Rackmaster Systems v. Maderia

193 P.3d 314 (2008)

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Rackmaster Systems v. Maderia

Arizona Court of Appeals
193 P.3d 314 (2008)

Facts

Patrick Maderia and his wife, Jane (defendants) were Arizona residents who jointly owned an Arizona bank account, which was community property in that state. Patrick was president of an Arizona corporation, TriStar International, Inc. (TriStar), and he personally guaranteed a credit agreement between TriStar and Rackmaster Systems (Rackmaster) (plaintiff), a Minnesota corporation. Jane did not sign the agreement. TriStar defaulted on the loan, and Rackmaster sued Patrick and TriStar in Minnesota; Rackmaster did not sue Jane. The Minnesota court awarded Rackmaster a default judgment for about $23,000 against only Patrick. Rackmaster then filed an affidavit of foreign judgment and application of a writ for garnishment in Arizona, naming only Patrick as the defendant. Rackmaster sought to garnish Jane and Patrick’s joint account. Patrick argued that Rackmaster could not garnish community property because Jane was not a defendant in the matter. Rackmaster argued that Arizona law treated debt incurred out of state the same as debt incurred in Arizona: if a debt incurred in Arizona would be classified as community debt, that same debt incurred out of state would be classified as community debt. The trial court ruled that Rackmaster could garnish the Maderias’ account. The Maderias appealed.

Rule of Law

Issue

Holding and Reasoning (Weisberg, J.)

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