US Bank v. Reynolds ( 2019 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
US BANK NATIONAL ASSOCIATION, Plaintiff/Appellee,
v.
AUDIE JAY REYNOLDS, Defendant/Appellant.
No. 1 CA-CV 18-0689
FILED 12-26-2019
Appeal from the Superior Court in Navajo County
No. S0900CV201800002
The Honorable Robert J. Higgins, Judge
AFFIRMED
COUNSEL
Bryan Cave Leighton Paisner LLP, Phoenix
By Sean K. McElenney, Daniel P. Crane
Counsel for Plaintiff/Appellee
Audie Jay Reynolds, Scottsdale
Defendant/Appellant
MEMORANDUM DECISION
Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge Maria Elena Cruz and Judge Michael J. Brown joined.
US BANK v. REYNOLDS
Decision of the Court
C A T T A N I, Judge:
¶1 Audie Reynolds appeals the superior court’s judgment
finding him and his wife guilty of forcible detainer and awarding U.S. Bank
National Association, as Trustee for Residential Asset Mortgage Products,
Inc., Mortgage Asset-Backed Pass-Through Certificates, Series 2006-NC2
(“US Bank”) immediate and exclusive possession of a residence in
Overgaard. For reasons that follow, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 In December 2017, US Bank purchased Reynolds’s residence
at a trustee’s sale and promptly recorded the trustee’s deed. Later that
month, US Bank mailed and personally served Reynolds with a notice to
vacate the premises. Reynolds did not leave, and US Bank filed this forcible
entry and detainer (“FED”) action.
¶3 Reynolds answered US Bank’s complaint with general
denials, pointed out that the complaint listed the wrong entity as successor
trustee, and proffered alleged defects in the trustee’s sale as affirmative
defenses. US Bank moved to amend the complaint to reference the correct
successor trustee and separately moved for judgment on the pleadings.
Reynolds did not file a new answer, but rather opted to rely on oral
argument at the forcible detainer hearing.
¶4 Relying on US Bank’s superior right to possession under the
trustee’s deed, the superior court found Reynolds and his wife guilty of
forcible detainer and entered judgment in favor of US Bank for immediate
possession of the property. The court later stayed the judgment pending
appeal, conditioned on Reynolds paying into court the rental value of
$1,000 per month. See A.R.S. § 12-1182(b). Reynolds appealed.
DISCUSSION
¶5 Reynolds argues the superior court erred by entering
judgment in favor of US Bank. First, he claims that US Bank was not
“executor, administrator, guardian, bailee, or grantee” of the trustee’s deed
and thus could not prosecute the FED action as real party in interest. But
US Bank—specifically, “U.S. Bank National Association, as Trustee for
Residential Asset Mortgage Products, Inc., Mortgage Asset-Backed Pass-
Through Certificates, Series 2006-NC2”—was expressly designated as
grantee under the trustee’s deed. And as owner of the property by virtue
of the trustee’s deed, US Bank established its right to possession. See
Carrington Mortg. Servs. LLC v. Woods, 242 Ariz. 455, 457, ¶ 12 (App. 2017).
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US BANK v. REYNOLDS
Decision of the Court
¶6 Second, Reynolds urges that defects in the trustee’s sale
render the trustee’s deed invalid and thus undermine US Bank’s asserted
right to possession. But the merits of US Bank’s title are beyond the scope
of an FED action. See A.R.S. § 12-1177(A) (“[In an FED action], the only
issue shall be the right of actual possession and the merits of title shall not
be inquired into.”); see also Curtis v. Morris, 186 Ariz. 534, 534 (1996). The
only issue was the right of possession, and as described above, US Bank had
the right of possession under the trustee’s deed.
¶7 Any challenge to the trustee’s sale—such as Reynolds’s claim
that the successor trustee was not authorized to act as a trustee under
Arizona law—must be pursued before the sale has been completed; the
trustor may not challenge the completed sale based on pre-sale objections.
See A.R.S. § 33-811(C); BT Capital, LLC v. TD Serv. Co. of Ariz., 229 Ariz. 299,
301, ¶ 11 (2012). And here, Reynolds apparently attempted to halt the
trustee’s sale before it went forward based on similar objections to the
successor trustee, but he was unsuccessful. Reynolds v. Ocwen Loan
Servicing, LLC, 719 Fed. Appx. 673 (9th Cir. 2018) (mem.), aff’g Reynolds v.
Ocwen Loan Servicing LLC, CV-17-08123-PCT-JJT, 2017 WL 4653037 (D. Ariz.
Aug. 18, 2017). To the extent he now attempts to raise new issues, the
trustee’s deed raised a presumption that the sale comported with statutory
requirements, see A.R.S. § 33-811(B), and Reynolds has offered no basis to
overcome either this presumption or waiver under § 33-811(C).
¶8 Finally, Reynolds’s challenge to the successor trustee is
factually flawed. He notes that the trustee’s deed is signed by “C. Scott
‘Trustee Sale Assistant’” and argues that “Assistant Trustees” are not
qualified to conduct trustee’s sale under Arizona law. But the trustee was
“Western Progressive – Arizona, Inc.,” not “C. Scott.” See also Reynolds, 719
Fed. Appx. 673. “C. Scott” did not substitute as trustee, but rather was a
“duly-authorized” agent signing on behalf of the corporate successor
trustee. See Samaritan Found. v. Goodfarb, 176 Ariz. 497, 502 (1993) (noting
that a corporation “can only act through its agents”); Best Choice Fund, LLC
v. Low & Childers, P.C., 228 Ariz. 502, 510, ¶ 26 (App. 2011) (as amended).
Western Progressive remained the successor trustee, and Reynolds’s
challenge to that entity’s authority to act as a trustee under Arizona law has
already been resolved against him. See Reynolds, 719 Fed. Appx. 673(affirming dismissal of Reynolds’s challenge to the trustee’s sale “because
Reynolds failed to allege facts sufficient to show that Western Progressive–
Arizona, Inc. was not a proper trustee authorized to initiate the non-judicial
foreclosure process under Arizona state law”).
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US BANK v. REYNOLDS
Decision of the Court
CONCLUSION
¶9 We affirm the forcible detainer judgment. US Bank requests
an award of attorney’s fees on appeal but cites no authority for its request.
Although we may award fees as a sanction for a frivolous appeal, in an
exercise of discretion, we decline to do so. As the prevailing party on
appeal, US Bank is entitled to an award of costs upon compliance with
ARCAP 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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