     Case: 14-60175   Document: 00512863591        Page: 1   Date Filed: 12/09/2014




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT


                                    No. 14-60175                  United States Court of Appeals
                                                                           Fifth Circuit

                                                                         FILED
BURNETTE AVAKIAN,                                                 December 9, 2014
                                                                    Lyle W. Cayce
             Plaintiff - Appellee                                        Clerk

v.

CITIBANK, N.A.,

             Defendant - Appellant




                Appeal from the United States District Court
                  for the Northern District of Mississippi


Before HIGGINBOTHAM, CLEMENT, and HIGGINSON, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
      Defendant-Appellant Citibank, N.A. (“Citibank”) appeals the district
court’s declaratory judgment in favor of Burnette Avakian (“Burnette”). The
district court found that the deeds of trust signed by Burnette and her
husband, Norair Avakian (“Norair”), were void because the Avakians signed
separate but identical deeds of trust rather than a single instrument. The
district court correctly recognized that, under Mississippi law, a deed of trust
on a husband and wife’s homestead is void if it is not signed by both spouses.
But we find that the Mississippi Supreme Court would likely hold that a valid
deed of trust is created when a husband and wife contemporaneously sign
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separate but identical deeds of trust.                Accordingly, we REVERSE and
REMAND.
                                   FACTS AND PROCEEDINGS
       The relevant facts are essentially uncontested. 1                     The Avakians
purchased a house by borrowing money that was secured by a properly-
executed deed of trust on the property. The property served as the Avakians’
homestead, where they lived together. 2 Citibank later refinanced the loan. 3
Unlike the original loan, the note for the refinancing loan only listed Norair as
the debtor. As part of the process of refinancing the loan, Citibank required
that the Avakians execute another deed of trust on the property. Norair signed
the Citibank deed of trust. The next day, Burnette signed a second, identical
Citibank deed of trust. 4 The deeds of trust did not mention each other, and
they did not contain a clause about the signature of counterpart documents.
But, throughout the process of signing the deeds of trust, Burnette and Norair
agreed to proceed with the refinancing. Citibank recorded the two deeds of
trust as separate instruments, although it recorded them back-to-back in the
land records.




       1 The only contested fact issue is which party requested that the Avakians sign
different deeds of trust. This issue is irrelevant to whether the deeds of trust are valid under
the Mississippi statute. See Miss. Code Ann. § 89-1-29.
       2At the district court level, Citibank challenged whether the property was actually
the Avakians’ homestead and whether they were living together when they signed the
Citibank deeds of trust. Citibank has not appealed the district court’s findings on these
issues.
       3The refinancing loan was originally issued by EquiFirst Corporation, but it was later
transferred to Citibank. For simplicity, the parties have treated the second loan as if it were
issued by Citibank, and we do the same.
       4 The deeds of trust actually have slightly different handwritten notations that add
Burnette’s name to the definition of “Borrower.” Burnette testified at a deposition that the
handwritten notation was added to her copy of the deed of trust after she signed it. The
parties have not made an issue about this discrepancy, however.
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      The Avakians fell behind on their loan payments, and they received a
loan modification. Around the time of Norair’s death, Burnette received notice
that Citibank was taking steps to foreclose on their property.                  Burnette
continued to negotiate with Citibank to attempt to prevent the foreclosure.
      After Norair’s death, Burnette brought a declaratory judgment action in
Mississippi state court to halt Citibank’s foreclosure of her property. Citibank
removed the case to federal court on the basis of diversity jurisdiction. It then
moved for summary judgment, arguing that the deeds of trust were valid and,
in the alternative, it should prevail under the equitable subrogation doctrine.
The district court informed the parties that it was considering granting
summary judgment to Burnette. In additional briefing, Citibank argued that
the district court should not grant summary judgment to Burnette because
there were genuine issues of material fact regarding Citibank’s affirmative
defenses of waiver, estoppel, ratification, laches, and recoupment. The district
court granted summary judgment to Burnette in part.                    It found that, if
Burnette and Norair were living together at the time they signed the Citibank
deeds of trust, the instruments were invalid and Citibank could not prevail on
any of its equitable theories. Citibank appeals both of these holdings.
      After a bench trial, the district court found that Burnette and Norair
were living together at the time they signed the Citibank deeds of trust. 5 Thus,
it granted Burnette’s motion for declaratory judgment.
                                  STANDARD OF REVIEW
      This court reviews the grant of summary judgment de novo. Rogers v.
Bromac Title Servs., L.L.C., 755 F.3d 347, 350 (5th Cir. 2014). “In this diversity
action, we apply Mississippi law as interpreted by the Mississippi state courts.”
Keen v. Miller Envtl. Grp., Inc., 702 F.3d 239, 243 (5th Cir. 2012). If the


      5   Again, Citibank does not appeal this factual finding.
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Mississippi Supreme Court has not directly ruled on an issue, we make an Erie
guess, relying on:
      (1) decisions of the Mississippi Supreme Court in analogous cases,
      (2) the rationales and analyses underlying Mississippi Supreme
      Court decisions on related issues, (3) dicta by the Mississippi
      Supreme Court, (4) lower state court decisions, (5) the general rule
      on the question, (6) the rulings of courts of other states to which
      Mississippi courts look when formulating substantive law and (7)
      other available sources, such as treatises and legal commentaries.
Centennial Ins. Co. v. Ryder Truck Rental, Inc., 149 F.3d 378, 382 (5th Cir.
1998).
                                 DISCUSSION
      Mississippi Code § 89-1-29 provides that:
      A conveyance, mortgage, deed of trust or other incumbrance upon
      a homestead exempted from execution shall not be valid or binding
      unless signed by the spouse of the owner if the owner is married
      and living with the spouse or by an attorney in fact for the spouse.
An instrument that does not satisfy this statute is void and inoperative, even
as to the spouse who signed the instrument. Welborn v. Lowe, 504 So. 2d 205,
207-08 (Miss. 1987).
      Here, it is undisputed that the property was the Avakians’ homestead
and that they were living together when they executed the deeds of trust.
Accordingly, to produce a valid deed of trust, both Burnette and Norair had to
sign it. It is also undisputed that Burnette and Norair separately signed
identical counterpart deeds of trust within one day of each other. The problem
is that neither deed of trust was signed by both Avakians.
      The district court’s opinion takes it for granted that the Citibank deeds
of trust do not comply with the requirements of Mississippi Code § 89-1-29.
But the statute does not explicitly require that both spouses sign the same
document to create a valid deed of trust. It seems consistent with the statute
to construe the two Citibank deeds of trust as together presenting one
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integrated deed of trust that complies with Mississippi Code § 89-1-29. After
all, the parties clearly intended to create a valid deed of trust at the time they
executed the two identical counterpart instruments.
       “In construing a statute, the Court must seek the intention of the
Legislature, and knowing it, must adopt that interpretation which will meet
the real meaning of the Legislature.” Delta Reg’l Med. Ctr. v. Green, 43 So. 3d
1099, 1102 (Miss. 2010) (internal quotation marks and alteration omitted).
Here, the statute was originally passed “primarily as a protection for the wife
in lieu of dower which had been abolished by statute.” Hudson v. Bank of
Leakesville, 249 So. 2d 371, 373 (Miss. 1971) (quoting Grantham v. Ralle, 158
So. 2d 719, 724 (Miss. 1963)).      Mississippi Code § 89-1-29 provided this
protection by “prevent[ing] her husband from conveying or encumbering the
homestead without the consent of his wife.” Id. The statute has since been
amended to afford both spouses the same protection. But the “basic purpose”
of protecting each spouse remains.      See id. at 373 (describing this “basic
purpose”). Here, construing the two Citibank deeds of trust together comports
with this “basic purpose” of protecting the spouses because the deeds of trust
provide a clear written record of the Avakians’ contemporaneous consent to the
creation of a deed of trust.
      Moreover, while no Mississippi case law is directly on point, several
decisions indicate that we should not take an overly formalistic approach to
Mississippi Code § 89-1-29. First, an old Mississippi Supreme Court case
contains dicta that clearly supports Citibank’s position:
      There is much force in the argument of defendant’s counsel that the
      statute does not require a joint deed of husband and wife for the
      conveyance of the husband’s homestead, but only that the wife
      should “sign” the husband’s deed to signify her consent to the
      disposition made by the husband of his property; that the
      substantial thing is the written evidence of such consent; and that
      this may be as certainly shown by a separate instrument as by
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       signing the deed of the husband. The present controversy does not
       call for a decision of what would be the effect of such separate deed
       made by the wife under the direction or consent of the husband,
       and we express no opinion on the subject. We are, however, of
       opinion that whatever be the form, it is, at least, essential to show
       the contemporaneous assent of both husband and wife to the
       conveyance.
Duncan v. Moore, 7 So. 221, 221-22 (Miss. 1890) (emphases added). Here, it is
uncontested that the Avakians both expressed contemporaneous assent to the
creation of a deed of trust when they signed the two documents. 6 Thus, the
situation here is precisely described by the Duncan dicta, and there is “much
force in the argument” that the deeds of trust, taken together, comply with the
statute.
       Burnette emphasizes that Duncan is only dicta, but she has pointed to
no other Mississippi Supreme Court decision that undermines it.                         Thus,
Duncan is an important guide in making our Erie guess. See Keen, 702 F.3d
at 244 (holding that “the decisions and dicta of the Mississippi Supreme Court
weigh more heavily in our Erie analysis” than even a holding from the
Mississippi Court of Appeals (alteration omitted)); Centennial Insurance, 149
F.3d at 382 (listing state supreme court dicta as a factor in making an Erie
guess).
       Second, a much more recent Mississippi Supreme Court case found a
deed of trust valid where the wife signed only its attachments, not the deed of
trust itself. United Miss. Bank v. GMAC Mortg. Co., 615 So. 2d 1174, 1176


       6Despite the one-day delay in Burnette’s signature of the deed of trust, the assent was
contemporaneous because it is uncontested that Norair knew of and consented to Burnette’s
signature of the deed of trust, and vice versa. See Howell v. Hill, 48 So. 177, 177 (Miss. 1909)
(“While it is true that the husband signed and acknowledged the deed conveying the
homestead in September, and the wife’s signature and acknowledgment bear date of the May
following, yet both signed the same instrument in furtherance of an intention to which there
was manifestly a common and contemporaneous assent . . . . In the case before us the wife
signed with the full knowledge and consent of the husband, and this is surely sufficient.”).
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(Miss. 1993). There, the deed of trust itself was four pages long and contained
lines for both spouses’ signatures on the fourth page. Id. at 1175. The deed of
trust attached an exhibit that described the land that would be used as
collateral, as well as an adjustable-rate-mortgage rider. Id. Both spouses
signed the two attachments, but only the husband signed the deed of trust. Id.
at 1175-76. The deed of trust mentioned the attached exhibit and rider, and
they were all recorded as a single instrument. Id. The Mississippi Supreme
Court found that the attached documents were “an integral part of the
contested deed of trust,” and therefore signing the separate documents was
sufficient. Id. at 1176. The Court based its decision in part on the fact that
Mississippi Code § 89-1-29 requires the spouses to “sign” rather than
“subscribe” to the deed of trust. Id. Under Mississippi law, the physical
location of a signature is critical for “subscribing” but not for “signing.” Id.
Thus, the Court reasoned that the location of the signature was not critical to
comply with Mississippi Code § 89-1-29. Id.
      Here, the identical counterpart deeds of trust were also integral to each
other, so the different physical locations of the spouses’ signatures should not
matter. Obviously, though, this case differs from GMAC in at least three
respects: the two deeds of trust were not attached to each other at the time of
signature, they did not refer to each other, and they were not recorded as a
single instrument. But, under Mississippi law, separate documents can be
construed together to form a single instrument if they “are executed at the
same time, by the same parties, as part of the same transaction.” Sullivan v.
Mounger, 882 So. 2d 129, 135 (Miss. 2004). Such documents may be construed
together even if they do not “include a written provision which specifically
recites that all documents are part of an integrated, or global, transaction.”
Sullivan v. Protex Weatherproofing, Inc., 913 So. 2d 256, 259-60 (Miss. 2005).
Here, the two identical Citibank deeds of trust, which were signed within one
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day of each other, are clearly part of one global transaction, so they can be
construed together. Similarly, the two documents do not have to be attached
to each other to form an integrated document. See id. at 260-61 (construing
two documents together without mentioning whether they were attached).
Finally, the fact that Citibank recorded the Avakians’ two deeds of trust as
separate instruments is irrelevant because recording an instrument does not
alter whether it is effective as between the parties, which is the matter at issue
here. See Miss. Code Ann. § 89-5-3 (providing that unrecorded instruments
are valid “as between the parties and their heirs”).                  Thus, the factual
distinctions between this case and GMAC should not alter the end result that
the Avakians created a valid deed of trust, even though they signed it at
different places.
       Burnette argues that GMAC is inapplicable because, there, the
Mississippi Supreme Court construed the attachments as being part of the
deed of trust itself. But she does not explain why the Court would not similarly
consider the Avakians’ identical counterpart deeds of trust as making up one
integrated whole. And, as mentioned previously, Mississippi Supreme Court
precedent strongly suggests that the Court would construe them together.
       Further, in finding that the deeds of trust were void, the district court
did not mention GMAC or Duncan. Instead, it relied on cases that generally
hold that a deed of trust must strictly comply with Mississippi Code § 89-1-29.
Unlike GMAC and Duncan, none of the cases cited by the district court deal
with instruments that contain the spouses’ signatures at different physical
locations (as in GMAC) or the contemporaneous signature of separate
instruments (as in Duncan). 7


       7 One case cited by the district court, Craddock v. Brinkley, 671 So. 2d 662 (Miss.
1996), involves the signature (but not the contemporaneous signature) of two separate
documents. Curiously, Burnette barely mentions this case in her appellate brief. Regardless,
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       Similarly, on appeal, Burnette does not point to any cases that are as
analogous as GMAC and Duncan. Instead, she argues that policy reasons
counsel against considering the two separate instruments together.                        For
example, she argues that difficulties could arise if two instruments contained
different terms. But that is not the situation presented here, and we need not
decide whether two instruments containing different terms could satisfy
Mississippi Code § 89-1-29. We similarly need not decide the outcome of
Burnette’s various other hypotheticals.
       Burnette also argues that Citibank cannot foreclose on two instruments
at the same time. But we construe the two Citibank deeds of trust as together
creating a single, valid deed of trust. Accordingly, if Citibank decides to pursue
foreclosure, it must rely upon a single deed of trust, albeit one that is composed
of two identical counterpart deeds of trust that are recorded back-to-back in
the land records.
       Thus, based on Duncan and GMAC, we conclude that the Mississippi
Supreme Court would likely construe the two identical deeds of trust as




it is readily distinguishable. In Craddock, the husband signed a deed of trust in 1974, but
the wife did not sign it or any other deed of trust. Id. at 665. A year later, the husband and
wife both signed a promissory note secured by the 1974 deed of trust. Id. The Mississippi
Supreme Court found that the wife’s subsequent act of signing a promissory note referring to
the deed of trust could not save it. Id. at 665-66. But the Court did not dismiss the signature
of the subsequent promissory note simply because it was a separate document. See id. at
665. Instead, the Court reasoned that the promissory note was not “an attachment to, or an
integral part of the 1974 deed of trust as the note was signed nearly one year later.” Id. In
contrast, here, the two deeds of trust were signed within a day of one another. The Court
also reasoned that “[a] promissory note and a deed of trust are two separate and distinct
instruments.” Id. Again in contrast, both documents signed by the Avakians were deeds of
trust, not one deed of trust and another entirely different type of instrument.

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together creating a valid deed of trust signed by both spouses. The district
court erred in holding to the contrary. 8
                                       CONCLUSION
      For the foregoing reasons, we REVERSE the district court’s declaratory
judgment in Burnette Avakian’s favor and REMAND for further proceedings
consistent with this opinion.




      8  Because we find that the Citibank deeds of trust together form a valid and
enforceable instrument, we do not reach Citibank’s alternative arguments that are based on
equitable theories.

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