Court Opinion

ID: 9899991
Source: CourtListenerOpinion
Date Created: 2023-11-18 01:00:31.8782+00
Date Added: 2024-06-11T09:20:57.985414
License: Public Domain

Case: 23-60103        Document: 00516972694             Page: 1      Date Filed: 11/17/2023

              United States Court of Appeals
                   for the Fifth Circuit                                         United States Court of Appeals
                                                                                          Fifth Circuit

                                     ____________                                       FILED
                                                                                November 17, 2023
                                       No. 23-60103                                  Lyle W. Cayce
                                     ____________                                         Clerk

   Christopher L. Sechler; Susan R. Sechler,

                                                                  Plaintiffs—Appellants,

                                            versus

   U.S. Bank National Association, Trustee for Truman 2016
   SC6 Title Trust,

                                               Defendant—Appellee.
                     ______________________________

                     Appeal from the United States District Court
                       for the Northern District of Mississippi
                               USDC No. 3:22-CV-198
                     ______________________________

                  ON PETITION FOR PANEL REHEARING

   Before Elrod, Oldham, and Wilson, Circuit Judges.
   Per Curiam: ∗
         IT IS ORDERED that Christopher Sechler and Susan Sechler’s
   petition for panel rehearing is GRANTED. We withdraw the previous
   opinion filed in this case on October 13, 2023, and substitute the following
   opinion.
         _____________________
         ∗
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-60103      Document: 00516972694           Page: 2   Date Filed: 11/17/2023

                                     No. 23-60103

          This dispute arises out of a foreclosure on the Sechlers’ home after
   they failed to pay their mortgage payments for over seven years. The
   Sechlers brought a wrongful foreclosure complaint against U.S. Bank
   National Association, alleging that the Deed of Trust by which U.S. Bank
   asserts its foreclosure rights is void. U.S. Bank filed a motion to dismiss for
   failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6),
   which the district court granted. For the reasons below, we AFFIRM.
                                          I
          The Deed of Trust attached to the Sechlers’ mortgage underwent
   several assignments. At the end of this chain of assignments comes U.S.
   Bank, the appellee in this case. U.S. Bank also holds the Promissory Note.
   Because of the Sechlers’ failure to pay their mortgage, U.S. Bank foreclosed
   on their home.
          The Sechlers then filed suit and brought a wrongful foreclosure claim.
   The Sechlers’ primary argument is that there were issues with the
   assignment of the Deed of Trust and therefore U.S. Bank cannot foreclose.
   U.S. Bank then moved to dismiss pursuant to Rule 12(b)(6). U.S. Bank
   argued that because it holds the Promissory Note it had the right to foreclose
   even if there were issues with the assignment of the Deed of Trust. The
   district court agreed with U.S. Bank and granted its motion to dismiss. The
   district court also determined that the Sechlers lacked prudential standing to
   bring the wrongful foreclosure claim. The Sechlers appealed.
                                          II
          We review the grant of a motion to dismiss under Rule 12(b)(6) de
   novo, “accepting all well-pleaded facts as true and viewing those facts in the
   light more favorable to the plaintiffs.” Dorsey v. Portfolio Equities, Inc., 540
   F.3d 333, 338 (5th Cir. 2008) (quotation omitted). A complaint must plead
   enough “factual content that allows the court to draw the reasonable

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Case: 23-60103      Document: 00516972694            Page: 3   Date Filed: 11/17/2023

                                      No. 23-60103

   inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
   Iqbal, 556 U.S. 662, 678 (2009).
                                          III
          On appeal, the Sechlers argue that (1) they do in fact have prudential
   standing to bring the wrongful foreclosure claim; (2) U.S. Bank cannot
   foreclose, because there were alleged issues with the assignment of the Deed
   of Trust; (3) the statute of limitations under which U.S. Bank could bring its
   foreclosure claim has passed (4) they were not in default because of an alleged
   loan modification.
          The Sechlers lack prudential standing to bring a wrongful foreclosure
   claim. “[P]rudential standing does not present a jurisdictional question, but
   a merits question: who, according to the governing substantive law, is entitled
   to enforce the right?” Abraugh v. Altimus, 26 F.4th 298, 304 (5th Cir. 2022)
   (quotation omitted). Essentially, the Sechlers lack a valid cause of action.
   See id. We have observed, “Mississippi case law holds that when an obligor
   defaults, the trustee of the deed may foreclose, and the obligor lacks standing
   to pursue a wrongful foreclosure claim.” Helmert v. Cenlar FSB, 802 F.
   App’x 125, 127–28 (5th Cir. 2020) (holding that the plaintiff lacked standing
   to pursue a wrongful foreclosure claim, despite his arguments that the deed
   was improperly assigned); see Peoples Bank & Tr. Co. & Bank of Miss. v. L & T
   Devs., Inc., 434 So. 2d 699, 708 (Miss. 1983), judgment corrected, 437 So. 2d 7
   (Miss. 1983); see also Patton v. Am. Home. Mortg. Servicing, Inc., No.
   1:11CV420-HSO-RHW, 2013 WL 1310560, at *4 (S.D. Miss. Mar. 28, 2013)
   (“Plaintiff’s responsibilities under the Deed of Trust and Note remained
   unchanged regardless of any assignments of these instruments.”). Because
   the Sechlers do not dispute that they have failed to make any mortgage
   payments in over seven years, which puts them in default of the Promissory

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Case: 23-60103         Document: 00516972694               Page: 4       Date Filed: 11/17/2023

                                           No. 23-60103

   Note, the district court correctly determined they lack standing to bring a
   wrongful foreclosure claim.
           The Sechlers argue that there were some issues with the assignments
   of the Deed of Trust and because of those issues, U.S. Bank cannot foreclose
   on their home. However, the Sechlers fail to cite any case law to support
   their proposition. In fact, the case law suggests otherwise: in Applewhite v.
   Carrington Mortgage Services, LLC, for example, the court stated that “there
   is no express provision requiring assignment of the Deed of Trust under
   Mississippi law and this court declines to impose such a requirement . . .
   [T]his court sees no limitations on the holder of the Note enforcing the Deed
   of Trust that was never assigned.” No 1:13CVV83-NBB, 2014 WL 1291806,
   at *3 (N.D. Miss. Mar. 31, 2014). Therefore, as the district court correctly
   determined, as long as U.S. Bank holds the Promissory Note, it has the ability
   to enforce the Deed of Trust and foreclose under Mississippi law.
           The Sechlers also claim that the statute of limitations, which is six
   years for U.S. Bank to bring a foreclosure action, has passed. 1 However,
   under Mississippi law, the statute of limitations runs “from and after the
   maturity date of the last note or installment.” Miss. Code Ann. § 89-5-
   19. The Deed of Trust and the Promissory Note reflect a maturity date of
   March 1, 2034. Therefore, the statute of limitations has not run.
           Finally, the Sechlers argue that they were not in default of the loan
   because of a previous loan agent’s “nonfeasance and misfeasance” in

           _____________________
           1
             On appeal, for the first time, the Sechlers argue that a previous lender accelerated
   the loan (and that they can prove as such) and therefore the statute of limitations did in fact
   run. This court does not consider issues first raised on appeal. See Rollins v. Home Depot
   USA, 8 F.4th 393, 398 (5th Cir. 2021).

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                                   No. 23-60103

   handling the Sechlers’ loan modification. They offer no support for their
   argument that this absolves them of their contractual duty to make payments.
                                       IV
         The judgement of the district court is AFFIRMED.

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