Daniel Coslow; Julie Coslow v. Intohomes, LLC

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DANIEL COSLOW; JULIE COSLOW,
Plaintiffs - Appellants,
v.
INTOHOMES, LLC; MILA, INC.; FIRST
AMERICAN TITLE; LITTON LOAN
SERVICING, LP; QUALITY LOAN
SERVICE CORP.; LSI TITLE
COMPANY; NORMA GONZALEZ;
DOES, 1 through 10 and Corporations A-
Z,
Defendants - Appellees.
No. 12-15045
D.C. No. 3:11-cv-00480-RCJ-VPC
MEMORANDUM*
Appeal from the United States District Court
for the District of Nevada
Robert Clive Jones, District Judge, Presiding
Submitted February 14, 2014 **
San Francisco, California
FILED
MAR 19 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

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Before: CALLAHAN and M. SMITH, Circuit Judges, and KORMAN, Senior
District Judge. ***
Julie and Daniel Coslow appeal from the dismissal of their claim that, under the
Nevada Revised Statutes (“N.R.S.”) § 107.080, Quality Loan Service Corp. (“Quality
Loan”), through its agent LSI Title Company (“LSI Title”), improperly foreclosed on
their property. In Nevada, an action for wrongful foreclosure requires a plaintiff to
“establish that at the time the power of sale was exercised or the foreclosure occurred,
no breach of condition or failure of performance existed on the mortgagor’s or
trustor’s part which would have authorized the foreclosure or exercise of the power
of sale.” Collins v. Union Fed. Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983).
The Coslows do not dispute that they defaulted on their mortgage, and we hold that
the foreclosure was otherwise valid.
First, “while entitlement to enforce both the deed of trust and the promissory
note is required to foreclose, nothing requires those documents to be unified from the
point of inception of the loan.” Edelstein v. Bank of New York Mellon, 286 P.3d 249,
259 (Nev. 2012). The note and deed of trust were split at the loan’s inception because
Mortgage Electronic Registration Systems, Inc. (“MERS”), a party other than the
original note holder MILA, Inc. (“MILA”), was listed as the deed’s beneficiary. See
*** The Honorable Edward R. Korman, Senior District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.
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id. The note and deed were unified, however, when MERS assigned “all beneficial
interest under th[e] . . . Deed of Trust . . . together with the Promissory Note secured
by said Deed of Trust” to LaSalle Bank National Association (“LaSalle”). See
Edelstein, 286 P.3d at 260-62. MERS was authorized to assign the deed of trust as the
named beneficiary, and it was authorized to assign the note as an agent for MILA
because the deed of trust named MERS as “nominee for Lender and Lender’s
successors and assigns.” See id. Accordingly, through its agent LSI Title, Quality
Loan, which LaSalle had properly substituted as trustee, was authorized to file a notice
of default and sell the property. See Nev. Rev. Stat. § 107.080(1) (“[I]f any transfer
in trust of any estate in real property is made . . . to secure the performance of an
obligation or the payment of any debt, a power of sale is hereby conferred upon the
trustee to be exercised after a breach of the obligation for which the transfer is
security.”).
Second, the fact that “MILA ceased operations approximately three months
prior to its chapter 11 filing on July 2, 2007,” Groshong v. Sapp (In re Mila, Inc.), 423
B.R. 537, 540 (B.A.P. 9th Cir. 2010), does not affect MERS’s authority to transfer the
deed of trust or the note. MERS transferred all beneficial interests in the deed of trust
and the note on May 22, 2007, before MILA filed for bankruptcy on June 2, 2007.
Accordingly, the transfer was valid.
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AFFIRMED.
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