Supreme Court Rules: Claims for Wrongful Foreclosure Must Be Filed Prior to Trustee Sale

File Your Wrongful Foreclosure Lawsuit Before It’s Too Late! 

The recent Arizona Supreme Court case, Zubia v. Shapiro, 243 Ariz. 412 (2018), reminds homeowners to obtain early legal counsel when facing foreclosure while bolstering lenders’ affirmative waiver defenses. Particularly, the Supreme Court ruled that borrowers waive claims to damages concerning the validity of a trustee’s sale when they first fail to obtain injunctive relief to prevent the trustee’s sale. The Supreme Court explained that because the “deed of trust scheme is a creature of statutes,” governed by § 33-811(C), “a person who has defenses or objections to a properly noticed trustee’s sale has one avenue for challenging the sale: filing for injunctive relief.” The statute’s express language requires enjoining the sale as a prerequisite to any claim arising out of the sale. The Court extrapolated from that reasoning and concluded that § 33-811(C) prohibits not only actions to void the sale, as with Zubia’s quiet title and declaratory judgment claims but also those “dependent upon the sale,” such as the slander of title and wrongful foreclosure claims. To support this conclusion, the Court parsed the technical language, stating that the statutory phrase “all . . . objections to the sale” does not “cabin the statute’s operation to a particular claim or type of relief sought and therefore does not apply only to those claims directly seeking to void a sale.” This language in § 33-811(C) “thus encompasses claims for damages which are based on a defective sell.”

Nonetheless, the Court stated that this rule has limits: a trustor who fails to enjoin a sale does not waive “claims that are independent of the sale.”

https://providentlawyers.com/supreme-court-rules-that-claims-for-wrongful-foreclosure-must-be-filed-prior-to-trustee-sale/

Comments

comments

Leave a Comment





This site uses Akismet to reduce spam. Learn how your comment data is processed.