Lowry et al v. JPMorgan Bank and Trust Company NA et al
Filing
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ORDER granting 14 Motion to Dismiss. The Clerk is directed to terminate this action and enter judgment accordingly. Signed by Judge G Murray Snow on 4/9/18. (DXD)
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WO
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Gary F. Lowry, et al.,
No. CV-17-08175-PCT-GMS
Plaintiffs,
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ORDER
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v.
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JPMorgan Bank and Trust Company NA, et
al.,
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Defendants.
Pending before the Court is Defendants’ Motion to Dismiss. (Doc. 14). The
Court grants the motion.
BACKGROUND
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Defendants JPMorgan Chase, U.S. Bank, and Quality Loan Service Corporation
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recorded a notice of trustee’s sale of Plaintiffs Gary Lowry’s and Marian Carol’s property
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in Cottonwood, Arizona on September 9, 2016. (Doc. 1 at 4, ¶ 3). Mr. Lowry requested
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temporary injunctive relief from the sale on November 14, 2016, which was denied on
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December 12, 2016. Lowry v. EMC Mortgage Corp, et al., No. CV-11-8177-PCT-JAT,
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Docs. 78, 84.
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December 9, 2016, which was denied on December 15, 2016. Lowry v. Chase, No. CV-
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16-8279-PCT-GMS, Doc. 16. Defendants foreclosed on the property on February 27,
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2017. (Doc. 1 at 4, ¶ 3).
Mr. Lowry requested an emergency temporary restraining order on
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Plaintiffs filed the present lawsuit on September 1, 2017. (Doc. 1). It alleges five
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causes of action: (1) wrongful foreclosure, (2) breach of contract and breach of duty of
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good faith and fair dealing, (3) violation of consumer protection act, (4) promissory
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estoppel, and (5) infliction of emotional distress. (Doc. 1).
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The parties do not contest that A.R.S. § 33-811 (C) states that “[t]he trustor . . .
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and all persons to whom the trustee mails a notice of a sale under a trust deed pursuant to
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§ 33-809 shall waive all defenses and objections to the sale not raised in an action that
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results in the issuance of a court order granting [a preliminary injunction or temporary
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restraining order] . . . .” The complaint alleges that the Plaintiffs changed addresses and
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the Defendants did not strictly comply with A.R.S. § 33-809 by properly notifying the
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foreclosure to the updated address. (Doc. 1 at 5, ¶ 7). However, as evidenced in their
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requests for injunctive relief and a temporary restraining order, plaintiffs had actual
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notice and presented defenses and objections to the sale. Therefore, the legal question
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before the Court is whether actual notice of a foreclosure sale is sufficient for a trustor to
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waive any defenses and objections after the conclusion of the foreclosure pursuant to
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A.R.S. § 33-811.
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DISCUSSION
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Legal Standard
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To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a
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complaint must contain more than “labels and conclusions” or a “formulaic recitation of
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the elements of a cause of action[;]” it must contain factual allegations sufficient to “raise
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a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
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555 (2007). While “a complaint need not contain detailed factual allegations . . . it must
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plead ‘enough facts to state a claim to relief that is plausible on its face.’” Clemens v.
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DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) (quoting Twombly, 550
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U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content
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that allows the court to draw the reasonable inference that the defendant is liable for the
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misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550
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U.S. at 556). Plausibility requires “more than a sheer possibility that a defendant has
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acted unlawfully.” Twombly, 550 U.S. at 555. When analyzing a complaint for failure to
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state a claim under Rule 12(b)(6), “[a]ll allegations of material fact are taken as true and
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construed in the light most favorable to the nonmoving party.” Smith v. Jackson, 84 F.3d
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1213, 1217 (9th Cir. 1996). However, legal conclusions couched as factual allegations
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are not given a presumption of truthfulness, and “conclusory allegations of law and
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unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto v. FDIC,
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139 F.3d 696, 699 (9th Cir. 1998).
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II.
Analysis
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As noted, “the trustor, its successors, and all persons to whom the trustee mails a
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notice of a sale . . . pursuant to § 33-809” waives all defenses and objections to the sale
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not raised in a motion for injunctive relief. A.R.S. § 33-811(C). The Arizona Supreme
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Court has held that this statute clarifies that “a person who has defenses or objections to a
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properly noticed trustee’s sale has one avenue for challenging the sale: filing for
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injunctive relief.” BT Capital, LLC v. TD Serv. Co. of Arizona, 229 Ariz. 299, 301 (2012)
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(en banc).
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An Arizona court explained that “[c]ompliance with § 33-809 is only required to
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apply the waiver provision to other persons who must be given notice” and “[t]he plain
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language of § 33-811(C) does not require the trustee to comply with the mailing
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requirements of § 33-809 for the waiver provision to apply later to the trustor.” Madison
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v. Groeth, 230 Ariz. 8, 12 (App. 2012). The Arizona appellate court recognized that
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under some circumstances, Ҥ 33-811(C) may apply to deprive a trustor of due process if
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that trustor is not given sufficient notice of the trustuee’s sale to obtain an injunction of
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the sale,” but when the trustor had “received notice sufficient to obtain a preliminary
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injunction,” the trustor waives any defenses and objections not raised in a motion for
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injunctive relief. Id. Notwithstanding the trustor’s claim that the trustee did not properly
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notice the foreclosure, using this rule, the appellate court upheld the dismissal of tort
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claims because the trustor had received adequate notice to request a preliminary
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injunction, filed a lawsuit approximately one month prior to the sale, and attended the
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foreclosure sale. Id. at 12–13.
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Mr. Lowry and Ms. Carol had sufficient notice to present defenses and objections
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and obtain injunctive relief against the foreclosure. Mr. Lowry and Ms. Carol filed
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multiple requests for injunctive relief, and they noted in one of those motions that they
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had notice of the foreclosure as early as February 18, 2015. Lowry v. EMC Mortgage
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Corp, et al., No. CV-11-8177-PCT-JAT, Doc. 51 at 2; Lowry v. Chase, No. CV-16-8279-
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PCT-GMS. In review of those decisions, neither the Plaintiffs nor the Court suggested
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that Mr. Lowry and Ms. Carol had not received proper notice and were consequently
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inhibited from presenting potential defenses and objections in their requests for injunctive
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relief. Mr. Lowry and Ms. Carol admitted in their Response that they knew about the
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pending foreclosure. (Doc. 26 at 5).
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Each of Plaintiffs’ claims arises from the foreclosure. (Doc. 1). Because Arizona
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requires litigants to present defenses and objections to a trustee sale in a motion for
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injunctive relief, and because Mr. Lowry and Ms. Carol had sufficient notice of the
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trustee sale to obtain injunctive relief, the Court grants Defendants’ Motion to Dismiss.
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CONCLUSION
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IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss, (Doc. 14), is
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GRANTED. The Clerk of Court is directed to terminate this action and enter judgment
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accordingly.
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Dated this 9th day of April, 2018.
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Honorable G. Murray Snow
United States District Judge
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