Wagner v. Bank of America

NOTICE: NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

JOHN WAGNER,
a married man in his sole and separate capacity,
Plaintiff/Appellant,

v.

BANK OF AMERICA, NA,
successor in interest to Countrywide Home Loans, Inc., and
Countrywide Bank, FSB,
Defendant/Appellee.

No. 1 CA-CV 13-0219
FILED 06-26-2014

Appeal from the Superior Court in Maricopa County
No. CV2012-093758
The Honorable David M. Talamante, Judge

AFFIRMED

COUNSEL

John Wagner, Mesa
Plaintiff/Appellant In Propria Persona

Bryan Cave LLP, Phoenix
By Robert W. Shely, Rodney W. Ott
Counsel for Defendant/Appellee
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Decision of the Court

MEMORANDUM DECISION

Judge Michael J. Brown delivered the decision of the Court, in which
Presiding Judge Randall M. Howe and Judge Jon W. Thompson joined.

B R O W N, Judge:

¶1 John Wagner appeals the superior court’s judgment
dismissing his claims for quiet title and unjust enrichment with prejudice
against Bank of America. For the reasons stated below, we affirm.

BACKGROUND

¶2 Wagner alleged that he purchased two properties from
Wanda Wortman in September 2011—one in Chandler and another in
Payson. 1 The purchase agreement was not in writing, and Wortman has
refused to sign any documents memorializing the purchase. According to
Wagner, the agreement obligated him to pay off any recorded
encumbrances on the properties. At the time of the alleged purchase,
Wortman told Wagner there was a deed of trust encumbering the
Chandler property in favor of Bank of America. After he was unable to
find a recorded deed of trust after two title searches, Wagner took
possession of the Chandler property and began making repairs.

¶3 A deed of trust in favor of Bank of America’s predecessor
had been executed in September 2007, but it was not recorded until
February 2012, after Wagner allegedly purchased the property. Wagner
filed a complaint seeking specific performance from Wortman and
asserting a quiet title claim against Bank of America. He alleged that his
interest in the property was superior to Bank of America’s subsequently
recorded deed of trust. Wagner also asserted unjust enrichment claims
against both defendants as an alternative form of relief in the event the
court found he did not have a superior interest in the property.

¶4 Bank of America moved to dismiss Wagner’s claims on the
grounds that: (1) he lacked legal title to the property because the purchase
contract violated the statute of frauds; (2) the deed of trust had priority

1 Only the Chandler property is at issue on appeal.

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because Wagner was not a subsequent purchaser for value without notice
of the unrecorded deed of trust; and (3) it was not inequitable to give
priority to the deed of trust. Wagner argued he had priority over Bank of
America’s deed of trust as a matter of law and that Bank of America could
not raise Wortman’s statute of frauds defense. The superior court found
that Wagner was not a subsequent purchaser for value without notice and
entered an appealable judgment dismissing all claims against Bank of
America. Wagner then filed a timely notice of appeal. 2

DISCUSSION

¶5 The only issue Wagner raises on appeal is that the superior
court improperly dismissed his quiet title claim. We review de novo the
grant of a motion to dismiss a complaint under Rule 12(b)(6), Arizona
Rules of Civil Procedure. Sw. Non-Profit Hous. Corp. v. Nowak, 234 Ariz.
387, 390-91, ¶ 10, 322 P.3d 204, 207-08 (App. 2014) (citations omitted). “In
doing so, we look only to the complaint, assuming the truth of all well-
pled factual allegations and indulging all reasonable inferences. . . .
Although we ‘uphold dismissal only if the plaintiffs would not be entitled
to relief under any facts susceptible of proof in the statement of the claim,’
. . . we may affirm if the dismissal is correct for any reason[.]” Id. (internal
citations omitted).

¶6 Applying this standard of review, we affirm the order of
dismissal, but on other grounds. See Long v. Napolitano, 203 Ariz. 247, 253,
¶ 12, 53 P.3d 172, 178 (App. 2002) (holding appellate court may affirm
lower court ruling if it is correct on any ground). The superior court
granted the motion to dismiss on the basis that Wagner was not a
subsequent purchaser for value without notice. We base our decision on
Wagner’s failure to show he had an enforceable interest in the property
because the alleged purchase contract did not comply with the statute of
frauds. See Ariz. Rev. Stat. § 44-101(6).

2 After Wagner filed his notice of appeal from the judgment
dismissing his claims against Bank of America, Wortman filed a motion
for summary judgment arguing: (1) the alleged oral contract violated the
statute of frauds, and (2) Wagner was in material breach for failing to
satisfy the encumbrances. After Wagner filed his opening brief on appeal,
the superior court granted summary judgment in favor of Wortman
without comment. Wagner did not amend his notice of appeal to include
the order dismissing his claims against Wortman or otherwise separately
appeal from that order.

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¶7 Bank of America argues that Wagner never legally acquired
title to the property and therefore could not properly assert that his
property interest was superior. We agree. The statute of frauds provides,
in relevant part:

No action shall be brought in any court in the following
cases unless the promise or agreement upon which the
action is brought, or some memorandum thereof, is in
writing and signed by the party to be charged, or by some
person by him thereunto lawfully authorized:

...

Upon an agreement . . . for the sale of real property or an
interest therein.

Id. Wagner admits that Wortman never signed a contract or escrow
documents. Thus, the alleged purchase fails to comply with the statute of
frauds. Wagner argued below that the contract falls outside the statute of
frauds by his part performance. 3 He alleged that his part performance
consisted of taking possession of the property, as well as turning on
utilities, cleaning, and making repairs to the property.

¶8 Part performance is a well-established exception to the
statute of frauds. Owens v. M.E. Schepp Ltd. P’ship, 218 Ariz. 222, 226,
¶ 16, 182 P.3d 664, 668 (2008). “[T]he acts of part performance take an
alleged contract outside the statute only if they cannot be explained in the
absence of the contract.” Id. That is, “any alleged act of part performance
[must] be consistent only with the existence of a contract and inconsistent
with other explanations such as ongoing negotiations, . . . or an existing
relationship between the parties[.]” Id. at 227, ¶ 18, 182 P.3d at 669
(citations omitted).

3 Wagner did not address the statute of frauds argument in his
opening brief because, he contends, it was not relied on by the superior
court. As noted above, we may affirm the grant of a motion to dismiss if
it correct for any reason. Wagner briefly addressed the statute of frauds in
his reply brief, but this court, in a previous order, declined to accept his
reply brief as untimely. Accordingly, we do not consider the arguments
raised in Wagner’s reply brief. We do, however, address the arguments
Wagner raised in the superior court regarding the statute of frauds.

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¶9 Although acts of part performance that demonstrate reliance
on an oral agreement may remove an agreement from the statute of
frauds, Wagner did not allege facts sufficient to demonstrate such
reliance. Specifically, Wagner asserted that upon taking possession of the
Chandler property, he “commence[d] cleaning and repairing . . .
performed plumbing repairs, had utilities turned on, had insurance put on
the property, had the water turned on, deduced a mold infestation and
commenced remediation of that problem.” However, despite Wagner’s
assertions that “these acts, and possession, were done with the knowledge
and concurrence of defendant Wortman” there is no allegation that they
were performed in reliance of the purchase contract. Additionally,
Wagner did not assert that he paid Wortman anything for the property.
Wagner’s complaint therefore failed to allege acts that were
“unequivocally referable” to an alleged contract to purchase the property.
Id. at 226, ¶ 16, 182 P.3d at 668 (quoting Burns v. McCormick, 135 N.E. 273,
273 (N.Y. 1922)). Accordingly, the statute of frauds precludes enforcement
of the alleged purchase agreement. Wagner was, therefore, not a
“purchaser” for purposes of the recording statutes. See A.R.S. §§ 33-
411(A); -412(B).

¶10 Wagner argued in the superior court that Bank of America
has no standing to raise the statute of frauds on Wortman’s behalf. Bank
of America, however, is entitled to raise the statute of frauds as a defense
to Wagner’s claim that he is a subsequent purchaser with superior rights
to the property. If Wagner is not a “purchaser” he cannot claim that he is
entitled to the protections afforded to a subsequent purchaser without
notice pursuant to A.R.S. § 33-411(A). Thus, Bank of America properly
raised the statute of frauds in its motion to dismiss.

¶11 Because Wagner has no enforceable interest in the property
at issue, he could not assert any rights to the property that are superior to
Bank of America. The superior court properly granted Bank of America’s
motion to dismiss. In light of this disposition, we need not address
whether Wagner had notice of the unrecorded deed of trust prior to his
alleged purchase.

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CONCLUSION

¶12 We affirm the order dismissing Wagner’s claims against
Bank of America.

:gsh

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