## Facts

- John F. Hogan bought two residential properties in Yavapai County, Arizona.
- In 2004, he borrowed funds from Long Beach Mortgage Company and signed a separate promissory note and deed of trust for each property.
- Each deed of trust identified Long Beach as lender, California Reconveyance Company as trustee, and Long Beach (or its successor/assignee) as beneficiary.
- By 2008, Hogan was delinquent on both loans.
- Notices of trustee’s sale were recorded initiating nonjudicial foreclosure; one notice identified Washington Mutual Bank, N.A. as beneficiary and the other identified Deutsche Bank National Trust Company as beneficiary.
- Hogan did not allege the named beneficiaries lacked the right to enforce the notes; he alleged the foreclosures could not proceed unless the beneficiaries first produced the original notes or otherwise proved authority to enforce them.

## Issues

1. Whether Arizona’s deed of trust statutes require a beneficiary to produce the original promissory note or otherwise prove its enforcement rights before a trustee may conduct a nonjudicial trustee’s sale.

## Decision

- The Arizona Supreme Court affirmed dismissal of Hogan’s complaints for failure to state a claim.
- The court held Arizona’s nonjudicial foreclosure statutes do not impose a “show-the-note” or similar proof-of-ownership requirement as a precondition to a trustee’s sale.
- The court vacated the court of appeals’ opinion while leaving the result intact.

## Legal Principles

- Arizona’s deed of trust statutes (A.R.S. §§ 33-801 to 33-821) provide the controlling procedures for nonjudicial trustee’s sales, and courts will not add prerequisites not found in the statutory text.
- A trustee’s authority to proceed with a power-of-sale foreclosure is governed by the deed of trust statutory scheme, which does not require presentation of the original note to the borrower before the sale.
- UCC rules on enforcement of negotiable instruments address enforcement of the note itself and do not, without statutory incorporation, create additional procedural conditions for a trustee’s sale under Arizona’s deed of trust statutes.
- A borrower seeking to stop a trustee’s sale must plead more than a general demand for pre-sale proof; absent an allegation that the identified beneficiary lacks entitlement to enforce the obligation, the statutory foreclosure process is not subject to a judicially created “show-the-note” requirement.

## Conclusion

Arizona’s Supreme Court rejected “show-the-note” challenges to nonjudicial foreclosure, holding that the deed of trust statutes permit a trustee’s sale to proceed without the beneficiary first producing the original promissory note or otherwise proving its enforcement authority.


Hogan v. Washington Mut. Bank, N.A., 277 P.3d 781 (Ariz. 2012)