Opinion
No. 1 CA-CV 13-0163
02-13-2014
STEPHEN S. EDWARDS, individually and as Trustee of the Super Trust Fund, u/t/d June 15, 2001, Plaintiff/Appellant, v. FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, Defendant/Appellee.
Stephen S. Edwards, Mesa Plaintiff/Appellant In Propria Persona Lake & Cobb, PLC, Tempe By Richard L. Cobb, Blake W. Rebling Counsel for Defendant/Appellee
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT
AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Maricopa County
No. CV2012-096712
The Honorable Mark F. Aceto, Judge
AFFIRMED
COUNSEL
Stephen S. Edwards, Mesa
Plaintiff/Appellant In Propria Persona
Lake & Cobb, PLC, Tempe
By Richard L. Cobb, Blake W. Rebling
Counsel for Defendant/Appellee
MEMORANDUM DECISION
Judge John C. Gemmill delivered the decision of the Court, in which Presiding Judge Samuel A. Thumma and Judge Randall M. Howe joined.
GEMMILL, Judge:
¶1 Plaintiff Stephen S. Edwards, individually and as trustee for Super Trust Fund ("Edwards"), appeals the trial court's granting of a motion to dismiss filed by Defendant First American Title Insurance Company ("First American") and the consequent dismissal with prejudice of his complaint. For the reasons that follow, we affirm.
BACKGROUND
¶2 In 2003 and 2004, Edwards acquired two loans. After Edwards failed to repay either loan, two judgments were entered against him. Both judgments were recorded with the Maricopa County Recorder by mid-2005.
¶3 In 2009, Edwards purchased property located at 1765 North Lemon in Mesa ("Lemon property") and retained Title Security Agency of Pinal County, LLC ("TSA Pinal") as title and escrow agent. TSA Pinal was also responsible for coordinating the issuance of title insurance from First American.
¶4 In June of 2009, TSA Pinal issued a preliminary title commitment and, in due course, First American issued a title insurance policy to Edwards. The two judgments against Edwards were not listed in the policy as exceptions to title or encumbrances.
¶5 Edwards obtained a loan from Charles Schwab Bank in early 2010 to build a home on the Lemon property, secured by a deed of trust on the property. After realizing his property was burdened by judgments not brought to his attention by First American, Edwards filed a complaint in November 2012. Edwards alleges that he entered into a contract with First American "as evidenced by the execution of the insurance Commitment." Edwards claims he was harmed by First American's failure to include all title encumbrances in the title commitment and asserts claims for breach of contract, breach of fiduciary duty, breach of
the implied covenant of good faith and fair dealing, specific performance, statutory real estate fraud, and negligence.
¶6 On December 20, 2012, First American filed a motion to dismiss Edward's complaint for failure to state a claim under Arizona Rule of Civil Procedure 12(b)(6). Edwards failed to timely respond to the motion and the court subsequently dismissed all of the claims against First American, explaining that "[d]efandant has established that dismissal is appropriate." On January 25, 2013, the court entered a Rule 54(b) final judgment, and on February 4, 2013, Edwards filed a notice of appeal. Edwards later filed a motion to set aside the order of dismissal. But because his notice of appeal had effectively divested the trial court of jurisdiction, the court denied his motion to set aside.
¶7 Edwards timely appeals and we have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") sections 12-120.21(A)(1) and - 2101(A)(1),(B).
ANALYSIS
¶8 Edwards argues that the trial court erred in granting First American's Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted. We review de novo the dismissal of a complaint under Rule 12(b)(6). Coleman v. City of Mesa, 230 Ariz. 352, 355-56, ¶7, 284 P.3d 863, 866-67 (2012). Our supreme court has explained the proper consideration of a Rule 12(b)(6) motion:
When adjudicating a Rule 12(b)(6) motion to dismiss, Arizona courts look only to the pleading itself and consider the well-pled factual allegations contained therein. Courts must also assume the truth of the well-pled factual allegations and indulge all reasonable inferences therefrom. Because Arizona courts evaluate a complaint's well-pled facts, mere conclusory statements are insufficient to state a claim upon which relief can be granted. The inclusion of conclusory statements does not invalidate a complaint, but a complaint that states only legal conclusions, without any supporting factual allegations, does not satisfy Arizona's notice pleading standard under Rule 8.
Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, 419, ¶ 7, 189 P.3d 344, 346 (2008) (citations omitted).
¶9 Generally, a written response is required whenever a motion is filed. Choisser v. State ex rel. Herman, 12 Ariz. App. 259, 260, 469 P.2d 493, 494 (App. 1970). If an opposing party fails to respond to the motion, the court may dispose of the motion summarily. Id; Ariz. R. Civ. P. 7.1(b). In relevant part, Rule 7.1(b) states
If a motion does not conform in all substantial respects with the requirements of this rule, or if the opposing party does not serve and file the required answering memorandum . . . such non-compliance may be deemed a consent to the denial or granting of the motion, and the court may dispose of the motion summarily.
(Emphasis added.)
¶10 After First American filed its motion to dismiss, Edwards had 10 days in which to file a response under Rule 7.1(a) unless he timely obtained an extension from the court. Edwards did not timely obtain an extension from the court and he admits he did not file a response within the allowable time, claiming that he was out of the country during the time the motion was filed. Edwards's failure to respond entitled the court to summarily grant First American's motion solely on the basis of the literal language of Rule 7.1(b).
¶11 It appears from the trial court's order granting the motion to dismiss that the court reviewed the motion and complaint to determine if First American was entitled to have the complaint dismissed. The court specifically stated that "[d]efendant has established that dismissal is appropriate." We will similarly examine the complaint and motion to determine if Edwards's complaint was appropriately dismissed.
¶12 Edwards's complaint alleges that First American and Edwards entered into a contract in the form of the "commitment letter" issued in June of 2009. Because the title commitment did not warn his lender of liens on Edwards's property, Edwards claimed First American breached its contract, its fiduciary duty, and the implied covenant of good faith and fair dealing. In A.R.S. § 20-1562(5), a title commitment is defined as
[A] report that is furnished in connection with an application for title insurance and that offers to issue a title insurance policy subject to the stated exceptions set forth in the report
or incorporated by reference. The reports are not abstracts of title and the rights, duties and responsibilities relating to the preparation and issuance of an abstract of title do not apply to the issuance of a report. The report is not a representation as to the condition of title to real property but does constitute a statement of the terms and conditions on which the issuer is willing to issue its title insurance policy if the offer is accepted.
In accordance with this statute, Edwards was not entitled to rely on the title commitment because it was only an offer without the force of a contractual obligation. See Centennial Dev. Grp., LLC v. Lawyer's Title Ins. Corp., 233 Ariz. 147,148, ¶¶ 5-6, 310 P.3d 23, 25 (App. 2013). Before issuing coverage, an insurer will review public records for defects, and then issue a title commitment that lists exceptions to coverage. Id. If the exceptions listed in the title commitment are accepted, then the policy is issued. Id. A title commitment is not a "representation of the condition of the title" and cannot be relied on by Edwards as the basis for the claims he asserts. Id. at ¶ 9. Accordingly, even if Edwards had timely opposed the motion to dismiss, his complaint does not state a claim upon which relief could be granted on this ground. Moreover, Edwards's complaint also fails to allege facts that, if proven, would support a finding that First American's alleged failure to identify two recorded judgments constituted a breach of fiduciary duty or a breach of the implied covenant of good faith and fair dealing.
¶13 Edwards's complaint also asserts negligence, specific performance, and statutory real estate fraud. These legal theories are asserted in conclusory fashion and are not properly pled. See Cullen, 218 Ariz. at 419, ¶7, 189 P.3d at 346 (stating that mere conclusory statements are insufficient to state a claim upon which relief can be granted). Further, claims for fraud must be pled with particularity. Ariz. R. Civ. P. 9(b). And while there is no "magic language" required, a claimant must "plead all the essential elements of fraud" in his complaint. Green v. Lisa Frank, Inc., 221 Ariz. 138, 155-56, ¶53, 211 P.3d 16, 33-34 (App. 2009). Edwards's complaint does not contain short and plain statements alleging all the elements of fraud or the other legal theories.
CONCLUSION
¶14 Edwards's complaint against First American fails to state claims upon which relief may be granted. In addition, Edwards did not
timely respond to the motion in superior court, thereby triggering application of Rule 7.1(b). For these reasons, we affirm the court's dismissal of the complaint.
¶15 First American requests an award of attorneys' fees and costs on appeal. In our discretion, we grant First American's request for attorneys' fees and costs on appeal, in accordance with A.R.S. §§ 12-341 and -341.01, upon compliance with Arizona Rule of Civil Appellate Procedure 21.