David Newman v. Bank of New York Mellon

FILED
NOT FOR PUBLICATION
MAY 13 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAVID LEROY NEWMAN, No. 13-17297
Plaintiff - Appellant, D.C. No. 1:12-cv-01629-AWI-
GSA
v.
ORDER and
BANK OF NEW YORK MELLON MEMORANDUM*
CORP., as Trustee for the Certificate
Holders of CWMBS, Inc., CHL Mortgage
Pass-Through Trust 2007-HY7, Mortgage
Pass Through Certificates 2007-HY7
(“BONY”), FKA The Bank of New York;
et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Eastern District of California
Anthony W. Ishii, Senior District Judge, Presiding
Submitted December 13, 2015**
San Francisco, California
Before: KOZINSKI, BYBEE, and CHRISTEN, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
This case is submitted as of the date of this order.
Plaintiff David Newman defaulted on his home mortgage and was told his
home was going to be foreclosed on. He filed this action seeking a declaration that
defendants do not have the right to foreclose and raising various related causes of
action. The district court dismissed Newman’s complaint with prejudice. We
reverse and remand with respect to most of Newman’s claims, but we affirm the
district court’s dismissal of Newman’s claims under California Civil Code section
2923.5.
1. The district court dismissed Newman’s claims for declaratory relief, quasi
contract, violations of the Fair Debt Collection Practices Act, violations of
California Business & Professions Code section 17200, and accounting because the
court determined that a borrower like Newman has no standing to challenge a
foreclosing entity’s legal authority to foreclose. But while this appeal was
pending, the California Supreme Court decided Yvanova v. New Century Mortgage
Corp., 365 P.3d 845 (Cal. 2016), which clarified that borrowers do have standing
to challenge a foreclosing entity’s authority to foreclose once the foreclosure has
occurred. Id. at 860–61. And it appears that Newman’s home was recently
foreclosed on, bringing him within the class of people who have standing to bring
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these kind of claims. We therefore reverse the district court’s dismissal of these
claims for the district court to apply intervening California case law in the first
instance.
2. As to Newman’s negligence claim, the district court correctly held that a
lender generally owes no duty to consider a loan modification. But while this
appeal was pending, the California Court of Appeal decided another case, Alvarez
v. BAC Home Loans Servicing, L.P., 176 Cal. Rptr. 3d 304 (Cal. Ct. App. 2014),
which clarified that a lender may have a duty to act reasonably once it
affirmatively agrees to consider a loan modification application. Id. at 310.
Because Newman alleges that defendants agreed to consider his loan modification
request, we also remand this claim to the district court for consideration of
intervening California case law in the first instance.
3. We affirm the district court’s dismissal of Newman’s claim for violations of
California Civil Code section 2923.5. Now that Newman’s home has been
foreclosed on, there is no remedy for a violation of this statute. Stebley v. Litton
Loan Servicing, LLP, 134 Cal. Rptr. 3d 604, 607 (Cal. Ct. App. 2011) (“After the
sale, [section 2923.5] provides no relief.”).
The parties will bear their own costs.
AFFIRMED in PART, REVERSED in PART and REMANDED.
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