Mejia v. GMAC Mortgage LLC et al

Filing 36

ORDER denying Defendants' 34 Motion to Strike; granting Defendants' 26 Motion for Summary Judgment; the Clerk shall enter judgment. Signed by Judge Frederick J Martone on 3/9/12.(REW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Plaintiff,
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vs.
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GMAC Mortgage LLC; Executive Trustee)
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Services LLC,
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Defendants.
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CV 11-01140-PHX-FJM

Monica Mejia,

ORDER

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The court has before it defendants’ motion for summary judgment (doc. 26) and

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separate statement of facts (“DSOF”) (doc. 27), plaintiff’s response (doc. 32), and

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defendants’ reply (doc. 35). We also have defendants’ motion to strike plaintiff’s response

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to the motion (doc. 34). Plaintiff did not respond to the motion to strike and the time for

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responding has expired.

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When considering a motion for summary judgment we accept undisputed facts as true

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and review disputed facts in the light most favorable to the non-moving party. Anthoine v.

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N. Cent. Cntys. Consortium, 605 F.3d 740, 745 (9th Cir. 2010).

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On May 21, 2008, plaintiff received a loan of $172,296 to purchase a home in

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Avondale, Arizona. Plaintiff signed a Note, promising to repay the money. The loan was

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secured by a Deed of Trust, which was executed by plaintiff and recorded with the Maricopa

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County Recorder’s Office. Pursuant to the loan and Note, plaintiff was required to make

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monthly payments to the loan servicer. GMAC became the holder of plaintiff’s Note and

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servicer of her loan prior to March 2009. Plaintiff did not make her monthly payments

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between March 2009 and November 2009. She was advised of these breaches in writing.

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A Notice of Trustee Sale was recorded and the sale was scheduled for November 5, 2009.

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Plaintiff received a notice in July 2009 that her home would be foreclosed on pursuant to the

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Deed of Trust.

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Upon plaintiff’s request, the Department of Housing and Urban Development

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(“HUD”) agreed to pay plaintiff’s past due arrears and cure her default in exchange for a

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fully executed subordinate mortgage on the home. HUD executed the subordinate mortgage

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on November 2, 2009 and notified plaintiff that this was complete. Plaintiff did not execute

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the subordinate mortgage until November 11, 2009. In the meantime, plaintiff’s home was

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sold on November 5, 2009 at the trustee sale as planned. On the date of sale, plaintiff owed

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over $14,000 in arrears. When GMAC received notice that plaintiff had executed the

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subordinate mortgage, it submitted a claim with HUD for payment of the arrears. Once

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GMAC received notice that the arrears had been paid, GMAC rescinded the foreclosure and

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reinstated plaintiff’s Deed of Trust.

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Plaintiff did not make her December 1, 2009 loan payment. Beginning on this date,

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plaintiff’s loan was once again in default. A Notice of Trustee’s Sale was recorded on April

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14, 2010, scheduling the sale for July 16, 2010. Plaintiff received notice of her default and

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the sale. This sale was reset to March 2011 due to plaintiff’s bankruptcy proceedings. In

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March 2011 plaintiff had not made loan payments for over a year, and her home was sold at

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the trustee’s sale as scheduled.

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Plaintiff filed this action in May 2011 and amended her complaint in July 2011 (doc.

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13). The amended complaint asserts four claims for relief: (1) wrongful foreclosure; (2) bad

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faith business practice; (3) negligence; and (4) quiet title. Defendants move for summary

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judgment on all claims.

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II
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Although plaintiff lists nine numbered facts in the body of her response to the motion,

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she did not include a separate controverting statement of facts or citations to those facts as

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required by LRCiv 56.1(b) and LRCiv 56.1(e). Defendants move to strike plaintiff's

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response in its entirety on this basis, but LRCiv 7.2(m) prohibits a motion to strike under

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these circumstances. Instead, we may simply consider any fact asserted by defendants that

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is not addressed by plaintiff as undisputed for the purposes of this motion. Fed. R. Civ. P.

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56(e)(2). Similarly, any disputed fact that plaintiff does not support with admissible evidence

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is insufficient to defeat summary judgment. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir.

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1989) (“A summary judgment motion cannot be defeated by relying solely on conclusory

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allegations unsupported by factual data.”). Defendants' motion to strike is denied.
III

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Defendants first argue that plaintiff's wrongful foreclosure claim fails as a matter of

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law because it is not a recognized cause of action in Arizona. Defendants are correct.

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Arizona has not recognized wrongful foreclosure as a cause of action, and it is not the federal

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courts’ place to implement a “trailblazing initiative[]” under state law. Cervantes v.

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Countrywide Home Loans, Inc., 656 F.3d 1034, 1043 (9th Cir. 2011) (citation omitted).

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Even if Arizona recognized this cause of action, the undisputed facts show that plaintiff

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cannot prevail on her wrongful foreclosure claim. The states that recognize the tort of

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wrongful foreclosure do so based on claims that a lender foreclosed when there was no

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default or procedural discrepancies that caused the borrower to incur damages. Id. at 1043-

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44. Plaintiff argues that defendants are liable for wrongful foreclosure because they refused

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to accept her December 2009 payment, and thus plaintiff was not in breach or default of her

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mortgage. Defendants presented evidence that plaintiff’s loan was in default beginning

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December 1, 2009, and that plaintiff’s home was sold because of this default. Plaintiff,

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however, does not provide any evidence that she attempted to pay her mortgage in December

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2009 or that her payment was rejected by defendants. Her allegation that she was not in

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default, unsupported by any evidence, does not raise a genuine issue of material fact. Taylor,

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880 F.2d at 1045. Thus, even if Arizona recognized wrongful foreclosure as a valid claim,
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which it does not, plaintiff has not shown that she was either current on her loan payments

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or that she suffered any damages. See Cervantes, 656 F.3d at 1043-44 (amending complaint

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to state a claim for wrongful foreclosure would be futile, for even if Arizona recognized this

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cause of action, plaintiff homeowners were in default and did not allege damages). Summary

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judgment is granted to defendants on the wrongful foreclosure claim.

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Next, defendants argue that plaintiff’s claim for “bad faith business practice” fails

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because it is not a recognized tort in Arizona. We agree, and plaintiff does not respond to

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this argument. Summary judgment is granted to defendants on the bad faith business practice

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claim.

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According to defendants, they are entitled to judgment as a matter of law on the

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negligence claim because it is barred by the economic loss doctrine. In most instances, the

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doctrine precludes a tort action for economic loss that does not involve physical injury to

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people or property. Flagstaff Affordable Hous. Ltd. P'ship v. Design Alliance, Inc., 223 Ariz.

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320, 323, 223 P.3d 664, 667 (2010). Plaintiff argues that GMAC, as a contractual party to

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the Note, owed her a duty, which it breached by failing to accept her December 2009

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payment. Plaintiff has not presented any evidence that she suffered physical injury as the

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result of the alleged breach of duty. Thus, her negligence claim against GMAC is barred by

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the economic loss doctrine. See id. Moreover, plaintiff has presented no evidence to

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corroborate her contention that she tended payment in December 2009. Thus, even if the

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economic loss doctrine did not operate to bar plaintiff's negligence claim, GMAC would still

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be entitled to summary judgment. And plaintiff has not argued that defendant Executive

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Trustee Services owed her any duty. Summary judgment is granted to both defendants on

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the negligence claim.

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Finally, defendants argue that plaintiff’s quiet title claim fails because she has not

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offered to pay the balance of her loan. In Arizona, quiet title is not available to a homeowner

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until the loan debt is paid or offered to be paid. Farrell v. West, 57 Ariz. 490, 491, 114 P.2d

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910, 911 (1941); see also McIntosh v. IndyMac Bank, FSB, CV-11-1805-PHX-GMS, 2012

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WL 176316, at *4 (D. Ariz. Jan. 23, 2012) (quiet title remedy unavailable unless a
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homeowner plaintiff has paid off or is willing and able to pay the full amount of the

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mortgage). Plaintiff does not dispute defendants’ argument, and there is no evidence that

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plaintiff paid off or is able to pay off her loan. We grant summary judgment to defendants

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on the quiet title claim.

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IV

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Plaintiff asks to amend her complaint if we grant defendants' motion. Our Rule 16

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scheduling order set a deadline of September 16, 2011 for motions to amend the complaint

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(doc. 18). Five months have passed since that deadline, the dispositive motion deadline has

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passed, and a firm trial date is set for June 19, 2012. Amending the complaint at this late

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juncture would require a modification of the scheduling order. Scheduling orders "may be

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modified only for good cause." Fed. R. Civ. P. 16(b)(4). Plaintiff has not shown any cause,

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let alone good cause, to modify the scheduling order. Plaintiff's request to amend her

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complaint is denied.

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IT IS ORDERED DENYING defendants' motion to strike (doc. 34).

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IT IS ORDERED GRANTING defendants' motion for summary judgment (doc. 26).

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The Clerk shall enter judgment.
DATED this 9th day of March, 2012.

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