Pamela King v. U.S. Bank Trust, N.A.

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 16, 2021
• Docket: 20-55030
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 16 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

PAMELA KING, AKA Pamela Schiavone, No. 20-55030

Plaintiff-Appellant, D.C. No. 3:19-cv-01689-CAB-WVG v.

U.S. BANK TRUST, N.A., as Trustee for MEMORANDUM* LSF9 Master Participation Trust, a National Banking Association; SUMMIT MANAGEMENT COMPANY, LLC, a Delaware corporation; BANK OF AMERICA, N.A., FKA Countrywide Home Loans Servicing LP, a National Banking Association, Successor by merger to BAC Home Loans Servicing, LP; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation; DOES, 1 to 25 inclusive including all persons or entities unknown claiming (A) any legal or equitable right, title, estate, lien, or interest in the subject property described in this verified complaint adverse to plaintiff's title, or (B) Any Cloud on plaintiff,

Defendants-Appellees.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Appeal from the United States District Court for the Southern District of California Cathy Ann Bencivengo, District Judge, Presiding

Submitted February 11, 2021** Pasadena, California

Before: BOGGS,*** M. SMITH, and MURGUIA, Circuit Judges.

Plaintiff-Appellant Pamela King (King) appeals the district court’s dismissal

of her claims that sought to unwind the foreclosure sale of real property located in

Encinitas, California (Property), cancel various assignments and substitutions

recorded against the Property, and quiet title to the Property. Because the parties are

familiar with the facts, we do not recount them here, except as necessary to provide

context to our ruling. We have jurisdiction under 28 U.S.C. § 1291. We review de

novo the district court’s dismissal under Federal Rule of Civil Procedure 12(b)(6).

Gingery v. City of Glendale, 831 F.3d 1222, 1226 (9th Cir. 2016). We affirm.

King entered into a mortgage-loan agreement with Countrywide Bank as

lender consisting of a promissory note and deed of trust secured by the Property. The

trustee under the deed of trust was CTC RealEstate Services, and the beneficiary was

Defendant Mortgage Electronic Registration Systems (MERS).

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Danny J. Boggs, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.

2 On October 20, 2009, MERS recorded a document substituting Recontrust

Company, N.A., as trustee, and transferring to BAC Home Loans Servicing LP all

beneficial interest under the deed of trust to the Property. On July 21, 2016,

Defendant Bank of America, N.A. (BoA), successor by merger to BAC Home Loans

Servicing LP, recorded a document assigning its rights under the deed of trust to the

Property to Defendant U.S. Bank Trust, N.A. (U.S. Bank). On July 25, 2016, a

“Substitution of Trustee” dated July 21, 2016, which substituted Defendant Summit

Management Company, LLC (Summit) as trustee, was recorded in the San Diego

County Recorder’s Office.

King failed to make her monthly mortgage payments, so a notice of default

and notice of trustee sale on the Property were recorded. Because King failed to cure

the default, a foreclosure sale was held with Summit as trustee, and the Property was

conveyed to U.S. Bank.

1. King contends that the district court erred by dismissing her claim for

wrongful foreclosure because U.S. Bank and Summit lacked standing to foreclose

on the Property. King argues that a deed of trust is not separately assignable from

the promissory note it secures. Therefore, she contends, BoA acquired nothing from

the MERS assignment such that the assignment, and the subsequent assignment to

U.S. Bank, were void. Along these same lines, King contends that U.S. Bank lacked

the right to foreclose because it did not hold the promissory note either because

3 MERS did not have the authority to transfer the note or because the recorded

assignment of the deed of trust to U.S. Bank did not also assign the note.

King’s arguments are foreclosed by California law with respect to California’s

nonjudicial foreclosure scheme. “There is no stated requirement in California’s non-

judicial foreclosure scheme that requires a beneficial interest in the Note to

foreclose. Rather, the statute broadly allows a trustee, mortgagee, beneficiary, or any

of their agents to initiate non-judicial foreclosure. Accordingly, the statute does not

require a beneficial interest in both the Note and the Deed of Trust to commence a

non-judicial foreclosure sale.” Debrunner v. Deutsche Bank Nat’l Tr. Co., 204 Cal.

App. 4th 433, 441 (2012) (quoting Lane v. Vitek Real Est. Indus. Grp., 713 F. Supp.

2d 1092, 1099 (E.D. Cal. 2010)).

Based on the First Amended Complaint and the documents judicially noticed

in the district court, U.S. Bank was the beneficiary of the deed of trust and Summit

was the trustee at the time of the foreclosure sale. Whether U.S. Bank had an interest

in the note is irrelevant to its right to foreclose based on its beneficial interest in the

deed of trust. See id.

King also argues that MERS’s “State by State Foreclosure Manual”

establishes that MERS lacked authority to assign the beneficial interest in the deed

of trust because Countrywide Bank was not a MERS member. However, the deed of

trust grants MERS the authority to act on behalf of Countrywide Bank, and this

4 authority was not limited to the terms of any other agreements between MERS and

Countrywide Bank. Therefore, any language in a MERS manual does not eliminate

this authority.

King fails to meet her burden to establish that any of the assignments or

substitutions with respect to the Property were void. See Rossberg v. Bank of Am.,

N.A., 219 Cal. App. 4th 1481, 1493 (2013). Therefore, the district court properly

dismissed King’s claim for wrongful foreclosure because she fails to plausibly allege

that U.S. Bank and Summit lacked standing to foreclose on the Property under

California’s nonjudicial foreclosure scheme.

2. King’s claims for quiet title, cancellation of instruments, unfair competition,

and slander of title are all premised on the same flawed theory underlying her

wrongful foreclosure claim that U.S. Bank and Summit lacked standing to foreclose

on the Property. Because the First Amended Complaint does not allege facts

plausibly supporting that theory, the district court properly concluded King’s

remaining claims fail as well.

3. King argues the district court erred by denying her leave to amend. However,

King’s First Amended Complaint failed to address the deficiencies identified by the

district court in its order dismissing her first complaint, and King makes no argument

in her briefing as to any additional allegations she could raise to cure her deficient

claims. Therefore, the district court did not abuse its discretion by denying leave to

5 amend because any further amendment would be futile. See A.E. ex rel. Hernandez

v. Cnty. of Tulare, 666 F.3d 631, 636 (9th Cir. 2012).

AFFIRMED.