Grady v. Hon. Barth (9/19/2013)

September 24, 2013

Arizona Court of Appeals Division One Holds That Superior Court Does Not Have Discretion Under A.R.S. § 12-1182(B) To Deny A Stay Of A Forcible Entry And Detainer Judgment Pending Appeal When The Party In Possession Satisfies Statutory Requirements.

In 2008, the Gradys executed a promissory note secured by a deed of trust on improved residential real property.  In 2012, Tri-City National Bank purchased the property at a trustee’s sale. Tri-City demanded that the Gradys vacate the property and subsequently filed a forcible entry and detainer (“FED”) action against them in superior court.  The superior court granted Tri-City’s motion for judgment on the pleadings.  The Gradys timely appealed and requested the superior court stay execution of the judgment.  The superior court denied the stay request and the Gradys filed a special action asking the Court of Appeals to direct the superior court to stay the judgment pending their appeal.

The Court of Appeals accepted special action jurisdiction and granted relief.  In Tovar v. Superior Court, 132 Ariz. 549, 647 P.3d 1147 (1982), the Arizona Supreme Court held that the superior court did not have discretion under A.R.S. § 12-1182(B) to deny a stay of a FED judgment pending appeal when the party in possession could post a bond meeting the statutory requirements.  Because the FED action between Tri-City and the Gradys did not arise out of a landlord-tenant dispute, the superior court found Tovar inapplicable.  The Court of Appeals agreed that the dispute did not arise out of a landlord-tenant relationship, but held that the rule adopted in Tovar nevertheless applied to the Gradys.   

Arizona’s FED statutes are not limited to the formal landlord-tenant relationship.  A.R.S. § 12-1173.01(A)(1) expressly authorizes an FED action when property has been sold through foreclosure of a mortgage, deed of trust or contract for conveyance of real property.  The FED statutes were expanded to include these various situations after Tovar was decided.  And although Tovar arose in the classic landlord-tenant relationship, it did not foreclose stay protection to a party who holds over after a trustee’s sale.  The Court of Appeals found that it was consistent with Tovar, the Legislature’s subsequent expansion of FED actions, and the language of A.R.S. § 12-1182(B) to require the superior court to stay execution of an FED judgment pending appeal when the party in possession posts a bond conditioned on prosecuting the appeal “to effect” and in an amount sufficient to cover rental value and all awarded damages, costs, and rent. 

Judge Norris authored the unanimous opinion; Judges Brown and Johnsen concurred.