Gibson v. PNC Bank National Ass'n
673 F. App'x 634
| 9th Cir. | 2016Background
- The Gibsons (Lori, Shon, and Ron) sued creditors seeking declaratory relief and a permanent injunction to challenge a nonjudicial foreclosure sale of property.
- Lori and Shon had previously sued the same creditors over the same transaction; that earlier suit was dismissed with prejudice for lack of standing.
- Lori and Shon’s current complaint largely repeats the allegations from the prior suit, with only limited new allegations.
- Ron acquired an interest in the property by quitclaim deed after the foreclosure sale and sued claiming the sale did not extinguish his interest because OTDA procedures were not followed.
- Ron also sought relief based on alleged violations of the Pooling and Servicing Agreement (PSA), though he was not a party to the PSA.
- The district court dismissed the Gibsons’ claims; the Ninth Circuit affirmed, applying claim preclusion to Lori and Shon and ruling Ron lacked a statutory cause of action under the Oregon Trust Deed Act (OTDA).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lori and Shon may relitigate foreclosure challenge after prior dismissal with prejudice | Their new filing asserts similar defects and limited new allegations that should allow relief | Prior dismissal with prejudice is claim-preclusive and bars relitigation of claims arising from same transaction | Dismissal affirmed: claim preclusion bars Lori and Shon’s suit |
| Whether Ron has standing to challenge the nonjudicial foreclosure sale | Ron contends his quitclaim deed gives him a property interest that survived an invalid sale and thus he can challenge the sale | Creditors argue Ron cannot assert rights beyond his own interest and lacks basis to assert PSA claims | Ron has standing to challenge the sale insofar as it affects his own interest, but not to assert claims beyond that scope |
| Whether a non-grantor (Ron) may bring a post-sale claim under the OTDA for procedural noncompliance | Ron urges extension of post-sale OTDA remedy to him as a harmed party | Creditors argue OTDA’s post-sale cause of action protects grantors, not non-grantors, and extending it would upset the statutory balance | Ron lacks a cause of action under the OTDA as a non-grantor; post-sale remedy recognized for grantors does not extend to him |
| Whether Ron may sue for PSA violations though he is not a party to the PSA | Ron alleges PSA breaches that affected the foreclosure | Creditors note Ron was not a party to the PSA and so cannot enforce it | Ron cannot bring PSA-based claims because he is not a party to the agreement |
Key Cases Cited
- Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (federal diversity actions look to state law for claim-preclusion effect)
- Taco Bell Corp. v. TBWA Chiat/Day Inc., 552 F.3d 1137 (9th Cir.) (federal courts apply state law to preclusion questions in diversity cases)
- Cornus Corp. v. Geac Enter. Sols., Inc., 289 P.3d 267 (Or. Ct. App.) (dismissal with prejudice has claim-preclusive effect under Oregon law)
- Krisor v. Lake Cty. Fair Bd., 302 P.3d 455 (Or. Ct. App.) (claim preclusion bars relitigation of causes of action arising from same transaction)
- Lee v. Mitchell, 953 P.2d 414 (Or. Ct. App.) (claim preclusion bars claims available from same transaction whether or not actually asserted)
- Ray Charles Found. v. Robinson, 795 F.3d 1109 (9th Cir.) (statutory causes of action extend only to plaintiffs within the statute’s zone of interests)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (zone-of-interests test governs prudential standing to sue under statutes)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (constitutional standing requires concrete and particularized injury)
- Staffordshire Investments, Inc. v. Cal-W. Reconveyance Corp., 149 P.3d 150 (Or. Ct. App.) (discusses OTDA’s balance between creditor interests and grantor rights)