Good v. National City

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE WAYNE GOOD and PAULETTE GOOD, Plaintiff/Appellant, v. NATIONAL CITY MORTGAGE, Defendant/Appellee ) ) ) ) ) ) ) ) ) ) ) ) No. DIVISION ONE FILED: 06/24/10 PHILIP G. URRY,CLERK BY: JT 1 CA-CV 09-0726 DEPARTMENT D MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV2009-023649 The Honorable Hugh E. Hegyi, Judge AFFIRMED Wayne Good and Paulette Good Plaintiffs/Appellants In Propria Persona Phoenix Ballard Spahr LLP By John G. Kerkorian and Craig C. Hoffman Attorneys for Defendant/Appellee Phoenix B R O W N, Judge ¶1 dismissal Wayne of and their Paulette Good (the complaint against Goods ) National appeal City the Mortgage ( National City ) for failure to state a claim upon which relief could be granted pursuant to Arizona Rule of Civil Procedure 12(b)(6). For the following reasons, we affirm. BACKGROUND ¶2 The October Goods purchased a 2007 (the home property ). in The Phoenix, property Arizona in was financed through National City and secured by a Deed of Trust. Sometime after the purchase of the property, National City threatened to initiate a non-judicial foreclosure sale, apparently due to the Goods inability to pay the mortgage on the property. to the Goods, the outstanding balance on the According mortgage is $230,000, but the home is now worth only $100,000. ¶3 In response to the threatened foreclosure, the Goods filed a complaint renegotiation of against the National mortgage City based on seeking a to public compel policy a to minimize home foreclosures[,] which they argued was created by the adoption of the Emergency Economic Stabilization Act (the Act ), 12 U.S.C. §§ 5201 to -5261 (Supp. 2008), and set forth in White v. Mattox, 127 Ariz. 181, 619 P.2d 9 (1980); and Wagenseller v. Scottsdale Mem. Hosp., 147 Ariz. 370, 710 P.2d 1025 (1985), superseded by statute on other grounds. National City filed a motion to dismiss the complaint for failure to state a claim, arguing that the public policy cited by the Goods was not a proper basis for a cause of action in Arizona. National City also argued the Goods failed to state facts that 2 could be construed to result in a cause of action against them. The trial court granted National City s motion and the Goods filed this appeal. DISCUSSION ¶4 We review a trial court s grant of a motion to dismiss for failure to state a claim de novo. Phelps Dodge Corp. v. El Paso Corp., 213 Ariz. 400, 402, ¶ 8, 142 P.3d 708, 710 (App. 2006). will We assume the allegations in the complaint are true, and uphold dismissal only if the plaintiff[] would not be entitled to relief under any facts susceptible of proof in the statement of the claim. T.P. Racing, L.L.L.P. v. Ariz. Dep't of Racing, 223 Ariz. 257, ___, ¶ 8, 222 P.3d 280, 282 (App. 2009) (citation and internal quotation marks omitted). ¶5 The Goods argue that public policy requires lenders like National City to meet with borrowers in a good faith effort to implement a plan to avoid foreclosure. They ask us to find that such a public policy is recognized in Arizona and to apply it here. ¶6 As an initial matter, the Goods make no specific arguments on appeal that the trial court erred in dismissing their complaint for failure to state a cognizable claim, which could constitute abandonment and waiver of their claim on that 3 basis. 1 See State v. Moody, 208 Ariz. 424, 452 n.9, ¶ 101, 94 P.3d 1119, 1147 n.9 (2004) (quoting State v. Carver, 160 Ariz. 167, 175, 771 P.2d 1382, 1390 (1989) ( [O]pening briefs must present significant arguments, supported by authority, setting forth an appellant s position on the issues raised. Failure to argue a claim usually constitutes abandonment and waiver of that claim. )). In our discretion, however, we decide this appeal on its merits based on our review of the record. See Adams v. Valley Nat l Bank of Ariz., 139 Ariz. 340, 342, 678 P.2d 525, 527 (App. 1984) (recognizing that courts prefer to decide cases on the merits rather than dismiss on procedural grounds). ¶7 We construe the Goods opening brief liberally and take it to be a challenge to the trial court s dismissal of their complaint pursuant Rule 12(b)(6) based on its finding that neither the [the Act] nor Arizona law articulate a policy of prohibiting residential foreclosures described in the Goods complaint. under the circumstances A complaint may be properly dismissed for failure to state a claim if it lacks a cognizable 1 The Goods also fail to cite to the record or provide any authority regarding the issues presented in their opening brief as required. ARCAP 13(a)(6) ( The brief of the appellant shall concisely and clearly set forth . . . [a]n argument which shall contain the contentions of the appellant with respect to the issues presented, and the reasons therefor, with citations to the authorities, statutes and parts of the record relied on. ). We therefore rely on our own review of the record for the pertinent facts. State Farm Mut. Auto. Ins. Co. v. Arrington, 192 Ariz. 255, 257 n.1, 963 P.2d 334, 336 n.1 (App. 1998). 4 legal theory or contains insufficient facts to support a claim under a cognizable legal theory. Balistreri v. Pacifica Police Dep t, 901 F.2d 696, 699 (9th Cir. 1990). ¶8 Here, the complaint, like the assertions proffered on appeal, rests on the notion that the Act created a public policy that required lenders to renegotiate mortgages when doing so would avoid foreclosure and be in the best interest of [the] nation or the best interest of their stockholders. But the Act only provides authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers[.] Emergency Economic Stabilization Act of 2008, Pub. L. No. 110-343, 122 Stat. 3765, introductory comment (codified at 12 U.S.C. §§ 5201 to -5261). To the extent the Secretary of the Treasury of the United States acquires mortgages, mortgage backed securities, and other assets secured by residential real estate, the Secretary is required to implement a plan that may accommodate reasonable loan modifications financially distressed homeowners. and provide assistance to See 12 U.S.C. § 5219(a)(1). Nothing in the Act, however, creates a private right of action for financially distressed homeowners or requires private mortgage lenders to renegotiate contract terms with borrowers. 5 ¶9 Nor do the cases cited by the Goods in the trial court support their legal theory. White stands for the proposition that not all contracts involving a violation of a statute are void. 127 Ariz. at 184, 619 P.2d at 12. The Goods, however, raise no claims regarding the validity of their agreement with National City; thus their reliance on White is misplaced. Wagenseller, on the other hand, does recognize that judicial decisions can be a source of public policy. 79, 710 P.2d at 1033-34. proceed absent cautiously some But it also warns that courts should called upon legislative or to declare judicial public expression policy on the Id. at 379, 710 P.2d at 1034 (citation omitted). subject. prior if 147 Ariz. at 378- As previously explained, in adopting the Act, the legislature did not create a private right of action or suggest mandatory consultation with borrowers regarding renegotiation of mortgage terms prior to foreclosure, nor has our research revealed any other authority that would do so under the circumstances presented here. ¶10 Moreover, the Goods acknowledge that financial institutions have a duty to foreclose on homes for nonpayment in order to protect their stockholders. Consequently, they admit that they do not seek to preclude National City from foreclosing on their property; rather they seek to have National City meet with them in a good faith 6 effort to determine if a renegotiation beneficial to of the all mortgage parties on the Goods home The Goods, involved. would be however, provide no authority that requires National City to participate in such a meeting, and we are aware of none. ¶11 claim, Because the Goods have failed to state any cognizable we find the trial court properly dismissed their complaint pursuant to Rule 12(b)(6). CONCLUSION ¶12 For the foregoing reasons, we affirm the dismissal of the Goods complaint against National City. /s/ _________________________________ MICHAEL J. BROWN, Presiding Judge CONCURRING: /s/ ______________________________ JON W. THOMPSON, Judge /s/ ______________________________ SHELDON H. WEISBERG, Judge 7

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