Court Opinion

ID: 4246049
Source: CourtListenerOpinion
Date Created: 2018-02-16 21:00:33.413963+00
Date Added: 2024-06-11T13:52:42.362252
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                             FEB 16 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

MARY JULIET NG,                                  Nos. 16-16949
                                                      16-17370
              Plaintiff-Appellant,
                                                 D.C. No. 4:15-cv-04998-KAW
 v.

U.S. BANK, NA, et al.,                           MEMORANDUM*

              Defendants-Appellees.

                   Appeal from the United States District Court
                      for the Northern District of California
                 Kandis A. Westmore, Magistrate Judge, Presiding

                          Submitted February 13, 2018**
                            San Francisco, California

Before: SCHROEDER and WATFORD, Circuit Judges, and SESSIONS,***
District Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
              The Honorable William K. Sessions III, United States District Judge
for the District of Vermont, sitting by designation.
                                                                          Page 2 of 5
      1. The district court properly dismissed Mary Ng’s wrongful foreclosure

claim with prejudice. To state a viable claim under California law, Ng must allege

that defects in her loan assignments rendered the assignments void, rather than

merely voidable. See Yvanova v. New Century Mortgage Corp., 365 P.3d 845, 861

(Cal. 2016). She cannot plausibly allege that element of her claim.

      Contrary to Ng’s argument, U.S. Bank can undertake a foreclosure sale even

though it was not named in the April 2010 assignment. That assignment

transferred beneficial interest in the deed of trust and promissory note from

JPMorgan Chase Bank to Bank of America as trustee. But as Ng acknowledges,

Bank of America assigned trustee rights to U.S. Bank in December 2010 when

U.S. Bank purchased Bank of America’s trustee business. While there was no

recorded assignment of the promissory note and deed of trust between Bank of

America and U.S. Bank, California law does not require that the assignment of a

note secured by a deed of trust be recorded. See Calvo v. HSBC Bank USA, N.A.,

199 Cal. App. 4th 118, 123 (2011).

      Ng asserts that the 2011 assignment transferring the deed of trust from

JPMorgan Chase to Bank of America is void because it did not include language

transferring the promissory note, but this argument is unavailing. Even if that

defect rendered the 2011 assignment void, it would not give rise to a wrongful
                                                                              Page 3 of 5
foreclosure action. The 2011 assignment merely duplicated and memorialized the

April 2010 assignment, which transferred both the note and deed of trust to Bank

of America as trustee. Because U.S. Bank later acquired Bank of America’s

trustee rights, it is the current beneficiary under the note and deed of trust.

        U.S. Bank’s execution of the foreclosure sale while this appeal was pending

does not change the outcome. Ng still cannot allege that the assignments of her

loan were void. Therefore, amendment of her complaint would be futile.

        2. We affirm the district court’s dismissal of Ng’s claims for declaratory

relief, slander of title, and violations of California’s Unfair Competition Law. On

appeal, Ng asserts only that these claims are derivative of her wrongful foreclosure

claim. Because Ng’s wrongful foreclosure claim fails, her derivative claims fail as

well.

        3. The district court properly dismissed Ng’s Fair Debt Collection Practices

Act (FDCPA) claim. Ng’s allegation that the defendants violated 15 U.S.C.

§ 1692e is without merit. The defendants’ actions “to facilitate a non-judicial

foreclosure . . . are not attempts to collect ‘debt’ as that term is defined by the

FDCPA.” Ho v. ReconTrust Co., 858 F.3d 568, 572 (9th Cir. 2016).

        Ng’s reliance on Dowers v. Nationstar Mortgage, LLC, 852 F.3d 964 (9th

Cir. 2017), is misplaced. The holding in Dowers was limited to § 1692f(6), but Ng
                                                                           Page 4 of 5
has not alleged violations of that provision. Even if she had, that claim would fail

because Ng cannot assert that U.S. Bank has no right “to possession of the property

claimed as collateral.” 15 U.S.C. § 1692f(6)(A). Accordingly, any attempt to

amend her complaint to allege violations of § 1692f would be futile.

      4. The district court properly awarded attorney’s fees to U.S. Bank and

Select Portfolio Servicing, Inc (SPS). Ng does not dispute that this lawsuit is an

action “on a contract” within the meaning of California Civil Code § 1717(a). As

the prevailing parties, U.S. Bank and SPS are entitled to reasonable attorney’s fees

pursuant to the terms of Ng’s promissory note.

      Ng’s argument that the foreclosure sale extinguished her obligation to pay

attorney’s fees is unpersuasive. California law distinguishes between indebtedness

under a note and an obligation under the note to pay attorney’s fees. This is

because an award of attorney’s fees “is the result of the debtor-trustor’s voluntary

act in bringing an unmeritorious suit which the creditor-beneficiary was required to

make expenditures to defend.” Passanisi v. Merit-McBride Realtors, Inc., 190 Cal.

App. 3d 1496, 1509 (1987).

      While U.S. Bank and SPS are not signatories to the promissory note, they

nonetheless are entitled to attorney’s fees. U.S. Bank is the current beneficiary

under the note and deed of trust, and SPS is its agent. Accordingly, both “stand[] in
                                                                          Page 5 of 5
the shoes” of the original signatory lender. Cargill, Inc. v. Souza, 201 Cal. App.
4th 962, 966 (2011).

      5. The district court properly granted the appellees’ motion to expunge the

lis pendens because Ng has not established the “probable validity” of a real property

claim. Cal. Civ. Proc. Code § 405.32.

      Ng’s motions for judicial notice (16-16949 Docket Entry 19, 16-17370

Docket 10) are DENIED as moot.

      AFFIRMED.