683 Fed.Appx. 715 (10th Cir. 2017), 16-4035, Koyle v. Sand Canyon Corp.

Docket Nº:16-4035
Citation:683 Fed.Appx. 715
Opinion Judge:Mary Beck Briscoe, Circuit Judge.
Party Name:SHERWIN V. KOYLE, Plaintiff - Appellant, v. SAND CANYON CORPORATION; WELLS FARGO BANK NATIONAL ASSOCIATION, Defendants - Appellees
Attorney:For SHERWIN V. KOYLE, Plaintiff - Appellant: Russell Cline, Esq., Crippen & Cline, Salt Lake City, UT. For SAND CANYON CORPORATION, WELLS FARGO BANK NATIONAL ASSOCIATION, Defendants - Appellees: Emilie K. Edling, Houser & Allison, Portland, OR; Jacob S. Smith, Houser & Allison, Las Vegas, NV.
Judge Panel:Before KELLY, BRISCOE and LUCERO, Circuit Judges.
Case Date:March 31, 2017
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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683 Fed.Appx. 715 (10th Cir. 2017)

SHERWIN V. KOYLE, Plaintiff - Appellant,

v.

SAND CANYON CORPORATION; WELLS FARGO BANK NATIONAL ASSOCIATION, Defendants - Appellees

No. 16-4035

United States Court of Appeals, Tenth Circuit

March 31, 2017

Editorial Note:

UNPUBLISHED OPINION

(D.C. No. 2:15-CV-00239-DBP) (D. Utah).

Koyle v. Sand Canyon Corp., (D. Utah, Mar. 8, 2016)

For SHERWIN V. KOYLE, Plaintiff - Appellant: Russell Cline, Esq., Crippen & Cline, Salt Lake City, UT.

For SAND CANYON CORPORATION, WELLS FARGO BANK NATIONAL ASSOCIATION, Defendants - Appellees: Emilie K. Edling, Houser & Allison, Portland, OR; Jacob S. Smith, Houser & Allison, Las Vegas, NV.

Before KELLY, BRISCOE and LUCERO, Circuit Judges.

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ORDER AND JUDGMENT [*]

Mary Beck Briscoe, Circuit Judge.

Sherwin Koyle, the plaintiff in this diversity action, appeals the district court's grant of summary judgment in favor of defendants Sand Canyon Corporation and Wells Fargo Bank National Association on Koyle's claims under Utah state law challenging defendants' attempts to foreclose on a deed of trust that secured Koyle's obligations under a corresponding note. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the judgment of the district court.

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I

Koyle's execution of the Note

On February 7, 2003, Koyle executed an adjustable rate note (Note) in the amount of $139,400, and a Deed of Trust encumbering a parcel of real estate located at 389 E. 1090 N. in the Mountain Green Subdivision of Orem, Utah (the Property). The TLP Funding Corporation (TLP) was the beneficiary named in the Deed of Trust and Stewart Title Company (Stewart Title) was the trustee. On February 21, 2003, the Deed of Trust was recorded in the official records of the Utah County Recorder.

Assignment of the Note to Wells Fargo

On or about May 1, 2003, TLP assigned its interest in the Deed of Trust to Option One Mortgage,1 which then immediately assigned the same interest to Wells Fargo Bank Minnesota, National Association (Wells Fargo).2 These May 1, 2003 transactions were registered by Stewart Title with the Utah County Recorder on December 12, 2003.3

Koyle's default on the Note

Koyle failed to make timely payments on the Note. As a result of Koyle's default, Wells Fargo caused two documents to be recorded with the Utah County Recorder on October 16, 2003. First, Wells Fargo caused to be filed with the Utah County Recorder a Substitution of Trustee naming Scott Lundberg as successor trustee to replace Stewart Title.[4] Dist. Ct. Docket No. 2, Ex. 1 at 3. Second, Scott Lundberg, as successor trustee, filed with the Utah County Recorder a Notice of Default and Election to Sell (Notice of Default) against the Property. Id. The Notice of Default " declare[d] all sums . . . immediately due and payable," but also noted that the " default [wa]s subject to reinstatement in accordance with Utah law." Dist. Ct. Docket No. 15, Ex. 4 at 1.

Koyle's Chapter 13 bankruptcy proceedings

On March 24, 2004, Koyle filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the District of Utah. Koyle's filing resulted in an automatic stay pursuant to 11 U.S.C. § 362 that prohibited Wells Fargo from taking further action in connection with the Notice of Default.

On October 19, 2004, the bankruptcy court overseeing Koyle's Chapter 13 bankruptcy proceeding signed an order and payment plan that was agreed to and signed by the parties. Under the terms of the payment plan, the parties agreed that the automatic stay would remain in effect subject to Koyle making specific monthly payments pursuant to the terms of the Note and Deed of Trust, and curing his post-petition arrearage on the Note.

Soon thereafter, however, Koyle failed to comply with the terms of the plan. Consequently, on December 20, 2004, the

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bankruptcy court dismissed Koyle's Chapter 13 petition without prejudice.

On February 17, 2005, Koyle filed a second Chapter 13 bankruptcy petition. Once again, that filing resulted in an automatic stay pursuant to 11 U.S.C. § 362. On July 18, 2005, the bankruptcy court signed an order and payment plan that was agreed to and signed by the parties (the 2005 Agreed Order). Similar to the order issued in Koyle's first bankruptcy proceedings, the 2005 Agreed Order stated that the automatic stay would remain in effect subject to Koyle making specific monthly payments pursuant to the terms of the Note and Deed of Trust.

Koyle failed to comply with the 2005 Agreed Order. In particular, Koyle failed to make a July 19, 2005 payment that was called for in the 2005 Agreed Order. Consequently, on October 7, 2005, the bankruptcy court dismissed Koyle's second Chapter 13 bankruptcy petition.

Koyle's state court proceedings

On February 3, 2005, Koyle filed a complaint (the 2005 Complaint) in Utah's Fourth District Court alleging numerous causes of action against Option One Mortgage and Wells Fargo, including violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § § 2601 through 2617, as well as state law claims for breach of contract, fraudulent notice of default, and improper foreclosure proceedings. Koyle also, on that same date, recorded a lis pendens on the Property. The 2005 Complaint remained pending in state court for nearly seven years, until January 12, 2012, when the parties entered into a stipulation to dismiss the matter with prejudice.

Prior to dismissing the 2005 Complaint, Koyle filed a second state court complaint on April 19, 2011 (the 2011 Complaint). Like the 2005 complaint, the 2011 Complaint alleged claims against Wells Fargo for violations of RESPA, breach of contract, and improper foreclosure practices. In addition, the 2011 Complaint alleged that the Notice of Default was fraudulent because Wells Fargo did not record its interest in the Note until after the Notice of Default was filed. As he did when he filed the 2005 Complaint, Koyle recorded a lis pendens on the Property on the same day that he filed his 2011 Complaint.5

Wells Fargo removed the 2011 Complaint to federal court and then moved to dismiss it for failure to state a claim upon which relief could be granted. The federal district court granted that motion and dismissed the complaint. Koyle appealed and this court affirmed in an unpublished order and judgment issued on July 16, 2012. Koyle v. Wells Fargo Bank Minn., 470 Fed.Appx. 712 (10th Cir. 2012).

Wells Fargo's cancellation of the Notice of Default

On September 27, 2011, Scott Lundberg, as trustee, filed with the Utah County Recorder a Cancellation of Notice of Default (Cancellation) which stated, in pertinent part, that " the undersigned hereby cancels the Notice of Default filed for record October 16, 2003." Dist. Ct. Docket No. 34, Ex. 17 at 1.

Wells Fargo's steps to foreclose on the Property and Koyle's response

On or about October 15, 2014, a Corrective Assignment of Deed of Trust was recorded with the Utah County Recorder. This corrected the December 12, 2003

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Deed of Trust and clarified tat the beneficiary of the Deed of Trust was Wells Fargo in its capacity as Trustee for Option One Mortgage Loan Trust 2003-4 Asset-Backed Certificates, Series 2003-4. Dist. Ct. Docket No. 15 at 5.

On December 19, 2014, Paul M. Halliday, Jr. (Halliday), who would soon thereafter be substituted as trustee for Scott Lundberg, filed with the Utah County Recorder a second " Notice of Default and Election to Sell" (Second Notice). Dist. Ct. Docket No. 15, Ex. 4 at 1. Like the first Notice, the Second Notice " declare[d] all sums secured" by the Note and Deed of Trust " immediately due and payable." Id. A trustee's sale was subsequently scheduled for April 20, 2015.

On January 5, 2015, Koyle responded by filing with the Utah County Recorder a Notice of Fraudulent Notice of Default.

Substitution of trustee

On January 23, 2015, a Substitution of Trustee (which was executed on January 20, 2015) was filed with the Utah County Recorder indicating that Halliday was appointed as successor trustee by Wells Fargo, in its capacity as trustee for Option One Mortgage Loan Trust 2003-4 Asset-Backed Certificates, Series 2003-4. Dist. Ct. Docket No. 2, Ex. 1 at 5...

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