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Zandonatti v. Bank of America

United States District Court, D. Arizona

September 3, 2019

Anthony Zandonatti, Plaintiff,
v.
Bank of America, Defendant.

          ORDER

          CINDY K. JORGENSON, UNITED STATES DISTRICT JUDGE

         Pending before the Court are the parties' Motions for Summary Judgment (Docs. 56 and 59). The pending motions are fully briefed and suitable for determination without oral argument. LRCiv 7.2(f).

         1. Legal Standard

         “Summary judgment is appropriate when, viewing the evidence in the light most favorable to the nonmoving party, ‘there is no genuine dispute as to any material fact.'” United States v. JP Morgan Chase Bank Account No. Ending 8215 in Name of Ladislao v. Samaniego, VL: $446, 377.36, 835 F.3d 1159, 1162 (9th Cir. 2016) (citing Fed.R.Civ.P. 56(a)). “[W]here evidence is genuinely disputed on a particular issue - such as by conflicting testimony - that ‘issue is inappropriate for resolution on summary judgment.'” Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (citing Direct Techs., LLC v. Elec. Arts, Inc., 836 F.3d 1059, 1067 (9th Cir. 2016)). “There is no such issue unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. In essence, the inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 243 (1986).

         2. Factual and Procedural Background

         On July 17, 2007, Plaintiff Anthony Zandonatti obtained a loan from Countrywide Bank[1] in the amount of $417, 000.00 for the purchase of a home (the “Property”). Under the terms of the loan agreement, Plaintiff agreed to make monthly payments on the loan until August 1, 2047, when the remaining balance of the loan would become immediately due. Plaintiff made regular monthly payments on the loan until January 2009, when he was sent a Notice of Intent to Accelerate (the “January 2009 Notice”) stating that he was in default but had a right to cure that default. Plaintiff cured his default and continued submitting payments until May 2009. On July 17, 2009, Defendant Bank of America again sent Plaintiff a Notice of Intent to Accelerate (the “July 2009 Notice”) stating that he was in default, but that he had a right to cure his default.

         Like the January 2009 Notice, the July 2009 Notice further provided:

If the default is not cured on or before August 16, 2009, the mortgage payments will be accelerated with the full amount remaining accelerated and becoming due and payable in full and foreclosure proceedings will be initiated at that time. As such, the failure to cure the default may result in the foreclosure and sale of your property. If your property is foreclosed upon, the Noteholder may pursue a deficiency judgment against you to collect the balance of your loan if permitted by law.

         (Doc. 57-1, pg. 38).

         Despite the July 2009 Notice's warning that foreclosure proceedings would be initiated and that the full amount of the mortgage payments would become due and payable on or before August 16, 2009 if the default was not cured, it is undisputed that Defendant did not demand Plaintiff pay the full amount of the mortgage payments or initiate foreclosure proceedings. Plaintiff made no further payments on the loan and, instead, filed for Chapter 7 bankruptcy on December 3, 2009. On June 23, 2011, Defendant sent Plaintiff another Notice of Intent to Accelerate (the “June 2011 Notice”). Like the July 2009 Notice, the June 2011 Notice stated that if Plaintiff did not cure his default on or before July 23, 2011 “the mortgage payments will be accelerated with the full amount remaining accelerated and becoming due and payable in full and foreclosure proceedings will be initiated at that time.” (Doc. 57-1, pg. 41).

         Although the June 2011 Notice stated that the full amount of the mortgage payments would become due and payable on or before July 23, 2011 if the default was not cured, Defendant did not demand Plaintiff pay the full amount of the mortgage payments. Defendant did, however, follow the June 2011 Notice by recording a Notice of Trustee Sale on August 25, 2011. In November 2011, Plaintiff initiated a lawsuit and recorded a Notice of Lis Pendens to halt the foreclosure process. Plaintiff later voluntarily dismissed this lawsuit due to his incarceration. What followed were multiple instances of Plaintiff's attempts to stall the foreclosure process and the initiation of another lawsuit in February 2013. After that lawsuit and a subsequent appeal were dismissed, Defendant filed a Notice of Trustee Sale on March 15, 2017. To stop that sale, Plaintiff filed the pending lawsuit and sought a Temporary Restraining Order (“TRO”) in Pima County Superior Court. That TRO was granted on June 19, 2017. On June 30, 2017, Defendant removed the lawsuit to this Court and this Court granted Plaintiff's preliminary injunction staying Defendant's Trustee Sale upon adjudication of the pending lawsuit.

         3. Discussion

         Plaintiff argues that the July 2009 Notice accelerated the debt and that since Defendant “failed to take sufficient enforcement action within six years of the acceleration, ” Defendant is time-barred from initiating a foreclosure action on the Property. (Doc. 59, pg. 1). If, as Plaintiff alleges, Defendant accelerated the debt in July 2009, the statute of limitations would operate to prohibit Defendant from initiating foreclosure proceedings due to the lapse of the six-year statute of limitations. See Andra R Miller Designs LLC v. U.S. Bank NA, 244 Ariz. 265, 270 (Ariz.Ct.App. 2018), review denied (July 3, 2018) (“When a creditor has the power to accelerate a debt, the six-year statute of limitations begins to run on the date the creditor exercises that power”).

         Defendant alleges that the July 2009 Notice was not an acceleration of the debt and that even if it was, that acceleration was later revoked by the June 2011 Notice. Alternatively, Defendant further alleges that equitable estoppel prevents Plaintiff from asserting that the statute of limitations has run. Defendant argues that Plaintiff's actions in delaying and preventing Defendant from initiating a foreclosure sale should cause any applicable statute of limitations to be ...


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