A DEFICIENCY ACTION IS SUBJECT TO ARBITRATION CLAUSE IN A PROMISSORY NOTE

 

The Arizona Court of Appeals recently ruled that in Arizona the potential recovery in a deficiency action arises from the promissory note and not from the non-judicial foreclosure.  A deficiency action therefore is subject to an arbitration clause in a promissory note.  Nat’l Bank of Ariz. v. Schwartz, 1 CA-CV 10-0772, 6/26/12.

Arizona’s Consumer Fraud Act Requires Some Showing Of Intent

 

In a recent case, the State of Arizona sued AutoZone alleging that AutoZone had violated the Arizona Consumer Fraud Act (the “CFA”) by mispricing -- offering for sale goods that displayed a price different than the price scanned at the register -- and by non-pricing -- offering for sale goods not priced individually or at the point of display.  AutoZone argued that the CFA required an intent element and that its mispricing and non-pricing were unintentional.  The State argued that the CFA imposes strict liability.  The trial court entered summary judgment in favor of AutoZone and the State appealed.  The Arizona Court of Appeals rejected the State’s strict liability argument and found that the CFA requires a form of intent.  Because the State presented evidence that AutoZone had offered mispriced and non-priced goods for sale, the burden then shifted to AutoZone to rebut the State’s prima facie showing that it had acted with the requisite intent.  The Court found, based on the record before it, that AutoZone was not entitled to summary judgment and remanded the matter back for further proceedings.

Diminution Of Value Can Be Claimed For Damage To Property

 

The Arizona Court of Appeals recently concluded that Arizona law did not require the sale or transfer of a damaged vehicle in order to establish a claim for diminution of value.  Arizona law holds, therefore, that as long as a plaintiff is able to prove loss of value though competent means, such as an expert appraisal of the pre-loss and post-repair value, a diminished value claim can proceed even if the plaintiff does not suffer any actual loss.