IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

DEUTSCHE BANK NATIONAL TRUST COMPANY, Plaintiff/Appellant,

v.

PHEASANT GROVE LLC, Defendant/Appellee.

No. 1 CA-CV 16-0663

Appeal from the Superior Court in Maricopa County

No. CV2015-005125

The Honorable Douglas Gerlach, Judge

AFFIRMED

COUNSEL

Gust Rosenfeld PLC, Phoenix

By Scott A. Malm, Charles W. Wirken

Counsel for Plaintiff/Appellant

Robert Stewart & Associates PC, Phoenix

By Robert L. Stewart, Jr., Sid A. Horwitz 

Counsel for Defendant/Appellee

OPINION

Judge Randall M. Howe delivered the opinion of the Court, in which 

Presiding Judge James P. Beene and Judge Kent E. Cattani joined.

FILED 8-23-2018
DEUTSCHE BANK v. PHEASANT GROVE

Opinion of the Court

2

H O W E, Judge:

¶1 Deutsche Bank National Trust Company (the “Bank”) sued 

Pheasant Grove LLC seeking a reformation of a deed of trust (“DOT”) 

secured by Pheasant Grove’s property and a declaratory judgment that it

holds a superior interest in the property. The trial court granted Pheasant 

Grove summary judgment, ruling that the Bank had filed its suit outside 

the applicable statute of limitations’ time period.

¶2 The Bank has appealed that ruling, raising several claims of 

error. Its primary argument, however, is that although its reformation claim 

may be barred by the applicable statute of limitations, its declaratory 

judgment claim—that the Bank’s interest in the property was superior to 

Pheasant Grove’s interest under a constructive notice or replacement 

mortgage theory—was within the statute of limitations applicable to an 

action to collect a debt. We reject all of the Bank’s claims of error, and we 

specifically hold that when a claim for reformation is time-barred, a request 

for declaratory judgment seeking substantively the same relief as the 

reformation claim is also time-barred.

FACTS AND PROCEDURAL HISTORY

¶3 This action involves the real property known as 40660 N. 

109th Place, Scottsdale, Arizona (the “Property”). The Property includes a 

residence built across two adjoining parcels, described as Lots 8 and 9, 

Desert Mountain Phase II Unit Six. Lot 8 is assigned Maricopa County 

Assessor’s Parcel Number (“APN”) 219–56–205 and Lot 9 is assigned APN 

219–56–206.

¶4 Brian Pellowski and Debra Peterson (collectively, the 

“Homeowners”) bought the Property in 2000 and obtained a $1.26 million 

loan secured by a recorded DOT in favor of Washington Mutual Bank, FA

that encumbered Lots 8 and 9. The Homeowners refinanced the loan in 2001 

and 2002. Both times the Homeowners recorded a new DOT in Washington 

Mutual’s favor, encumbering Lots 8 and 9; both times Washington Mutual 

released the prior DOT.

¶5 The Homeowners refinanced the loan again in 2003. They 

recorded a DOT in Washington Mutual’s favor (the “2003 DOT”), and 

Washington Mutual released the prior DOT. Although the 2003 DOT 

referenced the address of 40660 N. 109th Place, Scottsdale, Arizona, the 2003 

DOT legally described the collateral as only “Lot 8, DESERT MOUNTAIN 

PHASE II, UNIT SIX.” JP Morgan Chase Bank NA (“Chase”) acquired the 
DEUTSCHE BANK v. PHEASANT GROVE

Opinion of the Court

3

beneficial interest in the 2003 DOT from Washington Mutual. Chase 

assigned its beneficial interest in the 2003 DOT to the Bank in November 

2012; the assignment described the collateral as “LOT 8, DESERT 

MOUNTAIN PHASE II, UNIT SIX.”

¶6 Meanwhile, the Homeowners borrowed $800,000 from First 

National Bank of Omaha (“FNB”) in September 2006 and secured that loan 

with a DOT in FNB’s favor that encumbered Lots 8 and 9. The Homeowners 

defaulted on the loan, and FNB bought the Property in a trustee’s sale in 

July 2010. FNB later quitclaimed the Property to Pheasant Grove in 

December 2011.

¶7 The Homeowners subsequently defaulted on the promissory 

note secured by the Bank’s 2003 DOT, and the Bank learned that Pheasant 

Grove had obtained the Property without satisfying the 2003 DOT. In 

August 2015, the Bank filed a three-count “Verified Complaint for Quiet 

Title” against Pheasant Grove. Count One sought reformation of the 2003 

DOT to include Lot 9 in the legal description. Count Two was denominated 

quiet title; it sought a determination pursuant to Arizona’s quiet title 

statute, A.R.S. § 12–1101, that the Bank “has a superior interest in Lots 8 and 

9 of the Property and that Pheasant Grove’s interest in the Property is 

subject to [the Bank’s] interest under the Deutsche Bank DoT.” Count Three 

was denominated declaratory relief; it sought a declaration under A.R.S. 

§ 12–1101 that “Plaintiff’s interest under the Deutsche Bank DoT encumbers 

both Lots 8 and 9 of the Property and is superior to any other encumbrances 

currently existing against the property and that Pheasant Grove’s interest 

in the Property is subject to Plaintiff’s interest under the Deutsche Bank 

DoT.”

¶8 Pheasant Grove moved for summary judgment, arguing that

(1) the reformation claim was barred under the applicable statute of 

limitations and (2) the quiet title and declaratory relief claims failed as a 

matter of law because the Bank did not hold title to either Lot 8 or 9. In 

response, the Bank argued that (1) the statute of limitations did not apply 

to a reformation claim and (2) the declaratory relief claim sought a 

determination that Pheasant Grove had constructive notice of the 2003

DOT, which had priority over FNB’s DOT, or alternatively, that the 2003 

DOT was a replacement DOT for the 2000, 2001, and 2002 DOTs.

Additionally, the Bank moved under Arizona Rules of Civil Procedure 15 
DEUTSCHE BANK v. PHEASANT GROVE

Opinion of the Court

4

and 56(f) (2016)1 for additional time to conduct discovery and filed a 

“countermotion” for leave to amend the complaint to clarify the declaratory 

relief sought.

¶9 The trial court denied the Bank’s motions and granted 

summary judgment in Pheasant Grove’s favor:

Almost 12 years after the fact—11 years, nine-and-a-half

months after the fact, to be precise—Deutsche Bank as a 

successor wants to be relieved of what amounts to its own 

mistake. The statute of limitations ran on that claim some time 

ago. There’s nothing in the record that would warrant the 

Court to recognize a tolling of the statute of limitations, and 

otherwise if this is something that goes up on appeal, I’ll 

simply adopt the other reasons set forth in the Defendant’s 

motion and reply memorandum.

¶10 The trial court entered a final judgment and the Bank timely 

appealed.

DISCUSSION

1. Rule 56(f) Motion

¶11 The Bank argues that the trial court erred by denying its Rule 

56(f) motion. We review the denial of a Rule 56(f) request for an abuse of

discretion. Simon v. Safeway, Inc., 217 Ariz. 330, 332 ¶ 4 (App. 2007). The trial

court abuses its discretion if it makes an error of law or the record does not 

substantially support its decision. MM&A Prods., LLC v. Yavapai-Apache 

Nation, 234 Ariz. 60, 66 ¶ 18 (App. 2014).

¶12 A party opposing summary judgment may seek additional 

discovery before responding to the motion for summary judgment. See 

generally Ariz. R. Civ. P. 56(f) (2016). Rule 56(f)’s “major objective” is “to

insure that a diligent party is given a reasonable opportunity to prepare his 

case.” Simon, 217 Ariz. at 333 ¶ 6 (citations omitted). Accordingly, the 

motion must be accompanied by an affidavit “describing the reasons 

justifying the delay,” including “the evidence outside the party’s control, 

its location, what the party believes the evidence will show, the discovery 

 

1 The Arizona Rules of Civil Procedure were revised effective January 

1, 2017, to reflect comprehensive stylistic and substantive changes. To be 

consistent with the record below and briefing on appeal, we cite the former 

rules.
DEUTSCHE BANK v. PHEASANT GROVE

Opinion of the Court

5

method the party wishes to use, and an estimate of the time required to 

complete the discovery.” Id. (citation omitted).

¶13 The trial court did not abuse its discretion in denying the 

motion. In the Bank’s Rule 56(f) affidavit, counsel stated that it would 

require two months to complete discovery. The trial court did not rule on 

the Rule 56(f) motion until two months later, effectively giving the Bank the 

two months it stated that it needed, even though the court technically 

denied the motion. As the trial court noted, the request was “in effect, moot 

because Deutsche Bank has had the benefit of the two months that it said 

were required.” In its ruling, the trial court nevertheless allowed the Bank 

to file a new, comprehensive response and statement of facts, but the Bank 

did not file a new statement of facts and its second response largely restated 

its first. In the trial court and on appeal, the Bank has not explained why 

the evidence it hoped to discover could not have been obtained during the 

eight months preceding the summary judgment motion. As such, Deutsche 

Bank has not presented a prima facie case that it should have been allotted 

additional time for discovery. Thus, the trial court did not abuse its 

discretion by denying the Rule 56(f) motion.

2. Summary Judgment: Declaratory Judgment Claim

¶14 The Bank contends that the trial court erred in granting 

summary judgment against its claim that it was entitled to a declaratory 

judgment stating that its interest in Lot 9 was superior to Pheasant Grove’s 

interest.

2 The Bank argues that Pheasant Grove had constructive notice of 

its interest in Lot 9, and because the Bank was seeking to enforce the 2003 

DOT against Pheasant Grove’s interest, the trial court should have applied 

the six-year limitations period under A.R.S. § 12–548, which applies to 

actions for debt.

3

 

2 The Bank does not dispute the granting of summary judgment based 

on the reformation or quiet title claims.

3 Although the complaint did not specifically raise constructive notice, 

it alleged facts to support its contention that Pheasant Grove had 

constructive notice that the 2003 DOT encumbered Lots 8 and 9; thus, the 

complaint sufficiently raised this issue. See Cullen v. Auto-Owners Ins. Co., 

218 Ariz. 417, 419 ¶ 6 (2008) (citation omitted) (“Arizona follows a notice 

pleading standard, the purpose of which is to give the opponent fair notice 
DEUTSCHE BANK v. PHEASANT GROVE

Opinion of the Court

6

¶15 A motion for summary judgment should be granted “if the 

facts produced in support of the claim or defense have so little probative 

value, given the quantum of evidence required, that reasonable people 

could not agree with the conclusion advanced by the proponent of the claim 

or defense.” Orme Sch. v. Reeves, 166 Ariz. 301, 309 (1990). We review de 

novo whether any genuine issues of material fact exist and whether the trial 

court properly applied the law. Parkway Bank & Trust Co. v. Zivkovic, 232 

Ariz. 286, 289 ¶ 10 (App. 2013). The application of the statute of limitations, 

including the question of accrual, is also reviewed de novo. Cook v. Town of 

Pinetop-Lakeside, 232 Ariz. 173, 175 ¶ 10 (App. 2013). 

¶16 The Bank argues that a six-year statute of limitations under 

A.R.S. § 12–548(A)(1) applies to the declaratory relief claim premised on 

constructive notice. Section 12–548(A)(1) provides that “[a]n action for debt 

shall be commenced and prosecuted within six years after the cause of 

action accrues . . . if the indebtedness is evidenced by or founded on . . . [a] 

contract in writing that is executed in this state.” The Bank contends that it 

filed its complaint with this claim within six years of the claim’s accrual.

The Bank believes that the claim accrued when Pheasant Grove received 

title to the Property in 2011, when a proper title search would have revealed

to Pheasant Grove the Bank’s 2003 DOT. Because the Bank filed its 

complaint in August 2015, it argues that it satisfied A.R.S. § 12–548(A)(1)’s 

time limit.

¶17 In determining the limitations period applicable to a claim for 

declaratory relief, we examine the substance of the action “to identify the 

relationship out of which the claim arises and the relief sought.” Canyon del 

Rio Inv’rs, L.L.C. v. City of Flagstaff, 227 Ariz. 336, 341 ¶ 21 (App. 2011)

(citation omitted). The Bank seeks a declaration that Pheasant Grove holds 

title to Lot 9 subject to the Bank’s 2003 DOT, which is nothing more than an 

action to reform the 2003 DOT to include Lot 9 in the legal description. See 

Cosgrove v. Cade, 468 S.W.3d 32, 35 (Tex. 2015) (noting that a plaintiff’s 

declaratory relief claim asking the court to recognize mineral rights

mistakenly left out of a deed was “in effect a suit to reform the deed”). The 

substance of the Bank’s action arises out of Washington Mutual’s mistaken 

omission of Lot 9 from the 2003 DOT. As such, the declaratory relief theory 

is based on that mistaken omission, and reformation is not “merely 

 

of the nature and basis of the claim and indicate generally the type of 

litigation involved.”).
DEUTSCHE BANK v. PHEASANT GROVE

Opinion of the Court

7

incidental to the ultimate relief sought.”4 See Bradbury v. Higginson, 140 P. 

254, 256 (Cal. 1914). If the trial court were to grant the Bank’s request for 

relief, “the legal effect would be identical to that involved in a successful 

reformation.” See N. Star Reinsurance Corp. v. Super. Ct., 13 Cal.Rptr.2d 775, 

782 (App. 1992). Because the three-year statute of limitations bars the claim 

for reformation, see Transam. Ins. Co. v. Trout, 145 Ariz. 355, 358 (App. 1985), 

the declaratory relief claim is time-barred as well, cf. Canyon del Rio, 227 

Ariz. at 341 ¶ 21 (“Declaratory judgment claims filed within the relevant 

analogous limitations period are treated as timely.”).

5

¶18 The Bank also argues that its declaratory judgment claim 

could have been premised on the doctrine of replacement of mortgages. The 

replacement doctrine “allows a senior lender that discharges its mortgage 

of record and records a replacement mortgage to keep its priority as against 

the holder of an intervening interest in the property.” Cont’l Lighting & 

Contracting, Inc. v. Premier Grading & Utilities, LLC, 227 Ariz. 382, 387 ¶ 17

(App. 2011) (emphasis added). “Because an intervening lienholder 

maintains the same position it had before the replacement lender satisfied 

the pre-existing obligation, it suffers no prejudice.” Brimet II, LLC v. Destiny 

Homes Mktg., LLC, 231 Ariz. 457, 459–60 ¶ 11 (App. 2013). The problem with 

the doctrine’s application to this case, however, is that no “intervening 

interest” exists. Washington Mutual recorded a DOT in 2002 against Lots 8 

and 9, and released that lien in 2003. Washington Mutual then recorded a 

DOT only against Lot 8, which the Bank acquired in 2003. FNB did not 

record its DOT against Lots 8 and 9 until 2006. Thus, FNB’s DOT cannot be 

an “intervening interest” between the 2002 and 2003 DOTs, and the 

replacement doctrine is inapplicable as a matter of law.

 

4 The Bank explained during oral argument in the trial court that 

“[t]he problem is that if the mistake was not made, we would have an 

interest in both [Lots 8 and 9].”

5 Although not argued in its opening brief, the Bank claims in its reply 

brief that, in the alternative, the declaratory relief claim’s limitations period 

was four years under A.R.S. § 12–550. We generally do not consider 

arguments raised for the first time in a reply brief. Tucson Estates Prop. 

Owners Ass’n, Inc. v. McGovern, 239 Ariz. 52, 55 n.4 ¶ 11 (App. 2016). 

Moreover, the four-year limitations period is to be used when “no 

limitation is otherwise prescribed[.]” A.R.S. § 12–550. Because we find that 

the three-year statute of limitations applies, this argument fails.
DEUTSCHE BANK v. PHEASANT GROVE

Opinion of the Court

8

3. Motion to Amend

¶19 The Bank argues that the trial court erred by denying leave to 

amend the complaint to more specifically plead the declaratory relief claim. 

The denial of a motion to amend is reviewed for an abuse of discretion. Alosi 

v. Hewitt, 229 Ariz. 449, 452 ¶ 13 (App. 2012). Although leave to amend is 

liberally granted, MacCollum v. Perkinson, 185 Ariz. 179, 185 (App. 1996), it 

may be denied if the amendment would be futile, ELM Ret. Ctr., LP v. 

Callaway, 226 Ariz. 287, 292 ¶ 26 (App. 2010). As discussed above, the court 

correctly ruled that the statute of limitations barred the declaratory relief 

claim. Accordingly, an amendment clarifying the declaratory relief sought 

would have been futile, and the court did not abuse its discretion by

denying it. See Tovrea v. Nolan, 178 Ariz. 485, 490 (App. 1993). 

CONCLUSION

¶20 For the foregoing reasons, we affirm. We award costs to 

Pheasant Grove upon compliance with Arizona Rule of Civil Appellate 

Procedure 21.