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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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 

## A RIZONA 

## C OURT OF 

## A PPEALS

D IVISION O NE

In the Matter of the Estate of :

VIRGINIA G. MYRMAN, Decedent

.

LADIEN A. STEELMAN, as Trustee of THE MYRMAN LIVING TRUST DATED MAY 16, 1994; LADIEN A. STEELMAN, as Personal Representative of THE ESTATE OF EARL D. MYRMAN; and LADIEN A. STEELMAN, as Personal Representative of THE ESTATE OF VIRGINIA

G. MYRMAN
, Plaintiff

/Appellant
,

v.

U.S. BANK NATIONAL ASSOCIATION; and FIRST AMERICAN TITLE

INSURANCE COMPANY
, Defendants /Appellee s

.
No. 1 CA

- CV 15

- 0208 FILED 6

- 14

- 2016

Appeal from the S uperior Court in Maricopa County

No. PB 2013

- 091530 The Honorable Terri L. Clarke
, Judge Pro Tempore

AFFIRMED IN PART, VACATED IN PART

COUNSEL

James E. Bache PC, Mesa By James E. Bache Counsel for Plaintiff

/Appellant2

Dickinson Wright, PLLC
, Phoenix By Michael J. Plati C ounsel for Defendant

/Appellee U.S. Bank National Association

Lake & Cobb PLC, Tempe By Richard L. Cobb, Joseph J. Glenn Counsel for Defendant/Appellee First American Title Insurance Company

MEMORANDUM DECISION
Judge Andrew W. Gould delivered the decision of the Court, in which Presiding Judge Diane M. Johnsen and Judge Randall M. Howe joined.

G O U L D , Judge:

¶1 Appellant LaDien Steelman, as trustee of the Myrman Living Trust Dated May 16, 1994 (the “Trust”) and as personal representative of the e state s of her parents, Earl D. Myrman and Virginia D. Myrman, appeal s the trial court’s grant of summary judgment in favor of US Bank National Association (“US Bank”) and First American Tit le Insurance Company (“F irst A merican ”) . For the reasons set forth below, we affirm the trial court’s judgment exce pt for those portions quieting title in favor of US Bank and awarding US Bank attorney’s fees under Arizona Revised Statutes (“A.R.S”) section 12

- 1103(B) (2016)

.

FACTUAL AND PROCEDUR AL BACKGROUND

¶2 In 2006, t he Myrman s applied for a loan from Downey S avings & Loan, F.A. (“Downey”)

. The loan was to be secured by a lien against their home. T he h ome , however, was held by the Myrmans as trustees of the Trust

. Thus, to use the home as secur ity for the loan, the Myrmans , in their capacity as trustees, execute d a Quit c laim Deed transferring the property from the Trust to themselves individual ly as joint
tenants

. T he Myrmans also signed a Deed of Trust, in their individual capacities, to secure the loan.

¶3 The loan was finalized and the funds were disbursed to the Myrmans . After the closing, t he escrow agent recorded the Deed of Trust but did not record the Quitclaim Deed.STEELMAN v. US BANK Decision of the Court

3 ¶4 The Myrmans stayed current on the loan until July 2011, shortly before Virginia passed away

. 1 By that time, US Bank had acquired Downey’s interest in the loan

. In 2012, US Bank discovered the Quitclaim Deed had not been recorded. US Bank made a claim with its title insurer, F irst American
, and instructed F irst A merican to resolve the issue

. F irst A merican found a facsimile copy of the Quitclaim Deed and recorded it

. ¶5 Following the death of her parents
, Steelman became trustee of the Trust and was appointed as personal representative for their estate s

. In 2013, Steelman, in her capacity as personal representative, sued herself as trustee of the Trust
, seeking to have the Quitclaim Deed declared void. Neither US Bank n or F irst American was a party to that lawsuit

. The lawsuit concluded with the entry of a judgment stating that the Quitclaim Deed was void because it did not contain trust

- related disclosures as required by A.R.S. § 33

- 404(B) (2014)

. ¶6 In August 2013, US Bank started foreclosure proceedings on the Myrmans ’ home by record ing a Notice of Trustee’s Sale. S hortly thereafter, S teelman sued US Bank and F irst American on behalf of the Trust and the Myrmans’ estate s , alleging the Quitclaim Deed had been “fraudulently recorded [in 2012] and c ontained false statements and [was] therefore void and of no effect

. ” US Bank later c ounterclaimed to quiet title in its favor. On Steelman’s motion, the trial court issued a preliminary injunction staying the truste e’s sale

. ¶7 Steelman, US Bank, and F irst American each moved for summary judgment. The trial court granted US Bank’s and F irst American ’s motions , finding the Quitclaim Deed was valid despite Steelman’s objections

. The trial court also found t he stipulated judgment between the Trust and the Myrmans’ estate s did not bind US Bank

. The trial court lifted the injunction, quieted title to the property in favor of US Bank, awarded attorney’s fees to US Bank under A.R.S. § 12

- 1103(B) , and awarded att orney’s fees to F irst American under A.R.S. § 12

- 341.01(A)

. ¶8 S teelman timely appealed , and t he parties agre ed to reinstate the injunction pending the outcome of this appeal. 2

1 Earl passed away in 2008.

2 Because the parties stipulated to extend the injunction through this appeal, Steelman’s contention that the trial court abused its discretion by lifting the injunction is moot. W e therefore do not address this issue.STEELMAN v. US BANK Decision of the Court

4 DISCUSSION

¶9 We review a grant of summary judgment de novo to determine whether any genuine issue of material fact exists ; we view the evidence and all reasonable inferences in the non

- moving parties’ favor

. Russell Piccoli P.L.C. v. O’Donnell
, 237 Ariz. 43, 46

- 47, ¶ 10 (App. 2015)

. Summary judgment should be g ranted only “if the facts produced in support of [a] claim .

. . 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 .

. . . “ Orme Schoo l v. Reeves
, 166 Ariz. 301, 309 (1990)

.

I. The Quitclaim Deed Was Valid.

¶10 Steelman argues US Bank had no authority to notice a trustee’s sale. Steelman contends the Myrmans ’ Quitclaim Deed is void as to US Bank because it was not recorded and, as a result
, title to the Myrmans ’ home was never transferred from the Trust

. See A.R.S. § 33

- 412(A) (2014) (providing that conveyances of land “shal l be void as to creditors and subsequent purchasers for valuable consideration without notice, unless they are acknowledged and recorded in the office of the county recorder”). Thus, according to Steelman, when the Myrmans signed the Deed of Trust in their individual capacities it had no effect; the Deed of Trust never attached to the property, thereby making US B ank an unsecured creditor.

¶11 We begin our analysis by emphasizing that US Bank’s right to foreclose is not based on the Quitclaim Deed, but on the Deed of Trust. Steinberger v. McVey , 234 Ariz. 125, 135, ¶ 26 (App. 2014)

. Here, t he Quitclaim Deed is relevant only insofar as it affected the transfer of the property from the Trust to the Myrmans individually.

¶12 The Quitclaim Deed was valid. Pursuant to A.R.S. § 33

- 412 (B) , “[u]nrecorded instruments , as between the parties and their heirs . . . s hall be valid and binding.” A.R.S. § 33

- 412(B) (emphasis added)

. Th erefore
, t he Quitclaim Deed did not have to be recorded to effect a valid and binding transfer between the parties to the Deed; namely, the Trust and the Myrmans. And b ecause the Quitclaim Deed was valid, when the Myrmans signed the Deed of Trust in their individual capacities, the Deed of Trust attached to the property

. ¶13 We also reject Steelman ’s argument that A.R.S. § 33

- 412 ( A ) invalidate s the Quitclaim Deed. Steel man argues subsection A applies to US Bank because it is a subsequent purchaser that paid valuableSTEELMAN v. US BANK Decision of the Court

5 consideration for the Deed of Trust and was without knowledge of the prior unrecorded Quitclaim Deed. However, e ven if we assume (as Steelman argues) that U S Bank did not know about the Quitclaim Deed until 2012, Steelman’s argument is contrary to § 33

- 412(A) ’s clear purpose , which is to protect subsequent purchasers’ interests, not void them. See Hall v. World Sav. & Loan Ass'n , 189 Ar iz. 495, 503 (App. 1997)

. ¶14 Steelman contend s , however, that Rowe v. Schultz , 131 Ariz. 536 (App. 1982)
, supports application of § 33

- 412(A) to this case

. In Rowe , the plaintiff obtained a quitclaim deed to certain property but did not record it for five weeks. Id. at 537

. In the interim, the defendant obtained a money judgment against the original landowner and recorded an abstract of judgment against the property

. Id. We held that the defendant’s recorded abstract created a valid lien against the pla intiff’s land, finding that “ the judgment lien takes precedence over a prior unrecorded deed .

. . unless the judgme nt creditor has notice thereof.” Id . at 539 (quoting McDonald v. Powell Lumber Co ., 243 S.W.2d 192, 195 (Tex. App. 1951) ).

¶15 Rowe is distinguishable from this case. Rowe resolved a priority dispute between a judgment lien and an unrecorded deed adverse to the judgment creditor’s interest. Here, there is no priority dispute
, and the Quitclaim Deed was not adverse to US Bank’s posi tion.

¶16 Finally, we also reject Steelman’s contention that the stipulated judgment she obtained in her lawsuit inv olving the Trust and the Myrman s ’ estate s bars US Bank from litigating the validity of the Quitclaim Deed. US Bank was not a party to the lawsuit
, nor were its interests litigated in that lawsuit; therefore, that judgment doe s not b i nd it

. Thomas v. Grant
, 222 Ariz. 197, 201, ¶ 12 (App. 2009) ; see also Mosley v. Trans Rent

- A

- Car, Inc
., 133 Ariz. 274, 276 (App. 1982) (stating that non

- parties typica lly are not bound by the rules of res judicata ).

¶17 Additionally, the stipulated judgment was based on the premise the Quitclaim Deed was void because it violated the statute. See A.R.S. § 33

- 404(B) ( requiring disclosure of “ the names and addresses of the beneficiaries

. . . and

. . . the trust or other agreement under which the grantor is acting” in any deed or conveyance involving a grantor holding title as a trustee )

. However, it is undisputed the Myrmans acquired the property from the Trust “for value”; the Quitclaim Deed expressly states the Myrmans paid “consideration of Ten Dollars” to transfer title . As a result, pursuant to A.R.S. § 33

- 404(F)
, any failure to make the disclosures A.R.S. § 33

- 404(B) r equired did not void the Quitclaim Deed. See A.R.S. § 33

- 404(F) ( “ If real property or any interest in real property, or anySTEELMAN v. US BANK Decision of the Court

6 mortgage, deed of trust or other lien on real property, is acquired for value, the title, interest, mortgage, deed of trust or othe r lien is not impaired or in any way adversely affected by reason of the failure of any person to comply with the requirements of this section.”)

.

II. The Quitclaim Deed Was Delivered.

¶18 Steelman next contends the Quitclaim Deed was never

“ delivered ” under A.R.S. § 33

- 401(A) because it was not recorded; as a result, title to the property was never transfe rred from the Trust

. See Roosevelt Sav. Bank of City of New York v. State Farm Fire & Cas. Co ., 27 Ariz. App. 522, 524 (1976) (“ Under Arizona law, a deed t o real property does not vest legal title in the grantee until it is delivered and accepted. ”).

¶19 No specific procedure or action is required to complete delivery of legal title

. Pass v. Stephens , 22 Ariz. 461, 468 (1921)

. Delivery may consist of any act ion or conduct that “ clearly manifests the intention of the grantor and the person to whom it is delivered that the deed shall presently become operative

. . . and that the grantor loses all control over it, and that by it the grantee is to become possessed of the estate

. ” Id

. (quoting Baker v. Hall , 73 N.E. 351, 353 (Ill. 1905)). Whether delivery has occurred is dependent on the facts and circumstances of each case. Robinson v. Herring
, 75 Ariz. 166, 169 (1953)

. ¶20 It is undisputed the Myrm ans , individually and as trustees of the Trust, executed the Quitclaim Deed and gave it to the escrow agent for recording

. It also is undisputed that after the Myrmans signed the Quitclaim Deed and the Deed of Trust, Downey disbursed the loan funds
to the Myrmans , who in turn accepted the funds and made payments on the loan for approximately five years. Thus, based on the parties’ conduct, the Quitclaim Deed clearly was delivered and became effective after the Myrmans signed it

. ¶21 Steelman also argues the escrow agent could not have delivered the Quitclaim Deed until the escrow agent “could comply with the instructions of the new Lender, including, but not limited to, the obtaining of a Policy of Title Insurance

. . . co vering that certain real property

. . . r eflecting Title Vested as Follows: Virginia Myrman and Earl D. Myrman, wife and husband as joint tenants.” However, escrow did close, regardless of any alleged breach by the escrow agent , and the parties
,STEELMAN v. US BANK Decision of the Court

7 by their conduct
, acknowledged delivery. Accordingly , t he trial court did not err in finding delivery took place under A.R.S. § 33

- 401(A) and Pass

. 3

III. Neither US Bank nor First American Violated A.R.S. § 33

- 420(A)

. ¶22 Steelman contends US Bank is liable for damages under A.R.S. § 33

– 420(A) for instructing First American to record a “sham” copy of the Quitclaim Deed
, and First American is liable under the same statute for recording an “altered” facsimile copy of the Quitclaim Deed. Steelman also argues US Bank is liable under A.R.S. § 33

– 420 (A) for recording the Notice of Trustee’s Sale, because it knew the Quitclaim Deed had never been properly recorded and, as a result, the Deed of Trust never attached to the property.

¶23 A.R.S. § 33

– 420(A) imposes liability on one who records a document a sserting an interest in real property while “knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid .” Id. ; SWC Baseline & Crismon Inv'rs, L.L.C. v. Augusta Ranch Lt d. P'ship , 228 Ariz. 271, 279

- 80, ¶ 23 (App. 2011)

. ¶24 The trial court properly denied Steelman’s claim

. Steelman did not show the Quitclaim Deed was forged, groundless, or otherwise invalid . As discussed above, t he Quitclaim Deed does not contain any material misstatements; the parties intended to have the Trust convey title
t o the Myrmans so that Downey would fund the loa n , and that is exactly what the Quitclaim Deed accomplished

. See SWC , 228 Ariz. at 281, ¶ 30

. In addition
, A .R.S. § 33

– 420(A) does not apply to F irst American or US Bank: F irst American did not assert any interest in the property by recording the copy of the Quitclaim Deed, nor did US Bank by instructing F irst American to do so. Id

. ; cf. Stauffer v. U.S. Bank Nat ’ l Ass ’ n , 233 Ariz. 22, 26, ¶ 12 (App. 2013) ( stating that because substitute trustee held legal title for beneficiary, substitute trustee’s recording of notice of trustee’s sale fell within the ambit of A.R.S. § 33

- 420 (A)).

3 Steelman also argues that the Quitclaim Deed, having not been “delivered” in 2006, became “void ab initio ” and “no longer subject to being legally delivered or accepted” in 2012. Based on our analysis above, w e need not reach this argument or Steelman’s related contention that US Bank’s claim was unsecured and time

- barred under either A.R.S. § 14

- 3803(A) or (C)

.STEELMAN v. US BANK Decision of the Court

8 ¶25 Steelman also contends t he 2012 recording was improper because F irst American only recorded “an image of the [Quitclaim Deed] in a facsimile

. ” However, a copy of an instrument can be recorded if it is “sufficiently legible for the recorder to make certified copies from the photo graphic or micrographic record.” A.R.S. § 11

- 480(A)(2) (2012)

. ¶26 Steelman c ontend s, however, that F irst American inserted material misstatements into the Quitclaim Deed by eliminating the identifyi ng header and footer an d adding exemption language under A.R.S. § 11

- 1134(B)(3)

. A misstatement is only material for purposes of the statute “if a reasonable person would attach importance to its existence or nonexistence in determining [his or her] choice of action in the transaction in question.” Caruthers v . Underhill , 230 Ariz. 513, 521, ¶ 28 (App. 2012) (internal quotation marks omitted).

¶27 Here, no thing shows that the recorded Quitclaim Deed contained any false or material misstatements. T he omitted facs imile header and footer did not change or alter the d ocument in any material way. Likewise, the a dded statutory exemption language did not contain any misstatement, material or otherwise; F irst American simply added it to avoid paying the statutory recording fee

. See A.R.S. § 11

- 1134(B)(3) (exempting transfer between family members for nominal consideration from recording filing fee).

IV. F irst American Did Not Owe Fiduciary Duties to the Trust or the Myrmans’ Estates.

¶28 Steelman next contends F irst American “breached its fiduciary duty to dea l fairly with the Myrmans” by recording the facsimile copy of the Quitclaim Deed. Whether a fiduciary duty exists is a question of law we review de novo

. Gerow v. Covill
, 192 Ariz. 9, 17, ¶ 37 (App. 1998)

. ¶29 Steelman argues F irst American owed the Trust an d the Myrmans’ estate s a fiduciary duty via a Memorandum of Understanding (“MOU”) it entered into with the Maricopa County Recorder’s Office regarding electronic filing . Steelman cites one sentence from the MOU stating that “[a]ll parties of the Electroni c Recording transaction desire to operate and maintain a secure recording system that safeguards parties to recordation from deceit, fraud and forgery,” and contends that the Trust and the Myrmans’ estates, as “parties to recordation,” may sue F irst American for violating the MOU’s terms.

¶30 Assuming without deciding that the unsigned copy of the MOU w as a contract between First American and the Recorder’s Office , w eSTEELMAN v. US BANK Decision of the Court

9 reject Steelman’s contention that the Trust and the Myrmans’ estates were “members of that class

. . . to be protected by the duties created by the MOU.” A party is not a third party beneficiary of a contract unless the contract itself evidences a clear intent to benefit that party

. Sherman v. First Am. Title Ins. Co. , 201 Ariz. 564, 567, ¶ 6 (App. 2002)

. The language Steelman cit es does not confer any direct benefit on the Trust or the Myrmans’ estate s

. A t most, taking all inferences in Steelman’s favor, the MOU does not support a private cause of action, but merely confers an incidental benefit on Steelman by redu cing “deceit, fraud and forgery

. ” See Tanner Cos. v. Ins. Mktg. Servs., Inc.
, 154 Ariz. 442, 444 (App. 1987) (stating a party may not recover as a third party beneficiary “if it is mere ly an incidental beneficiary

. . . rather than one for whose express benefit the [contract] was executed ”).

¶31 Steelman next contends First American owed a fiduciary duty under Maxfield v. Martin , 217 Ariz. 312 (App. 2007)

. Under Maxfield
, an escrow agent owes the principals to an escrow two specific fiduciary duties: to comply strictly with the escrow agreement ’s terms , and to disclose facts that a reasonable escrow agent would perceive as evidence of fraud. Id . at 314, ¶ 12

. However, these duties do not apply to First American b ecause it

was not the escrow age nt for the original transaction

. Steelman cites no autho rity hol ding that either duty stated in Maxfield extend s to a title insurer under circumstances such as these

.

V. Granting Leave to Amend to Assert MOU

- Specific Claims Wo uld Have Been Futile.

¶32 Steelman also argues the trial court should have granted her l eave to amend the complaint to assert claims against First American under the MOU

. Leave to amend should be liberally granted, MacCollum v. Perkinson , 185 Ariz. 179, 185 ( App. 1996) , but is properly denied in cases of undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, or undue prejudice to the opposing party. Carranza v. Madrigal , 237 Ariz. 512, 515, ¶ 13 (2015)

. ¶33 We review the decision to deny leave to amend for an abuse of discretion. Id. There was no abuse of discretion here because a mending the complaint to assert MOU

- specific claims would have been futile. A s explained above, neither the Trust nor the Myrmans’ estates can sue First American for its alleged breaches of the MOU.

¶34 Steelman also argues the trial court did not directly address her request for leave to amend. This is true; however, the trial court expressly ruled that any alleged violation s of the M OU should “beSTEELMAN v. US BANK Decision of the Court

10 addressed between those two parties,” referring to First American and the Recorder’s Office. We may affirm a trial court’s ruling i f it is correct for any

reason , and do so here

. Tumacacori Mission Land Dev., Ltd. v. Union Pac. R. Co ., 231 Ariz. 517, 519, ¶ 4 (App. 2013)

.

VI. US Bank Was Not Entitled to Recover Attorn ey’s Fees un der A.R.S. § 12

- 1103(B)

. ¶35 Steel man next challenges the trial court’s attorney’s fees award to US Bank under A.R.S. § 12

- 1103(B)

. Steelman argue s US Bank could not recover fees because it held no interest in the title to the Myrmans’ home

. See A.R.S. § 12

- 1101(A)

. We agree.

¶36 A plaintiff pursuing a quiet title action must allege he holds title to the property

. Steinberger , 234 Ariz. at 140, ¶ 65 . US Bank did not

a llege or establish that it held any interest in the title to the Myrmans’ home ; it only alleged that it held “a valid deed of trust lien interest.” Further, DSL Service Company , which is not a party to this lawsuit, held title under the Deed of Trust, not US Bank. See Berryhill v. Moore , 180 Ariz. 77, 88 (App. 1994) (“[T]he mortgagee has no title.”).

¶37 US Bank argues that we can affirm the fee award under A.R.S. § 12

- 341.01(A) , but it did not ask for fees under § 12

- 341.01(A) in the trial
court. As a result, US Bank may not make a request pursuant to A.R.S. § 12

- 341.01(A) for the first time on appeal

. Barkhurst v. Kingsmen of Route 66, Inc. , 234 Ariz. 470, 476, ¶ 22 (App. 2014)

. We therefore vacate that portion of the judgment quieting title in US Ba nk’s favor as well as the fee award to US Bank.

VII. Attorney’s Fees on Appeal.

¶38 US Bank requests its attorney’s fees incurred on appeal under A.R.S. §§ 12

- 1103 and 12

- 341.01(A)

. We have already determined that US Bank cannot recover attorney’s fees under § 12

- 1103

. However, w e conclude that US Bank , as the prevailing p a rty in this appeal, is entitled to

an award of attorney’s fees on appeal under § 12

- 341.01(A)

. ¶39 A prevailing party may recover attorney’s fees under § 12

- 341.01(A) if a contract is the cause or origin of the dispute. Keystone Floor & More, LLC v. Ariz

. Registrar of Contractors , 223 Ariz. 27, 30, ¶ 10 (App. 2009)

. At oral argument, counsel for Steelman conceded that US Bank’s effort to foreclose on the subject prop erty arises from contract. We agree. T he Notice of Trustee’s Sale is based on Steelman’s breach of the Note , and is therefore based on a contract dispute

.STEELMAN v. US BANK Decision of the Court

11 CONCLUSION

¶40 For the reasons set forth above, w e vacate that portion of the judgment quieting title to the home in US Bank’s favor and awarding attorney’s fees to US Bank under A.R.S. § 12

- 1103

. We affirm the remainder of the judgment. We will awar d US Bank its reasonable attorney’s fees incurred on appeal, and both US Bank and First American their costs incurred on appeal
, contingent upon their compliance with Arizona Rule of Civil Appellate Procedure 21

. Addit i onally, it is ordered lifting the stay previously entered by this Court on June 2, 2015.