Jessica Saepoff v. HSBC Bank USA, N.A.
20-36031
| 9th Cir. | May 12, 2022Background
- Plaintiff Jessica Saepoff executed a Deed of Trust and Note on November 2, 2006, stopped paying around July 2010, and never paid off the loan. She sued pro se on April 25, 2016.
- Ocwen recorded an Assignment of Deed of Trust from MERS to HSBC on August 5, 2011; Saepoff alleged mortgage fraud, quiet title (based on fraud), Consumer Loan Act violations, CPA and fraudulent misrepresentation, and sought declaratory relief.
- The district court dismissed Saepoff’s claims on the pleadings under Rule 12(c), denied reconsideration under Rule 60(b), granted summary judgment to HSBC on foreclosure based on possession/holding of the original Note, and awarded attorney fees and costs to defendants.
- Saepoff claimed she had tendered pay-off funds but admitted she never transmitted payment to the servicer or HSBC.
- HSBC supported summary judgment with declarations attesting to physical possession of the original Note; Saepoff did not dispute the authenticity of the Note attached to HSBC’s summary judgment motion.
- The Ninth Circuit reviewed de novo the 12(c) dismissals and the summary judgment, reviewed denial of reconsideration and fee awards for abuse of discretion, and affirmed the district court in all respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wash. Rev. Code § 19.144.080 creates a private right of action for mortgage fraud | Saepoff asserted a statutory private right to sue under § 19.144.080 for mortgage fraud | Defendants argued the statute does not confer a private right of action | Court: No private right of action; mortgage fraud claim dismissed |
| Whether quiet title based on the mortgage-fraud theory is viable | Quiet title grounded on alleged mortgage fraud/invalid documents | Defendants: quiet title fails because underlying fraud claim is legally deficient | Court: Quiet title fails because mortgage-fraud theory fails; dismissal affirmed |
| Accrual/statute of limitations for CPA and fraudulent misrepresentation claims | Saepoff argued equitable tolling/that claims were timely | Defendants: claims accrued when assignment was recorded (2011); suit filed 2016 is untimely | Court: Claims time-barred; statute began to run on recording and public-record constructive notice |
| Whether HSBC had standing/authority to enforce the Note (possession) and whether summary judgment on foreclosure was proper | Saepoff challenged endorsement/HSBC’s proof and affidavit sufficiency | HSBC showed physical possession of original Note and supporting declarations | Court: HSBC is a holder entitled to enforce the Note; declarations were legally sufficient; summary judgment for HSBC affirmed |
| Whether district court should have granted Rule 60(b)(6) relief to reconsider dismissal | Saepoff argued clear and manifest error in applying limitations and merits rulings | Defendants: no extraordinary circumstances justified relief; original dismissal lawful | Court: Denial of Rule 60(b)(6) relief proper; no extraordinary circumstances shown |
| Whether attorney fees and costs award was proper and reasonable | Saepoff did not meaningfully contest claimed fees/costs | Defendants supported fees; district court applied lodestar and analyzed rates/hours | Court: Fee and cost award affirmed as reasonable; stay denial appropriate after Nken analysis |
Key Cases Cited
- Lyon v. Chase Bank USA, N.A., 656 F.3d 877 (9th Cir. 2011) (standard for reviewing Rule 12(c) dismissal)
- Siegel v. Fed. Home Loan Mortg. Corp., 143 F.3d 525 (9th Cir. 1998) (standard for reviewing summary judgment)
- Navajo Nation v. Dep’t of the Interior, 876 F.3d 1144 (9th Cir. 2017) (Rule 60(b) relief is extraordinary and disfavored)
- Green v. A.P.C., 960 P.2d 912 (Wash. 1998) (accrual and discovery rule for statute of limitations)
- Shepard v. Holmes, 345 P.3d 786 (Wash. Ct. App. 2014) (public-record constructive notice can trigger accrual)
- W. Wash. Laborers-Emps. Health & Sec. Tr. Fund v. Harold Jordan Co., Inc., 760 P.2d 382 (Wash. Ct. App. 1988) (statute of limitations begins at recording of instrument)
- Brown v. Wash. Dep’t of Com., 359 P.3d 771 (Wash. 2015) (holder-in-possession may enforce a negotiable instrument)
- Deutsche Bank Nat. Tr. Co. v. Slotke, 367 P.3d 600 (Wash. Ct. App. 2016) (holder of the note entitled to enforce it; foreclosure proper)
- Nken v. Holder, 556 U.S. 418 (2009) (stay factors analysis)