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Zubia v. Shapiro

Supreme Court of Arizona

January 12, 2018

Maria Carmen Zubia, individually, and in her capacity as trustee on behalf of The Maria C. Pena Revocable Living Trust, Plaintiff/Appellant,
v.
David Shapiro, individually, and as the Trustee of the Shapiro Trust Dated February 14, 2006; Ilana Shapiro a/k/a Illana Shapiro, individually, and as trustee of the Shapiro Trust Dated February 14, 2006, Defendants/Appellees.

         Appeal from the Superior Court in Maricopa County The Honorable Robert H. Oberbillig, Judge No. CV2015-002563

         Memorandum Decision of the Court of Appeals Division One 1 CA-CV 15-0404 Filed Sept. 29, 2016

          Kyle A. Kinney (argued), Law Offices of Kyle A. Kinney, PLLC, Scottsdale, Attorney for Maria Carmen Zubia

          Patrick J. Davis, Nathaniel B. Rose (argued), Fidelity National Law Group, Phoenix, Attorneys for David and Ilana a/k/a Illana Shapiro

          JUSTICE BRUTINEL authored the opinion of the Court, in which CHIEF JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, and JUSTICES TIMMER, BOLICK, GOULD, and LOPEZ joined.

          OPINION

          BRUTINEL JUSTICE

         ¶1 The issue in this case is whether a homeowner's failure to obtain injunctive relief under A.R.S. § 33-811(C) results in the waiver of her damages claim arising from a trustee's sale, where the homeowner alleges that her name was forged on the promissory note and deed of trust. We hold that failing to obtain an injunction before the trustee's sale results in the waiver of damage claims dependent on the validity of the sale.

         I. BACKGROUND

         ¶2 Maria Zubia and her husband, Jose Pena, acquired title to a single-family residence (the "Property") as joint tenants in 1995. Zubia and Pena separated in 2006. In 2008, Pena executed a $150, 000 Promissory Note (the "Note") in favor of David Shapiro, Ilana Shapiro, and the Shapiro Trust (collectively "Shapiro") and Advanced Capital Group, LLC ("Advanced"). To secure the loan, Pena simultaneously executed a Deed of Trust ("DOT") on the Property. The Note and DOT list Shapiro and Advanced as the Lender and Land America Lawyers Title as the Trustee.

         ¶3 Both the Note and DOT purport to be signed by Pena and Zubia. The DOT was recorded on January 13, 2009. Zubia contends that her signatures on the Note and DOT were forged and that she first learned of the loan and DOT in December 2013, when she tried to borrow against the Property.

         ¶4 The loan went into default in 2013. In August 2013, Advanced assigned its interest in the Property to Shapiro. Subsequently, Shapiro substituted Empire West Title Agency, LLC ("Empire"), as the trustee of the DOT. Empire then recorded a notice of trustee's sale stating that the Property was to be sold at public auction in February 2014.

         ¶5 In January 2014, Pena quitclaimed his joint tenancy interest in the Property to Zubia, who recorded the quitclaim deed on February 10. Shortly thereafter, Zubia filed a separate action against Pena, Shapiro, Advanced, Empire, and others, asserting that her signatures on the Note and DOT were forged. Representing herself, Zubia sought to quiet title to the Property but did not seek to enjoin the trustee's sale. Her complaint was dismissed without prejudice for lack of prosecution.

         ¶6 In January 2015, after Zubia's action was dismissed, Empire conducted a trustee's sale and Shapiro purchased the Property on a credit bid and recorded a trustee's deed.

         ¶7 After the sale, Zubia filed this action against Pena, Shapiro, Advanced, and others, reasserting her forgery allegations. She sought damages under A.R.S. § 33-420(A) and to quiet title to the Property in her name. As relevant here, Zubia alleged that because the Note and DOT were forged, "Shapiro[] never obtained a security interest in the property as the basis for a non-judicial foreclosure sale, " and thus the trustee's deed resulting from the sale was invalidly recorded. Zubia also added a "wrongful foreclosure" claim, asked the trial court to declare the January 2015 sale invalid, and sought to enjoin any future trustee's sales. Shapiro moved to dismiss, arguing Zubia had waived any claim to title of the Property and all defenses and objections to the sale pursuant to A.R.S. § 33-811(C).

         ¶8 The trial court dismissed Zubia's complaint under Arizona Rule of Civil Procedure 12(b)(6), ruling that under ยง 33-811(C), she had waived her claims by not obtaining injunctive relief before the January 2015 sale. The court ...


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