Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-00208/USCOURTS-azd-2_10-cv-00208-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1640 Truth in Lending

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WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

AOM Group, LLC, trustee of Triple Play

Land Trust, Serjio Hernandez, and Yvette

Hernandez, Beneficiary, 

Plaintiffs, 

vs.

DHI Mortgage Company, Ltd. Limited

Partnership, DHI Title of Arizona, Inc. -

Dietz; Trustee; Mortgage Electronic

Registration Systems, Inc. (MERS);

OneWest Bank, FSB; NGM Properties,

LLC; William Zinman, PC; its assignees

and successors in interest; and Does 1-40

Defendants. 

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No. CV-10-208-PHX-GMS

ORDER

This case arises out of a transaction whereby Serjio and Yvette Hernandez contracted

to purchase a home in Phoenix, Arizona. In February of 2007, the Hernandezes executed a

promissory note in favor of DHI Mortgage Company, Ltd. and accompanied the note with

a deed of trust. The deed of trust listed DHI Title of Arizona as the trustee and Mortgage

Electronic Registration Systems, Inc. (“MERS”) as the beneficiary. Ultimately, a trustee’s

sale was held, at which NGM Properties, LLC (“NGM”) purchased the property. This

lawsuit ensued, with Plaintiff AOM Group, LLC filing suit in Maricopa County Superior

Case 2:10-cv-00208-GMS Document 46 Filed 07/20/10 Page 1 of 4
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 AOM’s involvement in the case is based upon an October 2009 agreement, in which

the Hernandezes conveyed the Property to the newly-created Triple Play Land Trust. AOM

is the trustee for the Triple Play Land Trust, and the Hernandezes are the beneficiaries. 

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Court before Defendants removed the case to this Court.1

 

On June 29, 2010, the Court held a status conference to determine whether Plaintiffs’

attorney, Richard Clark, would continue to pursue this case. Mr. Clark, failed to attend. Mr.

Clark previously had indicated to counsel that he no longer planned to prosecute the case or

represent any parties in this matter, although he never properly sought or obtained an order

from this Court permitting his withdrawal under Arizona Local Rule of Civil Procedure

83.3(b). Based on Mr. Clark’s failure to attend the status conference or otherwise prosecute

this case, the Court ordered him to show cause why he should not be held in contempt and

to show cause why this matter should not be dismissed. (Doc. 42). The Court held a showcause hearing on July 8, 2010, and Mr. Clark again failed to attend or otherwise provide

notice of his absence to the Court. 

I. Dismissal of the Case

In the interest of achieving orderly and expeditious disposition of cases, a federal

district court “has the inherent power to dismiss a case sua sponte for failure to prosecute or

comply with a court order.” Levingston v. Piburn, 2010 WL 2640177, at *3 (D. Ariz. June

10, 2010) (citing Fed. R. Civ. P. 41(b); Link v. Wabash R.R. Co., 370 U.S. 626, 629–31

(1962); Ferdik v. Bonzelet, 963 F.2d 1258, 1260 (9th Cir.1992); Yourish v. Cal. Amplifier,

191 F.3d 983, 987 (9th Cir.1999)). As Mr. Clark, and thus Plaintiffs, have failed to comply

with multiple Court orders or to otherwise prosecute the case, dismissal is appropriate to

achieve a fair and expeditious resolution of this case and to maintain the Court’s civil docket.

See Carey v. King, 856 F.2d 1439, 1440 (9th Cir.1988) (explaining that courts consider

several factors in determining whether to dismiss a case for failure to prosecute: “(1) the

public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its

docket; (3) the risk of prejudice to the [parties]; (4) the public policy favoring disposition of

cases on their merits; and (5) the availability of less drastic sanctions”) (internal quotations

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 While Mr. Clark has not shown cause why he should not be held in contempt of

court, the Court finds that, given the Court is dismissing this action, it is unnecessary to issue

a contempt order. 

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omitted). Accordingly, the Court will dismiss this action.2

II. NGM’s Motion for Costs, Fees, and Sanctions

Defendant NGM Properties, LLC (“NGM”) has also filed a motion for costs,

attorneys’ fees, and sanctions. (Doc. 12). These requests were filed along with NGM’s

motion to dismiss. “A motion for sanctions [under Federal Rule of Civil Procedure 11] must

be made separately from any other motion . . . .” Fed. R. Civ. P. 11(c)(2). Because NGM

failed to file its motion for sanctions separately from its motion to dismiss, the Court will

reject the request for sanctions pursuant to Rule 11. See Guillen v. Thompson, 2010 WL

1266828, at *5 (D. Ariz. Mar. 29, 2010) (denying request for sanctions because it was filed

along with a motion for reconsideration).

NGM also moves for sanctions pursuant to several other Arizona statutes: A.R.S. §§

12-341, 12-341.01, 12-349, 33-420. To award sanctions under A.R.S. Sections 12-341.01(C)

and 12-349, “the court must determine that the party’s claim: (1) constitutes harassment; (2)

is groundless; and (3) is not made in good faith.” Fisher on Behalf of Fisher v. Nat’l Gen.

Ins. Co., 192 Ariz. 366, 370, 965 P.2d 100, 104 (Ct. App. 1998). “All three elements must

be shown” by clear and convincing evidence for Section 12-341.01(C) and by a

preponderance of the evidence for Section 12-349. Id. While the Complaint may have been

deficient with respect to some claims, it is not apparent that the claims constitute harassment,

or were not made in good faith. Nor does NGM’s motion provide any substantial reason for

believing that Plaintiffs acted to harass or in bad faith. Accordingly, the Court denies the

request for sanctions based on A.R.S. §§ 12-341.01(C) and 12-349.

Likewise, sanctions are inappropriate pursuant to A.R.S. § 33-420. In order to prevail

under Section 33-420, a party must establish that the other party “1) has caused to be

recorded a document, 2) in which [it] claims an interest in, or a lien or encumbrance against,

real property, 3) which is forged, groundless, contains a material misstatement or false claim

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or is otherwise invalid.” Evergreen West, Inc. v. Boyd, 167 Ariz. 614, 619, 810 P.2d 612, 617

(Ct. App. 1991). In determining whether the filing of a lis pendens was “groundless,” “the

trial court’s inquiry is limited to determining whether the action is one ‘affecting title to real

property.’” Id. at 620, 810 P.2d at 618. This inquiry is not an examination of the merits of

the case, and the Court need find only “some basis” to conclude that the action affects title

to real property. Id., 810 P.2d at 618. Here, while the Complaint may lack the factual detail

necessary to state a claim, the Court cannot say that the action in no way affects title to real

property. Rather, the Court finds that there was at least some basis upon which to file a lis

pendens.

IT IS THEREFORE ORDERED that AOM Group’s Complaint is dismissed for

failure to prosecute. 

IT IS FURTHER ORDERED that NGM’s Motion for Sanctions, (Doc. 12), is

denied. NGM may seek attorneys’ fees and costs as the prevailing party in a contract action

by following the local procedure regarding fee applications.

IT IS FURTHER ORDERED that all other remaining pending motions, (Docs. 12,

15, 34), be denied as moot.

IT IS FURTHER ORDERED releasing, voiding, rescinding, striking and

expunging the Lis Pendens recorded on or about December 9, 2009, Maricopa County

Recorder No. 2009-1126737, by Attorney Richard Clark and Orlando Sagarnaga for AOM

Group LLC, relating to the property at: 4535 N. 111TH GLEN, PHOENIX, AZ 85037,

legally described as: Lot 221, CAMELBACK RANCH UNIT 2, according to Book 777 of

Maps, Page 27, Records of Maricopa County, Arizona.

IT IS FURTHER ORDERED directing the Clerk of the Court to terminate this

action.

DATED this 20th day of July, 2010.

Case 2:10-cv-00208-GMS Document 46 Filed 07/20/10 Page 4 of 4