Delprete v. Ditech
1 CA-CV 17-0056
| Ariz. Ct. App. | Dec 5, 2017Background
- In 2006 the Delpretes refinanced their Anthem home with a promissory note and deed of trust showing MERS as nominee for Century Mortgage; subsequent assignments moved the deed of trust to Bank of America, then to Green Tree.
- Green Tree (later merged into Ditech) informed the Delpretes it serviced the loan and produced the Note; a later communication identified Fannie Mae as the noteholder; the Delpretes stopped paying and Ditech recorded a notice of trustee’s sale, which was later cancelled after payment.
- The Delpretes originally sued Century Mortgage in 2014 but failed to properly serve it; the court denied default and advised amendment; the Delpretes delayed and finally filed a first amended complaint in April 2016 naming Ditech and Fannie Mae.
- The amended complaint sought: injunctive relief to stop a trustee’s sale, declaratory judgment that defendants held no rights under the Note/Deed of Trust, quiet title, damages under Arizona’s False Recording Act, and rescission under TILA.
- The superior court granted defendants’ Rule 12(b)(6) dismissal, finding the Delpretes alleged only conclusory claims, failed to plead required facts (e.g., tender ability, wrongful transfers), and that statutory law (A.R.S. § 33-817) and documentary record supported defendants’ interests; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Injunction to stop trustee’s sale | Trustee’s sale would cause irreparable harm; injunction necessary | No imminent or actual harm; sale notice was cancelled | Moot and denied; no imminent harm or likelihood of success shown |
| Declaratory judgment re: ownership of Note/Deed | Defendants did not legally hold the Note or Deed; assignments invalid | Assignments/merger and A.R.S. § 33-817 transfer the security with the note | Dismissed; plaintiffs alleged only conclusory assertions and statute binds deed to note |
| Quiet title | Delpretes are rightful owners and defendants’ title is weak | Trustee (and beneficiaries) hold legal title under deed of trust until loan paid | Dismissed; plaintiffs didn’t allege payment or facts undermining defendants’ title |
| False Recording Act (A.R.S. § 33-420) | Recording the trustee’s sale notice was groundless and actionable | Documents and merger certificate show service/ownership were not groundless | Dismissed; plaintiffs failed to allege facts showing recordings were false or groundless |
| Rescission under TILA | Rescission demand within three years of 2012 modification; Bank misrepresented | TILA rescission excludes typical refinancings by same creditor; plaintiffs failed to allege new advances or ability to tender | Dismissed; rescission not available for this refinancing theory and plaintiffs failed to plead ability to tender |
Key Cases Cited
- Coleman v. City of Mesa, 230 Ariz. 352 (discussing Rule 12(b)(6) standards and consideration of public records)
- Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417 (pleading sufficiency principles)
- Gatecliff v. Great Republic Life Ins. Co., 154 Ariz. 502 (benefit of reasonable inferences on a motion to dismiss)
- Jeter v. Mayo Clinic Ariz., 211 Ariz. 386 (limits on accepting legal conclusions as facts)
- Steinberger v. McVey, 234 Ariz. 125 (trustee holds legal title under deed of trust until loan is paid)
- Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (TILA rescission framework)
- Yamamoto v. Bank of N.Y., 329 F.3d 1167 (borrower seeking rescission must show ability to tender)
- Logan v. Forever Living Prods. Int’l, Inc., 203 Ariz. 191 (Rule 12(b)(6) denial when plaintiffs entitled to no relief as a matter of law)