Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-01643/USCOURTS-azd-2_12-cv-01643-1/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1441 Petition for Removal- Declaratory Judgement

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Sandra Todd, 

Plaintiff, 

v. 

JPMorgan Chase Bank, NA, et al., 

Defendants. 

No. CV-12-01643-PHX-NVW

ORDER 

Before the Court are Defendant JPMorgan Chase Bank’s Motion to Dismiss (Doc. 

6) and Defendant Cal-Western Reconveyance Corporation’s Motion to Dismiss (Doc. 8). 

For the reasons stated below, the Court will grant both Motions to Dismiss, and dismiss 

this case against all defendants with prejudice. 

I. Background 

In November 2002, Plaintiff borrowed $147,175 by executing a Deed of Trust 

secured by real property in Chandler, Arizona. On February 9, 2009, Defendant CalWestern (“Cal-Western”) was appointed the successor trustee under Plaintiff’s Deed of 

Trust. Plaintiff defaulted on the loan, and Cal-Western recorded a Notice of Trustee’s 

Sale Under Deed of Trust on February 23, 2009. At the resulting trustee’s sale on June 

28, 2010, Plaintiff’s home was purchased by Chase Manhattan, a predecessor of 

Defendant JPMorgan Chase Bank (“JPMorgan”). A Trustee’s Deed Upon Sale was 

recorded on July 21, 2010. JPMorgan subsequently transferred its interest in the property 

Case 2:12-cv-01643-NVW Document 18 Filed 09/20/12 Page 1 of 5
- 2 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

to Defendant Housing and Urban Development (“HUD”). The Plaintiff filed a lawsuit in 

this District on January 20, 2012, (CV12-00129-PHX-FJM), asserting claims for quiet 

title and breach of contract. Plaintiff subsequently filed this action in the Superior Court 

of Arizona in Maricopa County on June 28, 2012 (Doc. 1-1), alleging fraud and 

racketeering activity against all Defendants arising from the same operative facts as her 

first lawsuit. JPMorgan removed the case to this Court on August 1, 2012, on the basis of 

diversity jurisdiction (Doc. 1). The District Court then dismissed all of the claims in the 

Plaintiff’s first lawsuit and entered judgment for the Defendants, (CV12-00129-PHXFJM, Docs. 33, 49). 

II. Judicial Notice 

On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), all 

allegations of material fact are assumed to be true and construed in the light most 

favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 

2009). In general, courts may not consider any material beyond the pleadings when 

ruling on a Rule 12(b)(6) motion. One exception, however, is that a court may take 

judicial notice of matters of public record under Federal Rule of Evidence 201. Lee v. 

City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Courts do not have to accept 

alleged facts as true when they contradict those matters subject to judicial notice. Sears, 

Roebuck & Co. v. Metropolitan Engraver, Ltd., 245 F.2d 67, 70 (9th Cir. 1956). 

In this case, the Court will take judicial notice of the Notice of Substitution of 

Trustee, appointing Cal-Western as trustee (Doc. 8-2 at 8), the Notice of Trustee’s Sale 

Under Deed of Trust (Doc. 8-2 at 10), and the Trustee’s Deed Upon Sale (Doc. 8-2 at 

13), all matters of public record. 

III. Cal-Western’s Motion to Dismiss 

Prior to the foreclosure of the Deed of Trust, Cal-Western was the trustee of 

Plaintiff’s trust deed. Under A.R.S. §33-807: 

The trustee need only be joined as a party in legal actions pertaining to a 

breach of the trustee’s obligation under this chapter or under the deed of 

Case 2:12-cv-01643-NVW Document 18 Filed 09/20/12 Page 2 of 5
- 3 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

trust. . . . If the trustee is joined as a party in any other action, the trustee is 

entitled to be immediately dismissed and to recover costs and reasonable 

attorney fees from the person joining the trustee. 

Plaintiff has not alleged that Cal-Western breached any obligation under the Deed of 

Trust in this case. To the extent that Plaintiff has based her claims on allegations that 

Cal-Western did not have authority to sell the property, her claims are barred by A.R.S. § 

33-820. That section entitles Cal-Western, as trustee, to “when acting in good faith, have 

the absolute right to rely upon any written direction or information furnished to him by 

the beneficiary.” A.R.S. § 33-820. As a result, all claims against Cal-Western are 

dismissed with prejudice. 

IV. Res Judicata 

The Plaintiff’s remaining claims are barred by the res judicata effect of the District 

Court’s earlier adjudication of Plaintiff’s first lawsuit (CV12-00129-PHX-FJM, Docs. 33, 

49). Where this Court’s jurisdiction is based on diversity of citizenship, as here, the res 

judicata law of Arizona applies. See Priest v. American Smelting & Refining Co., 409 

F.2d 1229, 1231 (9th Cir. 1969). In Arizona, res judicata will preclude a claim when a 

former judgment on the merits was rendered by a court of competent jurisdiction and the 

matter now in issue between the same parties was, or might have been, determined in the 

former action. Hall v. Lalli, 194 Ariz. 54, 57, 977 P.2d 776, 779 (Ariz. 1999). Arizona 

follows the “same evidence test” in which “the plaintiff is precluded from subsequently 

maintaining a second action based upon the same transaction, if the evidence needed to 

sustain the second action would have sustained the first action.” Pettit v. Pettit, 218 Ariz. 

529, 532, 189 P.3d 1102, 1105 (Ariz. Ct. App. 2008) (citation omitted). 

 The Plaintiff’s prior action named the same Defendants and involved the same 

foreclosure as this lawsuit. The District Court’s dismissal of all Plaintiff’s claims in 

CV12-00129-PHX-FJM was a judgment on the merits with respect to Plaintiff’s 

allegations that (1) the Deed of Trust was invalid; (2) that the Trustee’s Sale was 

fraudulent and so ineffective; (3) that the Trustee’s Deed Upon Sale was falsely created; 

Case 2:12-cv-01643-NVW Document 18 Filed 09/20/12 Page 3 of 5
- 4 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

(4) that the Defendants lacked any valid interest in the property and so could not 

foreclose; (5) that the Defendants participated in fraudulent “robosigning” and (6) that 

Defendants’ claims to interest in the property were fraudulent. (CV12-00129-PHX-FJM, 

Doc. 6 ¶ 3, 5, 32, 35-37, 40-42, 49-52, 66, 68-70). 

All of Plaintiff’s claims in this case arise from those allegations, now adjudicated. 

Plaintiff again claims that the Trustee’s sale was fraudulent, that the Defendants lacked 

authority to foreclose on the property, and that JPMorgan’s purchase of the property was 

fraudulent. Plaintiff now contends that those acts give rise to new causes of action for 

fraud and racketeering, but those causes of action depend on the same evidence. The 

fraud claim can be reduced to the allegation that that the Defendants unlawfully 

attempted to deprive Plaintiff of her property. (Doc. 1-1 at 10, ¶ 81-83.) The RICO 

claim depends on the allegation that Defendants record fraudulent Trustee’s Deeds and 

fraudulently claim interest in properties they do not own. (Id. at 11, ¶ 89-91.) 

The only allegation of wrongdoing in the Complaint that could be attributed to 

HUD – that it fraudulently acquired the property – is also precluded. (Id. at. 8, ¶ 65-66, 

70.) HUD, also named as a defendant in Plaintiff’s first lawsuit, was a transferee of the 

property, having acquired the property from JPMorgan following the trustee’s sale. 

Plaintiff’s claims with respect to that sale are precluded, and no action against HUD can 

be sustained without those claims. In short, Plaintiff has not alleged any claims she did 

not or could not have alleged in the earlier complaint, and res judicata precludes her 

claims in this lawsuit. This is the third lawsuit Plaintiff has initiated arising from the 

same incident; further amendment of the Complaint would be futile, so the Complaint is 

dismissed without leave to amend and the case is now terminated. 

IT IS THEREFORE ORDERED that Defendant JPMorgan Chase Bank’s Motion 

to Dismiss (Doc. 6), and Defendant Cal-Western Reconveyance Corporation’s Motion to 

Dismiss (Doc. 8) are granted. 

Case 2:12-cv-01643-NVW Document 18 Filed 09/20/12 Page 4 of 5
- 5 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

IT IS FURTHER ORDERED that the clerk enter judgment dismissing this action 

as to all defendants with prejudice. The clerk shall terminate the case. 

Dated this 20th day of September, 2012. 

Case 2:12-cv-01643-NVW Document 18 Filed 09/20/12 Page 5 of 5