                    SUPREME COURT OF ARIZONA
                             En Banc

JULIA V. VASQUEZ,                 )   Arizona Supreme Court
                                  )   No. CV-11-0091-CQ
                          Debtor, )
                                  )   United States
                                  )   Bankruptcy Court
                                  )   No. 4:08-bk-15510-EWH
JULIA V. VASQUEZ,                 )
                                  )
                       Plaintiff, )
                                  )   O P I N I O N
                                  )
                v.                )
                                  )
                                  )
SAXON MORTGAGE, INC.; SAXON       )
MORTGAGE SERVICES INC.; DEUTSCHE )
BANK NATIONAL TRUST COMPANY AS    )
TRUSTEE FOR SAXON ASSET           )
SECURITIES TRUST 2005-3,          )
                                  )
                      Defendants. )
                                  )
__________________________________)


   Certified Questions from the United States Bankruptcy Court
             The Honorable Eileen W. Hollowell, Judge

      FIRST QUESTION ANSWERED; SECOND QUESTION NOT ANSWERED
________________________________________________________________

SOUTHERN ARIZONA LEGAL AID, INC.                              Tucson
     By   Beverly B. Parker
          Anthony L. Young
Attorneys for Julia V. Vasquez

GREENBERG TRAURIG LLP                                     Phoenix
     By   Robert A. Mandel
          Gil Rudolph
          E. Jeffrey Walsh
          Julie Barton
Attorneys for Saxon Mortgage, Inc., Saxon Mortgage
Services Inc. and Deutsche Bank National Trust Company
as Trustee for Saxon Asset Securities Trust 2005-3
LORI ANGUS WILSON, ESQ.                                      Tucson
     By   Lori Angus Wilson

And

VINCE RABAGO, ESQ.                                           Tucson
     By    Vincent L. Rabago
Attorneys for Amici Curiae Southwest Fair
Housing Council, The National Association of Consumer
Bankruptcy Attorneys, and The National Consumer
Law Center

GORDON SILVER                                               Phoenix
     By   Ronald E. Warnicke

And

JOHNSON, FINDSEN & KINNEY PLLC                           Scottsdale
     By   Beth K. Findsen
Attorneys for Amici Curiae Karl Stauffer,
Fabiana Stauffer, Mariusz Buchna, and Julita Buchna

KOELLER NEBEKER CARLSON & HALUCK, LLP                      Phoenix
     By   William A. Nebeker
          Valerie R. Edwards
Attorneys for Amicus Curiae Arizona
Multi-District Litigation

THOMAS C. HORNE, ARIZONA ATTORNEY GENERAL                 Phoenix
     By   Carolyn R. Matthews, Assistant Attorney General
          Dena R. Epstein, Assistant Attorney General
          Donnelly A. Dybus, Assistant Attorney General
Attorneys for Amicus Curiae State of Arizona

QUARLES & BRADY LLP                                         Phoenix
     By   C. Bradley Vynalek
          Brian A. Howie
          Michael S. Catlett
          Susan G. Boswell
Attorneys for Amici Curiae Arizona Bankers Association
and The Greater Phoenix Chamber of Commerce

MCCARTHY HOLTHUS LEVINE                                Scottsdale
     By   Paul M. Levine
Attorney for Amicus Curiae United Trustees Association


                                2
FENNEMORE CRAIG, P.C.                                             Phoenix
     By   Timothy Berg
          Carrie Pixler Ryerson
          Theresa Dwyer-Federhar

And

K&L GATES LLP                                             Charlotte, NC
     By   Phoebe S. Winder
          Amy Pritchard Williams
          Robert W. Sparkes, III
Attorneys for Amicus Curiae Mortgage
Bankers Association

GUST ROSENFELD P.L.C.                                    Phoenix
     By   Richard A. Segal
          Kent E. Cammack
          Scott A. Malm
Attorneys for Amicus Curiae Land Title
Association of Arizona
________________________________________________________________

H U R W I T Z, Vice Chief Justice

¶1        Pursuant   to   A.R.S.   §§   12-1861   to   -1867   (2003)   and

Supreme Court Rule 27, we accepted jurisdiction of two questions

certified by the United States Bankruptcy Court for the District

of Arizona:

      1. Is the recording of an assignment of deed of trust
         required prior to the filing of a notice of
         trustee’s sale under A.R.S. § 33-808 when the
         assignee holds a promissory note payable to bearer?

      2. Must the beneficiary of a deed of trust being
         foreclosed pursuant to A.R.S. § 33-807 have the
         right to enforce the secured obligation?

¶2        The Bankruptcy Court’s certification order stated the

relevant facts as follows:


                                   3
     In September 2005,      Plaintiff [Julia V. Vasquez]
     refinanced her home    by executing a promissory note
     (“Note”) (Ex. A) in     favor of Saxon Mortgage, Inc.
     (“Saxon”) and a deed    of trust (“DOT”) (Ex. B).    The
     DOT named Saxon as     beneficiary and Ticor Title as
     trustee. The DOT was   recorded on September 16, 2005.

     On September 29, 2005, Saxon assigned the Note to
     Deutsche Bank National Trust Company as Trustee for
     Saxon Asset Securities Trust 2005-3 (“Deutsche Bank”)
     (the “Assignment”) by endorsing the Note in blank and
     without recourse to Saxon.    The Assignment was not
     recorded.

     The Plaintiff defaulted under the Note. On August 29,
     2008, Deutsche Bank executed a substitution of trustee
     pursuant to A.R.S. § 33-804 removing the title company
     as trustee under the DOT and appointing Michael A.
     Bosco, Jr. of Tiffany and Bosco (“Tiffany and Bosco”)
     as the substituting trustee (Ex. C). The substitution
     was recorded on September 12, 2008. On the same date,
     Tiffany and Bosco recorded a notice of trustee’s sale
     naming   “Deutsche   Bank/2005-3”   as   the   current
     beneficiary in “care of” Saxon Mortgage Services, Inc.
     c/o Fidelity National Foreclosure Solutions of Mendota
     Heights, Minnesota (Ex. D).

     On October 29, 2008, an agent of Saxon executed an
     assignment of the DOT, assigning all its beneficial
     interest to Deutsche Bank (Ex. E). The assignment of
     the DOT was recorded on November 7, 2008 and indicated
     it was retroactive to August 11, 2008.

(footnote omitted).   See A.R.S. § 12-1863(2); Ariz. R. Sup. Ct.

27(a)(3)(B) (requiring certification order to state the facts

relevant to the presented questions).

                                I.

                                A.

¶3        The first certified question is whether “the recording

of an assignment of deed of trust [is] required prior to the


                                 4
filing of a notice of trustee’s sale under A.R.S. § 33-808 when

the assignee holds a promissory note payable to bearer.”         The

answer is no; Arizona law imposes no such requirement.

¶4          We are mindful of the human costs attendant to home

foreclosures.    Our task today, however, is simply to answer two

purely legal questions certified to us by the Bankruptcy Court.

Because the “deed of trust scheme is a creature of statutes,” In

re Krohn, 203 Ariz. 205, 208 ¶ 9, 52 P.3d 774, 777 (2002), our

role   is    entirely   one   of   statutory   construction.1    Put

differently, we are called upon not to determine whether there

ought to be a law providing relief to Vasquez, but what current

Arizona statutes provide regarding the certified questions.

¶5          Trustee’s sales are governed by A.R.S. § 33-808.    That

statute expressly requires that a notice of trustee’s sale be

recorded.    A.R.S. § 33-808(A)(1).     The statute, however, does

not require that an assignment of a deed of trust be recorded

before recording the notice of trustee’s sale.2


1
     Until 1971, Arizona law did not provide for deeds of trust,
and loans on real property were routinely secured by mortgages.
After receiving complaints that the mortgage foreclosure process
was too “time-consuming and expensive,” the legislature created
the deed of trust, under which there is no right of redemption
and foreclosure occurs outside of the judicial process through a
trustee’s sale.   See Gary E. Lawyer, Note, The Deed of Trust:
Arizona’s Alternative to the Real Property Mortgage, 15 Ariz. L.
Rev. 194, 194 (1973).
2
     The legislature recently considered a bill that would have
required that when a trustee’s sale is noticed, the current
                                   5
¶6           The     recording      statutes         are     designed        to    protect

interests in property against claims of subsequent purchasers or

creditors without notice.                See, e.g., Buerger Bros. Supply Co.

v. El Rey Furniture Co., 45 Ariz. 1, 6, 40 P.2d 81, 83 (1935)

(“[I]t is the policy of the law of this state ‘that assignments

of   mortgages      must   be   recorded        as   instruments      affecting        real

estate in order to protect the holder of such assignment against

subsequent     purchasers         without       notice.’”     (quoting        Newman     v.

Fidelity Sav. & Loan Ass’n, 14 Ariz. 354, 358-59, 128 P. 53, 55

(1912))); Eardley v. Greenberg, 164 Ariz. 261, 265, 792 P.2d

724, 728 (1990) (“[A]ny person who receives an assignment of

beneficial interest and does not record it is in jeopardy of

having the assignment declared invalid as against a subsequent

purchaser for value without notice.”).

¶7           Consistent      with    this       general      purpose,    Arizona        law

expressly provides that “[u]nrecorded instruments, as between

the parties and their heirs . . . shall be valid and binding.”

A.R.S.   §   33-412(B).           Thus,    while     the    failure     to    record     an

assignment     of     a    deed     of     trust     might     leave     an       assignee

unprotected against claims by some purchasers or creditors, it

does not affect a deed’s validity as to the obligor.                              In light


____________________________
beneficiary (if not the original beneficiary) concurrently
record   a   document   identifying    all   past and   current
beneficiaries. See S.B. 1259, 50th Leg., 1st Reg. Sess. (2011).
That bill, however, was not enacted into law.
                                            6
of    §   33-412(B),     it       would    be    anomalous       to    read     §    33-808     as

preventing foreclosure of a valid deed of trust simply because

an assignment has not been recorded.

¶8              Arizona law also expressly provides that the transfer

of a contract secured by a deed of trust “shall operate as a

transfer of the security for such contract.”                               A.R.S. § 33-817.

When the note signed by Vasquez was assigned to Deutsche Bank in

2005,     the    deed    of       trust    was       therefore     also     transferred         by

operation of law.             Because § 33-817 does not require separate

documentation of an assignment of the deed of trust when the

secured note is transferred, it would make no sense to imply

into § 33-808 a requirement that the assignment be recorded.

¶9              Vasquez nonetheless argues that this Court implicitly

required recording of assignments of deeds of trust in Newman,

by stating that parties have “the right to presume that public

records     speak    the      truth       and    to    act    thereon      in   all       matters

affected by instruments required by law to be recorded.”                                        14

Ariz. at 357, 128 P. at 54.                      But Newman imposed no recording

requirement beyond those set forth in our statutes.                                 Rather, the

Court simply announced the consequences of failing to record an

instrument that is “required by law to be recorded.”                                Id.

                                                 B.

¶10             Vasquez asserts that even if § 33-808 does not require

an    assignment        of    a     deed    of        trust   to      be    recorded       as   a

                                                 7
prerequisite to a trustee’s sale, A.R.S. § 33-411.01 imposes

such a requirement.         That statute states:

       Any document evidencing the sale, or other transfer of
       real estate or any legal or equitable interest
       therein, excluding leases, shall be recorded by the
       transferor in the county in which the property is
       located and within sixty days of the transfer.      In
       lieu thereof, the transferor shall indemnify the
       transferee in any action in which the transferee’s
       interest in such property is at issue, including
       costs, attorney’s fees and punitive damages.

¶11            Vasquez argues that the first sentence of § 33-411.01

mandates recording an assignment of the beneficial interest in a

deed of trust.        But this argument ignores the second sentence of

the statute.

¶12            Read in its entirety, § 33-411.01 does not impose a

recording requirement.         Nor does § 33-411.01 suggest that notice

of a trustee’s sale on a previously assigned deed of trust is

valid only if the assignment was recorded.                       Rather, the statute

presents a transferor of a real property interest with options

and    consequences     —   either   record         a       document     evidencing    the

transfer or indemnify the transferee in any action in which the

transferee’s interest is at issue.                  The statute is not designed

to    shield    the   original    obligor      on       a    deed   of    trust   from   a

trustee’s       sale,   but      rather       to    protect         transferees       from

subsequently arising claims.3


3
     Vasquez’s reliance on A.R.S. § 33-818 is also unavailing.
That statute only provides that although recording an assignment
                                          8
¶13         The   Attorney   General       argues   as   amicus   curiae    that

recording of an assignment of the beneficial interest in a deed

of trust is necessary to give effect to A.R.S. § 33-807.01,

which requires lenders to “explore options” with borrowers at

least thirty days before recording a notice of trustee’s sale.

The   Attorney    General    concedes       that    §    33-807.01   does    not

expressly   require   recording   of       assignments,     but   argues    that

unless we so interpret the statute, homeowners will not know

with whom to “explore options.”

¶14         The argument is not persuasive; § 33-807.01 requires

the lender to contact the homeowner, not the other way around.

Thus, the identity of the party who can negotiate modification

of the loan will be clear to an obligor before the trustee’s

sale is noticed.4     And, because the notice of sale must identify

the current beneficiary of the deed of trust, see A.R.S. § 33-

808(C)(5), the obligor will receive additional notice before the

scheduled sale of the identity of that beneficiary.

¶15         It may well be, as the Attorney General argues, that

an obligor would benefit from the additional assurance, provided
____________________________
of the beneficial interest in a trust deed generally imparts
notice of its “content to all persons,” recording alone does not
invalidate subsequent payments made to a previous holder of the
instrument secured by the trust deed.
4
     In any event, § 33-807.01 is not applicable to this case
because the statute was not enacted until after the notice of
trustee’s sale was recorded.   See 2010 Ariz. Sess. Laws, ch.
325, § 1 (2d Reg. Sess.).
                                       9
through the recording of an assignment, that the lender who is

contacting the obligor to explore options under § 33-807.01 is

the current beneficiary of the deed of trust.                         The wisdom of

such an additional statutory requirement, however, is for the

legislature,       not    the   courts,     to    consider.5        We     decline   the

Attorney General’s invitation to amend the statute judicially.6

                                          III.

¶16          The    second      certified       question      requires     only   brief

discussion.          We      answer     only      questions         “which     may   be

determinative       of    the   cause     then     pending     in    the     certifying

court.”    A.R.S. § 12-1861.            The Bankruptcy Court’s order states

that the promissory note was assigned to Deutsche Bank well

before    the   notice     of    trustee’s       sale   was    recorded.       Because

Deutsche Bank had the right to enforce the note when the notice

of trustee’s sale was recorded in 2008, the answer to the second

question is not determinative of this case and we decline to

answer it.




5
     When urged by the Attorney General in 2011 to adopt such a
requirement through S.B. 1259, the legislature declined to do
so. See supra note 2.
6
     The assignment of the deed of trust in this case occurred
before a 2009 amendment to the federal Truth in Lending Act,
which now requires that a homeowner be informed within thirty
days after a note is transferred. 15 U.S.C. § 1641(g) (2009).
                                           10
                               IV.

¶17       For the reasons above, we answer the first certified

question in the negative and decline to answer the second.


                         _____________________________________
                         Andrew D. Hurwitz, Vice Chief Justice

CONCURRING:


_____________________________________
Rebecca White Berch, Chief Justice


_____________________________________
W. Scott Bales, Justice


_____________________________________
A. John Pelander, Justice


_____________________________________
Robert M. Brutinel, Justice




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