Estate of C. Brown Morris v. the Bank of New York Mellon ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 31 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ESTATE OF CATHERINE BROWN No. 19-55092
MORRIS; et al.,
D.C. No.
Plaintiffs-Appellants, 5:18-cv-01973-SJO-SP
v.
MEMORANDUM*
THE BANK OF NEW YORK MELLON, as
successor-in-interest to JP Morgan Chase
Bank, N.A., Trustee of Structured Asset
Mortgage Investments II Trust 2005-AR8, a
New York corporation; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
S. James Otero, District Judge, Presiding
Submitted March 30, 2021**
Before: FERNANDEZ, SILVERMAN, and N.R. SMITH, Circuit Judges.
The Estate of Catherine Brown Morris and Toddella A. Brown, individually
and as trustee of the Catherine Brown Morris Revocable Living Trust, appeal 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).
district court’s dismissal of their action alleging claims under federal and
California law regarding a mortgage obtained by Brown Morris on a property in
San Bernardino California. We have jurisdiction under 28 U.S.C. § 1291. We
review de novo the district court’s dismissal for failure to state a claim, Perez v.
Mortg. Elec. Reg. Sys., Inc., 959 F.3d 334, 337 (9th Cir. 2020), and we affirm.
Appellants failed to state a claim for wrongful foreclosure because they lack
standing to challenge as voidable the assignments of the deed of trust recorded
against the property, and they failed sufficiently to allege that the assignments were
void. See Yvanova v. New Century Mortg. Corp., 365 P.3d 845, 858-59 (Cal.
2016) (borrower must show that challenged assignment is void); Mendoza v.
JPMorgan Chase Bank, N.A., 6 Cal. App. 5th 802, 820 (2016) (borrower lacks
standing to challenge validity of “robo-signatures,” which would make an
assignment voidable, not void); Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal.
App. 4th 808, 813-14 (2016) (borrower lacks standing to challenge violation of
pooling and servicing agreement). Further, appellants cannot challenge the
assignments as void under California law because when they filed their complaint,
no foreclosure had taken place. See Perez, 959 F.3d at 340.
The district court properly dismissed various claims as barred by applicable
statutes of limitations. Appellants’ argument regarding the discovery rule lacks
merit because with reasonable diligence, they could have discovered the existence
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of the recorded assignments underlying their claims. See MGA Entm’t, Inc. v.
Mattel, Inc., 41 Cal. App. 5th 554, 561 (2019). The continuing violations doctrine
does not apply to appellants’ claim under the Fair Housing Act. See Havens Realty
Corp. v. Coleman, 455 U.S. 363, 380-81 (1982) (describing a continuing violation
as a number of related incidents). Appellants’ arguments regarding the merits of
their claims for restitution, elder abuse, and quantum meruit fail to acknowledge
that the district court dismissed these claims as time-barred.
The district court properly concluded that appellants failed to state a claim
under the Truth in Lending Act or the Real Estate Settlement Procedures Act. See
12 U.S.C. § 2605; 15 U.S.C. § 1604; Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(pleading standard).
As appellants argue, California’s Fair Employment and Housing Act
encompasses claims of housing discrimination. See Cal. Gov’t Code § 12955(e)
& (i). We nonetheless affirm on the ground that appellants failed sufficiently to
allege which defendants committed which acts of discrimination. See Iqbal, 556
U.S. at 678 (pleading standard); Karasek v. Regents of Univ. of Cal., 956 F.3d
1093, 1104 (9th Cir. 2020) (this court may affirm on any ground supported by the
record).
Under the Fair Debt Collection Practices Act’s general definition,
defendants are not “debt collectors.” See 15 U.S.C. § 1692a(6); Obduskey v.
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McCarthy & Holthus LLP, 139 S. Ct. 1029, 1033 (2019). Appellants cannot state a
claim for violation of 15 U.S.C. § 1692f(6), applicable to enforcers of security
interests, because they cannot show that defendants lacked a present right to their
property. See Dowers v. Nationstar Mortg., LLC, 852 F.3d 964, 971 (9th Cir.
2017) (discussing protections for borrowers set forth in § 1692f(6)). Although
mortgage lenders may qualify as debt collectors under California’s Rosenthal Fair
Debt Collection Practices Act, Davidson v. Seterus, Inc., 21 Cal. App. 5th 283, 290
(2018), we affirm the dismissal of this claim on the ground that it is barred by the
one-year statute of limitations, Cal. Civ. Code § 1788.30(f).
We affirm the dismissal of appellants’ claim under California Penal Code
§ 496(c) on the ground that they failed sufficiently to allege any theft. See Switzer
v. Wood, 35 Cal. App. 5th 116, 119 (2019) (“Although section 496 defines a
criminal offense, it also provides an enhanced civil remedy in the event there has
been a violation of the statute—that is, where a person has knowingly received,
withheld or sold property that has been stolen or that has been obtained in any
manner constituting theft.”). We also affirm the dismissal of appellants’
conversion claim. See Hernandez v. Lopez, 180 Cal. App. 4th 932, 939-40 (2009)
(elements of conversion).
Appellants failed to state a claim for breach of fiduciary duty because the
financing of a loan does not create a fiduciary duty. See Kalnoki v. First Am.
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Trustee Servicing Solutions, LLC, 8 Cal. App. 5th 23, 40 (2017) (trustee of deed of
trust is not true trustee with fiduciary obligations).
The district court properly dismissed appellants’ unfair competition claim
for failure sufficiently to allege damages, given that appellants remained in
possession of the property. See Cal. Bus. & Prof. Code § 17204; R&B Auto Ctr.,
Inc. v. Farmers Grp., Inc., 140 Cal. App. 4th 327, 360 (2006).
In summary, the district court properly dismissed appellants’ claims for
failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), and it did
not abuse its discretion in dismissing without leave to amend. See Perez, 959 F.3d
at 340.
Appellants’ certification motions (Docket Entry Nos. 19 and 66) are denied.
Appellants’ motion to file an oversized reply brief (Docket Entry No. 65) is
granted.
AFFIRMED.
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