Court Opinion

ID: 4229035
Source: CourtListenerOpinion
Date Created: 2017-12-14 21:00:39.859894+00
Date Added: 2024-06-11T14:43:04.716296
License: Public Domain

FILED
                                                                     United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                         Tenth Circuit

                             FOR THE TENTH CIRCUIT                        December 14, 2017
                         _________________________________
                                                                          Elisabeth A. Shumaker
                                                                              Clerk of Court
WEST MAUI PROPERTIES, LLC, a
Colorado limited liability company,

      Plaintiff - Appellant,

v.                                                         No. 17-1112
                                                  (D.C. No. 1:16-CV-01646-LTB)
DEUTSCHE BANK TRUST COMPANY                                  (D. Colo.)
AMERICAS, a New York corporation, in
its capacity as Trustee for Residential
Accredit Loans, Inc. Pass through
Certificates 2006-QO10 at 1761 East St.
Andrew Place; NATIONSTAR
MORTGAGE, LLC, a Delaware limited
liability company,

      Defendants - Appellees.
                      _________________________________

                             ORDER AND JUDGMENT*
                         _________________________________

Before KELLY, PHILLIPS, and McHUGH, Circuit Judges.
                  _________________________________

      Plaintiff - Appellant West Maui Properties, LLC, appeals from the district

court’s order granting Defendants - Appellees’ (Deutsche Bank and Nationstar

Mortgage, LLC) motion to dismiss. Order, W. Maui Props., LLC v. Deutsche Bank

Tr. Co. Ams., No. 16-CV-01646-LTB-KLM, 2016 WL 10518587 (D. Colo. Dec. 22,

2016). Our jurisdiction arises under 28 U.S.C. § 1291, and we affirm.

      *
         This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
                                      Background

      This case concerns real property located at 305 Kainoe Street in Lahaina,

Hawaii. In 2006, Randolph G. Currier obtained a loan to buy the property for

$1,207,500 from First Magnus Financial Corporation. Aplt. App. 35. That loan was

secured by a mortgage on the property dated October 23, 2006. Id.; Aplee. Supp.

App. 21–48. The prior servicer of the loan and Nationstar’s predecessor, Aurora

Loan Services, LLC, declared a default and foreclosed, acquiring a deed to the

property and later assigning it to Deutsche Bank. Aplt. App. 42–44; Aplee. Br. at 3.

      On November 12, 2015, West Maui sent Nationstar a letter ostensibly offering

to purchase the mortgage as well as the property itself. Aplt. App. 7, at para. 17; id.

20. The letter stated, “I have found a party to take on these problems [concerning

title to the property] and will clear it up by getting your loan for $50,000.00.” Id. at

20. It was signed by “Randolph G. Currier.” Id. Along with the letter, there was

also a cashier’s check payable to “NATIONSTAR MORTGAGE LLC” in the amount

of $7,000. Id. at 21. The remitter of the check was “WEST MAUI PROPERTIES

LLC.” Id. The memo line stated: “mort.purch.payment Inst. No. 2006-204309 Maui,

Hawii [sic].” Id. Nationstar deposited the check and responded with a letter

acknowledging receipt of the West Maui letter and promising a return letter. Id. 22,

37. West Maui continued to send various letters requesting a closing; Nationstar

promised more response letters. Id. at 7–11. Nationstar did not follow up, and on

June 27, 2016, West Maui filed this action.

                                            2
      In its complaint, West Maui asserted claims for breach of contract and breach

of the implied covenant of good faith and fair dealing, and it sought declaratory

relief. West Maui’s theory is that its November 12, 2015 letter constituted an offer to

purchase the mortgage loan on the foreclosed property and that by not responding to

its correspondence and by depositing its $7,000 check, Nationstar and Deutsche Bank

had accepted West Maui’s offer. Id. at 5–15. It contends that it owns an undivided

14% interest in the property and upon completion of payment (an additional $43,000)

it is entitled to 100% ownership. Id. at 14. Obviously, the defendants had a different

take: “the foreclosed and evicted mortgagors, through their own company, West

Maui, now claim to have submitted a valid ‘offer,’ and that Nationstar accepted such

offer, to buy their $1.2 million plus [l]oan balance, and/or the foreclosed [p]roperty

worth well over $1 million, for $50,000.” Aplee. Br. at 6.

      Deutsche Bank and Nationstar filed a motion to dismiss under Fed. R. Civ. P.

12(b)(6) arguing that the complaint failed as a matter of law because of insufficient

facts to demonstrate a contract. Moreover, they argued, even if a contract existed,

there was not a loan or mortgage to sell because both had been extinguished through

foreclosure. The district court agreed that there was no contract formed and

dismissed all of West Maui claims with prejudice.

      On appeal, West Maui argues the district court erred by concluding that (1) the

alleged offer was not sufficiently definite, (2) there was no plausible allegation of

acceptance, and (3) the mortgage had been extinguished. West Maui also contends

that the dismissal should have been without prejudice.

                                            3
                                       Discussion

      We review a district court’s grant of a motion to dismiss for failure to state a

claim under Fed. R. Civ. P. 12(b)(6) de novo. Khalik v. United Air Lines, 671 F.3d
1188, 1190 (10th Cir. 2012). “[T]o withstand a Rule 12(b)(6) motion to dismiss, a

complaint must contain enough allegations of fact, taken as true, ‘to state a claim to

relief that is plausible on its face.’” Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

      In this diversity case, as the law of the forum, Colorado substantive law

applies. Emp’rs Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1170 (10th Cir.

2010). Under Colorado law, a breach of contract claim has four elements: “(1) the

existence of a contract; (2) performance by the plaintiff or some justification for

nonperformance; (3) failure to perform the contract by the defendant; and (4)

resulting damages to the plaintiff.” W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058

(Colo. 1992) (citations omitted). To exist, a contract requires “mutual assent to an

exchange, between competent parties, with regard to a certain subject matter, for

legal consideration.” Indus. Products Int’l, Inc. v. Emo Trans, Inc., 962 P.2d 983,

988 (Colo. App. 1997), as modified on denial of reh’g (Dec. 26, 1997). Furthermore,

“[t]he terms of the offer must be sufficiently definite that the promises and

performances of each party are reasonably certain.” Watson v. Pub. Serv. Co. of

Colo., 207 P.3d 860, 868 (Colo. App. 2008).

                                           4
       We agree with the district court that the “offer” to purchase the mortgage and

property was not sufficiently definite or certain. It is entirely unclear what was being

bargained for, let alone who was doing the bargaining. The letter, signed by Mr. Currier,

the original mortgagor, stated it would “get[] your loan for $50,000” and that the

remaining $43,000 would be “paid at closing of the loan transfer.” W. Maui Props.,

LLC, 2016 WL 10518587, at *1. Which loan is unclear, as is to whom the loan would be

transferred. The check that was associated with the letter referenced West Maui

Properties, LLC, a company Nationstar had never done business with. Furthermore, the

mortgage the offer purports to buy was not for sale, having been foreclosed on many

years prior.1 Id. at *4. The promises and performances of the parties were far from

“reasonably certain.”

       Even supposing an offer, the defendants never accepted such offer. Acceptance of

a bilateral offer can occur in two ways: (1) “words or conduct that, when objectively

viewed, manifests an intent to accept an offer,” Marquardt v. Perry, 200 P.3d 1126, 1129

(Colo. App. 2008), or (2) by silence where the relationship between the parties suggests

that “an offeror is justified in expecting a reply or the offeree is under a duty to respond,”

Haberl v. Bigelow, 855 P.2d 1368, 1374 (Colo. 1993). West Maui contends that by

       1
        West Maui asserts that Nationstar sold the mortgage in question to Deutsche
Bank after the mortgage had been foreclosed. Aplt. Br. at 16. They cite this as proof
the mortgage was not extinguished. But this does not prove anything except that
Nationstar may have sold Deutsche Bank an extinguished mortgage.

                                              5
depositing the check, Nationstar implicitly accepted the offer.2 But the acknowledgment

letters do not respond to, let alone mention, the purported offer or its cryptic terms, and

no facts suggest a relationship between the parties such that it would be reasonable to

infer acceptance by silence.

       Finally, the district court correctly dismissed the complaint with prejudice. Even

given leave to amend, West Maui could not cure its complaint. See Curley v. Perry, 246
F.3d 1278, 1281–82 (10th Cir. 2001).

       AFFIRMED.

                                              Entered for the Court

                                              Paul J Kelly, Jr.
                                              Circuit Judge

       2
        Nationstar responds that it deposited the check because Mr. Currier, whose
loan account number was referenced in the letter, had an outstanding balance of
$18,509.15 due Nationstar for attorney’s fees and costs from his previous attempts to
challenge the original foreclosure action in Hawaii state court. Aplee. Br. at 20–23.
                                              6