Court Opinion

ID: 2678245
Source: CourtListenerOpinion
Date Created: 2014-06-12 21:00:31.1817+00
Date Added: 2024-06-11T13:09:22.275132
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                              JUN 12 2014

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

In re: MORTGAGE ELECTRONIC                       No. 12-16449
REGISTRATION SYSTEMS, INC.,
                                                 D.C. No. 2:09-md-02119-JAT

LADY JENNIFER BARONE,
                                                 MEMORANDUM*
              Plaintiff - Appellant,

  v.

MERSCORP, INC.; et al.,

              Defendants - Appellees.

                   Appeal from the United States District Court
                            for the District of Arizona
                James A. Teilborg, Senior District Judge, Presiding

                          Submitted November 8, 2013**
                            San Francisco, California

Before: TASHIMA, W. FLETCHER, and NGUYEN, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      Appellant Lady Barone challenges the district court’s dismissal of her

claims. We review dismissal for failure to state a claim de novo, Akhtar v. Mesa,

698 F.3d 1202, 1212 (9th Cir. 2012), and reverse in part and affirm in part.

      Appellant’s claims were dismissed, in the first instance, because they were

premised on the erroneous legal theory that assignments of the deed within the

Mortgage Electronic Registration System (“MERS”) were invalid under Arizona

law because the note was “split” from the deed. That theory was rejected by our

holding that, under Arizona law, “the split only renders the mortgage

unenforceable if MERS or the trustee, as nominal holders of the deeds, are not

agents of the lenders.” Cervantes v. Countrywide Home Loans, 656 F.3d 1034,

1044 (9th Cir. 2011). Seizing on this language, Barone maintains she has alleged

the trustee was not an authorized agent of the lender. The district court correctly

declined to accept that legal conclusion, which is unsupported by alleged facts, and

contradicted by the clear language on the face of the deed itself (which was

attached to Barone’s pleading). Fed. R. Civ. P. 12(b)(6); Papasan v. Allain, 478

U.S. 265, 286 (1986).

      The district court also correctly noted, with respect to Barone’s claim for

wrongful foreclosure, that this tort is unrecognized in Arizona. Cervantes, 656

F.3d at 1043. And, even assuming it were a viable theory, it does not appear from

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the record that Barone can, in good faith, allege satisfaction of the traditional

prerequisite, adopted by other states, that any default must be formally cured.

Because these defects cannot be cured by further amendment, the district court

properly denied leave to amend as futile. Eminence Capital, LLC v. Aspeon, Inc.,

316 F.3d 1048, 1051–52 (9th Cir. 2003).

      The district court erred, however, in dismissing Barone’s claim for recording

false documents, under Arizona Revised Statutes § 33-420. The court held that the

statute does not apply to assignments that do not originate a new property interest,

but Stauffer v. U.S. Bank National Ass’n, 308 P.3d 1173, 1175 (Ariz. Ct. App.

2013), holds, to the contrary, that section 33-420 applies to notices of substitution

of trustee, and assignments of deeds. Alternatively, the court held that Barone

lacked standing to assert a claim; but, the Arizona courts have rejected that

argument as well. Sitton v. Deutsche Bank Trust Co., 311 P.3d 237, 241 (Ariz. Ct.

App. 2013); see also In re Mortgage Elec. Registration Sys., Inc., No. 11-17615,

Slip op. at 18, 20. We therefore reverse the dismissal of Barone’s false documents

claim and remand to the district court for further proceedings.

      Each side to bear its own costs on appeal.

      AFFIRMED IN PART; AND REVERSED AND REMANDED IN

PART.

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