State ex rel. Childers v. 2525 East Arizona Biltmore Circle Corp.

731 P.2d 1239, 152 Ariz. 295, 1986 Ariz. App. LEXIS 680
CourtCourt of Appeals of Arizona
DecidedJuly 10, 1986
DocketNo. 1 CA-CIV 8510
StatusPublished

This text of 731 P.2d 1239 (State ex rel. Childers v. 2525 East Arizona Biltmore Circle Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Childers v. 2525 East Arizona Biltmore Circle Corp., 731 P.2d 1239, 152 Ariz. 295, 1986 Ariz. App. LEXIS 680 (Ark. Ct. App. 1986).

Opinion

OPINION

JACOBSON, Presiding Judge.

This appeal requires a determination of whether a lessor can assert a landlord’s lien pursuant to A.R.S. § 33-362 on the personal property of an entity which shares possession of the leased premises with the lessee, even though there is no formal sublease agreement. Collateral issues involve: (1) the propriety of the trial court’s refusal to hear a motion for reconsideration of a prior ruling on an issue of law; and (2) the propriety of the trial court’s finding that proration of the landlord’s lien was neither warranted nor possible.

[297]*297The material facts are undisputed. Arizona General Insurance Company (AGIC) was authorized to transact insurance business in Arizona. Arizona General Insurance Management, Ltd. (AGIM), provided management services to AGIC and other insurance companies. AGIM and AGIC had common officers and directors and were both owned by Arizona General Insurance Holding Corporation (Holding Company).

On February 1, 1980, AGIM, AGIC, and Holding Company signed an agreement, providing that AGIM would assume the general management of AGIC in exchange for a percentage of the gross earned and written premiums. For example, Section 11(2) of the AGIM Agreement provided that AGIM would pay the salaries of all employees necessary for conducting the business of AGIC.

Scottsdale Executive Centre Associates (Lessor)1 leased one of its offices to AGIM. Both AGIM and AGIC used the leased premises as their office. The signs indicated that the leased premises were used by AGIC. When the occupants of the leased premises answered the telephone, the answering party always identified the occupants as AGIC, not as AGIM. In the Metro-Phoenix Business Telephone Book, both AGIC and AGIM were listed at the address of the leased premises and as having the same telephone number.

On August 26, 1982, AGIC purchased computer equipment which it housed at the leased premises. Ivan Knopp (Knopp), a director of both AGIM and AGIC, testified that AGIC had paid for the computer equipment because AGIM did not have any money. Everything else on the leased premises was owned by AGIM. Although it was intended that AGIM use the computer equipment, there was no such formal agreement authorizing that use.

Both AGIM and AGIC ceased doing business and on March 23, 1984, the trial court entered an order appointing the Director of Insurance as receiver (Receiver) for AGIC and enjoining the transfer of its assets. At that time, the rent due for the leased premises was $27,060.67. On May 14, 1984, the Lessor filed a motion for relief from the injunction so that Lessor could assert a landlord’s lien on the computer equipment, pursuant to A.R.S. § 33-362. The Lessor and Receiver stipulated to the sale of the computer equipment and the deposit of the proceeds with the clerk of the superior court. The computer equipment was sold for $31,698.15.

The dispute resolved itself to a determination of whether the lessor was entitled to these proceeds as representing personal property upon which it claimed a lien, or whether the receiver was entitled to the proceeds as belonging to an insolvent insurer. The trial court ruled in favor of the Lessor, based on its findings that AGIC was in possession of the leased premises and was liable for rent, and thus that it could be considered a sublessee under A.R.S. §§ 33-323 and -362(B) against which a landlord’s lien could be asserted.

The court then conducted an unrecorded hearing to determine the extent to which Lessor was entitled to the proceeds from the sale of the computer equipment. After the hearing, the trial court declined to prorate the liability of AGIC and AGIM to the lessor. The court ruled, by minute entry, that the entire amount of the rent owed to the lessor should be distributed from the proceeds of the sale of the equipment. This ruling was based on the findings that proration was neither warranted nor possible.

The parties then briefed and argued the Lessor’s request for attorneys’ fees, which were subsequently denied by the trial court. On May 2,1985, the Receiver filed a motion for reconsideration, arguing in part that a landlord’s lien was not a secured claim within the meaning of A.R.S. § 20-611(11) of the Uniform Insurers Liquidation Act. The trial court declined to hear [298]*298this motion on grounds that it was untimely and that it did not present newly discovered facts or newly developed law. The trial court thereafter entered partial judgment on the landlord’s lien, the proration of the proceeds, and the attorneys’ fees issues, in accordance with its prior rulings.

We first dispose of the Receiver’s contention that even if the Lessor had a landlord’s lien on the computer equipment, a landlord’s lien is not a secured claim within the meaning of A.R.S. § 20-611(11) of the Uniform Insurers Liquidation Act. The trial court declined to address this argument on the ground it was not timely presented. See Cecil Lawter Real Estate School, Inc. v. Town & Country Shopping Center Co., 143 Ariz. 527, 694 P.2d 815 (1984). The Receiver introduced this argument for the first time more than five months after the trial court had concluded that a landlord’s lien was properly asserted. He waited until after the parties had tried and briefed the proration question and had briefed and argued the question of attorneys’ fees.

Without citation of authority, the Receiver argues that in light of the nature of a receivership proceeding and the fact that the Lessor’s claim had not yet been paid, the trial court abused its discretion in finding the motion for reconsideration untimely. To the contrary, we find nothing in the receivership proceeding or in the nonpayment of the Lessor’s claim to indicate that the trial court abused its discretion in declining to consider this afterthought.

The Receiver next argues that AGIO was not a sublessee subject to a landlord’s lien within the meaning of A.R.S. § 33-362(D). He, in essence, argues that a landlord’s lien only attaches to the property of a tenant, sublessee or an assignee and since no written document places AGIO in these categories, it must be considered as “any other person” under A.R.S. § 33-362, which provides in pertinent part:

The landlord shall have a lien on all property of his tenant not exempt by law, placed upon or used on the leased premises, until the rent is paid____ (emphasis added)
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The landlord may seize for rent any personal property of his tenant found on the premises, but the property of any other person,

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Cite This Page — Counsel Stack

Bluebook (online)
731 P.2d 1239, 152 Ariz. 295, 1986 Ariz. App. LEXIS 680, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-childers-v-2525-east-arizona-biltmore-circle-corp-arizctapp-1986.