Court of Appeals of Arizona, First Division, Department C
FRANK T. BECK and KIMBERLY K. BECK, Plaintiffs/Appellants/ Cross-Appellees,
U.S. BANK NATIONAL ASSOCIATION, as Trustee relating to Chevy Chase Funding LLC Mortgage Backed Certificates Series 2006-3; SPECIALIZED LOAN SERVICING, LLC; TIFFANY & BOSCO, P.A., 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Not for Publication -Rule 28, Arizona Rules of Civil Appellate Procedure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. CV2010-054881 The Honorable Linda H. Miles, Judge
Law Offices of Beth K. Findsen, PLLC Scottsdale By Beth K. Findsen Attorneys for Plaintiffs/Appellants/Cross-Appellees.
Tiffany & Bosco, P.A. Phoenix By Kevin P. Nelson Attorneys for Defendants/Appellees/Cross-Appellants
DIANE M. JOHNSEN, Chief Judge.
¶1 Frank T. Beck and Kimberly K. Beck appeal from the superior court's dismissal of their complaint against U.S. Bank National Association, as Trustee relating to Chevy Chase Funding LLC Mortgage Backed Certificates Series 2006-3; Specialized Loan Servicing, LLC; and Tiffany & Bosco, P.A. (collectively, "Appellees"). Appellees cross-appeal from the superior court's failure to award them attorney's fees. We affirm the superior court judgment in its entirety.
FACTS AND PROCEDURAL BACKGROUND
¶2 In 2006 the Becks executed a note (the "Note") promising to repay $1, 068, 750 to Valley Mortgage & Investment, Inc. The Note was endorsed to Chevy Chase Bank, F.S.B. It is undisputed that the Becks are in default under the Note. The Note was secured by a deed of trust that identified the Becks as the trustors, First American Title Insurance Company as the trustee and Mortgage Electronic Registration Systems, Inc. ("MERS"), "acting solely as a nominee for Lender and Lender's successors and assigns, " as the beneficiary.
¶3 In February 2010, MERS purported to assign "all beneficial interest" in the deed of trust to "US Bank, NA as trustee for CCB Libor Series 2006-A Trust" ("first assignment"). In apparent recognition that that assignment was in error, Capital One, N.A., the successor by merger to Chevy Chase Bank, F.S.B., recorded a "corrective assignment" of the deed of trust in July 2010. The corrective assignment stated that it would replace the first assignment and named "U.S. Bank National Association, as Trustee relating to Chevy Chase Funding LLC Mortgage Backed Certificates Series 2006-3" ("U.S. Bank") as the beneficiary of the deed of trust. In August 2010, MERS assigned its beneficial interest in the deed to U.S. Bank ("third assignment").
¶4 Almost immediately, U.S. Bank then substituted Quality Loan Service Corporation as the trustee of the deed of trust. While Quality Loan Service Corporation initially recorded a "Notice of Trustee's Sale" to be held on November 12, 2010, it recorded a cancellation of the sale a month later. U.S. Bank then recorded a second substitution of trustee in October 2010, naming Michael A. Bosco, Jr., as the successor trustee and Bosco, as trustee, recorded a second "Notice of Trustee's Sale" to be held on January 20, 2011.
¶5 In December 2010 the Becks filed a complaint for declaratory judgment, quiet title and "other relief" against Appellees and a number of other related parties. At their request, the superior court entered a temporary restraining order enjoining the trustee's sale but ordered the Becks to file a bond of $40, 000 by January 31, 2011, to secure the injunction. The Becks failed to file the bond and sought other emergency relief from the superior court, but while their request was pending, the property was sold at a trustee's sale on February 3, 2011. At the sale, the beneficiary under the deed of trust, U.S. Bank, purchased the property with a credit bid of $1, 249, 830.35. The trustee's deed upon sale was recorded on February 8, 2011.
¶6 On February 17, the Becks filed a first amended complaint, which Appellees moved to dismiss. The court granted the motion to dismiss, but allowed the Becks to file a second amended complaint.
¶7 In their second amended complaint, the Becks asserted Appellees violated Arizona Revised Statutes ("A.R.S.") section 33-420 (West 2013) by recording documents that asserted false claims relating to the property. The Becks also sought to quiet title as to parties asserting an interest in the property through those alleged false recordings. The complaint alleged Appellees recorded six documents regarding the property that "contain[ed] material misrepresentations purporting to create an interest in the Subject Property." The documents the Becks identified were the first, corrective and third assignments, the substitution of Bosco as trustee, the second notice of the trustee's sale and the trustee's deed upon sale. The Becks alleged that due to alleged false statements within each of the documents, each of them either assigned an interest improperly and/or that the recording was made by an individual who did not have authority to execute and/or record such a document. Generally speaking, the Becks alleged that because the various assignments were improper, U.S. Bank could not be the true beneficiary of the deed of trust. Accordingly, the Becks asserted that U.S. Bank had neither the power to appoint Bosco as trustee with authority to initiate a trustee's sale nor the power to make a credit bid at the trustee's sale.
¶8 The complaint also alleged that Bosco and the law firm that conducted the trustee's sale, Tiffany & Bosco, P.A., should be required to disgorge the price for which the Becks' property was purchased at the trustee's sale. The Becks alleged that because U.S. Bank was not a valid beneficiary entitled to make a credit bid at the trustee's sale in satisfaction of the loan, it was obliged to pay its bid price entirely in cash, and Bosco wrongfully withheld those proceeds from them. The Becks therefore demanded judgment for the full amount that U.S. Bank had bid at the sale.
¶9 Appellees moved to dismiss the second amended complaint pursuant to Arizona Rule of Civil Procedure ("Rule") 8(a)(2) for failure to contain a "short and plain statement of the claim" and Rule 12(b)(6) for failure to state a claim. The court granted the motion to dismiss and dismissed the Becks' claims with prejudice. Appellees then filed an application for attorney's fees and costs, requesting fees of "not less than $65, 207.50" and costs of $309. After the Becks ...