United States District Court, D. Utah, Central Division
MEMORANDUM DECISION AND ORDER GRANTING  WELLS
FARGO BANK, N.A.'S MOTION TO DISMISS
NUFFER, UNITED STATES DISTRICT JUDGE.
Wells Fargo Bank (“Wells Fargo”) filed the Motion
to Dismiss (“Motion”)seeking (under Fed R. Civ. P.
(12)(b)(6)) to dismiss Petitioner Kathleen
Sevastopoulous's (“Petitioner”) Petition for
Relief for Wrongful Lien Under Utah Code Ann. § 38-
9-205; Request for Hearing under Utah Code Ann. §
“Petition”). Wells Fargo argues that the encumbrance
it has on property now owned by Petitioner cannot be a
wrongful lien because Petitioner fails to allege that Wells
Fargo recorded a lien without the authorization of the owner
of the property at the time. Petitioner opposed the
Motion. Wells Fargo replied in
reviewing the parties' filings and relevant authority,
Wells Fargo's Motion is GRANTED for the reasons set forth
1973, Petitioner executed a trust agreement naming Marion
Burrows Smith (“Ms. Smith”) as Trustee of the
Kathleen Smith Trust (the “Trust”).
Trust purchased the property located at 1425 Tomahawk Drive,
Salt Lake City, UT 84103 (the “Property”) in
Under the language of the Trust, the Trust was to Terminate
on the 40th birthday of the Petitioner, or on
November 11, 1992.
February 25, 2003, the Trust conveyed the Property to Ms.
February 26, 2003, Ms. Smith obtained a line of credit from
Wells Fargo pursuant to which Ms. Smith borrowed funds from
Wells Fargo (the “2003 Loan”), secured by the
Property (the “2003 Loan
Pursuant to the 2003 Loan Transaction, Ms. Smith signed a
Deed of Trust (the “2003 Deed of Trust”) which
was recorded on March 7, 2003.
the time Wells Fargo recorded the 2003 Deed of Trust, the
Property was owned by Ms. Smith.
March 3, 2003, Ms. Smith conveyed the Property back to the
March 2013, the Trust into a second line of credit
transaction with Wells Fargo (the “2013 Loan
Pursuant to the terms of the 2013 Loan Transaction, on March
9, 2013, the Trust entered into a Short Form Open-End Deed of
Trust (the “2013 Deed of Trust”).
2013 Deed of Trust was recorded on May 31,
the time Wells Fargo recorded the 2013 Deed of Trust, the
Property was owned by the Trust.
June 3, 2013, Wells Fargo signed a Deed of Reconveyance
conveying to Ms. Smith “the estate, title, and
interest” held under the 2003 Deed of
September 1, 2016, the Trust conveyed the Property to
originally filed this action in the Third Judicial District
of the State of Utah.As the caption of the Petition states,
Petitioner sought relief for a wrongful lien under Utah Code
Ann. § 38-9-205. Under that statue, “a
record interest holder of real property against which a
wrongful lien is recorded may petition the district court in
the county in which the document is recorded for summary
relief to nullify the wrongful lien.” The district
court then reviews the petition for
sufficiency. If the district court finds the petition
sufficient, the district court schedules a hearing and the
petitioner is then required to serve a copy of the
petition on the respondent and the notice of the
process was not followed here. After the Petition was filed
in state court, a summons was issued to Wells Fargo,
apparently without the review of sufficiency and issuance of
the notice of hearing as required under Utah Code Ann. §
38-9-205. Wells Fargo then removed the petition from state
court to the federal court based on diversity
jurisdiction and filed the Motion.
date, this action has proceeded as a typical civil action
under the rules, notwithstanding the procedure specified in
Utah statute. Therefore, it is appropriate to consider the
Motion as one properly filed under Fed. R. Civ. 12.