                           NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                           FILED
                           FOR THE NINTH CIRCUIT                             DEC 19 2013

                                                                          MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS

FERMIN SOLIS ANIEL; ERLINDA                     No. 10-17369
ABIBAS ANIEL,
                                                D.C. No. 3:10-cv-01042-JSW
             Plaintiffs - Appellants,

       v.                                       MEMORANDUM*

AURORA LOAN SERVICES LLC, a
California limited liability company, its
assignee and/or successors; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., a corporate entity;
QUALITY LOAN SERVICES CORP, a
California corporate entity; MCCARTHY
AND HOLTHUS LLP, a California
limited liability partnership,

             Defendants - Appellees.

FERMIN SOLIS ANIEL; ERLINDA                     No. 11-15016
ABIBAS ANIEL,
                                                D.C. No. 3:10-cv-01042-JSW
             Plaintiffs - Appellants,

       v.

AURORA LOAN SERVICES LLC, a
California limited liability company, its

        *
        This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
assignee and/or successors; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., a corporate entity;
QUALITY LOAN SERVICES CORP, a
California corporate entity; MCCARTHY
AND HOLTHUS LLP, a California
limited liability partnership,

              Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Northern District of California
                     Jeffrey S. White, District Judge, Presiding

                    Argued and Submitted September 10, 2013
                            San Francisco, California

Before: WALLACE, FISHER and BERZON, Circuit Judges.

      Fermin and Erlinda Aniel appeal the dismissal with prejudice of their suit

arising out of a nonjudicial foreclosure on their rental property. We affirm in part,

reverse in part and remand.

      1. We agree with the district court that the Aniels’ pro se complaint fails to

state a claim for wrongful foreclosure. But as explained below, the Aniels should

have been provided an opportunity to amend this claim because it is not

“absolutely clear” the deficiencies could not be remedied. Akhtar v. Mesa, 698

F.3d 1202, 1212 (9th Cir. 2012) (internal quotation marks omitted).




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      The district court concluded that the Aniels did not – and could not – state a

plausible claim for wrongful foreclosure because they failed to allege they could or

would tender the amounts due and owing on their loan. Under California law, a

borrower generally “must offer to pay the full amount of the debt for which the

property was security” to set aside a trustee’s sale based upon irregularities in sale

notice or procedure. Lona v. Citibank, N.A., 134 Cal. Rptr. 3d 622, 640 (Ct. App.

2011); see Arnolds Mgmt. Corp. v. Eischen, 205 Cal. Rptr. 15, 17 (Ct. App. 1984).

Here, however, the Aniels argued that the substitution of trustee was fraudulent or

forged, such that Quality Loan Servicing Corporation was never substituted as the

trustee. If Quality was not properly substituted as trustee, it would have had no

authority to effectuate a nonjudicial foreclosure sale, and the sale would be void,

rather than voidable. See Dimock v. Emerald Props., LLC, 97 Cal. Rptr. 2d 255,

261-62 (Ct. App. 2000). Because tender is not required for an allegedly void sale,

see Lona, 134 Cal. Rptr. 3d at 641, the district court abused its discretion when it

dismissed the Aniels’ wrongful foreclosure claim with prejudice based on their




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inability to tender. On remand, the Aniels shall be given the opportunity to amend

this claim.1

      2. The district court properly dismissed the Aniels’ claim under the Fair

Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p, because they

failed to allege the existence of a “debt” within the meaning of the statute. Only

obligations incurred “primarily for personal, family, or household purposes” are

considered “debts” under the FDCPA, 15 U.S.C. § 1692a(5), which “applies to

consumer debts and not business loans,” Bloom v. I.C. Sys., Inc., 972 F.2d 1067,

1068 (9th Cir. 1992). The Aniels included only a single, conclusory allegation that

they “incurred a financial obligation in real property that was primarily for

personal, family, or household purpose[s]” that qualifies as a “debt” within the

meaning of the FDCPA. Yet the Aniels admitted that the subject property was a

rental unit at the time they acquired the refinancing loan, that they had never

resided there and that they were experienced real estate investors, owning and

managing a number of rental properties. See In re Aniel, 427 B.R. 811, 813

      1
        The dissent suggests that even if the tender requirement does not apply, the
Aniels failed to allege how they were “prejudiced or harmed” by the foreclosure,
and that there is “no way” for the Aniels to do so here. The district court did not
consider whether the Aniels had pled or could plead they were prejudiced or
harmed by the foreclosure. We decline to rely on this ground on appeal as the
dissent urges, but prefer to allow these pro se plaintiffs the opportunity to clarify
how they were prejudiced, if at all, in an amended pleading.

                                          4
(Bankr. N.D. Cal. 2010). The Aniels’ admissions establish that they cannot allege

a covered debt, and their bare assertion that they incurred the debt primarily for

personal, family or household reasons is insufficient to demonstrate otherwise.

Therefore, dismissal of this claim with prejudice was appropriate.

      Each party shall bear its own costs of appeal.

      AFFIRMED IN PART, REVERSED IN PART AND REMANDED.




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                                                                                 FILED
Aniel v. Aurora Loan Services LLC, 10-17369 & 11-15016                           DEC 19 2013

                                                                             MOLLY C. DWYER, CLERK
Wallace, Circuit Judge, concurring in part and dissenting in part:             U.S. COURT OF APPEALS



      I join with the majority with respect to its holding that the district court

correctly dismissed the Aniels’ claims for wrongful foreclosure and under the

FDCPA. However, I dissent from the majority’s decision that the district court

abused its discretion by dismissing with prejudice. It is “absolutely clear” that the

Aniels cannot amend their complaint to state a claim of wrongful foreclosure.

      In order to state a claim for wrongful foreclosure, the Aniels must not only

allege that they were excused from tendering the amount due, but also that they

were “prejudiced or harmed” by the foreclosure. Lona, 134 Cal. Rptr. 3d at 633.

The Aniels admit they defaulted on their loan in August 2008, and were subject to

foreclosure. They therefore have not suffered any harm or prejudice, even if the

foreclosure sale included procedural irregularities. Fontenot v. Wells Fargo Bank,

N.A., 129 Cal. Rptr. 3d 467, 480 (Ct. App. 2011) (“Prejudice is not presumed from

mere irregularities in the [foreclosure] process. . . . As to plaintiff, an assignment

merely substituted one creditor for another, without changing her obligations under

the note. Plaintiff effectively concedes she was in default, and she does not allege

that the transfer . . . interfered in any manner with her payment of the note, nor that

the original lender would have refrained from foreclosure under the circumstances

                                           1
presented. If MERS indeed lacked authority to make the assignment, the true

victim was not plaintiff but the original lender”) (citations omitted). Because there

is no way for the Aniels to plead that they were prejudiced or harmed by the

foreclosure, it is “absolutely clear” that they cannot cure the pleading deficiencies

of the complaint by amendment. Akhtar, 698 F.3d at 1212.

      The majority declines to address the prejudice issue because the “district

court did not consider” it. It is proper to address prejudice, and thus affirm the

district court in whole, because we “may affirm the dismissal on any ground

supported by the record.” Ecological Rights Found. v. Pac. Gas & Elec. Co., 713

F.3d 502, 507 (9th Cir. 2013). This rule applies equally to plaintiffs who file

complaints pro se. Serrano v. Francis, 345 F.3d 1071, 1076-77 (9th Cir. 2003)

(“Although it may seem premature to address [an issue] before the district court

has even ruled on it, we do so here because this court may affirm on any ground

supported by the record,” even though the plaintiff filed his complaint pro se).




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