Robin Zahran v. loanDepot

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
October 11, 2022
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2020AP1934 Cir. Ct. No. 2019CV121

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III

ROBIN ZAHRAN AND KAREN ZAHRAN,

PLAINTIFFS-APPELLANTS,

V.

LOANDEPOT AND APPRAISAL MANAGEMENT COMPANIES
REAL ESTATE VALUATION PARTNER,

DEFENDANTS-RESPONDENTS.

APPEAL from orders of the circuit court for Door County:
D. T. EHLERS, Judge. Affirmed.

Before Stark, P.J., Hruz and Gill, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2020AP1934

¶1 PER CURIAM. Robin Zahran and Karen Zahran, pro se, appeal
from two summary judgment orders that dismissed their claims against loanDepot
and Appraisal Management Companies Real Estate Valuation Partners for breach
of contract, fraud, alleged violations of the Consumer Protection Act, conspiracy,
and negligence. The claims all arose from the Zahrans’ application for a
residential mortgage. The circuit court concluded that none of the claims were
viable because the Zahrans did not hold title to the property they sought to
encumber with the mortgage.

¶2 On appeal, the Zahrans challenge both the merits of the circuit
court’s decisions and the procedures the court employed. The respondents move
for sanctions against the Zahrans for filing a frivolous appeal. In response, the
Zahrans seek sanctions against the respondents for misrepresenting the record and
making frivolous arguments in their response briefs and their motion for sanctions.
We conclude that the court properly dismissed the Zahrans’ claims. We further
conclude that neither the Zahrans’ appeal nor the respondents’ response briefs and
motions for sanctions are frivolous. Accordingly, we affirm the summary
judgment orders but deny the cross-motions for sanctions.

BACKGROUND

¶3 In 2003, Robin Zahran created a living trust into which significant
assets were subsequently transferred, including title to the Bayshore Drive
property that is at the center of this lawsuit. The trust identified Robin, Karen, and
their three children as income beneficiaries of the trust under various scenarios and
named Abbas Zahran as the trustee. Relevant to this appeal, Paragraph IX.A.5. of
the trust expressly assigned to the trustee the power to mortgage trust assets as
security for a loan. Subsections X.A. and X.D. of the trust provided that a

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No. 2020AP1934

majority of then-current income beneficiaries could “remove any acting trustee at
any time by written notice to that trustee (including the effective date of
removal).” Subsections XI.A. and XI.B. of the trust reserved to Robin the right to
revoke the trust, in full or part, or to amend any terms of the trust by written
instrument. Subsection XIII.A. provided that the Zahrans would have the “sole
right to the possession and use of … all real property held by this trust” and
occupied by the Zahrans as residences (except to the extent “considered not
practical or advisable” by the trustee), while the trustee would have the obligation
of making timely payment of taxes, insurance, and maintenance costs (unless
relieved of that obligation by Robin).

¶4 In 2017, the Zahrans applied to loanDepot for a $600,000 residential
mortgage loan to refinance an existing mortgage on the Bayshore Drive property.
The loan application stated that the title “will be held” in the Zahrans’ names as
“trustee on trust” and estimated the value of the property to be $1,000,000. The
trust was not listed as a borrower on the application, and the application was not
signed by the trustee, although the trust still held title to the property at that time.1

¶5 loanDepot hired Appraisal Management to conduct an appraisal of
the Bayshore Drive property. Appraisal Management estimated the value of the
property to be $650,000. Citing guidelines governing the necessary loan-to-value
ratio, loanDepot then refused to loan the Zahrans $600,000 and instead offered to
loan them $453,000. After the Zahrans’ attempts to challenge the appraisal failed,
the Zahrans, pro se, filed this lawsuit.

1
Abbas Zahran executed a Trustee’s Deed transferring title of the property to the
Zahrans in 2018, after loanDepot had already denied the loan application.

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No. 2020AP1934

¶6 loanDepot moved for summary judgment on August 6, 2020,
alleging that the Zahrans were not entitled to relief on any of their claims because
they did not hold title to the property they sought to mortgage when they applied
for the loan. On August 25, 2020, loanDepot filed a motion seeking to compel
discovery. On August 26, 2020, the circuit court issued a notice for a motion
hearing to be held on September 9, 2020.2 The Zahrans did not file a response to
loanDepot’s summary judgment motion prior to the hearing. On the day of the
hearing, Appraisal Management filed its own motion for summary judgment,
alleging that the Zahrans could not have been damaged by an appraisal performed
in connection with an invalid loan application.

¶7 At the hearing, the circuit court orally granted loanDepot’s summary
judgment motion on the basis that the Zahrans were not the titled owners of the
property at the time they applied for the loan. The court gave the Zahrans twenty
days to respond to Appraisal Management’s summary judgment motion, but it
denied the Zahrans’ request to file additional materials in response to loanDepot’s
summary judgment motion. The Zahrans then submitted affidavits and other
materials in support of a joint response to Appraisal Management’s summary
judgment motion and a motion “to vacate the order of loanDepot Dismissal Based
Upon Fraud Upon the Court.” The court subsequently entered written orders
granting both summary judgment motions, from which the Zahrans now appeal.

2
Although the hearing notice is not included in the appellate record, its existence is
reflected in docket entries, and the circuit court described it at the motion hearing.

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No. 2020AP1934

DISCUSSION

¶8 The Zahrans first challenge the adequacy of the notice they received
for the summary judgment hearing. Specifically, they allege that the notice did
not comply with WIS. STAT. §§ 802.10(3) and 802.08(2) (2019-20).3 We
independently review the interpretation and application of procedural court rules
and statutes to a given set of facts. State v. Sorenson, 2000 WI 43, ¶15, 234
Wis. 2d 648, 611 N.W.2d 240.

¶9 WISCONSIN STAT. § 802.10(3) provides circuit courts with the
discretionary authority to issue scheduling orders setting dates for the parties to
perform a variety of actions. Section 802.10(3) does not require a circuit court to
enter any scheduling order, however, and it has no bearing on the adequacy of the
notice given for a particular hearing.

¶10 WISCONSIN STAT. § 802.08(2) states that a motion for summary
judgment shall be served at least twenty days before the scheduled hearing and
that any opposing affidavits shall be filed at least five days before the hearing.
Here, loanDepot’s summary judgment motion was filed and served on August 6,
2020, thirty-four days before the hearing held on September 9, 2020. The circuit
court’s order for the motion hearing issued on August 26, 2020, provided sixteen
days’ notice of the motion hearing—more than enough time for Zahrans to meet
their statutory deadline to file any opposing affidavits at least five days before the
hearing. There is nothing in the record to support the Zahrans’ contention that the

3
All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
noted.

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No. 2020AP1934

language of the hearing notice was confusing or misleading. We therefore
conclude that the notice was adequate.

¶11 The Zahrans next challenge the circuit court’s refusal to extend their
time to submit written materials in opposition to loanDepot’s summary judgment
motion. However, the Zahrans did not present the court with any facts that would
excuse their failure to file their materials at least five days before the hearing.
Moreover, the materials the Zahrans subsequently submitted did not create any
factual dispute regarding the dispositive fact relied upon by the court—namely,
that the trust held title to the Bayshore Drive property at the time the Zahrans
applied for a mortgage on the property. Therefore, even if the court had somehow
erred in refusing to consider the Zahrans’ summary judgment materials in relation
to loanDepot’s motion, any such error would have been harmless. See WIS. STAT.
§ 805.18(2) (providing that this court will not reverse a judgment “for error as to
any matter of … procedure” unless “after an examination of the entire action or
proceeding, it shall appear that the error complained of has affected the substantial
rights of the party seeking to reverse or set aside the judgment”).

¶12 The same harmless error analysis applies to the Zahrans’ additional
claim that the circuit court should have resolved any pending discovery disputes
before addressing the summary judgment motions. That is, the Zahrans have not
identified any potential discovery items they were seeking that would affect the
ultimate basis for the summary judgments. In short, given the Zahrans’ material
admission that they were not the title holders of the property, there was no reason
for discovery to continue.

¶13 We turn next to the merits of the summary judgment decisions. This
court reviews summary judgment decisions de novo. Palisades Collection LLC v.

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No. 2020AP1934

Kalal, 2010 WI App 38, ¶9, 324 Wis. 2d 180, 781 N.W.2d 503. We examine the
pleadings and materials submitted by the parties to determine whether there are
material facts in dispute that would entitle the party opposing summary judgment
to trial. Id.; WIS. STAT. § 802.08(2).

¶14 The Zahrans do not dispute that the Bayshore Drive property was
titled under the name of the trust. They nonetheless contend that they were the
“legal and equitable” owners of the property—and therefore entitled to encumber
the property—based upon the terms of the trust granting them sole use and
enjoyment of the property and the rights to unilaterally revoke or amend the trust
or remove the trustee. They rely upon cases such as Penterman v. Wisconsin
Elec. Power Co., 211 Wis. 2d 458, 480-81, 565 N.W.2d 521 (1997), for the
proposition that a party may have a recognizable “interest” in property to which he
or she has what the Zahrans characterize as a “legitimate claim of entitlement,”
even if the party’s name does not appear on the title.

¶15 Having an “interest” in a property, however, is not the same thing as
having the right to encumber it. None of the terms of the trust to which the
Zahrans point confer upon them the legal or equitable right to encumber the
Bayshore Drive property titled in the name of the Trust. To the contrary, the plain
language of the trust bestows that right exclusively upon the trustee. While the
Zahrans had the authority to amend that provision, or to replace the trustee with
themselves, they took no steps to do so prior to applying for the refinancing
mortgage.

¶16 Because the Zahrans had no legal or equitable right to encumber the
Bayshore Drive property, either as title holders or under the terms of the trust,
their mortgage application was necessarily invalid. It follows that none of their

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No. 2020AP1934

claims against loanDepot and Appraisal Management for breach of contract, fraud,
alleged violations of the Consumer Protection Act, conspiracy, and negligence
arising out of the mortgage application were viable. Therefore, the circuit court
properly dismissed the claims on summary judgment.

¶17 Finally, while we find little merit in the Zahrans’ pro se appeal, we
decline loanDepot’s request to find their appeal frivolous and to award it costs and
attorney’s fees in this appeal. The Zahrans’ arguments are sufficiently tied to
arguments of procedural and substantive errors such that we cannot say they are
wholly without potential merit or made in bad faith. We also decline the Zahrans’
cross-motion for sanctions because the respondents’ arguments were meritorious.

By the Court.—Orders affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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