                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 13-2803
                        ___________________________

                              Yang Mee Thao-Xiong

                       lllllllllllllllllllll Plaintiff - Appellant

                                           v.

  American Mortgage Corporation; CitiMortgage, Inc.; Usset, Weingarden and
  Liebo, P.L.L.P., and also all other persons, unknown claiming any right, title,
    estate, interest, or lien in the real estate described in the complaint herein

                      lllllllllllllllllllll Defendants - Appellees
                                       ____________

                    Appeal from United States District Court
                   for the District of Minnesota - Minneapolis
                                  ____________

                           Submitted: December 9, 2013
                               Filed: July 21, 2014
                                  [Unpublished]
                                 ____________

Before MURPHY, SHEPHERD, and KELLY, Circuit Judges.
                          ____________

PER CURIAM.

     Young Mee Thao-Xiong brought this quiet title action against American
Mortgage Company, CitiMortgage, Inc., and the law firm Usset, Weingarden, and
Liebo, P.L.L.P. in Minnesota state court, challenging the foreclosure of her home in
Hennepin County. Following removal, the federal district court1 granted the
defendants' motion to dismiss the case. Thao-Xiong appeals, and we affirm.

       Thao-Xiong executed a promissory note for $179,200 in June 2006 to
American Mortgage, who secured the note with an adjustable rate mortgage on her
Hennepin County home and designated Mortgage Electronic Registration Systems,
Inc. (MERS) as its nominee. Thao-Xiong defaulted on her mortgage sometime after
the interest rate reset in July 2009. The assistant secretary of MERS, Brittney Jones,
acting on behalf of American Mortgage, assigned the mortgage to CitiMortgage on
January 9, 2012, though the assignment was not recorded until January 20. A notice
of pendency to foreclose the mortgage was executed by Brian Liebo of the Usset law
firm on behalf of CitiMortgage on January 17, notarized on January 19, and recorded
on January 20. Beginning on January 21 and running for six weeks, CitiMortgage
published notice of a March 15 mortgage foreclosure sale. On February 7,
CitiMortgage served Thao-Xiong with notices of foreclosure, help for homeowners
in foreclosure, and redemption rights. A power of attorney was then filed on
February 14 authorizing Liebo and Usset to foreclose on behalf of CitiMortgage, and
a sheriff's sale was held on April 26 after publication of a notice of postponement.
The sheriff's certificate of sale indicates that CitiMortgage purchased the home with
a bid of just over $81,000.

        On December 21, 2012, Thao-Xiong filed this action in state court to invalidate
the foreclosure and sale, seeking a determination of adverse claims under the
Minnesota quiet title statute, and asserting claims of negligence per se and slander of
title. The defendants removed the case to federal district court on February 13, 2013

      1
       The Honorable Michael J. Davis, Chief Judge of the United States District
Court for the District of Minnesota, adopting the report and recommendation of the
Honorable Tony N. Leung, United States Magistrate Judge for the District of
Minnesota.

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and filed a motion to dismiss on grounds that the facts asserted in the complaint were
too speculative to support the claims. After denying Thao-Xiong's motion to remand
to state court on grounds the law firm was fraudulently joined, the district court
granted the defendants' motion to dismiss all claims. The district court determined
that Thao-Xiong could not bring a quiet title claim because she was in default on her
mortgage and therefore lacked "clean hands." It also determined that the facts
asserted in her complaint were "too speculative" to support her claims. Thao-Xiong
appeals only the dismissal of her quiet title claim.

       A grant of a motion to dismiss is reviewed de novo, with the facts alleged in
the complaint being taken as true. Badrawi v. Wells Fargo Home Mortg., Inc., 718
F.3d 756, 758 (8th Cir. 2013). In order to survive a motion to dismiss, a complaint
must state "'enough facts to state a claim to relief that is plausible on its face.'" Id.
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Pleadings must
contain sufficient factual content to "'allow[] the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.'" Id. (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "Legally insufficient conjecture and
'labels and conclusions,'" do not suffice to state a claim. Karnatcheva v. JPMorgan
Chase Bank, N.A., 704 F.3d 545, 547 (8th Cir. 2013) (quoting Twombly, 550 U.S.
at 555). Federal courts applying state law under diversity jurisdiction "apply federal
pleading standards . . . to the state substantive law to determine if a complaint makes
out a claim under state law," Karnatcheva, 704 F.3d at 548, and they are bound to
follow the law as articulated by the state's highest court. Badrawi, 718 F.3d at 758.

       Thao-Xiong first argues that the district court erred by imposing on her the
burden of showing that CitiMortgage's interest in her home is invalid. She claims that
Minnesota law only requires her to plead possession of the property and
CitiMortgage's adverse interest in it. The burden at the pleading stage of a case is on
the plaintiff to state facts which "state a claim to relief that is plausible on its face,'"
Twombly, 550 U.S. at 570. In Karnatcheva, we determined that a claim under

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Minnesota's quiet title statute—to which we apply federal pleading
standards—requires facts showing the adverse claim is invalid. 704 F.3d at 548.

       Thao-Xiong alternatively argues that CitiMortgage's interest in her home is
invalid because it failed to comply strictly with several of the requirements in the
Minnesota statute for foreclosure by advertisement. She asserts that strict compliance
with all sections of the statute is required under the Minnesota Supreme Court
decision in Ruiz v. 1st Fidelity Loan Servicing, 829 N.W.2d 53 (Minn. 2013). We
note however that Ruiz held only that Minn. Stat. § 580.02(3) strictly "requires all
assignments of the mortgage to be recorded before the mortgagee has the right to
engage in the process of foreclosure by advertisement." Ruiz, 829 N.W.2d at 57
(emphasis in original). The state supreme court specifically declined to address
whether strict compliance with other sections of the statute is also necessary. Id. at
59.

       For the purposes of this appeal, we assume without deciding that the
defendants were required to comply strictly with all of the statutes Thao-Xiong cites.2
Thao-Xiong asserts the existence of several technical defects in the filings leading to
her foreclosure. Some of these defects she asserts for the first time on appeal. Her
complaint first alleged "upon information and belief" that Jones lacked authority to
assign the mortgage on behalf of MERS and American Mortgage. She now contends
that Jones was an employee of CitiMortgage at the time of the assignment rather than
the assistant secretary of MERS as the assignment document states. Thao-Xiong
argues that the mortgage assignment thus is void, since CitiMortgage could not assign


      2
        Thao-Xiong maintains that we misstated Minnesota law on this point in
Badrawi v. Wells Fargo Mortg., Inc., 718 F.3d 756, 759 (8th Cir. 2013). Badrawi
considered the Minnesota Court of Appeals decision in Ruiz; which was decided
before the subsequent Minnesota Supreme Court decision. We concluded in Badrawi
that strict compliance with Minn. Stat. § 580.032(3) was not required in homeowner
suits challenging foreclosures. Id.

                                         -4-
itself a mortgage it did not own. Even considering Thao-Xiong's new allegations, she
supplies no evidence contradicting the face of the mortgage assignment itself, which
plainly indicates Jones' position at MERS. We therefore conclude that Thao-Xiong
has asserted only "insufficient conjecture" and "labels and conclusions" to support
this claim. See Karnatcheva, 704 F.3d at 547.

       Thao-Xiong also asserts that Brian Liebo lacked recorded power of attorney
when he executed the notice of pendency on behalf of CitiMortgage and that this lack
invalidates the foreclosure. However, the relevant statute only requires that an entity
seeking foreclosure by advertisement "record a notice of the pendency of the
foreclosure . . . before the first date of publication of the foreclosure notice." Minn.
Stat. § 580.032(3). It does not require that notice be recorded by someone holding
recorded power of attorney. Liebo recorded a notice of pendency on behalf of
CitiMortgage on January 20, a day before the notice of the mortgage foreclosure was
first published. The record thus shows that CitiMortgage complied with the
requirements of § 580.032(3).

       Thao-Xiong also challenges the validity of the power of attorney used to
execute the mortgage foreclosure because it was recorded after the first publication
of notice of the sale. However, Minn. Stat. § 580.05 states that an attorney employed
to conduct a foreclosure "shall appear by power of attorney executed . . . and recorded
prior to the sale," not prior to the publication of notice. Liebo recorded a power of
attorney on February 14, more than two months before the April 26 sale. Thao-Xiong
now claims for the first time on appeal that the power of attorney filed in this case
violates Minn. Stat. § 582.25(1)(v), a statute of repose. Since Thao-Xiong failed to
raise this issue in the district court, we cannot reverse the judgment on that basis. See
Campbell v. Davol, Inc., 620 F.3d 887, 891 (8th Cir. 2010). Finally, Thao-Xiong
concedes in her reply a claim which she raises for the first time in her brief and which
is plainly contradicted by the record: that CitiMortgage published the notice of sale
for only one week, in violation of Minn. Stat. § 580.03.

                                          -5-
       Because Thao-Xiong fails to assert sufficient facts to support her claims, the
district court did not err in denying them, and we need not address whether it erred
in also determining they were barred by Thao-Xiong's "unclean hands."

      The judgment of the district court is affirmed.
                     ______________________________




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