The Court of Appeals’ opinion in Weitz Co., LLC v. Heth, 314 P.3d 569, 674 Ariz. Adv. Rep. 29 (App. 2013), which is the subject of this post from January 8, 2014, was vacated by the Arizona Supreme Court on August 26, 2014. As such, the case below is no longer good law. I will be drafting a post on the Supreme Court’s opinion in the near future.
As experienced contractors and material suppliers know, actions to foreclose upon mechanic’s liens can involve lien priority disputes with lenders. Contractors and suppliers recently scored a significant victory in connection with these disputes in Weitz Co., LLC v. Heth, 314 P.3d 569, 674 Ariz. Adv. Rep. 29 (App. 2013) which struck down the doctrine of equitable subrogation in the context of mechanic’s liens. Simply put, equitable subrogation “enables a later-filed lienholder to leap-frog over an intervening lienholder.” It had previously been used in Arizona to allow subsequent lenders who supplied funds to pay off a primary lien to jump intervening mechanic’s liens and be substituted into the position of the primary lienholder.