Guarantors Beware! A.R.S. § 33-814 May Not Save You from a Deficiency Judgment

By:  Ben Reeves

In First Credit Union v. Courtney, 309 P.3d 929, 669 Ariz. Adv. Rep. 18 (Ct. App. 2013), the Arizona Court of Appeals rejected three creative arguments that A.R.S. § 33-814 protected the guarantors from paying on their guaranty.  The opinion provides a stark reminder that Arizona courts will usually enforce a guarantor’s contractual obligation to repay a debt.

In 2006, First Credit made a $3.56 million construction loan to Orange Grove I, L.L.C. (the “Borrower”).  First Credit secured the loan with a lien against commercial real property called the Appian Estates.  The Courtneys guaranteed repayment of the loan. … Read More »

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