The Arizona State Court of Appeals has ruled that a homeowners association can’t foreclose on someone’s house for not paying assessments if it can’t prove the owner was served with the lawsuit.

In 2004, the Olive Green Vistas Homes Association where Santos Cruz lived went to court seeking to foreclose on a lien, saying it was owed $2,274, with interest continuing to accrue. When Cruz did not answer the lawsuit, the court entered a default judgment against him and ordered the property sold.

That sale was conducted several months later, with the association purchasing the home on a credit bid. Eight months later, a sheriff’s deputy evicted Cruz and his family.

Santos Cruz then filed a lawsuit to overturn the judgment, saying he never had been served.

The homeowners association responded with an affidavit from the process server that said the summons and complaint were served on “Estella Bastida, wife.”

The big problem with that was that Bastida had no ownership in the property and they were not legally married, and common-law marriages are not recognized in Arizona.

The law that is relied on by most lenders and servicers is a law that allows papers to be legally served if delivered to a person of “suitable age and discretion,” meaning an adult, who resides on the property.
But appellate Judge Patricia Norris said the law requires “clear and convincing evidence” that someone has been properly served.

Judge Norris noted that Cruz and Bastida said they were not home when the process server claims to have delivered the summons.

Cruz then provided the courts with a declaration from the process server saying the man had no independent recollection of serving Bastida and that reviewing the affidavit would not help.

The woman described in the affidavit also was 40 pounds lighter than Bastida.

Norris said that, based on this evidence, it was not only plausible that Cruz had not been served, there was not clear and convincing evidence he had been served.

The judges said that without proof of service, the foreclosure, and everything else that happened subsequently, is legally void.