Wilkinson et al v. Wells Fargo Bank NA et al
Filing
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ORDER granting Defendants' TruCap Grantor Trust 2010-2 and Marix Servicing LLC's 38 Motion for Judgment on the Pleadings. Defendants' 42 Motion for Ruling is deemed to be moot. Plaintiffs' 1 Complaint is dismissed. The Clerk is directed to terminate this action. Signed by Judge David G Campbell on 5/22/12. (LFIG)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Christopher C. and Laura L. Wilkinson,
Plaintiffs,
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ORDER
v.
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No. CV11-02467-PHX-DGC
Wells Fargo Bank, N.A., et al.,
Defendants.
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On March 9, 2012, Defendants TruCap Grantor Trust 2010-2 (“TruCap”) and
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Marix Servicing, LLC (“Marix”) filed a motion for judgment on the pleadings pursuant to
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Federal Rule of Civil Procedure 12(c). Doc. 38. Plaintiffs have not responded. TruCap
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and Marix have requested a ruling on their motion. Doc. 42; see LRCiv 7.2(i). For the
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reasons that follow, the Court will grant the motion.
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I.
Background.
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The following facts are taken from the complaint and will be assumed true for
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purposes of this motion. Plaintiffs refinanced their mortgage through a loan arrangement
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with Wells Fargo under a first and second mortgage, and pledged 6129 East Shangri La
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Road (the “Property”) as collateral for the deed of trust (“DOT”). Doc. 1-1 at 10. The
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first mortgage was dated May 8, 2007, and the second mortgaged was dated June 7, 2007.
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Id. Wells Fargo was the named beneficiary in both mortgages. Id. On or about April 2,
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2010, Plaintiffs contacted Wells Fargo to discuss options for refinancing or modifying the
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loan agreement. Id. Representatives of Wells Fargo told Plaintiffs that it was highly
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unlikely that any assistance was available and that Wells Fargo would not consider
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providing assistance until Plaintiffs were delinquent in their mortgage payments. Id.
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Plaintiffs continued making payments and submitted all requested information to be
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considered for a loan modification. Id. Between April 2 and June 29, 2010, Plaintiffs
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made multiple calls to Wells Fargo and were told that it was highly unlikely that they
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would be considered for any assistance unless the mortgage was delinquent. Id. During
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this time, Plaintiffs were told that their requests for modifications were in process.
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Doc. 1-1 at 11.
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On about June 29, 2010, Plaintiffs called Wells Fargo to follow up on the file and
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were told that it was in short sale status and a new file was required to be considered for
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loan modification. Id. Plaintiffs supplied additional documents on June 20 and August 3,
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2010. Id. On August 10, 2010, Wells Fargo asked Plaintiffs to provide additional
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documentation including medical records to justify a medical hardship. Id. Plaintiffs
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told Wells Fargo that the medical records may take up to 30 days. Id. On about
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August 24, 2010, Plaintiffs called Wells Fargo and were told that their file had been
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terminated for failure to provide documentation. Id. Plaintiffs told Wells Fargo that they
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had the required documentation and would fax it over. Id. Wells Fargo verified its
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receipt of the documentation and told Plaintiffs that the file would be changed to “in
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process.” Doc. 1-1 at 12.
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On about September 22, 2010, Plaintiffs were told that they needed to provide
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additional documentation. Id. On about September 28, 2010, Plaintiffs provided the
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additional requested documents. Id. On about October 5, 2010, Plaintiffs were told that
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more documentation was required and shortly thereafter provided it. Id. On about
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October 19, 2010, Plaintiffs were told that the file had been withdrawn due to missing
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documents. Id. Wells Fargo did not identify which documents were missing, but told
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Plaintiffs that they could resubmit a loan modification packet for consideration. Id. On
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about October 22, 2010, Plaintiffs resubmitted the entire packet, including the prior
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correspondence, and was told that file was again “in process.” Id.
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Between April and December 2010, Plaintiffs spoke to at least 15 different Wells
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Fargo representatives.
Id.
During the last few months of these communications,
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Plaintiffs missed payments because of financial hardship and because Wells Fargo
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indicated that it was unlikely to provide assistance if the loans were current. Id. On
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about November 18, 2010, Plaintiffs were informed that servicing on the first mortgage
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had been transferred to Marix, and that the loan modification requests would be handled
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by Marix. Doc. 1-1 at 13. On February 7, 2011, Wells Fargo recorded an assignment of
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the DOT to TruCap in Maricopa County, Arizona. Id. Plaintiffs believe that Wells Fargo
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assigned rights to the first and second mortgage prior to the assignment with TruCap. Id.
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Plaintiffs allege six counts in their complaint: (1) violations of the Arizona
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Consumer Fraud Act; (2) quiet title to the Property; (3) damages; (4) breach of contract;
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(5) fraud; and (6) demand for an accounting. Doc. 1-1, at 8-22.
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II.
Legal Standard.
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A motion for judgment on the pleadings under Rule 12(c) is assessed under the
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same standard as a Rule 12(b)(6) motion to dismiss for failure to state a claim. See
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Aldabe v. Aldabe, 616 F.2d 1089, 1093 (9th Cir. 1980). When analyzing a complaint for
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failure to state a claim under Rule 12(b)(6), the well-pled factual allegations are taken as
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true and construed in the light most favorable to the nonmoving party. Cousins v.
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Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual
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allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal, 129 S. Ct. 1937,
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1950 (2009), and therefore are insufficient to defeat a motion to dismiss for failure to
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state a claim, In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a
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Rule 12(b)(6) dismissal, the complaint must plead “enough facts to state a claim to relief
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that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This
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plausibility standard “is not akin to a ‘probability requirement,’ but it asks for more than
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a sheer possibility that a defendant has acted unlawfully.” Iqbal, 129 S. Ct. at 1949
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(quoting Twombly, 550 U.S. at 556). “[W]here the well-pleaded facts do not permit the
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court to infer more than the mere possibility of misconduct, the complaint has alleged –
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but it has not ‘show[n]’ – ‘that the pleader is entitled to relief.’” Id. at 1950 (quoting Fed.
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R. Civ. P. 8(a)(2)).
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III.
Discussion.
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A.
Claim One: Arizona Consumer Fraud Act.
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The elements of consumer fraud under A.R.S. § 44-1522 are “a false promise or
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misrepresentation made in connection with the sale or advertisement of merchandise and
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the hearer’s consequent and proximate injury.” Nahom v. Blue Cross & Shield, 885 P.2d
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1113, 1124 (Ariz. 1994) (quoting Parks v. Macro-Dynamics, Inc., 591 P.2d 1005, 1008
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(Ariz. 1979)). A claim for consumer fraud is subject to Rule 9(b). See, e.g., Grismore v.
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Capital One F.S.B., No. CV 05-2460-PHX-SMM, 2007 WL 841513, at *6 (D. Ariz.
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Mar. 16, 2007).
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plaintiff ‘must state the time, place, and specific content of the false representations as
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well as the identities of the parties to the misrepresentations.’” Stejic v. Aurora Loan
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Servs., LLC, No. 09-CV-819-PHX-GMS, 2009 WL 4730734, at *4 (D. Ariz. Dec. 1,
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2009) (quoting Schreiber Distrib. Co. v. ServWell Furniture Co., 806 F.2d 1393, 1401
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(9th Cir. 1986)). The plaintiff “‘must set forth what is false or misleading about the
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statement, and why it is false.’” Id. (quoting Vess v. Ciba-Geigy Corp. USA, 317 F.3d
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1097, 1106 (9th Cir. 2003)).
To satisfy Rule 9(b)’s heightened pleading standard for fraud, “a
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Plaintiffs allege that “Marix misled Plaintiff[s] regarding their alternatives to
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foreclosure, including loan modifications, forbearance of payments, etc., and expressly
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represented that Plaintiff had no alternatives but to deplete their life savings in order to
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keep their home.” Doc. 1-1, at 17, ¶ 47. Plaintiffs also allege that Marix told Plaintiffs
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“that they must be delinquent on their mortgage payments in order to be considered for a
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loan modification[.]” Id. at ¶ 48.
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These allegations do not satisfy Rule 9(b). With the exception of the statements
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regarding life savings and delinquency, Plaintiffs do not identify the specific
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misrepresentations at issue or the substance of those misrepresentations. Nor do they
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identify when the misrepresentations were made or by whom. For these reasons, the
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consumer fraud claim will be dismissed.
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B.
Claim Two: Quiet Title.
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An action for quiet title may be brought by anyone having or claiming interest in
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real property against any person adverse to the party, A.R.S. § 12-1101, but must “[s]tate
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that plaintiff is credibly informed and believes defendant makes some claim adverse to
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plaintiff,” A.R.S. § 12-1102(4). Plaintiffs cannot assert quiet title until they have paid off
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their loan or tendered the balance due. Eason v. IndyMac Bank, FSB, No. CV 09-1423-
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PHX-JAT, 2010 WL 4573270 at *3 (D. Ariz. Nov. 5, 2010); Farrell v. West, 114 P.2d
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910, 911 (Ariz. 1941). Plaintiffs do not allege that they have paid the loan amount, nor
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do they allege that they are ready, willing, and able to tender the full amount owed. Their
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quiet title claim will be dismissed.
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C.
Claim Three: Damages.
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Plaintiffs’ third claim alleges that “Defendants have recorded multiple documents
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against Plaintiff’s Property in an attempt by Defendants to improperly remove Plaintiff’s
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right to the Property and have refused to remove these [i]mproper and invalid
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recordations made with the Maricopa County Recorder’s office.” Doc. 1-1, at 19, ¶ 8.
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Plaintiffs seek damages for Defendants’ alleged violation of A.R.S. § 33-420(a). The
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documents referenced in the complaint are the DOT (Doc. 1-1, at 30-33), the assignment
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of DOT from Wells Fargo to TruCap (Doc. 1-1, at 35-36), the substitution of trustee
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naming Quality Loan Service Corporation (Doc. 1-1, at 38-39), and the notice of trustee’s
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sale (Doc. 1-1, at 41-46). Plaintiffs have not alleged how these documents are forged,
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groundless, contain material misstatements or false claims, or are otherwise invalid, as
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required by A.R.S. § 33-420(a).
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purporting to create an interest, lien, or encumbrance such as a lis pendens, mechanics
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lien, or the deed of trust itself, but it has not been applied to assignments of mortgages
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and notices of trustee’s sales. See Schayes v. Orion Fin. Grp., Inc., No. CV-10-02658-
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PHX-NVW, 2011 WL 3156303, at *6 (D. Ariz. July 27, 2011). Accordingly, Plaintiffs’
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claim for damages under § 33-420 will be dismissed.
Furthermore, this statute applies to documents
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D.
Claim Four: Breach of Contract.
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In an action for breach of contract, the plaintiff must show the existence of a
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contract, breach of the contract, and resulting damages. Chartone, Inc. v. Bernini, 83
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P.3d 1103, 1111 (Ariz. App. 2004). Plaintiffs’ fourth claim alleges that the substitution
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of trustee and the notice of trustee’s sale were defective. Doc. 1-1, at 20, ¶¶ 11-12.
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Plaintiffs, however, are not parties to those documents. See Doc. 1-1, at 38-39, 41-46.
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Plaintiffs have not identified a contract with Marix or TruCap, and have not shown how
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such a contract was breached.
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Plaintiffs also appear to allege that a recorded assignment is a prerequisite to a
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valid trustee’s sale under A.R.S. § 33-411. Doc. 1-1, at 20, ¶¶ 13-14. Courts in this
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District have recognized that “an assignment of the beneficial interest in a deed of trust
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[need not] be recorded to be valid.” Diamond v. One West Bank, No. CV-09-1593-PHX-
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JFM, 2010 WL 1742536, at *4 (D. Ariz. April 29, 2010). The Arizona Supreme Court
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has held that Arizona’s non-judicial foreclosure statutes do not impose a recording
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requirement before a trustee’s sale is noticed. In re Vasquez, 266 P.3d 1053, 1055-56
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(Ariz. 2011). Plaintiffs have therefore failed to state a claim for breach of contract.
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E.
Claim Five: Fraud.
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To prove fraud in Arizona, nine elements must be established: (1) a representation,
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(2) its falsity, (3) its materiality, (4) the speaker’s knowledge of its falsity or ignorance of
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its truth, (5) the speaker’s intent that the information should be acted upon by the hearer
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and in a manner reasonably contemplated, (6) the hearer’s ignorance of the information’s
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falsity, (7) the hearer’s reliance on its truth, (8) the hearer’s right to rely thereon, and
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(9) the hearer’s consequent and proximate injury. Taeger v. Catholic Family & Cmty.
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Serv., 995 P.2d 721, 730 (Ariz. App. 1999). “Mere conclusory allegations of fraud will
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not suffice; the complaint must contain statements of the time, place, and nature of the
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alleged fraudulent activities.” A.G. Edwards & Sons, Inc. v. Smith, 736 F. Supp. 1030,
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1033 (D. Ariz. 1989) (citing Bosse & Crowell Collier & MacMillan, 565 F.2d 602, 611
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(9th Cir. 1977)); see also Lancaster Cmty. Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d
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397, 405 (9th Cir. 1991) (“Federal Rule of Civil Procedure 9(b) requires a pleader of
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fraud to detail with particularity the time, place, and manner of each act of fraud, plus the
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role of each defendant in each scheme.”).
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Plaintiffs’ fifth claim alleges that Defendants committed residential mortgage
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fraud under A.R.S. § 13-2320 through deliberate misstatements, misrepresentations or
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material omissions, including causing an inaccurate substitution of trustee and notice of
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trustee sale to be recorded. Doc. 1-1 at 21. As discussed above with respect to Plaintiffs’
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consumer fraud claim, such general and conclusory allegations fail to meet the
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heightened pleading requirements of Rule 9(b).
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F.
Claim Six: Demand for Accounting.
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Plaintiffs request copies of the entire loan servicing file from Defendants and the
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true note holder. Doc. 1-1, at 21, ¶ 19. There is no such claim for accounting in Arizona.
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Kelly v. NationsBanc Mortg. Corp., 17 P.3d 790, 792-93 (Ariz. App. 2001) (concluding
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that there is no statutory authority to support a trustor’s request for a complete
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accounting). This claim therefore fails as a matter of law.
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IV.
Conclusion.
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Each of Plaintiffs’ claims must be dismissed for the reasons identified above. In
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addition, Plaintiffs’ complaint contains numerous allegations regarding federal loan
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modification programs. Borrowers cannot, however, enforce federal programs designed
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to encourage modifications. Robinson v. Wells Fargo Bank, N.A., No. CV 09-2066-
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PHX-JAT, 2010 WL 2534192, at *7-8 (D. Ariz. June 18, 2010) (holding that “TARP
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does not create, either explicitly or implicitly, a private right of action against TARP fund
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recipients”); Cettolin v. GMAC, No. CV 10-8036-PCT-JAT, 2010 WL 3834628, at *4
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(D. Ariz. September 24, 2010) (“[N]either TARP nor HAMP provides a private right of
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action against financial institutions for refusal to modify a loan.”).
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IT IS ORDERED:
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1.
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Defendants TruCap Grantor Trust 2010-2 and Marix Servicing, LLC’s
motion for judgment on the pleadings (Doc. 38) is granted.
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Plaintiffs’ complaint (Doc. 1-1) is dismissed.
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3.
Defendants’ motion for ruling (Doc. 42) is deemed to be moot.
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4.
The Clerk is directed to terminate this action.
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Dated this 22nd day of May, 2012.
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