Lunt v. Nationstar Mortgage ( 2020 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT January 28, 2020
_________________________________
Christopher M. Wolpert
Clerk of Court
JASON LUNT,
Plaintiff - Appellant,
v. No. 18-4093
(D.C. No. 1:13-CV-00065-DB)
NATIONSTAR MORTGAGE; JAMES H. (D. Utah)
WOODALL, Trustee; DOES 1 - 10,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before TYMKOVICH, Chief Judge, HARTZ and BACHARACH, Circuit Judges.
_________________________________
Plaintiff Jason Lunt sued Nationstar Mortgage, asserting two claims under
Utah law: (1) void contract and (2) quiet title. He sought various relief, including a
declaration that his mortgage contract with Nationstar was null and void and an order
invalidating all related documents encumbering his title. Nationstar moved for
summary judgment, arguing, among other things, that Plaintiff’s claims were
time-barred. Nationstar also moved for dismissal of the action based upon Plaintiff’s
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
failure to join an indispensable party, his wife Nicole Lunt. The district court granted
both motions and entered judgment dismissing the action in its entirety.1 In granting
the indispensable-party motion, the district court stated that joining Mrs. Lunt would
be futile because the limitations period had expired on Plaintiff’s claims.
Plaintiff argues on appeal that the court erred in holding that his quiet-title
claim was time-barred. He further contends that in light of that error, joining his
wife would not be futile. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
Plaintiff did not preserve in the district court the only argument he raises in his
opening brief challenging the district court’s grant of summary judgment, and he fails
to argue for plain-error review. Further, affirmance of the statute-of-limitations
dismissal disposes of Plaintiff’s sole argument in his opening brief against the district
court’s dismissal for failure to join an indispensable party.
I. Background
In 2007, Plaintiff considered refinancing the existing mortgage on his home
(the Property). He and his wife discussed this potential refinancing with a friend who
was in the mortgage business. Plaintiff was interested in extracting $50,000 in equity
to use for other investments. In August 2007, Plaintiff’s friend brought loan
documents to the couple’s home, and Plaintiff and his wife signed the documents
without reviewing them. In particular, they signed as co-borrowers on a Note
1
The district court’s judgment terminated the action as to all defendants,
including James H. Woodall, Trustee. Woodall is not participating in this appeal.
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secured by a trust deed encumbering the Property. Shortly after executing the loan
documents, Plaintiff received and deposited a $50,000 check from the loan proceeds.
In October 2007, Plaintiff received a coupon book reflecting loan terms that he
alleges were different from what he and his wife expected based on his friend’s
representations about the loan. Plaintiff then reviewed the loan documents and
discovered the new mortgage had an adjustable rate and a prepayment penalty.
Plaintiff contacted his friend about the alleged discrepancies in the loan, and he
initiated an investigation with the loan servicer about allegedly forged signatures on
some of the loan documents. He also contacted the title company and the police. But
he did not file suit.
Plaintiff and his wife continued to make mortgage payments through the end
of 2010. From 2011 to 2013, foreclosure proceedings were commenced, postponed,
and cancelled several times. At some point, Nationstar became the servicer of
Plaintiff’s mortgage.
Plaintiff filed this action in April 2013. His second-amended complaint (the
final, and operative, complaint) alleged that the mortgage contract was void and
sought to quiet title to the Property. Plaintiff contended that the contract is void
because he believed that the loan documents that he and his wife signed were only
preliminary, nonbinding documents and because his friend had fraudulently induced
him to agree to the loan. Nationstar moved for summary judgment, arguing that
Plaintiff’s void-contract claim was barred by the applicable statutes of limitations and
his quiet-title claim was therefore also untimely. Nationstar also contended that
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Plaintiff’s action should be dismissed because he failed to join his wife, who was an
indispensable party.
The district court held that Plaintiff’s void-contract claim, whether based on a
theory of unilateral mistake or fraud, was subject to a three-year statute of
limitations. Because Plaintiff was aware of all the facts giving rise to that claim in
2007, the court concluded it was untimely when filed in 2013.
As for the timeliness of Plaintiff’s quiet-title claim, the district court held that
“actions in which the principal purpose is to obtain some affirmative relief clearly
come within the statute of limitations,” and “quiet title claims contingent upon the
success of another claim are subject to the statute of limitations applicable to the
other claim.” Aplt. App. at 296 (ellipses and internal quotation marks omitted). For
these propositions, the district court relied on the Utah Supreme Court’s decision in
Bangerter v. Petty, 225 P.3d 874 (Utah 2009). The court concluded that Plaintiff’s
quiet-title claim sought affirmative relief—a declaration that the loan was void and
extinguishment of the trust deed—which was contingent on the success of his
void-contract claim. It therefore concluded that his quiet-title claim was untimely
because he filed it more than three years after his void-contract claim had accrued.
The district court also held that Plaintiff’s wife, who was a joint tenant of the
Property and a co-borrower on the mortgage note, was an indispensable party under
Federal Rule of Civil Procedure 19 and that her absence required dismissal of the
action. After noting that the time to add parties had expired, the court further found
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that joining Plaintiff’s wife at that time would be futile in light of its ruling that all of
the claims asserted in the action were time-barred.
II. Discussion
Plaintiff’s opening brief on appeal argues that the district court erred in
holding that his quiet-title claim is time-barred. He further contends that because the
court erred in dismissing that claim as untimely, it also erred in holding that joining
his wife in the action would be futile. Plaintiff asserts that on remand the district
court should consider whether her joinder in the action would cause any prejudice.
We review de novo a grant of summary judgment. See Cory v. Aztec Steel Bldg.,
Inc., 468 F.3d 1226, 1233 (10th Cir. 2006).
A. Statute of Limitations
Plaintiff contends that he filed a true quiet-title claim that is not subject to any
statute of limitations. He points out that it is undisputed that he is the title holder to
the Property and he was seeking to remove an encumbrance from his
title—Nationstar’s trust deed. He then argues that under Utah case law his status as
the title holder precludes application of a statute of limitations to his quiet-title claim.
In particular, he asserts that the district court misapplied Bangerter, in which the
Utah Supreme Court stated that “the statute of limitations does not apply to quiet title
actions where the claimant is in actual possession of the property in question under a
claim of ownership.” 225 P.3d at 876-77. Plaintiff distinguishes his quiet-title claim
from a case in which the claimant seeks to invalidate title already granted to another
as a condition precedent to obtaining an order quieting title.
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But, as Nationstar points out, Plaintiff failed to preserve his “true quiet-title”
argument in the district court, thereby forfeiting that argument on appeal. To
preserve an argument for appeal, it must be “presented to, considered and decided”
by the district court. Lyons v. Jefferson Bank & Tr., 994 F.2d 716, 721 (10th Cir.
1993) (brackets and internal quotation marks omitted). Plaintiff does not provide any
record citation showing that his appeal argument was raised before, and ruled on by,
the district court, as required by Tenth Circuit Rule 28.1(A). Our review of the
record does not reveal any material that could fairly be read to present Plaintiff’s
argument that no statute of limitations applies to his quiet-title claim because he
holds title to the Property.
Nationstar argued in its summary-judgment motion that Plaintiff’s quiet-title
claim was contingent on the success of his first cause of action for void contract. It
contended, “If a plaintiff’s claim for quiet title ‘can be granted only if the party
succeeds on another claim, then the statute of limitations applicable to the other
claim will also apply to the quiet title claim.’” Aplt. App. at 52 (quoting Bangerter,
225 P.3d at 877).
In response, Plaintiff’s entire argument challenging the applicability of any
statute of limitations to his claims was as follows:
D. Plaintiffs Bring this Suit in a Defensive Position; Statutes of
Limitations Don’t Apply
Statutes of Limitations are designed to prevent otherwise legally
enforceable rights from being exercised because the party who can enforce
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the obligation or statutory claim waited too long to do so, and allowing
them to do so at a late date would be manifestly unjust.
Nationstar, in arguing that Ms. Lunt would be barred from asserting
her property rights now should she be joined, has not understood that the
Lunts have brought this action in response to Nationstar’s efforts to
non-judicially forclose, and therefore seek an equitable order and quiet title
from a defensive position. There is no statute of limitations on raising a
defense.
Id. at 149. No authority was cited. The district court rejected Plaintiff’s “defensive
position” argument and adopted Nationstar’s reading of Bangerter in holding that the
quiet-title claim was untimely. Id. at 296-97.
Thus, although Plaintiff had ample opportunity to raise his appeal argument in
response to Nationstar’s summary-judgment contention, he never fairly presented it
to the district court. See FDIC v. Kan. Bankers Sur. Co., 840 F.3d 1167, 1170-71
(10th Cir. 2016).
Plaintiff argues that his district-court argument was close enough to his appeal
argument to preserve the latter for appellate review. We are not persuaded. He says
that his district-court argument simply stated in different terms the Utah Supreme
Court’s rationale for not applying statutes of limitations in quiet-title actions. But a
vague reference to a point in the district court is not sufficient to preserve an
argument more fully presented on appeal. See Lyons, 994 F.2d at 721. Nor is it
enough to have raised a related argument below. See id. at 722. Plaintiff’s
contention in the district court “is a far cry” from his theory on appeal that he filed a
true quiet-title claim not subject to any statute of limitations because he holds title to
the Property. Kan. Bankers Sur. Co., 840 F.3d at 1170. Moreover, Plaintiff did not
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cite in his district-court argument the cases he relies upon now. See id. (noting the
plaintiff cited for the first time on appeal the principal cases it relied upon). In
particular, Plaintiff did not argue below that Nationstar’s summary-judgment motion
misconstrued Bangerter, the case that the district court ultimately relied on in holding
that his quiet-title claim was untimely.
There is also no merit to Plaintiff’s contention that his assertion of a quiet-title
claim, in itself, was sufficient to preserve any theory he wishes to raise on appeal
regarding the timeliness of that claim. That assertion is contrary to this court’s case
law requiring litigants to present their specific arguments to the district court to
preserve them for appeal. See Parker Excavating, Inc. v. LaFarge W., Inc., 863 F.3d
1213, 1223 (10th Cir. 2017) (rejecting contention that alleging a particular claim
justifies making new arguments on appeal as to that claim); Fish v. Kobach, 840 F.3d
710, 730 (10th Cir. 2016) (characterizing this contention as “spurious under our
forfeiture and waiver principles”).
Accordingly, we conclude that Plaintiff did not preserve in the district court
his sole argument on appeal challenging the district court’s summary-judgment order.
The general rule is that issues not presented in the district court are forfeited
on appeal. See United States v. Jarvis, 499 F.3d 1196, 1201 (10th Cir. 2007). “[A]
party may not lose in the district court on one theory of the case, and then prevail on
appeal on a different theory.” Lyons, 994 F.2d at 721. This is so even if the
appellant advances a stronger argument on appeal. See Richison v. Ernest Grp., Inc.,
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634 F.3d 1123, 1127, 1130 (10th Cir. 2011) (plaintiff’s “much more plausible theory”
presented on appeal was nonetheless forfeited by his failure to preserve it).
“[W]e will entertain forfeited theories on appeal, but we will reverse a district
court’s judgment on the basis of a forfeited theory only if failing to do so would
entrench a plainly erroneous result.” Id. at 1128. To show plain error, Plaintiff must
demonstrate “(1) error, (2) that is plain, which (3) affects substantial rights, and
which (4) seriously affects the fairness, integrity, or public reputation of judicial
proceedings.” Id. But Plaintiff has neither invoked the plain-error standard nor
attempted to show how his new legal theory satisfies it. Consequently, his “failure to
argue for plain error and its application on appeal . . . marks the end of the road for
an argument for reversal not first presented to the district court.” Id. at 1131. We
affirm the dismissal of Plaintiff’s claims as untimely.
B. Failure to Join Indispensable Party
The district court also granted Nationstar’s motion to dismiss the action
because Plaintiff failed to join his wife, who the court held was an indispensable
party under Rule 19. In his opening brief, Plaintiff’s sole argument of error on this
issue is contingent upon a holding that the district court erred in dismissing his
quiet-title claim as time-barred. See Aplt. Opening Br. at 12-13 (challenging the
district court’s holding that joining Plaintiff’s wife was futile because the statutes of
limitations had run on all claims in the action and seeking reconsideration of the
joinder issue on remand). This argument fails because we affirm the district court’s
decision that the quiet-title claim is time-barred. Plaintiff raises additional arguments
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in his reply brief for why the indispensable-party ruling was erroneous. But we need
not address them because the appellant must raise in his opening brief all arguments
challenging the ruling of the district court. See Bronson v. Swensen, 500 F.3d 1099,
1104 (10th Cir. 2007) (“[T]he omission of an issue in an opening brief generally
forfeits appellate consideration of that issue.”); Wheeler v. Comm’r, 521 F.3d 1289,
1291 (10th Cir. 2008) (“[I]ssues raised by an appellant for the first time on appeal in
a reply brief are generally deemed waived.”).
Finally, Plaintiff suggests that the district court’s indispensable-party ruling
deprived it of jurisdiction to grant summary judgment. But the court was saying only
that if there were no limitations bar to plaintiff’s claims, the court would still have to
dismiss the case for failure to join an indispensable party. Plaintiff’s wife was not
indispensable to resolution of the complaint if the complaint was untimely.
III. Conclusion
The district court’s judgment is affirmed.
Entered for the Court
Harris L Hartz
Circuit Judge
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