United States District Court, D. Arizona
Gary F. Lowry, et al., Plaintiffs,
JPMorgan Bank and Trust Company NA, et al., Defendants.
Honorable G. Murray Snow United States District Judge.
before the Court is Defendants' Motion to Dismiss. (Doc.
14). The Court grants the motion.
JPMorgan Chase, U.S. Bank, and Quality Loan Service
Corporation recorded a notice of trustee's sale of
Plaintiffs Gary Lowry's and Marian Carol's property
in Cottonwood, Arizona on September 9, 2016. (Doc. 1 at 4,
¶ 3). Mr. Lowry requested temporary injunctive relief
from the sale on November 14, 2016, which was denied on
December 12, 2016. Lowry v. EMC Mortgage Corp, et
al., No. CV-11-8177-PCT-JAT, Docs. 78, 84. Mr. Lowry
requested an emergency temporary restraining order on
December 9, 2016, which was denied on December 15, 2016.
Lowry v. Chase, No. CV-16-8279-PCT-GMS, Doc. 16.
Defendants foreclosed on the property on February 27, 2017.
(Doc. 1 at 4, ¶ 3).
filed the present lawsuit on September 1, 2017. (Doc. 1). It
alleges five causes of action: (1) wrongful foreclosure, (2)
breach of contract and breach of duty of good faith and fair
dealing, (3) violation of consumer protection act, (4)
promissory estoppel, and (5) infliction of emotional
distress. (Doc. 1).
parties do not contest that A.R.S. § 33-811 (C) states
that “[t]he trustor . . . and all persons to whom the
trustee mails a notice of a sale under a trust deed pursuant
to § 33-809 shall waive all defenses and objections to
the sale not raised in an action that results in the issuance
of a court order granting [a preliminary injunction or
temporary restraining order] . . . .” The complaint
alleges that the Plaintiffs changed addresses and the
Defendants did not strictly comply with A.R.S. § 33-809
by properly notifying the foreclosure to the updated address.
(Doc. 1 at 5, ¶ 7). However, as evidenced in their
requests for injunctive relief and a temporary restraining
order, plaintiffs had actual notice and presented defenses
and objections to the sale. Therefore, the legal question
before the Court is whether actual notice of a foreclosure
sale is sufficient for a trustor to waive any defenses and
objections after the conclusion of the foreclosure pursuant
to A.R.S. § 33-811.
survive dismissal for failure to state a claim pursuant to
Rule 12(b)(6), a complaint must contain more than
“labels and conclusions” or a “formulaic
recitation of the elements of a cause of action[;]” it
must contain factual allegations sufficient to “raise a
right to relief above the speculative level.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While
“a complaint need not contain detailed factual
allegations . . . it must plead ‘enough facts to state
a claim to relief that is plausible on its face.'”
Clemens v. DaimlerChrysler Corp., 534 F.3d 1017,
1022 (9th Cir. 2008) (quoting Twombly, 550 U.S. at
570). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 556). Plausibility requires
“more than a sheer possibility that a defendant has
acted unlawfully.” Twombly, 550 U.S. at 555.
When analyzing a complaint for failure to state a claim under
Rule 12(b)(6), “[a]ll allegations of material fact are
taken as true and construed in the light most favorable to
the nonmoving party.” Smith v. Jackson, 84
F.3d 1213, 1217 (9th Cir. 1996). However, legal conclusions
couched as factual allegations are not given a presumption of
truthfulness, and “conclusory allegations of law and
unwarranted inferences are not sufficient to defeat a motion
to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699
(9th Cir. 1998).
noted, “the trustor, its successors, and all persons to
whom the trustee mails a notice of a sale . . . pursuant to
§ 33-809” waives all defenses and objections to
the sale not raised in a motion for injunctive relief. A.R.S.
§ 33-811(C). The Arizona Supreme Court has held that
this statute clarifies that “a person who has defenses
or objections to a properly noticed trustee's sale has
one avenue for challenging the sale: filing for injunctive
relief.” BT Capital, LLC v. TD Serv. Co. of
Arizona, 229 Ariz. 299, 301 (2012) (en banc).
Arizona court explained that “[c]ompliance with §
33-809 is only required to apply the waiver provision to
other persons who must be given notice” and
“[t]he plain language of § 33-811(C) does not
require the trustee to comply with the mailing requirements
of § 33-809 for the waiver provision to apply later to
the trustor.” Madison v. Groeth, 230 Ariz. 8,
12 (App. 2012). The Arizona appellate court recognized that
under some circumstances, “§ 33-811(C) may apply
to deprive a trustor of due process if that trustor is not
given sufficient notice of the trustuee's sale to obtain
an injunction of the sale, ” but when the trustor had
“received notice sufficient to obtain a preliminary
injunction, ” the trustor waives any defenses and
objections not raised in a motion for injunctive relief.
Id. Notwithstanding the trustor's claim that the
trustee did not properly notice the foreclosure, using this
rule, the appellate court upheld the dismissal of tort claims
because the trustor had received adequate notice to request a
preliminary injunction, filed a lawsuit approximately one
month prior to the sale, and attended the foreclosure sale.
Id. at 12-13.
Lowry and Ms. Carol had sufficient notice to present defenses
and objections and obtain injunctive relief against the
foreclosure. Mr. Lowry and Ms. Carol filed multiple requests
for injunctive relief, and they noted in one of those motions
that they had notice of the foreclosure as early as February
18, 2015. Lowry v. EMC Mortgage Corp, et al, No.
CV-11-8177-PCT-JAT, Doc. 51 at 2; Lowry v. Chase,
No. CV-16-8279-PCT-GMS. In review of those decisions, neither
the Plaintiffs nor the Court suggested that Mr. Lowry and Ms.
Carol had not received proper notice and were consequently
inhibited from presenting potential defenses and objections
in their requests for injunctive relief. Mr. Lowry and Ms.
Carol admitted in their Response that they knew about the
pending foreclosure. (Doc. 26 at 5).
Plaintiffs' claims arises from the foreclosure. (Doc. 1).
Because Arizona requires litigants to present defenses and
objections to a trustee sale in a motion for injunctive
relief, and because Mr. Lowry and Ms. Carol had sufficient
notice of the trustee sale ...