Edison Dicion v. Mers ( 2017 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS NOV 21 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
EDISON S. DICION, No. 14-17428
Plaintiff-Appellant, D.C. No.
1:14-cv-00252-JMS-KSC
v.
MANN MORTGAGE, LLC, MEMORANDUM*
Defendant,
and
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Hawaii
J. Michael Seabright, Chief Judge, Presiding
Submitted October 13, 2017**
Honolulu, Hawaii
Before: SCHROEDER, D.W. NELSON, and McKEOWN, Circuit Judges.
*
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).
Edison S. Dicion appeals from the district court’s dismissal of his claims for
lack of subject matter jurisdiction and failure to state a claim upon which relief can
be granted. Because the parties are familiar with the facts, we do not recite them
here. Our appellate jurisdiction rests on 28 U.S.C. § 1291, and we affirm.
Dicion invokes diversity jurisdiction for his quiet title claim. Diversity
jurisdiction requires that Dicion establish that the amount in controversy exceeds
$75,000, exclusive of interest and costs. See 28 U.S.C. § 1332(a). “In actions
seeking declaratory or injunctive relief, it is well established that the amount in
controversy is measured by the value of the object of the litigation.” Hunt v.
Washington State Apple Advert. Comm’n, 432 U.S. 333, 347 (1977) (emphasis
added) (citations omitted). Dicion claims the amount in controversy in this
declaratory judgment action is measured by the equity he has lost in the property or
by the value of the property. Dicion’s “quiet title” claim is not a true quiet title
claim, so neither the lost equity in nor the value of the subject property is the object
of the litigation. See Fed. Nat’l Mortg. Ass’n v. Kamakau, No. CIV. 11-00475
JMS, 2012 WL 622169, at *9 (D. Haw. Feb. 23, 2012) (“[I]n order to assert a
claim for ‘quiet title’ against a mortgagee, a borrower must allege he has paid, or is
able to tender, the amount of indebtedness.”); see also Klohs v. Wells Fargo Bank,
N.A., 901 F. Supp. 2d 1253, 1261 n.4 (D. Haw. 2012) (“Plaintiffs’ contention that
they do not know to whom their debt is owed is not a basis to ‘quiet title.’”).
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Dicion does not allege he has paid, or is able to tender, the amount of indebtedness.
Nor does he allege he owns his property free and clear of any debt obligations.
Dicion also does not allege that he is facing foreclosure or has received competing
demands for payment on the same loan. Thus, the district court correctly found the
object of the litigation to be the value of relieving Dicion’s uncertainty as to whom
to send his mortgage payments. Such relief “appear[s] to be intangible,
speculative, and lack[s] the capability of being translated into monetary value.”
Jackson v. Am. Bar Ass’n, 538 F.2d 829, 831 (9th Cir. 1976) (per curiam)
(citations omitted). Even if Dicion’s subjective relief could be translated into
monetary value, he has not even attempted to provide monetary estimates. The
district court properly dismissed his “quiet title” claim for lack of subject matter
jurisdiction.
Dicion’s slander of title claim and certain allegations in support of his
Federal Debt Collection Practices Act (“FDCPA”) claim rely on a challenge to the
validity of the mortgage assignment. Because Dicion lacks standing to challenge
the assignment, these arguments fail. Generally, “third parties do not have
enforceable contract rights” unless they are intended third party beneficiaries.
Velasco v. Sec. Nat’l Mortg. Co., 823 F. Supp. 2d 1061, 1067 (D. Haw. 2011)
(quoting Ass’n of Apartment Owners of Newtown Meadows v. Venture 15, Inc.,
167 P.3d 225, 262 (Haw. 2007)), aff’d, 508 F. App’x 679 (9th Cir. 2013). As such,
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“borrowers generally lack standing to challenge the assignments of their loans.”
Paik-Apau v. Deutsche Bank Nat. Tr. Co., No. CIV. 10-00699 SOM, 2012 WL
5207495, at *4 (D. Haw. Oct. 19, 2012). An exception applies when a challenge
would make an assignment void, not voidable. Id.; U.S. Bank Nat’l Ass’n v.
Salvacion, 338 P.3d 1185, 1190 (Haw. Ct. App. 2014).
We reject Dicion’s argument that, even though he is not a party to nor
beneficiary of the assignment, he nevertheless has standing because the assignment
of his mortgage from Mortgage Electronic Registration Systems, Inc. (“MERS”) to
Bank of America is void, not voidable. Dicion’s argument is based on allegations
that the person who executed the assignment, as both a representative of MERS
and an employee of Bank of America, lacked the authority to do so. A challenge
to the validity of an assignment based on the executor’s lack of authority would
make the assignment voidable, not void. See, e.g., Paik-Apau, 2012 WL 5207495,
at *5 (“Paik–Apau’s challenges to the assignments of her loan go to whether those
assignments are voidable, as she argues that persons or entities lacked authority to
assign the loan documents. She lacks standing to make those challenges.”); see
also Deutsche Bank Tr. Co. v. Beesley, No. CIV. 12-00067 SOM, 2012 WL
5383555, at *6 (D. Haw. Oct. 30, 2012) (“Nor do the Beesleys create standing to
contest the validity of the assignments by questioning the power of any person or
entity making the assignments.”). Thus, Dicion has no standing to bring his
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slander of title claim or the portions of his FDCPA claim that rely on a challenge to
the validity of the mortgage assignment.
To the extent that portions of Dicion’s FDCPA claim do not rely on a
challenge to the validity of the assignment, such portions were properly dismissed
under Federal Rule of Civil Procedure 12(b)(6). To be liable for a violation of the
FDCPA, a defendant must be a “debt collector” within the meaning of the statute.
See 15 U.S.C. § 1692a(6) (defining “debt collector” as “any person who uses any
instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts, or who regularly collects or
attempts to collect, directly or indirectly, debts owed or due or asserted to be owed
or due another.”); Heintz v. Jenkins, 514 U.S. 291, 294 (1995). “[A] debt collector
does not include the consumer’s creditors, a mortgage servicing company, or an
assignee of a debt, as long as the debt was not in default at the time it was
assigned.” Soriano v. Wells Fargo Bank, N.A., No. CIV. 11-00044 SOM, 2012
WL 1536065, at *6 (D. Haw. Apr. 30, 2012) (quoting Perry v. Stewart Title Co.,
756 F.2d 1197, 1208 (5th Cir. 1985)); see also Rowe v. Educ. Credit Mgmt. Corp.,
559 F.3d 1028, 1031 (9th Cir. 2009) (stating that a creditor is not a debt collector
under the FDCPA).
Dicion has provided no basis from which to infer that the defendants are
“debt collectors” within the meaning of the FDCPA. As the district court noted,
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Dicion has not alleged that any of the defendants’ principal business is debt
collection, or that they are collecting on behalf of others. See Schlegel v. Wells
Fargo Bank, NA, 720 F.3d 1204, 1209 (9th Cir. 2013) (holding that a plaintiff’s
establishment that debt collection is some of a defendant’s business is insufficient
to state a FDCPA claim). Nor has Dicion argued that his loan was in default at the
time of the assignment, such that creditors, assignees, or loan servicers might be
liable under the statute. See Soriano, 2012 WL 1536065, at *6.
Even if Dicion adequately alleged that the defendants were “debt collectors,”
he failed to provide allegations specific to the “deceptive” conduct that violated the
FDCPA other than a conclusory recitation of the types of prohibited collection
practices from the statute. Therefore, the district court did not err in dismissing
Dicion’s FDCPA claim on Rule 12(b)(6) grounds.
AFFIRMED.
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