Zadrozny, et al. v. Bank of New York Mellon, et al., No. 11-16597 (9th Cir. 2013)
Annotate this CasePlaintiffs appealed the district court's dismissal of their first amended complaint and the district court's denial of leave to further amend their complaint. Plaintiffs claimed that defendants improperly initiated non-judicial foreclosure proceedings after plaintiffs failed to comply with the mortgage obligations financing their residence. Because the provisions of the deed of trust foreclosed the pleading of a plausible "show me the note" claim by plaintiffs, the district court appropriately dismissed this claim; the district court properly dismissed plaintiffs' claims premised on the unauthorized appointment of a successor trustee and/or the lack of proof of ownership of the note where these claims lacked legal and factual plausibility; because Arizona law countenances the trustee sale as conducted, plaintiffs failed to allege any plausible claims premised on the PEB Report or the UCC; plaintiffs' constitutional challenges of A.R.S. 33-811(b) were rejected by the court; plaintiffs' fraud and misrepresentation claims were barred by A.R.S. 12-543(3); and denial of leave to amend was within the district court's discretion. Accordingly, the court affirmed the judgment.
Court Description: Diversity/Foreclosure. The panel affirmed the district court’s dismissal of a complaint in which plaintiffs alleged that defendants improperly initiated non-judicial foreclosure proceedings after plaintiffs failed to comply with the mortgage obligations financing their residence. The panel held that Arizona courts have rejected plaintiffs’ claim that non-judicial foreclosures require production of the promissory note prior to a sale, and their claim that successor trustees are unauthorized to initiate foreclosure proceedings. Arizona precedent similarly foreclosed plaintiffs’ contention that non-judicial foreclosure sales must comport with the Uniform Commercial Code. The panel further held that plaintiffs failed to provide any legal authority for their constitutional challenge to A.R.S. § 33-811(b), and waived any challenge to the district court’s dismissal of their fraud and misrepresentation claims as untimely.
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