id. required to hold the defendants’ marital (Weis- at 1121-22 also at 880 P.2d id. communities liable this transaction. We J., berg, There is in fact concurring). in denying erred also hold that the trial court inconsistency holding in Tatum between our to file his sec- MacCollum’s motion leave Bell, understood, ma- properly and the and complaint. and ond amended We reverse holding in jority Acosta. proceedings remand further consistent reconciling, factor distinguishing, and opinion. with this recognize apply and principle VOSS, P.J., partner’s decision: A both Acosta concurs. community has interest concurring: FIDEL, specially Judge, specific partnership item of sepa- join opinion, I lead but write in the or Though partnership may own owns. continuing validity rately to address community has no property, in real trade Bank Tatum and Bell First Interstate property, in such real interest Assoc., 821 P.2d 1384 Center only personal property interest in the (App.1991). This court held Tatum § 29- See A.R.S. nership assets a whole. guaranty signed members Bell a loan (“A partner’s interest does not bind the marital profits surplus, his share signing partners communities It follows personal property.”). same signatures spouses. absence of the of their in a engages who partner-spouse that a Id. at 821 P.2d 1389. We reached or acquisition, disposition “transaction 25-214(C), holding by application of section [partnership] encumbrance provides: which § 25- property,” (paraphrasing real spouse separately acquire, Either 214(C)(1)) not, any degree, engaged in manage, dispose control acquisition, disposition a “transaction community, except property, or bind the [community] proper- or encumbrance joinder required in spouses of both 25-214(C)(l) ty.” purpose Because following any of cases: dissipation prevent unilateral of communi- community personal acquisition, ty Any transaction for the (C)(1) property, the restrictions of subsection disposition or of an interest encumbrance 214(C)(2) (the exception).” 'guaranty' expressly “analyze declined Acosta at 1117. standpoint of A.R.S. 25- this issue from the Acosta, case, Acosta, like concerns Because this apply. do not 179 Ariz. at (C)(1), pro- property real only subsection P.2d at (C)(2), vision, guaranty not subsection real transformation unnecessary provision, colleagues find my property property community personal into and Tatum compare reconcile Acosta However, statutory the cases are bearing, on the Bell. because marking readily the distinction reconciled spousal guaranties. restriction on unilateral guar- transactions between community Partnership anties, highlight I add these words guar- personal guaranty but a lift cast Acosta distinction and shadow signs a anty. partner-spouse When a application of subsection over our narrow nership guaranty, engaged he has (C)(2) in Tatum and Bell. guaranty, indemnity or sure- “transaction of 25-214(0(2). And tyship.” spouse

statutory purpose—to preclude one unilaterally binding the to a from guaranty—is implicated less when guarantee signator unilateral undertakes he debt when undertakes guarantee debt another form. concluded that notes cir 1209-10 Absent these were securities and fell within dants Tober

Notes

notes the courts have deemed not be receivable, of accounts and notes which for securities. open malize a on an in a debt account busi Tober, The third Reves factor, ness.” at 212 n. public’s reason- question at 207 n. If the supports finding instrument expectations, able that the sufficiently similar to one of instru note in was a this case essence list, ments on the security decision whether an is its as an character invest- category other should be added list of ment. 110 S.Ct. non-regulated offering instruments is made exam POM refers to the transaction as Reves, ining the four factors. same Reves for “a limited number of investment interests 66, 110 Furthermore, 494 U.S. at S.Ct. at 951-52. in a note.”

to to the notes Id. at 431 n. 6. subject regula- non-security The note is not to substantial notes. Marine See laws. tion under other Arizona Here, have offered the defendants Weaver, 551, 556,102 Bank v. 455 U.S. S.Ct. analysis applying the meaningful as to how (1982) (certifi- 1220, 1223, 71 L.Ed.2d 409 presumption four Reves factors rebuts subject by FDIC and deposit cates of insured security. They that the MacCollum note is a banking were not regulation laws therefore, not, that demonstrated have Daniel, securities); Teamsters v. U.S. Reves “family” closely resembles the note (1979) 551, 58 L.Ed.2d 808 S.Ct. reasons, non-security For these and notes. comprehensively regulated un- (pension plan only one of the Reves find that because we act, security). der retirement not that points away from the conclusion factors Further, not se- question the note security, we Plan note MacCollum original investment cured. Under a securi- conclude that MacCollum POM, in the the investors scheme stated ty. plaintiffs claim for relief viola- would own no interest estate to should not have tion of the securities laws purchased. any provision Neither was there been dismissed. prom- securing repayment POM issory Al- notes issued the investors. Remaining Claims though later recorded the defendants claims for Four and Six make out Counts notes, it of trust to secure the investors’ duty, fiduciary breach of the cove- breach of original investment not called for under faith, negligent good nondisclo- nant scheme. trial each of these sure. The court denied Mortgage rely The defendants on Amfac it found the transaction claims because Tempe, Corp. v. Arizona Mall F.2d not a of securities. Conse- loan and sale (9th Cir.1978), proposition that court, the rela- quently, according to found notes similar to other courts have that parties sup- not tionship between the could note are not securities. the MacCollum Plan port have concluded the claim. Because we reasons, persuaded. we For several are finding the trial court erred between involved a construction loan Amfac security, also that it was not a hold borrower, lender, Amfac, Arizona and the finding did these claims erred Mall, shopping of a cen the construction proper grounds for relief. state promis loan was secured ter. Amfae’s Five, One, make Counts Seven note, trust, loan sory deed of construction contract, breach of out claims breach pledged collateral. After agreement, good fair deal implied covenant of faith and in the construction Arizona Mall defaulted unjust enrichment. The trial court ing, and agreement, Amfac sued the district had claims because MacCollum denied these court, alleging note exe already prevailed its claim his contract security Arizona Mall was a within cuted Consequent judgment. summary motion meaning and Arizona of the federal secu already ly, it concluded that these claims had rities laws. redundant, decided, or were su been concluded, “The The court form Amfac perfluous. position obligation supports appellee’s amend, definition, per- here The motion a commercial loan was involved stage pleading Be- Id. capital.” lawsuit. an investment of risk tains

notes pursue his alized tled to all theories Reves, 58, at 947-48. Mar 110 S.Ct. trial. v. 494 U.S. their conclusion at See Vinson 736, Assoc., 1,4, 739 that such demand notes ton 159 Ariz. The court concluded & term is used (App.1988). “securities” as that 70, 110 S.Ct. at federal securities law. Arguments Remaining 4. Defendants’ Thus, ar the fact that MacCollum loan, than an note rather gued that the was essentially claim that Defendants immaterial; investment,” there is “equity to file a second amended motion leave argu legal support the defendants’ denied because complaint should have been evidencing a can never a note ment that by MacCollum were the new claims asserted security. be a his asserted previously inconsistent with theory. Parties breach of contract reject assertion the defendants’ We also Ariz. alternatively inconsistently. plead judicially estopped from that MacCollum 8(e); Bldg. Tempe Corporate R.Civ.P. Office security. part, In claiming the note is a that Inc., Servs., Ariz. Funding 167 v. Arizona argument on MacCol- defendants base their 394, 398, 1130, (App.1991). 807 1134 P.2d representations in case that lum’s earlier this party to elect before And a cannot forced equity note not an investment. As was theory ad the conclusion of trial the it will above, argument has no mer- we observe Vinson, remedy it vance or the will seek. Additionally, judicial estoppel applies it. 159 Ariz. at 764 P.2d at 739. position in party has assumed a when who Furthermore, inconsistency be- we find no judicial assumes an inconsistent proceeding recovery on the MacCollum’s count for tween proceeding. Rosen- position subsequent in a al- and the other theories berg Rosenberg, 123 Ariz. leged complaint. in the proposed amended not MacCollum is cur- P.2d theory that first raised the The defendants rently asserting position inconsistent with loan, did evidence a but rather he position he asserted and on which paying “equity an investment” to avoid was judicial prior proceeding. in a received relief essence, on In MacCollum the note. judicial preclude estoppel does not $100,- argued that defendants MacCollum’s Thompson v. MacCollum’s claims. See an investment real estate. check was Thompson, P.2d defendants, According to until the real estate sold, leased, they owed refinanced or Finally, for the first time defendants assert nothing. MacCollum appeal not be on amendment should response, argued In MacCollum unduly prejudi- allowed would be because specific court should focus the note’s and futile. These issues were never cial $100,000 plus promise pay him sum of This will raised court. 18,1991, or “on or before November not raised below. consider issues theories upon ‘Property1____” the sale of the entire City v. Lake Havasu Ass’n for Sahf argued language MacCollum Handicapped, Retarded & promised pay unequivocally defendants 1177,1180 (App.1986). words, sum certain on a date certain. his “equity “was this was not investment” but Regesters’ Cross-Appeal: Attorneys’ C. According de a loan.” and remains Fees fendants, in this assertion MacCollum is alleged with his claim that defen consistent community argues Regester statutes. We dants the securities violated awarded the trial court should have disagree. against attorneys’ defending fees incurred hold that evi- claims. Because we is whether the note MacCollum’s The issue here Reves, properly against the entered dencing the loan community, community is cooperative, of funds to marital farmers’ need attorneys’ fees. operations, sold entitled to its business finance

Case Details

Case Name: MacCollum v. Perkinson

Court Name: Court of Appeals of Arizona

Date Published: Mar 13, 1996

Citation: 913 P.2d 1097

Docket Number: 1 CA-CV 94-0001

Court Abbreviation: Ariz. Ct. App.