NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT JUN 12 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
In re: MORTGAGE ELECTRONIC No. 12-16449
REGISTRATION SYSTEMS, INC.,
D.C. No. 2:09-md-02119-JAT
LADY JENNIFER BARONE,
MEMORANDUM*
Plaintiff - Appellant,
v.
MERSCORP, INC.; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Arizona
James A. Teilborg, Senior District Judge, Presiding
Submitted November 8, 2013**
San Francisco, California
Before: TASHIMA, W. FLETCHER, and NGUYEN, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Appellant Lady Barone challenges the district court’s dismissal of her
claims. We review dismissal for failure to state a claim de novo, Akhtar v. Mesa,
698 F.3d 1202, 1212 (9th Cir. 2012), and reverse in part and affirm in part.
Appellant’s claims were dismissed, in the first instance, because they were
premised on the erroneous legal theory that assignments of the deed within the
Mortgage Electronic Registration System (“MERS”) were invalid under Arizona
law because the note was “split” from the deed. That theory was rejected by our
holding that, under Arizona law, “the split only renders the mortgage
unenforceable if MERS or the trustee, as nominal holders of the deeds, are not
agents of the lenders.” Cervantes v. Countrywide Home Loans, 656 F.3d 1034,
1044 (9th Cir. 2011). Seizing on this language, Barone maintains she has alleged
the trustee was not an authorized agent of the lender. The district court correctly
declined to accept that legal conclusion, which is unsupported by alleged facts, and
contradicted by the clear language on the face of the deed itself (which was
attached to Barone’s pleading). Fed. R. Civ. P. 12(b)(6); Papasan v. Allain, 478
U.S. 265, 286 (1986).
The district court also correctly noted, with respect to Barone’s claim for
wrongful foreclosure, that this tort is unrecognized in Arizona. Cervantes, 656
F.3d at 1043. And, even assuming it were a viable theory, it does not appear from
2
the record that Barone can, in good faith, allege satisfaction of the traditional
prerequisite, adopted by other states, that any default must be formally cured.
Because these defects cannot be cured by further amendment, the district court
properly denied leave to amend as futile. Eminence Capital, LLC v. Aspeon, Inc.,
316 F.3d 1048, 1051–52 (9th Cir. 2003).
The district court erred, however, in dismissing Barone’s claim for recording
false documents, under Arizona Revised Statutes § 33-420. The court held that the
statute does not apply to assignments that do not originate a new property interest,
but Stauffer v. U.S. Bank National Ass’n, 308 P.3d 1173, 1175 (Ariz. Ct. App.
2013), holds, to the contrary, that section 33-420 applies to notices of substitution
of trustee, and assignments of deeds. Alternatively, the court held that Barone
lacked standing to assert a claim; but, the Arizona courts have rejected that
argument as well. Sitton v. Deutsche Bank Trust Co., 311 P.3d 237, 241 (Ariz. Ct.
App. 2013); see also In re Mortgage Elec. Registration Sys., Inc., No. 11-17615,
Slip op. at 18, 20. We therefore reverse the dismissal of Barone’s false documents
claim and remand to the district court for further proceedings.
Each side to bear its own costs on appeal.
AFFIRMED IN PART; AND REVERSED AND REMANDED IN
PART.
3