## Facts

- Real property owned by Schulz was encumbered, in priority order, by: (1) an FNMA mortgage; (2) Wachs’s deed of trust for $628,648; (3) Lanyon’s deed of trust; and (4) a judgment held by a law firm and later assigned to Michael and Janet Matcha (about $2,581.35).
- FNMA foreclosed the mortgage and purchased the property at a sheriff’s sale on February 9, 1978.
- Under Arizona law, Schulz had a six-month period to redeem; after that period, qualifying junior lienholders could redeem in priority order.
- During the owner’s redemption period, Wachs filed a notice of intent to redeem stating the lien amount and priority, but did not file a certified copy of the deed of trust with the notice, as the statute specified.
- Wachs later provided the certified copy within the five-day period when a lienholder could actually exercise redemption after the owner’s period expired.
- The Matchas contended Wachs’s omission prevented perfection of his redemption right, making them the first eligible lienholders to redeem.

## Issues

1. Whether substantial compliance, rather than strict compliance, with Arizona’s lienholder redemption statutory filing requirements is sufficient to perfect a lien creditor’s right to redeem after a foreclosure sale.
2. Whether a lienholder forfeits redemption rights by failing to file a certified copy of the lien concurrently with the notice of intent to redeem when the certified copy is supplied within the operative redemption period and no prejudice results.

## Decision

- The Arizona Supreme Court held that substantial compliance with the redemption statutes is sufficient to perfect a lien creditor’s right to redeem.
- The Court concluded Wachs substantially complied because his timely notice provided essential information and the certified copy was supplied within the period relevant to lienholder redemption.
- The Court reversed the superior court’s summary judgment for the Matchas and approved and modified the court of appeals’ decision recognizing Wachs’s redemption right.

## Legal Principles

- Redemption statutes are remedial and are construed to effect their protective purpose rather than to impose forfeiture for technical noncompliance.
- A lienholder’s redemption right is not defeated by minor defects in statutory filings when the filing substantially fulfills statutory objectives, including notice, verification of the lien, and determination of priority.
- Lack of prejudice to other interested parties is central; where other lienholders are not misled and statutory purposes are satisfied, technical omissions do not permit a junior creditor to gain priority by procedural default.

## Conclusion

The court recognized Wachs’s superior right to redeem because his notice and subsequent submission of the certified lien copy substantially satisfied statutory requirements and caused no prejudice, so the Matchas could not obtain priority based solely on a nonprejudicial filing defect.


Matcha v. Wachs, 646 P.2d 263 (Ariz. 1982)