Roger Deming v. Merrill Lynch & Co Inc , 528 F. App'x 775 ( 2013 )


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  •                                                                            FILED
    NOT FOR PUBLICATION                             MAY 01 2013
    MOLLY C. DWYER, CLERK
    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS
    FOR THE NINTH CIRCUIT
    ROGER J. DEMING,                                 No. 11-35957
    Plaintiff - Appellant,             D.C. No. 3:09-CV-05418-RJB
    v.
    MEMORANDUM *
    MERRILL LYNCH & CO., INC.; et al.,
    Defendants - Appellees.
    Appeal from the United States District Court
    for the Western District of Washington
    Robert J. Bryan, Senior District Judge, Presiding
    Argued and Submitted April 10, 2013
    Seattle, Washington
    Before: D.W. NELSON and CALLAHAN, Circuit Judges, and COLLINS, District
    Judge.**
    Roger J. Deming sought to bring an action on behalf of himself and others
    who were similarly situated, alleging that administrative and compliance review
    fees charges by First Franklin Financial Corporation (“Franklin”) on two real estate
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by 9th Cir. R. 36-3.
    **
    The Honorable Raner C. Collins, District Judge for the U.S. District
    Court for the District of Arizona, sitting by designation.
    loans violated Washington state law and his rights under the common law.1 The
    district court granted summary judgment for Franklin holding that Deming’s
    claims were preempted by the National Banking Act and regulations promulgated
    by the Office of the Comptroller of the Currency (“OCC”). We affirm.2
    The district court properly determined that Deming’s claims under
    Washington state laws are preempted by federal law. In Watters v. Wachovia
    Bank, 
    550 U.S. 1
    , 18 (2007), the Supreme Court held that a national bank could
    engage in real estate lending through an operating subsidiary. In Martinez v. Wells
    Fargo, 
    598 F.3d 549
    , 555 (9th Cir. 2010), we held that state laws that “obstruct
    impair, or condition a national bank’s ability to fully exercise its Federally
    authorized real estate lending powers” are preempted. See also 
    12 C.F.R. § 34.4
    (a). Here, applying the Washington Consumer Protection Act or the
    Washington Consumer Loan Act (“CLA”) to the administrative and compliance
    review fees charged by Franklin would obstruct Franklin’s ability to exercise its
    1
    Appellees Merrill Lynch & Co., Inc. and Bank of America Corp. are
    successors in interest to First Franklin Financial Corporation. Appellees are
    collectively referred to as “Franklin.”
    2
    Appellees’ “motion to strike or disregard new argument in appellant’s
    reply brief” is denied.
    2
    “Federally authorized real estate lending powers.” Accordingly, all of Deming’s
    claims based on Washington state laws are preempted.
    The district court dismissed all of Deming’s claims, including his alleged
    common law claims, on the ground that they were “premised on a violation of the
    CLA and/or its regulations.” At oral argument, Deming asserted that he had
    alleged claims under the common law, independent of Washington state statutory
    laws. To the extent that such claims are implicit in Deming’s complaint, he has
    failed to make the requisite factual showings necessarily to proceed. First, as
    Deming procured the underlying loans through an independent broker and did not
    have any conversations with anyone from Franklin, he has not shown that Franklin
    had a duty toward him necessary to give rise to a claim of negligence. Second, it
    appears that the charges in issue were disclosed in the loan documents, thus
    negating Franklin’s claim for fraud through concealment. Third, Deming has not
    shown that his contracts with Franklin specified how the administrative and
    compliance fees were to be calculated or charged. Fourth, as Deming is
    proceeding on a contract, under Washington law, he cannot proceed by way of
    unjust enrichment, but must prove a breach of contract. See U.S. for Use & Benefit
    of Walton Tech., Inc. v. Westar Eng’g., Inc., 
    290 F.3d 1199
    , 1204 (9th Cir. 2002)
    3
    Accordingly, the district court did not err in dismissing Deming’s common law
    claims as well as his claims based on Washington statutes and regulations.3
    Finally, at oral argument Deming asserted that he had alleged a claim under
    the Real Estate Settlement Procedures Act (“RESPA”), 
    12 U.S.C. § 2607
    (b).
    Assuming that such a claim was embedded in Deming’s complaint, it is factually
    and legally foreclosed by our decision in Martinez, 
    598 F.3d at 553-54
    . RESPA
    “prohibits only the practice of giving or accepting money where no service
    whatsoever is performed in exchange for that” and “does not extent to
    overcharges.” 
    Id.
     (internal quotation marks and citations omitted). Here, the
    record shows that Franklin did undertake some administrative tasks and paid
    Mavant, Inc. to undertake some compliance review. In addition, to the extent that
    Deming asserts that Franklin violated RESPA by not adhering to “safe and sound
    banking principles” as required by 
    12 C.F.R., §7.4002
    (b)(2), in Martinez we held
    that a lawsuit claiming that a national bank failed to abide by OCC regulations, “is
    fruitless because the regulation of a national bank’s adherence to OCC regulations
    is within the exclusive purview of the OCC.” 
    Id.
     at 556 n.8.
    3
    Because Deming failed to allege sufficient facts to constitute a
    common law cause of action, we need not, and do not, decide whether an
    adequately pled common law cause of action would be preempted by the National
    Banking Act and OCC regulations.
    4
    The district court’s grant of summary judgment for Franklin and dismissal of
    Deming’s claims is AFFIRMED.
    5
    

Document Info

Docket Number: 11-35957

Citation Numbers: 528 F. App'x 775

Judges: Nelson, Callahan, Collins

Filed Date: 5/1/2013

Precedential Status: Non-Precedential

Modified Date: 11/6/2024