Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-00702/USCOURTS-azd-2_13-cv-00702-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Azadeh Famili, 

Plaintiff, 

v. 

Wells Fargo Bank NA, et al., 

Defendants. 

No. CV-13-00702-PHX-DGC

ORDER 

 Defendants U.S. Bank National Association and BSI Financial Services, Inc. have 

filed a motion for summary judgment and a statement of facts in support of that motion. 

Docs. 24, 25. Plaintiff Famili, who is represented by counsel, has responded to the 

motion (Doc. 30) but has not filed a controverting statement of facts as required by Local 

Rule 56.1(b). Defendants have filed a reply. Doc. 31. Neither party has requested oral 

argument. For the reasons stated below, the Court will grant Defendants’ motion. 

Plaintiff’s requests for leave to file an Amended Complaint will be denied. 

I. Background. 

 On April 27, 2007, Plaintiff signed a Deed of Trust securing a Promissory Note in 

the amount of $412,000. The Deed was recorded on May 4, 2007 on property owned by 

Plaintiff at 409 E. Braeburn Drive in Phoenix, Arizona. Docs. 24 at 3, 30 at 2. In 

February 2012, Quality Loan Service Corporation (“Quality”) was substituted as the 

successor trustee of the Deed pursuant to a Substitution of Trustee, and that substitution 

was recorded. Id. Quality recorded a Notice of Trustee’s Sale on March 1, 2012 (Doc. 

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24 at 3), and mailed a Statement of Breach of Non-Performance and the Notice of 

Trustee’s Sale to Plaintiff’s mailing address at 254 Oakland Road, Glendora, California, 

91741, on March 16, 2012 (id. at 4, Doc. 30 at 3).1

 

 On March 27, 2013, Plaintiff filed her complaint in Maricopa County Superior 

Court, alleging eight counts against Defendants. Doc. 1-1. Count one alleged that 

neither the Mortgage Electronic Registration Systems (“MERS”) nor US Bank had 

standing or authority to non-judicially foreclose on the property, to enforce the note, or to 

appoint a successor. Id. at 11. Count two alleged breach of contract against US Bank for 

failure to provide a “Lost Note Affidavit.” Id. at 14. Count three alleged breach of 

contract/lack of authority of MERS to assign the Deed of Trust to US Bank. Id. at 15. 

Count four alleged that neither Wells Fargo nor MERS lawfully transferred interest in the 

Note or Deed of Trust and therefore had no power to foreclose on the property. Id. at 17. 

Count five alleged breach of contract against US Bank for not having the authority to 

appoint Quality as the successor trustee. Id. at 21. Count six alleged that US Bank must 

be the true successor lender/beneficiary in order to foreclose on the property. Id. at 23. 

Count seven alleged that MERS was not a beneficiary and lacked authority to take any 

action on the note or Deed of Trust. Id. at 25. Count eight requested a Temporary 

Restraining Order to halt the trustee’s sale of the property. Id. at 26. 

 Plaintiff’s request for a TRO was granted on March 27, 2013, temporarily 

 

1

 Plaintiff asserts that the Statement was not mailed to her “residence address in 

Phoenix.” Doc. 30 at 3. This assertion is not supported by an affidavit or declaration. 

Defendant provided the declaration of Bounlet Louvan, the Foreclosure Legal Liaison 

and former Trustee Sales Officer for Quality who was in charge of the sale of Plaintiff’s 

property, stating that the documents “were mailed to the Property (the East Braeburn 

house in Phoenix) and 254 Oakland Road in Glendora, California 91741.” Doc. 25 at 6. 

Whether or not the notice and statement were received by Plaintiff at the Braeburn 

property, there is no dispute that Defendant noticed Plaintiff at the address set forth in the 

Deed of Trust as required by A.R.S. § 33-809(b) (“The copy of the notice sent pursuant 

to this paragraph shall be addressed to the person whose interest appears of record at the 

address set forth in the document.”) (emphasis added). Plaintiff’s mailing address on the 

Deed of Trust is 254 Oakland Road, Glendora, California 91741. Maricopa County 

Records, Document No. 2007-0523012. 

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enjoining the trustee’s sale. The case was removed to federal court on April 5, 2013. 

Doc. 1. Wells Fargo Bank NA was dismissed as a party on June 7, 2013. Doc. 23. 

Remaining Defendants filed this motion for summary judgment on August 23, 2013. 

Doc. 24. Plaintiff did not respond. On October 29, 2013 Plaintiff made an ex parte

motion for leave to file a late response (Doc. 27), which this court granted on 

November 4, 2013 (Doc. 29). 

II. Legal Standard. 

 A party seeking summary judgment “bears the initial responsibility of informing 

the district court of the basis for its motion, and identifying those portions of [the record] 

which it believes demonstrate the absence of a genuine issue of material fact.” Celotex 

Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the 

evidence, viewed in the light most favorable to the nonmoving party, shows “that there is 

no genuine dispute as to any material fact and the movant is entitled to judgment as a 

matter of law.” Fed. R. Civ. P. 56(a). Only disputes over facts that might affect the 

outcome of the suit will preclude the entry of summary judgment, and the disputed 

evidence must be “such that a reasonable jury could return a verdict for the nonmoving 

party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

 The Court is not obligated to “‘scour the record in search of a genuine issue of 

triable fact.’” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (citation omitted). If 

the nonmoving party’s opposition fails to cite specifically to materials either in the 

Court’s record or not in the record, the Court is not required to search the entire record 

for evidence establishing a genuine issue of material fact or obtain the missing materials. 

See Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1028-29 (9th Cir. 2001); Forsberg 

v. Pac. N.W. Bell Tel. Co., 840 F.2d 1409, 1417-18 (9th Cir. 1988); Keenan, 91 F.3d at 

1278-79 (noting that opposing papers, due to size and poor citation, “obfuscate[d] rather 

than promote[d] an understanding of the facts,” and declining to scour papers or the rest 

of the record to determine if genuine issue of material fact existed). Rather, the Court 

relies on “‘the nonmoving party to identify with reasonable particularity the evidence that 

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precludes summary judgment.’” Keenan, 91 F.3d at 1279. “As the Seventh Circuit 

observed in its now familiar maxim, ‘judges are not like pigs, hunting for truffles buried 

in briefs.’” Indep. Towers of Wash. v. Wash., 350 F.3d 925, 929 (9th Cir. 2003) (quoting 

United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991)) (alteration omitted). 

 Any dispute raised must be genuine, that is, the evidence must be “such that a 

reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 

248. Furthermore, the party opposing summary judgment “may not rest upon the mere 

allegations or denials of [the party’s] pleadings, but . . . must set forth specific facts 

showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith 

Radio Corp., 475 U.S. 574, 586 n.11 (1986); see Fed. R. Civ. P. 56(e); Brinson v. Linda 

Rose Joint Venture, 53 F.3d 1044, 1049 (9th Cir. 1995); Taylor v. List, 880 F.2d 1040, 

1045 (9th Cir. 1989); see also Rule 1.10(l)(1), Rules of Practice of the United States 

District Court for the District of Arizona (“Any party opposing a motion for summary 

judgment must . . . set[] forth the specific facts, which the opposing party asserts, 

including those facts which establish a genuine issue of material fact precluding summary 

judgment in favor of the moving party.”). 

III. Disputed Issues of Fact. 

 Plaintiff claims that documents attached to Defendants motion contain false and 

fraudulent statements regarding the authority of signators to execute documents. Doc. 30 

at 5. Plaintiff appears to urge the Court to interpret her allegation that these are false 

statements as raising issues of fact that would preclude summary judgment. 

 Plaintiff identifies two statements in the Declaration of Louvan as false. First, 

Plaintiff says that the statement that Louvan “conducted the foreclosure of the real 

property in question” is false because the trustee’s sale has not yet taken place. Docs. 30 

at 13; 32. In response, Defendants filed a corrected Declaration clarifying that the sale 

has not, as Plaintiff alleges, occurred yet. Doc. 32. Not only is this fact no longer in 

dispute, but this statement is not material to any of Plaintiff’s claims of breach of contract 

or lack of authority to notice and conduct the trustee’s sale. Only disputes over facts that 

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might affect the outcome of the suit will preclude the entry of summary judgment. 

Anderson, 477 U.S. at 248. 

 Second, Plaintiff disputes the validity of the following statement in Louvan’s 

Declaration: “the Statement of Breach was signed by Mauro Guzman and is a true and 

correct copy of the Statement of Breach that was mailed.” Doc. 30 at 14. Plaintiff 

alleges that this is hearsay and that Louvan has no personal knowledge that Guzman 

obtained authority to mail the documents from an entity that had authority as holder of 

the note. Plaintiff’s hearsay objection is unfounded. The Louvan declaration establishes 

that the Statement of Breach is a business record of Quality’s under Federal Rule of 

Evidence 803(6), and the actual Statement of Breach is attached to the declaration. Doc. 

25 at 6, 9. In addition, whether Guzman had authority to sign and mail the document is a 

legal question, which the Court resolves here, and not a disputed fact. 

 Apart from these two statements, the Court cannot glean from Plaintiff’s response 

any specific disputed issues of fact. Rather, the remainder of Plaintiff’s response appears 

to focus on the legal argument that Defendant must show its authority to notice and 

conduct the trustee’s sale. In addition, as noted above, Plaintiff has failed to file a 

contravening statement of facts as required by Local Rule 56.1(b). When a party fails to 

file such a statement, the Court may take the following actions: (1) give the party an 

opportunity to properly do so; (2) consider the fact undisputed for purposes of the 

motion; (3) grant summary judgment if the motion and supporting materials show that the 

movant is so entitled; or (4) issue any other appropriate order. Fed. R. Civ. P. 56(c), (e). 

Because Plaintiff’s counsel had more than two months to file a controverting statement of 

facts and did not do so, the Court will not grant additional time to respond. The Court 

finds that summary judgment is appropriate. 

III. Analysis. 

All counts alleged in Plaintiff’s complaint center on her assertion that whenever 

the promissory note was transferred or a change was made to the beneficiary of the Deed 

of Trust, the holder or beneficiary was required to demonstrate authority for the transfer 

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or substitution. Each claim of breach of contract and lack of authority by Plaintiff is an 

iteration of the “show-me-the-note” argument resolved by the Arizona Supreme Court in 

Hogan v. Wash. Mut. Bank, N.A., 277 P.3d 781, 782 (Ariz. 2012), as amended (July 11, 

2012). As a matter of Arizona law, the Court finds Plaintiff’s argument without merit. 

 A. Authority to conduct trustee’s sale. 

 Plaintiff asserts that Defendant had no standing or authority to conduct a nonjudicial trustee’s sale because Plaintiff was presented with no evidence of ownership of 

the note and therefore Defendant had no authority to enforce the note. Doc. 1-1 at 13 

(Count One: “there is a significant unexplained five-year GAP in the ‘chain of 

custody’”); at 14 (Count Two: “Failure to Provide the ‘Lost Note Affidavit’ Required 

under” Arizona law precludes Defendant’s right to foreclose); at 15 (Count Three: MERS 

had no authority to assign the Deed of Trust to US Bank); at 17 (Count Four: without 

evidence of the transfer of interest, Quality Loan Services had no power to foreclose); at 

21 (Count Five: US Bank had no authority to appoint Quality as a successor with power 

to foreclose); at 23 (Count Six: US Bank must have authority to appoint a successor); at 

25 (Count Seven: MERS lacked authority to take any action). 

 “Arizona’s non-judicial foreclosure statutes do not require the beneficiary to prove 

its authority or ‘show the note’ before the trustee may commence a non-judicial 

foreclosure.” Hogan, 277 P.3d at 782. Rather, “the only proof of authority the trustee’s 

sales statutes require is a statement indicating the basis for the trustee’s authority.” 

Hogan, 230 277 P.3d at 783; see A.R.S. § 33-808(C)(5) (requiring the notice to set forth 

“the basis for the trustee’s qualification pursuant to § 33–803, subsection A”); see also

A.R.S. § 33-807(A) (granting the trustee the “power of sale”). Where a sale is “noticed 

by a trustee who had recorded an instrument demonstrating that it was a successor in 

interest to the original trustee,” a party has complied with the statutes. Id. 

 The notice of sale in this case was filed by Quality. Doc. 1-1 at 116. The notice 

contains a statement asserting that “the successor trustee qualifies to act as a trustee under 

A.R.S. § 33-803(A)(1).” Id. Defendant provides evidence that Quality had “recorded an 

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instrument demonstrating that it was a successor in interest,” by providing the notice of 

the recorded substitution of February 15, 2012, at Document 2012-0151818. See also

Doc. 1-1 at 112. 

 Plaintiff’s argument and claims seek to require clarification of the chain of title, 

and assert that she was entitled to notification of and authority for the transfer of the note 

and any substitution of trustees at each link in that chain. But there is no basis for this 

argument under Arizona law. Hogan clearly eliminated any obligation on the part of 

trustees to “show the note” prior to a sale. To the extent the Court can decipher 

Plaintiff’s legal citations, it appears she relies on law from New York, Kansas, Oregon, 

and Idaho, and a law review article. These authorities clearly are not controlling. 

 Additionally, courts repeatedly have held that MERS has authority to act as a 

lender’s agent and take action on its behalf, and have rejected the premise that MERS is a 

“sham beneficiary.” Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034 (9th 

Cir. 2011) (rejecting argument that MERS is a sham beneficiary where MERS did not 

initiate foreclosure). See also In re Mortgage Elec. Registration Sys. (MERS) Litig., 

MDL 09-2119-PHX-JAT, 2012 WL 1912133 (D. Ariz. May 25, 2012) (rejecting 

argument that MERS cannot act as a lender’s agent); Bean v. BAC Home Loans 

Servicing, L.P., No CV 11-553-PHX-GMS, 2012 WL 171435, at * 1-2 (D. Ariz. Jan. 20, 

2012) (same). 

 B. Applicability of the UCC and Pooling Services Agreement. 

 Plaintiff argues that the notice of trustee sale violated provisions of the Uniform 

Commercial Code (“UCC”) and a Pooling Services Agreement (“PSA”). Doc. 30 at 7. 

These arguments also lack merit. 

Hogan resolved any question that non-judicial sales of real property had to comply 

with the UCC. 277 P.3d at 783 (“The trust deed statutes do not require compliance with 

the UCC before a trustee commences a non-judicial foreclosure.”). Additionally, it is 

well established that mortgagees generally cannot cite violations of PSAs, or defects in 

the securitization process, to support a wrongful foreclosure claim because mortgagees 

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are not parties to the agreements and have no standing to claim noncompliance with the 

agreements. See, e.g., In re Cook, 457 F.3d 561, 567-68 (6th Cir. 2006) (ruling that the 

failure to record an assignment of a mortgage as required by contract impacted the 

relationship of the parties to the contract, but did not impede the ability to enforce the 

mortgage against third parties); In re Correia, 452 B.R. 319, 324 (1st Cir. B.A.P. 2011) 

(“[T]he Debtors lacked standing to challenge the mortgage’s chain of title under the 

PSA . . . . The Debtors cannot show they were a party to the contract . . . .”); Bittinger v. 

Wells Fargo Bank N.A., 744 F. Supp. 2d 619, 625-26 (S.D. Tex 2010) (rejecting 

mortgagor’s claim of wrongful foreclosure because mortgagor was not a party or 

beneficiary under the PSA and thus had “no ability under Texas law to sue for breach of 

contract.”); In re Washington v. Deutsche Bank Nat’l. Trust Co., 2011 WL 6010247, at 

*5 (Bankr. W.D. Mo. 2011). 

 Even if Plaintiff did have standing to challenge Defendants’ actions under the 

PSA, Plaintiff has not made a colorable claim that the requirements of the PSA were 

breached, or that such a breach impacted Defendants’ right to conduct a trustee’s sale. 

 C. Request for leave to amend Complaint. 

 In the event summary judgment is granted, Plaintiff requests that she be permitted 

to file an amended complaint “based upon rapidly evolving foreclosure law in Arizona 

and elsewhere.” Doc. 30 at 2. This request is denied. Leave to amend is appropriate 

“unless the court determines that the pleading could not possibly be cured by the 

allegations of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (quoting 

Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995)). Plaintiff’s claims depend on 

legal theories that have repeatedly been rejected by this Court and others, and her 

assertion that this area of foreclosure law is rapidly evolving is without merit. 

IT IS ORDERED: 

1. Defendants’ motion for summary judgment (Docs. 24) is granted. 

 2. Plaintiff’s request for leave to file an amended complaint is denied. 

 3. Defendant’s motion for summary adjudication (Doc. 26) is denied, and its 

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motion to correct the Louvan declaration (Doc. 32) is granted. 

 4. The Clerk shall terminate this action. 

 Dated this 19th day of December, 2013. 

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