Vollmer et al v. Present et al

Filing 65

ORDER that Defendant Wells Fargo's 62 Motion to Quash Lis Pendens is granted in part and denied in part; It is further ordered that Wells Fargo's motion as to quashing the lis pendens is granted; It is further ordered that Wells Fargo 9;s motion as to statutory damages is denied without prejudice. Directing the Clerk of the Court to reassign this case. This case has been reassigned by random lot to the Honorable G. Murray Snow. All future documents filed shall reflect the complete case number: CV10-1182-PHX-GMS. Signed by Judge Mary H Murguia on 04/07/11.(ESL)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Brian Vollmer and Peter M. Kane,
Plaintiff,

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vs.

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Randall C. Present, et al.,
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Defendants.
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No. CV-10-1182-PHX-MHM
ORDER

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Presently before the Court is Defendant Wells Fargo Bank N.A.’s (“Wells Fargo”)

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Motion to Quash Lis Pendens. (Doc. 62). After reviewing the documents filed by the parties

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and the relevant law, the Court issues the following order.

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I.

BACKGROUND

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On February 3, 2010, pursuant to the Power of Sale in the Deed of Trust, First

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American Title Insurance Company noticed a Trustee’s Sale of Plaintiffs’ property, located

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at 4304 South 104th Avenue, Tolleson, Arizona (“the property”). (Notice of Trustee Sale,

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Doc. 6, Exh. B). On May 4, 2010, Plaintiffs brought suit in state court seeking an emergency

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temporary restraining order enjoining the sale of the property. (Doc. 1). Plaintiffs also

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recorded a notice of lis pendens with the Maricopa County Recorder’s Office on May 7,

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2010. (Doc. 62). On June 3, 2010, Defendants collectively removed the case to this Court.

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(Doc. 1). One week later, Defendants moved to dismiss the case. (Doc. 6). After reviewing

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the parties’ arguments and the relevant law, this Court granted Defendants’ motion and

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dismissed Plaintiffs’ action on January 4, 2011. (Doc. 54). On February 20, 2011, Wells

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Fargo sent Plaintiffs a letter demanding that the lis pendens be removed. (Doc. 62 at 3).

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Plaintiffs did not respond, and Wells Fargo filed the present motion on March 9, 2011.

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Plaintiffs have not responded to Wells Fargo’s motion.

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II.

DISCUSSION

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Wells Fargo’s motion seeks an “order pursuant to A.R.S. § 33-420 to quash the lis

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pendens Plaintiffs recorded with the Maricopa County Recorder’s Office.” (Doc. 62 at 1).

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“A lis pendens is a statutory method for a party to litigation to alert future purchasers or

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encumbrancers of ‘the property affected . . . and the claims . . . made’ in the complaint.” In

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re Farnsworth, 384 B.R. 842, 847 (Bankr. D. Ariz. 2008) (quoting A.R.S. § 12–1191(B)).

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A.R.S. §12-1191(B) serves two purposes: “(1) to give notice to future third parties that

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whatever rights they might consider acquiring in the land could be subject to a superior right

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asserted by the plaintiffs in a pending action, and (2) to enable the court in which the action

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is pending to retain the power to fully deal with such property, to the exclusion of future

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claimants.” Farnsworth, 384 B.R. 847 (citing Hatch Cos. Contracting, Inc. v. Ariz. Bank,

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170 Ariz. 553, 556, 826 P.2d 1179, 1182 (App.1991)). Under Arizona law, in order to

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determine “whether a lis pendens was wrongfully recorded, the court is limited to

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considering whether the action is one affecting title to real property.” Santa Fe Ridge

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Homeowners’ Ass’n v. Bartschi, 219 Ariz. 391, 395, 199 P.3d 646, 650 (App. 2008) (internal

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citations and quotations omitted). “A lis pendens is groundless or has no basis only when

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the claim that the action affects title to real property has no arguable basis or is not supported

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by any credible evidence.” Id. (internal quotations omitted).

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Because their complaint was dismissed, Plaintiffs are not engaged in any pending

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action against Defendants. Therefore, Plaintiffs have no statutory basis on which to premise

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a lis pendens. See A.R.S. § 12-1191(B). Accordingly, Wells Fargo’s motion to quash the

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lis pendens will be granted. See Bartschi, 219 Ariz. at 395, 199 P.3d at 650, see also Coit

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v. Sutton Funding LLC, 2010 WL 2105116 (D. Ariz. May 24, 2010) (granting motion to
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quash lis pendens where underlying complaint was dismissed).

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Wells Fargo further asserts that pursuant to A.R.S. § 33-420, it is entitled to “statutory

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damages in the amount of $1,000 ” and “attorneys’ fees in connection incurred in obtaining

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its statutory relief.” (Doc. 62 at 3). A.R.S. § 33-420 states that a person named in a

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wrongfully filed lis pendens shall be,

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liable to the owner or title holder for the sum of not less than
one thousand dollars, or for treble actual damages, whichever is
greater, and reasonable attorney fees and costs as provided in
this section, if he wilfully refuses to release or correct such
document of record within twenty days from the date of a
written request from the owner or beneficial title holder of the
real property.

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A.R.S. § 33-420(C).

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demonstrate that Plaintiffs willfully refused to take appropriate measures to have the lis

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pendens removed. Wells Fargo asserts that its February 10, 2011 letter evinced Plaintiffs’

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willful refusal. (Doc. 62 at 1). Although Wells Fargo has provided a copy of the letter,

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(Doc. 62, Exh. A), it has not provided any evidence that there was an actual or attempted

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delivery of said letter. Therefore, Wells Fargo has not provided sufficient evidence that

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Plaintiffs willfully refused to remove the lis pendens. Accordingly, the Court finds that

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granting Wells Fargo monetary relief under A.R.S. § 33-420 would be premature and denies

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that portion of the motion without prejudice.

Thus, to be entitled to statutory damages, Wells Fargo must

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Accordingly,

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IT IS ORDERED that Defendant Wells Fargo’s Motion to Quash Lis Pendens is

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granted in part and denied in part;

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IT IS FURTHER ORDERED that Wells Fargo’s motion as to quashing the lis
pendens is granted;

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IT IS FURTHER ORDERED that Wells Fargo’s motion as to statutory damages is

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denied without prejudice.

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IT IS FURTHER ORDERED directing the Clerk of the Court to reassign this case.

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DATED this 7th day of April, 2011.

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