Michael Enos v. U.S. Bank, N.A. ( 2020 )

FILED
NOT FOR PUBLICATION
DEC 14 2020
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MICHAEL ENOS; PAULA ENOS, No. 19-15828
Plaintiffs-Appellants, D.C. No. 3:18-cv-06101-MMC
v.
MEMORANDUM*
U.S. BANK, N.A.,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of California
Maxine M. Chesney, District Judge, Presiding
Submitted December 10, 2020**
San Francisco, California
Before: TALLMAN, MURGUIA, and CHRISTEN, Circuit Judges.
Plaintiffs Michael and Paula Enos appeal the district court’s order granting
defendant U.S. Bank’s motion for judgment on the pleadings. Plaintiffs timely
appealed, and we have jurisdiction pursuant to 28 U.S.C. § 1291. Because the
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
parties are familiar with the facts, we recite only those necessary to resolve the
appeal.
“A judgment on the pleadings is properly granted when, taking all the
allegations in the pleadings as true, the moving party is entitled to judgment as a
matter of law.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713 (9th
Cir. 2001) (citation omitted). Because Rule 12(b) motions to dismiss and Rule
12(c) motions for judgment on the pleadings are “functionally identical, the same
standard of review applicable to a Rule 12(b) motion applies to its Rule 12(c)
analog.” Dworkin v. Hustler Mag., Inc., 867 F.2d 1188, 1192 (9th Cir. 1989).
Dismissal is warranted if the complaint fails to allege either a “cognizable legal
theory” or “sufficient facts [] under a cognizable legal theory.” Balisteri v.
Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). Here, on de novo
review, we affirm the district court’s judgment. See Milne ex rel. Coyne v. Stephen
Slesinger, Inc., 430 F.3d 1036, 1042 (9th Cir. 2005).
1. To prevail on a claim to cancel an instrument pursuant to Cal. Civ. Code
§ 3412, “a plaintiff must prove (1) the instrument is void or voidable due to, for
example, fraud; and (2) there is a reasonable apprehension of serious injury
including pecuniary loss or the prejudicial alteration of one’s position.” U.S. Bank
Nat’l Ass’n v. Naifeh, 205 Cal. Rptr. 3d 120, 128 (Ct. App. 2016) (citation
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omitted). We conclude the district court did not err by ruling that plaintiffs failed
to allege a cognizable legal theory in support of their claim.
The Deed of Trust named MERS as the beneficiary of the Deed of Trust and
the nominee for the original lender and its assigns. See Lee v. City of Los Angeles,
250 F.3d 668, 688 (9th Cir. 2001) (explaining that a court may consider material
beyond the pleadings without converting the motion to dismiss into a motion for
summary judgment if “the documents’ authenticity is not contested and the
plaintiff’s complaint necessarily relies on them” (citation and internal quotation
marks and alterations omitted)). The Deed of Trust further provided that MERS
had the right to exercise any and all of the interests of the original lender. Under
California law, the Deed of Trust permitted MERS to sell or assign both the
promissory note and the Deed of Trust on behalf of the original lender. See
Fontenot v. Wells Fargo Bank, N.A., 129 Cal. Rptr. 3d 467, 477 (Ct. App. 2011),
disapproved of on other grounds by Yvanova v. New Century Mortg. Corp., 365
P.3d 845, 859 n.13 (Cal. 2016). Accordingly, when MERS executed the
Assignment of Deed of Trust it transferred both the promissory note and the Deed
of Trust to U.S. Bank. U.S. Bank was the beneficiary of the Deed of Trust at the
time of the foreclosure sale and was entitled to purchase the property by credit bid.
See Fontenot, 129 Cal. Rptr. 3d at 477 (“Ordinarily, the owner of a promissory
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note secured by a deed of trust is designated as the beneficiary of the deed of
trust.” (citing 11 Thompson on Real Property (2d ed. 1998) § 94.02(b)(7)(i), p.
346)); Yvanova, 365 P.3d at 850 (explaining that a trustee may only initiate
foreclosure “at the direction of the person or entity that currently holds the note
and the beneficial interest under the deed of trust”); Cal. Civ. Code. § 2924h(b).
The district court did not err by concluding plaintiffs had not alleged a cognizable
theory underpinning their allegation that the Deed Upon Sale was void for lack of
consideration.
2. Because we conclude the district court did not err by ruling plaintiffs had
not alleged a cognizable legal theory, we do not consider the parties’ arguments
relating to tender and prejudice.
AFFIRMED.
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