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Puryer v. HSBC Bank USA, N.A.

Supreme Court of Montana

May 18, 2018

SINDA PURYER, Plaintiff and Appellant,
v.
HSBC BANK USA, NATIONAL ASSOCIATION AS Trustee for the holders of Ace Securities Corp. Home Equity Loan Trust, Asset Backed Pass-Through Certificates, series 2006-CW1, The registered holders of Ace Securities Corp. Home Equity Loan Trust, Series 2006-CW1, Ace Security Corp. Home Equity Loan Trust, Series 2006-CW1, Asset Backed Pass-Through Certificates, series 2006-CW1, HSBC MORTGAGE CORPORATION (USA), and NATIONSTAR MORTGAGE, LLC, Defendants and Appellees.

          Submitted on Briefs: March 7, 2018

          APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 16-879(A) Honorable Dan Wilson, Presiding Judge

          For Appellant: Evan F. Danno, Danno Law Firm, P.C., Kalispell, Montana

          For Appellees: Mark D. Etchart, Browning, Kaleczyc, Berry & Hoven, P.C., Helena, Montana

          OPINION

          INGRID GUSTAFSON JUSTICE

         ¶1 Sinda Puryer (Puryer) appeals a May 25, 2017 order of the Eleventh Judicial District Court, Flathead County, dismissing her Amended Complaint against HSBC BANK USA, National Association as Trustee for the holders of Ace Securities Corp. Home Equity Loan Trust, Asset Backed Pass-Through Certificates, series 2006-CW1, The registered holders of Ace Securities Corp. Home Equity Loan Trust, Series 2006-CW1, Ace Securities Corp. Home Equity Loan Trust, Series 2006-CW1, Asset Backed Pass-through Certificates, series 2006-CW1, HSBC Mortgage Corporation (USA), and Nationstar Mortgage LLC (collectively, Lenders).

         ¶2 We restate the issue on appeal as follows:

         Did the District Court err by granting Lenders' Motion to Dismiss pursuant to M. R. Civ. P. 12(b)(6)?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶3 On March 27, 2006, Puryer obtained a $285, 750 loan (the Loan) on real property located at 244 Wintercrest Drive in Kalispell, Montana. The Loan was secured by a Deed of Trust on the property from America's Wholesale Lender. The Deed of Trust identified Puryer as the borrower, America's Wholesale Lender as the original lender, Charles J. Peterson as the Trustee, and Mortgage Electronic Registration Systems, Inc. as the "nominee for Lender and Lender's successors and assigns . . . a beneficiary under this Security Instrument." On December 3, 2009, the Deed of Trust was assigned to HSBC Bank USA as trustee for the holders of Ace Securities Corp. Home Equity Loan Trust, Asset Backed Pass-Through Certificates, series 2006-CW1. On December 12, 2011, the Deed of Trust was assigned to Bank of America, N.A. On October 15, 2012, the Deed of Trust was assigned back to HSBC.

         ¶4 Due to financial difficulties, Puryer contacted Bank of America for assistance to modify her monthly mortgage payments. Puryer alleged Bank of America told her to stop making her monthly mortgage payment to qualify her for the Home Affordable Modification Program (HAMP).[1] Puryer alleged based on this advice she stopped making her monthly mortgage payments; however, Puryer never qualified for the HAMP. Her last mortgage payment was on October 1, 2007. Puryer has not made any payments on the Loan since October 1, 2007, and she admits she defaulted on the Loan on November 1, 2007. However, she continues to reside on the property.

         ¶5 Since Puryer defaulted on the loan, she has received at least nine Notices of Sale. Puryer received the first Notice of Sale on July 10, 2008, and the last on July 5, 2016. The Notices of Sale contained similar language, which Puryer alleged accelerated all amounts due under the Loan and Deed of Trust. For example, the last Notice of Sale, issued on July 5, 2016, stated the following:

The beneficiary has declared a default in the terms of said Deed of Trust by failing to make the monthly payments due in the amount of $1, 962.12, beginning November 1, 2007, and each month subsequent, which monthly installments would have been applied on the principal and interest due on said obligation and other charges against the property or loan. The total amount due on this obligation as of July 15, 2016 is $255, 563.04 principal, interest at a rate of 8.35000% totaling $193, 193.35, late charges in the amount of $2, 164.80, escrow advances of $34, 841.35, and other fees and expenses.

         Each Notice of Sale was later cancelled and no foreclosure sale took place.

         ¶6 The Deed of Trust contained provisions requiring notice to Puryer prior to accelerating the Loan if default was not cured. The Deed of Trust provided the following:

Acceleration Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument . . . The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law.

         The Deed of Trust then provided that if the lender invokes the power of sale, lender must notify the trustee and then the trustee or lender can record a notice of sale. It is undisputed that no notice was provided by Lenders to Puryer as required by the Deed of Trust. The Deed of Trust provided the maturity date as April 1, 2036.

         ¶7 Initially, Puryer, appearing pro se, filed a complaint on October 27, 2016. On March 3, 2017, Puryer filed an Amended Complaint. In the Amended Complaint, Puryer alleged six causes of action against Lenders. These causes of action included:

(1) declaratory judgment; (2) breach of contract and breach of the implied covenant of good faith and fair dealing; (3) violation of the Fair Debt Collection Practices Act (FDCPA); (4) violation of the Montana Consumer Protection Act (MCPA); (5) negligent or intentional infliction of emotional distress; and (6) lack of authority to foreclose. On March 20, 2017, Lenders moved to dismiss the Amended Complaint pursuant to M. R. Civ. P. 12(b)(6).

         ¶8 On May 25, 2017, the District Court granted Lenders' motion to dismiss. The District Court determined the following: (1) declaratory judgment is improper because the Notices of Sale did not accelerate the maturity date; therefore, the statute of limitations was not triggered by the first Notice of Sale; (2) securitization of the Loan does not invalidate the Deed of Trust; (3) Puryer did not suffer any actual damages from any breach of contract; (4) no special relationship existed to assert a breach of good faith and fair dealing with the named parties, [2] (5) Lenders do not meet the definition of a debt collector under the FDCPA; (6) litigation costs are not sufficient to satisfy the ascertainable loss element under the MCPA; (7) no factual basis existed for a claim of negligent and/or intentional infliction of emotional distress; and (8) lack of authority to foreclose is not a recognized claim.[3] Puryer timely appeals.

         STANDARD OF REVIEW

         ¶9 We review a district court's ruling on a motion to dismiss de novo, using the standards set forth in M. R. Civ. P. 12(b)(6). A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts which would entitle her to relief. A district court's determination that a complaint has failed to state a claim for which relief can be granted is a conclusion of law which we review for correctness. Victory Ins. Co. v. Mont. State Fund, 2015 MT 82, ¶ 11, 378 Mont. 388, 344 P.3d 977 (citations omitted).

         ¶10 A motion to dismiss under M. R. Civ. P. 12(b)(6) has the effect of admitting all well-pleaded allegations in the complaint. In considering the motion, the complaint is construed in the light most favorable to the plaintiff, and all allegations of fact contained therein are taken as true. Dismissal is proper under M. R. Civ. P. 12(b)(6) if the plaintiff would not be entitled to relief based on any set of facts that could be proven to support the ...


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