Phoenix v. Equity Recovery

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

CITY OF PHOENIX, Plaintiff/Appellee,

v.

EQUITY RECOVERY SPECIALISTS, LLC, Defendant/Appellant,

v.

VICTORIA GONZALES, et al., Defendants/Appellees.

No. 1 CA-CV 25-0647
FILED 08-06-2026

Appeal from the Superior Court in Maricopa County
Nos. CV2019-012216, CV2021-014553
The Honorable Richard F. Albrecht, Judge Pro Tempore

AFFIRMED IN PART, VACATED IN PART, AND REMANDED

COUNSEL

Law Offices of Kyle A. Kinney, PLLC, Scottsdale
By Kyle A. Kinney
Counsel for Appellant Equity Recovery Specialists, LLC

Zwillinger Wulkan, PLC, Phoenix
By Scott H. Zwillinger, Jennifer L. Allen
Counsel for Appellee Bridge1, LLC

PHOENIX v. EQUITY RECOVERY
Decision of the Court

MEMORANDUM DECISION

Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge Samuel A. Thumma and Judge Andrew J. Becke joined.

C A T T A N I, Judge:

¶1 Equity Recovery Specialists, LLC (“Equity”) appeals the
superior court’s order awarding excess proceeds from a sheriff’s sale to
Bridge1, LLC (“Bridge”) after remanded proceedings. We affirm in part,
vacate in part, and remand to the superior court for proceedings consistent
with this decision.

FACTS AND PROCEDURAL BACKGROUND

¶2 In 1983, Ronald Bacon purchased real property in Phoenix.
Bacon died intestate in 2009. In 2019, the City of Phoenix filed a complaint
to foreclose statutory liens on the property against the “unknown heirs and
devisees” of Bacon, Victoria Gonzales (who claimed an ownership interest
in the property), and others who are not parties to this appeal. In 2020, the
superior court entered a default judgment and decree of foreclosure. The
property was then sold at a sheriff’s sale, resulting in $89,991.37 in excess
proceeds.

¶3 Gonzales assigned her interest in the proceeds to Equity, and
the alleged Bacon heirs assigned their interest to Bridge. Equity and Bridge
then filed competing claims to the excess proceeds. Equity claimed that
Gonzales was entitled to the property based on adverse possession and
because she held an unrecorded deed to the property. Bridge argued that
Gonzales did not adversely possess the property and that the Bacon heirs
were entitled to the proceeds.

¶4 The superior court conducted an evidentiary hearing at which
Gonzales testified that she and other family members resided on the
property, for a period of years, but she acknowledged that she left at some
point after she became sick. The court admitted Bridge’s proffered heirship
declarations over Equity’s hearsay objection.

¶5 After the hearing, the superior court awarded Bridge the
excess proceeds plus $33,812 in attorney’s fees. The court noted that even
though Gonzales paid property taxes, she did not prove that she had

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PHOENIX v. EQUITY RECOVERY
Decision of the Court

purchased the property. The court did not directly address Equity’s
argument that Gonzales owned the property through adverse possession.

¶6 Equity appealed. See City of Phoenix v. Bacon, 2 CA-CV 2024-
0001, 2025 WL 383769 (Ariz. App. Feb. 4, 2025) (mem. decision). This court
vacated the superior court’s award, finding that the superior court failed to
address Equity’s adverse possession argument and that the heirship
declarations submitted by the alleged Bacon heirs were inadmissible
hearsay. Id. at *3, *5–6, ¶¶ 12–16, 26–31. See generally Ariz. R. Evid. 803.

¶7 On remand, the superior court held that Gonzales did not
establish the elements of adverse possession because her possession was
not hostile, exclusive, or continuous. The court thus denied Equity’s claim
for the excess proceeds and awarded the proceeds to Bridge. The court did
not address this court’s ruling that the heirship declarations were
inadmissible hearsay and did not otherwise explain why the alleged Bacon
heirs had an ownership interest in the property such that the excess
proceeds should be awarded to Bridge.

¶8 Equity timely appealed. We have jurisdiction under A.R.S.
§ 12-2101(A)(4).

DISCUSSION

I. Adverse Possession.

¶9 Equity asserts that the superior court incorrectly rejected its
claim that Gonzales adversely possessed the property. Adverse possession
requires “an actual and visible appropriation of land commenced and
continued under a claim of right inconsistent with and hostile to the claim
of another for a period of 10 years.” A.R.S. §§ 12-521(A)(1), -526(A); Beck v.
Neville, 256 Ariz. 415, 426, ¶ 42 (2024); Berryhill v. Moore, 180 Ariz. 77, 82
(App. 1994). If the claimant initially obtained permission from the owner
to use the property, the claimant must show a “positive disclaimer and
disavowal of the title” providing notice to the owner that the claimant’s use
changed from permissive to hostile. See Tenney v. Luplow, 103 Ariz. 363, 367
(1968). The claimant must prove each element of adverse possession by
clear and convincing evidence. Beck, 256 Ariz. at 426–27, ¶ 42. We view the
record most favorably to upholding the judgment, Jones v. Burk, 164 Ariz.
595, 596 (App. 1990), and we do not reweigh evidence on appeal, see Godwin
v. Farmers Ins. Co. of Am., 129 Ariz. 416, 419 (App. 1981).

¶10 Equity argues that case law establishes that once a claimant
shows open, notorious, continuous, and exclusive possession, the burden

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PHOENIX v. EQUITY RECOVERY
Decision of the Court

to prove hostile possession shifts to the party disputing adverse possession.
But the case on which Equity relies refers to establishing a prescriptive
easement, not adverse possession. See Spaulding v. Pouliot, 218 Ariz. 196,
201, ¶ 14 (App. 2008). To prove adverse possession, the claimant must
prove each element by clear and convincing evidence. Beck, 256 Ariz. at
426–27, ¶ 42.

¶11 Here, Equity did not meet this burden. Gonzales previously
testified that she purchased the property from the Bacon family under a
rent-to-own agreement, but that the agreement was “lost.” She could not
recall precisely when she purchased the property, but indicated that it was
before 2000. When asked if she ever occupied the property without
permission, Gonzales said “no.” Accordingly, the superior court did not
abuse its discretion by finding that Gonzales’s possession was not hostile
and denying Equity’s claim to the excess proceeds.

II. Bridge’s Entitlement to the Proceeds.

¶12 Equity next asserts that the superior court erred by awarding
the excess proceeds to Bridge because the court did not address the holding
in the prior appeal that the heirship declarations were inadmissible. “On
remand, a [superior] court must ‘strictly follow’ the mandate of an appellate
decision.” Bogard v. Cannon & Wendt Elec. Co., 221 Ariz. 325, 334, ¶ 30 (App.
2009). The superior court’s jurisdiction on remand is limited by the terms
of the mandate. Id. We review whether the superior court complied with
the mandate de novo. Id.

¶13 Bridge argues that Equity waived its argument that the
declarations should not be considered by not reasserting this argument on
remand. Although Bridge argues that Equity was required to object again
on remand, Bridge had the burden of establishing its entitlement to the
property. The only admissible evidence Bridge proffered was the quitclaim
deeds from the alleged Bacon heirs to Bridge. But a quitclaim deed conveys
only the interest the grantor possesses at the time of the conveyance, and
does not warrant or guarantee that the title is valid. See SWC Baseline &
Crimson Invs., L.L.C. v. Augusta Ranch Ltd. P’ship, 228 Ariz. 271, 281, ¶ 30
(App. 2011). And given this court’s prior ruling that the heirship
declarations were inadmissible hearsay, City of Phoenix, at *5–6, ¶¶ 26–31,
Bridge did not prove the heirs had any interest in the property to convey
and thus did not establish an entitlement to the proceeds. Accordingly, we
vacate the award.

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PHOENIX v. EQUITY RECOVERY
Decision of the Court

CONCLUSION

¶14 We affirm the superior court’s ruling on adverse possession,
but we vacate the court’s award of the excess proceeds to Bridge and
remand for further proceedings consistent with this decision.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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