George Kramer v. Quality Loan Servicing Corp. ( 2016 )

FILED
NOT FOR PUBLICATION
NOV 23 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
GEORGE M. KRAMER, No. 14-15973
Plaintiff-Appellant, D.C. No.
1:13-cv-01499-AWI-MJS
v.
QUALITY LOAN SERVICING MEMORANDUM*
CORPORATION; BANK OF AMERICA,
N.A., Successor by Merger to BAC Home
Loans Servicing, LP, fka Countrywide
Home Loans Servicing, LP; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC.; FEDERAL HOME
LOAN MORTGAGE CORPORATION;
DOES, 1-10, inclusive,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of California
Anthony W. Ishii, District Judge, Presiding
Argued and Submitted October 21, 2016
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: HAWKINS and CALLAHAN, Circuit Judges, and SOTO,** District
Judge.
Plaintiff-Appellant George Kramer appeals from the district court’s order
dismissing his complaint without leave to amend pursuant to Federal Rule of Civil
Procedure 12(b)(6) in favor of Defendants-Appellees Bank of America, Quality
Loan Service Corporation (QLSC), Mortgage Electronic Registration Systems, Inc.
(MERS), and Federal Home Loan Mortgage Corporation (Freddie Mac). We have
jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
1. It is unnecessary to decide whether Kramer has standing to challenge
the alleged violation of the terms of the Pooling & Servicing Agreement governing
the Freddie Mac Multiclass certificates REMIC Series 3201 Trust (“Freddie Mac
Trust”) under Yvanova v. New Century Mortgage Corp., 62 Cal. 4th 919 (2016).
The violation that Kramer claims —that the Note was transferred into the Freddie
Mac Trust but the Deed of Trust was not —cannot have occurred under California
law. Id. at 927 (reiterating that a “deed of trust . . . is inseparable from the note it
secures, and follows it even without a separate assignment”).
2. None of Kramer’s challenges to MERS’s assignment of the Note and
Deed of Trust to Bank of America, or Bank of America’s substitution of QLSC as
**
The Honorable James Alan Soto, United States District Judge for the
District of Arizona, sitting by designation.
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trustee, have merit. First, MERS was acting as the lender’s nominee when it
assigned the Note and Deed of Trust to Bank of America, and thus its lack of
possessory interest does not render this assignment invalid. Fontenot v. Wells
Fargo Bank, N.A., 198 Cal. App. 4th 256, 270 (2011), disapproved of on other
grounds by Yvanova, 62 Cal. 4th at 939 n.13. The Deed of Trust sufficiently
establishes MERS’s authority to take such action on behalf of the lender, and
Kramer’s allegations do not support an inference that additional authorization from
the lender was required. See id. at 270–71.
Second, while Kramer contends MERS’s assignment to Bank of America is
void because it was robo-signed by Renee Rosales, Kramer’s allegations, taken as
true, do not support an inference that Rosales lacked authority from MERS to make
this assignment on its behalf or was not validly acting as MERS’s agent when she
signed this document. Moreover, even assuming that this assignment was
“robo-signed,” forged, or otherwise unauthorized, it is subject to ratification. Cal.
Com. Code § 3403(a); Common Wealth Ins. Sys., Inc. v. Kersten, 40 Cal. App. 3d
1014, 1025–26 (1974). This assignment is therefore voidable, not void, and
Kramer lacks standing to challenge it. See Yvanova, 62 Cal. 4th at 936; Saterbak v.
JPMorgan Chase Bank, N.A., 245 Cal. App. 4th 808, 813–15 (2016), reh’g denied
(Apr. 11, 2016), review denied (July 13, 2016).
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Third, under California law, assignments of the Note need not be recorded.
Yvanova, 62 Cal. 4th at 927. Accordingly, the fact that the Note was allegedly
transferred to Freddie Mac without being recorded does not indicate any
impropriety.
Fourth, if the Note (and thus the Deed of Trust) was transferred to Freddie
Mac in 2006, making the assignments from Aegis Wholesale, Aegis Mortgage,
Countrywide Bank, and Countrywide Home Loans void ab initio, it does not
follow that MERS’s assignment of the Note and Deed of Trust to Bank of America
in 2012 was also void. Kramer’s allegations in no way suggest MERS lacked
authority from Freddie Mac to assign the Note and the Deed of Trust to Bank of
America in 2012. Thus, even assuming that the assignments recorded on the
allonges are void because the Note was transferred to Freddie Mac in 2006, this
theory does not support a claim for relief.
3. Kramer’s allegations do not support his contention that Appellees
lacked authority to foreclose, that the underlying debt was invalid, or that any other
exception to the tender rule applies. See Robinson v. Am. Home Mortg. Servicing,
Inc. (In re Mortg. Elec. Registration Sys., Inc.), 754 F.3d 772, 785 (9th Cir. 2014).
Kramer was therefore required to adequately allege tender to successfully bring his
claims for wrongful foreclosure, id. at 784, quiet title, Shimpones v. Stickney,
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219 Cal. 637, 649 (1934), and cancellation of instruments, Arnolds Mgmt. Corp. v.
Eischen, 158 Cal. App. 3d 575, 580 (1984). His allegations regarding his
willingness to tender are insufficient, Arnolds Mgmt. Corp., 158 Cal. App. 3d
at 580, and the district court properly dismissed these claims.
4. Assuming, without deciding, that Bank of America and QLSC owed
Kramer a duty of care once he requested a loan modification, see Alvarez v. BAC
Home Loans Servicing, L.P., 228 Cal. App. 4th 941, 948 (2014), Kramer’s
allegations do not support an inference that either Bank of America or QLSC
breached that duty. The district court therefore properly dismissed Kramer’s claim
for negligence.
5. Kramer’s claim for an accounting was also properly dismissed.
Kramer does not have a fiduciary relationship with any Appellee because “[t]he
relationship between a lending institution and its borrower-client is not fiduciary in
nature.” Nymark v. Heart Fed. Sav. & Loan Ass’n, 231 Cal. App. 3d 1089, 1093
n.1 (1991). Further, based on the language of the Note itself, Kramer has no
plausible claim that any Appellee owes him money, or that he did not need to make
payments, as a result of the securitization of the Note. Kramer therefore failed to
state a claim for accounting. Teselle v. McLoughlin, 173 Cal. App. 4th 156,
179–80 (2009).
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6. Kramer argues that Appellees violated California’s Unfair
Competition Law (UCL) by executing and recording false and misleading
documents, executing and recording documents without the legal authority to do
so, demanding and accepting payments for debts that were non-existent, reporting
payments as late to credit bureaus without the right to do so, and acting as a
beneficiary without the legal authority to do so. Kramer also contends that
Appellees violated the UCL by failing to transfer the Deed of Trust into Freddie
Mac Trust. We need not decide whether Kramer has standing to bring a claim
based on these alleged violations because these contentions lack legal and factual
support and fail to adequately state a claim for a UCL violation under any of the
tests employed in California. Davis v. Ford Motor Credit Co., 179 Cal. App. 4th
581, 595–97 (2009) (discussing the three tests employed by California courts).
AFFIRMED.
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