Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Bayer v. Nationstar Mortgage LLC

United States District Court, D. Arizona

May 1, 2017

Peter A Bayer, et al., Plaintiffs,
v.
Nationstar Mortgage LLC, et al., Defendants.

          ORDER

          David G. Campbell United States District Judge.

         On March 27, 2017, the Court issued an order granting in part and denying in part Defendants Nationstar Mortgage LLC and Aurora Loan Services LLC's (collectively “Defendants”) motion for summary judgment. Doc. 43. Defendants have filed a motion to reconsider (Doc. 45), and Plaintiffs have filed a response (Doc. 48) at the Court's request. No party requests oral argument. For the following reasons, the Court will grant Defendants' motion to reconsider in part.

         I. Legal Standard.

         Motions for reconsideration are generally disfavored and are not the place for parties to make new arguments not raised in their original briefs. See Northwest Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 925-26 (9th Cir. 1988). Nor is it the time to ask the Court to rethink its analysis. See United States v. Rezzonico, 32 F.Supp.2d 1112, 1116 (D. Ariz. 1998) (citing Above the Belt, Inc. v. Mel Bohannon Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983)). The Court may grant such motions only if (1) it is presented with newly discovered evidence, (2) it committed clear error or the initial decision was manifestly unjust, or (3) there is an intervening change in controlling law. See Sch. Dist. No. 1J, Multnomah County, Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993); Zimmerman v. City of Oakland, 255 F.3d 734, 740 (9th Cir. 2001).

         II. Discussion.

         A. Unclear note holder identity does not preclude summary judgment.

         The Court reached this conclusion in its previous order:

In this instance, Defendants have introduced conflicting evidence of ownership, submitting recorded documents to the bankruptcy court identifying both Aurora and Nationstar as the creditor on Plaintiffs' loan, and asserting in this litigation - with no supporting documents - that Fannie Mae has been the owner of the loan since 2006. Furthermore, Defendants assert that Nationstar is Fannie Mae's loan servicer for Plaintiffs' loan, but provide no documentation or affidavit from Fannie Mae to that effect. The Court finds that Plaintiffs have raised a question of fact regarding their good faith basis for disputing Defendants' authority to conduct a trustee's sale. In light of Defendants' conclusory argument and their confusing and unsupported assertions regarding the role of Fannie Mae in this case, the Court cannot grant summary judgment in their favor on this issue.

Doc. 43 at 12.

         Defendants contend that this decision is clearly erroneous because, under Arizona law, “[t]rustee sales are not conducted under the authority of the person who ‘owns' or ‘holds' the note, but rather, ‘are conducted on a contract theory under the power of sale authority of the trustee.'” Doc. 45 at 2-3 (citing In re Krohn, 52 P.3d 774, 777 (Ariz. 2002)). “‘[T]he dispositive question[, ]'” Defendants argue, “is not who ‘owns' or ‘holds' the note under the Uniform Commercial Code, but rather, ‘whether the trustee, acting pursuant to its own power of sale or on behalf of the beneficiary, had the statutory right to foreclose on the deeds of trust.'” Id. at 3 (citing Hogan, 277 P.3d at 784.). Defendants assert that “[t]he Court rejected all of Plaintiffs' arguments seeking to undermine the authority of the trustee. That is dispositive of the entire case as to these issues.” Id.

         The holding of Hogan is narrower than Defendants contend. Hogan stands for the proposition that a beneficiary is not required to “show the note” on a challenge to the non-judicial foreclosure, unless a borrower affirmatively alleges that the beneficiary lacks authority to enforce the note. Hogan, 277 P.3d at 783 (citing Mansour v. Cal-Western Reconveyance Corp., 618 F.Supp. 2d. 1178, 1181 (D. Ariz. 2009) (“Arizona's [non]-judicial foreclosure statutes . . . do not require presentation of the original note before commencing foreclosure proceedings.”) (emphasis added). The Court in Hogan was clear on this point, stating: “[w]e agree” that “a deed of trust . . . may be enforced only by, or in behalf of, a person who is entitled to enforce the obligation the mortgage secures, ” but “Hogan's complaints do not affirmatively allege that WaMu and Deutsche Bank are not holders of the notes in question or that they otherwise lack authority to enforce the notes.” Id.

         Imagine a situation where a borrower is current on her home loan payments, which are made on time each month to Note Holder Y. The note is secured by a deed of trust naming MERS the nominal beneficiary. MERS assigns its interest to Nationstar, which erroneously believes the note holder to be Wrong Company Z. Because Wrong Company Z has no record of receiving payments from the borrower, Nationstar believes the note is in default and appoints a trustee to initiate non-judicial foreclosure on the borrower's home. Under Defendants' reading of Hogan, the borrower would be unable to challenge Nationstar's erroneous belief that Wrong Company Z held the note and that borrowers were in default. The only question would be whether the trustee had been assigned legal authority to act. If so, it could sell the borrower's property even though the borrower was current in its payments to Note Holder Y. The fact that the debt was owed - and was current - to Note Holder Y would be irrelevant.

         Such an interpretation of Hogan is not correct. Hogan held that a beneficiary has no affirmative duty to prove its authority to proceed before initiating a non-judicial foreclosure. 277 P.3d at 783. The Arizona Supreme Court specifically noted, however, that the plaintiff in Hogan did not “affirmatively allege that WaMu and Deutsche Bank are not the holders of the notes in question or that they otherwise lack authority to enforce the notes.” Id. The clear implication of this statement is that the analysis would have been different if the plaintiff had made such an affirmative allegation.

         Although the Court concludes that Nationstar has misread Hogan, the Court still finds Nationstar's motion to be well-taken. Hogan makes clear that Plaintiffs bear the burden of affirmatively alleging in their complaint - and proving in their case - that Nationstar lacks authority to enforce the note. Id. Hogan placed the burden to prove a lack of authority on the borrower, rather than placing a burden of proving the existence of authority on the beneficiary or trustee. Hogan specifically held that “[n]othing in the non-judicial foreclosure ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.