Sysco Arizona v. Hoskins, et al. (CA1 6/10/14)

A cautionary tale for those who wonder why we tend to emphasize form and procedure.

A trustee’s sale had resulted in excess proceeds. An action was then initiated, as required by statute, to divvy up those proceeds among the junior lienholders. Sysco was one; it had obtained a judgment against the debtor. But it had perfected its judgment lien by recording the unsigned minute entry making the award rather than the judgment itself. The lien statute (33-961) requires recording “the judgment.”  As holder of a judgment lien Sysco would have priority among the junior lienholders so the others argued that the lien was not valid. The trial court agreed.

The Court of Appeals affirms. “Only a final judgment can create a judgment lien.” An unsigned minute entry is not a final judgment. The court does Sysco the courtesy of analyzing this for several paragraphs but it is black-letter law.

Because Sysco’s was not a judgment lien it fell from the top of the line to the bottom; instead of getting about $94,000 it got nothing. By not paying attention to form and procedure you run the risk of having to explain that sort of thing to your client and/or your carrier.

(link to opinion)