DAVID KESTER V. CITIMORTGAGE, INC. | 9th Cir - "the recording of false or fraudulent documents that assert an interest in a property may cloud the property's title"

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DAVID KESTER V. CITIMORTGAGE, INC. | 9th Cir – “the recording of false or fraudulent documents that assert an interest in a property may cloud the property’s title”

DAVID KESTER V. CITIMORTGAGE, INC. | 9th Cir –  “the recording of false or fraudulent documents that assert an interest in a property may cloud the property’s title”

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

DAVID A. KESTER, on behalf of himself
and all others similarly situated,
Plaintiff-Appellant,

v.

CITIMORTGAGE INC.; et al.,
Defendants-Appellees.

excerpt

CitiMortgage and CR Title (“Defendants”) knowingly caused the recording of
invalid property documents in violation of ARIZ. REV. STAT. (“A.R.S.”) § 33-
420(A). The district court granted Defendants’ motion to dismiss. We reverse and
remand.
1. Kester has standing to bring this action, despite the fact that A.R.S. § 33-
411(C) provides that “an instrument affecting real property containing any defect,
omission or informality in the certificate of acknowledgment and which has been
recorded for longer than one year . . . shall be deemed to have been lawfully
recorded on and after the date of its recording.”1
“The irreducible constitutional
minimum of standing consists of three elements. The plaintiff must have (1)
suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of
the defendant, and (3) that is likely to be redressed by a favorable judicial
decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016), as revised (May
24, 2016). Kester has adequately alleged all three elements. See Washington Env’tl
Council v. Bellon, 732 F.3d 1131, 1139 (9th Cir. 2013) (“The plaintiff . . . bears the
burden of proof to establish standing ‘with the manner and degree of evidence
required at the successive stages of the litigation.’ (quoting Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992))).

First, “the recording of false or fraudulent documents that assert an interest
in a property may cloud the property’s title”; therefore, Kester has adequately
alleged “a distinct and palpable injury as a result of those clouds on [his former
property’s] title.” In re Mortg. Elec. Registration Sys., Inc., 754 F.3d 772, 783 (9th
Cir. 2014) (quoting Stauffer v. U.S. Bank Nat. Ass’n, 308 P.3d 1173, 1179 (Ariz.
Ct. App. 2013)). Second, this injury is fairly traceable to Defendants’ conduct:
despite receiving notice of the revocation of Kristen Lindner’s notary commission,
Defendants allegedly continued to use her notary services to execute Assignments
of Deeds of Trust, Substitutions of Trustee, Notices of Default, and Notices of
Trustee Sale for three months. Third, Kester’s “injury would be redressed by an
award of statutory damages, which [A.R.S. § 33-420(A)] makes available to
prevailing [former property owners].” See Tourgeman v. Collins Fin. Servs., Inc.,
755 F.3d 1109, 1116 (9th Cir. 2014), as amended on denial of reh’g and reh’g en
banc (Oct. 31, 2014).

2. The district court incorrectly held that A.R.S. § 33-420(A) requires Kester
to allege “material” invalidity in the trustee’s sale documents. Arizona caselaw
does not clearly resolve the question whether a plaintiff must allege materiality to
[…]

David Kester v. Citimortgage, Inc. by DinSFLA on Scribd

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