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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
v.
AFFIRMED
COUNSEL
MEMORANDUM DECISION
J O N E S, Judge:
1 We view the facts in the light most favorable to upholding the trial
courts judgment. Beck v. Hy-Tech Performance, Inc., 236 Ariz. 354, 356 n.2,
1 (App. 2015) (quoting Harris v. City of Bisbee, 219 Ariz. 36, 37, 3 (App.
2008)).
2
MOTTA v. FLAGSTAR BANK
Decision of the Court
cancelling this Security Instrument. Under the terms of the Deed of Trust,
Motta consented to a non-judicial foreclosure in the event of his default on
the Note. Motta also agreed the Note could be sold one or more times
without prior notice to him. In August 2008, the Lenders interest in the
Note and Deed of Trust was transferred to the Bank.
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MOTTA v. FLAGSTAR BANK
Decision of the Court
DISCUSSION
I. The Evidence Supports the Trial Courts Finding That Motta Did
Not Rely upon the Banks Representations.
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MOTTA v. FLAGSTAR BANK
Decision of the Court
5
MOTTA v. FLAGSTAR BANK
Decision of the Court
6
MOTTA v. FLAGSTAR BANK
Decision of the Court
II. The Evidence Supports the Trial Courts Finding That the Banks
Conduct Was Not the Proximate Cause of Mottas Damages.
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MOTTA v. FLAGSTAR BANK
Decision of the Court
power of sale and citing cases from California, Missouri, and Texas);
Heritage Creek, 601 S.E.2d at 845 (affirming summary judgment in favor of
the lender where the undisputed evidence show[ed] that [the borrower]s
alleged injury was solely attributable to its own acts and omissions both
before and after the foreclosure including its default on the loan payment,
failure to cure, failure to bid on the property, and failure to take advantage
of the opportunity to repurchase the property pursuant to a separate
agreement).6
19 In its order, the trial court found that [i]n deciding not to pay
on the loan, Mr. Motta was not relying on any promises made by Flagstar.
Thus, Mottas default was of his own volition and not at the direction of
Flagstar. Therefore, the court concluded, the Bank was not responsible for
the natural consequences flowing from the default, including the trustees
sale. Contrary to Mottas assertions otherwise, this finding is supported by
the record. Although Motta testified he only stopped making payments in
2010 after the Bank advised it could not discuss modification if he was
current on the Note, the documentary evidence indicates Motta had no
contact with the Bank prior to discontinuing all payments in May 2010.
6 Motta defines the tort more generally as occurring where there has
been an illegal, fraudulent, or willfully oppressive sale of property under a
power of sale contained in a mortgage or deed of trust. See Miles v.
Deutsche Bank Natl Tr. Co., 186 Cal. Rptr. 3d 625, 635 (Ct. App. 2015)
(quoting Munger v. Moore, 89 Cal. Rptr. 323, 326 (Ct. App. 1970)). A
thorough reading of Miles, however, reveals that this quoted language is
but a summary of the theory behind a wrongful foreclosure action. Indeed,
the Miles court went on to list specific elements of a wrongful foreclosure
claim, which included proof that, in cases where the trustor or mortgagor
challenges the sale, the trustor or mortgagor tendered the amount of the
secured indebtedness or was excused from tendering. Id. at 636 (quoting
Lona, 134 Cal. Rptr. 3d at 633). The California Court of Appeal then adopted
the wrongful foreclosure standard enunciated in Collins, requiring the
foreclosure occur when the mortgagor is not in default, as a sound
addition to its explanation. Id. (quoting Collins, 662 P.2d at 623).
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MOTTA v. FLAGSTAR BANK
Decision of the Court
III. The Evidence Supports the Trial Courts Finding That the Bank
Did Not Know or Have Reason to Know the Recorded Documents
Were Forged, Groundless, Contained a Material Misstatement or
False Claim, or were Otherwise Invalid.
(Emphasis added). Motta argues the trial court erred in finding the Bank
did not know or have reason to know of any defects contained within its
recorded documents. The existence and extent of a partys knowledge
presents a question of fact, see, e.g., Cheek v. United States, 498 U.S. 192, 203
(1991) (Knowledge and belief are characteristically questions for the
factfinder.), and we will uphold the trial courts resolution of that factual
issue absent clear error, see supra 11.
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MOTTA v. FLAGSTAR BANK
Decision of the Court
Therefore, they are not probative of the Banks knowledge at the time of the
earlier recording. The cases cited in Mottas opening brief suffer from the
same chronological error. See, e.g., In re MERS, 754 F.3d 772; Cervantes v.
Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir. 2011). Moreover, the
existence of these internal business guidelines suggests the standard
practice prior to their issuance was consistent with the practice followed by
the Bank here, whereby MERS acted as the nominee of the lender and
beneficiary of the deed of trust. Finally, the consent order primarily
addresses the Banks delay and misconduct in relaying information to
consumers regarding loan modifications. But Motta does not complain of
delay or misconduct regarding the loan modification, and, regardless, the
trial court already found Motta was disinterested in the proposed
modification. See supra Part I.
CONCLUSION
8 Because the Bank cannot be liable under A.R.S. 33-420 where it did
not know or have reason to know of defects within the recorded documents,
we need not and do not address Mottas arguments challenging the trial
courts findings regarding the nature of the representations contained
therein or that statutory damages were appropriate.
10