New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
Commercial Litigation and Arbitration
« Back to Complex Lit Blog

Absent Compelling Reasons, Circuit Will Not Create Circuit Split on State Law Issue by Disagreeing with Circuit That Encompasses That State

Download PDF

Halajian v. Deutsche Bank Nat'l Trust Co., 2017 U.S. App. LEXIS 7497 (9th Cir. April 27, 2017):

*This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

In 2005, appellant Barry Halajian obtained a $175,200 home loan from Fremont Investment & Loan ("Fremont"), secured by a promissory note and deed of trust against his home in Fresno, California. Mortgage Electronic Registration Systems, Inc. ("MERS") was designated nominee for Fremont and its successors and assigns, beneficiary of the deed of trust, and holder of legal title to the loan. At some point thereafter, MERS assigned the loan to the GSAMP Trust 2005-HE4, Mortgage Pass-Through Certificate, Series 2005-HE4 Trust ("the Trust"), for which defendant Deutsche Bank National Trust Co. ("Deutsche Bank") served as trustee. After suffering financial setbacks starting in 2008, Halajian eventually ceased making mortgage payments. [*2]  Halajian's property was sold at a foreclosure sale on February 14, 2011.

Halajian filed suit against Deutsche Bank, JPMorgan Chase Bank, N.A. ("Chase"), NDEx West LLC, and Chase employee Whitney Cook, alleging (as relevant here) claims for wrongful foreclosure, quiet title, and a violation of Cal. Civ. Code § 2923.5. The nucleus of Halajian's legal theory was that Deutsche Bank lacked the power to foreclose because (1) Fremont was out of business at the time the loan was assigned to Deutsche Bank as trustee for the Trust; (2) the loan and deed of trust were assigned to Deutsche Bank after the closing date of the Pooling and Servicing Agreement (PSA), and were therefore void; and (3) Halajian never received proper notice of the loan, and did not have an adequate opportunity to discuss alternatives to foreclosure, as required by California law. The district court dismissed most of Halajian's claims, and after discovery, granted summary judgment to all defendants on Halajian's sole remaining claim, for wrongful foreclosure. We affirm.

1. The district court did not err in granting summary judgment on Halajian's wrongful foreclosure claim.

Halajian first contends that Deutsche Bank lacked authority to foreclose on his loan [*3]  because the loan was assigned to the Trust after the closing date specified in the PSA governing the Trust. The district court held that Halajian lacked authority to enforce the terms of the PSA, including the closing date, because Halajian was not a party to that agreement.

The California Supreme Court, applying New York law, has since held that where an alleged defect renders the assignment void — wherein it "binds no one and is a mere nullity" — the borrower may challenge the assignment in court regardless of whether the borrower was a party to the pooling and servicing agreement under which the assignment was made. Yvanova v. New Century Mortg. Corp., 62 Cal. 4th 919, 929, 942-43 (Cal. 2016) (citation omitted). When an alleged defect merely renders the agreement "voidable," and the parties to the assignment may ratify it, the borrower may not challenge the assignment. Id. at 936.

Yvanova did not address whether the particular defect [*4]  alleged by Halajian renders the assignment voidable, rather than void. Nor has the New York Court of Appeals. But the Second Circuit has held that the weight of New York authority indicates that it is voidable rather than void. See Rajamin v. Deutsche Bank Nat'l Tr. Co., 757 F.3d 79, 88-89 (2d Cir. 2014). "In the absence of compelling reasons, we would not create a circuit split with the circuit that encompasses New York regarding the meaning of New York law." United States v. Rivera-Ramos, 578 F.3d 1111, 1113 (9th Cir. 2009). No compelling reasons have been presented. We therefore conclude that even if Halajian's loan was assigned to the Trust after the designated closing date, that defect in the assignment was voidable rather than void. Consequently, Halajian lacks the authority to challenge that defect.2

***

AFFIRMED

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

(1) FRAP 38 Sanctions Inapt for Appeal That Is Weak — “Borderline Frivolous” — Test Is Whether Appellant Should Have Known the Appeal Had Absolutely No Chance of Success — (2) Lay Opinion Testimony under Rule 701: Nub of Helpfulness Requirement Is to Exclude Testimony When the Witness Is No Better Suited Than the Jury to Assess the Issue; (3) Appeals: No Appeal from Denial of Motion for Judgment As a Matter of Law Unless Appellant Made That Motion Before Case Was Submitted to Jury

(1) § 1927 and Inherent Power Sanctions — Extrajudicial Misconduct After Obtaining Verdict: Filing Lis Pendens Based on False Statements and in Violation of Governing Law, Filing Fraudulent Abstracts of Judgment That Represented They Had Been Court-Issued; (2) Rule 37 Sanctions for Baseless Motion to Compel Required Unless Target Shows That the Motion Was Substantially Justified Or Other Circumstances Make An Award Of Expenses Unjust

Rule 37 Dismissal Factors (10th Circuit) — Rule 37(d) Sanctions Apply Without Regard to Whether the Court Has Ordered the Delinquent Party to Appear for His, Her or Their Deposition

Rule 37 Dismissal Factors (Sixth Circuit) — Refusal to Answer Deposition Questions on Relevancy Grounds Is Not Valid Rule 30(c)(2) — Pro Se Deponent’s Attendance At Zoom Deposition While Driving A Semi, Refusing to Answer Questions, Inter Alia, Held Contumacious

Rule 26(a)(1) Disclosures and Rule 37 Preclusion: Rule 26 Does Not Require Disclosure of Legal Theories Underlying Damages Computations Provided Pursuant to 26(a)(1)(A)(i)

Rule 37 Sanctions: (1) Forfeiture of Objections to Produce Specific Categories of Documents (Including Tax Returns, Social Media Passwords) as Sanction for Violation of Discovery Order — (2) Default Judgment for Multiple Violations of Discovery Orders — (3) Ninth Circuit’s 5-Factor Test for Dismissal or Default Sanction — (4) Three Additional Factors Considered by Court of Appeals in Assessing Whether Lesser Sanctions Were Adequately Considered — (5) District Court Need Not Recite Each Factor: It Suffices If Record Permits Appellate Court to Apply Them — (6) Public Policy Favoring Disposition of Cases on the Merits Is Not Dispositive Where At Least 4 Factors “Support,” Or 3 Factors “Strongly Support,” Dismissal/Default — (7) And Lends Little Support to A Party Whose Conduct Impedes Adjudication on the Merits — (7) Order to Show Cause Why FRAP 38, § 1927 and Inherent Power Sanctions Should Not Issue for Multiple Misstatements Of Counsel At Oral Argument

Electronic Spoliation Sanctions: “Intent to Deprive” in Rule 37(e)(2) Means Willful Destruction of Evidence to Avoid Its Discovery by an Adverse Party — Relevant Circumstantial Evidence in Determining “Intent to Deprive” — Rule 37(e)(2)(C)’s Standards Trump Circuit’s Multi-Factor Test for Determining Whether Dismissal Is Appropriate — No Prejudice Required for 37(e)(2) Sanctions Because Intent to Deprive Creates Inference the Loss of Information Favored the Spoliator

Sanctions and Appealability — Fifth Circuit’s 2023 Survey of Circuit Cases Concerning Whether Judgment of Dismissal As a Sanction Bars Review of Earlier Sanctions Orders Due to Lack of Jurisdiction or Whether The Decision to Review Pre-Dismissal Sanctions Orders Is Prudential

Sanctions and Appealability — Prior Sanctions Orders Do Not Merge into Judgment of Dismissal Imposed As Sanction under Rules 16(f), 37(b) and 41(b) and Are Unappealable — Courts of Appeal Differ As to Whether This Lack of Reviewability Is Jurisdictional or Discretionary (Jurisdictional in Second Circuit)

Sanctions Enforcement and Appealability: Failure to Pay Rule 37 Sanctions and Otherwise Comply with Discovery Orders Leads to Dismissal under Rule 41(b) — Second Circuit Factors for Dismissal for Failure to Prosecute or Comply with Court Orders — Belated, Partial Compliance with Orders Does Not Deprive District Court of Discretion to Dismiss Based on Continuing Non-Compliance with Other Aspects of Orders — “Hopelessly Belated Compliance” with Court Orders Not Accorded Great Weight — Prior Sanctions Orders Do Not Merge into Judgment of Dismissal under Rule 41(b) And Are Unreviewable

Archives
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

New York Office

© 2024 Joseph Hage Aaronson LLC  
Disclaimer | Attorney Advertising Notice | Legal Notice