Richard Dahnken v. Wells Fargo Bank ( 2017 )

FILED
NOT FOR PUBLICATION
JUL 19 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RICHARD DAHNKEN, No. 14-15424
Plaintiff-Appellant, D.C. No. 4:13-cv-02838-PJH
v.
WELLS FARGO BANK, NA, Trustee of MEMORANDUM*
Wamu Mortgage Pass-Through
Certificates, Series 2005-PR4;
JPMORGAN CHASE BANK, N.A.;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Phyllis J. Hamilton, District Judge, Presiding
Submitted February 15, 2017**
San Francisco, California
*
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).
Before: GOULD and BERZON, Circuit Judges and GARBIS,*** District Judge.
In 2005, Appellant Richard Dahnken (“Dahnken”) obtained a $346,000
home loan, evidenced by a promissory note and secured by a deed of trust recorded
against the property. Mortgage Electronic Registration Systems, Inc. (“MERS”)
was designated the nominee for the lender and its successors and assigns,
beneficiary of the deed of trust, and holder of legal title to the loan. Through a
series of assignments, the loan was securitized into a mortgage-backed securities
pool that qualified as a Real Estate Mortgage Investment Conduit (“REMIC”) in
accordance with the Internal Revenue Code. JPMorgan Chase Bank (“Chase”)
ultimately became the servicer for the loan.
Dahnken stopped making payments on the loan beginning September 2008.
Before a scheduled foreclosure sale, he filed this lawsuit in June 2013, asserting
ten causes of action against Chase, MERS, and Wells Fargo Bank, NA (“Wells
Fargo”) as trustee of the securities trust. The district court dismissed Dahnken’s
amended complaint with prejudice. We have jurisdiction under 28 U.S.C. § 1291,
and we affirm.
1. The district court did not err in dismissing Dahnken’s wrongful
foreclosure claim for failing to state a claim under Federal Rule of Civil Procedure
***
The Honorable Marvin J. Garbis, United States District Judge for the
District of Maryland, sitting by designation.
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12(b)(6). Dahnken alleged that none of the named Defendants had standing to
enforce his mortgage loan because of failures with the assignments.
First, Dahnken’s challenges to MERS’ assignments have no merit. MERS
was acting as the lender’s nominee when it assigned the interest in the deed of
trust, so the assignment was valid. See Fontenot v. Wells Fargo Bank, N.A., 129
Cal. Rptr. 3d 467, 479-80 (Ct. App. 2011) (disapproved of on other grounds by
Yvanova v. New Century Mortg. Corp., 365 P.3d 845, 859 n.13 (Cal. 2016)).
Further, even if MERS lacked authority to transfer the note, the assignment merely
substituted one creditor for another and did not change Dahnken’s obligations, so
Dahnken cannot show the prejudice necessary to challenge foreclosure. Id. at 481.
Dahnken also argued that the attempted securitization failed because the
assignment to Wells Fargo was after the closing date of the trust. The weight of
authority now holds that an untimely assignment to a securitized trust, made after
the securitized trust’s closing date, is not void but merely voidable. See, e.g.,
Turner v. Wells Fargo Bank NA, --- F.3d ----, No. 15-60046, 2017 WL 2587981, at
*3 (9th Cir. June 15, 2017).
Finally, Dahnken’s allegation that the assignment was robo-signed does not
result in a void assignment. An unauthorized signature is subject to ratification, so
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the assignment would therefore, be voidable, not void. Cal. Com. Code § 3403(a);
Mendoza, 212 Cal. Rptr. 3d at 14.
Under California law, a borrower cannot bring an action challenging the
assignment of a loan or deed of trust from one lender or loan-servicer to another
unless that assignment was void rather than merely voidable. Turner, 2017 WL
2587981, at *3 (citing Yvanova, 365 P.3d at 861). Therefore, Dahnken lacked the
authority to challenge the assignments, and his claim for wrongful disclosure fails.
2. Dahnken’s claims for quiet title and restitution similarly fail. Dahnken
did not plausibly allege superior title in his property over Chase and Wells Fargo.
Nor did Dahnken allege that he had paid his debt, which is a necessary
prerequisite to quiet title to the property. Lueras v. BAC Home Loans Servicing,
LP, 163 Cal. Rptr. 3d 804, 835-36 (Ct. App. 2013). Also, Dahnken made no
plausible allegation of any payments he made not being properly credited to the
loan or unjustly enriching Chase or Wells Fargo. Dunkin v. Boskey, 98 Cal. Rptr.
2d 44, 62–63 (Ct. App. 2000).
3. The district court did not err in dismissing Dahnken’s claims of
California Civil Code violations. Dahnken alleged that defendants violated Cal.
Civ. Code § 2924.17 based on a Notice of Trustee’s Sale that was issued by the
trustee on behalf of Wells Fargo. Section 2924.17 applies to a mortgage servicer,
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which is defined in § 2920.5 to specifically exclude a trustee. Dahnken’s claims
against defendants are, therefore, inapplicable, since the notice was issued by the
trustee, not by defendants.
Dahnken also alleged a violation of Cal. Civ. Code § 2934a(a)(1)(A) based
on Chase not having the power to substitute a trustee. As discussed above,
Dahnken’s allegations with regard to the validity of MERS assignments have no
merit. Further, Chase recorded the substitution of trustee, so the Civil Code’s
procedural requirements were satisfied. See Cal. Civ. Code § 2934a(d) (recorded
substitution of trustee constitutes conclusive evidence of the authority of the
substituted trustee).
4. Dahnken did not raise any legal argument challenging the district court’s
ruling denying him leave to file a second amended complaint, so Dahnken failed to
preserve the issue for appeal. See D.A.R.E. Am. v. Rolling Stone Magazine, 270
F.3d 793, 793 (9th Cir. 2001) (“A bare assertion of an issue does not preserve a
claim, particularly when, as here, a host of other issues are presented for review.”
(citations omitted)). Further, after a previous opportunity to amend, Dahnken
failed to cure the complaint’s defects, and there is no showing that further
amendment would be successful.
AFFIRMED.
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