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Avakian v. Citibank, N.A.

United States Court of Appeals, Fifth Circuit

December 9, 2014

BURNETTE AVAKIAN, Plaintiff - Appellee
v.
CITIBANK, N.A., Defendant - Appellant

Page 648

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

For BURNETTE AVAKIAN, Plaintiff - Appellee: Steven Craig Panter, Panter Law Firm, P.L.L.C., Madison, MS; Elizabeth Crowell, Attorney, Panter Law Firm, P.L.L.C., Madison, MS.

For CITIBANK, N.A., Defendant - Appellant: William J. Long, IV, Esq., Eddie Travis Ramey, Burr & Forman, L.L.P., Birmingham, AL; Christopher D. Meyer, Burr & Forman, L.L.P., Jackson, MS; Forrest Stephen Latta, Esq., Burr & Forman, L.L.P., Mobile, AL.

Before HIGGINBOTHAM, CLEMENT, and HIGGINSON, Circuit Judges.

OPINION

Page 649

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 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.

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

Page 650

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 ...


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