Sechler v. U.S. Bank NA

U.S. Court of Appeals for the Fifth Circuit October 13, 2023

Opinion

Case: 23-60103 Document: 00516931397 Page: 1 Date Filed: 10/13/2023

United States Court of Appeals
for the Fifth Circuit
____________ United States Court of Appeals
Fifth Circuit

No. 23-60103 FILED
October 13, 2023
____________
Lyle W. Cayce
Christopher L. Sechler; Susan R. Sechler, Clerk

Plaintiffs—Appellants,

versus

U.S. Bank National Association, Trustee for Truman 2016
SC6 Title Trust,

Defendant—Appellee.
______________________________

Appeal from the United States District Court
for the Northern District of Mississippi
USDC No. 3:22-CV-198
______________________________

Before Elrod, Oldham, and Wilson, Circuit Judges.
Per Curiam: ∗
This dispute arises out of a foreclosure on the Sechlers’ home after
they failed to pay their mortgage payments for over seven years. The
Sechlers brought a wrongful foreclosure complaint against U.S. Bank
National Association, alleging that the Deed of Trust by which U.S. Bank
asserts its foreclosure rights is void. U.S. Bank filed a motion to dismiss for

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∗
This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-60103 Document: 00516931397 Page: 2 Date Filed: 10/13/2023

No. 23-60103

failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6),
which the district court granted. For the reasons below, we AFFIRM.
I
The Deed of Trust attached to the Sechlers’ mortgage underwent
several assignments. At the end of this chain of assignments comes U.S.
Bank, the appellee in this case. U.S. Bank also holds the Promissory Note.
Because of the Sechlers’ failure to pay their mortgage, U.S. Bank foreclosed
on their home.
The Sechlers then filed suit and brought a wrongful foreclosure claim.
The Sechlers’ primary argument is that there were issues with the
assignment of the Deed of Trust and therefore U.S. Bank cannot foreclose.
U.S. Bank then moved to dismiss pursuant to Rule 12(b)(6). U.S. Bank
argued that because it holds the Promissory Note it had the right to foreclose
even if there were issues with the assignment of the Deed of Trust. The
district court agreed with U.S. Bank and granted its motion to dismiss. The
district court also determined that the Sechlers lacked prudential standing to
bring the wrongful foreclosure claim. The Sechlers appealed.
II
We review the grant of a motion to dismiss under Rule 12(b)(6) de
novo, “accepting all well-pleaded facts as true and viewing those facts in the
light more favorable to the plaintiffs.” Dorsey v. Portfolio Equities, Inc.,

540 F.3d 333, 338

 (5th Cir. 2008) (quotation omitted). A complaint must plead
   enough “factual content that allows the court to draw the reasonable
   inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
   Iqbal,

556 U.S. 662, 678

 (2009).




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                                    No. 23-60103


                                         III
          On appeal, the Sechlers argue that (1) they do in fact have prudential
   standing to bring the wrongful foreclosure claim; (2) U.S. Bank cannot
   foreclose, because there were alleged issues with the assignment of the Deed
   of Trust; (3) the statute of limitations under which U.S. Bank could bring its
   foreclosure claim has passed (4) they were not in default because of an alleged
   loan modification.
          The Sechlers lack prudential standing to bring a wrongful foreclosure
   claim. “[P]rudential standing does not present a jurisdictional question, but
   a merits question: who, according to the governing substantive law, is entitled
   to enforce the right?” Abraugh v. Altimus,

26 F.4th 298, 304

 (5th Cir. 2022)
   (quotation omitted). Essentially, the Sechlers lack a valid cause of action.
   See

id.

 We have observed, “Mississippi case law holds that when an obligor
   defaults, the trustee of the deed may foreclose, and the obligor lacks standing
   to pursue a wrongful foreclosure claim.” Helmert v. Cenlar FSB,

802 F. App’x 125

, 127–28 (5th Cir. 2020) (holding that the plaintiff lacked standing
   to pursue a wrongful foreclosure claim, despite his arguments that the deed
   was improperly assigned); see Peoples Bank & Tr. Co. & Bank of Miss. v. L & T
   Devs., Inc.,

434 So. 2d 699, 708

 (Miss. 1983), judgment corrected,

437 So. 2d 7

   (Miss. 1983); see also Patton v. Am. Home. Mortg. Servicing, Inc., No.
   1:11CV420-HSO-RHW,

2013 WL 1310560

, at *4 (S.D. Miss. Mar. 28, 2013)
   (“Plaintiff’s responsibilities under the Deed of Trust and Note remained
   unchanged regardless of any assignments of these instruments.”). Because
   the Sechlers do not dispute that they have failed to make any mortgage
   payments in over seven years, which puts them in default of the Promissory
   Note, the district court correctly determined they lack prudential standing to
   bring a wrongful foreclosure claim.




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                                           No. 23-60103


           The Sechlers argue that there were some issues with the assignments
   of the Deed of Trust, and because of those issues, U.S. Bank cannot foreclose
   on their home. However, the Sechlers fail to cite any case law to support
   their proposition. In fact, the case law suggests otherwise: in Applewhite v.
   Carrington Mortgage Services, LLC, for example, the court stated that
   “[t]here is no express provision requiring assignment of the Deed of Trust
   under Mississippi law and this court declines to impose such a
   requirement. . . . [T]his court sees no limitations on the holder of the Note
   enforcing the Deed of Trust that was never assigned.” No 1:13CVV83-NBB,

2014 WL 1291806

, at *3 (N.D. Miss. Mar. 31, 2014). Therefore, as the
   district court correctly determined, as long as U.S. Bank holds the
   Promissory Note, it has the ability to enforce the Deed of Trust and foreclose
   under Mississippi law.
           The Sechlers also claim that the statute of limitations, which is six
   years for U.S. Bank to bring a foreclosure action, has passed. 1 However,
   under Mississippi law, the statute of limitations runs “from and after the
   maturity date of the last note or installment.”

Miss. Code Ann. § 89-5-19

. The Deed of Trust and the Promissory Note reflect a maturity
   date of March 1, 2023. Therefore, the statute of limitations has not run.
           Finally, the Sechlers argue for the first time on appeal that they were
   not in default of the loan because a previous loan agent, from a predecessor
   to U.S. Bank, agreed with them to a loan modification. Again, this court does
   not “ordinarily consider issues that are forfeited because they are raised for
   the first time on appeal.” Rollins, 8 F.4th at 398. Accordingly, because the

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           1
             On appeal, for the first time, the Sechlers argue that a previous lender accelerated
   the loan (and that they can prove as such) and therefore the statute of limitations did in fact
   run. This court does not consider issues first raised on appeal. See Rollins v. Home Depot
   USA,

8 F.4th 393, 398

 (5th Cir. 2021).



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   Sechlers brief this argument for the first time on appeal, this court does not
   consider it. See

id.

                                        IV
          The judgement of the district court is AFFIRMED.




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Reference

Status: Unpublished