Petition for Writ of Certiorari — Cagle v. Carlson

) Supreme cout. Jo.

85-993 FILED

No. DEC 2 1985

JOSEPH F. SPANIOL, JR.

CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1985

Ray E. Cagle,

Petitioner,

Vv.

Mary E. Cagle Carlson, Paul W. Mercer

and Florence L. Mercer, and Gertrude Doyel,

Respondents

Writ of Certiorari to the

Arizona Court of Appeals, Division One

\

Petition for Writ of Certiorari

Michael J. Meehan

P.O. Box 2268

Tucson, Arizona 85702

602-622-3531

Counsel for Petitioner

Herbert Mallamo,

Of Counsel

QUESTION PRESENTED FOR REVIEW

Whether a judgment debtor, whose real

property is subjected to a post judgment

sheriff's sale at auction, which is

intentionally conducted without either he

or his counsel having been given any actual

notice of the sale, is deprived of property

without due process of law in violation of

the Fourteenth Amendment to the United

States Constitution.

ii

ee ee

Table of Contents

QUESTION PRESENTED FOR REVIEW

DECISION BELOW ... + «© «© «© « «

STATEMENT OF JURISDICTION...

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

STATEMENT OF THE CASE ..... -

REASONS FOR GRANTING THE WRIT. .

CONCLUS ION . . . * . . . . . .

iii

ii

15

26

Table of Authorities

CASES

Betts v. Tom,

431 F.Supp. 1369

(D. Ha. 1977) 23

Brown v. Liberty Loan Corp.,

539 F.2d 1355 (5th Cir. 1976),

cert. denied, 430 U.S. 949

(1977) 23,24

Cagle v. Carlson, Ariz.

, 705 P.2a 1343 (App.

1986) 1

Chonowski v. Bonucci,

47 Il1l.2d 510, 267 N.E.2a

671 (1971) 23

Cooper v. Ariz. Western

College Dist. Governing

Board, 125 Ariz. 463, 610

P.2d 465 (1980) 8

Dionne v. Bouley, 583 F.Supp

307 (Dist. R.I. 1984) 23

Endicott-Johnson Corp. v.

Encyclopedia Press, Inc.,

2664 U.S. 285 (1924) 12,15,16,17,

18,19,21,24,

25,26

Finberg v. Sullivan,

634 F.2d 50 (3rd Cir.

1980) 23,24

iv

|

Fuentes v. Shevin,

407 U.S. 67 (1972) 21

Griffin v. Griffin,

327 U.S. 220 (1946) 16,17

Hanner v. DeMarcus,

389 ..S. 926 (1967) 19,25

Jesik v. Maricopa County

Community College Dist.,

125 Ariz. 543, 611 P.2d

547 (1980) 5

Knight v. DeMarcus,

102 Ariz. 105, 425 P.2d

837 (1967) 14,18,19

Langford v. Tennessee,

356 F.Supp. 399

(E.D. Mich. 1984) 23

Luskey v. Steffron,

461 Pa. 305, 336 A.2d

298 (1975), cert. denied,

430 U.S. 968 (1977) 22,23

Mennonite Board of Missions

v. Adams, 462 U.S. 791

(1983) 15,20,21

In the Matter of Paul W.

Mercer, 133 Ariz. 391,

652 P.2d 130 (1982) Q

Mitchell v. W. T. Grant,

416 U.S. 600 (1974) 21

ullane v. ‘entral Hanovel

Bank & Trust Cc., 339 U.S.

306 (1950) 14,15,19,

Neeley v. Century Finance

Co. Of Arizona, 606 F.Supp

1453 (D. Ariz. 1985) 24

North Georgia Finishing, Inc.

v. Di-Chem, Inc., 419 U.S.

601 (1975) 21

Sniadach v. Family Finance

Corp., 395 U.S. 337 (1969) 2l

STATUTES

Ariz. Rev. Stat. Ann.

§ 12-1282(B)

(West 1956) 6

Ariz. Rev. Stat. Ann.

§ 12-1621 2,40, 48

Ariz. Rev. Stat. Ann.

§ 33-726 | 5

28 U.S.C. § 1257(3) 1

United States Constitution,

Amendment XIV ii, 6

Vi

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1985

Ray E. Cagle,

Petitioner,

Ve

Mary E. Cagle Carlson, Paul W. Mercer

and Florence L. Mercer, and Gertrude Doyel,

Respondents

Writ of Certiorari to the

Arizona Court of Appeals, Division One

Petitioner Ray E. Cagle, respect-

fully requests this Court to issue its

Writ of Certiorari to review the decision

of the Court of Appeals of the State of

Arizona, Division One, as to which review

was denied by the Supreme Court of the

State of Arizona on September 4, 1985.

DECISION BELOW

The decision of the Arizona Court of

Appeals, Division One, is reported at

Ariz. _, 705 P.2d 1343 (App. 1985), and

is attached as Appendix A. The Order of

the Arizona Supreme Court, denying review,

attached as Appendix B, is unreported.

STATEM ie) URISDICTION

The opinion of the Arizona Court of

Appeals was entered January 29, 1985. A

timely motion for rehearing was denied,

and the Petitioner timely sought discre-

tionary review by the Arizona Supreme

Court, which was denied by order entered

September 5, 1985. This court has juris-

diction by virtue of 28 U.S.C. §1257(3).

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

United

The Fourteent’: Amendment to the

States Constitution provides:

"“(N)or shall any state

deprive any person of .

property without due process

of iaw."

Ariz. Rev. Stat. Ann. §12-1621

A. provides:

"Notice of Sale under execu-

tion shall be made as

follows:

3. For the sale of real

property, notice shall be

given by posting notices for

not less than fifteen days

successively before the day

of sale in three public

places in the county, one of

which shall be at or near

the court house door, and

publishing a copy thereof in

a newspaper for three weeks

before the day of sale."

STATEMENT OF THE CASE

Prior to 1972, petitioner was

married to respondent Mary Cagle Carlson.

In that year, respondent Carlson retained

respondent Mercer, who was then admitted to

3

practice law in Arizona, and sved petition-

er for divorce. A property «»<:tlement was

agreed upon, and the divorce granted.

Petitioner was in the trucking

business, and owned an office and yards

suitable for the conduct of that business,

in an industrial area of Phoenix, Arizona.

As part of the settlement of his civorce

action, Petitioner delivered to his ‘ormer

wife a promissory note for $50,000 plus

attorneys' fees of $2,500, and secured the

obligation by a mortgage on his business

nremises.

Petitioner experienced perennial

difficulties in operating his business,

which primarily consisted of trucking

cotton farmed in Arizona, and in 1974, he

was in default on the obligation to

Respondent Mary Cagle Carlson, which had

by this time been assigned in whole or in

part to lawyer, Respondent Mercer.! After

once reinstating, and again defaulting,

Petitioner suffered a foreclosure judgment

against him on 30 Sept 1974 in the Arizona

Superior Court. On 25 November 1974,

Petitioner perfected an appeal. He was

unaware that Respondent Mercer had insti-

tuted proceedings by which the local

sheriff would sell his business yard and

office, and therefore did not obtain a

supersedeas bond.

Respondent Mercer never provided

Petitioner with any notice that the

sheriff's sale was pending.* Petitioner

1 The extent of the assignment to

Mercer before the mortgage foreclosure

action was disputed below, but is irrele-

vant to this petition. His scheme to

acquire the property at a bargain price

occurred at and after the foreclosure

action which produced the sheriff's sale

complained of here.

2 while the Sheriff conducts the

sale, and theoretically gives the notice,

the practice in Arizona, as elsewhere, is

5

was unaware until the middle of January,

1975, that a sneriff's sale had been

conducted on November 27, 1974. App.

112.3. This meant that he had been unable

to redeem the premises prior to the

sheriff's sale, as was his legal right

under statute.4 Such pre-sale redemption

would have saved expenses of sheriff's

sale. It meant that he was unable to

for the judgment creditor's attorney to

prepare all papers and arrange for sched-

uling and published notice of the sale, as

well as to request posting by the sheriff

of notices of sale.

3 References to "App" are to the

appendix to the opening brief filed by

Petitioner in the Arizona Court of Appeals;

which appendix gathers more pertinent

portions of the trial court record. This

specific reference is to an amended and

supplemental complaint, which was verified

under oath by Cagle, and thus served as an

affidavit for consideration by the trial

court in its ruling on the summary judgment

motions which disposed of this case. £.g.,

Jesik v. Maricopa County Community College

Dist. 125 Ariz 543, 611 P.2d 547 (1980).

4 Ariz. Rev. Stat. Ahn. §33-726.

appear and bid upon the property. It meant

that approximately one-third of the time

that Petitioner would have had to obtain

funds to redeem the premises from the

sheriff's sale had also run by the time

that Petitioner learned of the sale.°

Petitioner did not redeem the premises.

Petitioner was ultimately to sue

respondents to have the sheriff's sale of

his trucking yard declared void, on

grounds which included the assertion that

failure to provide him actual notice

deprived him of property without due

process of law, in violation of the

Fourteenth Amendment to the United

States Constitution.© The ultimate ruling

> Ariz. Rev. Stat. Ann. §12-1282 B.

(West 1956).

6 The procedural history of this

case is protracted, given that motions in

the nature of demurrers to the pleadings

were originally granted, and ultimately

reversed on appeal. Most of the procedure

7

of the Arizona trial and appellate courts

rejected the notice and due process issue

presentea here. In the trial court,

summary judgment was granted against

petitioner, in proceedings by which respon-

dents both conceded Petitioner's material

and sworn allegations of fact, at least

for purposes of summary judgment, and chose

not to present any controverting affida-

vits. Thus, as pleaded and presented by

affidavits, the following facts were

is irrelevant to this Petition. However,

Petitioner's objection to the failure to

give him notice of the Sheriff's sale, and

the due process argument premised on the

federal constitution, were raised early and

often before the trial court. (second

amended complaint filed February 4, 1975,

App. 4; 1975 opposition to summary judg-

ment, App. 70,71; amended and supplemental

complaint, App. 110-112; 1981 response to

motion to dismiss, App. 52, 53)

placed before the Arizona courts for a

summary judgment ruling: ’

Respondent Mercer was himself the

true party in interest, he having unduly

influenced and coerced Respondent Mary

Cagle Carlson to sell her interest in

the property for $20,000. App. 124,

Summary Judgment Motion of Respondent

Carlson. Mercer had entered a "credit

bid" of $20,000 for the property at the

sheriff's sale of November 27, 1974. He

induced Respondent Carlson to quitclaim her

interest to Respondent Doyel, Mercer's

mother, without disclosing that relation-

ship. App. 127, affidavit of Respondent

7 In Arizona, as elsewhere, a party

against whom summary judgment is contempla-

ted is entitled to have all facts and

inferences contained in the record viewed

most favorably toward him, and most

stringently against the moving party.

E.g. Cooper v. Ariz. Western College Dist.

Governing Board, 125 Ariz. 463, 610 P.2d

465 (1980).

Carlson. This quitclaim was followed by

Mercer's mother, Respondent Doyel, quit-

claiming her interest in the property to an

entity known as L & M Investments, which

was owned by Mercer. App. 93, 99.

Mercer then obtained possession of the

premises, and under the name of L & M

Investments, leased the property to new

tenants, and began receiving rent.

App 95-99.8

In Arizona, the only statutory

requirement of notice is publication ina

newspaper of general circulation, and

posting of notices for fifteen days before

the sale in three public places, one of

which must be the courthouse. Ariz. Rev.

8 The scheme by Respondent Mercer

was not unlike other manipulations he

engaged in, using L & M Investments in

some instances, which lead to his disbar-

ment by the Arizona Supreme Court. In the

Matter of Paul W. Mercer, 133 Ariz. 391,

652 P.2d 130 (1982).

10

Stat. Ann. §12-1621 3. Mercer actually

knew Petitioner Cagle's business and

residence addresses; indeed the property

to be foreclosed was Cagle's trucking

yard. Moreover, these addresses were also

reasonably ascertainable to Mercer when he

was preparing for the sheriff's sale of the

property. Mercer intentionally failed to

give Cagle actual notice, and used a

newspaper for publication that he knew

Cagle was unlikely tec read.? App. 110,

111; App. 124.19

9 The publication was in the Arizona

Weekly Gazette, a paper which did qualify

as one of general circulation, but which

is widely known, and would have been

judicially noticed by the trial and

appellate courts sitting in Phoenix,

Arizona, not to be read by the general

public. |

10 These provisions of the sworn

supplemental complaint were accepted by

respondent Carlson for purposes of judgment

on the pleadings; they were not disputed

by respondent Mercer by the submission of

any affidavit, he rather arguing that they

did not state a claim, because no notice

1l

The property was sold to Mercer,

bidding on behalf of Respondent Mary Cagle

Carlson (before he obtained title by the

conveyance through his mother as a straw-

man) for a $20,000 credit bid. Petitioner,

in his complaint to set aside the sale as

void, and to recover damages, asserted that

the property was worth from $60,000 to

$262,500.11 In his suit, Cagle offered to

pay what the court might. determine he

still owed, but asserted under oath that

he had not only paid monies sufficient to

satisfy the judgment, but had paid an

additional $71,670.36 under compulsion and

was required to be given. App 131

11 In his verified complaint,

Petitioner asserted that the property was

worth $60,000. Tax records showed the

trucking yard to have been given a full

cash value assessment of $58,697. App 73.

Cagle's previous counsel, in an affidavit,

asserted that the premises were in an

industrial area, carried a value of $0.80

per square foot, or $262,500.00. App 21.

12

legal process brought about by the execu-

tion sale. App. 112.

The trial court granted respondents'

motions for judgment on the pleadings nd

for summary judgment. App. 155-159. The

Court of Appeals affirmed. It found that

this Court's decision in Endicott~-Johnson

Corp. v. Encyclopedia Press, Inc. 266 U.S.

285 (1924) was applicable, though it dealt

with post-judgment garnishment, rather

than execution sale. Noting, Appendix A,

infra, p. A-17 et seq., that more recent

cases from this Court have refined the

requirements of due process since the days

of Endicott, and acknowledging that other

states' appellate courts have disagreed on

the precise point, the Court of Appeals

nonetheless concluded that no due process

violation had occurred. It felt that

having received notice of the original

foreclosure proceeding was enough, because:

13

"The entry of judgment

placed the appellant and

certainly his counsel upon

notice that execution could

follow. Also, notice by

recording was made subsequent

to the sheriff's sale, and

the appellant still had the

statutory redemption period

under which to assert nis

rights." Appendix A, infra

at p. A-23,24.

The Court of Appeals did not address

itself to the facts that Petitioner did not

in fact receive notice; that he experienc-

ed added costs even if he was able to

redeem; that he lost one third of the

redemption period within which to try to

arrange for redemption; that he lost the

opportunity to try to arrange for other

bidders to bid the property at a fair

price; and that the authorities cited by

Petitioner required not merely constructive

notice but the best notice practicable

r+

<»

under the circumstances./2 Judge

Kleinschmidt specially concurred, believ-

ing that because "debtors will not always

be aware that their property has been

executed upon and will thereby lose their

right of redemption" Appendix A, infra, at

p. A-27, that the issue \of notice ought to

be reexamined. However, he felt himself

bound by an Arizona Supreme Court Case,

Knight v. DeMarcus, 102/Ariz. 105, 425 P.2d

837 (1967). :

Petitioner sought \Aiscretionary

review from the Arizona Supreme Court,

tendering the issue of "Whether due

process requires actual notice to a

defendant of a sale of execution."

Petition for Review, p. 6. That Court

declined to exercise its jurisdiction, by

le E.g. Mullane v. Central Hanover

Bank & Trust Co., 339 U.S. 306 (1950). The

due process issue was briefed by Petitioner

at p. 27, appellant's opening brief.

i5

a divided vote, in its order of September

4, 1985. This Petition was thereafter

timely filed.

REASONS FOR GRANTING THE WRIT

Both the reasoning by the Arizona

Court of Appeals, and the result in this

case, directly conflict with a line of

due process cases decided by this Court,

beginning with Mullane v. Central Hanover

Bank & Trust Co., 339 U.S. 306 (1950) and

continuing through Mennonite Board of

Missions v. Adams, 462 U.S. 791 (1983).

The conclusion by the Court of Appeals that

Endicott-Johnson Corp. v. Encyclopedia

Press, Inc., 266 U.S. 285 (1924) “enjoys

continued vitality", Appendix A, infra, p.

A-21, and that, therefore, "the entry of

judgment placed the Appellant and certainly

his counsel upon notice that execution

could follow", Id. at p. A-=23, squarely

contravenes the guarantees of due process

16

established by the cases of this Court

above cited, and others. The opinion below

relies upon a doctrine that was held to be

outmoded in Griffin v. Griffin, 327 U.S.

220 (1946). It contradicts cases from the

courts of other states and the United

States Courts of Appeal.

In 1924, this Court was first asked

to hold that the due process rights of

notice and an opportunity to be heard,

applied to post-judgment remedies for che

collection of a judgment. Endicott-Johnson

Corp. v. Encyclopedia Press, Inc., 266

U.S. 285 (1924). That case dealt with

post-judgment garnishment, and the Court

held that unless a statute required

notice, once judgment was entered, a

defendant was entitled to no further

notice of what would follow to execute

against tangible property. 266 U.S. at

288. In 1946, this Court, in Griffin v.

17

Griffin, 327 U.S. 220 (1946) held that

post-judgment proceedings to collect

arrearages in support - ‘ents were

invalid because no notice subsequent to

the original entry of judgment had been

given. The Griffin court, acknowledging

that Endicott had specified that once

judgment was entered there was no need for

notice "that further proceedings might be

taken" said:

"We find in this no ground

for saying that due process

does not require further

notice of the time and place

of such further proceedings,

inasmuch as they undertook

substantially to affect his

rights in ways which the

1926 decree did not".

Griffin v. Griffin, 327 U.S.

220, 229 (1946).

Thus, almost forty years ago this

Court had concluded that where actions

taken subsequent to the rendition of

judgment might substantially affect rights

in property, the concept that no notice was

18

required in a post-judgment proceeding was

incorrect. It is beyond dispute that an

execution sale of petitioner's truckyard

and his office, substantially affects his

rights. Such a sale determines the value

of the property, -ften at an artificially

low price. It starts a redemption time

running. It divests him of any interest

in the property, subject to rights of

redemption if exercised.

The Court below relied in great

part for its conclusion that Endicott-

Johnson remains fundamentally sound, upon

the Arizona case, Knight v. DeMarcus, 102

Ariz. 105, 4125 P.2da 837 (1967) which had

held, on the authority of Endicott, that an

execution sale, based upon the same

statutes and procedures as are here in

issue, was valid even though no notice had

been given to the judgment debtor whose

property was being sold. This Court had

19

granted certiorari to review the decision

of the Arizona Supreme Court in Knight v.

DeMarcus, Supra. Hanner v. DeMarcus, 389

U.S. 926 (1967). Indeed, two members of

this Court agreed at the time that the

DeMarcus case was taken in order to

consider overruling Endicott. Knight v.

DeMarcus, 390 U.S. 736, 737 (Douglas, J.,

joined by Brennan, J., dissenting from

dismissal of certiorari). Ultimately,

Hanner v. DeMarcus was dismissed as having

been improvidently granted, this Court

apparently concluding that the federal

question had not been properly and squarely

raised. That same question has been and

now is squarely raised in this case.

In the meantime, this Court had

decided Mullane v. Central Hanover Bank &

Trust Co., 339 U.S. 306 (1950) a case

that, together with extensive progeny,

requires as an element of due process that

20

a person having an interest in a proceeding

be given the best notice practicable under

the circumstances. Mennonite Board of

Missions v. Adams, 462 U.S. 791 (1983)

applied the principles of Mullane and

other similar cases to the sale of real

estate for delinquent taxes. The form of

notice was the central issue of the case,

and this Court held that

"notice by mail or other

means as certain to ensure

actual notice is a minimum

constitutional precon-

dition to a proceeding which

will adversely effect the

liberty or property interests

of any party, whether

unlettered or well-versed in

commercial practice, if its

name and address are reason-

ably ascertainable",

Mennonite Board of Missions

v. Adams, 462 U.S. 791, 800

(1983).

In this case, such an address was not only

21

escertainable but was known to the

Respondent. 13 It is exceedingly clear

that the result countenanced below cannot

stand in the face of Mullane, supra,

Mennonite Board, supra, and more generally

the due process cases of this Court

dealing with creditor's remedies.+4 One

of the three judges on the Court of Appeals

13 Because this case presents a

record of the Respondent Mercer intention-

ally withholding the giving of notice when

he in fact knew where to locate Petitioner,

this case is not in the penumbral zone of

those situations where the identity and

location of a party to be served requires

"reasonably diligent efforts" as opposed

to those cases where the identity of the

person to be served was either known or

"easily ascertainable", an issue which

divided the Court in Mennonite Board,

supra. in this case, under either stan-.

dard, notice could and should have been

given, if Mullane v. Central Hanover,

supra, and Mennonite Board, supra, were to

be complied with.

14 North Georgia Finishing, Inc. v.

DiChem, Inc., 419 U.S. 601 (1975); Mitchell

v. W. T. Grant, 416 U.S. 600 (1974);

Fuentes v. Shevin, 407 U.S. 67 (1972);

Sniadach v. Family Finance Corp., 395 U.S.

337 (1969).

22

panel which decided this case acknowledged

that his vote was controlled by Knight v.

DeMarcus, supra, the Arizona case following

Endicott, supra, but said "the issue

deserves re-examination. Debtors will not

always be aware that their property has

been executed upon and will thereby lose

the right of redemption", Appendix A,

infra, at p. A-27 (Kleinschmidt, J.,

specially concurring).

The result in this case squarely

conflicts with Luskey v. Steffron, 461 Pa.

305, 336 A.2d 298 (1975), cert. denied,

430 U.S. 968 (1977). There, notice of an

execution sale of property was posted on

the land to be sold, and was published.

Inasmuch as notice included posting on the

property, it was a better notice than is

involved in this case. Citing Mullane v.

Central Hanover & Trust Co., supra, the

Pennsylvania court concluded that the

23

notice was insufficient and property had

been sold in contravention of the due

process rights of the owner.

It is not just the court below and

Luskey, supra, which are in conflict on

whether notice must be given before

post-judgment remedies, such as execution

or garnishment, can go forward. Many state

and federal courts are in disagreement on

the issue. Among the cases finding no due

process violation, see Brown v. Liberty

Loan Corp., 539 F.2d 1355 (5th Cir. 1976),

cert. denied, 430 U.S. 949 (1977);

Chonowski v. Bonucci, 47 I11.2da 510, 267

N.E.2d 671 (1971); Langford v. Tennessee,

356 F.Supp. 1163 (W.D.Tenn. 1973); Jahn v.

Regan, 584 F.Supp. 399 (E.D.Mich. 1984).

Cases aligned with Luskey v. Steffron,

supra, finding due process violations,

include Finberg v. Sullivan, 634 F.2d 50

(3rd Cir. 1980); Dionne v. Bouley, 583

24

\

F.Supp. 307 (Dist. R.I. 1984); and Betts

v. Tom, 431 F.Supp. 1369 (D. Ha. 1977).

Indeed, Arizona's own garnishment

statutes have been held unconstitutional in

post judgment proceedings, for lack of

proper notice, in Neeley v. Century Finance

Co. of Arizona, 606 F.Supp. 1453 (D. Ariz.

1985). Thus in Arizona, the conflict on

what process is due in connection with

post judgment remedies is particularly

sharp. If a litigant is involved with

garnishment, due process has been held to

require the giving of notice. If execution

sale is involved, sales without actual

notice are allowed.

The opinion in this case departs

from both sides of this issue, however, in

that most courts having considered this

issue no longer believe Endicott contains

the correct analysis. See, e.g., Brown v.

25

Liberty Loan Corp., supra, Finberg v.

Sullivan, supra.

Much of the above-cited authority

which finds no due PFOCSSS VIGILEESON,

relates to garnishment proceedings in

which an opportunity for a prompt hearing

on Motions to Quash, or other proceedings

to challenge the correctness of a garnish-

ment, are available. In this case, while

it is true that, as the Court of Appeals

noted, there is a right of redemption,

there is noe automatic judicial procedure

at which deficiencies in the sale can be

pointed out, or an artificially low price

can be remedied, or the judgment debtor

can obtain other bidders to try and bid up

the price. Indeed, when notice of an

execution sale is, as here, intentionally

withheld, or is ineffective, a redemption

period may very easily run before the

26

debtor realizes what has happened to him.}°

While it is true that in this case a motion

to set aside the sale was brought before

the redemption time had run, by the

time Petition was aware that the sale had

eccurred, he had lost approximately 1/3 of

the time available to him in which to

arrange for redemption, and was not, in

fact, able to redeem the property.

CONCLUSION

The need for appropriate notice of

post-judgment remedies is an issue that

has matured, has divided the courts, and

is ripe for decision. Arizona's position,

depending as it does upon Endicott-Johnson

Corp. v. Encyclopedia Press, Inc., 266

15 In Hanner v. DeMarcus, 390 U.S.

736 (1968), discussed text supra, in which

the court had granted certiorari to

reconsider Endicott, the judgment debtor

was relegated to a quiet title action

because she did not discover the sale

until after the redemption period had run.

27

U.S. 285 (1924) is constitutionally

infirm. The issue is fundamental to the

integrity of the judicial process for

litigation and enforcement of claims.

For these reasons, it is respect-

fully requested that this Court grant the

Writ of Certiorari.

Respectfully submitted,

Michael J. Meehan

P.O. Box 2268

Tucson, Arizona 85702

602-622-3531

Counsel for Petitioner

December 2, 1985

28

APPENDIX A

IN THE COURT OF APPEALS

STATE OF ARIZONA

= DIVISION ONE

RAY E. CAGLE,

1 CA-CIV 6781

Plaintiff-Appellant,

vs. DEPARTMENT B

MARY E. CAGLE CARLSON,

dealing with her sole and

separate property; PAUL W.

MERCER and FLCRENCE L.

MERCER, individually and

as husband and wife;

GERTRUDE DOYEL, widow,

SF £8 228

Defendants~-Appellees.

me ee ee a ee ee ee ee ee ee”

Appeal from the Superior Court of

Maricopa County

Cause No. C-305893

The Honorable David J. Perry, Judge

AFFIRMED

GREER, Judge

This is an appeal from a suit to set

aside a sheriff's sale ordered as a result

of foreclosure proceedings upon the

appellant Cagle's default on a promissory

note.

In August 1972, the appellant gave a

note of $50,000 to his wife Mary Cagle

(appellee Cagle Carlson). She thereafter

assigned $15,000 of the note to her

attorney Paul Mercer. Cagle subsequently

defaulted on the note, and both Mercer and

Cagle Carlson then brought foreclosure

actions in March 1973 against the proper-

ties secured by the note. Mary Cagle was

granted summary judgment in her suit

and Ray Cagle was granted summary judgment

in the Mercer action. Mary Cagle then

preceeded to execute on the judgment in her

suit, and Mercer, using a credit bid of

$20,000, purchased the real property on

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Mary's behalf. In January, 1975, the

appellant breucht the present action to set

aside the December, -974 sale.

On November 10, 1975, the trial

court granted a motion to dismiss filed by

the defendants (appellees in the present

suit). Appeal was taken, and this court

issued a memorandum decision in January

1980. Cagle v. Cagle, 1 CA-CIV 4135

Memorandum Decision (Ariz. App. Jan. 15,

1980). We held that the motion to dismiss

should be reversed, since the trial court

had improperly refused to deal with

the issues raised. Specifically, we found

that the trial court erred in ruling that

the issues raised in the original complaint

had been previously tried in another suit.

The matter was remanded and on July

29, 1980, the defendants filed a new motion

for summary judgment on the issues of

unclean hands, waiver and tender. This

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motion was denied October 1, 1980. On

October 2, the defendants filed a motion

for dismissal claiming the plaintiffs had

failed to join an indispensable party.

This motion was also denied.

An amended complaint was filed on

August 6, 1981, adding the claimed indis-

pensable party, and offering to pay to the

defendants the amount of the underlying

judgment. On December 9, 1981, defendant

Mary Cagle Carlson filed a motion for

summary judgment, and on December 14,

defendants Mercer and Doyel (the claimed

indispensable party) did the same. In

January, 1982, the court sought additional

memoranda on the issue of tender. Judg-

ments were subsequently entered for the

defendants on April 26, 1982, from which

the present appeal is taken.

The primary issue raised by the

appellant is that the trial court was

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precluded from finding there were no

material issues of fact in the case by

virtue of this court's memorandum decision.

They argue that under a “law of the case"

or “res judicata" theory, the memorandum

decision was a mandate requiring the case

to be heard on the merits. We disagree.

In the case of In Re Monaghan's

Estate, 71 Ariz. 334, 227 P.2d 227 (1951),

our supreme court addressed the effect a

prior appellate decision has on subsequent

determinations in the same case. The

court found two exceptions to the "law of

the case" rule, stating, "(Wjhere the court

expressly reserves its decision on any

point raised in the first appeal it is not

conclusive as to those matters reserved .

Nor is it conclusive on points where

the first decision is ambiguous and

conflicting." 71 Ariz. at 336 (citations

omitted). In the present case, although

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our first decision stated, "[I]t appears

that Mr. Cagle may have stated a cause of

action." Siip op. at 5, we expressly

reserved determination on the substantive

issues, stating, "We wish to make it

abundantly clear that our decision is not

an adjudication of the merits of this case.

Rather, this case is remanded for the

litigants and court to deal with the

notice, conscionability and other matters

claimed as error relating to the sheriff

sale."l Slip op. at 5-6. In our opinion,

the issues subsequently addressed by the

trial court (and now this court) were not

precluded by our previous memorandum

decision.

. Appellant mentions the conscion-

ability and irregularities of sale issues

at various points in his brief. The brief,

however, does not contain argument or

citation in support of either clain.

Hence, those issues are deemed abandoned.

Valley Vendors Corp. v. City of Phoenix,

126 Ariz. 491, 616 P.2d 951 (App. 1980).

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Cases cited by appellant are

distinguishable from the case at bar. In

Tucson Gas and Electric Co. v. Superior

Court, 9 Ariz. App. 210, 450 P.2d 722

(1969), for example, division two of this

court dealt with specific errors that arose

at trial, and found its earlier decision to

implicitly require a "retrial." Appellant

also cites Hurst v. Hurst, 1 Ariz. App.

603, 405 P.2d 913 (1965). That decision,

however, deals with waiver by failure to

object at trial, and we do not find the

case in point.

We hold, therefore, that the issues

before the trial court had not been

previously determined when it entered

summary judgment for the defendants.

Turning to the merits of the case,

the appellees argue that the grant of

summary judgment was appropriate, and cite

several grounds to support the judgment.

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They assert that the entry is proper

since tender of the amount of judgment was

not made. Since we find the tender issue

dispositive, we will not discuss other

contentions made by appellees.

The appellee argues that summary

judgment was properly granted since the

plaintiff did not tender the amount of

judgment prior to moving to set aside

the sheriff's sale. In Young Mines Co. v.

Sevringhaus, 38 Ariz. 160, 298 P. 628

(1931), our supreme court held:

This is an equitable proceed-

ing for the foreclosure of a

mortgage, and in passing on

the motion the general

rules of equity should appiy.

Prominent among these rules

is the familiar one that he

who seeks equity must do

equity. It is not disputed

that defendant is both

legally and morally indebted

to plaintiff for the amount

of the judgment for which the

property was sold. It is but

equitable and the rule

sustained by the weight of

authority that, as a condi-

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tion precedent to the setting

aside of the sale, defendant

should tender to plaintiff

the amount of the judgment

with costs and interest.

38 Ariz. at 166, 167 (citations omitted).

Accord, Bracken v. Kyle, Inc., 589 S.W.2d

501 (Tex. App. 1979; Pachter v. Woodman,

534 S.W. 2d 940 (Tex. App. 1976), rev'd on

other grounds, 547 S.W.2d 954 (1977).

Appellants' responses to the tender

issue are that principles of res judicata,

or more properly, claim preclusion, bar

this issue; that an offer to make payment

suffices as a tender; and that in any

event payment of the judgment was made in

full.

We first address appellants'

contention that prior denial of a motion

for summary judgment constitutes res

judicata when a new motion for summary

judgment is made, based on the same

grounds. In Mozes v. Daru, 4 Ariz. App.

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385, 420 P.2d 957 (1966), division two of

this court discussed the practice of

renewing a motion for summary judgment

after such a motion had been denied. The

court characterized such a practice as an

abuse of the system, and stated that

repeated motions for summary judgment would

not be allowed. The court also noted,

however, that no purpose would be served by

forcing a case to trial where no genuine

issue of fact exists. Further, the court

stated, "Hence, there is no iron clad rule

that a denial of such a motion is res

judicata and absolutely precludes renewal

or the making of a subsequent motion for

the same relief." 4 Ariz. App. at 389.

Here, further discovery was undertaken

between the time of the denial of the July,

1980. motion for summary judgment and the

December 1981 filing of the new motion.

Therefore, even though successive motions

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were filed, we find no abuse of the system

in the present case.

We also note that "tender" involves

more than merely an offer to pay the amount

of the judgment. The appellant argues,

relying upon our decision in Nelson v.

Cannon, 126 Ariz. 381, 616 P.2d 56 (App.

1980), that his statement in the 1981

amended complaint offering to pay "any and

ali sums which may be, or found by the

court to be due and payable under or upon

said promissory note and mortgage securing

same" is sufficient to overcome the eck of

tender at the time of the original con-

plaint. Beyond the fact that the offer

came over six years after institution of

the action, we find that the statement does

not constitute "tender" of the amount

of judgment.

In Nelson, we noted that, as a

condition precedent to entitlement to the

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remedy of specific performance, a buyer

must show that he "stood ready, willing and

able to perform." 126 Ariz. at 385.

That case, however, dealing with specific

performance, does not render any less valid

the decision in Young Mines Co. v.

Sevringhaus. Furthermore, our supreme

court, in an early decision, found "tender"

to be more than merely the offer to pay.

In Somerton State Bank v. Maxey, 22 Ariz.

365, 197 P. 892 (1921), the court held:

[Tender] imports, not

merely the readiness and the

ability to pay or perform at

the time and place mentioned

in the contract, but also the

actual production of the

thing to be paid and deli-

vered over, and an offer of

it to the person to whom the

tender is to be made; and the

act of tender must be

such that it needs only

acceptance by the one to whom

it is made to complete

the transaction.

22 Ariz. at 369. (citations omitted).

Accord, Bembridge v. Miller, 235 Or. 396,

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385 P.2d 172 (1963). In the present case,

we hold that appellant's offer in the

amended complaint to pay the amount of

judgment did not satisfy the require-

ment of "tender" to the appellees as a

condition precedent to setting aside the

sale.

Finally, regarding appellant's

argument that he has already "tendered" -

sufficient amounts over to the appellees,

we find that the amounts claimed were

paid on other obligations owed by appel-

lant, and are not "tender" or payment in

the present suit. |

Appellants next contend that they

received no personal notice of the

sheriff's foreclosure sale; that statutory

notice by publication, posting and record-

ing after the sale does not provide due

process notice. We disagree.

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Although a review of the record

discloses that the issue has not been

clearly addressed throughout the proceed-

ings, it is apparent that both sides

concede compliance with statutory require-

ments. Appellants, however, assert that

due process considerations require notifi-

cation beyond that imposed by statute.

The requirements of notice pursuant

to a sheriff's sale are set ferth in A.R.S.

12-1621. That statute states, in part:

For the sale of real

property, notice shall be

given by posting notices for

not less than fifteen days

successively before the day

of sale and three public

places in the county,

one of which shall be at or

near the courthouse door, and

publishing a copy thereof in

a newspaper for three weeks

before the day of sale.

- § 12-1621(A) (3). In addition,

-§ 12-1626 states:

B. ..- - In all other cases

[not involving certain

specified leaseholds],

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§

including sales under order

of court in foreclosure

suits, the property is

subject to redemption.

C. The officer shall give to

the purchaser a certificate

of sale, setting forth a full

description of the real

property sold, the price bid

and paid for each parcel if

sold in lots or parcels and

whether subject to redemption

or not.

D. A duplicate of the

certificate shall be recorded

by the officer in the office

of the county recorder.

As early as 1924, the United States

Supreme Court held that a post-judgment

debtor was not required to receive personal

notice in a subsequent execution proceed-

ing. In Endicott-Johnson Corp. v.

Encyclopedia Press, Inc., 266 U.S. 285, 45

S.Ct. 61, 69 L.Ed. 288 (1924), a case

dealing with post-judgment garnishment, the

Court held:

"(Ijn the absence of a

statutory requirement, it is

not essential that he be

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given notice before the

issuance of an execution

against his tangible pro-

perty; after the rendition of

the judgment he must take

‘notice of what will follow,'

no further notice being

‘necessary to advance

justice.'"

266 U.S. at 288 (citations omitted).

Admittedly, this decision has since

come under attack. In Griffin v. Griffin,

327 U.S. 220, 66 S.Ct. 556, 90 L.Ed. 635

(1946), the Court held that a husband

against whom a judgment for support

arrearages was sought to be enforced

required notice so as to not cut off the

husband's defenses to the arrearages

proceedings. Notably, however, the

Griffin holding concerned an enforcement

proceeding based upon a judgment obtained

in an ex parte proceeding. The Court

distinguished between enforcement of such a

judgment and enforcement of a judgment

rendered upon notice ’and an opportunity for

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hearing. See Griffin, 327 U.S. at 233. In

that sense, the Griffin and Endicott-

Johnson decisions do not conflict.

More importantly, in the 1950's, the

entire due process analysis began to evolve

toward a more flexible analysis. In

Mullane v. anov a ck

Co., 339 U.S. 306, 70 S.Ct. 652, 94

L.Ed. 865 (1950), a case involving a

judicial proceeding for approval of an

account submitted by the trustee of a

common trust, the Supreme Court held that

due process required individual notice to

beneficiaries whose names and addresses

were known to the trustee. Mullane and its

»mrogeny, e.g., Walker v. City of

Hutchinson, 352 U.S. 112, 77 S.Ct. 200, 1

L.Ed.2da 178 (1956); Schroeder v. City of

New York, 371 U.S. 208, 83 S.Ct. 279, 9

L.Ed.2d 255 (1962), have come to stand for

the broad proposition that when an adjudi-

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catory proceeding is initiated in which the

complaining party might directly and

adversely have a legally protected interest

effected, he is entitled to a hearing.

This doctrine had gained wide acceptance in

the courts of a variety of states, includ-

irn.* Arizona. See, e.g., Laz v.

Southwestern Land Co., 97 Ariz. 69, 397

P.2d 52 (1964); Mason v. Wilson, 116 Ariz.

255, 568 P.2a@ 1153 (app. 1977), Brandt v.

City of Yuma, 124 Ariz. 29, 601 P.2da 1065

(App. 1979)

Further, the United States Supreme

Court, in 1969, issued the first in a line

of decisions affording additional due

process rights to pre-judgment debtors.

See Sniadach v. Family Finance Corp., 395

U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2da 349

(1969); Fuentes v. Shevin, 407 U.S. 67, 92

S.Ct. 1983, 32 L.Ed.2d 556 (1972): Mitchell

v. W. T. Grant Co., 416 U.S. 600, 94 S.Ct.

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1895, 40 L.Ed.2d 406 (1974); North Georgia

Finishing, Inc. v. Di-Chem, Inc., 419 U.S.

601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975).

Against this backdrop, the more

recent cases dealing with the due process

rights of post-judgment debtors have

produced mixed decisions. In Chonowski

v. Bonucci, 47 Ill.2d 5iU, 267 N.E.2d 671

(1971), the Illinois Supreme Court, in

deciding a claim brought by a judgment

creditor to set aside an execution sale

because of a lack of due process, held that

actual notice was not necessary. The

court stated:

Assuming that the

appellants lacked proper

notice in advance of the

sale, however, we are unable

to see in what manner this

prejudiced their rights. It

must be stressed at the

outset that the only rights

of the appellants in question

here are their rights as

judgment creditois to

redeem the property. As

judgment creditors they

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enjoyed no privilege to

purchase the property at the

execution sale beyond that of

any other potential pur-

chaser. As far as [their]

rights as judgment creditors

are concerned, the sale did

not involve an adjudica-

tion of them, nor did it

extinguish then.

267 N.E.2da at 675. In Langford v.

Tennessee, 356 F.Supp. 1163 (W.D. Tenn.

1973), the court relied upon Endicott-

Johnson, ruling that as a judgment debtor

upon whose automobile had been levied was

not entitled to personal notice of the

execution proceeding. To the contrary, the

Pennsylvania Supreme Court in Luskey v.

Steffron, 461 Pa. 305, 336 A.2d 298 (1975),

cert. denied, 430 U.S. 968, 52 L.Ed.2d

360, 97 S.Ct. 1651 (1977) specifically held

that the owner of real estate subject to a

sheriff's sale was required to receive

personal notice of the sale.

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In decisions dealing with post-

judgment garnishment, the results likewise

vary. In Jahn v. Regan, 584 F.Supp. 399

(E.D. Mich. 1984), and Brown v. Liberty

Loan Corp., 539 F.2d 1355 (5th Cir.

1976), cert. denied, 430 U.S. 949, 51

L.Ed.2da 797, 97 S.Ct. 1588 (1977), federal

courts found that state post-judgment

garnishment proceedings did not require

personal notice to the debtors. Other

federal courts, however, have found similar

statutes unconstitutional because they did

not afford personal notice to the debtor.

Dionne v. Bouley, 583 F.Supp. 307 (R.I.

1984); Betts v. Tom, 431 F.Supp. 1369 (D.

Hawaii 1977).

In Arizona, the rule of Endicott-

Johnson enjoys continued vitality. In

Knight v. DeMarcus, 102 Ariz. 105, 425 P.2d

837 (1967), cert. denied 390 U.S. 736, 20

L.Ed.2a 270, 88 S.Ct. 1437 (1968), for

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example, our supreme court held that a

debtor was not entitled to actual notice

when an appointed master sought to execute

on real property to satisfy an award of

compensation. The case was based upon

Rule 53(a) of the Rules of Civil Procedure,

and did not discuss the constitutional

implications involved. Notably, the United

States Supreme Court denied certiorari in

the case despite a dissent by Justice

Douglas, and joined by two others, in which

a stinging criticism of the Endicott-

Johnson doctrine was set forth.

More recently, in Huggins v.

Deinhard, 134 Ariz. 98, 654 P.2d 32 (1982),

this court held that a husband against whom

a judgment had been taken for child support

was not entitled to actual notice before a

writ-of garnishment was issued. The

opinion briefly noted the developments in

the due process analysis after Endicott-

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Johnson, but found nevertheless that

appellant had had an adequate opportunity

to be heard. We stated, "We know of no

authority holding that, after judgment, due

process of law requires that additional

opportunities for notice and hearing must

be offered the judgment debtor, such as

appellant, before a writ of garnish-

ment may be issued." 134 Ariz. at 103.

We find that the Endicott-Johnson

rationale remains fundamentally sound. In

the present case, the appellant concedes

that statutory notice procedures were

complied with. Furthermore, the appellant

received personal notice of the original

foreclosure proceeding, was represented by

counsel and appeare therein several times.

The entry of judgment placed the appellant

and certainly his counsel upon notice

that execution could follow. Also, notice

by recording was made subsequent to the

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sheriff's sale, and the appellant still had

the statutory redemption period under which

to assert his rights.

It should be noted also that the

situation at present is distinguishable

from post-judgment garnishment cases in

that exemption defenses are an important

right in garnishment proceedings; whereas

in a foreclosure case, the possibility of

execution upon the property is establishea

at the original proceeding.

We also find the post-Mullane

Arizona decisions distinguishable from the

case at bar. In Laz v. Southwestern Land

Co., 97 Ariz. 69, 397 P.2a 52 (1964), the

appellant never received actual notice

of any proceeding until after the redemp-

tion period. In Mason v. Wilson, 116 Ariz.

255, 568 P.2d 1153 (App. 1977), the

appellants were not a party to the under-

lying foreclosure and therefore had no

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notice whatsoever of the judgment.

Finally, in Brandt v. City of Yuma, 124

Ariz. 29, 601 P.2d 1065 (App. 1979), the

City's challenge was not to an execution

sale, but to an application for a trea-

surer's deed, which occurred subsequent to

the redemption period.

We find that the appellant was not

denied due process by his lack of actual

personal notice to the execution on the

property.

Finally, the appellant argues that

the grant of summary judgment denied him

his right to trial by jury under the United

States and Arizona Constitutions. We find

this claim to be without merit. In Morrell

v. St. Luke's Medical Center, 27 Ariz. App.

486, 556 P.2d 334 (1976), we addressed

this precise question and held:

Finally, appellant

argues that the entry of

summary judgment precludes

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his right to a jury trial and

to cross-examine witnesses.

No authority is presented by

the appellant, however,

to in effect hold that Rule

56, Rules of Civil Procedure,

16 A.R.S., is unconstitu-

tional.

It is obvious that the

entry of summary judgment

will preclude a later :

trial by jury. This is the

design of Rule 56 - to

resolve whether material

issues of fact exist, and if

none do, then to enter

judgment for the moving

party if he is entitled to it

as a matter of law.

27 Ariz. App. at 490 (citations omitted).

In short, the granting of summary judgment

does not deprive a plaintiff of his

constitutional rights to a jury trial

because, in such cases, there are simply no

genuine issues of fact for a jury to

consider.

In conclusion, we find no due

process violation in the notice afforded

appellant, and hold furthermore, that

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appellant's failure to tender to the

appellees the amount of judgment precluded

the appellants' setting aside of the sale.

Thus, the trial court correctly entered

summary judgment for the appellees.

Accordingly, the judgment is

affirmed.

D. L. GREER, Judge

FROEB, J., concurs.

KLEINSCHMIDT, Judge, special concurrence:

I concur that notice of execution

on the judgment was unnecessary because I

think Knight v. DeMarcus, 102 Ariz. 105,

425 P.2d 837 (1967) controls. The issue

deserves re-examination . Debtors will

not always be aware that their property

has been executed upon and will thereby

lose the right of redemption. See Luskey

v. Steffron, Inc., 461 pa. 305, 336 A.2da

298 (1975) cert. denied, 430 U.S. 968, 97

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S.Ct. 1651, 52 L.Ed.2d 360 (1977) fora

case at odds with Knight. I think the

rule adopted in Luskey ensures a fairer

result and places little added burden on

the judgment creditor.

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APPENDIX B

SUPREME COURT

STATE OF ARIZONA

September 5, 1985

Re: RAY E. CAGLE vs. MARY E. CAGLE

CARLSON, et al

Supreme Court No. 18163-PR

Court of Appeals No. 1 CA-CIV 6781

Maricopa County No. C-305893

GREETINGS:

The following action was taken by

the Supreme court of the State of Arizona

on September 4, 1985, in regard to the

above-referenced cause:

"ORDERED: Petition for Review =

DENIED.

Justice Feldman voting to grant."

Record returned to the Court of

Appeals, Division One, this 5th day of

September, 1985.

DIANA K. BENTLEY, Acting Clerk