Windrose Estates Homeowners Association v. Justin T. Wright; Midland Funding, Llc...

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO

WINDROSE ESTATES HOMEOWNERS ASSOCIATION,
AN ARIZONA NON-PROFIT CORPORATION,
Plaintiff/Appellee,

v.

JUSTIN T. WRIGHT, AN UNMARRIED MAN,
Defendant/Appellant,

JUSTIN T. WRIGHT, AN UNMARRIED MAN,
Plaintiff/Appellee,

v.

SUNSTATE ACQUISITIONS, LLC, AN ARIZONA LIMITED LIABILITY COMPANY;
SV 1, LLC, AN ARIZONA LIMITED LIABILITY COMPANY,
Defendants/Appellants.

Nos. 2 CA-CV 2024-0074 and
2 CA-CV 2025-0058 (Consolidated)
Filed December 15, 2025

Appeal from the Superior Court in Maricopa County
Nos. CV2022090201 and CV2023015900
The Honorable Brian D. Kaiser, Judge Pro Tempore
The Honorable Timothy J. Ryan, Judge

AFFIRMED IN PART; REVERSED IN PART AND REMANDED

COUNSEL

May, Potenza, Baran & Gillespie P.C., Phoenix
By Andrew S. Lishko, Trevor J. Wainfeld, and Danika Marzillier
Counsel for Appellant Justin Wright
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

Vial Fotheringham LLP, Mesa
By Christina N. Morgan
Counsel for Appellee Windrose Estates Homeowners Association

Law Offices of Kyle A. Kinney PLLC, Scottsdale
By Kyle A. Kinney
Counsel for Appellants Sunstate Acquisitions, LLC and SV 1, LLC

Maxwell & Morgan Inc., Mesa
By B. Austin Baillio, Charles B. Sellers, and Chad M. Gallacher
Counsel for Amicus Curiae Arizona Chapter of Community Associations Institute

OPINION

Judge Sklar authored the opinion of the Court, in which Vice Chief Judge
Eppich and Judge O’Neil concurred.

S K L A R, Judge:

We address here a trial court’s authority to set aside a
foreclosure sale arising out of a homeowners’ association lien. The court
set aside a sale of Justin Wright’s home and quieted title in Wright’s favor,
finding in part that the foreclosure sale price was “grossly inadequate.” We
conclude that the court erred in doing so. Although courts generally have
common-law powers to set aside foreclosure sales due to a grossly
inadequate price, that power is implicitly abrogated by A.R.S. § 33-1807, the
statute governing HOA liens. We likewise conclude that the court
improperly set aside the sale on the alternative ground that Wright was
“misled or surprised.”

We also conclude that in a consolidated action, a different trial
court correctly declined to set aside the default judgment against Wright
that allowed the foreclosure. In doing so, we reject Wright’s arguments
concerning the sufficiency of process. The result of our opinion in these
consolidated cases is to reinstate the sale. We remand the quiet-title action
to the trial court so it can effectuate our opinion.

2
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

BACKGROUND

Wright is a member of the Windrose Estates Homeowners
Association. In January 2022, the association filed a complaint against
Wright, alleging that he owed unpaid assessments and other charges
totaling $7,463.86. Among other things, the association sought to foreclose
its lien for assessments, which it acquired through Section 33-1807(A).

The association’s process server visited Wright’s residence
seven times. Although the server saw that the residence was occupied,
nobody answered the door. The association then conducted a search
known as a “skip trace,” which confirmed that Wright’s last known address
was at the property.

The association moved for alternative service, which the trial
court granted. The court’s order allowed the association to serve Wright by
mailing a copy of the summons, complaint, and order to Wright at the
property and posting a copy at or near the front door. The association did
so, but Wright did not respond to the complaint. In September 2022, the
court granted default judgment in favor of the association. The judgment
foreclosed the association’s lien and authorized the sheriff to sell the
property.

That sale occurred in February 2023. Sunstate Acquisitions,
LLC purchased the property for $20,100. After the six-month redemption
period expired, Wright received a “Written Demand of Surrender and
Possession” that was posted at the property. See A.R.S. § 12-1282(B). That
led him to take two steps. First, he moved to set aside the judgment under
Rule 60(b) of the Arizona Rules of Civil Procedure, asserting that he had not
been served with process. The trial court denied his motion. He appealed.

Second, Wright filed a separate complaint against Sunstate as
well as SV 1, LLC, which had acquired the property from Sunstate. He
sought a declaration that the foreclosure sale was void and that he was
entitled to a judgment quieting title in his favor. In October 2024, after an
evidentiary hearing, the trial court set aside the foreclosure sale and quieted
title in Wright’s favor. It found that Wright was misled or surprised, he
was not aware of the sale, and the property’s sale price was grossly
inadequate. Sunstate and SV 1 appealed. We consolidated the two cases.

3
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

ADEQUACY OF NOTICE OF FORECLOSURE ACTION

Both consolidated appeals raise issues concerning the notice
provided to Wright. Wright argues that the trial court in the foreclosure
action erred by denying his Rule 60(b) motion. Sunstate and SV 1 argue
that the court in the quiet-title action erred by setting aside the sale on the
ground that Wright was “misled or surprised.”

I. Rule 60(b) Motion

In his appeal concerning the Rule 60(b) motion, Wright
argues: (1) the trial court should not have granted the association
alternative service; (2) the method of service was not reasonably calculated
to serve him; and (3) the association did not provide sufficient evidence that
it actually served him with process. These issues all turn on the validity of
service, which is a legal question of personal jurisdiction that we review de
novo. Ruffino v. Lokosky, 245 Ariz. 165, ¶ 9 (App. 2018).

A. Grant of motion for alternative service

Whether the trial court properly authorized the association to
serve Wright by alternative means is governed by Rule 4.1(k) of the Arizona
Rules of Civil Procedure. Under that rule, “[i]f a party shows that the means
of service provided in Rule 4.1(c) through Rule 4.1(j) are impracticable, the
court may . . . order that service may be accomplished in another manner.”
Ariz. R. Civ. P. 4.1(k). The standard for impracticability requires
“something less than the ‘due diligence’ showing required before service
by publication may be utilized.” Blair v. Burgener, 226 Ariz. 213, ¶ 16 (App.
2010). It requires that service be “extremely difficult or inconvenient,” not
impossible. Id. ¶ 17.

Wright argues that the association did not show that serving
him under Rule 4.1(c) through (j) would be impracticable. In support, he
relies primarily on State ex rel. Department of Economic Security v. Pennel, in
which this court concluded that alternative service had not been justified.
257 Ariz. 558, ¶ 1 (App. 2024). The plaintiff had attempted service at only
one of the defendant’s two last known current addresses and not his place
of work. Id. ¶¶ 12-13. Pennel is distinguishable. Unlike the defendant there,
the skip trace here confirmed that Wright had only a single address, where
the association attempted service seven times. And although Wright argues
that the association could have attempted service on other days at other
times, he does not present evidence that such efforts would have succeeded.

4
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

Wright also argues that the association was required to
attempt contact by email or phone before showing impracticability. But
Wright has pointed to no case law imposing such a requirement. And in
Bank of New York Mellon v. Dodev, this court concluded that a plaintiff had
presented sufficient evidence of impracticability when it attempted
personal service five times but did not try to call the defendant or contact
family, neighbors, and co-workers. 246 Ariz. 1, ¶¶ 30-32 (App. 2018). We
are not persuaded that this case compels a different outcome than Dodev.

In addition, Wright argues that impracticability required the
association to request a waiver of service under Rule 4.1(c). Again, he
points to no case law imposing such a requirement. Although Rule 4.1(k)
requires that service under Rule 4.1(c) through (j) be impracticable, it does
not require plaintiffs to attempt service by each means applicable to the
relevant defendant. A general showing of impracticability is sufficient.
Even so, nothing in the record suggests that Wright would have been
willing to waive service or would have responded to efforts from the
association’s process server to obtain a waiver.

B. Sufficiency of method of service

Next, Wright argues that the alternative methods of service
approved by the trial court were not reasonably calculated to provide him
notice. The court ordered that service be effectuated by two means—
posting at the property and mail. Wright does not plausibly argue that
posting the documents at the property was insufficient to provide notice.

Instead, Wright focuses on the portion of the trial court’s
order concerning mail. He argues that mail service without delivery
confirmation was insufficient, given that the association knew some
homeowners were having issues with mail delivery. This argument is
inconsistent with Rule 4.1(k)(2), which provides that in addition to any
alternative means ordered by the court, “the serving party must mail the
summons, the pleading being served, and any court order authorizing an
alternative means of service to the last-known business or residential
address of the person being served.” The rule contains no
delivery-confirmation requirement. Ariz. R. Civ. P. 4.1(k)(2). The court’s
order correctly applied the rule. And indeed, Wright testified that he
checked his mail once a week, which provided him sufficient time to
respond before the default deadline ran. See Ariz. R. Civ. P. 12(a), 55(a).

5
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

C. Validity of service

Third, Wright argues that the association did not comply with
the trial court’s alternative-service order because there was no evidence that
process was actually delivered to his home. But the association filed a
declaration in which its process server attested that he had served Wright
by posting on the front entry of the home and by U.S. mail. Nothing more
was necessary to comply with the court’s order.

Wright nevertheless argues that there was no evidence that
the process was presented to him in a “format that would indicate its
legitimacy or seriousness.” He compares the association’s method of
service with that in Pennel, where the plaintiff had served the defendant
through a Dropbox link. 257 Ariz. 558, ¶¶ 16-18. But the relevant portion
of Pennel concerns the plaintiff’s failure to include copies of all the relevant
documents in that link. Id. ¶ 17. Here, the record reflects that the process
server included all the documents both in his posting and mailing. We
otherwise reject any suggestion that Pennel can be read as requiring the
documents to be presented in a particular format to indicate their
“legitimacy or seriousness.” In short, the trial court did not err in denying
Wright’s motion for Rule 60(b) relief from judgment.

II. Sale set aside for being misled or surprised

Despite the foreclosure court’s findings on the
service-of-process issues, the trial court in the quiet-title case concluded that
Wright was entitled to have the foreclosure sale set aside because he was
“misled or surprised.” Sunstate and SV 1 challenge that conclusion.
Whether an HOA foreclosure sale may be set aside due to the homeowner
being “misled or surprised” is a legal issue, which we review de novo. See
Dabrowski v. Bartlett, 246 Ariz. 504, ¶ 17 (App. 2019). Because foreclosure of
HOA liens is governed by Section 33-1807, the issue concerns statutory
interpretation, which we also review de novo. See Cao v. PFP Dorsey Invs.,
LLC, 257 Ariz. 109, ¶ 15 (2024).

When the text of a statute is clear and unambiguous, we
“determine the plain meaning of the words the legislature chose to use,
viewed in their broader statutory context.” In re Drummond, 257 Ariz. 15,
¶ 5 (2024) (quoting Columbus Life Ins. Co. v. Wilmington Tr., N.A., 255 Ariz.
382, ¶ 11 (2023)). Here, Section 33-1807(A) provides, in relevant part, that
an HOA’s lien “may be foreclosed in the same manner as a mortgage on
real estate.” See A.R.S. §§ 33-721 to 33-730 (judicial foreclosure of real
property mortgages).

6
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

We must determine whether this language provides a
freestanding right for homeowners to obtain the set-aside of a foreclosure
sale when they are misled or surprised—independent of any right to obtain
relief under Rule 60(b) or for failure to follow applicable procedures. We
do so against the backdrop of case law recognizing that courts have some
powers to set aside foreclosure sales. Homecraft Corp. v. Fimbres, 119 Ariz.
299, 302 (App. 1978); Mason v. Wilson, 116 Ariz. 255, 257 (App. 1977).

However, absent a grossly inadequate price—an issue we
address below—setting aside a sale typically requires an inadequate price
plus other irregularities or equitable circumstances. Fimbres, 119 Ariz. at
302; Mason, 116 Ariz. at 257. The trial court did not rely on those bases in
setting aside the sale, nor does Wright meaningfully argue that it should
have done so. We therefore need not address whether courts may rely on
these bases in setting aside HOA foreclosures. See Lunney v. State, 244 Ariz.
170, ¶ 40 (App. 2017).

Instead, the trial court set aside the sale based on its
conclusion that Wright was “misled or surprised.” It did not identify any
language in Section 33-1807 to support the conclusion that the statute
allowed it to set aside the sale on this basis. Nor do we discern any.
Likewise, the broader statutory context does not suggest that sales may be
set aside simply because the homeowner is misled or surprised. See
Roundtree v. City of Page, ___ Ariz. ___, ¶ 13, 573 P.3d 65, 69 (2025) (“We
interpret statutory . . . provisions not in isolation, but in context with other
provisions covering the same subject matter . . . .”).

Rather, the applicable statutes and rules contain detailed
notice requirements. A homeowner has record notice of the lien by virtue
of the planned community’s declaration. § 33-1807(F). Before a collection
proceeding from an entity other than the association’s agent may begin, the
association must send a notice specified by statute. § 33-1807(L). If the
association’s board seeks to initiate foreclosure, it must also “exercise
reasonable efforts to communicate with the member and offer a reasonable
payment plan.” § 33-1807(A). And as detailed above, Rule 4.1 entitles the
homeowner to notice of any foreclosure action. Then, after judgment is
entered, Section 12-1621(A)(3) requires that notice of the execution sale be
posted in three public places in the county fifteen days or more before the
sale and in a newspaper for three weeks before the sale.

These procedural protections guard against homeowners
being misled or surprised by a sale. And as Wright attempted to do through
his Rule 60(b) motion, homeowners may exercise any relevant rights to

7
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

enforce these procedures. But the procedures’ availability reinforces that
the statutory scheme includes no unstated, freestanding right to set aside a
sale simply because the homeowner was misled or surprised. See Roberts v.
State, 253 Ariz. 259, ¶ 20 (2022) (providing that “court will not inflate,
expand, stretch or extend a statute to matters not falling within its
expressed provisions” (quoting City of Phoenix v. Donofrio, 99 Ariz. 130, 133
(1965))).

In arguing to the contrary, Wright points to Citizens’ State
Bank v. McRoberts, 29 Ariz. 173 (1925). In that case, our supreme court
affirmed the trial court’s decision to set aside a sheriff’s sale of the plaintiff’s
property, in part because the plaintiff was misled or surprised when her
home was sold without her knowledge. Id. at 179-80. McRoberts, however,
predates the statutory scheme applicable to HOA liens and foreclosures.
See 1996 Ariz. Sess. Laws, ch. 236, § 1 (enacting Section 33-1807). Nor does
it suggest that being misled or surprised, standing alone, is a sufficient basis
for setting aside a sale. Thus, we conclude that Section 33-1807(A) did not
permit the trial court to set aside the foreclosure sale simply because Wright
was misled or surprised. It erred by doing so.

GROSSLY INADEQUATE SALE PRICE

The quiet-title court’s other ground for setting aside the
foreclosure sale was that “Sunstate’s bid of $20,100 was so grossly
inadequate as to shock the conscience because it was less than 20% of the
fair market value of the Property.” As noted, our case law broadly
recognizes that courts may set aside foreclosure sales due to a grossly
inadequate price. The buyers argue, though, that Section 33-1807(A)
abrogates any such common-law right in the context of HOA foreclosures.

This is a matter of first impression for our appellate courts.
But see First Am. Title Ins. Co. v. Action Acquisitions, LLC, 218 Ariz. 394 (2008)
(addressing title-insurance implications following set aside of HOA
foreclosure sale for grossly inadequate price, where set aside was not
challenged). The issue requires us to engage in statutory interpretation,
which is a matter of de novo review. See Garibay v. Johnson, 259 Ariz. 248,
¶¶ 17-21 (2025) (applying de novo review in determining whether statute
abrogates common-law judicial immunity).

8
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

I. Statutory language and principles concerning abrogation of
common law

We begin with the language of Section 33-1807(A) in effect at
the relevant time, and we cite that version despite a subsequent
amendment. 2025 Ariz. Sess. Laws, ch. 71, § 1. As with our prior analysis,
we must interpret the statute based first on “the plain meaning of the words
the legislature chose to use, viewed in their broader statutory context.”
Drummond, 257 Ariz. 15, ¶ 5 (quoting Columbus Life Ins. Co., 255 Ariz. 382,
¶ 11).

Section 33-1807(A) generally provides HOAs with a lien for
assessments. Most relevant here, it sets forth the procedure for foreclosing
the lien, as well as minimum thresholds for delinquencies before an HOA
may initiate foreclosure. In relevant part, the statute reads:

The association has a lien on a unit for any
assessment levied against that unit from the
time the assessment becomes due. The
association’s lien for assessments . . . may be
foreclosed in the same manner as a mortgage on
real estate but may be foreclosed only if the
owner has been delinquent in the payment of
monies secured by the lien . . . for a period of
one year or in the amount of $1,200 or more,
whichever occurs first, as determined on the
date the action is filed.

2019 Ariz. Sess. Laws, ch. 200, § 1. Nothing in this language expressly
authorizes courts to evaluate the sale price in determining whether an HOA
foreclosure sale may be set aside. Although the statute provides for
foreclosures to occur “in the same manner as a mortgage on real estate,” it
does not expressly extend this language to post-sale challenges. And in the
buyers’ view, the minimum thresholds of one year or $1,200 of unpaid
assessments preclude any “further price scrutiny.”

We agree with Wright, though, that this language does not
end our analysis. As we have explained, our case law has long recognized
that courts possess some authority to set aside execution sales due to a
grossly inadequate price. See, e.g., Wiesel v. Ashcraft, 26 Ariz. App. 490,
494-97 (1976); McCoy v. Brooks, 9 Ariz. 157, 159-60 (1905). This authority
arises from a court’s “inherent power to control its own process.”
Nussbaumer v. Superior Court, 107 Ariz. 504, 506 (1971). That power had

9
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

applied only to judicial foreclosures until our supreme court in In re Krohn
extended it to trustee’s sales. 203 Ariz. 205, ¶ 38 (2002). In light of Krohn,
courts may set aside trustee’s sales due to a grossly inadequate price if the
sale price is under twenty percent of fair market value. Id. ¶ 29.

From this case law, Wright argues that the trial court here
merely applied a longstanding common-law power to set aside the sale due
to a grossly inadequate price. In his view, Section 33-1807 does not abrogate
that power. Instead, he argues that courts should be authorized to set aside
HOA foreclosure sales where the price was less than twenty percent of the
homeowner’s equity. He derives that threshold from Section 8.3 of the
Restatement (Third) of Property: Mortgages, which the court applied in the
trustee-sale context in Krohn. 203 Ariz. 205, ¶ 38.

In support of this argument, Wright points to the principle
that “if the common law is to be changed or abrogated by statute, the
legislature must do so expressly or by necessary implication.” Garibay, 259
Ariz. 248, ¶ 19; see also A.R.S. § 1-201 (“The common law only so far as it
is . . . not repugnant to or inconsistent with the . . . constitution or laws of
this state . . . is adopted and shall be the rule of decision in all courts of this
state.”). Consistent with this rule, our supreme court has written that
“[a]bsent a clear manifestation of legislative intent to abrogate the common
law, we interpret statutes with ‘every intendment in favor of consistency
with the common law.’” Pleak v. Entrada Prop. Owners Ass’n, 207 Ariz. 418,
¶ 12 (2004) (quoting In re Thelen’s Estate, 9 Ariz. App. 157, 160-61 (1969)).
But see State v. Tunkey, 254 Ariz. 432, ¶ 32 (2023) (Bolick, J., concurring)
(rejecting interpretive methodology of seeking legislative intent).

II. Case law concerning implied abrogation of common-law rights

Assuming that the authority to set aside foreclosure sales
derives from common law, we agree with Wright that nothing in Section
33-1807 expressly abrogates that authority. But we must still address
whether the statute abrogates it by “necessary implication.” As our
supreme court explained in Columbus Life Insurance Co. v. Wilmington Trust,
N.A., this type of abrogation can occur when the legislature has adopted a
“comprehensive statutory scheme” and that scheme “establish[es]
exclusive remedies.” 255 Ariz. 382, ¶¶ 11-24. See also AAA Cab Service, Inc.
v. Indus. Comm’n, 213 Ariz. 342, ¶ 4 (App. 2006) (comprehensive statutory
scheme concerning workers’ compensation “control[s] when that scheme
conflicts with common law principles”).

10
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

In Columbus, the statute at issue governed the contestability of
life-insurance policies. 255 Ariz. 382, ¶¶ 12-24 (citing A.R.S. § 20-1204). The
court held that this statute abrogated a common-law rule that rendered
policies void where they were held by a third party that lacked an insurable
interest. Id. The statute did so in two ways. First, it limited the time period
in which such policies could be contested. Id. ¶ 15. Second, it provided
only insureds, not insurers, with a remedy where benefits on such a policy
are paid. Id. The court concluded that these provisions implicitly abrogated
insurers’ common-law right to void the policy, at least outside the statutory
contest period, even when it had previously paid proceeds to a third party
with no insurable interest. Id. ¶¶ 16-17. To conclude otherwise, the court
reasoned, would “largely eviscerate” the statutory remedy, which required
that benefits be paid—an impossibility if the policy were void. Id. ¶ 17.

By contrast, a statute typically does not abrogate the common
law where the statutory remedy does not undermine the common-law
remedy. See, e.g., State v. Allen, 253 Ariz. 306, ¶ 68 (2022) (statute concerning
admissibility of confessions does not abrogate common-law rule of corpus
delicti, which requires corroboration of confessions). For example, in Wilks
v. Manobianco, an insurance agent argued that a statute had abrogated a
common-law negligence claim for failure to procure the policy requested
by the insured. 237 Ariz. 443, ¶ 1 (2015). The statute permitted insurers to
provide insureds with a form allowing them to select certain types of
coverage. Id. ¶ 7 (citing A.R.S. § 20-259.01). The alleged negligence,
however, did not involve failure to provide the form. Instead, it involved
failure to procure the coverage the insured requested on the form. Id. ¶ 10.
Because that common-law claim involved conduct not addressed by the
statute, the statute did not abrogate the common law. Id. ¶ 11.

III. Whether Section 33-1807 impliedly abrogates common-law right
to set aside foreclosure sales for grossly inadequate price

Like the statutory scheme in Columbus, Section 33-1807
imposes a comprehensive set of rules concerning the foreclosure remedy
available to HOAs. Whether those rules abrogate the common-law right to
set aside foreclosure sales for a grossly inadequate price depends largely on
the effectiveness of that statutory remedy if the common-law right remains.
See Columbus, 255 Ariz. 382, ¶ 11 (“[W]e view ‘the statute as a whole’ to ‘give
meaningful operation to all of its provisions.’” (quoting Wyatt v.
Wehmueller, 167 Ariz. 281, 284 (1991))).

Three provisions of Section 33-1807 are especially relevant.
First, is the $1,200 or one-year minimum threshold for unpaid assessments

11
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

before an HOA may initiate foreclosure. Second, the statute imposes a
functional maximum on the amount that can be foreclosed by requiring
foreclosure actions to be brought within six years of the assessment
becoming due. § 33-1807(G). Six years of assessments often amounts to a
small number. For example, Wright’s monthly assessment in this case was
$145 per month, so six years would total $10,440. Third, the statute
subordinates HOA liens to first mortgages and tax liens. § 33-1807(C).
Because any foreclosure-sale buyer would take the property subject to those
liens, the buyer is incentivized to make a low bid to account for them.

Given these statutory provisions, HOA foreclosure sales
almost necessarily involve low bids, which will frequently be well below
twenty percent of the homeowner’s equity. Consider an HOA that initiates
foreclosure proceedings when the unpaid assessments total $1,200. The
total lien amount would likely be higher due to late fees, attorney fees, and
other items. But even if the total lien were $3,000, that amount would
typically set the floor for bidding by becoming the HOA’s credit bid. In this
circumstance, a homeowner with little more than $15,000 in equity would
have a strong argument to set aside a sale consummated via credit bid for
grossly inadequate price. Even if the minimum bid were higher due to
larger monthly assessments, an HOA delaying foreclosure, or multiple
bidders at the sale, the equity necessary to set aside the sale would typically
be low.

Preserving the common-law right in this context would allow
numerous homeowners to set aside foreclosures that comply with the
statute. It might also chill HOAs from exercising their statutory rights
because a foreclosure could be set aside later. Just as in Columbus, the
common law would “largely eviscerate” the statutory remedy. 255 Ariz.
382, ¶ 17. For that same reason, this case conceptually differs from Wilks,
where the statute did not abrogate the common-law negligence claim
against the insurance agent. 237 Ariz. 443, ¶¶ 13-14. In Wilks, unlike here,
the common law and statute could operate independently without one
significantly undermining the other.

Moreover, by positing that gross inadequacy should be
measured based on equity, Wright’s argument raises practical challenges
about compliance with federal law. Under a federal privacy statute, neither
foreclosing HOAs nor prospective buyers are entitled to information about
the homeowner’s equity. See 15 U.S.C. § 6802(b)(1) (financial institutions
“may not disclose nonpublic personal information to a nonaffiliated third
party” without consumer’s notice and opportunity to respond). Thus,

12
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

neither creditor nor bidder could know with certainty the size of the bid
necessary to avoid a grossly inadequate price. They would learn this
information only in post-foreclosure litigation. We do not believe we
should interpret Section 33-1807(A) as creating the hidden risk that sales
may be set aside due to information that is unknowable to HOAs and
purchasers, even where the foreclosure otherwise complies with the statute.

Finally, Wright argues that the monetary minimum is simply
a procedural requirement while the right to set aside a sale for a grossly
inadequate price is substantive. Procedural laws prescribe mechanisms for
enforcing rights and obtaining redress. Krol v. Indus. Comm’n, 259 Ariz. 261,
¶ 32 (2025). Substantive laws, by contrast, create, define, and regulate
rights. Id.

Parts of Section 33-1807 are procedural, such as the language
in Section 33-1807(A) requiring HOA liens to be foreclosed “in the same
manner as a mortgage on real estate.” But the provisions most relevant to
our analysis are substantive, namely, the minimum and maximum
foreclosure thresholds, as well as the subordination provision. These
provisions define the rights of HOAs and foreclosure buyers. Similarly, any
common-law right to set aside the sale is also substantive, as it concerns
homeowners’ rights. That both rights are substantive lends further support
to our conclusion that the statute abrogates the common law. Thus, we
interpret Section 33-1807 as abrogating any common-law right to set aside
foreclosure sales due to grossly inadequate price. We therefore reverse the
trial court’s decision to set aside the sale.

ATTORNEY FEES

Wright and the association both request an award of attorney
fees and costs on appeal. As the prevailing party in the foreclosure action,
the association is entitled to recover its taxable costs and attorney fees under
Section 7.1 of its Amended and Restated Declaration of Covenants,
Conditions, and Restrictions, upon its compliance with Rule 21(b) of the
Arizona Rules of Civil Appellate Procedure.

The buyers, who are the prevailing parties in the quiet-title
action, do not request their attorney fees or costs on appeal. However, as
prevailing parties, they are entitled to recover their costs upon compliance
with Rule 21. See A.R.S. § 12-341.

13
 WINDROSE ESTS. HOMEOWNERS ASS’N v. WRIGHT
Opinion of the Court

DISPOSITION

We affirm the trial court’s order denying Wright’s motion for
Rule 60(b) relief from judgment in the foreclosure action. We reverse the
court’s order setting aside the foreclosure sale. We remand to the trial court
for any further proceedings necessary to effectuate our opinion.

14