Alosi v. Citibank

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

JOSEPH P. ALOSI, et al., Plaintiffs/Appellants,

v.

CITIBANK NA, et al., Defendants/Appellees.

No. 1 CA-CV 21-0266
FILED 5-24-2022

Appeal from the Superior Court in Maricopa County
No. CV2017-055664
No. CV2020-055077
The Honorable Jacki Ireland, Judge pro tempore
The Honorable Sally Schneider Duncan, Judge
The Honorable Bruce R. Cohen, Judge

AFFIRMED

COUNSEL

Joseph P. Alosi and Joyce M. Alosi, Cave Creek
Plaintiffs/Appellants

Wright, Finlay & Zak, LLP, Las Vegas
By Robert A. Riether
Counsel for Defendants/Appellees
 ALOSI, et al. v. CITIBANK, et al.
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Paul J. McMurdie delivered the Court’s decision, in which
Vice Chief Judge David B. Gass and Judge Angela K. Paton joined.

M c M U R D I E, Judge:

¶1 Joseph and Joyce Alosi appeal from the superior court’s
dismissal of their quiet title action against Citibank and Select Portfolio
Servicing (“Select”). Because the Alosis were precluded from raising their
claims under the doctrine of claim preclusion, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 In January 2007, the Alosis executed a promissory note
favoring Washington Mutual Bank (“WaMu”) and secured by a deed of
trust encumbering their home. WaMu transferred and assigned the note to
Citibank. After WaMu went into receivership, JP Morgan Chase Bank
(“Chase”) acquired the loan-servicing rights. Chase transferred the
servicing rights to Citibank, which designated Select as the loan servicer.

¶3 The Alosis defaulted on the note, and Citibank recorded a
Notice of Trustee’s Sale to sell the property. The Alosis tried to secure an
injunction to prevent the sale, but the court declined to issue one. The Alosis
filed a quiet title action against Citibank and Select under the theory that
Chase never bought the note or the deed of trust, and thus it could not
assign them to Citibank. Citibank and Select moved for summary
judgment. The court held that the note was a bearer instrument in
possession of Citibank, Citibank did not acquire the note by illegal means,
and thus Citibank had the right to enforce the note.

¶4 The Alosis moved the court to cancel the sale and set aside the
judgment, alleging that Citibank knew or should have known that the note
had a forged endorsement. The court denied the motion, and the Alosis
appealed to this court. See Alosi v. Citibank N.A., 1 CA-CV 19-0405, 2020 WL
1312885 (Ariz. App. Mar. 19, 2020) (mem. decision). We affirmed the ruling,
concluding that the note was properly endorsed and that the Alosis failed
to show why Citibank knew or should have known the note was forged. Id.
at *3–4, ¶¶ 12–20.

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 ALOSI, et al. v. CITIBANK, et al.
Decision of the Court

¶5 In September 2020, the Alosis filed a second action asserting
that Chase, and thus Citibank, never acquired WaMu’s rights to the
property and identified other evidence provided by a title researcher and
legal counsel. Citibank and Select moved the court to consolidate the new
action with the previous one. The court consolidated the cases. Citibank and
Select then moved the court to dismiss the Alosis’ newly raised claims,
arguing they were barred under the doctrine of claim preclusion.1 The court
found that the newly raised claims were barred. The Alosis appealed, and
we have jurisdiction under A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).

DISCUSSION

¶6 We first note that we will not address the Alosis’ argument
about Citibank’s standing. This court authorized the Alosis to file an
amended opening brief but limited the changes to correcting page numbers,
case numbers, and spacing. The Alosis amended their opening brief to
include another argument about standing. The argument is waived because
they did not include the standing argument in their original opening brief.
Dawson v. Withycombe, 216 Ariz. 84, ¶ 40, n. 11 (App.2007) (arguments not
raised in the opening brief are waived). Moreover, this argument is barred
under claim preclusion analysis.

¶7 We review a court’s decision on a motion to dismiss for an
abuse of discretion, but we review the application of claim preclusion de
novo. City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, 180, ¶ 16
(App. 2008) (motion to dismiss); Lawrence T. v. DCS, 246 Ariz. 260, 262, ¶ 7
(App. 2019) (claim preclusion). Claim preclusion applies when a court of
competent jurisdiction rendered a former judgment on the merits, and “the
matter now in issue between the same parties or their privities was, or
might have been, determined in the former action.” Hall v. Lalli, 194 Ariz.
54, 57 (1999). Claims raised based on a new theory that could have been
raised earlier are barred. Tumacacori Mission Land Dev., Ltd. v. Union Pac. R.
Co., 231 Ariz. 517, 519–20, ¶ 8 (App. 2013). The extinguishment of the prior
claim “includes all rights of the plaintiff to remedies against the defendant
with respect to all or any part of the transaction, or series of connected
transactions, out of which the action arose.” Heinig v. Hudman, 177 Ariz. 66,
71, (App. 1993) (quoting Restatement (Second) of Judgments § 24(1) (1982)).
In determining whether a subsequent claim arises from the same
transaction as the first, we consider “whether the underlying facts are

1 The parties refer to res judicata, but we use “claim preclusion.”
Peterson v. Newton, 232 Ariz. 593, 594, ¶ 3, n.2 (App. 2013).

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 ALOSI, et al. v. CITIBANK, et al.
Decision of the Court

related in time, space, origin, or motivation, and whether the parties would
expect them to be treated as a unit for trial.” Tumacacori Mission, 231 Ariz.
at 520, ¶ 8 (quotation omitted).

¶8 Claim preclusion applies here. The Alosis, Citibank, and
Select were parties to both actions. The court issued a final judgment on the
merits in the first action when it entered summary judgment for Citibank
and Select. See El Paso Nat. Gas Co. v. State, 123 Ariz. 219, 222 (1979)
(“[S]ummary judgments are final judgments on the merits.”). And the
Alosis’ current and previous claims are the same. Their new evidentiary
basis for arguing that Citibank never acquired WaMu’s rights to the
property, at most, supports a new theory. Because the current and the
earlier claims arose out of the Alosis’ dispute over the property with
Citibank, they arose out of the same transaction. And the Alosis could have
raised the current issues in the first proceeding; as such, they are precluded.

¶9 Rather than challenging the applicability of claim preclusion,
the Alosis repeat their substantive argument that Citibank did not own the
loan on their home. But that is the claim that the Alosis are now precluded
from making, so we will not reconsider the argument.

CONCLUSION

¶10 We affirm.

AMY M. WOOD • Clerk of the Court
FILED: AA

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