Hogan v. Washington Mutual Bank, N.A.
227 Ariz. 561
| Ariz. Ct. App. | 2011Background
- Hogan owns real property in Yavapai County secured by a 2004 deed of trust to Long Beach Mortgage.
- In 2007, a Notice of Substitution of Trustee named Washington Mutual Bank as successor to Long Beach with California Reconveyance Company as Trustee.
- In 2008 Hogan received notices of breach and a Notice of Trustee's Sale naming Washington Mutual as beneficiary and CRC as Trustee.
- Washington Mutual was closed by the OTS and FDIC-appointed receiver; Chase acquired certain assets and the loan servicing rights.
- In 2009 Hogan sued to stay the trustee’s sale and sought an evidentiary showing of the note and standing; in 2009–2010 he filed a First Amended Complaint asserting multiple claims.
- The trial court dismissed the amended complaint; Hogan appeals arguing WaMu/Chase lacked proof they were entitled to enforce the note.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must the foreclosing entity prove it is entitled to enforce the note? | Hogan: must prove holder of the note to foreclose. | Chase/WaMu: foreclosure under a deed of trust does not require presenting the original note or enforcing under UCC. | No; foreclosure authority arises under the deed of trust, not the note title. |
| Is the note subject to the UCC person-entitled-to-enforce provision in this context? | Hogan: note ownership must be established under A.R.S. § 47-3301. | WaMu/Chase: even if the note is an instrument, the deed of trust foreclosure is contract-based and not controlled by the UCC here. | Deed of trust foreclosure is not governed by the UCC enforcement provisions for negotiable instruments. |
Key Cases Cited
- Diessner v. Mortgage Electronic Registration Sys., Inc., 618 F. Supp. 2d 1184 (D. Ariz. 2009) (non-judicial foreclosures do not require original note presentation)
- Mansour v. Cal.-West Reconvey Corp., 618 F. Supp. 2d 1178 (D. Ariz. 2009) (rejects 'show me the note' arguments in Arizona foreclosure context)
- In re Krohn, 203 Ariz. 205 (Ariz. 2002) (deeds of trust foreclosures are contract-based)
- Binder v. Fruth, 150 Ariz. 21 (App. 1986) (deeds of trust are creatures of statute)
- Schabel v. Deer Valley Unified Sch. Dist. No. 97, 186 Ariz. 161 (App. 1996) (issues not argued on appeal are waived)
- Fidelity Sec. Life Ins. Co. v. State, 191 Ariz. 222 (1998) (standard for reviewing dismissal on appeal)
- McDonald v. City of Prescott, 197 Ariz. 566 (App. 2000) (treats reasonable-inference standards on appeal)