Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-01547/USCOURTS-azd-2_10-cv-01547-2/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

IN RE Mortgage Electronic Registration

Systems (MERS) Litigation

MDL 09-2119-PHX-JAT

_________________________________

Milan Stejic,

Plaintiff,

v.

Aurora Loan Services, LLC; Shelter

Mortgage Co., LLC; and Mortgage

Electronic Registration Systems, Inc.,

Defendants.

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CV 10-1547-PHX-JAT

ORDER

Pending before the Court is Plaintiff Milan Stejic’s Motion to Reconsider Dismissal

of Stejic (Doc. 1611). The Court now rules on the Motion.

I. BACKGROUND

This case is part of a multi-district litigation (“MDL”), wherein Plaintiff was ordered

to file a consolidated amended complaint with numerous other plaintiffs because his claims

were similar to those of other plaintiffs in the MDL. On June 4, 2011, Plaintiffs filed their

Consolidated Amended Master Complaint (Doc. 1424) (“CAC”). 

In that Complaint, Plaintiff alleged that he owned a Property located at 2015 East

Barkwood Road, Phoenix, Arizona 85048 (the “Property”). (Doc. 1424 at 21 and Exhibit

51). Plaintiff alleged that Mortgage Electronic Systems, Inc. (“MERS”) and/or Quality Loan

Service Corporation (“QLS”) recorded a Substitution of Trustee related to the Property,

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which was signed by Jim Montes (“Montes”) acting as “Vice-President” for MERS, Inc. (Id.

at 21). Plaintiff alleged that Montes did not have authority to sign the Substitution of Trustee

in the capacity of Vice-President for MERS, Inc. because he was not employed by MERS,

Inc. or a true beneficiary under the Deed of Trust on the Property. (Id.). Plaintiff alleged that

Montes was employed by QLS, but was not an officer of MERS, QLS, or Aurora, and none

of those parties had a legal interest in the Deed of Trust on the Property. (Id.). Plaintiff

alleged that Montes lacked any knowledge of any of the representations contained in the

Substitution of Trustee. (Id.). 

Plaintiff also alleged that the Substitution of Trustee was false because MERS, acting

through a QLS employee, purported to substitute QLS as the trustee, but MERS was not the

Lender. (Id. at 21-22). Plaintiff alleged that only the Lender could substitute the trustee,

accelerate the debt, or direct the power of sale. (Id. at 22). Plaintiff also alleged that the

Assignment was notarized in blank prior to being signed and Jim Montes did not sign the

document or did not have authority to sign the document. (Id.). Plaintiff alleged that on

January 27, 2009, QLS recorded the Notice of Sale of the Property and Substitution of

Trustee signed by Jim Montes for MERS. Plaintiff further alleged that Jim Montes signed

and recorded numerous Substitutions of Trustee with visibly differing signatures in the

Maricopa County Recorder’s Office. (Id.). 

Plaintiff alleged that MERS authorized or directed the recording of the Notice of

Trustee’s sale and that the Notice listed the current beneficiary as MERS c/o Aurora Loan

Services. (Id. at 23). Plaintiff alleged that this document was false because it did not list the

true beneficiary under the Deed of Trust because it was part of a “chain of documents” based

on invalid designations and identifications of the beneficial interest in the Deed of Trust for

the Property. (Id.). 

Plaintiff alleged that Quality Loan Service Corporation, with the knowledge and/or

at the direction of Defendant Aurora Loan Services, caused the Trustee’s Deed upon Sale to

be recorded. (Id.). Plaintiff alleged that the Deed was signed by Karla Sanchez, “a

robosigner employee of QLS.” (Id. at 24). Plaintiff alleged that Karla Sanchez signed and

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recorded over one hundred Trustee’s Deeds Upon Sale in the Maricopa County Recorder’s

Office, and, in many of them, the signatures appear very different. (Id. at 24). Plaintiff

alleged that the assertions contained in the Deed that Aurora paid for the property at the sale

and that Aurora is the foreclosing beneficiary are false because the beneficiary was MERS.

(Id.). Plaintiff also alleged that the information in the document was false because it ignored

the securitization that occurred in 2007. (Id.). 

Plaintiff alleged that, as a result of the above allegations, Defendants “knew or had

reason to know that the documents were ‘robosigned’ (or forged), contained false claims, or

were otherwise invalid based on MERS’s status as making the assignments as ‘beneficiary’

when it had no beneficial interest in the deed of trust subject to the assignment, was not the

Lender, was not the party to whom the money was owed, and it had no interest in the notes

secured by the deed of trust, and therefore constitute a violation of A.R.S. 33-420(A).” (Id.

at 25). 

Plaintiff alleged that he did not know or have reason to know that the documents listed

were false until consultation with counsel and investigations into “robosigners.” (Id.). 

As relief, Plaintiffs demanded (1) damages; (2) attorneys’ fees and costs; (3) recission;

(4) restitution; (5) a temporary restraining order and preliminary and permanent injunctions

prohibiting foreclosure, eviction, collection, and transfer of interest related to the residences

of Plaintiffs and class members; (6) a declaratory judgment that Plaintiffs’ rights were

violated, that the class members notes have been rendered unsecured, and that class

members’ loans shall be delisted from the MERS system; (7) a quiet title order; and (8) prejudgment interest. 

In July 2011, Defendants moved to dismiss the CAC for failure to state a claim upon

which relief could be granted (Doc. 1477; 1481). The Court granted the Motion to Dismiss

with prejudice as to Plaintiff’s claims (Doc. 1602 at 22). Plaintiff now seeks reconsideration

of that Order.

II. LEGAL STANDARD

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Reconsideration is only appropriate if: (1) the court is presented with newly

discovered, previously unavailable evidence; (2) the court committed a clear error of law and

the initial decision was manifestly unjust; or (3) there has been an intervening change in

controlling law. Sch. Dist. No. 1J, Multnomah County, Or. v. AC and S, Inc., 5 F.3d 1255,

1262 (9th Cir. 1993); 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999).

The Court ordinarily will deny a motion for reconsideration absent a showing of manifest

error or a showing of new facts or legal authority that could not have been brought to the

Court’s attention earlier with reasonable diligence. LRCiv 7.2(g). No motion for

reconsideration may repeat any oral or written argument made by the movant in support of

or in opposition to the motion that resulted in the Order for which the party seeks

reconsideration. Id. Repeating arguments in a motion to reconsider may be grounds for

denying the motion. Id.

III. ANALYSIS

Plaintiff argues that the Court erred when it dismissed his claims alleging that

Defendants violated Arizona Revised Statutes section 33-420. Plaintiff does not contend that

there is newly discovered, previously unavailable evidence or that there has been an

intervening change in controlling law. Rather, he disagrees with several of the Court’s legal

conclusions. See Doc. 1611 (“the Court materially misconstrued A.R.S. §33-420” and

“gutted the statute’s meaning.”). 

In its Order dismissing Plaintiff’s Arizona Revised Statutes section 33-420 claims, the

Court specifically found:

To state a claim under A.R.S. § 33–420, Plaintiffs must

allege that “[a] person purporting to claim an interest in, or a

lien or encumbrance against, real property, who causes a

document asserting such claim to be recorded in the office of the

county recorder, knowing or having reason to know that the

document is forged, groundless, contains a material

misstatement or false claim or is otherwise invalid . . .” A.R.S.

§ 33–420(A). Plaintiffs (specifically named plaintiffs Bilyea,

DeBaggis, Molina–Hernandez, Rinehimer, Robinson, Silvas,

and Stejic) allege Defendants caused to be recorded various

assignments, substitution of trustees, notices of trustee’s sales

and trustee’s deeds upon sale, which were false documents

because they “contained false claims, or were otherwise invalid

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based on MERS’ status as making the assignments as

‘beneficiary.’” Doc. 1424 at 24–25. Plaintiffs also allege that

the assignments were “robosigned,” that is, notarized in blank

prior to being signed on behalf of MERS. Id. at 22. This claim

fails for several reasons.

First, the alleged falsity in this claims arises from the

fundamental argument that the MERS recordation process splits

the note from the deed of trust and renders the note

unenforceable. However, as discussed above, this Court does not

find legal support for the proposition that the MERS system of

securitization is so inherently defective so as to render every

MERS deed of trust completely unenforceable and unassignable.

In as much as this claim is based on this alleged falsity, it is

dismissed with prejudice.

Second, the purportedly untrue recordations are not of the

type covered by the statute. As explained by this Court, Arizona

courts have interpreted § 33–420 to apply only to “some sort of

document purporting to create an interest, lien, or encumbrance,

such as a lis pendens, mechanics lien, or the deed of trust itself

. . . The Court could locate no authority applying this statute to

assignments of mortgages and notices of trustee’s sales.”

Schayes v. Orion Fin. Group, Inc., CV–10–2658–PHX–NVW,

2011 WL 3156303, at *6 (D.Ariz. July 27, 2011) (collecting

cases); see also In re Vasquez, No. 4:08–BK–15510–EWH,

2010 WL 3084975, at *1 (Bankr.D.Ariz. Aug.5, 2010) (“In

recording the Assignment, [defendant] was not purporting to

claim an interest in the Plaintiff’s property. A.R.S. § 33–420

simply does not apply to the facts here.”). Thus, there can be no

claim for a violation of A.R.S. § 33–420 and this claim will be

dismissed.

Third, the allegations of robosigning do not state a claim

for two reasons. In the first place, Plaintiffs have not pled

sufficient facts that parties who are represented to have signed

the MERS Assignments, “did not sign the document, and/or did

not have the authority to sign the document, and/or did not have

knowledge of the representation contained in the document.”

These legal conclusions are not supported by sufficient factual

pleading. Yet, even if these allegations were well pled, Plaintiffs

lack standing to challenge the validity of the MERS

assignments. Even if an assignment were voidable, an action to

declare an assignment void could only be brought by someone

who can demonstrate a concrete and particularized injury in fact

that is fairly traceable to the challenged assignment. No such

injury is alleged. Thus, Plaintiffs, as third-party borrowers, are

uninvolved and unaffected by the alleged Assignments, and do

not possess standing to assert a claim based on such. See Bridge

v. Aames Cap. Corp., 2010 WL 3834059, at *3 (N.D.Ohio,

Sept.29, 2010) (“Borrower certainly has an interest in avoiding

foreclosure. But the validity of the assignments does not affect

whether Borrower owes its obligations, but only to whom

Borrower is obligated . . .).

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Fourth, this claim is time-barred. Even if the recordations

actually damaged Plaintiffs, that damage would have accrued at

the time of recordation. See State v. Mabery Ranch, Co., 216

Ariz. 233, 165 P.3d 211, 227 (Ariz. Ct. App.2007). Yet, as

alleged, all documents at issue were recorded in the public

records more than one year before Plaintiffs initiated this Claim

for Relief, Plaintiffs claim is also barred for this reason.

In re Mortgage Elec. Registration Sys. (MERS) Litig., MDL Docket No. 09-2119-JAT, 2011

WL 4550189, at *4 -5 (D. Ariz. Oct. 3, 2011).

With regard to the Court’s conclusion that the “purportedly untrue recordations are

not of the type covered by the statute,” Plaintiff argues that (1) the Court erred by relying on

Schayes because it is factually distinguishable, and (2) the Court erred by ignoring the plain

language of Arizona Revised Statutes section 33-420. 

These arguments are nothing more than a re-argument of the facts previously

presented to the Court in the opposition to the Motion to Dismiss, or new arguments that

should have been presented at that time. Rule 59 motions cannot be used to ask the Court

“to rethink what the court ha[s] already thought through,” merely because a plaintiff

disagrees with the Court’s decision. U.S. v. Bus. Recovery Servs., LLC, No. CV 11-390-

PHX-JAT, 2011 WL 4915192 (D. Ariz. Oct. 17, 2011) (quoting Above the Belt, Inc. v. Mel

Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983)); see Refrigeration Sales Co. v.

Mitchell-Jackson, Inc., 605 F. Supp. 6, 8 (N.D. Ill. 1983). Such disagreements should be

dealt with in the normal appellate process. Database Am., Inc. v. Bellsouth Adver. & Publ’g

Corp., 825 F.Supp. 1216, 1220 (D.N.J. 1993); Refrigeration Sales Co., 605 F.Supp. at 7. 

With regard to the Court’s conclusion that Plaintiff did not have standing to assert his

section 33-420 claims, Plaintiff argues that the Court erred in concluding that Plaintiff was

not “a class of ‘owner’ who can challenge a false recording against his property,” within the

meaning of section 33-420. (Doc. 1611 at 14). This argument not only asks the Court to

rethink what it has already thought, but also misconstrues the Court’s reasoning regarding

Plaintiff’s standing. The Court actually held:

Even if an assignment were voidable, an action to declare an

assignment void could only be brought by someone who can

demonstrate a concrete and particularized injury in fact that is

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1

 Moreover, the Court has since reaffirmed and elaborated its reasoning in finding that

third-party borrowers do not have standing with regard to claims mirroring Plaintiff’s claims:

The Court finds that Plaintiff has failed to state a claim

upon which relief can be granted under section 33–420 because

Plaintiff lacks standing to bring this action.

 . . .

In this case, Plaintiff has failed to allege an injury that is

fairly traceable to the challenged act of Defendant that can be

fairly redressed through a favorable decision by this Court.

Plaintiff alleges that someone forged the Assignment of the

Deed of Trust assigning Defendant Chase’s rights in the Deed

of Trust to BOA. Plaintiff alleges that as a result of Defendant

Chase’s recording of this alleged forgery, he is entitled to a quiet

title in his name against anyone claiming an interest in the

property, an order declaring the assignment of the Deed of Trust

invalid, an order setting aside the assignment against all persons

who claim an interest in the property, and attorneys’ fees and

costs.

Even if this Court were to declare the assignment invalid,

this Court could not grant Plaintiff the relief he is seeking.

Plaintiff alleges that, because of the recording of the alleged

forged assignment, he is entitled to avoid foreclosure of the

Property and is entitled to avoid any obligation he still owes on

the promissory note. Plaintiff has failed to establish that his

injury (foreclosure of the Property) is fairly traceable to the

challenged act of Defendant (filing a document it allegedly

knew to be forgery).

Plaintiff executed a promissory note in favor of WaMu

in the amount of one million eight hundred and twenty thousand

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fairly traceable to the challenged assignment. No such injury is

alleged. Thus, Plaintiffs, as third-party borrowers, are

uninvolved and unaffected by the alleged Assignments, and do

not possess standing to assert a claim based on such.

This did not suggest that a third-party borrower could never assert a claim under

section 33-420, but merely acknowledged that Plaintiffs did not “demonstrate a concrete and

particularized injury in fact that is fairly traceable” to the allegedly invalid assignments that

were the subject of Plaintiff’s claims in this case. Nothing in Plaintiff’s Motion for

Reconsideration convinces the Court that such reasoning and conclusion was “clear error.”1

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dollars. Plaintiff does not challenge that Defendant Chase, as

successor in interest to WaMu, was entitled to assign its interest

in the Property to a third party. The Assignment of the Deed of

Trust purports to assign the Deed of Trust from Defendant

Chase to BoA. If this assignment were fraudulent, Defendant

Chase would be the party to have suffered an injury from such

an assignment because its interest in the note would be

compromised. Plaintiff's injury is not fairly traceable to

Defendant’s conduct and is not redresssable through the relief

he seeks because, based on Plaintiff’s default, Defendant Chase

or its assigns were entitled to initiate foreclosure proceedings

and notice a Trustee’s Sale on the Property. The identity of the

party who initiated these proceedings (whether Defendant Chase

or BOA, its purported assignee) does not change Plaintiff’s

injury and thus, Plaintiff’s injury cannot be traced to the alleged

fraudulent transfer of the note.FN3

FN3. See Russell v. OneWest Bank, FSB, No. CV

11–01463–PHX–FJM, 2011 WL 5007958, at *3 (D.Ariz.

Oct.20, 2011) (dismissing Plaintiff’s claim based on an alleged

violation of Arizona Revised Statutes section 33–420 because

Plaintiff failed to establish standing when an assignment was

allegedly forged because he defaulted on his note, and, thus was

“neither involved with nor affected by the assignment and

substitution.”); In re Mortgage Electronic Registration Systems

(MERS) Litig., MDL Docket No. 09–2119–JAT, 2011 WL

4550189, at *5 (D.Ariz. Oct.3, 2011) (same).

If Plaintiff alleged that he was unable to determine which

party he owed payments to based on a suspected fraudulent

assignment of the note, he would have standing because

Plaintiff’s own rights would be affected and he would have

suffered an injury in fact attributable to Defendant’s alleged

fraudulent conduct. However, Plaintiff does not make any such

allegations. For example, Plaintiff does not allege that the

assignment to BOA prevented him from making payments on

his note or from determining the valid holder of his note, so that

he could make such payments. Even if such facts were alleged,

the Court could not properly grant Plaintiff the relief that he

requests. Accordingly, Plaintiff has failed to plead that he

suffered an injury in fact that is attributable to Defendant’s

alleged misconduct or is redressable by the relief he seeks in this

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action. Accordingly, Plaintiff lacks standing to challenge the

alleged violation of section 33–420.

Henkels v. JP Morgan Chase Bank, Nat’l Ass’n, No. CV 11-00299-PHX-JAT, 2012 WL

10380, at * 2-3 (D. Ariz. Jan. 3, 2012).

2

 The Court notes that, in his Reply, Plaintiff argues that the statute of limitations

defense could not be an independent basis for dismissal because he filed his lawsuit in 2009

and none of the recording pre-dated that filing by a year. Even if the statute of limitations

defense does not apply to Plaintiff’s claims, Plaintiff has still failed to state a claim upon

which relief can be granted. 

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IV. CONCLUSION

This case does not fall within one of those narrow instances where reconsideration is

appropriate. The moving party must show more than a disagreement with the Court’s

decision; the Court should not grant a motion for reconsideration unless there is need to

correct a clear error of law or prevent manifest injustice. Database Am., Inc., 825 F.Supp.

at 1220; Refrigeration Sales Co., Inc., 605 F.Supp. at 7. Such is not the case here.2

 Plaintiff

has failed to present this Court with cause to reconsider its October 3, 2011 Order granting

Defendants’ Motions to Dismiss. 

Based on the foregoing, 

IT IS ORDERED that Plaintiff Milan Stejic’s Motion to Reconsider Dismissal of

Stejic (Doc. 1611) is denied.

The Clerk of the Court shall file a copy of this Order in MDL 09-2119-PHX-JAT and

CV 10-1547-PHX-JAT. 

DATED this 20th day of March, 2012.

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