Obal v. Deutsche Bank National Trust Company

Nov 3, 2016
15-775
Versions:

was insufficient because it did not prove which specific invoices were unpaid.

However, the NYUCC imposes no such requirement. To the contrary, the NYUCC provides that a party accepting goods pursuant to a contract is obligated to pay the contract price. See N.Y.U.C.C. § 2-607(1). The district court correctly concluded that Aceco failed to effectively reject the goods and thus accepted them. It would make no difference which invoices were paid and which were unpaid, as Shaoxing is entitled to recover the full balance due. See id. § 2-709(1); cf. Bank of Cal. v. Webb, 94 N.Y. 467, 473 (1884) (noting that, where plaintiffs were entitled to recover full amount of debt, “it could make no legal difference with the defendants how the payments were applied“). The formalistic requirement that Aceco seeks to impose is not only without support in precedent, it contravenes the express purposes of the NYUCC. See N.Y.U.C.C. § 1-305(a) (“The remedies provided by this act must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed....“); id. § 1-305 cmt.1 (“Compensatory damages are often at best approximate: they have to be proved with whatever definiteness and accuracy the facts permit, but no more.“). Accordingly, we reject Aceco‘s argument that Shaoxing was required to allocate each payment to a specific invoice.

Aceco also argues that the district court ignored evidence that Shaoxing shipped Aceco defective goods and invoiced Aceco for goods that it neither ordered nor received. This contention is belied by the record. The district court expressly considered the evidence that Aceco submitted in support of these contentions and found it not to be credible. In light of Aceco‘s failure to submit any substantial documentary evidence and the vague and evasive testimony of its witnesses, this finding was not clearly erroneous.

We have considered all of Aceco‘s remaining arguments and find them to be without merit. For the reasons given, we AFFIRM the judgment of the district court.

FOR APPELLANT: David Obal, pro se, Henderson, NV.

FOR APPELLEES: Lisa J. Fried and Heather R. Gushue, Hogan Lovells US LLP, New York, NY; and Chava Brandriss, Hogan Lovells US LLP, Washington, DC.

PRESENT: ROBERT A. KATZMANN, Chief Judge, RALPH K. WINTER, RICHARD C. WESLEY, Circuit Judges.

SUMMARY ORDER

Appellant David Obal, proceeding pro se, appeals from the district court‘s dismissal of his complaint against two financial institutions. His complaint sought, among other remedies, damages and a declaratory judgment invalidating an assignment that transferred ownership of his residential mortgage loan to defendant Deutsche Bank National Trust Company (“Deutsche Bank“) as trustee for a Morgan Stanley Mortgage Loan Trust (the “Trust“). The district court granted defendants’ motion to dismiss Obal‘s amended complaint for lack of subject matter jurisdiction, reasoning primarily that Obal lacked standing to challenge the assignment. We assume the parties’ familiarity with the underlying facts, the procedural history of the case, and the issues on appeal.

We review de novo a district court‘s determination that a plaintiff lacked standing to sue. See Rajamin v. Deutsche Bank Nat‘l Tr. Co., 757 F.3d 79, 84-85 (2d Cir. 2014). “The question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues,” and it implicates “both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.” Id. at 84 (internal quotation marks and brackets omitted). Here, Obal lacked both constitutional and prudential standing to challenge either the validity of the assignment of his mortgage loan or the assignment‘s compliance with laws, regulations, and the Trust‘s prospectus and pooling and servicing agreement.

To have standing under Article III of the Constitution, “a plaintiff must have suffered an injury in fact which is (a) concrete and particularized, ... and (b) actual or imminent, not conjectural or hypothetical.” Id. at 85 (alteration in original) (internal quotation marks omitted). Upon review, we agree with the district court that Obal alleged only injuries that are “highly implausible” and “entirely hypothetical,” id. and therefore fail to meet the constitutional standing requirements. For example, Obal‘s claim that the improper transfer of his debt deprived him “of the opportunity to explore options with the true debt owner,” relies on too speculative an injury to serve as a basis for Article III standing. Consequently, we find that Obal lacked constitutional standing to bring a challenge to Deutsche Bank‘s ownership of his debt based on the alleged invalidity of the assignment.

Moreover, even if Obal had constitutional standing to challenge the validity of the assignment, he would have lacked prudential standing. “The prudential standing rule ... normally bars litigants from asserting the rights or legal interests of others in order to obtain relief from injury to themselves.” id. at 86 (alteration in original) (internal quotation marks omitted). To satisfy the prudential standing requirement, “the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.” Id. (internal quotation marks and brackets omitted). Obal lacks prudential standing to assert his claims against defendants because his theories are largely premised on injuries to third parties, such as intended beneficiaries of the Trust.

Obal also challenges the district court‘s denial of leave to further amend his complaint. We review such a denial for abuse of discretion. See In re Lehman Bros. Mortgage-Backed Sec. Litig., 650 F.3d 167, 188 (2d Cir. 2011). Here, in light of the issues discussed above, the district court did not abuse its discretion in finding that repleading would have been futile. See Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000).

We have considered Obal‘s remaining arguments and find them to be without merit. Accordingly, we AFFIRM the judgment of the district court.

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