Sysco Ariz., Inc. v. Hoskins – 6/10/2014
Arizona Court of Appeals Division One Holds That Recording an Unsigned Minute Entry Does Not Create a Valid Judgment Lien Under Arizona’s Judgment Lien Statute, A.R.S. § 33-961.
After a trustee’s sale, the trustee deposited excess proceeds in the amount of $286,177.44 with the county treasurer, and filed a complaint informing all junior lien holders of the excess proceeds. Appellant Sysco Arizona, Inc. (“Sysco”), as well as three other lien holders, claimed to have judgment liens on the property. Sysco claimed priority to the excess proceeds because it had recorded a certified copy of an unsigned minute entry awarding it judgment before the other three lien holders had recorded their liens. The superior court, however, concluded that Sysco did not have a valid judgment lien and gave the other three lien holders priority over Sysco. Sysco timely appealed.
The Arizona Appeals Court affirmed. The Court held that an unsigned minute entry is not a judgment pursuant to Arizona’s judgment lien statutes. “Judgment liens do not exist at common law, they exist only by statute.” Bryan v. Nelson, 180 Ariz. 366, 368, 884 P.2d 252, 254 (App. 1994) (citation omitted). Under A.R.S. § 33-961, to perfect a judgment lien, a party must, among other things, “file and record” a certified copy of the judgment in the office of the county recorder in each county where the party desires the judgment to become a lien. Only a final judgment can create a valid judgment lien. Bryan, 180 Ariz. at 369, 884 P.2d at 255.
Because the judgment lien statutes do not define “judgment,” Arizona courts have concluded “that the term Judgment as used in the statutes takes its meaning from the definition set forth in the Rules of Civil Procedure.” Ariz. Farmers Prod. Credit Ass’n v. Stewart Title & Trust of Tucson, 24 Ariz. App. 5, 7, 535 P.2d 33, 35 (1975). Ariz. R. Civ. P. 58(a) states that “all judgments shall be in writing and signed by a judge.” Because the minute entry Sysco recorded was not signed, it was not a judgment and did not become a judgment lien when recorded.
In light of the plain language of A.R.S. § 33-961, the Court declined to address Sysco’s policy arguments as to why the filing of unsigned minute entries should be permitted under the statute.
Presiding Judge Gould authored the opinion; Presiding Judge Winthrop and Judge Portley concurred.