Duncan Robertson v. Gmac Mortgage
702 F. App'x 595
| 9th Cir. | 2017Background
- Robertson purchased real property subject to a first-position deed of trust (the "Nicholls DOT") and defaulted on obligations tied to that DOT.
- A non-judicial foreclosure process began; trustee sales were scheduled repeatedly over ~2 years while Robertson sought the correct trustee/beneficiary so he could pay off the debt and sell or develop the property.
- Beneficial interest was purportedly transferred to Residential Funding Real Estate Holdings, LLC (RFREH); trustee LSI Title Agency, Inc. (LSI) issued a foreclosure-sale notice on RFREH’s behalf but no sale occurred and no payoff amount was resolved.
- Robertson sued in Washington state court to quiet title and alleged violations of the Washington Deed of Trust Act (DTA) and Consumer Protection Act (CPA), naming LSI, Chase, BNY, First American, and others; most claims were dismissed or decided for defendants and the case was removed to federal court.
- On remand for jurisdictional issues the district court found diversity jurisdiction existed (LSI’s principal place of business was California), and on the merits dismissed Robertson’s DTA and CPA claims and denied leave to amend; the Ninth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LSI was a home‑forum defendant defeating removal under 28 U.S.C. § 1441(b)(2) | Robertson argued OIC filings showed LSI’s business address in Bellevue, Washington, making LSI a Washington citizen | Defendants showed LSI’s "nerve center" (key executives) was in California at removal | LSI was not a home‑forum defendant; removal proper (California "principal place of business") |
| Whether Robertson stated a justiciable DTA claim against Chase and BNY | Robertson sought declaratory relief under the DTA to void the DOT and restrain foreclosure | Chase/BNY had not asserted an interest or threatened foreclosure; no adverse legal interest exists | DTA claim dismissed for lack of a justiciable case or controversy (no present dispute with Chase/BNY) |
| Whether Robertson pled a CPA claim against LSI (and others) | Robertson alleged deceptive acts by LSI caused a cloud on title, loss of value, and lost use/revenue | Defendants argued Robertson cannot show causation: harms stem from the existing first‑position DOT and defendants not shown to have caused the cloud | CPA claims dismissed: plaintiff failed to prove unfair/deceptive act causation, public‑interest impact, and injury proximately caused by LSI |
| Whether district court abused discretion by denying leave to amend | Robertson sought to correct typos, add defendants, supplement distress allegations, and add records to avoid dismissal | Defendants argued amendments would be futile and would not cure pleading defects | Denial of leave to amend not an abuse of discretion because proposed amendments would not avoid dismissal |
Key Cases Cited
- Hertz Corp. v. Friend, 559 U.S. 77 (2010) (defines corporation's principal place of business as the "nerve center")
- Frias v. Asset Foreclosure Servs., Inc., 334 P.3d 529 (Wash. 2014) (explains DTA remedies and that the DTA does not create a damages remedy)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531 (Wash. 1986) (elements required for a Washington CPA claim)
- Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 170 P.3d 10 (Wash. 2007) (CPA causation requires that but for defendant's act the injury would not have occurred)
- Shell Gulf of Mex. Inc. v. Ctr. for Biological Diversity, Inc., 771 F.3d 632 (9th Cir. 2014) (requiring adverse legal interests for declaratory relief)
- Doe v. Abbott Labs., 571 F.3d 930 (9th Cir. 2009) (standard of review for dismissals for failure to state a claim)
- Lacano Invs., LLC v. Balash, 765 F.3d 1068 (9th Cir. 2014) (denial of leave to amend reviewed for abuse of discretion; futile amendments may be denied)