Monroe v. Bank of America Corporation ( 2019 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT July 16, 2019
_________________________________
Elisabeth A. Shumaker
Clerk of Court
AMY MONROE, a/k/a Amy L.
McCafferty; C. MARCUS
MCCAFFERTY,
Plaintiffs - Appellants,
No. 18-5089
v. (D.C. No. 4:17-CV-00248-JED-JFJ)
(N.D. Okla.)
BANK OF AMERICA CORPORATION,
f/k/a Bank of America, N.A.;
WILMINGTON SAVINGS FUND
SOCIETY, FSB, doing business as
Christiana Trust, not in its individual
capacity, but soley as trustee for BCAT
2015-14BTT,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before BRISCOE, McKAY, and LUCERO, Circuit Judges.
_________________________________
Amy Monroe (also known as Amy L. McCafferty) and C. Marcus McCafferty
(collectively, “the McCaffertys”) allegedly defaulted on a promissory note secured by
*
After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument. This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral estoppel. It
may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
and 10th Cir. R. 32.1.
a mortgage on their home. The original holder of those instruments was Bank of
America Corporation (formerly known as Bank of America, N.A. or “BANA”).
BANA ultimately assigned its rights to Wilmington Savings Fund Society, FSB
(“Wilmington”). After BANA and Wilmington initiated separate foreclosure actions
that were dismissed without prejudice, the McCaffertys filed this declaratory
judgment action to challenge the enforceability of the note and mortgage. The
district court dismissed most of their claims under Federal Rule of Civil Procedure
12(b)(6) and granted summary judgment to Wilmington on the remaining claim under
Federal Rule of Civil Procedure 56(f). Exercising jurisdiction under 28 U.S.C.
§ 1291, we affirm.
BACKGROUND
In 2006, the McCaffertys borrowed $175,000 from BANA. Ms. McCafferty
executed a promissory note, which was secured by a duly recorded mortgage that the
McCaffertys jointly executed on their real property located at 1616 South Owasso
Avenue in Tulsa, Oklahoma. The promissory note and the mortgage cross reference
each other. The McCaffertys apparently stopped making payments in 2010, causing
the loan to go into default and precipitating a series of foreclosure actions against
them in state court.
BANA filed the initial foreclosure action in March 2011 (the “2011 action”).
It invoked its option to accelerate the total payment due upon default and demanded
$174,996.31, together with accrued interest and applicable fees. For reasons that are
2
not evident from the record, the 2011 action was dismissed without prejudice in late
2012.
In September 2015, BANA assigned all of its interest in the note and mortgage
to Wilmington. The record is silent as to whether the McCaffertys were aware of the
assignment, which was recorded with the county clerk in October 2015. In June
2016, the McCaffertys’ counsel sent a letter to BANA’s agent, demanding that
BANA release the mortgage. The next week, Wilmington filed its own foreclosure
action against the McCaffertys (“the 2016 action”). The 2016 action was dismissed
without prejudice in January 2017, this time for failure to serve process.
The McCaffertys filed this lawsuit in state court in April 2017, asserting three
claims: (1) a declaratory judgment that the mortgage is unenforceable because of an
error in the property description; (2) a declaratory judgment that the promissory note
and mortgage are unenforceable because the statute of limitations has passed; and
(3) slander of title based on the filing of the 2016 action and the defendants’ refusal
to release the mortgage. After BANA removed the case to federal court, the
defendants moved to dismiss all claims under Rule 12(b)(6). In the meantime,
Wilmington filed its second foreclosure action against the McCaffertys in state court
in December 2017 (“the 2017 action”).1
1
Based on our review of the docket in Tulsa County District Court, we take
judicial notice that the 2017 action, No. CJ-2017-4987, is currently stayed pending
this appeal. See Estate of McMorris v. Comm’r, 243 F.3d 1254, 1259 n.8 (10th Cir.
2001) (explaining that we can take judicial notice of documents and docket materials
filed in other courts).
3
In March 2018, the federal district court dismissed the first and second claims
against BANA, finding that BANA had no continuing interest in the enforceability of
the note or mortgage after it assigned the instruments to Wilmington. It also
dismissed the first claim against Wilmington on the ground that an erroneous
property description does not necessarily invalidate a mortgage under Oklahoma law.
The rest of the claims survived, at least for the time being. The district court denied
the motion to dismiss the second claim against Wilmington, rejecting the notion that
the statute of limitations began to run after the last missed installment payment and
finding instead that the limitations period began to run in 2011, when BANA
accelerated the due date for the entire balance. The district court reserved its ruling
on the third claim against both defendants pending supplemental briefing on the
applicable statute of limitations: the six-year statute of limitations for promissory
notes codified at Okla. Stat. tit. 12A, § 3-118(a); or the five-year statute of
limitations for actions upon a contract codified at Okla. Stat. tit. 12, § 95(A)(1). In a
follow-up order issued in April 2018, the district court dismissed the slander of title
claim, holding that the McCaffertys could not satisfy the elements as a matter of law.
Within this context, the district court resolved the statute of limitations question,
concluding that the six-year statute of limitations in § 3-118(a) applies to both the
note and mortgage in this case.
Only one claim remained: the second declaratory judgment claim against
Wilmington based upon the expiration of the statute of limitations. In May 2018, the
district court ordered Wilmington to show cause why summary judgment should not
4
be entered in the McCaffertys’ favor given its ruling that a six-year statute of
limitations began to run in March 2011. Wilmington responded that it had one year
from the dismissal of the 2016 action (not the dismissal of the 2011 action) to re-file
a foreclosure action against the McCaffertys under Okla. Stat. tit. 12, § 100,
Oklahoma’s savings statute, and it had done just that. It provided evidence that it
filed the 2017 action on December 18, 2017. The district court agreed with
Wilmington’s position. In an order issued in July 2018, it held that the 2017 action is
not barred by the six-year statute of limitations because it falls within the savings
statute; therefore, Wilmington prevailed on the remaining claim as a matter of law
under Rule 56(f).
The McCaffertys filed this timely appeal. They argue that the district court
erred in granting summary judgment in Wilmington’s favor on the declaratory
judgment claims because (1) the six-year statute of limitations in Oka. Stat. tit. 12A,
§ 3-118(a) does not apply to mortgage foreclosure actions in Oklahoma; and (2) the
mortgage was fatally defective. They do not challenge the dismissal of the claims
against BANA2 or the dismissal of their slander of title claim.
2
The notice of appeal specifies that the McCaffertys are appealing from the
judgment entered on July 31, 2018, which was entered in Wilmington’s favor. To
protect its interests, BANA filed a response brief, asking this court to affirm the
dismissal of the claims against it. The McCaffertys do not address their claims
against BANA in their opening or reply briefs or otherwise acknowledge BANA’s
response brief. Therefore, to the extent (if any) they challenge the dismissal of the
claims against BANA, we affirm the district court’s judgment in BANA’s favor. See
Fed. R. App. P. 28(a)(8)(A) (stating that an appellant’s opening brief must identify
“appellant’s contentions and the reasons for them, with citations to the authorities
and parts of the record on which the appellant relies”); see also Lenox MacLaren
5
ANALYSIS
I. Standard of Review
We review the grant of summary judgment de novo, applying the same standard
the district court applied. Cillo v. City of Greenwood Vill., 739 F.3d 451, 461
(10th Cir. 2013). Summary judgment must be granted if “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). When applying this standard, “[w]e must view facts in the light
most favorable to the non-moving part[y]” and “resolv[e] all factual disputes and
reasonable inferences in [the non-moving party’s] favor.” Cillo, 739 F.3d at 461
(internal quotation marks omitted).
II. Statute of Limitations
To assess the district court’s summary judgment ruling on the enforceability of
the note and mortgage, we must determine whether a five- or six-year statute of
limitations applies to mortgage foreclosure actions in Oklahoma. We must then
apply that statute of limitations to the facts at hand, considering the date on which the
limitations period was triggered and the extra time conferred by Oklahoma’s savings
statute.
Surgical Corp. v. Medtronic, Inc., 762 F.3d 1114, 1122 n.7 (10th Cir. 2014)
(explaining that issues that are not adequately briefed will not be considered on
appeal).
6
A. A six-year statute of limitations applies to mortgage foreclosure
actions under Okla. Stat. tit. 12A, § 3-118(a).
The central issue on appeal is which statute of limitations applies to mortgage
foreclosure actions in Oklahoma. The McCaffertys argue it is five years, citing Okla.
Stat. tit. 12, § 95(A), which delineates the limitations period for “[c]ivil actions other
than for the recovery of real property.”3 They rely on § 95(A)(1), which states that
“[a]n action upon any contract, agreement, or promise in writing” must be filed
within five years. By contrast, Wilmington argues it is six years, citing Okla. Stat.
tit. 12A, § 3-118(a). Excepting circumstances not relevant here, that provision states
that “an action to enforce the obligation of a party to pay a note payable at a definite
time must be commenced within six (6) years after the due date or dates stated in the
note or, if a due date is accelerated, within six (6) years after the accelerated due
date.”4 Id.
As a preliminary matter, we note that it is difficult for us to evaluate what
arguments were properly preserved for appellate review for this issue and its subparts
3
Neither party acknowledges the exclusion of actions “for the recovery of real
property” from § 95(A) or discusses whether that phrase includes mortgage
foreclosure actions, nor could we find any case law answering this question.
Accordingly, we will not base our ruling on this exclusion.
4
The Oklahoma Comments to § 3-118 explain that “[t]his is a new Section,
introduced as part of the 1992 UCC revisions to gain greater uniformity than was
present when the statute of limitations issue was left to other local law (e.g., in
Oklahoma, 12 Okla. Stat. § 95 . . . ).” § 3-118 cmt. 1. They further explain that
“[f]or the most part, the limitations period will be longer under Section 3-118:
6 years, rather than 5 years under 12 Okla. Stat. § 95 (First) (1992).” § 3-118 cmt. 1;
see also Lenders Collection Corp. v. Harris, 900 P.2d 1022, 1024 (Okla. Civ. App.
1995) (“[A]lthough § 95 was not repealed, to the extent it conflicts with § 3-118(a) in
7
because the McCaffertys’ appendix is incomplete. See Burnett v. Sw. Bell Tel., L.P.,
555 F.3d 906, 908 (10th Cir. 2009). An appellant who is represented by retained
counsel has the duty to file an appendix that serves as the record on appeal. See
10th Cir. R. 10.1. The appendix must be “sufficient for considering and deciding the
issues on appeal.” Id. 30.1(B)(1). Yet the McCaffertys did not include the
supplemental briefs on the applicable statute of limitations or the briefs in response
to the show-cause order directed to Wilmington that were filed in the district court.
This court generally is “not inclined to consider reversing the district court based
upon the parties’ tacit assurances that we have before us all of the relevant matter.”
Burnett, 555 F.3d at 910. “[A]n appellant who provides an inadequate record does so
at his peril.” Id. at 908 (internal quotation marks omitted); see also Rios v. Bigler,
67 F.3d 1543, 1553 (10th Cir. 1995) (“It is not this court’s burden to hunt down the
pertinent materials. Rather, it is Plaintiff’s responsibility as the appellant to provide
us with a proper record on appeal.”). In the interest of justice, however, we have
reviewed the filings in the district court to ensure that the parties’ arguments were
adequately preserved for appellate review.
Turning to the merits, case law on this statute of limitations question is
admittedly scant. The Oklahoma Supreme Court has not considered it, and one
division of the Oklahoma Court of Civil Appeals treated it as an open question in
suits on promissory notes, § 3-118(a) will control because it is the more specific of
the two statutes.”).
8
Wells Fargo Bank, N.A. v. Kindle, 332 P.3d 302, 307 n.6 (Okla. Civ. App. 2014).5
Two other divisions have applied a six-year statute of limitations to a mortgage
foreclosure action based on a promissory note without analyzing or rejecting the
contrary position that the McCaffertys advance here. In Bankers Trust Co. of
California, N.A. v. Wallis, 280 P.3d 974 (Okla. Civ. App. 2012), the court applied
§ 3-118(a) to a mortgage foreclosure action in which the lender accelerated the due
date for the mortgage, where the mortgage secured a promissory note. Id. at 976 n.8
(finding that the foreclosure action was timely filed “within the six-year statute of
limitations”). And in Cinco Enterprises, Inc. v. Botts, 931 P.2d 81 (Okla. Civ. App.
1996), the court held that the mortgagee’s “right to enforce its mortgage was
extinguished by the passage of six years after the promissory note became due.” Id.
at 83. Likewise, a bankruptcy court has applied Oklahoma’s six-year statute of
limitations to assess the timeliness of a foreclosure action within a Chapter 13
adversary proceeding. See Soriano v. Wells Fargo Bank, N.A. (In re Soriano),
587 B.R. 371, 385 n.10 (Bankr. W.D. Okla. 2018). For the reasons that follow, we
5
The factual scenario in Kindle resembles this case in that the mortgagee bank
filed a petition for foreclosure and sought a reformation of the legal description in the
mortgage, and the parties debated the applicable statute of limitations and the effect
of the note’s acceleration on the timeliness of the action. The record was silent as to
which statute of limitations the trial court applied to the foreclosure case, and the
appellate court did not find it necessary to opine on any limitations issues because of
its other rulings. Kindle, 332 P.3d at 307 n.6 (“[I]t is unnecessary to address the
questions of which statute of limitations applies, [Okla. Stat. tit. 12, § 95(A)(1) or
Okla. Stat. tit. 12A, § 3-118(a)], the effect of that application on [the bank’s] claims,
or the effect of the note’s acceleration.”).
9
agree with the latter courts’ position and hold that the statute of limitations for
mortgage foreclosure actions in Oklahoma is six years.
Our analysis begins with Cinco, the only case that provides any rationale for
applying § 3-118(a) in the mortgage context. The lender in Cinco held a promissory
note and a real estate mortgage that referred to the terms of the note and secured it.
Nine years after the last maturing obligation evidenced by the promissory note
became due, the lender filed a foreclosure action and the court had to decide whether
it was time barred. Cinco, 931 P.2d at 82.
The court began by assessing whether Okla. Stat. tit. 46, § 301 is a statute of
repose or a statute of limitations. Id. At that time, § 301 provided that “[n]o suit,
action or proceeding to foreclose or otherwise enforce the remedies in any mortgage
. . . [could] be had or maintained after the expiration of ten (10) years from the date
the last maturing obligation secured by such mortgage . . . bec[ame] due as set out
therein, and such mortgage . . . [ceased] to be a lien,” unless the mortgage holder
filed a written notice of extension. Okla. Stat. tit. 46, § 301(A) (1991).6 The court
concluded that § 301 is a statute of repose because the statute of repose for tort
actions is similarly phrased and § 301’s language “sets the outer boundary beyond
which an action for foreclosure may be brought and allows no exceptions thereto.”
Cinco, 931 P.2d at 82. The foreclosure action fell within the then-ten-year statute of
repose. Id. at 83.
6
The expiration date later changed to seven years for foreclosure actions filed
after November 1, 2001, like the 2017 action. See Okla. Stat. tit. 46, § 301(B).
10
The court then considered whether the foreclosure action was nonetheless time
barred under § 3-118(a), which it explained was the applicable statute of limitations
due to its interplay with Okla. Stat. tit. 42, §§ 5 & 23:
§ 3-118(a) provides a six-year statute of limitations for actions to
enforce the obligations of a promissory note, while [Okla. Stat. tit. 42,
§ 23] provides that a lien is extinguished “by the mere lapse of the time
within which, under the provisions of civil procedure, an action can be
brought upon the principal obligation,” and [§ 5] specifically provides
that the provisions of Title 42 apply to mortgages. Thus, any action by
Cinco to enforce the underlying obligation secured by the mortgage is
time-barred, and Cinco’s right to enforce its mortgage was extinguished
by the passage of six years after the promissory note became due.
Cinco, 931 P.2d at 83.
In other words, the right to enforce a mortgage is subject to the same time
constraints as the right to enforce a promissory note because Title 42, which governs
liens, links their fate together. “A lien is a charge imposed upon specific property, by
which it is made security for the performance of an act.” Okla. Stat. tit. 42, § 1. And
a mortgage is a type of lien by virtue of § 5, which states that “[c]ontracts of
mortgage . . . are subject to all the provisions of this chapter.” Id., § 5. The
enforceability of a mortgage is tied to the enforceability of a promissory note in that
“[a] lien is to be deemed accessory to the act for the performance of which it is a
security . . . and is extinguishable in like manner with any other accessory
obligation.” Id., § 21. Thus, “[a] lien [, here, the mortgage,] is extinguished by the
mere lapse of the time within which . . . an action can be brought upon the principal
obligation [, here, the promissory note].” Id., § 23; accord Fourth Nat’l Bank of
Tulsa v. Appleby, 864 P.2d 827, 834 (Okla. 1993) (“When the statute of limitations
11
bars a debt, that bar serves to extinguish any lien securing the debt.”); Rice v.
Burgess, 254 P. 746, 747 (Okla. 1926) (“[T]he mortgage given to secure a note must
stand or fall with the note, and if there is no debt that can be legally collected, the
mortgage cannot be foreclosed.”).
The reasoning in Cinco is consistent with how other Oklahoma statutes treat
promissory notes and the mortgages that secure them as interconnected. For
instance, the statute of repose for foreclosure actions, discussed supra, expressly ties
the deadline to file a foreclosure action to the terms of the promissory note.
Foreclosure actions cannot be maintained “after the expiration of seven (7) years
from the date the last maturing obligation secured by such mortgage . . . becomes due
. . . and such mortgage . . . shall cease to be a lien.” Okla. Stat. tit. 46, § 301(B)
(articulating the rule for actions filed after November 1, 2001). The statute
addressing judgments in a foreclosure suit also ties the two together. See Okla. Stat.
tit. 12, § 686 (“In actions to enforce a mortgage . . . , [a judgment] shall be rendered
for the amount or amounts due . . . .”); see also Bank of Okla., N.A. v. Red Arrow
Marina Sales & Serv., Inc., 224 P.3d 685, 691 n.10 (Okla. 2009) (“In a foreclosure
proceeding the single judgment is the court’s determination of the amount due the
creditor and its order that the encumbered property be sold to satisfy the mortgage
lien.”).
Cinco’s reasoning also aligns with how the Oklahoma Supreme Court has
treated promissory notes and the mortgages that secure them. It has described a
“judgment upon the note” as “a necessary predicate in foreclosing the lien upon the
12
real estate.” Rice, 254 P. at 747. A “predicate act” is “[a]n act that must be
completed before legal consequences can attach either to it or to another act or before
further action can be taken.” Predicate Act, Black’s Law Dictionary (11th ed. 2019).
Thus, it would not make sense chronologically for the statute of limitations for a
foreclosure action to precede the one for an action on a promissory note. Indeed, the
Oklahoma Supreme Court actually merged the note and mortgage together in its
analysis when it spoke generally about “[t]he statute of limitations applicable to
indebtedness evidenced by a promissory note, secured by a real estate mortgage” and
stated that “the bar of the statute against the debt operates to extinguish the lien
securing the same.” State ex rel. Land Office Comm’rs v. Hall, 128 P.2d 838, 840
(Okla. 1942).
This interconnectedness is also evident from the Oklahoma Supreme Court’s
treatment of the promissory note as the controlling instrument and the mortgage as
incidental. See, e.g., Gill v. First Nat’l Bank & Tr. Co. of Okla. City, 159 P.2d 717,
719 (Okla. 1945) (stating that where a promissory note is secured by a mortgage, “we
have always held that the note which evidences the debt due is the controlling
factor”); Ogilvie v. First Nat’l Bank, 64 P.2d 875, 877 (Okla. 1937) (per curiam)
(“The mortgage securing a note is merely incident and accessory to the note . . . .”);
accord Okla. Stat. tit. 42, § 21 (“A lien is to be deemed accessory to the act for the
performance of which it is a security . . . .”). Under this principle, a promissory note
and a mortgage are so closely connected that if a note is assigned, the mortgage
13
securing it is as well, even without a formal assignment. See Gill, 159 P.2d at 719;
Ogilvie, 64 P.2d at 877.
The promissory note and mortgage under consideration in this case are no
exception: they frequently cross reference each other in a way that makes them
inextricably connected. In the promissory note, for instance, Ms. McCafferty
promises to pay BANA the credit advanced to her, finance charges, and costs and
expenses for which she was responsible “under this Agreement or under the
‘Mortgage’ which secures [her] Credit Line.” Aplt. App. at 23. She also authorizes
BANA to “charge [her] Credit Line to pay other fees and costs that [she is] obligated
to pay under this Agreement [or] the Mortgage.” Id. at 24. Additionally, the
promissory note obligates Ms. McCafferty to “obtain insurance on the Property
securing this Agreement.” Id. at 25. It gives BANA the right to terminate or
accelerate the credit line account if her actions adversely affect the collateral for the
loan, i.e., the property named in the mortgage. See id. at 27. And it affirms that
“[t]he Mortgage or Deed of Trust [and all related documents] have been properly
perfected and are fully enforceable in [illegible] accordance with the terms thereof.”
Id. at 30. The mortgage, in turn, repeatedly references the promissory note. See,
e.g., id. at 34, 35, 39, 43, 45, 49, 50.
It is clear from our analysis of Oklahoma’s case law and statutes, together with
the agreements under consideration here, that the same six-year statute of limitations
necessarily covers an action based on either a promissory note or the mortgage
securing it. We are not persuaded by the McCaffertys’ arguments to the contrary.
14
The McCaffertys first insist that different statutes of limitation apply to claims
predicated on promissory notes (six years) and claims predicated on mortgages,
including foreclosure actions (five years).7 Like the district court, we find no support
for this notion. Oklahoma courts and statutes treat these two instruments as
interconnected, and the limitations periods necessarily track each other. Further,
because the agreements under scrutiny are replete with references to each other, it
would make no sense to treat them differently for enforcement purposes.
The McCaffertys next attempt to avert foreclosure by disassociating
Ms. McCafferty’s promissory note from their joint mortgage—emphasizing that they
are separate instruments and do not share the same signatories. But the debtors in
Wallis proceeded in the same fashion, with one homeowner executing the promissory
note and both homeowners executing the mortgage, 280 P.3d at 975, and the court
still applied a six-year statute of limitations to the foreclosure action, see id. at 976-
77 & n.8. Not only does the McCaffertys’ argument exalt form over substance, but
adopting it could promote gamesmanship among mortgagors and borrowers.
Finally, the McCaffertys argue that § 3-118 cannot apply to a foreclosure
action because it is modeled after Article 3 of the Uniform Commercial Code
(“UCC”), which excludes real estate transactions (and thereby mortgages) from its
coverage. Additionally, Article 3 applies only to negotiable instruments and
7
The McCaffertys moved to amend their complaint on this ground, but the
district court denied their motion. They asked the district court to allow them to
divide their second declaratory judgment claim into two claims: one as to the
enforceability of the note and one as to the enforceability of the mortgage.
15
§ 3-118(a) addresses only actions to enforce notes, yet a mortgage is neither a
negotiable instrument nor a note. They cite cases from New Jersey, Massachusetts,
Michigan, and Texas to support their position, but those cases are not binding. The
parties have not cited, and the court has not found, any Oklahoma case law to this
effect.
B. Even assuming the statute of limitations began to run when BANA
accelerated the debt, the 2017 action was timely in light of
Oklahoma’s savings clause.
We now apply the six-year statute of limitations to the scenario at hand. The
district court found that the statute of limitations began to run when BANA filed the
2011 action because BANA elected to accelerate the due date for the entire balance
owed under the note, but the 2017 action was timely filed by virtue of Oklahoma’s
savings clause, Okla. Stat. tit. 12, § 100. The savings clause affords a party the
opportunity to refile its action one time after it has failed “otherwise than upon the
merits” and after the statute of limitations has run. Id.
In its July 2018 order, the district court applied the relevant factors and
correctly concluded that the 2017 action is timely under § 100 because it is
Wilmington’s first refiling after the dismissal of the 2016 action and after the statute
of limitations ran, assuming it was triggered in 2011. See Aplt. App. at 152-54.
Moreover, the McCaffertys did not challenge the savings-clause ruling in their
appellate briefs and thus did not provide any basis to overturn it. See Fed. R. App. P.
28(a)(6) (requiring an appellant to “identify[] the rulings presented for review” in the
opening brief); see also Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007)
16
(“[W]e routinely have declined to consider arguments that are not raised, or are
inadequately presented, in an appellant’s opening brief.”). We therefore affirm the
grant of summary judgment to Wilmington on the declaratory judgment claim based
on the statute of limitations.
III. Validity of the Mortgage Agreement
To support their declaratory judgment claim, the McCaffertys also argue that
the mortgage is invalid and unenforceable because of an error in the legal description
of the property in the mortgage agreement. Even though the mortgage references
1616 South Owasso Avenue in its entirety, they contend that address is technically
broken up into four lots (Lots 5, 6, 7, and 8), but only one lot (Lot 5) is referenced in
the property description in Schedule A to the mortgage. Lot 5, they argue, is part of
a larger parcel of land that cannot be severed or sold separately under applicable
zoning laws. They cite general contract law for the notion that reformation is
available only when the mistake is mutual, summarily portraying the error in
designating the Lots as a unilateral mistake on BANA’s part.
The district court dismissed this claim under Rule 12(b)(6), so we apply a
different standard of review here. “To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation
marks omitted). Plaintiffs must allege specific facts that would support the conclusion
that they are entitled to relief. Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir.
17
2012) (“[M]ere labels and conclusions . . . will not suffice.” (internal quotation marks
omitted)).
We affirm the dismissal of this claim for substantially the same reasons
articulated by the district court. An inaccurate description of this type can be
reformed and does not necessarily invalidate a mortgage under Oklahoma law. How
to proceed is a matter for the state court, which can consider parol evidence to
identify the real property at issue. This principle has been established for close to a
century. The Oklahoma Supreme Court declared in Varner-Collins Hardware Co. v.
New Milford Security Co., 153 P. 667 (Okla. 1915), that “mere indefiniteness in the
description of land in a mortgage, or an error of description, although it may be such
as to render the instrument prima facie inoperative, does not necessarily invalidate
it.” Id. at 669. Rather, a court may “impart certainty to the description” by
considering “evidence of extrinsic facts relative to the situation of the parties and the
circumstances attending the transaction.” Id.; see also Stillwater Nat’l Bank & Tr.
Co. v. Woolley, 823 P.2d 374, 376-77 (Okla. Civ. App. 1991) (discussing a court’s
equitable power to “correct[] a written instrument to reflect that which the signatories
had actually agreed to” and explaining that “even where a mortgage misdescribes the
property intended to be mortgaged, the mistake is a matter to be corrected by a proper
proceeding before judicial foreclosure”). In Clement Mortgage Co. v. Lewis, 253 P.
88 (Okla. 1926), the court even applied that rule to a similar scenario, in which the
parties misidentified the lot numbers on the mortgage document. It looked at the
entire record, concluded that the parties intended to cover lots that were not listed in
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the mortgage, and directed the parties to reform the mortgage accordingly. Id. at 89-
90.
In keeping with these principles, Wilmington has appropriately asked the state
court in the 2017 action to correct the property description to reflect the parties’
intent. Under these circumstances, we cannot say the mortgage is invalid or
unenforceable.
CONCLUSION
For the foregoing reasons, we affirm the judgment of the district court.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
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