Homeowner Win in Arizona Court of Appeals in Stauffer v First American Title Relating to ARS 33-420 and False Recordings in Foreclosure

1CA-CV12-0073 Stauffer v USB

Stauffer v. First American Title, Co., et. al. was the first case to go up to the Arizona Court of Appeals on the issue of whether Arizona’s false recording statute, A.R.S. 33-420 applies to the types of documents recorded in the typical non-judicial foreclosure, the Assignment of Beneficial Status in the Deed of Trust, the Notice of Trustee’s Sale, and the Substitution of Trustee.  The court held that these documents are encompassed by part A of the statute, which provides damages for the recording of a document containing false statements that “purport to create an interest or lien or encumbrance” in real property.

The court also held that the homeowner has standing as an “owner or beneficial title holder of the real property” to bring the claim.

Finally, the court said that section (b) providing an expeditious way to clear title was only applicable to liens, and that these documents aren’t liens.  In other words, you can’t rely on 33-420(B) to clear anything other than liens, you’ll have to sue under the broader title statute of A.R.S. 12-1101.

The case was remanded back to the trial court (where it had been dismissed on a 12(b)(6) motion) for further proceedings.

A homeowner victory!