Protection Of Anti-Deficiency Statute Cannot Be Waived

  On June 13, 2013, the Arizona Court of Appeals ruled that the Arizona anti-deficiency statute cannot be waived in advance by a homeowner. Parkway Bank and Trust Company v. Joseph Zivkovic, 1 CA-CV 12-0612.

Facts:

  Zivkovic personally guaranteed a loan for his business, listing himself as the borrower and incorporating a previous loan secured by a Deed of Trust on a home in Mesa, Arizona.  The loan documents contained a provision choosing the law of Illinois as governing law, as both Parkway and Zivkovic’s businesses were located in Illinois.

  When Zivkovic defaulted on the loan, Parkway sold the home at a trustee’s sale in Arizona.  Parkway then filed a complaint against Zivkovic seeking a deficiency judgment as authorized under Illinois law after the foreclosure of a home.  For reasons of public policy the Arizona Court of Appeals ruled against Parkway, and said that the Arizona anti-deficiency statute could not be waived.