FILED
NOT FOR PUBLICATION
MAR 27 2020
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
EDWARD HURT, No. 18-16515
Plaintiff-Appellant, D.C. No. 2:17-cv-01122-JAD-CWH
v.
DEUTSCHE BANK NATIONAL TRUST MEMORANDUM*
COMPANY, as Trustee for IXIS Real
Estate Capital Trust 2005-HE3 Mortgage
Pass Through Certificates, Series 2005-
HE3,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Nevada
Jennifer A. Dorsey, District Judge, Presiding
Submitted March 23, 2020**
Las Vegas, Nevada
Before: W. FLETCHER, BYBEE, and WATFORD, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Edward Hurt appeals the dismissal of his claims against Deutsche Bank
National Trust Company (“DBNTC”) based on non-party Deutsche Bank AG’s
manipulation of the London Interbank Offered Rate (“LIBOR”). We affirm.
In 2005, Hurt purchased a home in Las Vegas, Nevada, with a loan secured
by a deed of trust held by Lime Financial Services, Ltd. The deed of trust included
an adjustable rate rider tied to the LIBOR. Lime assigned the deed of trust to a real
estate trust for which DBNTC serves as trustee. On at least three occasions since
2005, Hurt has become delinquent on his payments under the deed of trust, and
DBNTC or its predecessors in interest have initiated foreclosure proceedings
against him, most recently in January 2017.
Hurt filed this action in April 2017 alleging that “Deutsche Bank”
fraudulently induced him to enter into the deed of trust and demanded interest
payments based on the LIBOR while manipulating the LIBOR for its own benefit.
As the sole basis for this allegation, Hurt cited an order of the Commodities
Futures Trading Commission (“CFTC”) that found that Deutsche Bank AG had
engaged in misconduct designed to influence financial benchmarks including the
LIBOR. Deutsche Bank AG is the parent corporation of DBNTC. The CFTC
order does not refer to or otherwise implicate DBNTC in misconduct related to the
LIBOR.
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The district court held that Hurt had failed to state a plausible claim against
DBNTC because he did not identify any connection between DBNTC and
Deutsche Bank AG’s misconduct. It therefore dismissed his first amended
complaint without leave to amend. On appeal, Hurt argues that he could have
cured any defect in his complaint by alleging that DBNTC knew or should have
known of Deutsche Bank AG’s misconduct because Deutsche Bank AG is
DBNTC’s parent corporation.
We agree with the district court that Hurt has failed to state a plausible claim
for relief against DBNTC and that any further amendment would be futile. “A
basic tenet of American corporate law is that the corporation and its shareholders
are distinct entities.” Ranza v. Nike, Inc., 793 F.3d 1059, 1070 (9th Cir. 2015)
(quoting Dole Food Co. v. Patrickson, 538 U.S. 468, 474 (2003)). “[T]he mere
fact that there exists a parent–subsidiary relationship between two corporations
[does not] make the one liable for the torts of its affiliate.” United States v.
Bestfoods, 524 U.S. 51, 61 (1998) (quoting 1 Fletcher Cyclopedia of Private
Corporations § 33 (rev. ed. 1990)). Hurt offers nothing more than this relationship
to tie DBNTC to any alleged LIBOR manipulation.
We also reject Hurt’s argument that DBNTC failed to provide Hurt with an
accurate statement of “[t]he amount in default,” Nev. Rev. Stat.
3
§ 107.0805(1)(b)(3), before initiating foreclosure proceedings because it based its
interest rate calculations on the published LIBOR rather than what the LIBOR
might have been absent manipulation by third-party banks. The deed of trust
required the interest rate to be set based on the LIBOR six-month index as
published in The Wall Street Journal. DBNTC complied with that requirement.
AFFIRMED.
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