Baumgartner v. Timmins

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

THOMAS M. BAUMGARTNER and JULIE B. BAUMGARTNER; DANIEL
CROSS and CATHY CROSS; CLYDE CUMING and BETSY CUMING;
GARY ENGELS and DENISE ENGELS; LARRY PUTNAM and MARTHA
PUTNAM; DONALD SGAMBELLURI and PATRICIA SGAMBELLURI,
Plaintiffs/Appellees,

v.

EDWARD A. TIMMINS, JR. and ANN M. TIMMINS,
Defendants/Appellants.

No. 1 CA-CV 17-0484
FILED 8-30-18

Appeal from the Superior Court in Apache County
No. S0100CV201600124
The Honorable C. Allan Perkins, Judge

REVERSED; REMANDED

COUNSEL

Criss Candelaria Law Office, P.C., Concho
By Criss E. Candelaria
Counsel for Defendants/Appellants

Brown & Brown Law Offices, P.C., Eagar
By Douglas E. Brown
Counsel for Plaintiffs/Appellees
 BAUMGARTNER, et al. v. TIMMINS, et al.
Opinion of the Court

OPINION

Judge Jennifer M. Perkins delivered the opinion of the Court, in which
Presiding Judge Diane M. Johnsen and Judge Kent E. Cattani joined.

P E R K I N S, Judge:

¶1 Edward A. Timmins Jr. and Ann M. Timmins appeal from a
judgment against them, and in favor of fourteen individual property-owner
Plaintiffs. The superior court held that affidavits signed by the Timminses
and recorded by Ann Timmins created encumbrances against the Plaintiffs’
properties, and therefore the Timminses violated Arizona Revised Statutes
(“A.R.S.”) section 33-420 (2018). The affidavits alleged that the Plaintiffs’
properties were in violation of neighborhood covenants, conditions, and
restrictions (“CC&Rs”), but did not assert that the violations gave the
Timminses or anyone else a claim or interest in the affected properties.
Because the affidavits do not claim or purport to create encumbrances, they
are not subject to the statute. Therefore, we reverse the judgment and direct
entry of judgment in favor of the Timminses.

FACTUAL AND PROCEDURAL HISTORY

¶2 Property-owner Plaintiffs and the Timminses all own real
properties in the same subdivision in Apache County. While there is a
voluntary homeowners association in this subdivision, as well as an
Architectural Committee that considers new building plans, the record in
this case does not establish whether either entity has the authority to
enforce alleged CC&R violations. In 2015, the individual property-owner
Plaintiffs filed a lawsuit against the Timminses, alleging violations of
applicable CC&Rs, and obtained a default judgment against the Timminses.

¶3 In apparent response to the lawsuit and resulting default
judgment, the Timminses created and signed affidavits alleging that the
property-owner Plaintiffs were themselves in violation of several
provisions of the CC&Rs, such as those regarding parking, on-site signs and
tanks, and restrictions against commercial uses. The affidavits asserted that
Plaintiffs’ own violations of the CC&Rs prevented them from being able to
enforce the CC&Rs against the Timminses. Ann Timmins recorded the
affidavits in the Apache County Recorder’s Office.

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 BAUMGARTNER, et al. v. TIMMINS, et al.
Opinion of the Court

¶4 The property-owner Plaintiffs brought a special action in the
superior court against the Timminses under A.R.S. § 33-420, and the
Timminses counterclaimed, raising claims not relevant to this appeal.
Plaintiffs alleged the affidavits claimed or purported to create
encumbrances against their properties and were groundless because they
were not authorized by any statute. Following a show-cause hearing, the
superior court ruled that the affidavits created encumbrances against the
Plaintiffs’ properties under A.R.S. § 33-420. The court subsequently entered
final judgment pursuant to Arizona Rule of Civil Procedure 54(b),
nullifying the recordings and awarding damages, attorney’s fees, and costs
to Plaintiffs.

¶5 The Timminses appealed from the judgment, arguing that the
affidavits were not encumbrances, the affidavits were not groundless, and
the superior court’s ruling failed to include sufficient findings of fact and
conclusions of law as required by Arizona Rule of Civil Procedure 52.

DISCUSSION

¶6 Whether the affidavits are documents subject to A.R.S. § 33-
420 is a matter of statutory interpretation, which we review de novo.
Stauffer v. U.S. Bank Nat. Ass’n, 233 Ariz. 22, 25, ¶¶ 8–9 (App. 2013).

¶7 The statutory provisions at issue here are A.R.S. § 33-420(A)
and (C): Plaintiffs allege that Ann Timmins violated subsection (A) by
recording the affidavits and that Edward Timmins violated subsection (C)
by signing and refusing to correct the recorded affidavits. The statutory
language is as follows:

(A) A person purporting to claim an interest in, or a lien or
encumbrance against, real property, who causes a document
asserting such claim to be recorded in the office of the county
recorder, knowing or having reason to know that the
document is forged, groundless, contains a material
misstatement or false claim or is otherwise invalid is liable to
the owner or beneficial title holder of the real property . . . .

...

(C) A person who is named in a document which purports to
create an interest in, or a lien or encumbrance against, real
property and who knows that the document is forged,
groundless, contains a material misstatement or false claim or
is otherwise invalid shall be liable to the owner or title holder

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 BAUMGARTNER, et al. v. TIMMINS, et al.
Opinion of the Court

. . . if he wilfully refuses to release or correct such document
of record within twenty days from the date of a written
request from the owner or beneficial title holder of the real
property.

A.R.S. § 33-420(A), (C). Thus, the question is whether the affidavits claimed
or purported to create encumbrances against Plaintiffs’ properties.

¶8 The Timminses argue on appeal that by recording the
affidavits, they did not claim or purport to create “encumbrances” against
the properties within the meaning of the law. The statute does not define
the word “encumbrance.” “[G]enerally speaking, language in a statute is to
be given the meaning in which it would be understood by the ordinarily
intelligent [person], unless it is clearly used in a technical sense.” Southern
Pac. Co. v. Maricopa County, 56 Ariz. 247, 254 (1940), abrogated on other
grounds by Boyd v. Bell, 68 Ariz. 166 (1949). Because the word
“encumbrance” has a technical meaning in the context of property law, we
look only to that technical meaning. See A.R.S. § 1-213 (“Technical words
and phrases and those which have acquired a peculiar and appropriate
meaning in the law shall be construed according to such peculiar and
appropriate meaning.”).

¶9 By statute and case law, when used in a property law context
in Arizona, the word “encumbrance” refers to a non-ownership interest in
property. See A.R.S. § 47-9102 (defining encumbrance as “a right, other than
an ownership interest, in real property”); HSL Linda Gardens Properties, Ltd.
v. Freeman, 176 Ariz. 206, 208 (App. 1993) (“For example, the encumbrance
might be a lien securing a debt.”); Coventry Homes, Inc. v. Scottscom
Partnership, 155 Ariz. 215, 218 (App. 1987) (“equitable lien is a right over
real property constituting an encumbrance, so that the real property itself
may be proceeded against in an equitable action”). Thus, § 33-420(A) & (C)
do not apply unless the recorded document purports to create or claim a
right or liability of some kind attached to the property.

¶10 The Timminses' affidavits did not claim any right to
individually enforce the CC&Rs against the properties. They also did not
assert that the alleged violations gave the Timminses any right, claim,
interest, or lien in or on the Plaintiffs’ real property. Nor did the affidavits
claim that the homeowners association has asserted that the alleged
violations gave rise to any liability owed by Plaintiffs to the homeowners
association. The affidavits simply alleged that the properties were not in
compliance with the CC&Rs. For these reasons, we hold that the affidavits
did not claim or purport to create “an interest in, or a lien or encumbrance

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 BAUMGARTNER, et al. v. TIMMINS, et al.
Opinion of the Court

against” the Plaintiffs’ properties under A.R.S. § 33-420. Thus, the
Timminses did not violate A.R.S. § 33-420 by executing and recording the
affidavits.

¶11 Plaintiffs urge us to construe the statute using the Merriam-
Webster online dictionary meaning of the word “encumbrance” as
“something that encumbers,” and “encumber” as “[t]o cause problems or
difficulties for (someone or something).” See MERRIAM WEBSTER,
encumbrance, Definition of ENCUMBRANCE, https://www.merriam-
webster.com/dictionary/encumbrance (last visited Aug. 13, 2018);
encumber, Definition of ENCUMBER for English Language Learners,
https://www.merriam-webster.com/dictionary/encumber (last visited
Aug. 13, 2018). Plaintiffs argue that the affidavits “encumber” the
properties because they “cloud” the properties' titles, causing problems or
difficulties and requiring prospective purchasers to investigate or resolve
the alleged violations before deciding whether to move forward with a
purchase. But, as noted above, ¶¶ 8–9, “encumber” and “encumbrance”
have technical meanings unique to the legal field. In fact, the very
dictionary Plaintiffs cite also defines “encumber” as “to burden with a legal
claim (such as a mortgage).” Id. And, as Plaintiffs themselves concede, “the
recorded documents are not authorized by any specific legal authority.”
Furthermore, Plaintiffs do not assert that the Timminses’ allegations of
CC&R violations necessarily resulted in a lien against the properties or that
the homeowners association has taken any action against Plaintiffs
asserting a lien or interest based on the alleged violations. Accordingly,
because the alleged false statements did not purport to create a legal
interest, claim, or liability against Plaintiffs’ properties which lessened their
values, Plaintiffs’ remedy cannot be found in § 33-420.

¶12 Because we reverse the superior court’s judgment, we do not
address whether the affidavits were groundless or whether the superior
court’s ruling contained sufficient findings of fact and conclusions of law as
required by Arizona Rule of Civil Procedure 52. See Scenic Arizona v. City of
Phoenix Bd. of Adjustment, 228 Ariz. 419, 436 n.28, ¶ 54 (App. 2011) (declining
to address whether agency’s decision included required findings of fact
after reversing on another ground), as amended.

CONCLUSION

¶13 For the foregoing reasons, we reverse the judgment of the
superior court, including its award of attorney’s fees and costs, direct entry
of judgment in favor of the Timminses, and remand for any further required
proceedings consistent with this decision. The Timminses request

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Opinion of the Court

attorney’s fees and costs incurred in this appeal. In our discretion, and
because the Timminses failed to specify a basis for an award of fees in
compliance with Arizona Rule of Civil Appellate Procedure (“ARCAP”)
21(a)(2), we decline to award fees. The Timminses may seek costs upon
compliance with ARCAP 21.

AMY M. WOOD • Clerk of the Court
FILED: JT

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