BT Capital, LLC v. TD Service Company of Arizona

Summary

The Supreme Court of Arizona held that litigation concerning competing claims arising from trustee's sales of commercial property became moot after a later, lawfully conducted trustee's sale conveyed the property to the deed-of-trust beneficiary. The court concluded that the lis pendens did not preserve the claimant's objections or establish priority over the pre-existing deed of trust, and that no viable statutory or contract damages claim remained.

Holdings

1. The lawful July 2010 trustee's sale rendered BT Capital's appeal moot because the sale eliminated any practical effect that a decision concerning the earlier sale could have on the parties' rights to the property.
2. A person subject to A.R.S. § 33-811(C) who fails to obtain an order granting relief under Arizona Rule of Civil Procedure 65 before the scheduled trustee's sale waives all defenses and objections to the completed sale.
3. The trustee's deed from the July 2010 sale conveyed the property to PCF clear of BT Capital's subordinate claims or interests.
4. Recording a lis pendens gave constructive notice of BT Capital's lawsuit but did not establish the validity of its claim, create a substantive right, or give the claim priority over PCF's pre-existing deed of trust.
5. BT Capital had no viable statutory or common-law contract claim for damages against TD or PCF in these circumstances, and any statutory claim to compel completion of the 2009 sale was mooted by the 2010 sale.

Questions Presented

1. Whether the July 2010 trustee's sale rendered BT Capital's appeal moot.
2. Whether Arizona's deed-of-trust statutes waived BT Capital's objections to the July 2010 trustee's sale after BT received notice, attended the sale, and failed to obtain injunctive relief or a stay.
3. Whether a lis pendens preserved BT Capital's claimed interest or gave its claim priority over the pre-existing deed of trust.
4. Whether BT Capital could maintain statutory or common-law contract claims for damages after the July 2010 trustee's sale.

Disposition

vacated