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Zrihan v. Wells Fargo Bank, N.A.

United States District Court, D. Arizona

January 31, 2014

Aisha Zrihan, Plaintiff,
Wells Fargo Bank, N.A., et al., Defendants.


DAVID G. CAMPBELL, District Judge.

Defendant Wells Fargo Bank, N.A. has filed a motion for summary judgment. Doc. 62. Plaintiff Aisha Zrihan has also filed a motion for summary judgment. Doc. 64. The motions are fully briefed. For the reasons that follow, the Court will deny the motions.[1]

I. Background.

Plaintiff is the sole heir of the estate of Yafit Butwin. Doc. 28, ¶ 1. On June 2, 2012, Mrs. Butwin and her three children were tragically murdered by her husband, James Butwin, who then took his own life. Doc. 64 at 3. The Butwins were married in 1994 and moved to Arizona in 2001. Id. at 2. They purchased the real property located at 9361 South Kenneth Plaza, Tempe, Arizona, 85284 (the "Butwin residence"), in a cash transaction. Id. Mr. Butwin is alleged to have encumbered the Butwin residence by first taking out a mortgage in October 2001 and then a home equity line of credit ("HELOC") from Defendant on October 15, 2002, which was used to pay off the mortgage. Id. The HELOC was secured by a deed of trust recorded on October 31, 2002 (the "2002 Deed of Trust"). Doc. 63-1 at 22-23. Mr. Butwin then increased the limit of the HELOC to $720, 000 in January 2006. Doc. 62 at 2. A "Deed of Trust Modification Agreement" was subsequently recorded on February 1, 2006 (the "2006 Modification"). Doc. 63-1 at 42-47. Both the 2002 Deed of Trust and the 2006 Modification appear to be signed by both Mr. and Mrs. Butwin. Doc. 63-1 at 23, 46. Plaintiff asserts that Mrs. Butwin was unaware of the HELOC and that her signatures on the 2002 Deed of Trust and the 2006 Modification were written by someone else. Doc. 28 at ¶ 19; Doc. 72 at 2. She further contends that Mary J. Higgens, the individual who purportedly notarized the acknowledgment of both the 2002 Deed of Trust and the 2006 Modification, was not and never has been a properly commissioned and authorized notary in Arizona. Doc. 64 at 2-3; Doc. 72 at 2. As a result, Plaintiff contends that Defendant has no valid security interest in the property. Doc. 64 at 4.

Plaintiff contends that Mrs. Butwin did not become aware of the HELOC until January 9, 2009. Id. at 9. She alleges that on that date, Mrs. Butwin went to the bank to attempt to get money because Mr. Butwin had canceled her credit cards and restricted her access to their bank accounts. Id. While at the bank, Mrs. Butwin allegedly asked a bank employee if she had anything else under her name, at which time the employee informed Mrs. Butwin of the HELOC. Id. After learning of the HELOC, Mrs. Butwin drew cash advances totaling $26, 000 from the HELOC and placed those funds in a new bank account. Doc. 66 at 2. Mrs. Butwin filed for divorce on September 22, 2011, and the proceedings were ongoing at the time of her death. Doc. 64 at 3. Plaintiff alleges that Mr. Butwin claimed the HELOC to be his sole and separate debt during the divorce proceedings. Id. Defendant argues that even if Mrs. Butwin's signatures were not valid, she ratified the HELOC by withdrawing the January 2009 cash advances. Doc. 62 at 7. Defendant also notes that Mrs. Butwin did not claim during her divorce proceedings that any signature on any HELOC document was forged or invalid, and did not at any time "repudiate, object to, or attempt to rescind the HELOC." Id. at 3.

Plaintiff filed this action asserting two claims: (1) to quiet title to the Butwin residence in her name "pursuant to A.R.S. § 14-2803"; and (2) for a judgment declaring that Wells Fargo has no valid lien or security interest in the Butwin residence. Doc. 28, ¶¶ 34-54.

II. Legal Standard.

A party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Summary judgment is also appropriate against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. Only disputes over facts that might affect the outcome of the suit will preclude the entry of summary judgment, and the disputed evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

III. Defendant's Motion for Summary Judgment.

A. Statutes of Limitation.

Defendant first argues that Plaintiff's quiet title claim is barred by the one-year statute of limitations contained in A.R.S. § 12-541(5). Doc. 62 at 4. Defendant is incorrect. "[A] cause of action to quiet title for the removal of the cloud on title is a continuous one and never barred by limitations while the cloud exists." Cook v. Town of Pinetop-Lakeside, 303 P.3d 67, 70 (Ariz.Ct.App. 2013) (quoting City of Tucson v. Morgan, 475 P.2d 285, 287 (Ariz.Ct.App. 1970)). A.R.S. § 12-541 does not apply.

Defendant next argues that "[c]laims of an alleged forgery are a form of fraud claim, " and that Plaintiff's claims are therefore subject to the three-year statute of limitations in A.R.S. § 12-543. Doc. 62 at 5. Defendant's cited authority does not support this assertion. In addition, Plaintiff has not asserted a fraud claim against Defendant. A.R.S. § 12-543 is also inapplicable.

B. Forgery.

Defendant contends that Plaintiff is unable to "satisfy her burden to prove the alleged forgery by clear and convincing evidence." Doc. 62 at 6. Defendant cites Vizcarra-Ayala v. Mukasey, 514 F.3d 870, 874-75 (9th Cir. 2008), as setting forth the "elements of forgery, " but that case discusses the elements of criminal forgery. See id. Defendant provides no authority for the proposition that the standard for the crime of forgery is relevant in this civil action, or that forgery in a civil case must be proved by clear and convincing ...

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