NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

PAUL ANTSELIOVICH, et al., Plaintiffs/Appellants, 

v.

JP MORGAN CHASE BANK NA, et al., Defendants/Appellees, 

US BANK NA, Defendant/Appellee.

No. 1 CA-CV 16-0515 

Appeal from the Superior Court in Maricopa County

No. CV2013-005659 

The Honorable Karen A. Mullins, Judge

REVERSED IN PART, AFFIRMED IN PART, AND REMANDED

COUNSEL

Stephen Silverman Law, Scottsdale

By Stephen E. Silverman

Counsel for Plaintiffs/Appellants

Dickinson Wright PLLC, Phoenix

By Michael J. Plati

Counsel for Defendants/Appellees JP Morgan Chase Bank NA and Wells Fargo 

Bank NA

Quarles & Brady LLP, Phoenix

By C. Bradley Vynalek, Sarah R. Anchors, Brian Howie

Counsel for Defendant/Appellee US Bank NA

FILED 5-1-2018
ANTSELIOVICH, et al. v. US BANK

Decision of the Court

2 

MEMORANDUM DECISION

Judge Jennifer M. Perkins delivered the decision of the Court, in which 

Presiding Judge Diane M. Johnsen and Judge Kent E. Cattani joined.

P E R K I N S, Judge:

¶1 Appellants Paul Antseliovich and Oksana Gugis appeal the 

superior court’s orders denying their motion for new trial and dismissing 

their Second Amended Complaint against Appellees JP Morgan Chase 

Bank NA (“Chase”), Wells Fargo Bank NA (“Wells Fargo”), and U.S. Bank

NA. For the following reasons, we reverse dismissal of the conversion claim 

against Chase and Wells Fargo, affirm in part, and remand. 

FACTS AND PROCEDURAL HISTORY

¶2 Appellants obtained a loan from U.S. Bank in May 2009, 

secured by a recorded deed of trust encumbering their residential property.

In 2011, Appellants submitted a claim to their insurer, IDS Property 

Casualty Insurance Company (“IDS”), for water and structural damage to 

their home. Appellants then hired a contractor to repair at least some 

portion of their home. Between 2011 and 2012, IDS issued four checks 

totaling approximately $90,000 (the “Checks”) to pay for the repairs. IDS 

made the checks jointly payable to Appellants, the contractor, and U.S. 

Bank. Appellants received the Checks, indorsed them, and gave them to the 

contractor. The contractor then deposited or cashed the Checks at Chase, 

without U.S. Bank’s indorsement. The Checks were drawn on IDS’s account 

with Wells Fargo, which honored the checks without U.S. Bank’s 

indorsement.

¶3 A dispute between Appellants and IDS arose sometime 

during the claims adjustment process. In May 2013, when this dispute could 

not be resolved, Appellants filed suit against IDS, Wells Fargo, Chase, and 

others. The following month, Appellants amended their complaint to 

include U.S. Bank. In September 2013, Appellants requested leave to file a 

second amended complaint. Chase and Wells Fargo filed a joint motion to 

dismiss the First Amended Complaint in October 2013. Thereafter, in 

November 2013, the superior court granted Appellants’ request to amend

and the Second Amended Complaint became the operative complaint. In 
ANTSELIOVICH, et al. v. US BANK

Decision of the Court

3 

December 2013, U.S. Bank filed its own motion to dismiss the Second 

Amended Complaint. 1 

¶4 In their Second Amended Complaint, Appellants alleged 

Chase and Wells Fargo converted the Checks, intentionally interfered with 

a contract between Appellants and U.S. Bank, and engaged in a conspiracy 

to deprive Appellants of their rights in the Checks. Additionally, 

Appellants alleged U.S. Bank had breached its deed of trust with 

Appellants by failing to pursue or assign a conversion claim against Chase 

and Wells Fargo, violated the contract’s implied covenant of good faith and 

fair dealing, and converted the Checks. After oral argument, the superior 

court dismissed the claims against Chase, Wells Fargo, and U.S. Bank in 

March 2014. The case proceeded against IDS until Appellants and IDS 

reached a settlement in January 2016. Thereafter, the superior court entered 

a judgment of dismissal with prejudice as to Chase, Wells Fargo, and U.S. 

Bank. 

¶5 Appellants filed a motion for new trial as to Chase, Wells 

Fargo, and U.S. Bank in March 2016, arguing Chase and Wells Fargo 

converted the Checks under Arizona’s version of the Uniform Commercial 

Code. The superior court denied Appellants’ motion and Appellants timely 

appealed the dismissal and denial of their motion for new trial. 

DISCUSSION

¶6 The grant of a motion under Arizona Rule of Civil Procedure 

12(b)(6) is question of law. Thus, we review dismissal for failure to state a 

claim on which relief can be granted de novo. Coleman v. City of Mesa, 230 

Ariz. 352, 355–56, ¶¶ 7, 9 (2012). In doing so, we assume the truth of all wellpled factual allegations and “indulge” reasonable inferences from those 

allegations; however, mere conclusory statements are insufficient to state a 

claim. Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, 419, ¶¶ 6–7 (2008). While 

the superior court looks only to the complaint in adjudicating a Rule 

12(b)(6) motion, it may consider exhibits to the complaint, other documents 

central to the alleged claim, and public records regarding matters 

referenced in a complaint without converting a Rule 12(b)(6) motion into 

one for summary judgment. See Strategic Dev. & Constr., Inc. v. 7th & 

Roosevelt Partners, LLC, 224 Ariz. 60, 63–64, ¶¶ 10, 13–14 (App. 2010). We 

will affirm dismissal only if, as a matter of law, the plaintiff is not entitled 

 

1 The superior court, without objection, ruled on the combined Chase and 

Wells Fargo Motion to Dismiss as though it had been directed at the Second 

Amended Complaint.
ANTSELIOVICH, et al. v. US BANK

Decision of the Court

4 

to relief under any interpretation of the alleged facts susceptible to proof. 

Fidelity Sec. Life. Ins. Co. v. State Dep’t of Ins., 191 Ariz. 222, 224, ¶ 4 (1998). 

I. Conversion Claims

¶7 Conversion of a negotiable instrument is governed by 

Arizona Revised Statutes (“A.R.S.”) section 47-3420, which provides, in 

relevant part, “An instrument is also converted if . . . a bank makes or 

obtains payment with respect to the instrument for a person not entitled to 

enforce the instrument or receive payment.” A.R.S. § 47-3420(A). Thus, 

Chase and Wells Fargo are proper defendants in an action by Appellants 

for conversion of the Checks if the contractor who deposited the Checks 

was not entitled to enforce them or receive payment from them. 

¶8 The Checks were made jointly payable to Appellants, the 

contractor, and U.S. Bank. Jointly payable negotiable instruments may only 

be “negotiated, discharged or enforced” by all co-payees. A.R.S. § 47-

3110(D). The Checks were not indorsed by U.S. Bank and were paid to the 

contractor despite U.S. Bank’s missing indorsement. 

¶9 The superior court found that Appellants had no claim of 

conversion because they transferred their interest in the Checks under 

A.R.S. § 47-3203. “Transfer” is defined in that statute as the delivery of a 

negotiable instrument “by a person other than its issuer for the purpose of 

giving to the person receiving delivery the right to enforce the instrument.” 

A.R.S. § 47-3203(A). In this context, “delivery” is statutorily defined as the 

“voluntary transfer of possession.” A.R.S. § 47-1201(B)(15). Upon transfer, 

the transferee gains any right of the transferor to enforce the instrument. 

A.R.S. § 47-3203(B). 

¶10 A transfer of less than complete interest operates as an 

assignment. See West v. Baker, 109 Ariz. 415, 417 (1973). However, transfer

or assignment only occurs when the payee delivers the instrument to a 

person with the intent to give the person receiving the instrument their

rights to the instrument. A.R.S. § 47-3203(A). Thus, whether there was an 

assignment implicates a question of fact as to whether the delivery was 

meant to give any interest Appellants had in the checks to the contractor. 

Here, Appellants’ intent in passing the Checks to the contractor has not 

been determined. Accordingly, the superior court erred by granting Chase 

and Wells Fargo’s Rule 12(b)(6) motion solely on the basis that Appellants 

had indorsed the Checks and gave the Checks to the contractor. For the 

foregoing reasons we reverse the dismissal of Appellants’ conversion claim 

against Chase and Wells Fargo. 
ANTSELIOVICH, et al. v. US BANK

Decision of the Court

5 

¶11 Appellants additionally alleged U.S. Bank converted the 

Checks or converted a cause of action on the Checks. Appellants’ Second 

Amended Complaint contains nothing more than conclusory statements 

regarding a common law claim of conversion against U.S. Bank. Because 

we do not consider mere conclusory statements, Appellants have failed to 

state a claim for common law conversion of a cause of action against U.S. 

Bank. Cullen, 218 Ariz. at 419, ¶ 7. Moreover, Appellants do not allege that 

U.S. Bank ever possessed the Checks or received proceeds from the Checks. 

Appellants’ claim for conversion under A.R.S. § 47-3420 fails as to U.S. 

Bank; the superior court’s dismissal of that claim is therefore affirmed. 

II. Remaining Claims

¶12 Appellants’ remaining claims against Chase, Wells Fargo, and 

U.S. Bank were properly dismissed. For the reasons set forth below, the 

allegations on which these claims are based are mere conclusory statements 

which fail to state a claim for which relief could be granted. See Cullen, 218 

Ariz. at 419, ¶¶ 6–7. 

A. Intentional Interference with Contractual Relations 

¶13 Appellants alleged Chase and Wells Fargo intentionally 

interfered with the contract between Appellants and U.S. Bank. In support 

of this claim, Appellants alleged that Chase and Wells Fargo “are aware of 

the contract entered into between Plaintiffs and U.S. Bank” and 

“intentionally interfered with the contract . . . by engaging in a scheme to 

indifferently delay resolution of the fraud committed by a third party, and 

aided and endorsed by these defendants.” 

¶14 Intentional interference with contractual relations is an 

intentional tort that requires: the existence of a valid contractual 

relationship; knowledge of the relationship on the part of the interferor; 

intentional interference inducing or causing a breach; resultant damage to 

the party whose relationship has been disrupted; and improper action by 

the defendant. Safeway Ins. Co., Inc. v. Guerrero, 210 Ariz. 5, 10, ¶ 14 (2005). 

Although Appellants assert Chase and Wells Fargo knew of their 

relationship with U.S. Bank, they alleged no facts to support this assertion 

beyond U.S. Bank’s presence as a co-payee on the Checks. More 

significantly, Appellants did not allege any acts by Chase or Wells Fargo to 

induce U.S. Bank to breach its contract with Appellants. Finally, Appellants 

did not allege any facts showing how Chase or Wells Fargo’s alleged 

“scheme to indifferently delay resolution” of conduct by a third party 

constitutes intentional action by Chase or Wells Fargo, nor how such delay 
ANTSELIOVICH, et al. v. US BANK

Decision of the Court

6 

induced or caused U.S. Bank to breach Appellants’ contract. Accordingly, 

we affirm the superior court’s dismissal of the intentional interference 

claim.

B. Breach of Contract 

¶15 With respect to U.S. Bank, Appellants alleged their contract 

required U.S. Bank to deposit any property insurance proceeds into 

“escrow . . . to be held for the benefit of Plaintiffs.” U.S. Bank filed a copy of 

its deed of trust, as reflected in Maricopa County’s public records, with its 

motion to dismiss. 2 The superior court properly considered the document 

as a matter of public record integral to the claims at issue. See Strategic Dev. 

& Constr., Inc., 224 Ariz. at 64, ¶ 13. Reviewing the record de novo, and 

considering the actual text of the trust deed pursuant to Strategic 

Development & Construction, Inc., the language alleged by Appellants

appears nowhere in the deed. Instead, the deed gives U.S. Bank the right, 

but not the obligation, to hold insurance proceeds until repairs are made to 

its satisfaction. No term of the deed of trust requires U.S. Bank to hold or 

pursue insurance proceeds on behalf of Appellants, nor is there any 

indication that the insurance-related provisions are for the benefit of 

Appellants rather than U.S. Bank. Further, no term of the contract requires 

U.S. Bank to “credit [Appellants’] mortgage obligation” in the amount of 

checks it never received, to assign a cause of action, or to otherwise pay 

Appellants for missing or converted insurance proceeds. Consequently, we 

affirm the superior court’s dismissal of Appellants’ breach of contract claim 

against U.S. Bank. 

C. Breach of Implied Covenant of Good Faith and Fair Dealing

¶16 Appellants also alleged U.S. Bank breached the implied 

covenant of good faith and fair dealing in the deed of trust. The superior 

court dismissed this claim on the basis that it is derivative of Appellants’ 

claim for breach of contract; however, breach of the implied covenant of 

good faith and fair dealing is not dependent on a breach of an enumerated 

contractual term. Bike Fashion Corp. v. Kramer, 202 Ariz. 420, 423–24, ¶ 14 

 

2 The deed of trust filed by U.S. Bank was dated 2013; however, the 

operative contract for the events giving rise to the Second Amended 

Complaint was actually a 2009 deed of trust. The 2009 deed of trust is 

recorded in the Maricopa County Recorder’s Office. Pursuant to Arizona 

Rule of Evidence 201, we take judicial notice of the 2009 deed of trust. 

Paragraph 5 of the 2009 and 2013 deeds of trust are identical in all respects 

and do not affect the outcome at the superior court or on appeal.
ANTSELIOVICH, et al. v. US BANK

Decision of the Court

7 

(App. 2002). Indeed, a contracting party may commit a breach by exercising 

express discretion in a manner that denies the other party a reasonably 

expected benefit of the bargain. Id. at 424, ¶ 14. 

¶17 As discussed supra, however, nothing in the deed of trust 

required U.S. Bank to preserve, process, or pursue insurance proceeds 

outside its control. Instead, to the extent insurance proceeds are discussed, 

the deed of trust merely allows U.S. Bank to protect its security interest in 

Appellants’ property by acting to preserve the collateral. From the terms of 

their agreement, Appellants could not reasonably expect U.S. Bank to 

affirmatively pursue insurance proceeds. Moreover, nothing in the deed of 

trust required U.S. Bank to litigate missing or converted insurance proceeds 

on behalf of Appellants, and Appellants could not characterize such action 

as an expected benefit of their bargain. We affirm the superior court’s 

dismissal of Appellants’ claim for bad faith as to U.S. Bank. 

D. Common Law Conspiracy and Fraud Claims

¶18 Appellants also alleged all the defendants acted in concert to 

“commit a fraud upon the appraisal process” and to “delay and refuse 

payment” of the Checks. Nothing in the Second Amended Complaint 

explains or alleges any details of any Appellee’s participation in the 

appraisal process. Furthermore, Appellants alleged no facts suggesting U.S. 

Bank was involved in the alleged conspiracy or fraud despite Appellants’ 

reference to “Defendants” acting collectively. To the extent Appellants 

alleged a civil conspiracy in their Second Amended Complaint, these 

allegations amount to mere conclusory statements that do not satisfy the 

notice pleading requirements of Rule 8. See also Cullen, 218 Ariz. at 419, ¶¶ 

6–7. Moreover, civil conspiracy alone is not a recognized cause of action in 

Arizona. Wells Fargo Bank v. Arizona Laborers, Teamsters & Cement Masons 

Local No. 395 Pension Trust Fund, 201 Ariz. 474, 498–99, ¶ 99 (2002). Plaintiffs 

must allege an underlying tort, such as fraud, when pleading a civil 

conspiracy. Id.

¶19 Appellants alleged Appellees agreed to “commit a fraud” and 

“refuse payment” as part of the conspiracy. Once more, these allegations 

amount to mere conclusory recitations of unlawful acts and are insufficient 

to survive a motion to dismiss. Cullen, 218 Ariz. at 419, ¶¶ 6–7. Moreover, 

allegations of fraud must satisfy a higher standard of specificity. See Ariz. 

R. Civ. P. 9(b) (allegations of fraud must be stated with “particularity” as to 

the circumstances constituting fraud). While there is no “magic language” 

necessary to plead fraud, a plaintiff must plead all the essential elements of 

fraud. Steinberger v. McVey ex rel. County of Maricopa, 234 Ariz. 125, 141, 
ANTSELIOVICH, et al. v. US BANK

Decision of the Court

8 

¶20 ¶ 73 (App. 2014). Here, Appellants failed to plead any of the 

elements of fraud. Thus, we affirm the superior court’s dismissal of the civil 

conspiracy and fraud allegations. 

III. Motion for New Trial

¶21 We review the denial of a motion for new trial for an abuse of 

discretion. Styles v. Ceranski, 185 Ariz. 448, 450 (App. 1996). Because we 

reverse the superior court’s dismissal of the conversion claim against Chase 

and Wells Fargo, we do not consider the denial of retrial as to that claim. 

As to the remaining claims, for the reasons discussed supra, we affirm the 

superior court’s denial of Appellants’ motion for new trial. 

CONCLUSION

¶22 For foregoing reasons, we reverse the dismissal of Appellants’ 

claim for conversion against Chase and Wells Fargo and remand the matter 

to the superior court. We affirm the dismissal of Appellants’ remaining 

claims and the denial of Appellants’ motion for new trial.

¶23 With respect to the contract claims against U.S. Bank, U.S. 

Bank has requested an award of attorneys’ fees and costs. The award of 

attorneys’ fees pursuant to A.R.S. § 12-341.01 is discretionary. Winter v. 

Coor, 144 Ariz. 56, 65 (1985). In our discretion, we deny U.S. Bank’s request 

for attorneys’ fees. As the prevailing party, U.S. Bank may seek its costs 

upon compliance with Arizona Rule of Civil Appellate Procedure 

(“ARCAP”) 21. Because neither Appellants nor Appellees Chase and Wells 

Fargo prevailed on the totality of their claims, they are not prevailing 

parties under ARCAP Rule 21.