Rhonda G. MILLS, Plaintiff, Appellant, v. U.S. BANK, NA, as Trustee for the Lehman XS Trust Mortgage Pass-Through Certificates, Series 2007-4N; OneWest Bank FSB individually and as successor to IndyMac Bank, F.S.B.; Mortgage Electronic Registration Systems, Inc., Defendants, Appellees.
No. 13-1907
United States Court of Appeals, First Circuit.
May 27, 2014.
Furthermore, Robinson makes no effort to show prejudice beyond a general contention that his performanсe was “woeful.” He does not even attempt to argue that he would have performed better or pursued a different trial strategy had he been given more time to prepare to represent himself at trial. Moreover, Robinson‘s performance, while not the polished presentation of an experienced trial attorney, was not atrocious. For example, his cross-examination of Agent Payne was quite effective. He forced Agent Paynе to admit that he relied on a CI who tampered with evidence (i.e., the drugs he bought from Robinson‘s associates) on at least four separate occasions, that he allowed the CI to use a government vehicle even though he knew the CI did not have a driver‘s license, and that he allowed the CI to go into Talu‘s and consume alcohol for two hours before getting behind the wheel of a government vehicle and driving away. Robinson also advanced multiple, nonfrivolous objections at trial, and delivered a cogent closing argument.
At bottom, Robinson‘s conviction is best explained not by any deficiency in his self-representation, but by the mountain of evidence against him. The evidence at trial was overwhelming and included witness testimony, video surveillance, audio recordings of multiple drug sales at Talu‘s and, most damning of all, the transcript and audio recording of the jailhouse interview in which Robinson admitted he was a drug dealer. Robinson‘s conviction hinged not on the trial judge‘s denial of his morning-of-trial request for a continuance, but on the government‘s proof of his own extensive criminal activities.
Based on this record, we are satisfied that Robinson has failed to show he suffered any prejudice whatsoever as a result of the denial of his motion to continue, let alone the type of specific and substantial prejudice that would have been required in order even to arguably entitle him to a new trial.
III.
CONCLUSION
Having thoroughly reviewed the record and the arguments of counsel, we discern no error. The trial judge acted within her discretion in denying both untimely motions to continue. And, although her Faretta warnings could have been more explicit, she did not err when she allowed Robinson to represent himself at trial. That Robinson‘s attempts at delay came to naught and that he now regrets getting exactly what he asked for—the opportunity to represent himself—is no basis for reversal given that the rеcord shows he made the request with his eyes wide open. Accordingly, we affirm Robinson‘s convictions in their entirety.
David G. Thomas, with whom Russell P. Plato and Greenberg Traurig, LLP were on brief, for appellees.
Before LYNCH, Chief Judge, HOWARD and KAYATTA, Circuit Judges.
HOWARD, Circuit Judge.
Following the 2011 foreclosure on her home, plaintiff Rhonda Mills filed this suit against defendants U.S. Bank, N.A. (“U.S. Bank“), OneWest Bank, F.S.B. (“OneWest“), and Mortgage Electronic Registration Systems, Inc. (“MERS“), raising a potpourri of challenges to OneWest‘s authority to foreclose on her property. On appeal from the district court‘s dismissal of her suit for failure to state a claim, Mills primarily takes issue with the district court‘s reliance on our decision in Culhane v. Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir.2013). Finding Culhane to be on point, we affirm.
I.
On October 6, 2006, Mills refinanced her home in Mashpee, Massachusetts, executing an adjustable rate note (the “note“) in favor of MortgageIT, Inc. (“MortgageIT“) for $376,000 and also granting a mortgage to MERS. The mortgage contract identified MortgageIT as the lender and MERS as the mortgagee, “acting solely as a nominee for Lender and Lender‘s successors and assigns.” The mortgage provided MERS with “only legal title” to Mills‘s property, giving it the right to foreclose and sell the property “as nominee for Lender and Lender‘s successors and assigns.”
MERS, as we explained in Culhane, “was formed by a consortium of residential mortgage lenders and investors desiring to streamline the process of transferring ownership of mortgage loans in order to facilitate securitization.” Id. at 287. Joining MERS enables lenders to “nаme MERS as the mortgagee in mortgages that they originate, service, or own.” Id. MERS itself acts solely as a “nominee” for the owner or servicer of a mortgage, giving MERS legal title to the mortgage but leaving it with no beneficial interest in the loan. Id. When a note is sold by one MERS member to another, MERS memorializes the sale in its database but remains the mortgagee of record, thereby avoiding the time and expense of publicly assigning the mortgage to a new noteholder. Id.; see also Butler v. Deutsche Bank Trust Co. Ams., 748 F.3d 28, 32-33 (1st Cir.2014). On the other hand, when a note is sold to a nonmember, MERS assigns the mortgage to the new noteholder or its designee. Culhane, 708 F.3d at 287.
Like Culhane, this case illustrates the function served by MERS. Mills‘s note was sold by MortgageIT on the secondary market and changed hands several times before ultimately being deposited into the Lehman XS Trust, Mortgage Pass-Through Certificates, Series 2007-4N (the “Trust“), of which U.S. Bank was trustee; no corresponding assignments were made of legal title to the mortgage. Mills, meanwhile, began struggling to keep up with her loan payments, and applied to IndyMac, F.S.B. (“IndyMac“), the loan servicer at the time, for a loan modification. IndyMac approved Mills‘s loan modification application in December 2008, and Mills signed, notarized, and returned the modification agreement. Unfortunately for Mills, however, in March 2009 IndyMac was succeeded as loan servicer by OneWest, which failed to honor the modification. On April 23, 2009, MERS executed a document assigning the mortgage to OneWest,
Mills filed this lawsuit on May 23, 2012 in Barnstable Superior Court; the defendants removed the case to the District of Massachusetts a week later. Following the plaintiff‘s submission of an amended complaint, the defendants moved for dismissal for failure to state a claim. On March 28, 2013, the district court granted the defendants’ motions to dismiss and deniеd Mills‘s motion to amend her complaint and add an allegation to her claim under
II.
A. Dismissal
1. Validity of Assignment
Under Massachusetts statute, only “the mortgagee or his executors, administrators, successors or assigns” can exercise a statutory power of sale (which Mills‘s mortgage granted) and foreclose without prior judicial authorization.
Before turning to the merits of Mills‘s claim, we briefly review our prior analysis of the MERS system in Culhane, which, notwithstanding Mills‘s protestations to the contrary, we ultimately conclude is dispositive of this case. In Culhane, we rejected the plaintiff‘s contention that the nominal designation of MERS as holder of the mortgage “was a nullity because MERS never owned the ‘beneficial half of the legal interest’ in the mortgage,” leaving MERS with nothing to assign to the foreclosing entity. 708 F.3d at 291. On the contrary, we concluded that “the MERS framework, which customarily separates the legal interest [in the mortgage] from the beneficial interest [in the underlying debt], corresponds with longstanding common-law principles regarding mortgages.” Id. at 292.
We elaborated that “[t]he mortgage, in a title theory state like Massachusetts, transfers legal title to the mortgaged premises from the mortgagor to the mortgagee for the sole purpose of securing the loan,” leaving the mortgagee with “bare legal title to the mortgaged premises, defeasible upon repayment of thе loan (because the mortgagor owns the equity of redemption).” Id. We noted that under Massachusetts law, a note and the underlying mortgage need not be held by the same party. Id.; see also Eaton v. Fed. Nat‘l Mortg. Ass‘n, 462 Mass. 569, 969 N.E.2d 1118, 1124 (2012). We further explained that the MERS framework, in which the mortgage and note are held by separate entities from the outset, creates an implied equitable trust in which the
Accordingly, we found that “MERS‘s role as mortgagee of record and custodian of the bare legal interest as nominee for the member-noteholder, and the member-noteholder‘s role as owner of the beneficial interest in the loan, fit comfortably with each other and fit comfortably within the structure of Massachusetts mortgage law.” Id. at 293. Our conclusion was bolstered by the terms of the mortgage contract itself, which (identical to the mortgage in this case) designated MERS as the mortgagee “solely as nominee for [the lender] and [its] successors and assigns.” Id. As the lender‘s nominee, MERS held “title for the owner of the beneficial interest,” and was therefore contractually authorized to transfer the mortgage at the direction of the designated loan servicer. Id. In short, MERS validly held legal title to the mortgaged property and was doubly authorized (under both Massachusetts common law and the terms of the mortgage contract) to assign its interest to the foreclosing entity.
Mills‘s argument in this case, though not entirely duplicative of the unsuccessful challenge in Culhane, is a variation on the same theme. Mills focuses primarily on the Massachusetts statute of frauds,
Without specifically addressing this statute of frauds-based argument, the district court found Culhane fatal to Mills‘s claim, citing our pronouncement that the MERS system “fit comfortably within the structure of Massachusetts mortgage law.” We agree with the district court‘s conclusion, and we find that Mills‘s contentions to the contrary rest on a misperception оf the MERS framework.
At the outset, we note that Mills‘s complaint does not allege that the mortgage (which evidences legal title to Mills‘s property) changed hands prior to securitization; instead, Mills‘s allegation is that the note (which evidences the beneficial interest) “was subsequently sold by MortgageIT on the secondary market and earmarked to become, through a series of transfers, part of a mortgage pool deposited into the [Trust].” This is hardly surprising, since MERS‘s very raison d‘être “is its ability to remain mortgagee of record, possessing a legal interest in a homeowner‘s mortgage, while the beneficial interest in the accompanying note is transferred among MERS‘s member institutions.” Butler, 748 F.3d at 33. Given the separability of the mortgage and note under Massachusetts law, see Eaton, 969 N.E.2d at 1124, the transfer of the promissory note between MERS members does not affect legal title to the mort-
Mills‘s statute of frauds-based argument, while less than a paragon of lucidity, appears to follow a narrower track than the broad challenges that we rejected in Culhane, Woods, and Butler. Rather than resting on the erroneous premise that the transfer of the note entails a corresponding transfer of the separately-held mortgage as a matter of law, Mills scrutinizes the language of the mortgage contract in an apparent attempt to demonstrate that it did not in fact grant MERS legal title to the property. Specifically, Mills alleges that there is a “strident ambiguity” as to whether MERS is an “actual mortgagee” (i.e., “owner of legal title to the secured property“) or merely “act[ing] in a representative capacity on behalf of the actual owner” of legal title. As we have recounted, the mortgage contract established MERS as mortgagee while also describing MERS as “acting solely as a nominee for Lender and Lender‘s successors and assigns.” Mills claims that these provisions “place[] MERS in the impossible position of being both рrincipal and agent with regard to the same mortgage at the same time.”
Proceeding on the theory that MERS acted solely as an agent of the successive noteholders with no legal title to the property, Mills suggests that each intermediary transfer of the promissory note entailed a change of principals and thus a transfer of the mortgage from one principal to the next. Because these intermediary transfers were not recorded, continuеs the argument, the mortgage failed to move down the chain of principals. Any subsequent assignment by MERS on behalf of a principal who did not in fact validly receive title to the mortgage, Mills concludes, “becomes a fraudulent act, the recording of which is not only meaningless but an affront to the democratic recording system.”2
We decline Mills‘s invitation to revisit our still-recent precedent. Contrary to Mills‘s claim of “strident ambiguity” as to MERS‘s status under the mortgage contract, Culhane makes cleаr that MERS validly serves both as the holder of “bare legal title as mortgagee of record” and as “nominee for the member-noteholder.” 708 F.3d at 291, 293; see also Culhane v. Aurora Loan Servs. of Neb., 826 F.Supp.2d 352, 369 (D.Mass.2011) (“[T]he notion that MERS is pejoratively ‘two-faced’ [as ‘both principal and agent‘] derives from a legal premise that is faulty in its understanding of MERS‘s interest in the mortgage.“). MERS‘s designation as nominee means that it “holds title for the owner of the beneficial interest,” not, as Mills appears to suggest, that it lacks title altogether. Culhane, 708 F.3d at 293; cf. Morrison v. Lennett, 415 Mass. 857, 616 N.E.2d 92, 94 (1993) (“A nominee trust is often used tо hold legal title to real estate so that the identity of the trust beneficiary may remain undisclosed.“); Black‘s Law Dictionary 1149 (9th ed.2009) (defining “nominee” as “[a] party who holds bare legal title for the benefit of others“). Because legal title to the mortgage remained vested in MERS and not in the noteholder, the intermediary transfers of the note in no way undermined the subsequent assignment of the mortgage from MERS to OneWest. See In re Marron, 455 B.R. at 7 (“Through all of these transfers [of the promissory note] right up until it finally assigned the mortgage to HSBC, MERS remained the mortgagee in its capacity as trustee and as nominee for whomever happened to own the note.“).
2. Mass. Gen. Laws ch. 183, § 54B
Mills also avers that the assignment of her mortgage from MERS to OneWest ran afoul of
[An] assignment of mortgage . . . if executed before a notary public . . . by a person purporting to hold the position of president, vice president, treasurer, clerk, secretary, cashier, loan representative, principal, investment, mortgage or other officer, agent, asset manager, or other similar office or position, including assistant to any such office or position, of the entity holding such mortgage, or otherwise purporting to be an authorized signatory for such entity . . . shall be binding upon such entity and shall be entitled to be recorded. . . .
Mills claims that the statute “was misread and misapplied in such a way as to allow the non-holder of a mortgage to foreclose merely by having its agent ‘purport’ to act on their behalf.” Once again, her positiоn is foreclosed by Culhane, where we described the plaintiff‘s claim that “MERS was not the ‘entity holding such mortgage’ within the purview of section 54B” as “simply an old wine in a new bottle,” premised on the already-refuted proposition that MERS did not validly hold the mortgage. 708 F.3d at 294. Mills‘s argument is of the same spoiled vintage as that in Culhane; here, too, we
3. Miscellany
As a secondary challenge, Mills appears to suggest in the rather murky closing pages of her opening brief that OneWest may not “have been servicing the mortgage on the Trust‘s behalf.” Only in her reply brief and at oral argument did Mills develop this argument into the more cogent argument that OneWest lacked authority to foreclose because it “did not own the note at the time of foreclosure.” Mills has failed, however, to sufficiently unfold this argument on appeal. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir.1990) (“[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at dеveloped argumentation, are deemed waived.“); Pignons S.A. de Mecanique v. Polaroid Corp., 701 F.2d 1, 3 (1st Cir.1983) (“[A]ppellant generally may not preserve a claim merely by referring to it in a reply brief or at oral argument.“)4.
We also treat as waived the plethora of additional embryonic arguments that Mills raises at the end of her opening brief and in portions of her reply brief, including perfunctory contentions that the mortgage loan was “toxic, predatory, and doomed to fail“; that “the securitization was not dоne in compliance with the trust agreements or New York law“; and that the assignment from MERS to OneWest was “signed by a known robosigner.” See Zannino, 895 F.2d at 17.
B. Leave to Amend
Mills also challenges the district court‘s denial of her motion to amend her complaint and add an allegation that she sent a demand letter to the defendants pursuant to her claim under
C. Submission of Newly Discovered Evidence
Mills finally assigns error to the district court‘s failure to rule on her motion—filed mere hours before the district court issued its dismissal order—to submit newly discovered evidencе. In her opening brief, however, Mills alluded only in passing to “the newly discovered evidence of material discrepancies in both the assignment and the promissory note,” and did not develop this argument until her reply. It is accordingly waived. See Zannino, 895 F.2d at 17; Pignons S.A. de Mecanique v. Polaroid Corp., 701 F.2d at 3.6
III.
For the foregoing reasons, we affirm the district court‘s order granting the defendants’ motion to dismiss and denying Mills‘s motion to amend her complaint.
Notes
In the MERS model, MERS is the agent for the originating lender, A. As such, assuming it has the authority to do so, MERS may transfer the mortgage from A to B. But that transfer is of an interest in land, and there must still [be] a writing . . . signed by the party to be bound in order to have any legal effect. And even though MERS may also act as B‘s agent, it cannot transfer the mortgage from B to C unless and until there has been a valid written assignmеnt from A to B—that is to say, without a valid assignment from A to B there is nothing for MERS to assign on behalf of B even though there is an agency relationship between MERS and B.