Foreclosure v. Asset

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

FORECLOSURE EXCESS PROCEEDS, LLC, Appellant,

v.

ASSET RECOVERY, INC., Appellee.

No. 1 CA-CV 25-0829
FILED 08-05-2026

Appeal from the Superior Court in Mohave County
No. S8015CV202201130
The Honorable Steven C. Moss, Judge

AFFIRMED

COUNSEL

John N. Moore Attorney at Law, Glendale
By John N. Moore
Counsel for Appellant

Law Offices of Kyle A. Kinney PLLC, Scottsdale
By Kyle A. Kinney
Counsel for Appellee

FORECLOSURE v. ASSET
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Andrew J. Becke delivered the decision of the Court, in
which Judge James B. Morse Jr. and Judge Samuel A. Thumma joined.

B E C K E, Judge:

¶1 Appellant Foreclosure Excess Proceeds LLC (“FEP”) appeals
the superior court’s judgment requiring it to return certain monies to the
court and awarding Appellee Asset Recovery, Inc. (“ARI”) attorneys’ fees
and costs. For the following reasons, we affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 Arizona permits non-judicial foreclosure under a deed of
trust, allowing the trustee to sell property securing a defaulted loan. A.R.S.
§ 33-807. A statute sets out how the trustee must distribute the proceeds of
the sale. A.R.S. § 33-812(A)-(B). Instead of distributing the funds directly,
the trustee may choose to deposit some or all proceeds with the county
treasurer and initiate a civil action to notify interested parties. A.R.S. § 33-
812(C)-(D). As applicable here, a claimant may hire a third party to recover
proceeds from the county treasurer on the claimant’s behalf. A.R.S. § 33-
812(P). The statute prescribes requirements for such an agreement and
limits the fees the third party may charge. Id.

¶3 Catheryn Erickson owned real property in Kingman. After
her death, Quality Loan Service Corporation (“Quality”) sold the property
at a trustee’s sale pursuant to Catheryn’s deed of trust. Quality then
deposited $60,849.11 in excess proceeds (the “Excess Proceeds”) from the
sale with the Mohave County Treasurer and filed a complaint for
distribution of the Excess Proceeds to any party legally entitled to them.

¶4 FEP filed an application asking the court to release the Excess
Proceeds to it for Catheryn’s two children, Kaara Borker and Michael
Erickson1 (collectively, “the Heirs”). FEP attached an agreement in which
Borker authorized FEP to collect the Excess Proceeds for her. It asserted that
Borker was entitled to collect the monies (under what was referred to as a

1 To avoid confusion between parties who have the same last name, we

respectfully refer to Catheryn and Michael Erickson by their first names.
2

FORECLOSURE v. ASSET
Decision of the Court

successor affidavit) because the amount was less than $75,000 and Michael
had consented to Borker acting on his behalf.

¶5 In March 2023, the superior court ordered the Mohave
County Treasurer to release the Excess Proceeds to FEP for the benefit of
Borker. The Mohave County Treasurer released the funds to FEP, but FEP
did not deliver the funds to Borker. When Borker followed up by email
several months later, FEP responded that she should call its office. Borker
then repeatedly called FEP, but reached only voicemail; the voice mailbox
was full and would not accept a message.

¶6 In August 2024, having heard nothing from FEP and unaware
that it had obtained the Excess Proceeds, the Heirs assigned their rights to
the Excess Proceeds to ARI in exchange for consideration. ARI applied to
the superior court for an order directing the Mohave County Treasurer to
distribute the Excess Proceeds to ARI, citing the Heirs’ assignments. The
superior court noted that it had already entered an order releasing the
Excess Proceeds to FEP and indicated it would dismiss ARI’s application if
no action was taken to set aside the March 2023 order.

¶7 ARI moved for relief from the March 2023 order, citing
Arizona Rule of Civil Procedure (“Rule”) 60(b)(3), (4), and (6). It argued that
FEP had submitted a false signature from Michael with its application for
distribution of the Excess Proceeds and that the agreement with FEP that
Borker entered “on behalf of [Catheryn’s] estate” was void because Borker
had never been appointed the personal representative for Catheryn’s estate.
ARI asked the court to set aside the March 2023 order and require FEP to
return the Excess Proceeds so the court could properly distribute them.

¶8 FEP, purportedly on behalf of Borker, filed a response. It
offered documents to rebut ARI’s assertion that Michael’s signature was
false and argued that Borker was not required to be appointed the personal
representative for Catheryn’s estate because the property at issue was less
than $75,000. FEP maintained that the March 2023 order was not void and
the motion to set it aside on the grounds of fraud was untimely.

¶9 At oral argument on the motion, FEP acknowledged that it
had received the Excess Proceeds from the Mohave County Treasurer and
affirmed that it still held the money. The superior court directed FEP’s
counsel to deposit any remaining Excess Proceeds with the Clerk of Court
and to provide an accounting of all funds received and disbursed. The court
set an evidentiary hearing, indicating it would determine whether the fees
FEP charged Borker were appropriate under A.R.S. § 33-812(P) and would

3

FORECLOSURE v. ASSET
Decision of the Court

receive evidence regarding the authenticity of Michael’s signature
submitted with FEP’s application and other factual issues.

¶10 FEP deposited $50,512.97 with the Clerk, accompanied by a
document purporting to show the fees and costs FEP had deducted from
the gross amount of $56,796.76 to determine a net amount of $50,512.97 was
owed to Borker. ARI objected that the accounting was insufficiently
detailed and contained no supporting documents. It also complained that
the gross amount of the Excess Proceeds—before fees and costs were
deducted—should have been $60,849.11, not $56,796.76. FEP admitted it
had incorrectly listed the gross amount, and the court ordered FEP to remit
an additional $4,056.76 to the Clerk, to reflect the correct gross amount.

¶11 After an evidentiary hearing, the superior court found that no
forgery had occurred, but FEP breached its agreement with Borker and
made “little or no effort” to deliver the Excess Proceeds to the Heirs. The
court determined that, although FEP’s contract with Borker capped fees and
costs at $4,000, FEP sought unverified, “highly dubious and often
ridiculous” charges exceeding that limit. It concluded FEP was entitled to
$500 in filing and certified mailing fees and $3,500 in reasonable attorneys’
fees. The court also found that the Heirs had assigned their rights to the
Excess Proceeds to ARI. Treating ARI’s Rule 60 motion as one to enforce the
March 2023 order, the court ordered that $56,849.11 ($60,849.11 - $4,000) be
paid to ARI. It later awarded ARI $9,500 in attorneys’ fees under A.R.S. §
12-341.01 and its taxable costs against FEP.

¶12 FEP timely appealed. We have jurisdiction under A.R.S. § 12-
2101(A)(2). See Arvizu v. Fernandez, 183 Ariz. 224, 226–27 (App. 1995)
(post-judgment order is appealable when it raises issues different from
those that could be raised in an appeal from the judgment itself and when
it enforces or stays the judgment).

DISCUSSION

¶13 FEP argues ARI lacked standing and the superior court
exceeded its authority under Rule 60. After a bench trial, we review the
superior court’s legal decisions de novo, but defer to its findings of fact
unless they are clearly erroneous. Town of Marana v. Pima Cnty., 230 Ariz.
142, 152, ¶ 46 (App. 2012). We view the evidence presented at trial in the
light most favorable to upholding the court’s ruling. Id. We also review the
availability of equitable remedies de novo but will not disturb the court’s
imposition of an equitable remedy absent an abuse of discretion. Loiselle v.
Cosas Mgmt. Grp., LLC, 224 Ariz. 207, 210, ¶ 8 (App. 2010).

4

FORECLOSURE v. ASSET
Decision of the Court

I. The Evidence Supports the Superior Court’s Determination that
the Heirs Assigned Their Interest in the Excess Proceeds to ARI.

¶14 FEP asserts that ARI held no legitimate interest in the Excess
Proceeds and therefore lacked standing to participate in the superior court
proceedings. It bases this contention on two propositions: first, that Borker
and Michael had already assigned their rights to the Excess Proceeds to FEP
and thus had no remaining rights to convey to ARI and second, that ARI
failed to present sufficient evidence demonstrating a valid assignment from
the Heirs. We reject both arguments.

A. Borker & Michael Did Not Assign Their Rights to FEP

¶15 An assignment is a transfer of rights or property from one
party (the assignor) to another party (the assignee). Assignment, Assignor,
Assignee, Black’s Law Dictionary (12th ed. 2024). When an assignment is
unconditional, whatever right, title, or interest the assignor possessed
passes to the assignee. Martinez v. Bucyrus-Erie Co., 113 Ariz. 119, 120 (1976).
Once an interest has been assigned, the assignor has no remaining interest
to be assigned to any other party. Allen v. Hamman Lumber Co., 44 Ariz. 145,
151 (1934).

¶16 ARI submitted evidence showing that the Heirs assigned
their ownership interests in the Excess Proceeds to ARI, and the superior
court concluded that the Heirs had, in fact, transferred their rights to ARI.
FEP contends the court erred because, in its view, the Heirs had already
transferred those rights to FEP and therefore had nothing left to assign to
ARI.

¶17 To begin, only Borker entered an agreement with FEP.
Michael never had an agreement with FEP and did not assign any of his
rights to the Excess Proceeds to FEP.

¶18 Even as to Borker, though, FEP’s argument fails. Borker’s
agreement with FEP was not an assignment of the Excess Proceeds. The
agreement states that Borker “partially assigns to FEP all right and
authority to pursue [Borker’s] rights, claims and interests in the Excess
Proceeds,” which confirms that she retained ownership of the funds and
merely authorized FEP to act on her behalf to collect them. The fact that she
agreed to compensate FEP for this work further underscores that no
assignment of her substantive rights occurred.

5

FORECLOSURE v. ASSET
Decision of the Court

¶19 Because neither Borker nor Michael assigned their rights in
the Excess Proceeds to FEP, both remained free to assign those rights to
ARI.

B. ARI Was Not Required to Produce the Full Assignment Document

¶20 FEP argues ARI failed to establish that it had a direct stake in
the outcome of this case because it did not prove that Borker and Michael
assigned their rights to the Excess Proceeds to ARI.

¶21 To establish its interest in the Excess Proceeds, ARI offered
Borker’s testimony that she assigned her ownership interest in the Excess
Proceeds to ARI in exchange for consideration. Michael also confirmed that
he signed the document ARI submitted to the court evidencing the
assignment. In that document entitled “Sale, Transfer and Assignment of
Surplus Foreclosure Funds,” each of the Heirs states that they are selling,
transferring, and assigning to ARI any and all rights they have in the Excess
Proceeds. The document notes that it is not the parties’ full agreement
because they also executed a confidential contract containing the complete
terms, including the compensation ARI paid to the Heirs.

¶22 FEP argued that ARI was required to prove it received an
assignment of the Heirs’ rights by producing the confidential contract and
asked the superior court to exclude the “Sale, Transfer and Assignment of
Surplus Foreclosure Funds” document under the best evidence rule. The
superior court overruled FEP’s best evidence objection. FEP contends the
court erred because the nature and extent of the Heirs’ assignment to ARI
cannot be determined based on the “Sale, Transfer and Assignment of
Surplus Foreclosure Funds” document alone. “We will not disturb a trial
court’s rulings on the exclusion or admission of evidence unless a clear
abuse of discretion appears and prejudice results.” Roaf v. Stephen S. Rebuck
Consulting, LLC, 257 Ariz. 452, 456, ¶ 11 (2024) (cleaned up) (quoting
Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493, 506 (1996)).

¶23 We reject FEP’s argument that the best evidence rule required
ARI to produce the confidential contract. Under Arizona Rule of Evidence
1002, an original document is required only when a party seeks to prove the
content of that document. ARI was not attempting to prove the content of
the confidential contract; it sought only to show that an assignment
occurred. That fact was established through the “Sale, Transfer and
Assignment of Surplus Foreclosure Funds” document and the Heirs’
testimony. See also Strawberry Water Co. v. Paulsen, 220 Ariz. 401, 406, ¶ 9 n.2
(App. 2008) (water company was not required to prove its ownership of

6

FORECLOSURE v. ASSET
Decision of the Court

water through sales documents or ownership certificates under the best
evidence rule and could instead rely on any admissible evidence to
establish its rights to water that pond owners used). Accordingly, ARI was
not required to produce the confidential contract to prove that Borker and
Michael assigned their rights to the Excess Proceeds to ARI.

¶24 The superior court also found that the confidential contract
was not relevant, so ARI was not required to produce it and FEP was not
permitted to question witnesses about it. FEP offers no argument disputing
that ruling and therefore has waived any challenge to it. See Schabel v. Deer
Valley Unified Sch. Dist. No. 97, 186 Ariz. 161, 167 (App. 1996) (“Issues not
clearly raised and argued in a party’s appellate brief are waived.”).

¶25 To the extent FEP challenges the superior court’s factual
finding that the Heirs assigned their rights to ARI, FEP has not shown that
the court’s ruling was clearly erroneous. Town of Marana, 230 Ariz. at 152, ¶
46.

II. The Superior Court Properly Exercised Its Discretion to Reduce
FEP’s Fee and Order It to Return the Excess Proceeds.

¶26 FEP argues that because ARI sought relief solely under Rule
60, the superior court lacked authority to enforce the March 2023 order or
take any further action once it denied the Rule 60 motion.2

¶27 At the oral argument on ARI’s Rule 60 motion, the superior
court noted a factual dispute as to whether the signature attributed to
Michael in FEP’s application for distribution of the Excess Proceeds was
forged, and set an evidentiary hearing under Rule 60. The court also
explained that A.R.S. § 33-812 authorized it to resolve disputes over a third
party’s fees even after judgment and stated it would address that issue at
the evidentiary hearing.

¶28 Although FEP did not object when the superior court set an
evidentiary hearing to evaluate the reasonableness of its fees, it now argues
that the court erred in doing so. It further contends that the court exceeded
its authority by awarding ARI relief after it denied the Rule 60 motion. But

2 FEP also raises several arguments on appeal challenging the merits of

ARI’s Rule 60 motion. Because the superior court denied that motion, we
do not address those arguments. Cf. In re Estate of Friedman, 217 Ariz. 548,
551, ¶ 9 (App. 2008) (party may only appeal that portion of a judgment that
adversely affects it).

7

FORECLOSURE v. ASSET
Decision of the Court

A.R.S. § 33-812(P) expressly allows a claimant to challenge the
reasonableness of any fee charged by a third party assisting in the recovery
of excess proceeds from a non-judicial foreclosure. A.R.S. § 33-812(P). And
the superior court retains inherent authority to enforce its judgments and
to issue orders necessary to effectuate the administration of justice. Arpaio
v. Baca, 217 Ariz. 570, 572, ¶ 4 n.3 (App. 2008); see also In re Marriage of Rojas,
255 Ariz. 277, 282, ¶ 9 (App. 2023) (“Consistent with the general power of
any court to enforce and give effect to its judgments, a court similarly
retains the power to enforce its decrees through enforcement actions.”);
Holaway v. Realty Assocs., 90 Ariz. 289, 293 (1961) (“[E]very regularly
constituted court has power to do all things that are reasonably necessary
for the administration of justice within the scope of its jurisdiction, and for
the enforcement of its judgments and mandates.”).

¶29 FEP has shown no error in the superior court’s consideration
of the reasonableness of its fees.

CONCLUSION

¶30 For the foregoing reasons, we affirm.

¶31 FEP argues an award of its attorneys’ fees and costs on appeal
is appropriate as a sanction pursuant to A.R.S. § 12-349 because ARI’s Rule
60 motion was brought without substantial justification. Because ARI
prevailed in the superior court and on appeal, FEP has not shown that ARI’s
action was without substantial justification (i.e., frivolous) or brought for
purposes of delay or harassment.

¶32 ARI requests attorneys’ fees on appeal under A.R.S. §§ 12-
341.01 and -349(A)(1). We grant ARI’s request under A.R.S. § 12-341.01 and
award ARI costs and reasonable attorneys’ fees on appeal upon its
compliance with ARCAP 21.

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

8