Sostenes Pena v. HSBC Bank USA

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:14-cv-01018-JCC-JFA Copies to all parties and the district court/agency. [999725030].. [14-2329]

Appeal: 14-2329

Doc: 37

Filed: 12/28/2015

Pg: 1 of 6

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-2329

SOSTENES PENA; YOLANDA PENA,
Plaintiffs – Appellants,
v.
HSBC BANK USA, National Association as Trustee for Deutsche
Alt-A Securities Mortgage Loan Trust, Series 2007-OA2;
SURETY TRUSTEES, LLC,
Defendants – Appellees.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. James C. Cacheris, Senior
District Judge. (1:14-cv-01018-JCC-JFA)

Submitted:

November 4, 2015

Decided:

December 28, 2015

Before DUNCAN, KEENAN, and DIAZ, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Christopher E. Brown, TUCKER & ASSOCIATES PLLC, Vienna,
Virginia, for Appellants. John C. Lynch, Maryia Y. Jones,
Jennifer E. Bowen, TROUTMAN SANDERS LLP, Virginia Beach,
Virginia, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

Appeal: 14-2329

Doc: 37

Filed: 12/28/2015

Pg: 2 of 6

PER CURIAM:
This

case

concerns

the

efforts

of

Plaintiffs–Appellants

Sostones and Yolanda Pena to retain possession of their real
estate

in

Loudoun

County,

Virginia,

after

they

defaulted

on

their mortgage loan and the property was sold at a foreclosure
sale.

Defendant–Appellee

Trustee

for

Series

Deutsche

2007-OA2,

HSBC

Alt-A

was

the

Bank

USA,

Securities

beneficiary

N.A.

Mortgage
of

the

(“HSBC”),
Loan

deed

as

Trust,

of

trust

associated with the Penas’ loan, and purchased the property at
the foreclosure sale.

After the sale, the Penas sued HSBC,

raising

premised

several

claims

on

their

assertion

that

the

assignment of the deed of trust from the Penas’ original lender
to HSBC was invalid.
The district court granted HSBC’s motion to dismiss the
Penas’ complaint for failure to state a claim, holding that the
Penas

lack

standing

to

challenge

the

assignment.

For

the

reasons that follow, we affirm.

I.
Because this case arises at the motion-to-dismiss stage, we
“assum[e] all well-pleaded, nonconclusory factual allegations in
the complaint to be true.”
391 (4th Cir. 2011).

Aziz v. Alcolac, Inc., 658 F.3d 388,

In addition to the complaint itself, we

may consider “documents attached to the complaint, . . . as well
2

Appeal: 14-2329

Doc: 37

Filed: 12/28/2015

Pg: 3 of 6

as those attached to the motion to dismiss, so long as they are
integral to the complaint and authentic.”

Philips v. Pitt Cty.

Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

We may also

“take judicial notice of matters of public record.”

Id.

The Penas’ complaint and the associated documents reveal
the following facts: The Penas purchased the property at issue
on

February

5,

2007.

To

finance

their

purchase,

the

obtained a loan from IndyMac Bank, F.S.B. (“IndyMac”).
was secured by a deed of trust on the property.

Penas

The loan

Instead of

identifying itself as the trust beneficiary, IndyMac appointed a
separate

company

Systems,

Inc.

called

(“MERS”)

Mortgage
as

the

Electronic

“nominee”

for

Registration
IndyMac

and

IndyMac’s “successors and assigns,” and MERS became the trust
beneficiary.
On

July

respectively,

J.A. 31.
27,
MERS

2010,

July

29,

2010,

executed

and

and

recorded

June
three

11,

2013,

separate

documents, each entitled “Assignment of Deed of Trust.”

Each

document purported to assign to HSBC “all beneficial interest”
under the Penas’ deed of trust.
appointed

Surety

Trustees,

LLC

J.A. 63–66.
(“Surety

HSBC, in turn,

Trustees”)

as

a

substitute trustee in place of Trust Title Company, which had
been named trustee in the original deed of trust.

After the

Penas defaulted on their loan, HSBC instructed Surety Trustees

3

Appeal: 14-2329

Doc: 37

Filed: 12/28/2015

Pg: 4 of 6

to initiate foreclosure proceedings.

At the foreclosure sale,

HSBC purchased the property.

II.
In their complaint, the Penas seek various types of relief
from the foreclosure sale, asserting that MERS’s assignment of
the deed of trust to HSBC was invalid, and that HSBC therefore
had

no

authority

to

appoint

Surety

Trustees

as

a

substitute

trustee and no authority to instruct Surety Trustees to initiate
foreclosure proceedings. 1
motion

to

dismiss,

held

The district court, in granting HSBC’s
that

the

Penas

lack

standing

challenge MERS’s assignment of the deed of trust to HSBC.

to
We

review de novo a district court’s decision to grant a motion to
dismiss for failure to state a claim.

Aziz, 658 F.3d at 391.

On appeal, the Penas do not dispute the basic principle of
Virginia

law

that

“generally,

one

who

is

not

in

privity

contract cannot attack the validity of the contract.”

of

Wells v.

Shoosmith, 428 S.E.2d 909, 913 (Va. 1993); see Mich. Mut. Ins.
Co. v. Smoot, 129 F. Supp. 2d 912, 920 (E.D. Va. 2000) (stating

1

Specifically, in Count I, the Penas seek rescission of the
foreclosure sale; in Count II, they request removal of a cloud
on title; and in Count III, they seek damages for slander of
title.
The Penas also asserted a breach-of-contract claim
against HSBC in Count IV, but they do not contest the district
court’s dismissal of that claim on appeal.

4

Appeal: 14-2329

Doc: 37

that,

under

Filed: 12/28/2015

Virginia

law,

Pg: 5 of 6

“[o]ne

must

be

a

party

to,

beneficiary of, a contract to sue on that contract”). 2
the

Penas

claim

that

they

were

in

fact

parties

or

a

Nor do
to,

or

beneficiaries of, the assignment of the deed of trust from MERS
to HSBC.
Instead, the Penas argue that their complaint seeks only to
enforce the conditions precedent to foreclosure contained in the
deed of trust (to which they are a party), and point out that
under Virginia law, “[b]orrowers may sue to enforce conditions
precedent

to

foreclosure,”

Mathews

724 S.E.2d 196, 200 (Va. 2012).
in

their

precedent”

first
to

amended

foreclosure

v.

PHH

Mortgage

Corp.,

And indeed, the Penas do allege

complaint
“were

that

not

“several

satisfied.”

conditions
J.A.

23.

Specifically, the Penas allege that
-

The lender . . . did not declare a default, nor
give notice thereof

-

The Lender did not accelerate the Note, nor give
notice thereof

-

The Lender did not appoint the substitute trustee

-

The Lender did not advise the borrower in the
notice of the right to cure . . . that she had the
right to file a court action and raise any defense

-

Lender provided no notice of the sale as required
by the contract and Virginia law.

2

Federal prudential standing doctrine likewise contains a
“general prohibition on a litigant's raising another person's
legal rights.” CGM, LLC v. BellSouth Telecomm., Inc., 664 F.3d
46, 52 (4th Cir. 2011) (quoting Allen v. Wright, 468 U.S. 737,
751 (1984)).

5

Appeal: 14-2329

Doc: 37

Filed: 12/28/2015

Pg: 6 of 6

J.A. 23–24.
The Penas’ briefing on appeal makes clear, however, that
they are not alleging that they never received notice of their
default and of the impending foreclosure.
contains

several

letters

that

notice.

See J.A. 112–22.

provided

In fact, the record
the

Penas

with

such

The Penas’ only contention is that

they were provided such notice by the wrong entity: the deed of
trust requires that notice be provided by the Lender (or its
agents), and according to the Penas, HSBC is not the Lender.

Of

course, the Penas’ assertion that HSBC is not the Lender is
entirely dependent on their challenge to the validity of the
assignment

from

MERS

standing to raise.

to

HSBC--a

challenge

that

they

have

no

Thus, even though the Penas’ complaint is

styled as a suit to enforce the deed of trust, it is clear that,
at bottom, their suit seeks only to challenge a contract to
which they are neither parties nor beneficiaries.

Virginia law

provides no avenue for such a challenge.

III.
For

the

foregoing

reasons,

the

district

court’s

order

dismissing the Penas’ complaint is
AFFIRMED.

6