Filed: Jun. 18, 2014
Latest Update: Mar. 02, 2020
Summary: FILED NOT FOR PUBLICATION JUN 18 2014 MOLLY C. DWYER, CLERK UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT TRAVIS MICKELSON; DANIELLE H No. 13-35008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 corpo
Summary: FILED NOT FOR PUBLICATION JUN 18 2014 MOLLY C. DWYER, CLERK UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT TRAVIS MICKELSON; DANIELLE H No. 13-35008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 corpor..
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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NOT FOR PUBLICATION JUN 18 2014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