Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-00277/USCOURTS-azd-2_13-cv-00277-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1441 Petition for Removal- Petition to Quiet Title

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

Arturo Soltero, 

Plaintiff, 

v. 

OneWest Bank FSB, 

Defendant.

No. CV-13-0277-PHX-DGC

ORDER 

 Pro se Plaintiff Arturo Soltero filed a quiet title action against Defendant OneWest 

Bank FSB relating to the alleged foreclosure and trustee sale of property located at 2873 

North 144th Drive, Goodyear, Arizona, 85338 (the “Property”). Doc. 1-1 at 5-11, ¶¶ 8, 

19. Defendant removed the action to federal court (Doc. 1) and filed a motion to dismiss 

(Doc. 4). The motion is fully briefed. Docs. 9 & 11. No party has requested oral 

argument. For the reasons that follow, the Court will grant the motion. 

I. Legal Standard. 

 When analyzing a complaint for failure to state a claim to relief under Rule 

12(b)(6), the well-pled factual allegations are taken as true and construed in the light 

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

Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the 

assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are 

insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec. 

Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the 

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complaint must plead enough facts to state a claim to relief that is plausible on its face. 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This plausibility standard “is not 

akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a 

defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 

556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere 

possibility of misconduct, the complaint has alleged B but it has not ‘show[n]’ B ‘that the 

pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). 

 Absent specific exceptions, the Court will not consider evidence or documents 

beyond the complaint in the context of a Rule 12(b)(6) motion to dismiss. See United 

States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003). “If, on a motion under Rule 

12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the 

court the motion must be treated as one for summary judgment under Rule 56.” 

Fed. R. Civ. P. 12(d). “A court may, however, consider certain materials – documents 

attached to the complaint, documents incorporated by reference in the complaint, or 

matters of judicial notice – without converting the motion to dismiss into a motion for 

summary judgment.” Ritchie, 343 F.3d at 908 (citations omitted); see also Knievel v. 

ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (noting that the court may take into account 

documents “whose contents are alleged in a complaint and whose authenticity no party 

questions, but which are not physically attached to the [plaintiff's] pleading.”). 

 Defendant attached two documents to its motion to dismiss: (1) the Note (Ex. A, 

Doc. 4-1 at 2-10); and (2) the Deed of Trust (“DOT”) (Ex. B, Doc. 4-1 at 12-33). 

Plaintiff did not physically attach these documents to the complaint, but the complaint 

alleges their content and the documents are central to Plaintiff’s quiet title claim. 

Doc. 1-1 at 5-11, ¶¶ 3-7, 14-18. Plaintiff’s response does not contest the authenticity of 

the documents. Doc. 9. Accordingly, the Court will consider the Note and the DOT 

under the incorporation by reference doctrine. 

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II. Analysis. 

 A. Failure to Respond.

 The Court’s February 28, 2013, order noted that Plaintiff had failed to file a timely 

response to the motion to dismiss. Doc. 8. The order provided Plaintiff with until 

March 15, 2012, to file a response and warned that the Court would summarily grant the 

motion to dismiss if Plaintiff failed to comply with the order. Id. Plaintiff did not file a 

response until March 18, 2013. Doc. 9. Plaintiff’s failure to respond in accordance with 

the Court’s order provides sufficient reason for the Court to grant Defendant’s motion to 

dismiss. In light of Plaintiff’s status as a pro se litigant, however, the Court will consider 

the merits of the complaint. 

B. Merits of Complaint. 

 Plaintiff makes a claim for quiet title, requesting the Court declare that title to the 

Property is vested in Plaintiff alone and that Defendant does not have any interest in the 

Property. Doc. 1-1 at 5-1, ¶ 1; id. at 9. A party bringing a quiet title action must allege 

that it has an interest in real property and that the interest is adverse to another person 

who claims an interest in the same property. A.R.S. § 12–1101(A). The complaint 

alleges that Defendant does not have a security interest in the Property (Doc. 1-1 at 5-11, 

¶¶ 24-26) because the assignment of the DOT and the Note to Defendant was not 

perfected (id., ¶ 22), thereby rendering “Plaintiff’s interests [in the Property] superior to 

the interest of the Defendant’s, and the lien of Defendant and any subsequent mortgage 

assignment and rents may be avoided” (id., ¶ 23). 

 Defendant raises the following arguments in support of its motion to dismiss: 

(1) Plaintiff lacks standing to challenge the validity of an assignment of the Note and 

DOT; (2) as trustor, Plaintiff does not have a right to bring a quiet title claim under 

Arizona law; (3) the complaint fails to state a quiet title claim because there is no 

allegation that Plaintiff has paid or tendered all amounts owed; (4) Arizona law rejects 

the “show-me-the-note” theory; (5) Defendant is the beneficiary under the DOT because 

Defendant is in possession of the Note, which is indorsed in blank; and (6) the complaint 

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does not state a plausible claim. Doc. 4 at 2. The Court will consider each in turn. 

 First, to the extent Plaintiff’s claim is based on the validity of the assignment of 

the Note and the DOT, this Court has held that borrowers who were not parties to the 

assignment lack standing to challenge the assignment’s validity. See In Re MERS Litig., 

MDL Doc. No. 09-2119-JAT, 2011 WL 4550189, *5 (D. Ariz. Oct.03, 2011) (finding 

that borrowers who were not parties to the assignment of their deed lacked standing to 

challenge the assignment’s validity because they had not alleged a “concrete and 

particularized injury that is fairly traceable to the challenged assignment.”); see also 

Graham-Miller v. Nationstar Mortg. LLC, No. CV-11-00848-PHX-JAT, 2012 WL 

2368494, *4 (D. Ariz. June 21, 2012). Plaintiff does not allege facts sufficient to confer 

standing to challenge the assignment. 

 Second, “[i]t is thoroughly settled that a complaint to quiet title . . . [must] show 

title in the plaintiff[.]” Verde Water & Power Co. v. Salt River Valley Water Users’ 

Ass’n, 197 P. 227, 228 (Ariz. 1921). Under Arizona law, legal title passes to the trustee 

upon the execution of a DOT. Brant v. Hargrove, 632 P.2d 978, 984 (Ariz. Ct. App. 

1981) (citations omitted). As trustor under the DOT (Ex. B, Doc. 4-1 at 12), Plaintiff 

does not hold title and thus cannot bring a quiet title claim. See Robertson v. DLJ Mortg. 

Capital, Inc., No. CV-12-8033-PCT-LOA, 2012 WL 4840033, *8 (D. Ariz. Oct. 11, 

2012) (“Under Arizona law, neither a mortgagee nor a trustor can bring an action to quiet 

title because neither holds title.” (citations omitted)). Although Plaintiff alleges that his 

interests are “superior to the interest of the Defendant’s” (Doc. 1-1 at 5-11, ¶ 23), 

Plaintiff has not pled that he has title and the DOT shows otherwise. 

 Third, it is well established in Arizona that “a plaintiff cannot bring a quiet title 

action unless [he] has paid off her mortgage in full.” Bergdale v. Countrywide Bank FSB,

No. CV-12-8057-PCT-GMS, 2012 WL 4120482, *6 (D. Ariz. Sept. 18, 2012) (citing 

Farrell v. West, 114 P.2d 910, 911 (Ariz. 1941) (“[I]f it appears there is an unsatisfied 

balance due a defendant-mortgagee, or his assignee, the court will not quiet the title until 

and unless [the plaintiff-mortgagor] pays off such mortgage lien.”)); Eason v. Indymac 

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Bank, FSB, No. CV 09-1423-PHX-JAT, 2010 WL 1962309, *2 (D. Ariz. May 14, 2010) 

(action to “[q]uiet title is not a remedy available to the trustor until the debt is paid or 

tendered.”); Frazer v. Millennium Bank, No. 2:10-01509 JWS, 2010 WL 4579799, *4 

(D. Ariz. Oct. 29, 2010) (same). The complaint does not allege that Plaintiff has paid or 

tendered all amounts owed on the Note, and the facts of this case strongly suggest he has 

not. 

 Fourth, the Arizona Supreme Court has rejected the “show me the note” theory 

and its requirement that a party must be in possession of the actual note in order to 

foreclose. Hogan v. Wash. Mut. Bank. N.A., 277 P.3d 781, 782 (Ariz. 2012) (noting that 

Arizona statutes do not require “that before a trustee may exercise that power of sale, the 

beneficiary must show possession of, or otherwise document its right to enforce, the 

underlying note.”); see also Diessner v. Mortg. Elec. Registration Sys., 618 F. Supp. 2d 

1184, 1187 (D. Ariz. 2009) (“[D]istrict courts have routinely held that Plaintiff’s ‘show 

me the note’ argument lacks merit.”). Plaintiff’s claim lacks legal authority to the extent 

it seeks to require Defendant to prove that it is the holder of the Note. See Doc. 1-1 at 5-

11, ¶¶ 1, 19. 

 Fifth, the holder of a note indorsed in blank, A.R.S. § 47-3205(B) (providing a 

note indorsed in blank is “payable to the bearer and may be negotiated by transfer of 

possession alone”), is “[t]he person in possession of a negotiable instrument[,]” 

A.R.S. § 47-1201(B)(21)(a). Defendant submits that Plaintiff is not entitled to quiet title 

because Defendant is in possession of the Note. Doc. 4 at 7. The complaint alleges that 

Defendant is the holder of the Note (Doc. 1-1 at 5-11, ¶¶ 15-18), but that the Note is no 

longer secured by the DOT because “the note and the [DOT] were assigned to different 

parties; whereby a split of the note and [DOT] has occurred that nullifies Defendant’s 

security interest (if any) in the said [DOT] and the subsequent assignments” (id., ¶ 17). 

This theory does not comport with Arizona law. By operation of law, the transfer of a 

contract secured by a trust deed “shall operate as a transfer of the security for such 

contract.” A.R.S. § 33-817; see also Cervantes v. Countrywide Home Loans, Inc., 656 

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F.3d 1054, 1044 (9th Cir. 2011) (“Even if we were to accept the plaintiffs’ premises that 

. . . the note is split from the deed, we would reject the plaintiff’s conclusion that, as a 

necessary consequence, no party has the power to foreclose.”). Plaintiff’s claim is 

untenable to the extent it is based on the allegation that Defendant possesses a nonsecuritized Note. 

 Sixth, Plaintiff has failed to plead sufficient facts to state a plausible quiet title 

claim. Plaintiff has not alleged that he has an interest in the real property at issue. 

Plaintiff alleges that he “is the owner” of the property (Doc. 1-1 at 5-11, ¶ 8), but this is a 

legal conclusion unsupported by any properly alleged fact. Plaintiff does not allege that 

he has made any payments under the Note or any other fact sufficient to show that he has 

an interest in the Property. Accordingly, the Court will grant the motion to dismiss. 

III. Leave to Amend.

 Pro se Plaintiffs should be granted leave to amend if the defects in their claims can 

be cured by re-pleading. Plaintiff asserts that “any defects alleged by the Defendant can 

be cured . . . by filing an amended pleading.” Doc. 9 at 5. Leave to amend should be 

freely given when justice so requires. Fed. R. Civ. P. 15(a)(2). The Court cannot 

determine that an amendment could not cure the complaint’s deficiencies (specifically, 

with respect to the amount Plaintiff may or may not have paid on the Note) and therefore 

will grant leave to amend. As to theories alleged that are without legal foundation (show 

me the note, and splitting of the Note and DOT), the Court dismisses allegations related 

to these theories with prejudice. If Plaintiff chooses to file an amended complaint, he 

may not advance legal claims based on these theories. 

IT IS ORDERED: 

1. Defendant’s motion to dismiss (Doc. 4) is granted. 

2. Plaintiff has 30 days from the date of this order to file a first amended 

complaint. Failure to do so will result in the Court dismissing the action 

with prejudice and directing the Clerk to enter judgment accordingly. 

 3. The Case Management Conference set for May 3, 2013 at 3:00 p.m. is 

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vacated, and will be rescheduled if Plaintiff files an amended complaint. 

 Dated this 3rd day of May, 2013. 

Case 2:13-cv-00277-DGC Document 16 Filed 05/03/13 Page 7 of 7