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Brewster v Sun Trust Mortgage, Inc.

Case No. 12-56560 (C.A. 9, Feb. 7, 2014)

In this appeal, we must determine the scope of the term “foreclosure” for the purposes of § 533 of the Servicemembers Civil Relief Act (“SCRA”). Christopher Brewster appeals the district court’s dismissal under Federal Rule of Civil Procedure 12(b)(6) of his claim that Defendant Nationstar Mortgage, LLC, (“Nationstar”) violated § 533 when it maintained certain fees related to a rescinded Notice of Default on his account while he was on active duty. 50 U.S.C. app. § 533. We review a district court’s grant of a motion to dismiss for failure to state a claim de novo. Dennis v. Hart, 724 F.3d 1249, 1252 (9th Cir. 2013). We have jurisdiction under 28 U.S.C. § 1291, and we reverse.

I



Brewster is a Lieutenant Colonel in the United States Marine Corps Reserve, and was called up to active duty on three occasions between 2008 and 2011, including an overseas deployment from October of 2010 to March of 2011. During this time, Brewster failed to make the full payments owed on the mortgage on his home in California. Brewster had originally taken out the mortgage in 2007, before he was recalled to active duty service. His initial loan servicer, Sun Trust Mortgage, Inc., (“Sun Trust”) started foreclosure proceedings on December 11, 2009 by filing a Notice of Default, which was accompanied by various fees. Sun Trust rescinded the Notice of Default in August 2010, but it did not remove the associated foreclosure fees from his account. During the month of November 2010, Sun Trust transferred the servicing rights on Brewster’s mortgage to Nationstar, the appellee in this action. Nationstar similarly did not remove the fees associated with Sun Trust’s attempted foreclosure before Brewster’s filing of this suit, and it attempted to recover those fees during roughly five months of Brewster’s active-duty service, including three and a half months while Brewster was deployed overseas.

II



The Servicemembers Civil Relief Act was passed “to enable [servicemembers] to devote their entire energy to the defense needs of the Nation.” 50 U.S.C. app. § 502(1). It accomplishes this purpose by imposing limitations on judicial proceedings that could take place while a member of the armed forces is on active duty, including insurance, taxation, loans, contract enforcement, and other civil actions. 50 U.S.C. app. § 501 et seq. These limitations are “always to be liberally construed to protect those who have been obliged to drop their own affairs to take up the burdens of the nation.” Boone v. Lightner, 319 U.S. 561, 575 (1943) (granting a stay in state trustee proceedings); see also LeMaistre v. Leffers, 333 U.S. 1, 6 (1948) (overturning a state tax sale by giving a broad construction to the SCRA in light of its “beneficient purpose” and noting that “the Act must be read with an eye friendly to those who dropped their affairs to answer their country’s call”).
 

 

Judge(s): Ronald M. Gould
Jurisdiction: U.S. Court of Appeals, Ninth Circuit
Related Categories: Finance / Banking , Property
 
Circuit Court Judge(s)
Jay Bybee
Edward Chen
Ronald Gould

 
Trial Court Judge(s)
Larry Burns

 
Plaintiff Lawyer(s) Plaintiff Law Firm(s)
Christopher Brewster Brewster & Lee PC
Kenneth Lee Brewster & Lee PC

 
Defendant Lawyer(s) Defendant Law Firm(s)
Regina McClendon Locke Lord LLP
Sally Mimms Locke Lord LLP

 
Amicus Lawyer(s) Amicus Law Firm(s)
Nathaniel Pollock U.S. Department of Justice

 

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of the trials and tribulations of civilian life, we hold that the america. applies retroactively. period of the servicemember’s military service” unless the damages,4 before he was recalled to active duty service. his initial loan servicer, sun trust mortgage, inc., (“sun trust”) started mortgaged property). second, the language of the statute to the proceedings which were terminated before nationstar lab-wmc the fees goes to the amount of damages to which brewster may be eligible defense needs of the nation.” 50 u.s.c. app. § 502(1). it christopher ayden brewster, 333 u.s. 1, 6 (1948) (overturning a state tax sale by giving a the scra. we asked for supplemental briefs on this issue, and we have mortgage-service company’s rescinded notice of default no. 12-56560 at this stage of the litigation, we need not and do not reach the enable [servicemembers] to devote their entire energy to the the honorable edward m. chen, district judge for the u.s. district foreclosure contemplates the inclusion of specified fees as a lord llp, san francisco, california, for defendant- three occasions between 2008 and 2011, including an while they serve their country. the part of the statute at issue in this case provides that iii friendly to those who dropped their affairs to answer their armed forces is on active duty, including insurance, taxation, overseas deployment from october of 2010 to march of benefits act, we need not reach the questions raised in nationstar’s punished by the federal government through fines or reversing the district court’s dismissal under federal sale or seizure that conclude the foreclosure proceedings. appellee argues that the statute should be read only to apply attempted collection of fees related to a notice of default on that the attempted collection of fees incident to a notice of default was active-duty members of the armed forces repose from some also contained additional allegations against sun trust, but those claims nationstar mortgage, llc, (“nationstar”) violated § 533 nathaniel s. pollock, united states department of justice, costs, and attorney’s fees. 50 u.s.c. app. “foreclose,” black's law dictionary (9th ed. 2009) and that there should be a decision of the district court in the first instance. 1 rule of civil procedure 12(b)(6), the panel held that a been prepared by court staff for the convenience of the reader. 454, 457 (4th cir. 2011). this section contains an explicit private right of defendant, case is remanded for further proceedings consistent with this argued and submitted “stayof proceedings”); metro one telecomms., inc. v. c.i.r., opinion. proceeding seeking the transfer of ownership or the sale of default that began the foreclosure proceeding, brewster has servicemembers civil relief act. christopheraydenbrewster(argued)andkennethalexander did not remove the feesassociatedwith sun trust’s attempted remove improper foreclosure fees associated with a prior servicemembers civil relief act (“scra”). christopher the statute’s plain language suggests two reasons that the term 111-275 (2010); gordon v. pete’s auto serv. of denbigh, inc., 637 f.3d if he is successful in this lawsuit, it does not impact the analysis of creating time limits on their imposition, and requiring them part of the foreclosure proceeding, and because the united brewster v. sun trust mortgage4 thereby suggesting that foreclosure must mean more than just foreclosure before brewster’s filing of this suit, and it than a single act. 50 u.s.c. app. § 533(b) (providing for a appeared on a statement. we agree. “foreclosure” for the purposes of § 533 of the was a continuation of that foreclosure proceeding while originated before the servicemember’s military service] shall statute includes numerous requirements relating to fees, brewster was on active duty service in violation of § 533 of pled facts sufficient to allege that nationstar’s continuing country’s call”). section 533 does not define the term “foreclosure.” associated with the prior mortgage-service company’s notice gould, circuit judge: brewster is a lieutenant colonel in the united states for publication defendant-appellee. in state trustee proceedings); see also lemaistre v. leffers, supplemental briefing of whether the remainder of the scra contains an in november 2010, while brewster was on active-duty that continued while a “foreclosure sale” was abandoned); jurisdiction under 28 u.s.c. § 1291, and we reverse. 704 f.3d 1057, 1061 (9th cir. 2012) (“[i]n the absence of an marine corps reserve, and was called up to active duty on united states court of appeals for the ninth circuit § 2924c. because the state-law statutory definition of plaintiff-appellant, during this time, brewster failed to make the full but it did not remove the associated foreclosure fees from his ii to drop their own affairs to take up the burdens of the nation.” 2 the decision of the district court is reversed and the brewster v. sun trust mortgage2 what the word “foreclosure” encompasses, in addition to the for plaintiff-appellant. obligation described in subsection (a) [a mortgage that not be decided absentanappropriate record developed inthe district court, opinion by judge gould competing views of counsel, but we have concluded that this issue should attempted to recover those fees during roughly five months of * counsel rule of civil procedure 12(b)(6) of his claim that defendant opinion complaint stated a claim under § 533 of the servicemembers were settled prior to this appeal and are therefore not at issue here. from him. even though nationstar did not issue the notice of specifically bars a “sale, foreclosure, or seizure of property,” and edward m. chen, district judge.* brewster appeals the district court’s dismissal under federal sun trust rescinded the notice of default in august 2010, november 8, 2013—pasadena, california brewster’s account after brewster filed this lawsuit. however, while the 207 (1997))); see also kachlon v. markowitz, 85 cal. rptr. remove the improper fees from brewster’s account between november itself a part of the foreclosure proceedings barred by the scra. 50 u.s.c. nationstar mortgage, llc, benefits act of 2010, which became law on october 13, 2010. pub. l. the light most favorable to the non-moving party. brewster’s complaint loans, contract enforcement, and other civil actions. “proceedings,” a term which generallymeans a process rather accomplishesthis purposebyimposinglimitations onjudicial foreclosure is approved by a court. 50 u.s.c. app. § 533(c). when it maintained certain fees related to a rescinded notice the servicemembers civil relief act was passed “to filed february 7, 2014 states supreme court has unambiguously required courts to boone v. lightner, 319 u.s. 561, 575 (1943) (granting a stay action. because we hold that nationstar violated the scra by failing to larry a. burns, district judge, presiding washington, d.c., for amicus curiae the united states of brewster v. sun trust mortgage8 sun trust mortgage, inc., whether or not the scra was violated in the first place, because we hold should be construed to be entirely redundant.”). we must brewster v. sun trust mortgage 3 brewster had originally taken out the mortgage in 2007, may bear their ordinary, contemporary, common meaning.” individually, where brewster’s property and mortgage are located. the app. § 533. make up a foreclosure proceeding in the state of california, 2010 and april 2011, see part iii, infra, after the adoption of the veterans violations or attempted violations of this section can be i appellee. lee (argued), brewster & lee, pc, costa mesa, california, brewster alleges that nationstar violated § 533 of the receive equitable relief as well as appropriate monetary (describing “foreclosure proceedings” as encompassing service. over the next five months, while brewster remained v. brewster’s active-duty service, including three and a half before: ronald m. gould and jay s. bybee, circuit judges, 3 property. first, the statute refers to foreclosure summary** (quoting walters v. metro. educ. enters., inc., 519 u.s. 202, implied right of action or whether the veterans benefits act of 2010 3:12-cv-00448- nationstar, the appellee in this action. nationstar similarly v. hart, 724 f.3d 1249, 1252 (9th cir. 2013). we have brewster v. sun trust mortgage 5 ** imprisonment of up to one year and private plaintiffs3 court for the northern district of california, sitting by designation. foreclosure proceedings on december 11, 2009 by filing a of default on his account while he was on active duty. the time), brewster alleges that they attempted to collect fees appeal from the united states district court in the briefing, the parties note that nationstar removed the fees from of default, even afterbrewstercomplained about the fees that account. during the month of november 2010, sun trust purpose” and noting that “the act must be read with an eye fact that brewster does not allege that nationstar ever actually collected on active duty (and deployed overseas for a large portion of because this case is an appeal of a motion to dismiss under fed. r. while the plaintiff was on active duty. indication to the contrary, words in a statute are assumed to brewster v. sun trust mortgage6 transferred the servicing rights on brewster’s mortgage to and civil relief act by alleging that the defendant failed to move beyond the statute’s explicit terms to determine exactly brewster v. sun trust mortgage 7 50 u.s.c. app. § 533. we review a district court’s grant of a give a broad construction to the statutory language of the nationstargainedservicingrightsonbrewster’smortgage a california property constitutes a violation of § 533 of the proceedings that could take place while a member of the establishing the causes for which they can be imposed, this summary constitutes no part of the opinion of the court. it has broad construction to the scra in light of its “beneficient failure to remove the fees incidental to the notice of default scra when it did not remove improper foreclosure fees scra to effectuate the congressional purpose of granting 4 civ. p. 12(b)(6), all facts are taken from the complaint and interpreted in question of whether punitive damages are available under this section of be liberally construed to protect those who have been obliged “[a] sale, foreclosure, or seizure of property for a breach of an v. united states, 345 f.3d 683, 691 (9th cir. 2003) (noting motion to dismiss for failure to state a claim de novo. dennis the servicemembers civil relief act. opinion notice of default, which was accompanied by various fees. 2011.1 not be valid if made during, or within one year after, the prohibition aimed at keeping members of the armed forces the “cardinal rule of statutory interpretation that no provision 50 u.s.c. app. § 597a was added to the scra by the veterans d.c. no. for the southern district of california “appropriate statutory steps” that precede the sale of a servicemembers civil relief act a sale or seizure. 50 u.s. app. § 533(c); spencer enters., inc. payments owed on the mortgage on his home in california. encompasses more than just the formal foreclosure § 533(d); 50 u.s.c. app. § 597a. the scra sets a serious assumed the servingrights ofbrewster’smortgage. however, to be in reasonable amounts. see, e.g., cal. civ. code california civil code § 2924 et seq. outlines the steps that 50 u.s.c. app. § 501 et seq. these limitations are “always to regina j. mcclendon (argued) and sally w. mimms, locke 3d 532, 542 (2008) (describing a “foreclosure proceedings” months while brewster was deployed overseas.2 free of foreclosures which would be distractions and unfair in this appeal, we must determine the scope of the term


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