Court Opinion

ID: 2669415
Source: CourtListenerOpinion
Date Created: 2014-04-10 15:10:49.711313+00
Date Added: 2024-06-11T12:37:11.930287
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 13-2555
                         ___________________________

                               Julie Quale; Paul Quale

                       lllllllllllllllllllll Plaintiffs - Appellants

                                            v.

 Aurora Loan Services, LLC; Mortgage Electronic Registration System, Inc.; and
also all other persons, unknown claiming any right, title, estate, interest, or lien in
                  the real estate described in the complaint herein

                      lllllllllllllllllllll Defendants - Appellees

                           Wilford, Geske & Cook, P.A.

                             lllllllllllllllllllll Defendant
                                     ____________

                     Appeal from United States District Court
                    for the District of Minnesota - Minneapolis
                                   ____________

                           Submitted: December 12, 2013
                               Filed: April 10, 2014
                                  [Unpublished]
                                  ____________

Before MURPHY, SHEPHERD, and KELLY, Circuit Judges.
                          ____________

PER CURIAM.
       Appellants, Julie and Paul Quale, are homeowners attempting to stop the
foreclosure of their home. The Quales brought suit in Minnesota state court against
Aurora Loan Services, LLC (“Aurora”) and its foreclosure counsel Wilford, Geske
& Cook, P.A. (“Wilford”). Aurora removed the case to federal court under diversity
jurisdiction. The district court1 granted Aurora’s motion to dismiss, and the Quales
appeal. Having jurisdiction under 28 U.S.C. § 1291, we affirm.

      In 2006, the Quales executed a mortgage in favor of MILA, Inc., listing
Mortgage Electronic Registration Systems (“MERS”) as the nominee. After the
Quales defaulted on their loan, MERS executed an assignment of mortgage in favor
of Aurora in January 2012. In May 2012, Aurora commenced foreclosure by
advertisement. On May 13, 2012, a Sheriff’s sale was held, and Aurora received the
Sheriff’s certificate for the property.

       The Quales filed suit contending that Wilford “knew or had reason to know”
that both the assignment of the mortgage and the foreclosure documents were
executed without proper authority. The Quales argue that because the documents
were not executed with proper authority, the foreclosure is void, and they remain the
owners of the property. The district court concluded the complaint offered
insufficient factual allegations, and its claims were “fatally implausible and
speculative.” Consequently, the district court granted Aurora’s motion to dismiss.
The district court also held, in the alternative, that: “Insofar as the Quales based their
claims on the allegations that an individual lacked authority to execute the assignment
of mortgage, the Court rejects this argument because the Quales lack standing to
make such a challenge . . . .” The Quales appeal both grounds for dismissal.

      1
      The Honorable Joan N. Ericksen, United States District Judge for the District
of Minnesota.

                                           -2-
       “We review de novo the district court’s grant of a motion to dismiss under Rule
12(b)(6), construing all reasonable inferences in favor of the nonmoving party.”
Dunbar v. Wells Fargo Bank, N.A., 709 F.3d 1254, 1256 (8th Cir. 2013) (quotation
omitted). The Quales argue that in order to bring a quiet-title action under Minn. Stat.
§ 559.01, a complaint need only assert two things: (1) “possession [of the property]
by the plaintiff”; and (2) “a claim adverse to him by the defendant.” Appellants’ Br.
at 8. We have repeatedly rejected the proposition that these two facts alone are
enough to meet the pleading requirements of Federal Rules of Civil Procedure 8 and
12. Dunbar, 709 F.3d at 1257; Karnatcheva v. JPMorgan Chase Bank, N.A., 704 F.3d
545, 548 (8th Cir. 2013). As in other recent, similar foreclosure cases, we find the
Quales’ complaint fails to include sufficient factual allegations to state a plausible
claim on which relief can be granted.

      “We review the district court’s conclusion [about whether] the plaintiff had
standing de novo.” Hodak v. City of St. Peters, 535 F.3d 899, 903 (8th Cir. 2008)
(quotation omitted). We also agree that the Quales lack standing. Quite simply, the
Quales were not injured by the assignment. The party injured by an improper or
fraudulent assignment is the mortgagee-assignor (mortgage holder), not the
mortgagor (homeowner). “[A]ny dispute would be between the assignor and
assignee.” Novak v. JPMorgan Chase Bank, N.A., No. 12-00589, 2012 WL 3638513,
at *6 (D. Minn. Aug. 23, 2012). Under these circumstances, “any injury to [the
Quales] in losing [their] home pursuant to a foreclosure sale is not fairly traceable to
the Assignment of Mortgage and is not likely to be redressed by the relief sought.”
Gerlich v. Countrywide Home Loans, Inc., No. 10-4520, 2011 WL 3920235, at *2–*3
(D. Minn. Sept. 7, 2011). Therefore, we find the Quales lacked standing.

      The judgment of the district court is affirmed.
                     ______________________________

                                          -3-