Opinion
1 CA-CV 11-0535
06-05-2012
US BANK, National Association, as Trustee relating to CHEVY CHASE FUNDING, L.L.C., mortgage backed certificates series 2006-3, Plaintiffs/Appellees, v. FRANK BECK and KIMBERLY BECK, Defendants/Appellants.
Tiffany & Bosco, P.A., By Kevin P. Nelson Attorneys for Plaintiffs/Appellees Johnson, Findsen & Kinney, P.L.L.C. By Beth K. Findsen Attorneys for Defendants/Appellants
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz.R.Sup.Ct. 111(c); ARCAP 28(c); Ariz.R.Crim.P. 31.24
MEMORANDUM DECISION
(Not for Publication -Rule 28, Arizona Rules of Civil Appellate Procedure)
Appeal from the Superior Court in Maricopa County
Cause No. CV2011-001488
The Honorable Michael L. Barth, Commissioner
AFFIRMED
Tiffany & Bosco, P.A.,
By Kevin P. Nelson
Attorneys for Plaintiffs/Appellees
Phoenix
Johnson, Findsen & Kinney, P.L.L.C.
By Beth K. Findsen
Attorneys for Defendants/Appellants
Scottsdale PORTLEY, Judge
¶1 Frank and Kimberly Beck (collectively, the "Becks") appeal the forcible entry and detainer ("FED") judgment in favor of U.S. Bank, N.A. ("US Bank"). For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 The Becks refinanced their home, which was secured by a promissory note and Deed of Trust in favor of Valley Mortgage & Investment, Inc., in 2006. The recorded trust deed identified Mortgage Electronic Registrations Systems ("MERS") as the beneficiary. After the Becks defaulted on the note, the Deed of Trust was assigned to US Bank, and it directed the substituted trustee to initiate foreclosure proceedings.
¶3 The Becks filed a quiet title action against US Bank, the trustee, and MERS challenging the chain of title, the authority to assign the note and substitute the trustee, and related matters. They obtained a temporary restraining order ("TRO") to prevent the trustee from conducting the sale on the set sale date. The TRO, however, automatically dissolved when the Becks failed to post a $40,000 bond by January 31, 2011. US Bank purchased the property at the rescheduled trustee's sale, and the Becks unsuccessfully asked the court to sanction the trustee for conducting the sale.
Maricopa County Cause No. CV 2010-004881. We take judicial notice of the record in the related cases. See In re Sabino R., 198 Ariz. 424, 425, ¶ 4, 10 P.3d 1211, 1212 (App. 2000) (citations omitted) ("It is proper for a court to take judicial notice of its own records or those of another action tried in the same court," and an appellate court may "take judicial notice of anything of which the trial court could take notice, even if the trial court was never asked to take notice.").
¶4 US Bank then filed an FED action, but the court dismissed it without prejudice because of a defect in the notice of demand for possession. After the defect was corrected and notice was properly served, US Bank filed this FED action. In addition to filing an answer, the Becks moved to dismiss the complaint for lack of jurisdiction and to preclude evidence of US Bank's Trustee's Deed.
A copy of both the trustee's deed and the notice of demand for possession were attached to the FED complaint.
¶5 US Bank filed a motion for judgment on the pleadings. After considering arguments at the subsequent hearing, the court granted judgment in favor of US Bank.
DISCUSSION
¶6 The Becks argue that the trial court erred by granting judgment on the pleadings because the factual dispute over title precluded judgment.
¶7 A plaintiff in a FED action is entitled to judgment on the pleadings if the complaint states a claim for relief, and the answer does not raise a legally cognizable defense or does not effectively deny material allegations. Pac. Fire Rating Bureau v. Ins. Co. of N. Am., 83 Ariz. 369, 376, 321 P.2d 1030, 1035 (1958) (citation omitted). The purpose of a FED action is to provide rightful owners a summary, speedy, and adequate means by which to obtain possession. Andreola v. Ariz. Bank, 26 Ariz. App. 556, 557, 550 P.2d 110, 111 (1976) (citations omitted). Because the only issue to be determined is the right of possession, the court cannot inquire into the merits of title. Ariz. Rev. Stat. ("A.R.S.") § 12-1177(A) (West 2012). Thus, disputes over title must be determined in a separate civil action. Mason v. Cansino, 195 Ariz. 465, 468, ¶ 8, 990 P.2d 666, 669 (App. 1999) (citations omitted).
Absent revisions material to this decision, we cite to the current version of any applicable statute.
¶8 Because it appears that the trial court may have considered matters beyond the pleadings, we treat the motion as one for summary judgment. Ariz. R. Civ. P. 12(c) (quoted in Am. Fed'n of State, Cnty. & Mun. Emps. v. Lewis, 165 Ariz. 149, 151, 797 P.2d 6, 8 (App. 1990)). We review a motion for summary judgment de novo and view all facts in favor of the opposing party. Mousa v. Saba, 222 Ariz. 581, 585, ¶ 15, 218 P.3d 1038, 1042 (App. 2009) (citations omitted). "[W]e . . . will affirm only if there is no genuine [dispute] of material fact . . . ." Yollin v. City of Glendale, 219 Ariz. 24, 27, ¶ 6, 191 P.3d 1040, 1043 (App. 2008) (citation omitted).
¶9 After a person or entity acquires title to real property by trustee's deed, the new owner can remove any other person who wants to stay in possession of that property. The new owner, however, first needs to give written demand of possession, and if the person does not voluntarily relinquish possession, the owner can secure possession by a FED action. A.R.S. § 12-1173.01(A)(2) (West 2012). Here, US Bank acquired title by trustee's sale, provided written demand of possession to the Becks, and then filed suit to recover possession. US Bank, as the owner of the property, was entitled to possession and judgment on its claim. See, e.g. , Andreola, 26 Ariz. App. at 558-59, 550 P.2d at 112-13 (affirming grant of summary judgment to bank that acquired ownership by trust deed and permitting use of FED "summary remedy against persons who occupy the premises solely at the will or sufferance of the owner").
A trustee's deed is conclusive evidence that a trustee's sale met all of the statutory requirements. A.R.S. § 33-811(B) (West 2012).
¶10 The Becks dispute the validity of the bank's title. They, however, failed to properly challenge the trustee's sale in a separate action. Although they acquired a TRO in a separate action, it lapsed when they failed to post their bond and, as a result, they did not obtain a preliminary injunction preventing the sale. They therefore waived any objections and defenses they could have asserted against the title that US Bank acquired by trustee's deed. See A.R.S. § 33-811(C); BT Capital, LLC v. TD Serv. Co. of Ariz., ___ Ariz. ___, ___, 1 12, 275 P.3d 598, ___ (2012) (defenses and objections to a trustee's sale that are not timely raised in an action that results in the issuance of a court order granting a preliminary injunction are waived).
¶11 Although the Becks contend that they did not waive any objections to the bank's title because a TRO was granted before the sale, they omit that the TRO was dissolved before the trustee's sale. Consequently, their failure to secure a preliminary injunction resulted in a waiver of their objections to the sale and the title transfer to US Bank.
¶12 Despite the waiver, the Becks argue that their lis pendens and quiet title action put US Bank on notice that there were defects in the title. The merits of title, however, cannot be challenged in a FED action. A.R.S. § 12-1177(A) (West 2012) (In a FED action, "the only issue shall be the right of actual possession and the merits of title shall not be inquired into."); Andreola, 26 Ariz. App. at 557, 550 P.2d at 111 (citations omitted).
¶13 Additionally, the contention that a lis pendens establishes a defect in title is not supported by statute or case law. A lis pendens provides constructive notice that a pending lawsuit may affect title to the property, but it is not evidence of any such defect. See BT Capital, ___ Ariz. at ___, ¶ 14, 275 P.3d at ___ (citation omitted) ("Although filing the lis pendens provided constructive notice of the lawsuit, it did not establish the validity of [plaintiff]'s claim or give it priority over the pre-existing deed of trust . . . ."); Kelly v. Perry, 111 Ariz. 382, 385, 531 P.2d 139, 142 (1975) (because it provides only "notice of a legal proceeding [that] affects the title to realty," a lis pendens is "fundamentally procedural" and confers no substantive right).
¶14 Despite the fact that a trustee's deed is conclusive evidence that a trustee's sale met all statutory requirements, A.R.S. § 33-811(B), the Becks argue that the deed should have been presumed "groundless and invalid" pursuant to A.R.S. § 33-420(D) (West 2012) because their verified quiet title complaint was evidence that the deed contained misinformation. Again, they ignore the fact that the trustee's deed creates a conclusive presumption regarding the regularity of the process under A.R.S. § 33-811(B). Consequently, the trial court did not err by rejecting their groundless argument.
¶15 The Becks also argue that the deed was inadmissible hearsay. We disagree. The deed was a recorded document affecting an interest in real property. See Ariz. R. Evid. 803(14). As a result, it was admissible to demonstrate that US Bank had the right to possess the house that it purchased at the trustee's sale. See Curtis v. Morris, 186 Ariz. 534, 535, 925 P.2d 259, 260 (1996) (citation and internal quotation marks omitted) ("[W]hile the merits of title may not be litigated in a forcible detainer action, the fact of title may be proved as a matter incidental to showing right of possession by an owner.").
¶16 Finally, the Becks argue that it was inequitable and a due process violation for the trial court to reject their evidence relating to title. We find no error because the court faithfully followed the FED statutes and case law.
¶17 US Bank requests attorneys' fees and costs on appeal pursuant to Arizona Rule of Civil Appellate Procedure 21(c) and A.R.S. §§ 12-341, -341.01, -1178(A) and -1182(B) (West 2012). Although the Becks object, § 12-1178(A) provides that the prevailing party in a FED action is entitled to an award of attorneys' fees and costs. As a result, we grant the request for reasonable fees and costs on appeal upon US Bank's compliance with Arizona Rule of Civil Appellate Procedure 21. And, because the Becks did not prevail, they are not entitled to their attorneys' fees or costs on appeal.
CONCLUSION
¶18 For the foregoing reasons, we affirm the FED judgment.
Because we affirm the judgment, we need not address the Becks' jury trial request. See K.B. v. State Farm Fire & Cas. Co., 189 Ariz. 263, 268, 941 P.2d 1288, 1293 (App. 1997) (citation omitted) ("[T]he Arizona Rules of Civil Procedure do not require a jury trial where there are no genuine fact disputes on relevant issues."). Similarly, we need not address the argument that the trial court erroneously failed to address their request for an accounting and judgment for anything in excess of the trustee's sale price because it is beyond the scope of the FED action.
_________________
MAURICE PORTLEY, Judge
CONCURRING:
_________________
MICHAEL J. BROWN, Presiding Judge
_________________
MARGARET H. DOWNIE, Judge