Duncan Robertson v. Gmac Mortgage , 702 F. App'x 595 ( 2017 )

FILED
NOT FOR PUBLICATION
AUG 21 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DUNCAN K. ROBERTSON, No. 14-35672
Plaintiff-Appellant, D.C. No. 2:12-cv-02017-MJP
v. MEMORANDUM
GMAC MORTGAGE, LLC, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Marsha J. Pechman, Chief District Judge, Presiding
Submitted August 16, 2017
Seattle, Washington
Before: HAWKINS and TALLMAN, Circuit Judges, and LEFKOW, ** Senior
District Judge.

This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

The panel unanimously finds this case suitable for decision without oral
argument. See Fed. R. App. P. 34(a)(2)(C).
*
The Honorable Joan H. Lefkow, Senior United States District Judge for
the Northern District of Illinois, sitting by designation.
1
This case comes back following our remand to the district court. Duncan K.
Robertson owns real property subject to a deed of trust (“the Nicholls DOT”). The
obligor on the Nicholls DOT defaulted, triggering a non-judicial foreclosure by the
trustee on behalf of the beneficiary of the Nicholls DOT. Over a period of nearly
two years, Robertson successfully resisted several scheduled trustee sales while
endeavoring to identify the correct trustee and beneficiary of the Nicholls DOT
(which had been transferred more than once), as he intended to pay off the
deficiency and improve the property for sale and profit. Ultimately, the beneficial
interest in the Nicholls DOT was purportedly transferred to Residential Funding
Real Estate Holdings, LLC (“RFREH”), and the trustee, LSI Title Agency, Inc.
(“LSI”),1 issued a notice of foreclosure sale on RFREH’s behalf. That sale did not
occur and, as far as the record reflects, neither has a resolution of the payoff
amount been reached nor the sale gone forward. Robertson alleges that the cloud
on his title has prevented him from improving and selling the property.
Robertson filed suit to quiet title to the property in Washington state superior
court, naming as defendants LSI, Bank One, N.A. and its successor in interest J.P
1
Since March 2014, LSI has been doing business as ServiceLink Title Agency,
Inc. For simplicity, we will refer to LSI by its name at the time this suit was filed
in 2012.
2
Morgan Chase Bank, N.A. (collectively, “Chase”), Bank of New York Mellon
Trust Co., N.A. (“BNY”), First American Title Insurance Co., and several other
entities that claimed some interest in the Nicholls DOT,2 either as a beneficiary of
the promissory note or as trustee. Robertson alleged violations of state law,
including the Washington Deed of Trust Act (“DTA”) and Consumer Protection
Act (“CPA”), and sought declaratory judgment to void the Nicholls DOT, as well
as injunctive relief and damages. The district court either dismissed or entered
summary judgment in favor of the defendants on almost all of Robertson’s claims.3
The district court entered final judgment pursuant to Federal Rule of Civil
Procedure 54(b), and Robertson appealed.
After oral argument, we remanded to the district court to determine whether
it had jurisdiction based on diversity of citizenship. The district court so concluded
and we now can determine the merits of Robertson’s appeal. Robertson continues
to challenge the district court’s jurisdiction as to LSI and BNY and its dismissal of
2
Those entities included RFREH, GMAC Mortgage, LLC, Executive
Trustee Services, LLC, Residential Funding Corp., Residential Funding Co., LLC,
and Homecomings Financial, LLC (“the GMAC defendants”).
3
Robertson’s remaining claims against the GMAC defendants were stayed
under 11 U.S.C. § 362(a)(1) pending those defendants’ chapter 11 bankruptcy
proceeding in the Southern District of New York. Those claims are not before us.
3
his DTA and CPA claims. We have jurisdiction under 28 U.S.C. § 1291. We
affirm.
1. We review de novo a district court’s order denying a motion to
remand to state court for lack of removal jurisdiction. Hunter v. Philip Morris
USA, 582 F.3d 1039, 1042 (9th Cir. 2009). A district court’s factual findings
regarding domicile or citizenship, however, are reviewed for clear error. See Rea v.
Michaels Stores Inc., 742 F.3d 1234, 1237 (9th Cir. 2014) (per curiam) (citing Fed.
R. Civ. P. 52(a)(6)). Clear error requires a “definite and firm conviction that a
mistake has been committed.” Anderson v. City of Bessemer City, 470 U.S. 564,
573 (1985) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948))
(internal quotation marks omitted).
Robertson contends that LSI was a home-forum defendant, defeating
removal under 28 U.S.C. § 1441(b)(2). Robertson relies on LSI’s representation on
its regulatory filings with Washington’s Office of the Insurance Commissioner
(“OIC”) that its “business address” was in Bellevue, Washington. After an
evidentiary hearing, the district court rejected this argument. First, the relevant
Washington regulatory code, which requires title insurance agents that wish to be
treated as resident agents to maintain a lawfully-established place of business in
the state, says nothing regarding such an agent’s principal place of business. See
4
Wash. Rev. Code § 48.17.090(4)(b). Second, an OIC compliance officer testified
that her use of the term “principal place of business” in her declaration submitted
by Robertson simply referred to the licensee’s primary physical address within the
state of Washington, not to its national headquarters.
The district court determined that LSI’s principal place of business at the
time of removal was California, based on evidence provided by LSI that showed
that its key executives, including its president, were located in California at the
time of removal. The court found that the corporation’s “nerve center” was in
California, making it a citizen of California. See Hertz Corp. v. Friend, 559 U.S.
77, 80–81 (2010) (defining a corporation’s principal place of business as its “nerve
center,” the place from which the corporation’s high level officers direct, control,
and coordinate the corporation’s activities). The district court’s finding that LSI
was not a home-forum defendant was not clear error; thus, it committed no error in
denying Robertson’s motions to remand to the state superior court.4
4
Robertson’s argument that the district court lacked jurisdiction under 28
U.S.C. § 1359 because the defendants-appellees colluded to deceive the court
regarding BNY’s citizenship also fails. Even if BNY were a citizen of Florida, as
defendants initially pleaded in the notice of removal, and not California, as
defendants asserted during remand proceedings, complete diversity would still
exist relative to Robertson, a citizen of Oregon. Robertson thus cannot show that
defendants took any action “to invoke the jurisdiction” of the district court. See 28
U.S.C. § 1359. Also unavailing is Robertson’s argument that BNY should be
5
2. We review de novo a district court’s orders dismissing for failure to
state a claim and granting summary judgment. Doe v. Abbott Labs., 571 F.3d 930,
933 (9th Cir. 2009). We may affirm dismissal on any basis supported by the
record. Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121 (9th Cir.
2008).
Robertson contends that the district court erred in dismissing his declaratory
judgment action for violations of the DTA against Chase and BNY based on lack
of standing to sue to enforce its protections. Because we find that the district court
should have dismissed this claim for lack of a justiciable case or controversy,
rather than lack of statutory standing, we do not reach whether Robertson has
standing under the DTA.5 If no justiciable controversy exists, then the court lacks
estopped from denying the “jurisdictional fact” that it is a citizen of Florida as it
originally contended. A party’s citizenship cannot be stipulated to or admitted by a
party if it is not accurate. Cf. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365,
377 n.21 (1978).
5
Although the district court applied the Washington Uniform Declaratory
Judgment Act (“UDJA”), Wash. Rev. Code § 7.24.010, in the proceedings below,
we apply the federal Declaratory Judgment Act, 28 U.S.C. § 2201, when sitting in
diversity. Golden Eagle Ins. Co. v. Travelers Cos., 103 F.3d 750, 753 (9th Cir.
1996), overruled on other grounds by Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220(9th Cir. 1998). Analyzing Robertson’s claim under the UDJA, however, would
not alter our conclusion that he has not alleged a justiciable case or controversy.
6
subject-matter jurisdiction and must dismiss under Federal Rule of Civil Procedure
12(b)(1).6
Robertson’s complaint does not allege a controversy between himself and
either Chase or BNY. The DTA serves to protect interested parties from wrongful
non-judicial foreclosure sales. Frias v. Asset Foreclosure Servs., Inc., 334 P.3d
529, 537 (Wash. 2014). If a foreclosure sale has not yet occurred, the DTA allows
interested parties to restrain the sale, Wash. Rev. Code § 61.24.130(1), or pay the
trustee the amount due under the deed of trust, Wash. Rev. Code § 61.24.090(1),
but the DTA does not create a damages remedy, Frias, 334 P.3d at 533. Here,
Robertson has not alleged that Chase and BNY continue to claim an interest in the
property encumbered by the Nicholls DOT. Neither Chase nor BNY has threatened
Robertson, explicitly or implicitly, to foreclose on the property. Therefore, under
the DTA, Robertson and Chase and BNY do not have “adverse legal interests” to
warrant rendering declaratory relief. See Shell Gulf of Mex. Inc. v. Ctr. for
Biological Diversity, Inc., 771 F.3d 632, 635 (9th Cir. 2014). Because no
6
In his opening brief Robertson argues in passing that such a dismissal of
his declaratory judgment claim requires that the entire case be remanded pursuant
28 U.S.C. § 1447(c). That is incorrect. See Lee v. Am. Nat’l Ins. Co., 260 F.3d 997,
1006 (9th Cir. 2001) (citing Wis. Dep’t of Corr. v. Schacht, 524 U.S. 381, 392
(1998)) (holding that remand under § 1447(c) is only required “if subject-matter
jurisdiction is lacking over the entire case, and not over just some of the plaintiff’s
claims”).
7
justiciable case or controversy between Robertson, Chase, and BNY exists, we
dismiss Robertson’s claims under the DTA for lack of subject matter jurisdiction.
3. To prove a claim for violation of the CPA, a plaintiff must establish
an “(1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3)
public interest impact; (4) injury to plaintiff in his or her business or property; (5)
[and] causation.” Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co.,
719 P.2d 531, 533 (Wash. 1986). The district court found that Robertson failed to
establish the first, third, fourth, and fifth elements as to all defendants-appellees.7
The injuries Robertson asserts in his Complaint are clouding title to his
property, which is causing its value to diminish, and loss of use, including lost
revenue from sale, rental, or development.8 Robertson has not explained, however,
how LSI’s allegedly deceptive practices in particular caused his injuries. And, as
the district court noted, the cloud on his title and his limited ability to sell, rent, or
7
Because Robertson did not “distinctly raise[] and argue[]” dismissal of his
CPA claims against defendants other than LSI in his opening brief, we consider
these arguments waived. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir.
2009) (per curiam).
8
Robertson additionally lists as injuries pecuniary losses from liquidating
assets and taking loans in anticipation of paying off the Nicholls DOT as well as
loss of appreciation value of the liquidated securities, but these injuries are
explicitly attributed to the actions of defendants that are not participating in this
appeal.
8
develop the property resulted from his purchasing the property subject to a first-
position deed of trust. Thus, these injuries cannot reasonably be attributed to LSI.
See Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 170 P.3d 10,
21 (Wash. 2007) (holding that, to satisfy the causation element, a CPA plaintiff
must “establish that but for the defendant’s unfair or deceptive act or practice the
plaintiff’s injury would not have occurred”).
4. We review for abuse of discretion denial of leave to amend a
complaint. Lacano Invs., LLC v. Balash, 765 F.3d 1068, 1071 (9th Cir. 2014). A
district court does not abuse its discretion by denying leave where the proposed
amendment would be futile. See id. at 1076.
The district court denied the motion to amend because it found that
Robertson’s proposed amendments, which included correcting typos, adding
defendants, supplementing his emotional distress allegations, and adding judicial
notice of public records and court cases, would not avoid dismissal of the claims
against LSI. The district court did not abuse its discretion.
AFFIRMED. Each party shall bear its own costs of this appeal.
9