11.5 “Deficiency Judgment” Against a Guarantor.

• Jurisdiction: Arizona

In the deed of trust context, A.R.S. § 33-814 provides that an action for a “deficiency judgment” against a guarantor must be commenced within 90 days after the date of sale of a trust deed pursuant to § 33-807, or the trustee’s sale will be deemed to be in full satisfaction of the guarantor’s obligation. A.R.S. § 33-814(C) provides that an action against a guarantor may be commenced regardless of whether a trustee’s sale is held. See Crown Life Ins. Co. v. Howard, 170 Ariz. 130, 822 P.2d 483 (App. 1991) (guarantor could be sued without precondition of a trustee’s sale). However, if a trustee’s sale is held, a guarantor’s liability is subject to the “fair market value limitation” of § 33-814(A), which was formerly reserved for makers and others directly liable on the note. A.R.S. § 33-814(C). Cf. In re Rhead, 179 B.R. 169 (Bankr. D. Ariz. 1995) (guarantor gets the “fair market value credit” only if a foreclosure takes place).

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