Rollins v. Mortgage Electronic Registration Systems, Inc. , 578 F. App'x 700 ( 2014 )

FILED
NOT FOR PUBLICATION JUN 12 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DUSTIN ROLLINS, on behalf of himself No. 12-16261
and all other similarly situated persons,
D.C. No. 2:11-cv-00027-JAT
Plaintiff - Appellant,
v. MEMORANDUM*
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.;
MERSCORP, INC.,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Arizona
James A. Teilborg, Senior District Judge, Presiding
Argued and Submitted November 8, 2013
San Francisco, California
Before: TASHIMA, W. FLETCHER, and NGUYEN, Circuit Judges.
Dustin Rollins appeals the district court’s order dismissing his claim for
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
statutory wrongful foreclosure and partially dismissing his claims1 for tortious
wrongful foreclosure, declaratory judgment, equitable relief, punitive
damages and attorneys’ fees. On limited remand from this Court, the district court
certified its dismissal order as an appealable final judgment under Federal Rule of
Civil Procedure 54(b). Therefore, we have jurisdiction pursuant to 28 U.S.C. §
1291.
“We review de novo the district court’s dismissal under Rule 12(b)(6) and
review for abuse of discretion the denial of leave to amend.” Sylvia Landfield
Trust v. City of Los Angeles, 729 F.3d 1189, 1191 (9th Cir. 2013) (citation
omitted). We affirm, but remand for entry of an order permitting Rollins to file a
motion for leave to amend.
Rollins’s claim for statutory wrongful foreclosure fails. Defendants
Mortgage Electronic Registration Systems, Inc. and MERSCORP, Inc. (together,
“MERS”) had the legal authority to send Rollins the foreclosure notice under Ga.
Code Ann. § 44-14-162.2 and to foreclose under Ga. Code Ann. § 44-14-162(b),
even though MERS was not the holder of the note. You v. JP Morgan Chase Bank,
N.A., 743 S.E.2d 428, 433 (Ga. 2013) (“Under current Georgia law, the holder of a
1
As discussed in our previous order, the district court partially remanded
these claims to the United States District Court for the Northern District of Georgia
(i.e., the transferor court).
2
deed to secure debt is authorized to exercise the power of sale in accordance with
the terms of the deed even if it does not also hold the note or otherwise have any
beneficial interest in the debt obligation underlying the deed.”).2
Furthermore, under Section 44-14-162.2, the “required notice need not
expressly identify the foreclosing party as a ‘secured creditor.’” Id. at 434 n.7.
Instead, “[w]e need look no further than the plain language of the statute to
determine whom the notice must name,” i.e., “the name, address, and telephone
number of the individual or entity who shall have full authority to negotiate,
amend, and modify all terms of the mortgage with the debtor.” Id. at 433-34
(citing Ga. Code Ann. § 44-14-162.2). Rollins concedes that the foreclosure notice
names the “servicing agent,” see id., Aurora Loan Services, as the entity that has
“full authority to negotiate, amend, and modify all terms of the mortgage.”
In addition, Rollins’s claim that MERS violated Ga. Code Ann. § 23-2-114(“Powers of sale in deeds of trust, mortgages, and other instruments shall be
strictly construed and shall be fairly exercised.”), as well as – in relevant part – his
claims for tortious wrongful foreclosure, declaratory judgment, equitable relief,
punitive damages and attorneys’ fees, are all based on the alleged violations of
2
The Supreme Court of Georgia now has issued its decision in You.
Accordingly, Rollins’s motion for judicial notice of the federal court order
certifying questions to the Supreme Court of Georgia is denied as moot.
3
Sections 44-14-162(b) and 44-14-162.2. These derivative claims fail for the same
reasons.
Nevertheless, we remand. Given that You had not yet been decided at the
time of the dismissal order, we cannot say that the district court abused its
discretion in denying Rollins leave to amend. However, in light of You, Rollins
now argues that he has a plausible basis to allege that Aurora Loan Services lacked
full authority to modify the loan, and that the foreclosure notice therefore was
inadequate under Section 44-14-162.2. See You v. JPMorgan Chase Bank, N.A.,
No. 1:12-CV-202-JEC-AJB, 2014 WL 793325, at *1-3 (N.D. Ga. Feb. 25, 2014)
(“In response to the Georgia Court’s opinion, the amended complaint specifically
alleges that Chase did not have ‘full authority’ to modify ‘all the terms’ of the
mortgage.”). Whether any such proposed amendment successfully states a claim
for relief will be a question for the district court on remand. See Cervantes v.
Countrywide Home Loans, Inc., 656 F.3d 1034, 1040-41 (9th Cir. 2011).
Each side to bear its own costs on appeal.
AFFIRMED in part, and REMANDED for entry of an order permitting
Rollins to file a motion for leave to amend.
4