Jessica Saepoff v. HSBC Bank USA, N.A.

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 12, 2022
• Docket: 20-36031
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 12 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

JESSICA SAEPOFF, Nos. 20-36031 21-35017 Plaintiff-Appellant, D.C. No. 2:17-cv-00957-RSL v.

HSBC BANK USA, N.A., as Trustee for Ace MEMORANDUM* Securities Corp. Home Equity Loan Trust 2007-WM2; et al.,

Defendants-Appellees,

and

NORTH CASCADE TRUSTEE SERVICES, INC.; JOHN DOES, 1-20,

Defendants,

UNITED STATES OF AMERICA,

Counter-defendant.

Appeal from the United States District Court for the Western District of Washington Robert S. Lasnik, District Judge, Presiding

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Submitted May 10, 2022** Portland, Oregon

Before: TALLMAN and CHRISTEN, Circuit Judges, and BLOCK,*** District Judge.

Jessica Saepoff appeals the district court’s orders dismissing her claims

against Defendants-Appellees, denying reconsideration, granting summary

judgment for Defendant-Appellee HSBC Bank, and awarding attorney fees and

costs to Defendants-Appellees.

We review de novo the district court’s orders dismissing Saepoff’s claims on

the pleadings under Federal Rule of Civil Procedure 12(c), see Lyon v. Chase Bank

USA, N.A., 656 F.3d 877, 883 (9th Cir. 2011), and granting summary judgment for

HSBC, see Siegel v. Fed. Home Loan Mortg. Corp., 143 F.3d 525, 528 (9th Cir.

1998). The district court’s orders denying reconsideration and awarding attorney

fees are reviewed for abuse of discretion. See Navajo Nation v. Dep’t of the

Interior, 876 F.3d 1144, 1173 (9th Cir. 2017); Siegel, 143 F.3d at 528. We affirm.1

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Frederic Block, United States District Judge for the Eastern District of New York, sitting by designation. 1 We DENY Saepoff’s motion to supplement the record on appeal and for judicial notice (Dkt. 38), as it improperly seeks to introduce documents that were not before the district court at the time it ruled, are not appropriate subjects

2 1. The district court properly dismissed Saepoff’s action on the

pleadings for failing to state valid claims for relief. Several of Saepoff’s claims are

not cognizable. First, Revised Code of Washington § 19.144.080 does not confer a

private right of action for Saepoff’s mortgage fraud claim. See Wash. Rev. Code

§ 19.144.120; see also Hummel v. Nw. Tr. Servs., Inc., 180 F. Supp. 3d 798, 805

(W.D. Wash. 2016), aff’d, 740 F. App’x 142 (9th Cir. 2018). Second, because

Saepoff based her quiet title claim, see Wash. Rev. Code § 19.144.090(5), only on

the mortgage fraud theory, it too fails. Finally, Saepoff’s standalone Consumer

Loan Act claim fails because there is no private right of action for violations under

§ 31.04.027. See id. §§ 31.04.165, .168, .205, .208.

Three- and four-year statutes of limitations apply to Saepoff’s fraudulent

misrepresentation and Consumer Protection Act (CPA) claims respectively. See

id. §§ 4.16.080(4), 19.86.120. In Washington, “a cause of action may accrue for

purposes of the statute of limitations if a party should have discovered salient facts

regarding a claim.” Green v. A.P.C., 960 P.2d 912, 915 (Wash. 1998) (en banc).

Washington courts permit constructive notice, and “[o]ne instance in which actual

discovery will be inferred is where the facts constituting the fraud were a matter of

public record.” Shepard v. Holmes, 345 P.3d 786, 790 (Wash. Ct. App. 2014).

for judicial notice, or are duplicative of documents already in the record on appeal. See Fed. R. Evid. 201.

3 “Thus, the statute of limitations begins to run from the date of the recording of the

instrument.” W. Wash. Laborers-Emps. Health & Sec. Tr. Fund v. Harold Jordan

Co., Inc., 760 P.2d 382, 385 (Wash. Ct. App. 1988).

The district court properly found Saepoff’s CPA and fraudulent

misrepresentation claims time barred. As Saepoff’s own complaint recites, she

executed the Deed of Trust and Note on November 2, 2006, and Ocwen recorded

the Assignment of Deed of Trust from MERS to HSBC on August 5, 2011. She

filed suit pro se on April 25, 2016. The causes of action would have existed on the

date that Ocwen recorded the allegedly invalid Assignment of Deed of Trust on

behalf of MERS and HSBC in 2011, and Saepoff did not timely file suit within the

pertinent statutes of limitations. See Shepard, 345 P.3d at 790–91; Harold Jordan

Co., Inc., 760 P.2d at 385. Dismissal was appropriate because the operative

complaint contains “a detailed account of the procedural history of the case,

reciting the chronology of what happened at each stage,” and all facts necessary to

decide when Saepoff’s causes of action accrued are in the record. Estate of Blue v.

County of L.A., 120 F.3d 982, 984 (9th Cir. 1997).

Finally, the district court did not err in dismissing Saepoff’s associated

claims for declaratory relief. Saepoff argues that the district court resolved factual

questions against her in determining whether she brought her claims within a

“reasonable time.” Because a claim stemming from a written contract accrues on

4 the date of the breach, the district court did not err in finding the claims time barred

because Saepoff in essence claimed the Note and Deed of Trust were invalid ab

initio—in 2006. See Schreiner Farms, Inc. v. Am. Tower, Inc., 293 P.3d 407, 411–

12 (Wash. Ct. App. 2013). Nor did the district court err in dismissing these claims

on the merits. Her mortgage fraud claim fails as a matter of law, and she lacked

standing to challenge the assignment of the loan documents because she did not

allege a genuine risk of paying the same debt twice. Without a substantive cause

of action, declaratory relief is improper.

Accepting all factual allegations in Saepoff’s operative complaint as true,

Defendants-Appellees are still entitled to judgment as a matter of law. See Chavez

v. United States, 683 F.3d 1102, 1108–09 (9th Cir. 2012).

2. Saepoff maintains the district court committed clear and manifest

error in applying the statute of limitations to dismiss her mortgage fraud, CPA, and

declaratory relief claims, and therefore reconsideration under Federal Rule of Civil

Procedure 60(b)(6) was warranted. But “Rule 60(b) relief should be granted

‘sparingly’ to avoid ‘manifest injustice’ and ‘only where extraordinary

circumstances prevented a party from taking timely action to prevent or correct an

erroneous judgment.’” Navajo Nation, 876 F.3d at 1173 (citation omitted). Here,

the district court did not err in denying reconsideration because dismissal on the

pleadings was legally proper, and Saepoff alleged no other basis for relief in her

5 motion. See id. (“Rule 60(b)(6) relief normally will not be granted unless the

moving party is able to show both injury and that circumstances beyond its control

prevented timely action to protect its interests.” (citation omitted)).

3. Saepoff alleges that factual issues preclude summary judgment of

foreclosure for HSBC based on the endorsement of the Note and that HSBC’s

motion was not supported by a legally sufficient affidavit. Saepoff does not

dispute she owes a debt, stopped making payments around July 2010, and still has

not paid off the loan. While she claimed she “tendered pay-off of the Note in the

amount of $516,365.03,” she later admitted that she never transmitted that money

to the loan servicer or HSBC.

In Washington, the “person in possession of a negotiable instrument that is

payable either to bearer or to an identified person that is the person in possession”

is the “holder” and may enforce a negotiable instrument like a promissory note.

Wash. Rev. Code §§ 62A.1-201(b)(21)(A), 62A3-301; see also Brown v. Wash.

Dep’t of Com., 359 P.3d 771, 778–79 (Wash. 2015) (en banc). “[I]t is the holder

of a note who is entitled to enforce it. It is not necessary for the holder to establish

that it is also the owner of the note secured by the deed of trust.” Deutsche Bank

Nat. Tr. Co. v. Slotke, 367 P.3d 600, 604 (Wash. Ct. App. 2016). Foreclosure is

the legal remedy for default under the Note and Deed of Trust, which Saepoff

signed. The declarations attached to HSBC’s motion for summary judgment

6 confirming physical possession of the original Note are legally sufficient. See id.;

cf. Wash. Rev. Code § 61.24.030(7)(a) (“A declaration by the beneficiary made

under the penalty of perjury stating that the beneficiary is the holder of any

promissory note or other obligation secured by the deed of trust shall be sufficient

proof as required [for a nonjudicial foreclosure/trustee’s sale].”). Further, Saepoff

never disputed that the original Note attached to HSBC’s motion for summary

judgment was not the Note that she signed. As a matter of law, HSBC is entitled to

enforce the debt through foreclosure. See Slotke, 367 P.3d at 606.

4. The district court carefully considered the Nken v. Holder factors and

used its discretion to deny Saepoff’s request to stay ruling on Defendants-

Appellees’ motion for attorney fees. See 556 U.S. 418, 433–34 (2009). On the

merits, Saepoff did not object to Defendants-Appellees’ claimed amounts for

attorney fees and costs. The district court acted well within its discretion in

awarding reasonable costs and fees after explaining Defendants-Appellees’

entitlement to fees, analyzing the reasonableness of the rates and hours claimed,

and applying the lodestar.

AFFIRMED.

Costs on appeal are awarded to Defendants-Appellees.