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Burris & MacOmber, PLLC > Articles > Property Law > Credit Bid Not Admissible In Deficiency Action

- Credit Bid Not Admissible In Deficiency Action -

In Desarrollo v. Kader, Division Two of the Court of Appeals last Spring upheld a Judgment entered by Judge James Soto in Santa Cruz County Superior Court in favor of a landlord on a commercial lease of a building in Mexico.  This case is an example of a party failing to prevail on a technical defense.  Kader was a guarantor of the lease by the tenant, who had fallen behind in lease payments.  Originally, the lease had indicated that the law of Mexico would apply and the Courts of Mexico would be the forum for the resolution of any controversies.  But the building was built with a loan funded by Bank One in Arizona, who had insisted upon a lease amendment which indicated that both the law of Arizona would apply and its Courts would have jurisdiction.  Bank One also took an assignment of the lease as additional security for its loan.  Kader argued that the amendment would not apply to it, as a guarantor.  The amendment to the lease provided that Arizona law would apply, it did not dictate that the parties were consenting to the jurisdiction of the Courts of Arizona to govern any litigation between them.  Nevertheless, the Court of Appeals found that the fact that Kader had signed both the lease and a separate guarantee and the fact that Kader had consented to the assignment of the lease to Bank One, indicated that it was bound by the change in jurisdiction. The Court of Appeals went through the facts pointing out how everything pointed to all parties acknowledging the change in jurisdiction and would not let Kader off the hook because the change was not also replicated in every single one of the documents Kader had signed.

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