# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 3- 25 13

__ __ __ __ __ __ __ __ __ __ __ __ __ _ And rew Mc Glo ry ; Ca rm it a Mc Glo ry

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll an ts

v.

Ci ti Mo rtg ag e, In c.; Us se t, Wein ga rd en an d Li eb o, P.L.L.P.; Pe te rs on , Fram & Berg m an , P.A.; Ch ris to ph er Kal la , and all ot he r pe rs on s u nk no wn cl ai m in g a ny rig ht
, ti tl e, es ta te , in te res t, or li en in th e real es ta te de sc rib ed in th e co m pl ai nt he rei n

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of M in ne so ta - Mi nn eap ol is

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Su bm it te d: Decem

be r 11 , 20 13 Fil ed : M arch 12 , 20 14 [Un pu bl is he d]

__ __ __ __ __ __ Befo re MUR PHY, SHEPHERD, and KELLY , Cir cu it Ju dg es

.

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PER CURI AM.

Thi s cas e be ga n in Mi nn es ot a st at e co ur t whe n And rew an d Carm it a McGl or y br ou gh t a qu ie t tit le actio n ch al le ng in g th e fo recl os ur e of th ei r ho m e by Ci ti Mo rtg ag e,I n c

. u n d e r m ul ti pl e th eo rie s. The cas e was rem ov ed to th e fed eral di st ric t co ur t 1
whe re Ci ti Mo rtg ag e mo v e d to di sm is s. The m ot io n was gr an te d by U.S. Dis tri ct Ju dg e Dav id S. Dot y . The Mc Glo ry s ap pe al , and we affi rm

.

In 20 02 And rew a n d Carm it a McGl or y bo rro wed $1 50 ,00 0 fro m Am eri can Su m m it Lend in g C om

pa ny to p ur ch as e a ho m e in Mi nn eap ol is , and sec ur ed it wit h

an ad jus ta b l e rat e m or tg ag e th at was reco rd ed in Hen ne pi n Co un ty. Am eri can Su m m it as si gn ed th e m or tg ag e in 20 03 to Ci ti Fi na nc ia l, In c., whi ch la te r m erg ed in to Ci ti Mo rtg ag e, In c. in 20 06

.

The McGl or y s de fau lt ed on th ei r lo an , a n d o n May 23
, 20 11
, Ci ti Mo rtg ag e fil ed a no ti ce o f m or tg ag e fo recl os ur e sa le th ro ug h t he law fi rm Uss et , W ei ng ard en

an d Lieb o, PLLP. The fo recl os ur e no ti ce in d i c a te d th at a sh eri ff's sa le of th e

m or tg ag e was sc he du le d fo r Ju ly 22 an d th at th e McGl or y s wou ld ha ve to va cat e th e
pr op ert y on Ja nu ary 23
, 20 12 un le ss th ei r m or tg ag e was rei n s t a t e d o r th e pr op ert y

was r e d e e m ed

. On Ju ne 1 th e Uss et la w fir m th en ex ecu te d an d fil ed a no ti ce of

pe nd en cy to fo recl os e th e m or tg ag e. Ci ti Mo rtg ag e ad ve rti se d th e fo recl os ur e no ti ce

on Ju ne 3, an d Ci ti Mo rtg ag e se rv ed And rew Mc Glo ry on Ju ne 6 wi th a co py of th e fo recl os ur e no t i c e , a s well as wit h a "h el p fo r ho m eo wne rs in fo recl os ur e" no ti ce i n f or m in g th e McGl or y s th at th ey owe d $3 0,9 18 .53 on th ei r m or tg ag e an d wou l d

ne ed to pa y th at am ou nt to rei ns ta te it

. Ci ti Mo rtg ag e ex ecu te d an d reco rd ed on Ju ne 20 a no ti ce of pe nd en cy of pr oc eed in g an d po wer of at to rn ey to fo recl os e au th or iz in g th e la w fir m to fo recl os e on th e McGl or y s' m or tg ag e. The m or tg ag e was so ld an d

pu rch as ed by Citi Mo rtg ag e at a sh eri ff's act io n o n J ul y 22 , 20 11

.

Ci ti Mo rtg ag e co m

m en ced ev ic ti on pr oc eed in gs in st at e co u rt ag ai ns t th e McGl or y s in Feb ru ary 20 12
, aft er th e ex pi rat io n of th e red em pt io n pe rio d. The st at e

The Hon or ab le Dav id S. Dot y , Uni te d St at es Dis tri ct Ju dg e fo r th e Dis tri ct of 1 Mi nn es ot a.

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-di st ric t co ur t is su ed a writ of reco ve ry of pr em is es an d or de r to va cat e on Mar ch 26
,

whi ch Hen ne pi n Co un ty ex ecu te d on Apr il 25

. The Mi nn es o t a C o ur t of App eal s affi rm ed th e ev ic ti on in lat e Aug us t.

The Mc G l o r ys fil ed a co m pl ai nt in Mi nn es ot a st at e co ur t on Nov em be r 19
, 20 12 , a g a i n s t Ci ti Mo rtg ag e an d it s la w f irms, a ll eg in g co un ts of ne gl ig en ce pe r se ,
wro ng fu l ou st er, an d sl an de r of ti tl e. The y se ek to qu ie t ti tl e un d e r M i n n

. St at

. §
55 9.0 1 an d a de cl arat or y jud gm en t un de r Mi nn

. St at

. § 55 5. 0 1 th at th e sh eri ff's

cert ifi cat e of sa le of th ei r m or tg ag e is vo id an d Ci ti Mo rtg ag e ha s no in te res t in it

. T he Mc G lory s' co m

pl ai nt al le ge s th at va rio us no ti ces of pe nd en cy , po wers of at tor ne y

an d m or tg ag e as si gn m en ts fil e d by Am eri can Su m m it
, Ci ti Fi na nc ia l an d Ci ti Mo rtg ag e be twee n 20 02 an d Ju ly 2011 ar e inv al id be cau se th e in di vi du al s si gn in g th em were un au th or iz ed

. The McGl or y s as se rt o n " in fo rm at io n a nd be li ef" th at th e in di vi du al s w h o s i g n ed th e no ti ces of pe nd en cy , po wers of at to rn ey , an d m or tg ag e

as si gn m en ts be twee n 20 02 an d Ju ly 20 11 la ck ed au th or it y

. The y al so al le ge , "u po n in fo rm at io n an d be li ef," th e ex is te n c e o f un reco rd ed as si gn m en ts of m or tg ag e an d

po wers of at to r n e y whi ch th ey as se rt vo id ed bo th th e fo recl os ur e an d la te r sh eri ff's

sa le of t he ir m or tg ag e.

C i ti Mo rtg ag e rem ov ed th e cas e to th e fed eral di st ric t co ur t whe re it fil ed a

m ot io n to di sm is s th e McGl or y s' co m pl ai nt in la te Decem

be r 20 12

. The di st ric t co ur t
gr an te d th e m ot io n an d di sm is se d al l th e McGl or y s' cl ai m s. The McGl or y s ap pe al

on ly th e di sm is sa l of th ei r qu ie t ti tl e cl ai m an d on ly wit h res pe ct to Ci ti Mo rtg ag e. The y no w al le g e fo r th e fir st ti m e th at Ci ti Mo rtg ag e fai le d to co m pl y st ric tl y wit h

st at e fo recl os ur e by ad ve rti se m en t req ui rem en ts , arg ui ng th at th is fai lu re vo id ed th e fo recl os ur e.

W e rev ie w de no vo a di st ric t co ur t's gr an t of a m ot io n to di sm is s, ta ki ng th e fact s al le ge d in th e co m

pl ai nt a s t r u e

. B ad rawi v. W el ls Farg o Hom e Mo rtg ., In c., 71 8 F.3 d 75 6, 75 8 (8 th Ci r. 20 13 ). A co m pl ai nt can su rv iv e a m ot io n to di sm is s on ly

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-if it co nt ai ns "'en ou gh fact s to st at e a cl ai m to rel ie f th at is pl au si bl e on it s face .'" Id

.

(q uo ti ng Bel l Atl

. Co rp

. v. Twom bl y , 55 0 U.S. 54 4, 57 0 (2 00 7) ). The pl ai nt iff m us t pl ead su ffi ci en t fact ua l co nt en t to "'al lo w[] th e co ur t to dr aw th e reas on ab le in fere nc e th at th e de fen da nt is li ab le fo r th e m is co nd uc t al le ge d.'" I d

. ( qu ot in g Ash cro ft v. Iq ba l, 55 6 U.S. 66 2, 6 78 (2 00 9) ). Fed eral co ur ts ap pl y in g st at e la w un de r di ve rs it y juri s d i c t i on "ap pl y fed eral pl ead in g st an da rd s— Ru le s 8 an d 12 (b )(6 )—t o th e st at e

su bs ta nt iv e la w to de te rm in e if a co m pl ai nt mak e s o u t a cl ai m un de r st at e la w."
K a r na tc he va v. JP Mo rg an Ch as e Ban k, N.A., 70 4 F.3 d 54 5, 54 8 (8 th Ci r. 20 13 )

. W he n ap pl y in g st at e su bs ta nt iv e la w, fed eral co ur ts are bo un d to fo ll ow th e la w as la id ou t b y

th e st at e's hi gh es t co ur t. Bad rawi , 71 8 F .3d at 7 58

.

The McGl o r ys a r g u e th at Mi nn es ot a la w on ly req ui res a qu ie t ti tl e cl ai m to al le ge t h a t t h e y po ss es s real pr op ert y in whi ch Ci ti Mo rtg ag e cl ai m s an ad ve rs e in te res t. W e reject ed th is th eo ry in Karn at ch ev a, co nc lu di ng th at Mi nn

. St at

. § 55 9.0 1
req ui res pl ai nt iff

s to st at e a pl au si bl e cl ai m th at th e al le ge d ad ve rs e in te res t is in va li d.
70 4 F

. 3 d a t 54 8 (ci ti ng Uni on Cen tra l Life In s. Co

. v. Pag e, 19 0 Mi nn

. 36 0, 36 3 (1 93 3) ). The McGl or y s al so arg ue th at th ei r co m pl ai nt m et th is req u i r e men t by al le gi ng un au th or iz ed an d u nt im el y no ti ces of pe nd en cy

an d p owe rs of a tt or ne y , as well as un au th or iz ed an d u nr eco rd ed ass ig nm en ts of m or tg ag es

. The y as se rt th is is

su ffi ci en t to vo id th e f

o r e cl os ur e. Id en ti cal al le ga ti on s were m ad e in Karn at ch ev a,

an d we reject ed th em as "l ab el s an d co nc lu si on s, ba se d on sp ecu la ti on th at tra ns fers aff e c t i n g pa y ees an d as si gn m en ts of th e no te s were in va li d." Id

. The McGl or y s

as se rt no ad di ti on al fact ua l su pp or t fo r th ei r al le ga ti on be y ond th es e sp ecu la ti on s, an d th e d is tri ct co ur t t he refo re d id no t er r in co nc lu di ng th ey fai le d t o s ta te a cl ai m

.

The McGl or y s ad va nc e fo r th e fi rs t t im e o n ap pe al two ad di ti on al arg um en ts fo r why th e fo recl os ur e sa le o f t h e i r m or tg ag e was in va li d. Fi rs t, th ey arg ue th at Ci ti Mo rtg ag e fai le d to co m pl y wit h Mi nn

. St at

. § 58 2.2 5 whe n it ex ecu te d po wer of

at to rn ey aft er it ad ve rti se d th e fo recl os ur e sa le . They ne xt arg ue th at Cit iM or tg ag e fai le d to co m

pl y wit h Mi nn

. St at

. § 58 0.0 32
, th ou gh th ey do no t st at e wha t th e ba nk

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-di d to vi ol at e th at st at ut e. Eve n if th es e cl a i ms ha d m eri t, th e McGl or y s ha ve

de fau lt ed
, si nc e is su es no t rai se d in th e tri al co ur t can no t be co ns id ered as a ba si s fo r

rev ers al on ap pe al . Cam

pb el l v . Davo l, In c., 62 0 F .3d 88 7, 8 91 (8t h C ir. 2 01 0)

.

The jud gm en t o f th e d is tri ct co ur t i s af fir m ed

.

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