                     NOTICE: NOT FOR OFFICIAL PUBLICATION.
 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                 AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.




                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE


                 JOHN M. KASSON, JR., Plaintiff/Appellee,

                                        v.

              CLIFTON W. BURGENER, Defendant/Appellant.

                             No. 1 CA-CV 16-0469
                               FILED 2-13-2018


           Appeal from the Superior Court in Maricopa County
                          No. CV2014-015350
              The Honorable Lori Horn Bustamante, Judge

                                  AFFIRMED


                                   COUNSEL

Barry Becker, P.C., Phoenix
By Barry C. Becker, Aaron J. Moskowitz
Counsel for Plaintiff/Appellee

Law Office of Lawrence K. Lynde, Phoenix
By Lawrence K. Lynde
Counsel for Defendant/Appellant
                          KASSON v. BURGENER
                           Decision of the Court



                      MEMORANDUM DECISION

Judge Maria Elena Cruz delivered the decision of the Court, in which
Presiding Judge Michael J. Brown and Judge Maurice Portley1 joined.


C R U Z, Judge:

¶1           Clifton W. Burgener2 appeals the superior court’s judgment
granting John M. Kasson’s motion for summary judgment and denying
Burgener’s cross-motion for summary judgment. For the following
reasons, we affirm.

               FACTUAL AND PROCEDURAL HISTORY

¶2            On September 28, 2007, Burgener executed a promissory note
(“Note”) payable to Joseph G. Urquhart for $1,000,000.00 with interest at
12% per annum, with payments on the accrued interest to be paid January
1, 2009, and each month thereafter until the Note was paid in full. The same
day, Urquhart assigned “all of [his] right, title and interest in and to [the
Note]” to John M. Kasson, Jr., trustee of the John M. Kasson, Jr. 1995 Living
Trust (“Assignment”).

¶3            Four months later, Kasson executed a “Collateral Assignment
of Beneficial Interest” (“Collateral Assignment”) that “collaterally
assign[ed] and transfer[red] . . . $1,000,000.00 of [Kasson’s] interest in [the
Note] and Deed of Trust”3 to several of Kasson’s family members. The
Collateral Assignment said Kasson owed his family members $1,000,000.00,


1      The Honorable Maurice Portley, Retired Judge of the Court of
Appeals, Division One, has been authorized to sit in this matter pursuant
to Article 6, Section 3, of the Arizona Constitution.

2       Although Jane Doe Burgener is also listed as an Appellant in this
case, all actions taken on the part of Appellants in this case were performed
by Clifton W. Burgener. Accordingly, for ease of reference, we refer only to
Clifton W. Burgener within this decision.

3       According to the parties’ statements at oral argument, the property
underlying the Deed of Trust has been sold since the inception of this
action.


                                      2
                          KASSON v. BURGENER
                           Decision of the Court

and provided Kasson “agreed to pay the same according to the terms of
[the Note] . . . .”

¶4           When the Note became due on January 1, 2009, Burgener did
not pay. In December 2014, Kasson brought an action for breach of contract,
alleging Burgener had breached the contract by failing to make monthly
payments on the Note. Kasson moved for summary judgment, and
Burgener cross-moved for summary judgment, arguing the superior court
should dismiss the action with prejudice because Kasson had “assigned and
conveyed his interest in the Note and in the Urquhart [D]eed of [T]rust and
has no standing or legal capacity to bring an action against [Burgener]
under the Note.” Burgener also argued the equitable defense of laches,
arguing Kasson

       agreed to accept the security in the Urquhart [D]eed of [T]rust
       for satisfaction of any obligation owed under the Note. The
       parties [sic] understanding that the Note was non-recourse is
       evidenced by the fact that no attempt to collect on the Note
       was made for more than seven (7) years after its execution and
       . . . that [Kasson] himself assigned and conveyed his interest
       in the Note in January 2008. . . . [I]t is clear [Kasson] used no
       diligence in pursuing his claim. . . . [Burgener] has been
       prejudiced in that he has incurred obligations and . . . debt
       based upon the parties’ agreement that [Kasson] would look
       solely to the security for payment of the Note.

¶5            The superior court granted Kasson’s motion, ruling Kasson
had standing because the Collateral Assignment “did not transfer all of
[Kasson]’s interest in the promissory note and [D]eed of [T]rust” and laches
did not prevent Kasson from asserting the claim against Burgener. The
court denied Burgener’s cross-motion, found it was undisputed that
Burgener had failed to make payments since the time the Note was signed
in 2007, and awarded Kasson his attorneys’ fees under the terms of the
Note.4 Burgener moved for new trial, asserting the court’s ruling was not
supported by the terms of the Assignment or the law briefed by the parties,
but the court denied the motion.



4      The Note provided, in relevant part, “If Lender brings suit on this
Note . . . Borrower shall pay all attorneys’ fees, costs and expenses actually
incurred by Lender as a result thereof, including, without limitation . . .
attorneys’ fees, costs and expenses incurred . . . as a result of a foreclosure
of any of the Security Documents . . . .”


                                      3
                         KASSON v. BURGENER
                          Decision of the Court

¶6          Burgener timely appealed. We have jurisdiction pursuant to
Arizona Revised Statutes (“A.R.S.”) section 12-2101(A)(1).

                               DISCUSSION

¶7            Burgener asserts the superior court erred by granting
summary judgment because: (1) Kasson is not the holder of the Note, is not
the real party in interest, and has no standing to bring this lawsuit; and (2)
Kasson’s failure to collect on the Note for more than six years supports the
application of laches.

I.     Standard of Review

¶8              We review the grant of summary judgment and a
determination of standing de novo. Delgado v. Manor Care of Tucson AZ, LLC,
242 Ariz. 309, 312, ¶ 10 (2017); State ex rel. Brnovich v. Maricopa Cty. Cmty.
Coll. Dist. Bd., 242 Ariz. 325, 329, ¶ 7 (App. 2017). We also review issues of
contract interpretation de novo. Am. Power Prods., Inc. v. CSK Auto, Inc., 242
Ariz. 364, 367, ¶ 12 (2017). We review the superior court’s decision on
laches for an abuse of discretion. McLaughlin v. Bennett, 225 Ariz. 351, 353,
¶ 5 (2010). When conducting our review, we view the evidence and
reasonable inferences therefrom in the light most favorable to the party
against whom summary judgment was entered. Delgado, 242 Ariz. at 311,
¶ 2.

II.    Standing

¶9             Burgener argues Kasson had no standing and no capacity to
file suit on the Note because he assigned and transferred his interest in the
Note with the subsequent Collateral Assignment. We disagree.

¶10            An absolute assignment “leaves the assignor no interest in the
assigned property or right.” Absolute Assignment, Black’s Law Dictionary
(10th ed. 2014). A collateral assignment, in contrast, is “[a]n assignment of
property as collateral security for a loan.” Collateral Assignment, Black’s
Law Dictionary (10th ed. 2014); see Fotinos v. Baker, 164 Ariz. 447, 448 (App.
1990) (addressing settlement agreement in which “[t]he debt would be
secured by a collateral assignment of beneficial interest by [appellant] in a
land trust jointly owned by him and [appellees]”); see also Moore v. Mark, 13
Ariz. App. 261, 262 (App. 1970) (“Payment of the promissory note was
arranged by the execution . . . of a collateral assignment of his real estate
commissions . . . .”).




                                      4
                          KASSON v. BURGENER
                           Decision of the Court

¶11           A comparison of the Collateral Assignment’s language and
the Assignment’s language demonstrates the Collateral Assignment was
not an absolute assignment. See ELM Ret. Ctr., LP v. Callaway, 226 Ariz. 287,
290-91, ¶ 15 (App. 2010) (providing that when interpreting a contract, we
“look to the plain meaning of the words as viewed in the context of the
contract as a whole”). First, the Collateral Assignment expressly states it is
a “Collateral Assignment of Beneficial Interest.” It also provides in relevant
part:

       WHEREAS, the Assignor wishes to collaterally assign
       $1,000,000.00 of the balance due under the . . . [N]ote and
       [D]eed of [T]rust wherein the Assignor is Payee and
       Beneficiary; NOW THEREFORE, for the purpose of securing the
       payment of the aforementioned [N]ote, together with the interest
       due thereon, the Assignor by these presents does hereby
       collaterally assign and transfer unto [Kasson’s relatives]
       $1,000,000.00 of Assignor’s interest in said [N]ote and Deed of
       Trust.”

(Emphases added.).

¶12            In contrast, the initial Assignment from Urquhart to Kasson is
titled, “Assignment of Deed of Trust,” and provides, inter alia, “Assignor
now desires to assign, grant and transfer all of its rights and benefits as the
Beneficiary under the Deed of Trust to Assignee.” The Assignment’s
language indicates the Assignment is absolute because it expressly states
Urquhart transferred “all of [his] rights and benefits” under the Deed of
Trust, leaving him “no interest in the assigned property or right.” Absolute
Assignment, Black’s Law Dictionary (10th ed. 2014). The Collateral
Assignment, on the other hand, does not contain such absolute language
and only “assign[ed] and transfer[red] . . . $1,000,000.00 of Assignor’s
interest” in the Note as security for Kasson’s loan to his relatives. In light
of this language, the superior court did not err in concluding the Collateral
Assignment was not an absolute assignment and that Kasson had not
assigned the right to enforce the Note.

¶13           Furthermore, Kasson is in possession of the Note and is
accordingly entitled to enforce it. See A.R.S. §§ 47-3301 (providing the
“‘[p]erson entitled to enforce’ an instrument means the holder of the
instrument” and “[a] person may be a person entitled to enforce the
instrument even though the person is not the owner of the instrument or is
in wrongful possession of the instrument”), -1201(B)(21)(a) (providing the
“holder” is “[t]he person in possession of a negotiable instrument that is


                                      5
                         KASSON v. BURGENER
                          Decision of the Court

payable either to bearer or to an identified person that is the person in
possession[,]”). Although Burgener asserts that Kasson is not the Note
holder, he provides no argumentation on the issue beyond his argument
regarding the Collateral Assignment, supra ¶ 9. Because we conclude
Kasson retained his right to enforce the Note after executing the Collateral
Assignment, and because Burgener provides no further argumentation
regarding Kasson’s possession of the Note, we conclude Kasson is the
holder of the Note and is entitled to enforce it according to its terms.

III.   Laches

¶14           Burgener argues the superior court erred by failing to apply
the doctrine of laches because Kasson did not pursue his claim with
diligence, thereby prejudicing Burgener because he has incurred
obligations and incurred debt based on the parties’ agreement that Kasson
would look solely to the security for payment of the Note.

¶15            “Laches is the equitable counterpart of a statute of
limitations.” Harris v. Purcell, 193 Ariz. 409, 410 n.2, ¶ 2 (1998). It “will
generally bar a claim when the delay [in filing suit] is unreasonable and
results in prejudice to the opposing party.” Sotomayor v. Burns, 199 Ariz.
81, 83, ¶ 6 (2000). Delay alone will not establish a laches defense; the delay
“must also result in prejudice . . . which may be demonstrated by showing
injury or a change in position as a result of the delay.” League of Arizona
Cities and Towns v. Martin, 219 Ariz. 556, 558, ¶ 6 (2009).

¶16            The superior court did not abuse its discretion by declining to
apply the doctrine of laches. In his response to Kasson’s motion for
summary judgment, Burgener asserted he was prejudiced “in that [he] ha[s]
incurred obligations and incurred debt based upon the parties’ agreement
that Plaintiff would look solely to the security for payment of the Note.”
Burgener failed to support this assertion with any admissible evidence,
however, and accordingly failed to show he was prejudiced by Kasson’s
delay in filing suit. Because Burgener failed to show prejudice, the superior
court did not abuse its discretion by declining to apply laches.




                                      6
                         KASSON v. BURGENER
                          Decision of the Court

IV.    Attorneys’ Fees on Appeal

¶17          Both parties request attorneys’ fees on appeal pursuant to the
terms of the Note.5 We award Kasson his reasonable attorneys’ fees and
costs upon his compliance with ARCAP 21.

                               CONCLUSION

¶18        For the foregoing reasons, we affirm the superior court’s grant
of summary judgment to Kasson and denial of summary judgment to
Burgener.




                        AMY M. WOOD • Clerk of the Court
                        FILED: AA




5      “Borrower shall pay all attorneys’ fees, costs and expenses actually
incurred by Lender as a result thereof, including, without limitation . . .
attorneys’ fees, costs and expenses incurred in appellate proceedings . . . .”


                                         7
