Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_12-cv-08092/USCOURTS-azd-3_12-cv-08092-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Bernice MacKenzie 

Plaintiff, 

v. 

Federal National Mortgage Association; 

Wells Fargo Home Mortgage, Inc.; Tiffany 

& Bosco; MERS 

Defendants.

No. CV 12-8092-PCT-JAT

ORDER 

 Currently pending before the Court is the Motion to Dismiss of Defendants 

Federal National Mortgage Association (“Federal”), Wells Fargo Bank, N.A. (“Wells 

Fargo”), and Mortgage Electronic Registration Systems, Inc. (“MERS”). (Doc. 11.) The 

Court now rules on the Motion. 

I. BACKGROUND

 Plaintiff Bernice MacKenzie purchased property located at 1030 South Foothills 

Drive, Dewey, Arizona (the “Property”) on November 14, 2006 with a loan in the amount 

of $361,000 (the “Loan”) secured by a Deed of Trust (the “DOT”).1

 The DOT names the 

lender as nonparty Crestar Mortgage and the Trustee as Michael A. Bosco, Jr. The DOT 

provides that, in the event of default, the Lender, or its successors and assigns, may 

 

1

 The Court can consider publicly recorded documents, like the Deed of Trust, 

without converting this motion to dismiss into a motion for summary judgment. Lee v. 

City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). 

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invoke the DOT’s power of sale and sell the Property at public auction to the highest 

bidder. 

 On March 24, 2010, Mr. Bosco, as Trustee, recorded a Notice of Trustee’s Sale. 

Plaintiff neither reinstated her loan nor had the sale enjoined, so the Trustee’s Sale took 

place on April 11, 2011. Mr. Bosco recorded a Trustee’s Deed upon Sale conveying the 

Property to Fannie Mae on April 15, 2011. On May 31, 2011, Fannie Mae obtained a 

forcible entry and detainer judgment against Plaintiff requiring Plaintiff to surrender the 

Property by June 13, 2011. 

 Plaintiff filed the pending case on May 14, 2012. (Doc. 1.)2

 Plaintiff’s Complaint 

does specifically delineate her claims, but the Complaint appears to contain claims 

frequently found in mortgage foreclosure litigation. Defendants Federal, Wells Fargo, 

and MERS filed the pending Rule 12(b)(6) Motion to Dismiss on June 26, 2012, arguing 

that Plaintiff has failed to state a claim. 

II. LEGAL STANDARD

 The Court may dismiss a complaint for failure to state a claim under Federal Rule 

of Civil Procedure 12(b)(6) for two reasons: 1) lack of a cognizable legal theory and 2) 

insufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police 

Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 

 To survive a 12(b)(6) motion for failure to state a claim, a complaint must meet 

the requirements of Federal Rule of Civil Procedure 8(a)(2). Rule 8(a)(2) requires a 

“short and plaint statement of the claim showing that the pleader is entitled to relief,” so 

that the defendant has “fair notice of what the . . . claim is and the grounds upon which it 

rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)(quoting Conley v. 

Gibson, 355 U.S. 41, 47 (1957)). 

 Although a complaint attacked for failure to state a claim does not need detailed 

 

2

 Plaintiff previously filed a very similar complaint in this Court, which eventually was dismissed when Plaintiff failed to respond to a motion to dismiss. MacKenzie v. 

Wells Fargo Bank, N.A., et al., Case No. CV11-8114-PCT-DGC. 

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factual allegations, the pleader’s obligation to provide the grounds for relief requires 

“more than labels and conclusions, and a formulaic recitation of the elements of a cause 

of action will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). The factual 

allegations of the complaint must be sufficient to raise a right to relief above a 

speculative level. Id. Rule 8(a)(2) “requires a ‘showing,’ rather than a blanket assertion, 

of entitlement to relief. Without some factual allegation in the complaint, it is hard to see 

how a claimant could satisfy the requirement of providing not only ‘fair notice’ of the 

nature of the claim, but also ‘grounds’ on which the claim rests.” Id. (citing 5 C. Wright 

& A. Miller, Federal Practice and Procedure §1202, pp. 94-95 (3d ed. 2004)). 

 Rule 8’s pleading standard demands more than “an unadorned, the defendantunlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(citing 

Twombly, 550 U.S. at 555). A complaint that offers nothing more than naked assertions 

will not suffice. To survive a motion to dismiss, a complaint must contain sufficient 

factual matter, which, if accepted as true, states a claim to relief that is “plausible on its 

face.” Iqbal, 556 U.S. at 678. Facial plausibility exists if the pleader pleads factual 

content that allows the court to draw the reasonable inference that the defendant is liable 

for the misconduct alleged. Id. Plausibility does not equal “probability,” but plausibility 

requires more than a sheer possibility that a defendant acted unlawfully. Id. “Where a 

complaint pleads facts that are ‘merely consistent’ with a defendant’s liability, it ‘stops 

short of the line between possibility and plausibility of entitlement to relief.’” Id. (citing 

Twombly, 550 U.S. at 557). 

 In deciding a motion to dismiss under Rule 12(b)(6), a court must construe the 

facts alleged in the complaint in the light most favorable to the drafter of the complaint 

and the court must accept all well-pleaded factual allegations as true. See Shwarz v. 

United States, 234 F.3d 428, 435 (9th Cir. 2000). Nonetheless, courts do not have to 

accept as true a legal conclusion couched as a factual allegation. Papasan v. Allain, 478 

U.S. 265, 286 (1986). 

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III. ANALYSIS AND CONCLUSION

 Plaintiff’s Complaint lists several federal statutes, but does not allege how 

Defendants violated those statutes. Her actual allegations boil down to the following 

arguments: Defendants did not have “standing” to foreclose her home and were not “real 

parties in interest” because Defendants are not the holders of the note evidencing the 

Loan; the Deed and Note were impermissibly “separated;” the Note was illegally 

securitized; and MERS cannot have a real interest in a mortgage. Plaintiff also implicitly 

alleges a claim for wrongful foreclosure. 

 A. A.R.S. §33-811(C)

 This Court previously has rejected all the legal theories asserted by Plaintiff. 

Arizona courts and this Court repeatedly have held that a party does not have to produce 

the original note before the party can foreclose in Arizona, which is a statutory deed of 

trust state. See, e.g., Hogan v. Washington Mut. Bank, N.A., 277 P.3d 781, 783-84 (Ariz. 

2012). Courts also have rejected foreclosure plaintiffs’ “impermissible separation of the 

deed and note” theory of liability. See, e.g., Owens v. Reconstruct Co., 2011 WL 

3684473 at *3 (D. Ariz. August 23, 2011). Nor have courts recognized a cause of action 

for the sale of loans into the secondary market or “securitization.” See, e.g., Harding v. 

U.S. Bank, N.A., 2012 WL 3871506 at *3 (D. Ariz. Sept. 6, 2012). Finally, courts have 

rejected the argument that MERS is a “sham” beneficiary because it has no actual interest 

in the loan. Cervantes v. Countrywide Home Loans, Inc., 2009 WL 3157160 at *10 (D. 

Ariz. Sept. 24, 2009). 

 But even if any of those legal theories were viable, Plaintiff waived them because 

she did not obtain an injunction at least one day before the Trustee’s Sale of the Property. 

 Section 33-811(C) of the Arizona Revised Statutes reads in pertinent part: 

 The trustor . . . and all persons to whom the trustee mails a 

notice of a sale under a trust deed pursuant to §33-809 shall 

waive all defenses and objections to the sale not raised in an 

action that results in the issuance of a court order granting 

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relief pursuant to Rule 65, Arizona rules of civil procedure, 

entered before 5:00 p.m. mountain standard time on the last 

business day before the scheduled date of sale. 

Plaintiff indisputably did not obtain injunctive relief before the Trustee Sale of the 

Property. 

 A trustor, like Plaintiff, waives all defenses and objections to the trustee sale not 

raised in an action resulting in injunctive relief awarded at least one business day before 

the trustee sale. Because Plaintiff did not obtain an order enjoining the Trustee Sale of 

the Property, she waived all claims that would have provided defenses or objections to 

the sale. Madison v. Groseth, 279 P.3d 633, 637-38 (Ariz. Ct. App. 2012). The Court 

finds Plaintiff could have raised all the arguments she makes in her Complaint, except for 

the wrongful foreclosure claim, in a motion to enjoin the Trustee Sale. Because all those 

arguments could have provided defenses or objections to the Trustee Sale, Plaintiff has 

waived them. 

 B. Wrongful Foreclosure

 Plaintiff asserts throughout the Complaint that Defendants had no right to 

foreclose on the Property, which the Court will construe as an attempt to state a claim for 

wrongful foreclosure. Although Arizona state courts have not yet explicitly recognized a 

cause of action for wrongful foreclosure, this Court has. See, e.g., Schrock v. Federal 

Nat’l Mortg. Assoc., 2011 WL 3348227 at *6 (D. Ariz. August 3, 2011). The Court has 

held that the tort of wrongful foreclosure is not waived by A.R.S. section 33-811(C) 

because it is only ripe once a foreclosure sale has occurred. Id. 

 To establish a claim for wrongful foreclosure, Plaintiff must prove that either she 

was not in default at the time of the foreclosure or that the foreclosing party caused her 

default. See, e.g., Holt v. Countrywide Home Loans, Inc., 2012 WL 369591 at *4 (D. 

Ariz. Feb. 6, 2012); Jada v. Wells Fargo Bank, N.A., 2011 WL 3267330 at *3 (D. Ariz. 

July 29, 2011). Plaintiff never alleges that she was not in default on the Loan at the time 

of the foreclosure or that the foreclosing party caused her failure to make Loan payments. 

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Rather, her allegations center on Defendants not being the appropriate parties, for various 

reasons, to foreclose on the Property. Because Plaintiff does not allege that she was 

current on the Loan at the time of the Trustee Sale, she cannot state a claim for wrongful 

foreclosure. 

 Accordingly, 

IT IS ORDERED GRANTING Defendants’ Motion to Dismiss (Doc. 11). This 

case is dismissed in its entirety. 

 Dated this 2nd day of October, 2012. 

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