Proal v. J.P. Morgan Chase Bank, et al

Filing

OPINION issued by Juan R. Torruella, Appellate Judge; Rogeriee Thompson, Appellate Judge and William J. Kayatta , Jr., Appellate Judge. Unpublished. [16-2150]

Case: 16-2150

Document: 00117178555

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Date Filed: 07/18/2017

Entry ID: 6106673

Not for Publication in West's Federal Reporter

United States Court of Appeals
For the First Circuit
No. 16-2150
CAROL PROAL,
Plaintiff, Appellant,
v.
J.P. MORGAN CHASE BANK, N.A.; CITIBANK, N.A.,
Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Timothy S. Hillman, U.S. District Judge]

Before
Torruella, Thompson, and Kayatta,
Circuit Judges.

Mark Ellis O'Brien on brief for appellant.
Matthew J. Libby and Preti, Flaherty, Beliveau & Pachios, LLP
on brief for appellees.

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THOMPSON, Circuit Judge.
Stage-Setting
A

district

judge

dismissed

Carol

Proal's

state-law

complaint against J.P. Morgan Chase Bank, N.A. ("J.P. Morgan") and
Citibank, N.A. ("Citibank") for failure to state a claim.
Fed. R. Civ. P. 12(b)(6).

And Proal appeals.

See

Because the parties

know the facts, a simple sketch of the complaint's well-pleaded
allegations — taken as true, Schatz v. Republican State Leadership
Comm., 669 F.3d 50, 55 (1st Cir. 2012) — suffices for present
purposes.
In March 2007, Proal bought a home in Massachusetts,
borrowing

$528,000

from

Community

Lending

Incorporated

("Community") via a promissory note secured by a mortgage.

The

mortgage was immediately assigned (the complaint uses the passive
voice)

to

the

Mortgage

Electronic

("MERS"), as "nominee" for Community.

Registration

Systems,

Inc.

Two years later, in March

2009, MERS assigned the mortgage to Citibank, as trustee for
"Certificate Holders of Structured Asset Mortgage Investments II
Inc., Bear Stearns ALT-A Trust, Mortgage Pass-Through Certificates
Series 2007."
say.

The trust is governed by New York law, the parties

Anyhow, Liquenda Allotey signed the assignment as vice

president of MERS.

The assignment was notarized and recorded at

the registry of deeds (the complaint phrases these allegations in
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the passive voice too).

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The assignment occurred after the April

2007 closing date listed in the trust's pooling and servicing
agreement.

J.P. Morgan got involved here when it acquired Bear

Sterns, and a J.P. Morgan affiliate started servicing the mortgage.
Unfortunately, at some point Proal fell behind on her
mortgage. Springing to action, Citibank foreclosed on her mortgage
in January 2010 and bought her property at a foreclosure sale.
"New owners," the complaint says, "purchased the property" from
Citibank

"in

March

of

2013."

And

in

September

2014,

the

Massachusetts Attorney General's office notified Proal that (we
quote from the complaint) "she was eligible for a settlement
regarding J.P. Morgan, and that the settlement had left the door
open for individual mortgagors to sue on their own behalf."
Jumping

to

January

2016,

Proal

filed

a

multi-count

complaint against J.P. Morgan and Citibank in federal district
court.

Insisting that Allotey "was not a vice president of MERS

except by his own appointment" and that "the authority granting
the ability for [him] to assign the mortgage ran afoul of MERS['s]
governing

documents,"

Proal

alleged

the

following

"causes

of

action":1

"to void or cancel assignment of mortgage" — count 1;

"wrongful foreclosure" — count 2; unfair and deceptive trade

1

FYI, we omit unnecessary capitalization throughout this
opinion.
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practices under "Massachusetts General Law 93A" — count 3; "unjust
enrichment" — count 4; "to set aside" Citibank's "sale" of the
property — count 5; and "to void or cancel" Citibank's "foreclosure
deed" — count 6.2
to

dismiss.

J.P. Morgan and Citibank responded with a motion

Agreeing

with

the

parties,

the

judge

applied

Massachusetts law to all claims except for the one tied to the
pooling and servicing agreement — and for that claim he, like them,
applied New York law.

In the end, the judge granted the motion,

which triggered this appeal.
Standard of Review
Given how familiar everyone is with our standard of
review, we pause only to say that we take a fresh look at the
judge's dismissal order, knowing that the order stands if Proal's
complaint

does

not

have

enough

non-conclusory/non-speculative

facts, "accepted as true, to 'state a claim to relief that is
plausible on its face.'"

Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)); see also Schatz, 669 F.3d at 55.

2

Parenthetically (and as the parties know), Proal's complaint
sometimes uses the pronouns "he," "his," and "her" when referring
to Allotey.
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Our Take
Proal's brief raises a raft of issues related to the
MERS-Citibank assignment.

But having carefully considered each of

them, we see no way to reverse the judge's finely-tuned decision.
Actually, we think this is the ideal case to apply our long-held
rule that when a district judge "accurately takes the measure of
a case, persuasively explains [his] reasoning, and reaches a
correct result, it serves no useful purpose for a reviewing court
to write at length in placing its seal of approval on the decision
below."

See Moses v. Mele, 711 F.3d 213, 216 (1st Cir. 2013)

(collecting cases). So we affirm essentially for the reasons given
by the judge, adding just these brief comments.
First.

Canvassing cases applying Massachusetts law, the

judge concluded that Proal's chief claim — that the MERS-Citibank
assignment was void because Allotey had no authority to make it —
was actually a claim that the assignment was voidable (as opposed
to void).

That being so, the judge — staying with cases applying

Massachusetts law — ruled that Proal lacked standing to contest
the MERS-Citibank assignment.

See Culhane v. Aurora Loan Servs.

of Neb., 708 F.3d 282, 291 (1st Cir. 2013) (noting that "a
mortgagor" under Massachusetts law "does not have standing to
challenge shortcomings in an assignment that render it merely
voidable at the election of one party").
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Proal seemingly agrees

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that this result is required by existing state law — "[t]he law as
it stands," she writes, "apparently affords MERS [or Citibank] the
opportunity to question the assignment but denies that opportunity
to

the

mortgagor."

What

she

wants

us

to

do

is

"revise"

Massachusetts law because (in her words) it "leave[s] no or very
limited avenues of redress open to the mortgagor."

But federal

courts have no power to redo Massachusetts law, whether statutory
or judge-created.

See id. at 294; see also Wilson v. HSBC Mortg.

Servs., Inc., 744 F.3d 1, 12 (1st Cir. 2014).

Enough said about

that.
Second.

Regarding Proal's claim that the assignment

from MERS to Citibank (as trustee for the trust) was invalid
because it occurred after the closing date listed in the trust's
pooling and servicing agreement, the judge ruled as follows:

the

clear weight of authority applying New York law holds that an
infraction of the pooling and servicing agreement "render[s] the
assignment voidable rather than void" — and so a claim like hers
is barred for lack of standing.
Against the solid phalanx of authority arrayed in the
judge's order, Proal — in a section of her brief titled "Persuasive
Precedent" — cites three cases: Wells Fargo Bank, N.A. v. Erobobo,
972 N.Y.S.3d 147 (unpublished table decision), 2013 WL 1831799
(N.Y. Sup. Ct. Apr. 29, 2013); Saldivar v. JPMorgan Chase Bank,
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N.A., Adv. No. 12–01010, 2013 WL 2452699 (Bankr. S.D. Tex. June 5,
2013); and Glaski v. Bank of Am., 218 Cal. App. 4th 1079 (Cal. Ct.
App. 2013).

None of these helps her cause, however.

reversed on appeal.

Erobobo got

See Wells Fargo Bank, N.A. v. Erobobo, 9

N.Y.S.3d 312, 314 (N.Y. App. Div. 2015).

And Saldivar and Glaski

have been spurned by courts across the country.

See, e.g., Brown

v. Green Tree Serv. LLC, 86 F. Supp. 3d 1047, 1048 n.2 (D. Minn.
2015) (calling Saldivar and Glaski rejected outliers); Turner v.
Wells Fargo Bank N.A., No. 15-60046, 2017 WL 2587981 at *3 (9th
Cir. June 15, 2017) (emphasizing that "[t]he Second Circuit and
New York state courts . . . have rejected Glaski's interpretation
of New York law"); Mendoza v. JPMorgan Chase Bank, N.A., 212 Cal.
Rptr. 3d 1, 10 (Cal. Ct. App. 2016) (stressing that the court found
"no state or federal cases to support the Glaski analysis" and so
would "follow the federal lead in rejecting" Glaski's holding).
Third.

The judge said that "[t]o the extent" Proal

questioned "the validity of the foreclosure on the basis that
Citibank did not hold both the mortgage and the note at the time
of foreclosure," her argument "fail[ed]" given Eaton v. Federal
National Mortgage Association, 969 N.E.2d 1118 (Mass. 2012). True,
Eaton construed Massachusetts's foreclosure statutes to require
the foreclosing mortgage holder to possess the note too.
at 1129-30.

See id.

But as the judge explained, Eaton — decided years
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after the mortgage foreclosure here — specifically made this rule
apply only prospectively.

See id. at 1133.

Trying to work around

this difficulty, Proal protests that we should still apply the
Eaton rule because (she says) it jibes with "the law in place
before Eaton" came down.

The problem for her, however, is that

Eaton itself labeled its interpretation "new."

Id. at 1121.3

And

that makes her argument a non-starter.
Fourth.

The judge kicked out Proal's Chapter 93A claim

for two reasons.

The first was that the statute's four-year

limitations period had expired.

The second was that she had not

pled facts showing the foreclosure occurred because defendants
dealt with her unfairly or deceptively.

"She contends," the judge

wrote, "that the defects in the assignment rendered it void," but
"her allegations, if true, would merely render the assignment
voidable."

And so, the judge added,

assuming arguendo that Allotey acted outside of her
authority when executing the assignment, and that the
3

See also id. at 1132 (observing that attorneys "and others
who certify or render opinions concerning real property titles
ha[d] followed in good faith a[n] . . . interpretation of the
relevant statutes . . . that require[d] the mortgagee to hold only
the mortgage, and not the note, . . . to effect a valid foreclosure
by sale"); id. at 1133 (emphasizing that when an opinion "is not
grounded in constitutional principles, but instead 'announces a
new common-law rule, a new interpretation of a State statute, or
a new rule in the exercise of our superintendence power,'" there
is no constitutional impediment to applying "'the new rule or new
interpretation . . . only prospectively'" (quoting Commonwealth v.
Dagley, 816 N.E.2d 527, 533 n.10 (Mass. 2004))).
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assignment occurred in violation of the terms of the
trust's [pooling and servicing agreement], legal title
nevertheless passed to Citibank, giving it the authority
to foreclose on the mortgage.
Regarding the judge's first point, Proal argues that he
should have found the limitations clock tolled until "September
2014," which is when the Attorney General's office contacted her.
But she presents nothing that undermines the judge's second point,
which dashes her reversal hopes for this claim.

See, e.g., Tutor

Perini Corp. v. Banc of Am. Secs. LLC, 842 F.3d 71, 95 (1st Cir.
2016).
Fifth.

As a parting shot, Proal insists that the

assignment of mortgage from MERS to Citibank infracted the Fifth
Amendment's

due-process

clause

because

"until

[her]

federal

complaint" she had no "avenue of redress." We see several problems
with this argument, not the least of which is her failure to plead
a constitutional claim in her complaint — a failure that means her
claim is waived.

See, e.g., Daigle v. Me. Med. Ctr., Inc., 14

F.3d 684, 687–88 (1st Cir. 1994) (applying the raise-or-waive rule
to an omitted constitutional claim).
Somewhat relatedly, Proal fleetingly suggests that the
judge's dismissal ruling violated her due-process rights.

But

because she does not develop this suggestion in any meaningful
way, we deem it waived too.

See, e.g., United States v. Zannino,

895 F.2d 1, 17 (1st Cir. 1990) (warning that parties must do more
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than mention arguments "in the most skeletal way, leaving the court
to do [their] work").
Wrap Up
Having mulled over Proal's many arguments — including
some not mentioned above, because they deserve no discussion given
(for example) the judge's thoughtful handling of them or her
failure to preserve them — we let the dismissal of her complaint
stand.
Affirmed.

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