Court Opinion

ID: 2679102
Source: CourtListenerOpinion
Date Created: 2014-06-18 21:00:31.166185+00
Date Added: 2024-06-11T09:40:04.199392
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                 JUN 18 2014

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

TRAVIS MICKELSON; DANIELLE H                     No. 13-35008
MICKELSON, and the marital community
thereof,                                         D.C. No. 2:11-cv-01445-MJP

              Plaintiffs - Appellants,
                                                 MEMORANDUM*
  v.

CHASE HOME FINANCE LLC, an
unknown entity; JPMORGAN CHASE
BANK NA, a foreign corporation;
MORTGAGE ELECTRONIC
REGISTRATION SERVICE, INC., a
foreign corporation; NORTHWEST
TRUSTEE SERVICES INC., a domestic
corporation; CHICAGO TITLE, an
unknown corporation; ROUTH
CRABTREE OLSEN PS, a domestic
Personal Services Corporation; FEDERAL
HOME LOAN MORTGAGE
CORPORATION, a corporation; VONNIE
MCELLIGOTT; JEFF STENMAN; RHEA
S PRE,

              Defendants - Appellees.

                   Appeal from the United States District Court

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                      for the Western District of Washington
                 Marsha J. Pechman, Chief District Judge, Presiding

                         Argued and Submitted May 14, 2014
                                Seattle, Washington

Before: O’SCANNLAIN, KLEINFELD, and BERZON, Circuit Judges.

       Travis and Danielle Mickelson appeal the district court’s rejection of various

claims — some for failure to state a claim, others on summary judgment — arising

from the non-judicial foreclosure of their home. We affirm.

       I. To the extent the Mickelsons seek to unwind the sale by seeking quiet

title or injunctive relief, their failure to assert a claim prior to the trustee’s sale

waives those objections under Plein v. Lackey, 67 P.3d 1061, 1066–67 (Wash.

2003). They received notice of the right to enjoin the sale, had constructive

knowledge of their defenses, and failed to assert them prior to the sale. See, e.g.,

Frizzell v. Murray, 313 P.3d 1171, 1174 (Wash. 2013).1 Enforcing waiver here is

equitable, because the Mickelsons “had knowledge of how to enjoin the sale and

failed to do so through [their] own actions,” without being lulled into complaisance

“due to the actions of a third party.” Id. at 1175. And it is consistent with the

DTA’s policies. Id. We need not address the Mickelsons’ contention that the DTA

       1
        The one exception — the Mickelsons’ claim that Freddie Mac unlawfully
received the trustee’s deed — is implausible for failure to allege prejudice, as
discussed below. See infra Part II.A.4.

                                                                                          2
“does not apply,” because the factual predicate of that argument is baseless: the

sale did comply with the requisites of the DTA, as discussed below. See infra Part

II.A.

        II. To the extent the Mickelsons seek damages based on the trustee’s

alleged failure to comply with the DTA or on the defendants’ alleged violations of

Washington’s Consumer Protection Act (“CPA”), Wash. Rev. Code § 19.86.020,

those claims are not waivable. See Wash. Rev. Code § 61.24.127(1)(b)–(c). None

of those claims, however, has merit.

        A. The Mickelsons contend that the trustee, Northwest Trustee Services

(“NWTS”), and various of its employees failed to comply with Washington’s

Deeds of Trust Act (“DTA”).

        1. The Mickelsons assert that NWTS’s relationship with Chase and the

Mortgage Electronic Registration System, Inc. (“MERS”) disqualify NWTS from

serving as trustee. See Wash. Rev. Code § 61.24.010(3)–(4). Although recent

amendments to the DTA have lessened the duty of care a trustee owes the parties to

a non-judicial foreclosure, see 2009 Wash. Legis. Serv. ch. 292, § 7 (S.B. 5810)

(West) (codified at Wash. Rev. Code § 61.24.010(4)), NWTS’s signing agreement

with MERS and its limited power of attorney for Chase Home Finance LLC

(“Chase”) do not breach even the more rigorous pre-amendment standard. Those

                                                                                    3
agreements did not compromise NWTS’s capacity to exercise its discretion as

trustee. See Klem v. Wash. Mut. Bank, 295 P.3d 1179, 1190 (Wash. 2013); see

also Cox v. Helenius, 693 P.2d 683, 687 (Wash. 1985) (tolerating the appointment

of a beneficiary’s lawyer as trustee absent “an actual conflict of interest”). And the

Mickelsons offer no evidence that NWTS shares any obligation that Routh

Crabtree Olsen, P.S. (“RCO”) might owe the beneficiary in its capacity as legal

counsel to Chase.

      2. The Mickelsons allege that NWTS failed to secure adequate proof that

Chase owned the note. See Wash. Rev. Code § 61.24.030(7). Chase actually held

the promissory note during the relevant period. For this reason, even if the

Mickelsons were correct that Chase’s beneficiary declaration was inadequate under

Washington Revised Code § 61.24.030(7)(a), any such failing could not have

prejudiced them, see, e.g., Udall v. T.D. Escrow Servs., Inc., 154 P.3d 882, 889–90

(Wash. 2007). In any case, the declaration was adequate. Its reference to a

provision of Washington’s Uniform Commercial Code is consistent with the

Washington Supreme Court’s use of that same provision to interpret the meaning

of the word “holder” in the DTA. See Bain v. Metro. Mortg. Grp., Inc., 285 P.3d
34, 44 (Wash. 2012).

                                                                                    4
      3. The Mickelsons allege that NWTS failed to identify the owner of the note

in its communications with the Mickelsons, as the DTA requires. See Wash. Rev.

Code §§ 61.24.030(8)(l), 61.24.040(2). In its communications with the

Mickelsons, NWTS identified Chase. Proof of status as the “actual holder” of the

note is sufficient to demonstrate ownership under the DTA. See Wash. Rev. Code

§ 61.24.030(7)(a). Even if proof that Chase held the note established only a

presumption of ownership, the Mickelsons’ reference to an ambiguous

interrogatory answer and a declaration would not be sufficient to rebut it. NWTS’s

communications with the Mickelsons thus complied with the DTA.

      4. The Mickelsons allege that NWTS conducted the trustee’s sale

improperly. But receipt of the trustee’s deed by Federal Home Loan Mortgage

Corp. (“Freddie Mac”), or NWTS’s alleged acceptance of a credit bid from it, in no

way prejudiced the Mickelsons. Their objection to NWTS’s conveyance of the

deed to Freddie Mac is thus not actionable. See Udall, 154 P.3d at 889–90.

      In sum, we reject the Mickelsons’ DTA-based claims against NWTS and its

employees, as well as any claim against them under Washington’s CPA, Wash.

Rev. Code § 19.86.020, premised on violation of the DTA.

      B. The Mickelsons bring CPA claims for damages against MERS, Freddie

Mac, and Chase. But they do not plausibly allege that any of those defendants

                                                                                   5
caused them any injury, which is required to prove a CPA claim. See e.g., Bain,
285 P.3d at 49. As to MERS, it did not purport to serve as beneficiary at the time

of the foreclosure, and the Mickelsons do not allege that they contacted it to re-

negotiate their mortgage. As to Freddie Mac, it merely received the trustee’s deed.

Although the Mickelsons also allege that Freddie Mac “owned” the note, they do

not specify what they mean by “ownership” and do not assert that Freddie Mac

ever held the note. As to Chase, it actually held the note and was thus authorized

to initiate the non-judicial foreclosure process, as noted.

      C. The Mickelsons allege that NWTS, RCO, and NWTS’s employees

engaged in “robo-signing” in violation of the CPA. Although falsely dating

notarized documents in a non-judicial foreclosure constitutes “an unfair or

deceptive act or practice” under the CPA, see Klem, 295 P.3d at 1191, the

Mickelsons offer no evidence that such false dating occurred here. The disparity

between the date on which a document becomes effective and the date on which it

was notarized does not indicate that it was signed on one day and notarized on

another.

      III. The district court dismissed the Mickelsons’ claims for breach of

contract, unconscionability, and violation of Washington’s Criminal Profiteering

Act as waived under Plein, 67 P.3d at 1066–67, finding that none fell within the

                                                                                     6
four exceptions to waiver codified in the DTA. See Wash. Rev. Code § 61.24.127.

Whether the statutory exceptions to waiver are exclusive is an open question under

Washington law, see Frizzell, 313 P.3d at 1175, which we decline to answer here.

Instead, we affirm the dismissal of the Mickelsons’ contract and criminal

profiteering claims for failure to plausibly allege any injury. See Vestar Dev. II,

LLC v. Gen. Dynamics Corp., 249 F.3d 958, 960 (9th Cir. 2001).

      IV. NWTS and its employees did not violate the Federal Debt Collection

Practices Act (“FDCPA”), 15 U.S.C. § 1692f(6)(A), by conducting a non-judicial

foreclosure at Chase’s behest. Chase was the beneficiary and thus empowered to

initiate non-judicial foreclosure under Washington’s DTA. Nor did RCO violate

the FDCPA by sending the Mickelsons letters on behalf of Chase, advising them of

alternatives to foreclosure. RCO acted as Chase’s agent, a relationship the DTA

approves. See Bain, 285 P.3d at 45.

      V. If the Mickelsons harbor any other objections to the district court’s

resolution of their case — including, for example, any objection regarding the

dismissal of all claims against Chicago Title Insurance Company or JPMorgan

Chase Bank, N.A. — they have forfeited those objections by failing to raise them

in a cognizable manner in their opening brief. See, e.g., Hayes v. Cnty. of San

Diego, 736 F.3d 1223, 1228 n.2 (9th Cir. 2013).

                                                                                      7
      VI. The Mickelsons’ motion to certify to the Washington Supreme Court a

question concerning the validity of the DTA under the Washington Constitution is

DENIED. The Mickelsons first raised that question in their motion for

certification. They have thus forfeited the claim for failure to assert it both before

the district court and in their briefing on appeal. See, e.g., Hayes, 736 F.3d at 1228

n.2; Beets v. Cnty. of L.A., 669 F.3d 1038, 1043 (9th Cir. 2012). Answering that

question is thus unnecessary to the resolution of this appeal.2

      AFFIRMED.

      2
        Because we need not rely on a party’s motion to take judicial notice of
matters of public record, see Fed. R. Evid. 201(c)(1), the Mickelsons’ motion to
take judicial notice is DENIED as unnecessary.

                                                                                         8