West Maui Properties v. Deutsche Bank Trust Company
17-1112
| 10th Cir. | Dec 14, 2017Background
- Property at 305 Kainoe St., Lahaina, HI; Randolph Currier obtained a 2006 mortgage and later defaulted; Aurora foreclosed, acquired the deed, and assigned it to Deutsche Bank.
- On Nov. 12, 2015 West Maui Properties (via a letter signed by Currier) sent Nationstar an offer asserting it would obtain the loan for $50,000 and enclosed a $7,000 cashier’s check.
- Nationstar deposited the $7,000 check and sent acknowledgment letters promising further response but never consummated any transfer.
- West Maui sued (breach of contract, breach of implied covenant, declaratory relief), alleging the letter plus deposit constituted a valid offer and acceptance, giving it a 14% interest and a path to full ownership after paying the remaining $43,000.
- Defendants moved to dismiss under Rule 12(b)(6), arguing no definite contract existed and the mortgage had been extinguished by prior foreclosure. The district court dismissed with prejudice.
- On appeal the Tenth Circuit affirmed, holding the alleged offer was too indefinite, there was no plausible acceptance, and amendment would not cure the defects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a contract (offer) existed | West Maui: Nov. 12 letter plus $7,000 check was an offer to buy the mortgage/property for $50,000 with $43,000 at closing | Nationstar/Deutsche Bank: terms were vague, unclear what was being sold or who the parties were; mortgage already foreclosed | No contract: offer not sufficiently definite or certain |
| Whether defendants accepted the offer | West Maui: deposit of the $7,000 check constituted acceptance (or conduct/silence) | Defendants: acknowledgment letters did not accept or reference the offer; deposit explained by other account reasons | No acceptance: no objective manifestation of acceptance and no basis for acceptance by silence |
| Whether the mortgage remained subject to sale | West Maui: sale to Deutsche Bank after foreclosure shows mortgage not extinguished | Defendants: foreclosure had extinguished mortgage; sale of an extinguished instrument doesn’t revive it | Mortgage was extinguished by foreclosure; not available to be sold |
| Whether dismissal should be with prejudice | West Maui: dismissal should be without prejudice to amend | Defendants: complaint fundamental defects; amendment futile | With prejudice: amendment would not cure the substantive defects |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of plausibility standard)
- Khalik v. United Air Lines, 671 F.3d 1188 (10th Cir. 2012) (12(b)(6) review and pleading standard)
- W. Distrib. Co. v. Diodosio, 841 P.2d 1053 (Colo. 1992) (elements of breach of contract under Colorado law)
- Marquardt v. Perry, 200 P.3d 1126 (Colo. App. 2008) (objective manifestation test for acceptance)
- Haberl v. Bigelow, 855 P.2d 1368 (Colo. 1993) (acceptance by silence where duty to reply exists)
- Curley v. Perry, 246 F.3d 1278 (10th Cir. 2001) (futility of amendment standard on dismissal)