Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-01106/USCOURTS-azd-2_11-cv-01106-0/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 28:1444 Petition for Removal- Foreclosure

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Curtis Bridgeman, 

 Plaintiff, 

vs. 

CitiMortgage Inc., et al., 

Defendants.

No. CV11-1106-PHX DGC

ORDER 

All defendants except Provident Funding Associates LP move to dismiss. Doc. 8, 

The Court will refer to moving defendants as Defendants or Moving Defendants for 

purposes of this order. Plaintiff opposes through counsel (Doc. 11), and Defendants have 

filed a reply (Doc. 13). The Court will grant the motion as stated below. 

I. Background. 

This civil action challenging foreclosure, filed by Plaintiff in Arizona Superior 

Court for Maricopa County (Doc. 1-2), was removed to this Court by Defendants on 

grounds of diversity jurisdiction (Doc. 1 at 3). Although Defendant Shelley Boek is a 

resident of Arizona, Defendants assert that she was fraudulently joined. Id. at 4-6. 

Defendant Provident Funding Associates LP did not join in the removal, but Plaintiff did 

not seek remand on this ground. 

The complaint pleads ten counts: (1) declaratory judgment; (2) injunctive relief; 

(3) breach of the covenant of good faith and fair dealing, alleged against Defendants 

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CitiMortgage, CitiGroup, and MERS; (4) breach of contract, alleged against Defendant 

CitiMortgage and an unnamed trustee; (5) breach of contract, violation of statute, and 

lack of agency authority, alleged against all defendants; (6) breach of contract and lack of 

authority, alleged against MERS; (7) breach of contract, alleged against all defendants; 

(8) wrongful foreclosure, alleged against MERS, CitiMortgage, and an unnamed trustee; 

(9) challenge to A.R.S. § 33-811(B) as violating the Arizona Constitution’s separation of 

powers doctrine, alleged against all defendants; and (10) breach of contract, alleged 

against all defendants. Doc. 1-2. 

II. Discussion. 

 A. Summary of Defendants’ Arguments. 

Defendants move to dismiss on several grounds, some overarching and some 

specific. Defendants argue that the complaint violates Rule 8’s fair notice requirement 

because it is disorganized, and also argue that all claims are barred by A.R.S. § 33-

811(C). Doc. 8 at 4-6. Defendants further assert that all claims must be dismissed 

because: (1) Defendants are not required to present the note before they may proceed 

with a trustee sale; (2) securitization was permitted by the deed of trust and, in any case, 

does not affect Plaintiff’s obligations; (3) MERS is a valid beneficiary under the deed of 

trust; and (4) the consent order alleged in Count 3 does not create a private right of 

action. Id. at 7-11. In the alternative, Defendants argue that the claims against Citigroup 

and MERSCORP should be dismissed because parent companies are not liable for 

subsidiaries’ acts absent involvement, and that Shelley Boek must be dismissed as a party 

because no facts were alleged showing Boek is personally liable under an alleged cause 

of action. Id. at 11-12. 

Defendants further assert that specific counts fail because: (1) Count 3 has not 

alleged Plaintiff was deprived of a benefit flowing from the note and deed of trust; 

(2) Counts 4, 5, 6, 7 and 10 fail because no breach has been alleged, no damages have 

been alleged, and the foreclosure sale has not yet occurred; (3) Count 5 fails because 

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MERS assigned its rights as beneficiary to CitiMortgage, CitiMortgage was the only 

beneficiary, and CitiMortgage signed the substitution of trustee; (4) Counts 8 and 9 are 

not ripe because the foreclosure sale has not yet occurred; and (5) Counts 1 and 2 fail 

because Plaintiff lacks standing to obtain equitable remedies of declaratory and injunctive 

relief, and declaratory relief is not proper where the complaint fails to state a claim. Id. at 

13-17. 

B. Plaintiff’s Arguments, and Discussion. 

 1. Preliminary Matters. 

Plaintiff responds seeking leave to amend, but does not attach a copy of the 

proposed amended complaint as required by Local Rule 15.1. Leave to amend will 

therefore be denied without prejudice, and Plaintiff may file a proper motion for leave to 

amend in due course. The Court will rule on such motion once it has been fully briefed. 

Plaintiff fails to address the argument that Shelley Boek was fraudulently joined to 

avoid federal diversity jurisdiction. The Court will therefore dismiss the claims against 

Ms. Boek without prejudice and retain diversity jurisdiction. 

2. In re Veal.

Plaintiff asserts as a general matter that In re Veal, 450 B.R. 897 (9th Cir. BAP 

2011), recently held that the Uniform Commercial Code (“UCC”) applies to non-judicial 

foreclosures, that the deed of trust follows the note, and that the right to enforce the note 

is critical to foreclosure. Doc. 11 at 2-3. Plaintiff reads Veal out of context. Veal

concerned the issues of standing to assert proofs of claim in a bankruptcy proceeding and 

standing to seek leave from a bankruptcy stay. 450 B.R. and 902. The burden in each 

case was on the creditor and movant, respectively, and the court held the burden was not 

met. Id. at 922. The court assumed without deciding, as a result of assumptions made by 

the parties, that the UCC governed the note at issue. Id. at 908-09 (“Here, the parties 

assume that the Uniform Commercial Code (‘UCC’) applies to the note.”). Moreover, 

although Arizona law governed the analysis of real parties in interest as to the note, id. at 

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920-21, Illinois law governed the analysis on mortgage enforcement, id. at 916. (The real 

property at issue in Veal was located in Illinois. 450 B.R. at 902.). 

By contrast, this case involves non-judicial foreclosure of property under the 

power-of-sale clause in a deed of trust governed by Arizona law. Plaintiff fails to explain 

why this Court should consider Illinois law when adjudicating rights under an Arizona 

deed of trust, or why Veal is controlling in this case. Because Veal is materially 

distinguishable, the Court concludes that it does not control. Plaintiff’s response 

regarding the enforceability of the note as related to foreclosure (Doc. 11 at 3-7, 11-12) is 

equally inapposite because he has not shown foreclosure was attempted or made here 

pursuant to the note rather than the deed of trust. Although the security is incident to the 

debt under Arizona law, Plaintiff conflates the concepts of “note” and “debt,” which are 

distinct under Arizona law. Silving v. Wells Fargo Bank, NA, ___ F. Supp. 2d ___, 2011 

WL 2669246, *9 (D. Ariz. July 7, 2011). 

3. Remaining Matters. 

Plaintiff also argues that CitiMortgage cannot foreclose on the deed of trust 

because it does not appear in the chain of title and the original lender did not record the 

substitution of trustee. Doc. 11 at 8-11. Plaintiff fails to persuasively address 

Defendants’ argument regarding MERS’s ability to assign the original lender’s interest to 

CitiMortgage (e.g., Doc. 8 at 9-10), and Plaintiff’s citations to non-Arizona law are 

unavailing (Doc. 11 at 13-14). 

Plaintiff fails to address the other arguments made by Defendants. Although the 

Court does not conclude that all of Defendants’ arguments are sound law, Plaintiff 

waived opposition for purposes of this motion on arguments to which responses were not 

given. 

III. Conclusion. 

 For the reasons above, the claims against Moving Defendants shall be dismissed 

without prejudice. The motion for attorney fees is denied because Defendants have not 

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yet shown they are the successful parties in the contract claims, and have not argued why 

the Court should exercise its discretion to award fees under A.R.S. § 12-341.01. 

IT IS ORDERED: 

 1. The motion to dismiss (Doc. 8) is granted as stated above. 

 2. The motion for attorney fees (Doc. 8) is denied. 

 Dated this 1st day of September, 2011. 

 

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