Court of Appeals of Arizona, First Division, Department C
Appeal from the Superior Court in Maricopa County Cause No. CV2011-055772 The Honorable Alfred M. Fenzel, Judge
Law Offices of Beth K. Findsen, PLLC by Beth K. Findsen Attorneys for Plaintiff/Appellant
Tiffany & Bosco, P.A. by Kevin P. Nelson Natalya Ter-Grigoryan Attorneys for Defendants/Appellees
PETER B. SWANN, Presiding Judge
¶1 In this case, we hold that a homeowner may not recover damages or unwind a trustee's sale when recorded documents concerning transfers of the lender's interest contain immaterial errors.
¶2 Nancy Sitton brought an action for quiet title and damages under A.R.S. § 33-420 based on allegedly false assignments and notices that were recorded before a trustee's sale of her home. The trial court entered summary judgment against her. We affirm because A.R.S. § 33-811(C) eliminated Sitton's claims to title upon the occurrence of the trustee's sale, and because A.R.S. § 33-420(A) does not support relief in favor of a person who could not have been harmed by a recorded misrepresentation.
FACTS AND PROCEDURAL HISTORY
¶3 In February 2007, Sitton executed a promissory note secured by a deed of trust on her home. It is undisputed that she defaulted on the debt. The deed of trust identified SFG Mortgage as the lender, First American Title Insurance Company as the trustee, and Mortgage Electronic Registration System, Inc. ("MERS"), "acting solely as a nominee for Lender and Lender's successors and assigns, " as the beneficiary. The deed of trust provided that MERS held "only legal title" to the lender's interests but had the right to exercise the interests. The deed of trust also provided that the note and the deed of trust could be sold one or more times without notice, and that the deed of trust's covenants would bind the lender's successors and assigns.
¶4 In March 2007, Deutsche Bank National Trust Company, as trustee for the Terwin Mortgage Trust 2007-4HE Asset-Backed Securities, took custody of the note and the deed of trust under a Sale and Servicing Agreement that provided for assignment of the loan from Terwin entities to Deutsche Bank. Deutsche Bank then transferred the note to Specialized Loan Servicing, Inc., a MERS-member loan servicing company authorized under the Sale and Servicing Agreement, so that Specialized could service and administer the loan.
¶5 At all relevant times, Specialized's corporate resolutions authorized Darren Bronaugh, an officer in Specialized's default administration department, to sign all documents required to be executed in connection with the responsibilities of his position. MERS's corporate resolutions also appointed Bronaugh as an officer of MERS for the purpose of taking all actions and executing all documents necessary to fulfill Specialized's servicing obligations to owners of MERS-registered loans.
¶6 In August 2010, the following occurred: (1) Bronaugh, on behalf of MERS "as nominee for SFG Mortgage, " executed an assignment of the note and the deed of trust to Deutsche Bank; (2) Bronaugh, on behalf of Specialized as Deutsche Bank's "attorney in fact, " executed a notice substituting Christopher Charles Rebhuhn as the trustee; and (3) Rebhuhn executed a notice of trustee's sale. Each of these documents was recorded in August 2010.
¶7 The trustee's sale that Rebhuhn noticed did not take place because Sitton and Specialized agreed to a loan modification. Sitton then failed to make payments under the modified loan. In February 2011, Specialized mailed Sitton a notice of default and intent to foreclose. In April 2011, the following preparations for foreclosure were made: (1) Bronaugh, on behalf of MERS "as nominee for SFG Mortgage, " executed a second assignment of the deed of trust and the note to Deutsche Bank (because, according to Bronaugh, the first recorded assignment failed to specify that SFG Mortgage was an Arizona corporation); (2) Bronaugh, on behalf of Specialized as Deutsche Bank's "attorney in fact, " executed a notice substituting Les Zieve as the trustee; and (3) Zieve executed a notice of trustee's sale. Each of these documents was recorded in May 2011.
¶8 In August 2011, before the trustee's sale, Sitton filed a complaint against SFG Mortgage, Deutsche Bank, and Specialized. Alleging material misstatements and other defects in the assignments and notices of substitution recorded in August 2010 and May 2011, as well as in the notice of trustee's sale recorded in May 2011, Sitton requested a monetary award under A.R.S. § 33-420(A) and an order quieting title to the property in her favor.
¶9 Deutsche Bank and Specialized filed a motion to dismiss, arguing that Sitton could not state a claim under § 33-420(A) because she lacked standing, the statute did not apply to the documents she challenged, and her claims were time-barred. Deutsche Bank and Specialized further argued that Sitton was not entitled to relief based on the facts alleged.
¶10 The court treated the motion to dismiss as one for summary judgment. Deutsche Bank and Specialized then filed a supplemental statement of facts, to which they attached evidence that included a declaration by Specialized's custodian of records. Sitton similarly filed a statement of facts to which she attached evidence. She also filed a motion to strike the declaration by Specialized's custodian. Deutsche Bank and Specialized then filed additional declarations -- one by a Deutsche Bank vice president and one by the person who had acted as Specialized's custodian, who this time asserted that he was acting as ...