763 F. Supp. 2d 1116
D. Ariz.2011Background
- Puzz borrowed to purchase property in Mesa, executed note and deed of trust later assigned to Chase.
- Puzz defaulted on mortgage; he sought loss-mitigation/loan modification options from Chase.
- Chase referred Puzz's file to Bosco Defendants for non-judicial foreclosure; substitution of trustee recorded and trustee sale noticed.
- Bosco Defendants contacted Puzz directly and posted signs; foreclosure proceedings continued despite TRO and partial stays.
- Puzz filed FAC alleging multiple claims (fraud, misrepresentation, defamation, etc.) against all Defendants; Chase and Bosco moved to dismiss; Puzz did not timely respond.
- Court granted in part and denied in part, dismissing most counts for failure to plead damages or plausible claims, but allowed defamation claim (count 8) to proceed; addressed A.R.S. § 33-807(E) and sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether counts fail to state plausible claims under Rule 12(b)(6). | Puzz alleges Chase promised loan modification and Bosco knew, thus viable injury and duty. | Counts lack plausible damages and legal basis; HAMP does not create private right of action; statements not plausibly damages. | Counts 1-7, 9-12 dismissed; defamation claim (8) survives. |
| Whether the defamation claim is adequately pled and damages are shown. | Statements about delinquency and foreclosure harmed credit/standing. | Some statements true or privileged; others lack damages and factual basis. | Defamation claim survives in part; some statements dismissed for lack of damages or plausibility, but count 8 remains viable. |
| Whether A.R.S. § 33-807(E) requires dismissal and fee shifting for certain claims against Bosco Defendants. | Bosco should face claims despite not alleging trustee-breach. | Statute provides dismissal/fee shifting when trustee not breached and action not pertaining to trustee authority. | Counts 1, 10, 11, 12 dismissed as to Bosco; fees awarded to Bosco on those counts; other counts not barred by statute remain for Chase and other counts. |
| Whether sanctions are warranted against Puzz. | Defendants should be sanctioned for failure to settle. | No improper conduct or frivolous filings; sanctions unwarranted. | Motion for sanctions denied. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading after Twombly and Iqbal)
- Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) (facially plausible claims required; not mere legal conclusions)
- Ghazali v. Moran, 46 F.3d 52 (9th Cir. 1995) (local rule noncompliance may warrant summary dismissal)
- United States v. $22,474 in U.S. Currency, 55 F. Supp. 2d 1007 (D. Ariz. 1999) (local rule noncompliance and dismissal standards)
- Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) (pleading requirements post-Twombly/Iqbal)
- Pareto v. FDIC, 139 F.3d 696 (9th Cir. 1998) (conclusory allegations insufficient to state claim)
- Janson v. Christensen, 167 Ariz. 470 (Ariz. 1991) (statutory interpretation and plain meaning controls)
- State ex rel. Indus. Comm'n v. Pressley, 250 P.2d 992 (Ariz. 1952) (court can supply words to give effect to legislative intent)
- Keller v. State, 46 Ariz. 106 (Ariz. 1935) (statutory interpretation and contextual meaning)