Tag Archives: arizona supreme court

legal

Irvine Appointed to Committee on Character and Fitness

Fennemore Craig, a leading Mountain West regional law firm, announced that Patrick Irvine, a shareholder in the firm’s Business and Litigation practice groups, has been appointed by the Arizona Supreme Court to serve on its Committee on Character and Fitness.

Irvine is a former Judge of the Arizona Court of Appeals who now practices in the areas of business law and litigation, with particular emphasis on taxation, appellate practice, Indian law and arbitration/mediation. He also serves on the State Bar of Arizona’s Civil Practice and Procedure Committee, and has previously been a member of the City of Phoenix Judicial Selection Advisory board, the Judicial Ethics Advisory Committee, and the Arizona State-Tribal-Federal Court Forum. He is active in Kiwanis and is currently president of the Capitol Gateway Kiwanis Club.

The Committee on Character and Fitness consists of 18 members appointed by the Supreme Court to review applications to practice law in the State of Arizona and recommend to the Court for admission individuals who are deemed qualifies on the basis of character and fitness. If required, the Committee holds formal or informal hearings to enable the Committee to pass upon an applicant’s qualifications.

Rebecca White Berch

Rebecca White Berch – 50 Most Influential Women in Arizona Business

Rebecca White Berch – Chief justice, Arizona Supreme Court Chief Justice

White Berch was appointed to the Arizona Supreme Court in 2002 and has been chief justice since 2009. Before her Supreme Court appointment, she was a Court of Appeals judge (1998-2002); Arizona’s solicitor general (1991-1994); a member of the ASU College of Law faculty (1986-1995); and was in private practice (1979-1986).

Surprising fact: “I officiated at a wedding for 100 couples on the steps of the Supreme Court on February 14, 2012, the centennial of Arizona’s statehood — and Valentine’s Day.”

Biggest challenge: “Each new job has posed challenges that seemed, at that time, to have been the biggest I’d faced … Patience, humor, hard work, good advisors and good friends are the keys to meeting such challenges.”

Fifty Most Influential Women in Arizona Business – Every year in its July/August issue Arizona Business Magazine features 50 women who make an impact on Arizona business. To see the full list, read the digital issue >>

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Phoenix Attorney Receives Top Appellate Award

Kathi M. Sandweiss, partner at Phoenix law firm Jaburg & Wilk, P.C has been selected as a ‘2013 Top Rated Lawyer in Appellate Law’ by American Lawyer Media and  Martindale-Hubbell.

Award recipients are selected based on peer reviews. Sandweiss has achieved the AV Preeminent peer review rating, the highest rating in legal ability and ethical standards.

Sandweiss is head of the appellate law department and has represented clients in Arizona and federal appellate courts. She has filed over 100 appellate briefs and petitions for review in the Arizona Court of Appeals, the Arizona Supreme Court, the Bankruptcy Appellate Panel, the Ninth Circuit Court of Appeals and the U.S. Supreme Court.

Jaclyn Foutz

Jaclyn Foutz Joins Andante Law Group

Andante Law Group of Daniel E. Garrison, PLLC announced that Jaclyn D. Foutz has joined the firm as an attorney.  Her practice is concentrated in commercial litigation, bankruptcy, reorganization and capital recovery.  She represents creditors in collection and enforcement matters, as well as in all facets of bankruptcy proceedings and advising clients on creditors’ rights.

Daniel E. Garrison, Managing Partner of Andante Law Group stated,  “We are pleased to have Ms. Foutz join our firm.  She is a very talented litigation and bankruptcy attorney who will compliment our firm’s corporate restructuring, business bankruptcy, loan workouts and enforcement, and commercial litigation practice.

Prior to joining the Andante Law Group, Ms. Foutz was with Ballard Spahr LLP in Phoenix.  She began her legal career clerking for Justice Andrew Hurwitz at the Arizona Supreme Court.  Before re-entering private law practice, Ms. Foutz founded and was General Counsel to the Human Tribe Project, a patient support and fundraising website.

She earned her BS from the University of Arizona in 2000 and her JD in 2005 from Arizona State University, Sandra Day O’Connor College of Law.  She is licensed in both state and federal courts in Arizona and U.S. District Court for the Eastern District of Michigan.

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Are Arizona’s anti-deficiency statutes feeding the bubble?

Jack and Jill were living the American dream. They bought their dream house in 2006. Then, the economy spiraled downward. Jack lost his job. Housing values dropped, and the amount remaining on Jack and Jill’s mortgage exceeded the value of the property — commonly known as having a house that is “under water.”

Jack and Jill didn’t want to pay the mortgage any more, so they walked away, leaving the bank to clean up the mess from their financial misstep.

They were able to do that because of Arizona’s anti-deficiency statute, which says that if a person or corporation owns a residential property on 2.5 acres or less that is used as a dwelling, the owner is not responsible for any deficiency occurring after a foreclosure, according to Lynne B. Herndon, city president for BBVA Compass.

“The difference between the fair market value of the home — or the amount that the foreclosure sale brings — and the loan balance is known as a deficiency,” said Paul Hickman, president and CEO of the Arizona Bankers Association. “In Arizona, the bank suffers that loss, not the homeowner who walks away from the home.”

But it’s not only the homeowners — whom the statutes were intended to protect — who are catching the breaks.

“Unfortunately, the statute has been interpreted more broadly than originally intended such that properties used for investment are also covered,” Herndon said.

Arizona is one of only 12 states that has some form of anti-deficiency protection. Of the 12, Herndon said Arizona has the most liberal statute.

“This statute absolutely contributed to the housing bubble as investors both in this state and outside of the state knew they could buy residential real estate in Arizona and walk away if the investment became negative,” Herndon said. “Homeowners in this state have experienced larger declines in home value due to this statute allowing investors to speculate and walk away.”

The incidence of homeowners like Jack and Jill walking away from their home, avoiding hundreds of thousands of dollars of negative equity in their home, and legally sticking their lenders with a loss and became an all-too-common move during the Recession, experts said.

“In my view, the average borrower was not likely aware of the finer points of the anti-deficiency statutes when determining whether to purchase a home,” said Jennifer Hadley Dioguardi, a partner in Snell & Wilmer’s Phoenix office. “However, once the housing market crashed, the anti-deficiency statutes likely caused some homeowners who had the means to make their mortgage payments to decide to simply walk away from the residence given the fact that the lender had no recourse against them other than to foreclose upon the residence once the residence was under water. The borrower was not responsible for the deficiency. This likely contributed to some homeowners who could pay their mortgage simply walking away from the property and leaving the lender on the hook.”

Experts believe that homeowners and investors who seized the opportunity to take advantage of Arizona’s anti-deficiency statutes to protect their own financial futures, might be stifling the state’s chance at an economic recovery and exacerbating the economic collapse.

“The broadness of the deficiency statute has had an overall negative impact not just on the banking industry, but more importantly, Arizona’s long-term economy,” said Keith Maio, president and chief executive officer of National Bank of Arizona. “Arizona’s statute is the most liberally interpreted of the 12 non-recourse/deficiency states, the majority of which limit the protection to primary residences or some other means that limit its contribution to speculation. In Arizona, it allows investors to finance their speculation in housing, risk-free. If their investment does not work out, they don’t have to pay back the difference between what they sold the home for and what they owe. This statute was intended to protect homeowners, but what it has really done is hurt traditional homeowners by opening them up to large swings in housing values. I believe the impact, while negatively effecting banks earnings, is greater on the homeowners in the community at large.”

Despite the impact on the overall economy, it’s still been the banks who take the initial and biggest hit because they are often precluded from recovering the balance of the loan deficiency from the foreclosed borrower. While short sales are not protected by the Arizona’s anti-deficiency statutes, lenders have often been willing to agree to short sales and reduce or otherwise waive deficiency claims, because lenders know they could not otherwise recover loan deficiencies, should the borrower elect to foreclose.

“The deficiency statute has led to greater losses for residential lenders in Arizona because they cannot obtain a judgment against the borrower who may have the ability to repay the deficiency,” Kevin Sellers, executive vice president of First Fidelity Bank. “Lenders’ inability to pursue the borrower for the deficiency creates an environment that results in a higher incidence of strategic defaults.”

The biggest problem for lenders may be that it doesn’t appear that they will get any relief from lawmakers. Dioguardi said properties initially covered by the anti-deficiency statutes had to be two and one-half acres or less and utilized either for a single one-family or a single two-family dwelling. This language was interpreted by the Arizona Supreme Court to require that the dwelling be built and at least occasionally occupied.

“However, a recent decision by the Arizona Court of Appeals has extended the anti-deficiency protection to cover a residence that was not yet constructed and in which the borrowers had never resided,” Dioguardi said. “The Court found that even though the home was never utilized for a residence as required by the statute, because the borrowers intended to live in the single-family home upon its completion, they were subject to the protections of the anti-deficiency statute.”

The court decision, Dioguardi said, needs to be refined to protect both lenders and borrowers.

“Given that the Arizona Supreme Court declined the petition for review of the decision, the legislature should amend the statute to make it even clearer that the borrower must physically inhabit the property to claim the protection of the anti-deficiency statute,” she said. “The current risk to lenders created by the decision as it currently stands will likely drive up the cost of construction loans.”

Bank executives also believe that amending — not necessarily getting rid of — the state anti-deficiency statutes is what the banking industry needs to continue on the road to post-Recession economic recovery.

“A very reasonable solution proposed by the Arizona banking community is to simply require that a property protected from a deficiency judgment be the primary residence of you or a member of your family as already defined in Arizona’s property tax statues,” Maio said. “This will have the effect of limiting this protection for homeowners, which is what was intended. Those in our Arizona business community that oppose this type of change are motivated by their own special interests. Those whose real motivation is to profit on speculative investment or from the fees and commissions that come from buying and selling speculative homes for profit, you will oppose this type of change. But for the rest of us that want to protect Arizonans from future bubbles and encourage a long-term and sustainable economy, we should support this simple change, as it is in our best long-term interest.”

legal

Arizona allows law students take early bar exams

Law students in Arizona who are nearing graduation will have the chance to take the bar exam early in an experimental program approved by the state Supreme Court.

The experiment will run from January 2013 through December 2015 and would be available to students who are expected to graduate within 120 days of the test date and have satisfied all but eight semester hours of their course requirements.

Law students have traditionally taken the exam in July and get their results in October.

Students at Arizona’s three law schools would have the option of taking the test in February and would get back their results in June.

Proponents of the change say early tests would allow law school graduates to find work as lawyers faster.

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Brewer appoints Republican judge to Supreme Court

Arizona Court of Appeals Judge Ann Scott Timmer is Gov. Jan Brewer’s choice to fill a vacancy on the Arizona Supreme Court.

The 52-year-old Republican was one of three finalists nominated by a state screening commission.

Timmer replaces former Justice Andrew Hurwitz, a Democrat, and her appointment changes the court’s partisan makeup to four Republicans and one Democrat. Hurwitz resigned in June to become a federal judge.

Brewer’s three Supreme Court appointments have all gone to fellow Republicans.

Timmer was appointed to the Court of Appeals in 2000 by then-Gov. Jane Hull, another Republican.

Brewer says in a statement that Timmer embodies judicial restraint and respects the separation of powers between branches of government.

In 2003, Timmer authored a panel’s decision upholding the constitutionality of Arizona’s law banning same-sex marriages.

goldwater institute

Goldwater Institute Seeks Injunction Against Police Union Release Time

Arguing that release time “diverts precious resources from the core public safety mission to ‘union business,’” the Goldwater Institute today asked the Maricopa County Superior Court to enjoin provisions that allow the Phoenix Law Enforcement Association (PLEA) to use thousands of hours of police time — including six full-time positions — for its own purposes.

The Goldwater Institute represents two Phoenix taxpayers, William Cheatham and Marcus Huey, who allege that this use of their tax dollars violates the Arizona Constitution’s Gift Clause, which forbids subsidies to private entities. In a previous lawsuit, the Goldwater Institute successfully argued in the Arizona Supreme Court that subsidies to private developers are unconstitutional.

The City estimates the annual cost of release time for the police union at $1 million. The City’s practice of giving release time to its seven public employee unions was documented last September in a Goldwater Institute investigative report by Mark Flatten. The Legislature, which previously acted to prohibit release time by school districts, is considering a bill that would largely curtail the practice by municipalities.

In a document exchanged in its secret negotiations with PLEA over the current police contract, the City argued that release time provisions reduce “funds available for mission critical functions that provide a direct benefit to the citizens of Phoenix,” and they provide “taxpayer funding to decrease the efficiency of City Government.” Although the union provides representation to officers in official proceedings, release time also is used for lobbying—sometimes contrary to the City’s own positions — and can be used for union office staffing, collecting petition signatures for ballot measures, and any other purposes the union deems “legitimate Association business.”

Full-time release positions report to work at the union headquarters rather than the Police Department. The current PLEA president, Joe Clure, has been on release time for 14 years. He and the other full-time release positions collect full salary and benefits, qualify for pensions, and receive automatic overtime despite performing union business full-time. The City does not require officers to report what they do on release time.

“Paying city staffers to perform union business is an illegal scam,” declared Clint Bolick, the Goldwater Institute’s vice president for litigation and lead lawyer in the case. “What’s worse, the diversion of police officers to union business threatens public safety. It’s time this scheme came to an end.”

The City currently is negotiating a new contract with PLEA. The Goldwater Institute argues in its motion that an injunction would provide important guidance to City officials to help them conform future public employee contracts to the Arizona Constitution.