The Arizona Court of Appeals Expands Anti-Deficiency Protection for Borrowers


On December 27, 2011, the Arizona Court of Appeals issued a decision that, if upheld on appeal, will negatively impact a lender’s ability to obtain a deficiency judgment under certain circumstances. See M&I Marshall & Ilsley Bank v. Mueller, 2011 Ariz. App. LEXIS 216 (Dec. 27, 2011). M&I Marshall and Ilsley Bank (M&I) recently appealed the Court of Appeals’ decision in M&I v. Mueller to the Arizona Supreme Court. M&I v. Mueller is a significant decision that marks a departure from the case law interpreting Arizona’s anti-deficiency statutes over the past 20 years. The purpose of this article is to alert you to the M&I v. Mueller decision and its potential impact, if affirmed on appeal.

In addition, the Arizona Rules of Civil Appellate Procedure permit amicus curiae briefs when a party has an interest in another case that might be affected by the decision on appeal. Therefore, because the ultimate decision in M&I v. Mueller could have a significant impact on current or future litigation you may be involved in, we also want to make you aware of the opportunity to file an amicus curiae brief on the issues presented in M&I v. Mueller.

What follows is a brief background on Arizona’s deed of trust anti-deficiency statutes and a discussion of the Court of Appeals’ decision in M&I v. Mueller.

Please see full alert below for more information.

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