Bornstein v. Nationstar ( 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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
JAMIE BORNSTEIN, Plaintiff/Appellant,
v.
NATIONSTAR MORTGAGE LLC, et al., Defendants/Appellees.
No. 1 CA-CV 19-0108
FILED 12-26-2019
Appeal from the Superior Court in Maricopa County
No. CV2018-052567
The Honorable Cynthia Bailey, Judge
AFFIRMED
COUNSEL
Jamie Bornstein, Phoenix
Plaintiff/Appellant
Akerman LLP, Denver, Colorado
By Justin D. Balser, Ashley E. Calhoun
Counsel for Defendant/Appellee Nationstar Mortgage LLC
Barrett Daffin Frappier Treder & Weiss LLP, Phoenix
By Carson T.H. Emmons
Counsel for Defendant/Appellee Carson Emmons
BORNSTEIN v. NATIONSTAR, et al.
Decision of the Court
MEMORANDUM DECISION
Chief Judge Peter B. Swann delivered the decision of the court, in which
Presiding Judge David D. Weinzweig and Judge David B. Gass joined.
S W A N N, Chief Judge:
¶1 The day before a scheduled trustee’s sale of real property, the
owner of the property moved for a temporary restraining order to enjoin
the sale. The superior court did not enter the restraining order until the day
set for the sale, and the trustee did not receive actual notice of the order on
that day. The trustee therefore proceeded with the sale as scheduled. The
superior court later dissolved the restraining order and dismissed the
owner’s complaint against the trustee and the beneficiary. We affirm.
Under A.R.S. § 33-811(C), a party’s objections to a trustee’s sale can only be
preserved by injunctive relief entered before the day set for the sale.
FACTS AND PROCEDURAL HISTORY
¶2 In April 2016, Travis Smith borrowed money to purchase real
property and executed a promissory note secured by a deed of trust on the
property. Two months later, Smith executed a warranty deed transferring
the property to Jamie Bornstein subject to the deed of trust. Smith thereafter
allegedly defaulted on the loan.
¶3 In May 2017, trustee Carson Emmons recorded notice of a
trustee’s sale of the property. Bornstein filed for bankruptcy protection and
the sale was automatically stayed. The bankruptcy court lifted the
automatic stay as to the property on June 13, 2018. Bornstein appealed that
order and moved the bankruptcy court to impose a discretionary stay
pending resolution of the appeal. On July 9, the bankruptcy court granted
the discretionary stay on a temporary basis and set a hearing for July 16.
According to the trustee, at the July 16 hearing, he announced to Bornstein
and the court that the sale was set for July 18.
¶4 Meanwhile, in June, Bornstein had filed a pro per complaint
and an objection in the superior court to stop the sale. Then, late in the
afternoon on July 17, she filed an ex parte motion for a temporary
restraining order to halt the “trustee sale scheduled for tomorrow for the
sale of my home.”
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BORNSTEIN v. NATIONSTAR, et al.
Decision of the Court
¶5 The superior court entered and filed an order granting a
temporary restraining order before 10:00 a.m. on the morning of July 18—
the day of the sale. The same day, the appellate bankruptcy court denied
Bornstein’s motion for a discretionary stay.
¶6 Smith called Emmons that morning, before the time set for the
sale, and told him that a temporary restraining order had been obtained.
Smith asked whether he could email the order to Emmons, and Emmons
said yes. Emmons did not thereafter receive an email, so his legal assistant
called the superior court clerk’s office at 10:05 a.m. and asked if the court
had entered an injunction in the case number associated with Bornstein’s
complaint. She was told that no order had been entered. At 10:19 a.m.,
Bornstein sent the legal assistant an entirely blank email—it had no subject
line, text, or attachments. At 10:41 a.m., the legal assistant again called the
superior court clerk’s office and asked if an injunction had been entered in
favor of Smith. She was told no. The record reveals that the temporary
restraining order initially was filed under a case number other than the one
associated with Bornstein’s complaint.
¶7 Emmons proceeded with the sale and an outside bidder
purchased the property at approximately 11:10 a.m. on July 18. Bornstein
emailed Emmons’s legal assistant a copy of the temporary restraining order
the next day, and she served the order on Emmons several days later.
¶8 The superior court thereafter dissolved the temporary
restraining order and dismissed Bornstein’s complaint. The superior court
then denied Bornstein’s motions for relief from the dissolution order under
Ariz. R. Civ. P. 60, and it denied her motion for reconsideration of the
dissolution and dismissal orders. Bornstein appeals.
DISCUSSION
¶9 Bornstein emphasizes that she obtained the temporary
restraining order before the trustee’s sale and that Emmons was told of the
order before the sale. But A.R.S. § 33-811(C) specifically provides that to
preserve defenses and objections to a trustee’s sale, injunctive relief must
be obtained by a time certain before the sale—it must be “entered before
5:00 p.m. mountain standard time on the last business day before the
scheduled date of the sale.”1 See also A.R.S. § 33-811(D) (“A sale is not
1 Bornstein contended in the superior court proceedings that
§ 33-811(C) did not apply because it describes waiver by “all persons to
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BORNSTEIN v. NATIONSTAR, et al.
Decision of the Court
complete if the sale violates subsection C of this section because of an
undisclosed order entered by the court within the time provided for in
subsection C of this section.” (emphasis added)). “[W]here the language [of a
statute] is plain and unambiguous, courts generally must follow the text as
written.” Canon Sch. Dist. No. 50 v. W.E.S. Constr. Co., 177 Ariz. 526, 529
(1994). Under the plain language of § 33-811(C), Bornstein obtained her
temporary restraining order a day too late. The superior court therefore
properly dissolved the order and dismissed as waived the objections to the
sale raised by Bornstein’s complaint.2 See BT Capital, LLC v. TD Serv. Co. of
Ariz., 229 Ariz. 299, 301, ¶¶ 10–11 (2012) (applying § 33-811(C)).
¶10 Further, to the extent that Bornstein’s complaint could be
construed to assert claims separate from the sale, dismissal still was
appropriate. First, the complaint’s mere reference to “clouding title” and
citation to § 33-420, which governs false recordings, was insufficient to
plead a claim for false recording. See Cullen v. Auto-Owners Ins. Co., 218
Ariz. 417, 419, ¶¶ 6–7 (2008) (holding that complaint must set forth well-
pled facts to give opponent fair notice of the nature and basis of the claim,
and that mere conclusory statements are insufficient). Second, the
complaint’s reference to a “fail[ure] to respond to request for [a] certified
qwr” presumably invokes the federal statute governing qualified written
requests, 12 U.S.C. § 2605, which applies only to borrowers. Likewise, as a
non-party to the loan documents, Bornstein lacks standing to assert any
breach of contract claim based the complaint’s allegation of “refusal of
whom the trustee mails a notice of a sale under a trust deed pursuant to
§ 33-809” and she was not mailed such notice. But the appellees provided
sufficient evidence to show that, consistent with § 33-809(B), Bornstein was
sent a copy of the original notice of sale by certified mail in May 2017. And
though the mail was returned by the postal service as undeliverable, the
record demonstrates that Bornstein had actual notice of the trustee’s intent
to conduct the sale and the ultimate sale date.
2 We note the potential for conflict between § 33-811(C) and Ariz. R.
Civ. P. 65(d)(2) because the rule provides that a temporary restraining order
is effective upon actual notice. But here there is no conflict, because
Emmons did not receive actual notice of the order until the day after the
sale. See 3502 Lending, LLC v. CTC Real Estate Serv., 224 Ariz. 274, 277, ¶ 16
(App. 2010) (holding that “[n]otice of facts and circumstances which would
put a [person] of ordinary prudence and intelligence on inquiry”
constitutes constructive notice of the facts a reasonably diligent inquiry
would reveal); Manicom v. CitiMortgage, Inc., 236 Ariz. 153, 156, ¶ 8 (App.
2014) (“Constructive notice contrasts with actual notice . . . .”).
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BORNSTEIN v. NATIONSTAR, et al.
Decision of the Court
payments.” See Stratton v. Inspiration Consol. Copper Co., 140 Ariz. 528, 530–
31 (App. 1984) (holding that absent privity of contract, party has no claim
for personal judgment sounding in breach of contract).
CONCLUSION
¶11 We affirm for the reasons set forth above.
AMY M. WOOD • Clerk of the Court
FILED: AA
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