Ngaruiya v. Az Dept. of Housing

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

JOSEPHINE NGARUIYA, Plaintiff/Appellant,

v.

ARIZONA DEPARTMENT OF HOUSING, et al., Defendants/Appellees.

No. 1 CA-CV 25-0204
FILED 10-30-2025

Appeal from the Superior Court in Maricopa County
No. CV2024-018970
The Honorable Melissa Iyer Julian, Judge

AFFIRMED

APPEARANCES

Josephine Ngaruiya, Mesa
Plaintiff/Appellant

Arizona Attorney General’s Office, Phoenix
By Rebecca Banes, Matthew J. Kelly, Todd Evans
Counsel for Defendant/Appellee Arizona Department of Housing

Buchalter PC, Scottsdale
By Stephen Best
Counsel for Defendant/Appellee Select Portfolio Servicing Inc.

McCarthy & Holthus LLP, Scottsdale
By Kristin E. McDonald
Counsel for Defendants/Appellees Quality Loan Service Corporation &
McCarthy Holthus LLP
 NGARUIYA v. AZ DEPT. OF HOUSING, et al.
Decision of the Court

MEMORANDUM DECISION

Presiding Judge David B. Gass delivered the decision of the court, in which
Judge Michael J. Brown and Judge Andrew J. Becke joined.

G A S S, Judge:

¶1 Josephine Ngaruiya appeals from the dismissal of her
complaint challenging the 2022 foreclosure of her house by trustee’s sale.
The court affirms.

FACTUAL AND PROCEDURAL HISTORY

¶2 Ngaruiya owned a house in Phoenix subject to a deed of trust
held by successor trustee Quality Loan Service Corporation. In April 2022,
Ngaruiya defaulted, and Quality scheduled a trustee’s sale for July 19, 2022.
Ngaruiya applied to the Arizona Department of Housing for help with her
house payment, but the Department ultimately denied her application. The
house was sold at a trustee’s sale, and the sale proceeds applied to clear the
outstanding loan balance.

¶3 Two years later, Ngaruiya filed a civil complaint in superior
court, naming Quality, Select Portfolio Servicing Inc., the buyer, the
Department, and McCarthy Holthus, LLP. Select is the loan administrator.
McCarthy is the law firm responsible for processing the excess proceeds
from the trustee’s sale for Quality. The buyer is not a party to this appeal.

¶4 Ngaruiya’s complaint acknowledged Ngaruiya received
notice of the trustee’s sale in April 2022. Even so, Ngaruiya alleged the
defendants conspired to wrongfully foreclose on her home, asserting claims
for: (1) “fraudulent foreclosure,” (2) “grand theft and identity theft,” (3)
discrimination, (4) “intentional misconduct and negligence,” and (5)
“unethical business practices.” She also specifically accused Quality of
refusing to give her “any sort of modification assistance.”

¶5 She alleged the Department approved her for assistance with
her loan payment and told her in May or June 2022 it would pay the total
amount due, but then it did not. She further alleged she was “fraudulently
incarcerated in a mental institution” in late June 2022, which provided
defendants “an opening to proceed with auctioning [her] home . . . without

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notice.” She accused the buyer of taking possession of her personal
property and stealing her identity.

¶6 Ngaruiya listed her injuries as “being robbed,” homelessness,
emotional distress, and “loss of [her] home.” She requested compensatory
and punitive damages, court and legal fees, the return of her home, the
“value of all [her] personal belongings” she alleges were stolen, and “future
medical costs for PTSD and trauma.” As legal bases for her claims, the
complaint cites criminal statutes for bribery and theft, “breach of contract
and unfair business practices,” and “intentional misconduct and intentional
purposeful negligence.”

I. Select

¶7 Select moved to dismiss Ngaruiya’s complaint, arguing the
complaint did not allege Select engaged in any conduct forming the basis
of a viable action. When Ngaruiya did not respond to Select’s motion, the
superior court granted it and dismissed Select under Ariz. R. Civ. P.
7.1(b)(2). Ngaruiya moved for reconsideration, admitting she had not
responded to the motion but asking for reconsideration, saying she was
“unaware” she needed to respond to the motion. The superior court denied
her motion, finding she did “not establish a valid basis for relief.” Ngaruiya
again moved for reconsideration. The superior court set oral argument on
that motion, but then denied it and vacated the oral argument.

II. Quality and McCarthy

¶8 Quality and McCarthy moved to dismiss the complaint
against them under A.R.S. § 33-811.C, which says a person waives “all
defenses and objections to the sale” unless the person obtains a court
injunction of the sale. They also argued the complaint did not identify
McCarthy’s alleged wrongful conduct and just alleged Quality scheduled
the foreclosure sale acting in its role as trustee. As such, the complaint’s
allegations were insufficient to provide grounds for her listed claims.

¶9 The superior court granted Quality and McCarthy’s motion
to dismiss. The superior court concluded the complaint made no factual
allegations to support a viable claim against McCarthy. The superior court
also concluded Ngaruiya’s failure to obtain injunctive relief barred her
post-sale damages claims against Quality, relying on Zubia v. Shapiro, 243
Ariz. 412 (2018).

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III. State of Arizona

¶10 The Department is a nonjural entity, so the State of Arizona
has appeared as the proper party. See Boyd v. State, 256 Ariz. 468, 475 ¶ 30
(App. 2023) (affirming dismissal of agency when enabling statutes does not
allow it to be sued). The State moved to dismiss on three grounds: (1) failure
to state a cognizable claim against the Department, (2) failure to file a notice
of claim against the State, and (3) failure to file within the applicable statute
of limitations.

¶11 Ngaruiya admitted she did not file a notice of claim, saying
she was not aware of the requirement. She also argued the limitations
statute was tolled because she was mentally incompetent while under
court-ordered mental health treatment. The superior court granted the
State’s motion because Ngaruiya missed both the notice of claim deadline
and the one-year statute of limitations deadline.

¶12 The court has jurisdiction over Ngaruiya’s timely appeal
under Article VI, Section 9, of the Arizona Constitution and A.R.S. §§ 12-
120.21.A.1 and -2101.A.1.

DISCUSSION

¶13 The court reviews de novo dismissals under Rule 12(b)(6),
Arizona Rules of Civil Procedure. Coleman v. City of Mesa, 230 Ariz. 352, 355
¶ 7 (2012). Dismissal is appropriate only if no interpretation of the well-
pleaded facts would entitle the plaintiff to relief. Id. at 356 ¶ 8. When
reviewing a Rule 12(b)(6) dismissal, the court assumes all well-pleaded
factual allegations are true and draws all reasonable inferences from those
allegations, but the court does not give the same consideration to vague or
conclusory statements. Id. at ¶ 9. The court also reviews de novo questions
of law. Id. at ¶ 8.

I. Select

¶14 Under Rule 7.1(b)(2) a superior court summarily may grant a
motion when the opposing party does not respond. The court reviews the
grant of a motion under Rule 7.1(b) for an abuse of discretion. Strategic Dev.
& Const., Inc. v. 7th & Roosevelt Partners, LLC, 224 Ariz. 60, 65 ¶ 17 (App.
2010).

¶15 Ngaruiya’s opening brief does not address her failure to
respond to Select’s dismissal motion. The court thus could affirm based on
waiver. Robert Schalkenbach Found. v. Lincoln Found., Inc., 208 Ariz. 176, 180

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¶17 (App. 2004) (saying court usually will consider an issue not raised in
opening brief as waived). Even so, the court will address it.

¶16 In her reply brief, Ngaruiya admits she did not respond to the
motion and asks the court to consider her inexperience and her being
“forced to defend” herself. The rules of civil procedure apply to all cases
without exception, whether a party is represented by counsel or is self-
represented. Ariz. R. Civ. P. 1; Flynn v. Campbell, 243 Ariz. 76, 83–84 ¶ 24
(2017) (saying self-represented litigants do not get special leniency in
application of procedural rules). The record shows Ngaruiya was aware of
the motion and chose not to respond. The superior court did not abuse its
discretion when it summarily granted the motion based on Ngaruiya’s
failure to respond.

¶17 Ngaruiya also argues the superior court denied her “the right
to present . . . evidence” for her claims when it cancelled the oral argument
on her second motion for reconsideration. The superior court has broad
discretion to decide whether oral argument would be helpful to the court.
See Ariz. R. Civ. P. 7.1(d) (giving the superior court authority to decide
motions without oral argument, even if oral argument is requested); Cristall
v. Cristall, 225 Ariz. 591, 597 ¶ 29 (App. 2010) (recognizing the superior court
has discretion to grant or deny request for oral argument). The court
presumes the superior court reconsidered whether oral argument would
have been helpful, determined it would not, and then denied the second
motion for reconsideration without oral argument. Those decisions are
within the superior court’s sound discretion.

¶18 The superior court did not err when it dismissed Select for
failure to state a claim against it. And the superior court did not abuse its
discretion when it vacated oral argument on Ngaruiya’s second motion for
reconsideration and then denied that motion.

II. Quality and McCarthy

¶19 Ngaruiya’s claims against both Quality and McCarthy are tort
claims, and she waived them when she failed to secure an injunction of the
trustee’s sale.

¶20 Any person who receives notice of a trustee’s sale waives all
defenses and objections to the sale unless the person brings an injunctive
action before the sale date. A.R.S. § 33-811.C. Failure to file such an action
bars post-sale tort claims based on the validity of the sale. Zubia, 243 Ariz.
at 415 ¶ 18. Ngaruiya did not file an injunctive action before the trustee’s
sale. She thus waived all claims arising out of the sale. For this reason, the

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superior court did not err when it dismissed her claims against Quality and
McCarthy.

¶21 In addition, though Ngaruiya named McCarthy as a
defendant in the complaint, she makes no specific factual allegations
against it. Based solely on the face of the complaint, the superior court did
not err when it dismissed McCarthy.

III. State of Arizona

¶22 The superior court dismissed claims against the State because
Ngaruiya did not file a timely notice of claim under A.R.S. § 12-821.01.A
and because she failed to file her claims within 1 year. A.R.S. § 12-821.
Dismissal is appropriate if, as a matter of law, a plaintiff “‘would not be
entitled to relief under any interpretation of the facts susceptible of proof.’”
Coleman, 230 Ariz. at 356 ¶ 8 (quoting Fid. Sec. Life Ins. Co. v. State Dep’t of
Ins., 191 Ariz. 222, 224 (1998).

¶23 A party must file a notice of claim against a public entity
within 180 days of the claim accruing. See A.R.S. § 12-821.01.A. “Claims that
do not comply with A.R.S. § 12-821.01.A are statutorily barred.” Deer Valley
Unified Sch. Dist. No. 97 v. Houser, 214 Ariz. 293, 295 ¶ 6 (2007). Here, the
latest Ngaruiya’s claim could have accrued was on July 18, 2024, when she
filed the lawsuit. She never filed a notice of claim. Because she failed to do
so, Ngaruiya has no valid claim against the State. See Swenson v. Cnty. of
Pinal, 243 Ariz. 122, 128 ¶ 20 (App. 2017) (“[T]here is no dispute that
Swenson never filed a notice of claim with the County. Accordingly,
Swenson’s claim is barred by § 12-821.01(A).”).

¶24 The superior court thus did not err when it dismissed her
claims against the State.

IV. Attorney Fees and Costs

¶25 Quality requests for attorney fees and costs under A.R.S. § 33-
807.E. That subsection says a trustee is entitled to recovery of “costs and
reasonable attorney fees” if the trustee is joined in any action other than for
breach of trustee’s duties under the terms of a deed of trust or the statutes
governing deeds of trust. Here, Ngaruiya sought tort relief against Quality
under several legal theories. The court thus awards Quality reasonable
attorney fees and costs upon compliance with Rule 21, Arizona Rule of Civil
Appellate Procedure. The court also awards taxable costs on appeal to all
other appellees under A.R.S. § 12-342 upon their compliance with Rule 21,
Arizona Rule of Civil Appellate Procedure.

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CONCLUSION

¶26 The court affirms.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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