4.2.9 Set-off and Counterclaim.

• Jurisdiction: Arizona

Except in unusual circumstances of special equity, an unliquidated debt cannot be set off against a mortgage debt. Nogales Serv. Ctr. v. Atl. Richfield Co., 119 Ariz. 552, 582 P.2d 642 (1978), cert. denied, 439 U.S. 930, 99 S. Ct. 318, 58 L. Ed. 2d 323 (1978); Nutter v. Occidental Petroleum Land & Dev. Corp., 117 Ariz. 458, 573 P.2d 532 (App. 1977).

A liquidated claim arising out of a collateral transaction might in some circumstances preclude foreclosure of a mortgage. Mitchell v. Am. Sav. & Loan Ass’n,...