Court Opinion

ID: 2647529
Source: CourtListenerOpinion
Date Created: 2013-12-24 21:26:02.744511+00
Date Added: 2024-06-11T12:12:57.878400
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              DEC 24 2013

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

                            FOR THE NINTH CIRCUIT

NUSRAT BHATTI; ERFAN SEMUEL,                     No. 12-35035
individuals,
                                                 D.C. No. 2:11-cv-00480-JLR
              Plaintiffs - Appellants,

  v.                                             MEMORANDUM*

GUILD MORTGAGE COMPANY;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.;
DOES, 1-10,

              Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Western District of Washington
                     James L. Robart, District Judge, Presiding

                     Argued and Submitted December 2, 2013
                              Seattle, Washington

Before: TALLMAN and BEA, Circuit Judges, and MURPHY, District Judge.**

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
              The Honorable Stephen Joseph Murphy, III, District Judge for the
U.S. District Court for the Eastern District of Michigan, sitting by designation.
      Plaintiffs Nusrat Bhatti and Erfan Semuel filed a complaint in Washington

state court against Guild Mortgage Co. (“Guild”) and Mortgage Electronic

Registration Systems, Inc. (“MERS”) for quiet title, declaratory judgment, and

violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601.

Defendants removed to federal court based on federal question jurisdiction and

filed a Fed. R. Civ. P. 12(b)(6) motion to dismiss. Plaintiffs then filed a motion for

leave to amend their complaint to add Washington state law claims for infliction of

emotional distress, wrongful foreclosure under the Washington Deed of Trust Act

(“DTA”), and violation of Washington’s Consumer Protection Act (“CPA”).

Plaintiffs then lodged a proposed amended complaint with the new causes of

action. The district court granted defendants’ motion to dismiss, granted

defendants’ motion to strike plaintiffs’ amended complaint, and denied plaintiffs’

motion to continue the motion to dismiss. Plaintiffs appealed only the dismissal of

their state-law DTA and CPA claims. We have jurisdiction under 28 U.S.C. §

1291, and we affirm the district court.

1. The district court did not abuse its discretion in ruling on defendants’ 12(b)(6)

motion when it did. Defendants filed a 12(b)(6) motion to dismiss on May 11,

2011, and plaintiffs did not lodge their proposed amended complaint until

September 12, 2011. The district court still considered the allegations in the

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proposed amended complaint, and correctly concluded that they were “conclusory

allegations” that could not support a claim for relief.

2. Defendants did not violate the DTA’s requirement that a deed of trust’s

beneficiary hold the note when it appoints a successor trustee. Wash. Rev. Code §

61.24.005(2). MERS had assigned its beneficiary interest back to Guild, the note

holder, when Guild appointed Northwest Trustee Services, Inc. as the successor

trustee. Defendants therefore complied with the DTA’s requirement that only

beneficiaries who hold the note may appoint successor trustees.

3. Plaintiffs’ CPA claim fails because they did not allege that MERS’s temporary

status as beneficiary caused them any injury. See Wash. State Physicians Ins.

Exch. & Ass’n v. Fisons Corp., 858 P.2d 1054, 1061 (Wash. 1993) (stating that a

CPA claim requires “a causal link between the unfair or deceptive act and the

injury suffered”). Plaintiffs’ foreclosure was not caused by a violation of the DTA

because Guild was both the note holder and the beneficiary when it initiated

foreclosure proceedings, and therefore the “cause” prong of the CPA is not

satisfied.

       Accordingly, the district court’s judgment is AFFIRMED.

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