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UNPUBLISHED PER CURIAM OPINION filed.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]
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UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.
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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
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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
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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.
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that,
under
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Virginia
law,
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“[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)).
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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.
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