# 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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Nor be rt A. Krau s; Cla ire J. Fo x- Krau se ; Will ia m G. Beda rd ; Jo hn Mu rp hy; Ja ne t M ur

ph y ; Ted J. Th ei s; an d S ha nn on K. Thei s

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.; M or tg ag e Ele ct ro ni c Reg is tra ti on Sy st em s, In c.; MERSC ORP, In c.; Us se t, Wein ga rd en , and Lieb o, P.L.L.P.

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

__ __ __ __ __ __ Su bm it te d: May 13, 2 01 3 Fil ed : J un e 1 0, 2 01 3 [Un pu bl is he d]

__ __ __ __ __ __ Befo re WOL LMAN, MURPHY, an d S MITH, Ci rcu it Ju dg es

.

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PER CURI AM.

App el la nt s are se ve n ho m eo wne rs (th e H o meo w n ers ) who fil ed su it ag ai ns t Ci ti Mo rtg ag e, In c.; Mo rtg ag e Elec tro ni c Reg is tra ti on Sy st em s, In c.; a nd MERSC ORP, In c. (th e Len de rs /S erv ic ers ) fo r un la wfu ll y fo recl os in g or att em pt in gto fo recl os e on th ei r ho m e m or tg ag es

. The Hom eo wne rs al so fil ed su it ag ai ns t Uss et ,

W ei ng ard en , an d Lieb o, P.L.L.P. (th e Law Fi rm ), whi ch th ey cl ai m as si st ed wit h

so m e of th e fo recl os ur es

. The di st ric t co ur t di sm is se d th e Hom eo wne rs ’ co m pl ai nt 1
fo r fai lu re to st at e a cl ai m on whi ch rel ie f can be gr an te d an d de ni ed le av e to am en d.
W e aff irm.

The Hom eo wne rs fir st ch al le ng e th e di st ric t co ur t’s su bjec t m at te r juri sd ic ti on ,
c o n t en di ng th at di ve rs it y of ci ti zen sh ip was la ck in g be cau se th e Law Fi rm was n o t frau du le nt ly joi ne d. W e ha ve rece nt ly reject ed id en ti c a l a r g u m en ts co nt es ti ng th e

as se rti on of frau du le nt joi nd er, co nc lu di ng th at th e cl ai m s al le ge d ha d no reas on ab le ba si s in la w an d fact un de r Mi nn es ot a la w. See Dun ba r v. W el ls Farg o Ban k, N.A., 70 9 F .3d 12 54 , 12 56 (8t h C ir. 2 01 3) ; Kar na tc he va v. J PMo rg an Ch as e Ban k, N.A., 70 4 F.3 d 5 4 5 , 5 46 (8 th Ci r. 20 13 ); Mu rp hy v. Aur or a Loa n Serv s., LLC, 69 9 F.3 d 10 27 , 10 31 -3 2 (8 th Ci r. 20 12 ). Bec au se th e cl ai m s as se rte d ag ai ns t th e Law Fi rm in th is cas e si m il arl y la ck a reas on ab le ba si s in la w an d fact
, we co nc lu de th at th ere was di ve rs it y juri sd ic ti on un de r 28 U.S.C. § 13 32 (a) an d th at th e di st ric t co ur t di d no t err in di sm is si ng th os e cl ai m s.

W e ne xt ad dr es s th e cl ai m s ag ai ns t th e Len de rs /S erv ic ers

. Alt ho ug h th e Hom eo wne rs as se rte d twel ve cl ai m s ag ai ns t th e Le n d ers /S erv ic ers , th ey ha ve ab an do ne d on ap pe al al l bu t fo ur —q ui et ti tl e, sl an de r of ti tl e, co nv ers io n, an d br each of fid uc ia ry du ty. W e affi rm th e di sm is sa l of th e qu ie t ti tl e cl ai m on th e ba si s of ou r

rece nt di sm is sa l of a vi rtu al ly id en ti cal cl ai m in Je rd e v. JP Mo rg an Ch as e Ban k, N.A., 50 2 F. App ’x 61 6, 61 7 (8 th Ci r. 20 13 ) (p er cu ria m ). See al s o D u n b a r , 70 9 F.3 d at 12 57 (aff irming th e di sm is sa l of a si m il ar qu ie t ti tl e cl ai m th at rel ie d in pa rt on th e

sa m e se ve n gr ou nd s as se rte d in th is cas e). W e affi rm th e di sm is sa l of th e sl an de r of ti tl e cl ai m

as we ll , bec au se li ke th e sl an de r of ti tl e cl ai m

reject ed in Dun ba r, th e

The Hon or ab le Don ov an W

. Fran k, Uni te d St at es Dis tri ct Ju d g e fo r th e 1 Dis tri ct of M in ne so ta

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-Hom eo wne rs in th is cas e “ ha ve fai le d to pl ead fact ua l co nt en t th at ‘perm it [s ] th e co ur t

to in fer m or e t h a n th e m ere po ss ib il it y of m is co nd uc t.’” Dun ba r, 70 9 F.3 d at 12 58 (al te rat io n i n o rig in al ) (q uo ti ng Ash cro ft v . Iqb al , 55 6 U.S. 6 62 , 67 9 (2 00 9) ).

W e li ke wis e affi rm th e di st ric t co ur t’s di sm is sa l of th e Hom e o w n e r s’

co nv ers io n an d br each of fid uc ia ry du ty cl ai m s, be cau se each cla im rel ie s u po n th e

“ sh ow- m e-t he -n ot e” the or y reject ed by th e Mi nn es ot a Su pr em e Co ur t in Jac ks on v. Mo rtg ag e Elec tro ni c Reg is tra ti on Sy st em s, In c., 77 0 N.W .2d 48 7 (Mi nn

. 20 09 ). The

co nv ers io n cl ai m is pr em is ed on th e al le ga ti on th at th e Len de rs /S erv ic ers “ were no t

en ti tl ed to en fo rce th e Orig in al Not e s an d were no t en ti tl ed to rece iv e pa y m en ts on th e no te s fro m th e Pl ai nt iff s.” Co m pl

. ¶ 76

. As we co nc lu de d in Mu rp hy, th is cl ai m is no th in g m or e th an a va ria ti on of a sh ow- m e-t he -n ot e cl ai m

. See Mu rp hy, 69 9 F.3 d

at 10 31

. W e co nc lu de th at th e br each of fid uc ia ry du ty cl ai m su ffer s fro m th e sa m e de fect
, in th at th e on ly no n- co nc lu so ry fact al le ge d in s u p po rt th ereo f is th at th e Len de rs /S erv ic e r s fai le d to di sc lo se “ in fo rm at io n reg ard in g th e en ti ty th at he ld th e pr om is sory not es an d co uld en fo rce th e m or tg ag es se cu rin g Pl ai nt iff ’s [s ic ] pr op ert y .” Co m pl

. ¶ 92

. Bec au se th es e cl ai m s are m erel y sh ow- m e-t he -n ot e cl ai m s in di ffer en t dr es s, we af

fir m th e d is tri ct co ur t’s d is m is sa l o f bo th cla im s.

The Hom eo wne rs ’ al so ap pe al fro m th e di st ric t co ur t’s de ni al of th ei r or al

m ot io n to am en d th e co m pl ai nt , ar g u i n g th at th e di st ric t co ur t fai le d to ru le on th e

m ot io n an d th a t ju s t i c e r eq ui res th at th ey be gr an te d le av e to am en d. The di st ric t

co ur t’s or de r st at es : “ Hav in g rev ie wed Pl ai nt iff s’ pr op os ed Am en de d Co m pl ai nt , th e C o u rt co nc lu de s th at Pl ai nt iff s can no t al le ge a se t of fact s th at wou ld s u r v i v e a

m ot io n to di sm is s. Acco rd in gl y , th e Co ur t de ni es Pl ai nt iff s’ req ue st to am en d[ .] ” D. Ct

. Ord er of May 4, 20 12 , at 8- 9 n.3

. Bec au se th e di st ric t co ur t cl earl y ad dr es se d th e Hom eo wne rs ’ req ue st fo r le av e to am en d, th ei r fir st arg um en t is wit ho ut m eri t. To th e ex te nt th e Home o w ne rs ’ co nt en d th at th ey sh ou ld ha ve be en gr an te d le av e to

am en d be cau se jus ti ce so req ui res , th ey ha ve fai le d to de mo n s t r a te th at th e di st ric t

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-co ur t erre d by co nc lu di ng th at th e pr op os ed am en dme n t w o ul d be fu ti le

.

Acco rd in gl y , we affi rm

th e d is tri ct co ur t’s d en ia l o f le av e to am en d.

The jud gm en t i s af

fir m ed

.

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