Filed: Not For Publication
Filed: Not For Publication
Filed: Not For Publication
FILED
1 NOT FOR PUBLICATION NOV 24 2014
SUSAN M. SPRAUL, CLERK
2 U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP No. NC-13-1615-KuPaJu
)
6 ANTON ANDREW RIVERA and DENISE ) Bk. No. 14-54193*
ANN RIVERA, )
7 ) Adv. No. 14-05108
Debtors. )
8 _______________________________)
)
9 ANTON ANDREW RIVERA; DENISE )
ANN RIVERA, )
10 )
Appellants, )
11 )
v. ) MEMORANDUM**
12 )
DEUTSCHE BANK NATIONAL TRUST )
13 COMPANY, Trustee of Certificate)
Holders of the WAMU Mortgage )
14 Pass Through Certificate )
Series 2005-AR6, )
15 )
Appellee. )
16 _______________________________)
17 Argued and Submitted on October 23, 2014
at San Francisco, California
18
Filed – November 24, 2014
19
Appeal from the United States Bankruptcy Court
20 for the Northern District of California
21 Honorable M. Elaine Hammond, Bankruptcy Judge, Presiding
22
*
23 The bankruptcy case and adversary proceeding were
originally pending in the Oakland Division of the United States
24 Bankruptcy Court for the Northern District of California as
bankruptcy case no. 12-49703 and adversary proceeding
25 no. 13-04008. On October 15, 2014, the bankruptcy case and
26 adversary proceeding were transferred to the San Jose Division
and assigned new case numbers.
27 **
This disposition is not appropriate for publication.
28 Although it may be cited for whatever persuasive value it may
have (see Fed. R. App. P. 32.1), it has no precedential value.
See 9th Cir. BAP Rule 8013-1.
Case 13-1615, Document 32, Filed 11/24/2014 Page 2 of 27
1
2 Appearances: Ronald H. Freshman argued for appellants; Stefan
Perovich of Keesal, Young & Logan argued for
3 appellee.
4
Before: KURTZ, PAPPAS and JURY, Bankruptcy Judges.
5
6 INTRODUCTION
7 Chapter 131 debtors Anton and Denise Rivera appeal from an
8 order dismissing their second amended complaint without leave to
9 amend and dismissing their adversary proceeding with prejudice.
10 We have conducted a de novo review of the Riveras’ second
11 amended complaint against defendant Deutsche Bank National Trust
12 Company, Trustee of Certificate-Holders of the WAMU Mortgage Pass
13 Through Certificate Series 2005-AR6 (“DBNTC”). Based on our de
14 novo review, we conclude that some of the Riveras’ claims for
15 relief contain sufficient factual allegations to state a
16 plausible entitlement to recovery under a cognizable legal
17 theory. Some of their claims do not. Accordingly, we AFFIRM IN
18 PART, REVERSE IN PART, and REMAND for further proceedings.
19 FACTS
20 The Riveras’ second amended complaint contained five causes
21 of action, as follows: (1) to determine the extent and validity
22 of DBNTC’s lien; (2) for cancellation of written instruments;
23 (3) for slander of title; (4) for violation of California’s
24 Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.;
25
1
26 Unless specified otherwise, all chapter and section
references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
27 all "Rule" references are to the Federal Rules of Bankruptcy
Procedure, Rules 1001-9037. All "Civil Rule" references are to
28 the Federal Rules of Civil Procedure.
2
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1 Washington Mutual.
2 According to the Riveras, there were fatal problems not only
3 with the endorsement of the note, but also with the transfer of
4 Washington Mutual’s rights in the loan and the security. The
5 Riveras’ second amended complaint pled alternate theories. In
6 the first theory, the Riveras alleged that Chase’s purported
7 transfer of the security to the trust – by way of the 2012
8 corporate assignment of deed of trust – was void because Chase’s
9 purported 2012 assignment occurred seven years after the trust
10 pool was supposed to close, as specified in the pooling and
11 servicing agreement governing the securitization trust. Relying
12 on Glaski v. Bank of Am., N.A., 218 Cal.App.4th 1079, 1083
13 (2013), the Riveras reason that Chase’s attempted assignment was
14 void because the assignment violated the trust’s terms.
15 In the second theory, the Riveras allege that Chase could
16 not convey to DBNTC any interest in the loan or the security
17 because Chase never acquired from Washington Mutual any interest
18 in the loan or security. The Riveras have offered two potential
19 explanations for this theory. First, they posit that the FDIC’s
20 2008 asset sale to Chase did not include Washington Mutual’s
21 rights with respect to the Rivera loan and security. And second,
22 they posit that, because the note never was properly negotiated
23 or otherwise properly transferred to Chase, neither Chase nor
24 DBNTC ever acquired any valid right in the loan or the security.3
25
3
26 The Riveras admit in their opening appeal brief that their
legal argument – the one regarding the assignment of the security
27 being a nullity without a valid assignment of the underlying debt
– is new. See Aplt. Opn. Br. at pp. 16-17. Ordinarily, we will
28 (continued...)
5
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1 CVS Caremark Corp., 669 F.3d 1005, 1016 n.9 (9th Cir. 2012). We
2 can take judicial notice of the existence, filing and content of
3 documents in the Riveras’ underlying bankruptcy case. See
4 O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d
5 955, 957–58 (9th Cir. 1989).
6 We also may consider the existence and content of documents
7 attached to and referenced in the complaint as exhibits. Lee v.
8 City of L.A., 250 F.3d 668, 688 (9th Cir. 2001); Durning v. First
9 Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). Even when a
10 document is not physically attached to the complaint, we may
11 consider its existence and contents when its authenticity is not
12 contested and when it necessarily is relied upon by the
13 plaintiffs in their complaint. See United States v. Ritchie,
14 342 F.3d 903, 907–08 (9th Cir. 2003); Lee, 250 F.3d at 688.
15 Of course, just because a document states a “fact” does not
16 necessarily mean that this fact is true. Roth v. Jennings,
17 489 F.3d 499, 509 (2d Cir. 2007). Whether the facts stated in a
18 judicially noticed document are reasonably subject to dispute
19 depends on the nature of the facts stated and the nature and
20 purpose of the document as a whole. See Ferguson v. Wells Fargo
21 Bank, N.A., 2013 WL 504709, at **2-3 (E.D. Cal. 2013); see also
22 Lee, 250 F.3d at 690.
23 DISCUSSION
24 Citing Gomes and Dick, the bankruptcy court held that the
25 Riveras had no right to dispute that DBNTC was the person
26 entitled to enforce the note and no right to challenge the
27 validity of the assignment of the deed of trust from Chase to
28 DBNTC. We disagree with the bankruptcy court on both points.
10
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1 and the state’s highest court has not yet addressed the issue,
2 our job as a federal court applying state law is to predict how
3 the state’s highest court would resolve the issue. Hemmings v.
4 Tidyman's Inc., 285 F.3d 1174, 1203 (9th Cir. 2002). Unless we
5 are convinced that the California Supreme Court would decide the
6 issue differently, we are obliged to follow the decisions of
7 California’s intermediate appellate courts. Vestar Dev. II, LLC
8 v. Gen. Dynamics Corp., 249 F.3d 958, 960 (9th Cir. 2001); Spear
9 v. Wells Fargo Bank, N.A. (In re Bartoni-Corsi Produce, Inc.),
10 130 F.3d 857, 861 (9th Cir. 1997).
11 Here, we note that the California Supreme Court recently
12 granted review from an intermediate appellate court decision
13 following Jenkins and rejecting Glaski. Yvanova v. New Century
14 Mortg. Corp., 226 Cal.App.4th 495 (2014), review granted &
15 opinion de-published, 331 P.3d 1275 (Cal. Aug 27, 2014). Thus,
16 we eventually will learn how the California Supreme Court views
17 this issue. Even so, we are tasked with deciding the case before
18 us, and Ninth Circuit precedent suggests that we should decide
19 the case now, based on our prediction, rather than wait for the
20 California Supreme Court to rule. See Hemmings, 285 F.3d at
21 1203; Lewis v. Telephone Employees Credit Union, 87 F.3d 1537,
22 1545 (9th Cir. 1996). Because we have no convincing reason to
23 doubt that the California Supreme Court will follow the weight of
24 authority among California’s intermediate appellate courts, we
25 will follow them as well and hold that the Riveras lack standing
26 to challenge the assignment of their deed of trust based on an
27 alleged violation of a pooling and servicing agreement to which
28 they were not a party.
19
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1 on DBNTC’s behalf.
2 As provided in Cal. Civ. Code § 3412:
3 A written instrument, in respect to which there is a
reasonable apprehension that if left outstanding it may
4 cause serious injury to a person against whom it is
void or voidable, may, upon his application, be so
5 adjudged, and ordered to be delivered up or canceled.
6 Id.; see also In re Cedano, 470 B.R. at 533. To plead a viable
7 claim for relief, the Riveras needed to allege that they would be
8 injured or prejudiced unless these instruments were cancelled.
9 See Dick, 2013 WL 5299180, at *4.
10 The Riveras’ second claim for relief is based on the same
11 two legal arguments regarding the violation of the pooling and
12 servicing agreement and the absence of a valid transfer of the
13 underlying debt to DBNTC. As set forth above, the Riveras lack
14 standing to assert violations of the pooling and servicing
15 agreement in support of their claims for relief. See Jenkins,
16 216 Cal.App.4th at 515; see also In re Sandri, 501 B.R. at 375-
17 76.
18 As for their remaining argument – that the assignment was a
19 nullity because DBNTC did not receive a valid transfer of the
20 underlying debt – the only alleged harm the second amended
21 complaint specifically references (arising from the trust deed
22 assignment, the notice of default and the notice of sale) relates
23 to DBNTC’s pending nonjudicial foreclosure proceedings. As we
24 already have explained, the alleged absence of noteholder status
25 is not an issue that a borrower can raise to challenge
26 nonjudicial foreclosure proceedings. Debrunner, 204 Cal.App.4th
27 at 440-42.
28 Even if the California courts generally permitted borrowers
21
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1 wrongful practices are actionable under the UCL, the Riveras have
2 not alleged facts from which we reasonably can infer that they
3 personally have been injured by those practices. See Iqbal,
4 556 U.S. at 678.
5 We already have explained in detail above the fatal
6 deficiencies in the Riveras’ second amended complaint concerning
7 the issues of causation and injury. More specifically, we
8 explained that any loss they might have suffered as a result of
9 DBNTC’s foreclosure proceedings is logically and legally the
10 result of the Riveras’ default on their loan obligations rather
11 than the result of Chase’s and DBNTC’s alleged conduct.
12 Accordingly, the bankruptcy court did not err when it dismissed
13 the Riveras’ slander of title claim.
14 5. Fifth Claim for Relief – for violation of the Federal Truth
15 In Lending Act, 15 U.S.C. § 1641(g)
16 The Riveras’ TILA Claim alleged, quite simply, that they did
17 not receive from DBNTC, at the time of Chase’s assignment of the
18 deed of trust to DBNTC, the notice of change of ownership
19 required by 15 U.S.C. § 1641(g)(1). That section provides:
20 In addition to other disclosures required by this
subchapter, not later than 30 days after the date on
21 which a mortgage loan is sold or otherwise transferred
or assigned to a third party, the creditor that is the
22 new owner or assignee of the debt shall notify the
borrower in writing of such transfer, including--
23
(A) the identity, address, telephone number of the new
24 creditor;
25 (B) the date of transfer;
26 (C) how to reach an agent or party having authority to
act on behalf of the new creditor;
27
(D) the location of the place where transfer of
28 ownership of the debt is recorded; and
24
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1 Am., N.A. (In re Nordeen), 495 B.R. 468, 489-90 (9th Cir. BAP
2 2013). Here, however, the Riveras did not argue in either the
3 bankruptcy court or in their opening appeal brief that the court
4 should have granted them leave to amend. Having not raised the
5 issue in either place, we may consider it forfeited. See Golden
6 v. Chicago Title Ins. Co. (In re Choo), 273 B.R. 608, 613 (9th
7 Cir. BAP 2002).
8 Even if we were to consider the issue, we note that the
9 bankruptcy court gave the Riveras two chances to amend their
10 complaint to state viable claims for relief, examined the claims
11 they presented on three occasions and found them legally
12 deficient each time. Moreover, the Riveras have not provided us
13 with all of the record materials that would have permitted us a
14 full view of the analyses and explanations the bankruptcy court
15 offered them when it reviewed the Riveras’ original complaint and
16 their first amended complaint. Under these circumstances, we
17 will not second-guess the bankruptcy court’s decision to deny
18 leave to amend. See generally In re Nordeen, 495 B.R. at 489-90
19 (examining multiple opportunities given to the plaintiffs to
20 amend their complaint and the bankruptcy court’s efforts to
21 explain to them the deficiencies in their claims, and ultimately
22 determining that the court did not abuse its discretion in
23 denying the plaintiffs leave to amend their second amended
24 complaint).
25 CONCLUSION
26 In ruling on DBNTC’s motion to dismiss the Riveras’ second
27 amended complaint, the bankruptcy court erred when it dismissed
28 the Riveras’ first and fifth claims for relief, but the court did
26
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1 not err when it dismissed the Riveras’ second, third and fourth
2 claims for relief. Accordingly, we AFFIRM the dismissal of the
3 second, third and fourth claims for relief, we REVERSE the
4 dismissal of the first and fifth claims for relief, and we REMAND
5 for further proceedings.
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