Foreclosure Surplus | Ariz. R. Civ. P. 7.1 | 2 CA-CV 2022-0096
After an HOA foreclosure, the sheriff’s-sale purchaser fought a junior lienholder over $59,819.17 in surplus proceeds; the Court of Appeals affirmed, finding a premature ruling harmless under the law-of-the-case doctrine.
Last updated July 1, 2026. Case: TRAILS AT AMBER RIDGE HOMEOWNERS ASSOCIATION, an Arizona nonprofit corporation, Plaintiff, v. GERARDO MACIAS, a married man, as his sole and separate property; COMMUNITY HOUSING RESOURCES OF ARIZONA; ARIZONA HOME FORECLOSURE PREVENTION FUNDING CORPORATION, Defendants/Appellees, MARICOPOLY, LLC, a limited liability company, Intervenor/Appellant.; 2 CA-CV 2022-0096; CV2017092698 (Maricopa County Superior Court; Hon. Brian D. Kaiser, Judge Pro Tempore).
Scope note: This educational case page summarizes a court ruling for Arizona HOA homeowners, boards, and counsel. It is not legal advice.
The rule in one sentence
Although the trial court erred by granting the junior lienholder’s motion to release excess foreclosure proceeds before the opposing party’s Rule 7.1 response deadline, the error was harmless and did not violate procedural due process. Because the prior appellate mandate and the law-of-the-case doctrine limited the intervenor to re-asserting its already-rejected equitable-assignment claim — and barred new priority theories such as equitable subrogation — the intervenor suffered no prejudice, and the orders were affirmed.
Case Participants
Neutral Parties
- Trails at Amber Ridge Homeowners Association (Plaintiff)
Arizona nonprofit corporation; obtained the 2018 default judgment and judicially foreclosed on Macias’s home. Its judgment was already paid from the sale, so it was not an active participant in the excess-proceeds dispute on appeal. - Gerardo Macias (Appellee)
Defendant/Appellee; the foreclosed homeowner, who applied to receive any excess proceeds remaining after AZ Home’s junior lien was satisfied. - Arizona Home Foreclosure Prevention Funding Corporation (Appellee)
Defendant/Appellee (“AZ Home”); junior lienholder that moved for release of the excess proceeds and prevailed on appeal. - Community Housing Resources of Arizona (Appellee)
Named defendant/appellee in the caption; not a focus of the appellate analysis. - Maricopoly, LLC (Appellant)
Intervenor/Appellant; the limited liability company that purchased the property at the sheriff’s sale and claimed the surplus on an equitable-assignment theory. - Valerie L. Marciano (Counsel)
Arizona Attorney General’s Office (Mark Brnovich, Attorney General)
Assistant Attorney General; counsel for Defendant/Appellee Arizona Home Foreclosure Prevention Funding Corporation. - Kyle A. Kinney (Counsel)
Law Offices of Kyle A. Kinney PLLC
Counsel for Intervenor/Appellant Maricopoly, LLC. - Chief Judge Garye L. Vásquez (Judge)
Chief Judge of the Court of Appeals, Division Two; authored the memorandum decision. - Presiding Judge Peter J. Eckerstrom (Judge)
Presiding Judge of the Court of Appeals panel; concurred in the decision. - Judge Christopher Cattani (Judge)
Court of Appeals judge; concurred in the decision. - Hon. Brian D. Kaiser (Judge)
Maricopa County Superior Court Judge Pro Tempore who entered the orders under review (Superior Court No. CV2017092698).
What happened and why it matters
This memorandum decision from the Arizona Court of Appeals, Division Two, arose from a homeowners association’s judicial foreclosure. In 2018, Trails at Amber Ridge Homeowners Association obtained a default judgment against homeowner Gerardo Macias and foreclosed on his home. Maricopoly, LLC purchased the property at the sheriff’s sale, and after the Association’s judgment was satisfied, $59,819.17 in excess proceeds was deposited with the clerk of court. Maricopoly intervened and claimed the surplus on the theory that it had acquired an “equitable assignment” of the senior lien, but in an earlier appeal Division Two rejected that theory, vacated the order paying Maricopoly, and remanded with directions to have Maricopoly return the funds. On remand, Arizona Home Foreclosure Prevention Funding Corporation (“AZ Home”), a junior lienholder, moved for release of $21,902.81 of the proceeds. The trial court granted that motion on September 1, 2021 — before Maricopoly’s response deadline under Rule 7.1. Maricopoly appealed, arguing the premature ruling denied it procedural due process and that the court wrongly refused to set the order aside under Rule 60. The Court of Appeals agreed the ruling was premature but held the error was harmless: under the appellate mandate and the law-of-the-case doctrine, Maricopoly could only re-assert its already-rejected equitable-assignment claim and could not raise new priority theories. Finding no prejudice, the court affirmed.
The court first agreed with Maricopoly that the trial court had acted prematurely. Under Rule 7.1(a)(3), Ariz. R. Civ. P., an opposing party must file any responsive memorandum within 10 days after service; because AZ Home served its August 19, 2021 motion by U.S. mail under Rule 5(c)(2)(C), five calendar days were added under Rule 6(c), and the weekend/holiday exclusion of Rule 6(a)(2) applied, making Maricopoly’s response due September 7, 2021. The court had signed and filed AZ Home’s order on September 1 — before that deadline. The panel explained that although Rule 7.1(b) permits a court to summarily grant a motion in three situations (noncompliance with Rule 7.1(a), the opposing party’s failure to file a response, or counsel’s failure to appear for oral argument), none applied here, so summary treatment was inappropriate and the trial court erred.
Nevertheless, the court held Maricopoly was not prejudiced and its due process rights were not violated. Procedural due process requires only the opportunity to be heard at a meaningful time and in a meaningful manner (citing Sycamore Hills Estates Homeowners Ass’n v. Zablotny). Maricopoly had already fully presented its sole basis for the surplus — equitable assignment — and the first appeal had rejected it. Under the mandate rule (Raimey v. Ditsworth) and the law-of-the-case doctrine (State v. Bocharski), that prior decision bound the trial court and the parties throughout the remaining proceedings, so Maricopoly could not re-assert equitable assignment or introduce new evidence to support it (United Dairymen of Ariz. v. Schugg; Crouch v. Truman).
The court further held that Maricopoly could not raise “other grounds for priority,” such as equitable subrogation, for the first time on remand, and that its attempt to advance that theory for the first time in its appellate reply brief was untimely and waived (United Bank v. Mesa N. O. Nelson Co.; BMO Harris Bank N.A. v. Espiau). The proper time to raise such theories had been the initial trial-court proceedings before the first appeal. The record also belied Maricopoly’s claim that it would have argued differently if given a chance to respond, because on remand it had told the trial court the case was remanded only to address equitable assignment. And even assuming an argument that surplus proceeds automatically flow up to an unextinguished senior lien, the court noted it would have been unavailing under Tortosa Homeowners Ass’n v. Garcia. Finding no prejudice and thus no reversible error (Volk v. Brame; Creach v. Angulo), the court affirmed and denied Maricopoly’s request for costs because it was not the successful party under A.R.S. § 12-341.
For homeowners, purchasers, and lienholders navigating Arizona HOA assessment-lien foreclosures, this decision illustrates how “excess” or surplus sale proceeds are contested after the association is paid, and how an appellate mandate constrains what can be argued later. When an HOA forecloses and the property sells for more than the association’s judgment, the surplus does not automatically belong to the sheriff’s-sale purchaser; competing junior lienholders (here a state-affiliated foreclosure-prevention corporation) and the former owner may also claim it, and entitlement turns on lien-priority principles rather than on who bought the home.
The case is also a practical lesson in civil procedure. A trial court’s ruling on a motion before the response deadline is error, but Arizona appellate courts will not reverse unless the error actually prejudiced the complaining party. Because the law-of-the-case doctrine and the mandate from the first appeal had already foreclosed Maricopoly’s only viable theory, the premature ruling changed nothing and the panel affirmed. The decision underscores that a party must raise all of its legal theories — such as equitable subrogation — in the trial court before the first appeal, not for the first time on remand or in a reply brief, or it risks waiver. As an unpublished memorandum decision it creates no binding precedent, but it offers a concrete window into surplus-proceeds and remand practice in Arizona HOA foreclosures.
Step-by-step litigation record
Complete uploaded source-document index
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Opinion
Type: Decision or judgment
Decision document; read it to understand the controlling result before moving to later filings.
FAQ
What was this case about?
It was a dispute over surplus (“excess”) proceeds from an HOA’s judicial foreclosure. Trails at Amber Ridge Homeowners Association foreclosed on Gerardo Macias’s home; Maricopoly, LLC bought it at the sheriff’s sale, and after the Association was paid, $59,819.17 remained with the clerk of court. Maricopoly and a junior lienholder (AZ Home) each claimed the surplus.
Why did the Court of Appeals say the trial court erred?
The trial court granted AZ Home’s motion to release the proceeds on September 1, 2021, before Maricopoly’s response was due. Under Rule 7.1, Ariz. R. Civ. P. (with mailing and weekend/holiday adjustments), Maricopoly’s response was not due until September 7, 2021, and none of the conditions allowing a summary grant under Rule 7.1(b) applied. Ruling early was therefore error.
If the trial court erred, why did the purchaser still lose?
Because the error was harmless. Procedural due process requires only a meaningful opportunity to be heard, and Maricopoly had already fully presented its only theory — equitable assignment — which Division Two rejected in an earlier appeal. Under the mandate rule and the law-of-the-case doctrine, Maricopoly could not re-litigate that theory or add new ones on remand, so the premature ruling caused no prejudice.
What is the “law-of-the-case” or “mandate” rule referenced here?
It means that an appellate court’s decision, and the mandate implementing it, bind the trial court and the parties in later proceedings in the same case. Because the first appeal had already decided that Maricopoly had no equitable assignment of the senior lien, the trial court on remand could only carry out that ruling — it could not revisit the question or let Maricopoly raise new priority theories.
Why couldn’t Maricopoly argue equitable subrogation?
Maricopoly raised equitable subrogation (and the idea that surplus automatically flows up to an unextinguished senior lien) for the first time in its appellate reply brief. Arizona courts will not consider issues raised for the first time in a reply brief, and the theory should have been presented in the trial court before the first appeal, so the court deemed it waived and noted it would have failed under Tortosa Homeowners Ass’n v. Garcia anyway.
Is this decision binding precedent?
No. It is an unpublished memorandum decision under Ariz. R. Sup. Ct. 111(c)(1) and Ariz. R. Civ. App. P. 28(a)(1), (f), so it does not create legal precedent and may be cited only as those rules allow. It is presented here for educational context about HOA foreclosure surplus disputes and Arizona remand procedure, not as controlling law.
Case Dossier
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Case Summary
| Case ID / citation | 2 CA-CV 2022-0096 |
|---|---|
| Court / tribunal | Court of Appeals |
| Decision / key date | October 17, 2022 |
| Judge / panel | Chief Judge Garye L. Vásquez (authored), Presiding Judge Peter J. Eckerstrom (concurred), Judge Christopher Cattani (concurred) |
| Parties | Trails at Amber Ridge Homeowners Association (Plaintiff) / Arizona Home Foreclosure Prevention Funding Corporation (Defendant/Appellee) v. Maricopoly, LLC (Intervenor/Appellant) |
| Governing law |
|
| Topics | foreclosureliensprocedureassessments |
| Outcome / holding | Although the trial court erred by granting the junior lienholder’s motion to release excess foreclosure proceeds before the opposing party’s Rule 7.1 response deadline, the error was harmless and did not violate procedural due process. Because the prior appellate mandate and the law-of-the-case doctrine limited the intervenor to re-asserting its already-rejected equitable-assignment claim — and barred new priority theories such as equitable subrogation — the intervenor suffered no prejudice, and the orders were affirmed. |
| Primary public source | View source opinion/order |
Parties, Court, and Research Coverage
| Uploaded source package | 1 PDF |
|---|---|
| Step-by-step docket roadmap | 9 roadmap entries |
| Video overview | No video embed currently configured |
| Study / briefing material | 1 section |
| FAQ / homeowner questions | 6 questions |
| Curated download aliases | 1 download link |
Key Issues & Findings
This memorandum decision from the Arizona Court of Appeals, Division Two, arose from a homeowners association’s judicial foreclosure. In 2018, Trails at Amber Ridge Homeowners Association obtained a default judgment against homeowner Gerardo Macias and foreclosed on his home. Maricopoly, LLC purchased the property at the sheriff’s sale, and after the Association’s judgment was satisfied, $59,819.17 in excess proceeds was deposited with the clerk of court. Maricopoly intervened and claimed the surplus on the theory that it had acquired an “equitable assignment” of the senior lien, but in an earlier appeal Division Two rejected that theory, vacated the order paying Maricopoly, and remanded with directions to have Maricopoly return the funds. On remand, Arizona Home Foreclosure Prevention Funding Corporation (“AZ Home”), a junior lienholder, moved for release of $21,902.81 of the proceeds. The trial court granted that motion on September 1, 2021 — before Maricopoly’s response deadline under Rule 7.1. Maricopoly appealed, arguing the premature ruling denied it procedural due process and that the court wrongly refused to set the order aside under Rule 60. The Court of Appeals agreed the ruling was premature but held the error was harmless: under the appellate mandate and the law-of-the-case doctrine, Maricopoly could only re-assert its already-rejected equitable-assignment claim and could not raise new priority theories. Finding no prejudice, the court affirmed.
The court first agreed with Maricopoly that the trial court had acted prematurely. Under Rule 7.1(a)(3), Ariz. R. Civ. P., an opposing party must file any responsive memorandum within 10 days after service; because AZ Home served its August 19, 2021 motion by U.S. mail under Rule 5(c)(2)(C), five calendar days were added under Rule 6(c), and the weekend/holiday exclusion of Rule 6(a)(2) applied, making Maricopoly’s response due September 7, 2021. The court had signed and filed AZ Home’s order on September 1 — before that deadline. The panel explained that although Rule 7.1(b) permits a court to summarily grant a motion in three situations (noncompliance with Rule 7.1(a), the opposing party’s failure to file a response, or counsel’s failure to appear for oral argument), none applied here, so summary treatment was inappropriate and the trial court erred.
Nevertheless, the court held Maricopoly was not prejudiced and its due process rights were not violated. Procedural due process requires only the opportunity to be heard at a meaningful time and in a meaningful manner (citing Sycamore Hills Estates Homeowners Ass’n v. Zablotny). Maricopoly had already fully presented its sole basis for the surplus — equitable assignment — and the first appeal had rejected it. Under the mandate rule (Raimey v. Ditsworth) and the law-of-the-case doctrine (State v. Bocharski), that prior decision bound the trial court and the parties throughout the remaining proceedings, so Maricopoly could not re-assert equitable assignment or introduce new evidence to support it (United Dairymen of Ariz. v. Schugg; Crouch v. Truman).
The court further held that Maricopoly could not raise “other grounds for priority,” such as equitable subrogation, for the first time on remand, and that its attempt to advance that theory for the first time in its appellate reply brief was untimely and waived (United Bank v. Mesa N. O. Nelson Co.; BMO Harris Bank N.A. v. Espiau). The proper time to raise such theories had been the initial trial-court proceedings before the first appeal. The record also belied Maricopoly’s claim that it would have argued differently if given a chance to respond, because on remand it had told the trial court the case was remanded only to address equitable assignment. And even assuming an argument that surplus proceeds automatically flow up to an unextinguished senior lien, the court noted it would have been unavailing under Tortosa Homeowners Ass’n v. Garcia. Finding no prejudice and thus no reversible error (Volk v. Brame; Creach v. Angulo), the court affirmed and denied Maricopoly’s request for costs because it was not the successful party under A.R.S. § 12-341.
For homeowners, purchasers, and lienholders navigating Arizona HOA assessment-lien foreclosures, this decision illustrates how “excess” or surplus sale proceeds are contested after the association is paid, and how an appellate mandate constrains what can be argued later. When an HOA forecloses and the property sells for more than the association’s judgment, the surplus does not automatically belong to the sheriff’s-sale purchaser; competing junior lienholders (here a state-affiliated foreclosure-prevention corporation) and the former owner may also claim it, and entitlement turns on lien-priority principles rather than on who bought the home.
The case is also a practical lesson in civil procedure. A trial court’s ruling on a motion before the response deadline is error, but Arizona appellate courts will not reverse unless the error actually prejudiced the complaining party. Because the law-of-the-case doctrine and the mandate from the first appeal had already foreclosed Maricopoly’s only viable theory, the premature ruling changed nothing and the panel affirmed. The decision underscores that a party must raise all of its legal theories — such as equitable subrogation — in the trial court before the first appeal, not for the first time on remand or in a reply brief, or it risks waiver. As an unpublished memorandum decision it creates no binding precedent, but it offers a concrete window into surplus-proceeds and remand practice in Arizona HOA foreclosures.