Eardley v. Greenberg
In Eardley v. Greenberg, 164 Ariz. 261, 792 P.2d 724 (1990), a borrower/trustor filed an action to set aside a trustee's sale on the grounds the notice of substitution of trustee was defective.
Greenberg, the beneficiary who executed the notice, and the alleged successor trustee, Investment Security, Inc., filed a motion for summary judgment, which the trial court granted. Id. at 263, 792 P.2d at 726.
The supreme court reversed, holding that a triable issue existed as to whether the substitution was defective, because the notice may have been signed by Greenberg without authority or permission from one of the other beneficiaries.
In reaching this conclusion, the supreme court stated:
The trustor, trustee, and beneficiary are inextricably interconnected links in the chain of title to real property. Each has certain rights, legal or equitable, separated from the complete bundle of real property rights . . . the trustee is the holder of legal title . . . The beneficiary holds an enforceable lien on the property. The trustor possesses the bulk of the bundle of rights, but it is obvious that the trustor's ability to deal with those rights can be effectively eliminated by uncertainties in the chain of title concerning either the beneficiaries or the trustee. Id. at 265, 792 P.2d at 728.
The supreme court ultimately remanded the case to the trial court, holding "that the trustor has standing to inquire into and raise objections about the process by which a trustee has been substituted." Id.