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Huff v. Mason

Court of Appeals of Arizona, First Division, Department E

August 22, 2013

BARBARA J. HUFF and CHRISS L. FEDER, Plaintiffs/Appellants/ Cross-Appellees,
v.
MATTHEW H. MASON, as Successor Trustee; FLAGSTAR BANK, F.S.B.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; and MERSCORP, INC., Defendants/Appellees/ Cross-Appellants.

Not for Publication – Rule 28, Arizona Rules of Civil Appellate Procedure

Appeal from the Superior Court in Maricopa County Cause No. CV2011-052504 The Honorable Linda H. Miles

Law Offices of Beth K. Findsen, PLLC Scottsdale By Beth K. Findsen Attorneys for Plaintiffs/Appellants/Cross-Appellees

Wilenchik & Bartness, P.C. Phoenix By Dennis I. Wilenchik Kathleen E. Martoncik Attorneys for Defendants/Appellees/Cross-Appellants

MEMORANDUM DECISION

MAURICE PORTLEY, Judge

¶1 Barbara Huff and Chriss Feder appeal the dismissal of their first amended complaint. Mortgage Electronic Registration Systems and Merscorp, Inc. (collectively "MERS"), Mason, and Flagstar Bank, F.S.B., cross-appeal the denial of an award of attorneys' fees to Flagstar and MERS. For the following reasons, we affirm in part, reverse in part and remand.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 Huff purchased a house in Surprise in 2008.[1] She borrowed money from Primary Lending, Inc., to buy the house, signed a promissory note ("Note") and a Deed of Trust ("DOT") securing the Note with the Property. She acknowledges that the recorded DOT is valid and enforceable.

¶3 In her original complaint, Huff alleged, among other things, that in an attempt to foreclose on the house, Flagstar and MERS recorded several documents purporting to claim an interest in the house, which contained false claims and misstatements in violation of Arizona Revised Statutes ("A.R.S.") section 33-420 (West 2013) . The Defendants filed a motion to dismiss under Arizona Rules of Civil Procedure ("Rule") 12(b)(6) or, alternatively, a motion for summary judgment. Huff then amended her complaint, eliminated several causes of action, and added clarifying details to support her claim for false recording under A.R.S. § 33-420 and her quiet title claim.

¶4 The trial court denied Defendants' motion to dismiss the original complaint because they presented items outside the pleadings and the alternative motion for summary judgment failed to comply with Rule 56. The Defendants then filed a similar motion to dismiss the first amended complaint, but subsequently withdrew their alternative motion for summary judgment. The court granted Defendants' motion to dismiss and awarded them attorneys' fees pursuant to A.R.S. §§ 12-341.01 and 33-807(E) (West 2013) . The court reconsidered the award of attorneys' fees and ruled that the Defendants were not entitled to fees, but Defendant Mason was entitled to fees pursuant to A.R.S. § 33-807(E). After judgment was entered, Huff filed her appeal and Defendants filed their cross-appeal.

DISCUSSION

¶5 Huff maintains that her first amended complaint was well-pled and should not have been dismissed. We review a dismissal of a complaint under Rule 12(b)(6) de novo, Coleman v. City of Mesa, 230 Ariz. 352, 355, 7, 284 P.3d 863, 866 (2012); Stauffer v. U.S. Bank National Ass'n, 1 CA-CV 12-0073, 1 CA-CV 12- 0123, slip op. at *6, ¶ 7 (Ariz. App. Aug. 20, 2013), accepting as true the facts alleged in the complaint and affirming the dismissal only if the plaintiff would not be entitled to relief under any interpretation of the facts susceptible of proof. Fidelity Sec. Life Ins. Co. v. State, 191 Ariz. 222, 224, 4, 954 P.2d 580, 582 (1998); Stauffer, 1 CA-CV 12-0073, 1 CA-CV 12-0123, slip op. at *6, ¶ 7.

A. False Recordings Under A.R.S. § 33-420(A)

¶6 Huff alleges that documents were falsely recorded. She contends that the DOT identifies Primary Lending, Inc., as the Lender; Flagstar, as the Trustee; and, MERS as the nominee for the Lender (and Lender's successors and assigns) and as the Beneficiary. MERS, as the Lender's nominee, has the right to appoint a successor trustee under paragraph twenty-four of the DOT.[2] MERS, purporting to act on Flagstar s behalf, however, recorded a Notice of Substitution of Trustee ("Notice"), which appointed Mason as the successor trustee. Huff contends that the recorded document is a false ...


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