In the Matter of Merrill Lynch Mortgage Investors Trust Mortgage Loan Asset-Backed Certificates, Series 2006-RM2.

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-1554

In the Matter of Merrill Lynch Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-RM2.

Filed May 13, 2019
Affirmed
Schellhas, Judge

Ramsey County District Court
File No. 62-TR-CV-17-53

John B. Orenstein, Greene Espel PLLP, Minneapolis, Minnesota (for appellant Procure
LLC)

David R. Crosby, Kadee J. Anderson, Stinson, Leonard Street, LLP, Minneapolis,
Minnesota; and

Timothy G. Cameron (pro hac vice), Cravath, Swaine & Moore, LLP, New York, New
York (for respondent Nationstar Mortgage LLC)

Considered and decided by Slieter , Presiding Judge; Worke, Judge; and Schellhas,
Judge.
U N P U B L I S H E D O P I N I O N
SCHELLHAS, Judge
Appellant challenges the dismissal of its action to prevent the termination of a trust
and for an instruction related to the administration of the trust. We affirm.

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FACTS
Under a pooling and servicing agreement (PSA) entered into in 2006, Merrill Lynch
Mortgage Investors Trust (the trust) holds residential mortgage-backed securities originally
valued in excess of $991 million. Article IX of the PSA specifies that the trust “shall
terminate upon the earlier of . . . an Optional Termination” and the later of the maturity or
liquidation of the trust’s assets. Following the initial optional termination date, which
occurs on the first date that the aggregate stated balance of the trust’s assets is “equal to or
less than 10%” of the assets’ original value, the trustee “shall attempt” to terminate the
trust by determining the optional termination price based on information provided by the
servicer of the tru st, respondent Nationstar Mortgage LLC. The trustee then auctions off
the assets and, if it receives no bid equal to or above the optional termination price, the
servicer of the trust can terminate the trust by purchasing the assets at the optional
termination price. After the servicer purchases the trust’s assets, the trustee transfers the
assets to the servicer, sends notice of final termination to all certificate holders, makes the
final distribution of proceeds to the trust’s beneficiaries, and terminates the trust.
In 2016, the value of the trust’s assets fell below 10% of their original value,
triggering Article IX of the PSA. Nationstar exercised its right to purchase the assets at the
optional termination price, and the trustee posted a notice of te rmination on its website on
August 31, 2017. Appellant Procure LLC, a trust -beneficiary, petitioned the district court
for instructions in the administration of the trust, requesting a temporary restraining order
to prevent the trust’s termination and chal lenging Nationstar’s calculation of the optional
termination price. Nationstar then rescinded its offer to purchase the trust’s assets and

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moved to dismiss Procure’s petition for lack of a justiciable controversy. Both parties then
amended their pleadings, restating their arguments. The court granted Nationstar’s motion
to dismiss, concluding that Procure’s amended petition was moot and not ripe, and that
Procure lacked standing to bring its action.
This appeal follows.
D E C I S I O N
I. Procure’s standing before the district court
Procure argues that the district court erred by concluding that Procure lacked
standing to bring its claim following Nationstar’s rescission of its offer to terminate the
trust. We agree.
“Because standing is a jurisdictional issue , we evaluate a decision on standing de
novo.” In re Gillette Children’s Specialty Healthcare, 883 N.W.2d 778, 784 (Minn. 2016)
(quotation omitted). “Standing is the requirement that a party have a sufficient stake in a
justiciable controversy.” Security Bank & Trust Co. v. Larkin, Hoffman, Daly & Lindgren,
Ltd., 916 N.W.2d 491, 496 (Minn. 2018) (quotation omitted) . “A party may acquire
standing either as the beneficiary of a statutory grant of standing or by suffering an injury-
in-fact.” Id. (quotation omitted). The necessary injury in fact must be “concrete” and
“actual or imminent, not conjectural or hypothetical.” In re Custody of D.T.R., 796 N.W.2d
509, 512 (Minn. 2011) (quoting Lujon v. Defenders of Wildlife , 504 U.S. 560 –61, 112 S.
Ct. 2130, 2136 (1992)).
Here, the district court concluded that Procure lacked standing “because its
‘particular purpose’ in seeking instructions are based on hypothetical scenarios,” and it had

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suffered no injury-in-fact. But standing is the “requisite personal interest that must exist at
the commencement of the litigation .” In re Guardianship of Tschumy , 853 N.W.2d 728,
735 (Minn. 2014) (quotation omitted) (emphasis added). And while Procure may not have
faced an actual or imminent injury when the district court dismissed the action, Procure did
face such an injury when it filed its claims based on the potential for financial loss if the
termination of the trust proceeded. The district court therefore erred when it concluded that
Procure lacked standing to bring its suit.
II. Procure’s standing to bring appeal
Nationstar next argues that Procure lacks standing to pursue this appeal because the
district court dismissed the action without prejudice. We disagree.
We review issues of standing de novo. Gillette, 883 N.W. 2d at 784. “To have
standing to appeal, a party must be aggrieved by the decision of a court from which the
party appeals,” and a party is aggrieved and has standing to appeal when “the adjudication
of a court injuriously affects a party’s interests.” Webster v. Hennepin County, 910 N.W.2d
420, 434 (Minn. 2018). “The injury to the right impacted by the adjudication must be
immediate, and not a possible, remote consequence, or mere possibility arising from some
unknown or future contingency.” In re Custody o f D.T.R., 796 N.W.2d 509, 513 (Minn.
2011) (quotation omitted). “Thus, a party is ‘aggrieved’ when that person had a direct
interest in the litigation and that person’s rights were injuriously affected by the
adjudication.” Id.
A dismissal without prejudice is generally not appealable, Sussman v. Sussman, 178
N.W.2d 244, 244 (Minn. 1970), but we may review such a dismissal if it involves the merits

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of the action or if the dismissal affects an appellant’s rights, Fischer v. Perisian, 86 N.W.2d
737, 740 (Minn. 1957). Here, because the district court dismissed Procure’s claims as moot
and therefore unreviewable, its order amounted to a dismissal with prejudice, which is
reviewable. See Minn. Ed. Ass’n v. Indep. Sch. Dist. No. 404, 287 N.W.2d 666, 668–69 &
n.6 (Minn. 1980) ( allowing appeal from dismissal with prejudice based in part on
underlying controversy being moot); cf. Stransky v. Indep. Sch. Dist. 761, 439 N.W.2d 408,
409 (Minn. App. 1989) (granting discretionary review of dismissal without prejudice that
“amounted to dismissal with prejudice for lack of jurisdiction” because plaintiff was unable
to refile action (quotation omitted)), review denied (Minn. July 12, 1989). We therefore
conclude that Procure has standing to bring this appeal. See Minn. R. Civ. App. P.
103.03(e) (stating that appeal may be taken “from an order which, in effect, determines the
action and prevents a judgment from which an appeal might be taken”).
III. District court’s dismissal of Procure’s petition
Procure argues that the district cou rt erred by dismissing its action for lack of a
justiciable controversy. We disagree.
“Justiciability is an issue of law, which [appellate courts] review de novo.” Dean v.
City of Winona, 868 N.W.2d 1, 4 (Minn. 2015). “A court should exercise its jurisdiction to
decide a matter only if there is a justiciable controversy.” In re Risk Level Determination
of J.V., 741 N.W.2d 612, 614 (Minn. App. 2007), review denied (Minn. Feb. 19, 2008). “A
controversy is justiciable if it involves definite and concrete asser tions of right,” and a
“hypothetical injury will not will not satisfy this standard.” Id.

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In this case, the district court concluded that Procure’s action was moot because
Nationstar rescinded its purchase of the trust’s assets, thereby eliminating the need to
determine whether Nationstar wrongfully calculated the optional termination price. “A
matter may be dismissed as moot if an event occurs that resolves the issue or renders it
impossible for a court to grant effectual relief.” Id.; see also Dean, 868 N.W.2d at 4 (stating
that when district court is unable to grant relief, “the jurisdictiona l question is one of
mootness”). “The mootness doctrine is not a mechanical rule that is automatically invoked
whenever the underlying dispute between the parties is settled or otherwise resolved,” but
rather “it is a flexible discretionary doctrine,” described as “the doctrine of standing set in
a time frame: The requisite personal interest that must exist at the commencement of the
litigation (standing) must continue throughout its existence (mootness).” Dean, 868
N.W.2d at 4–5 (quotations omitted).
In Dean, homeowners challenged a municipality’s rental ordinance affecting their
ability to rent their property. 868 N.W.2d at 4. During the pendency of their appeal from a
district court’s grant of summary judgment in favor of the municipality, the homeowners
sold their home. Id. The supreme court dismissed the homeowners’ appeal as moot because
they did “not have a current interest in the litigation,” stating that dismissal of a case as
moot is appropriate “when a decision on the merits is no longer necessary or an award of
effective relief is no longer possible.” Id. at 5.
Here, similar to the homeowners in Dean, Procure has no “current interest in the
litigation” because Nation star has rescinded its purchase of the trust. Upon Nation star’s
rescission, Procure faced only a “hypothetical injury” that would occur only if Nationstar

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decided to invoke its option to terminate the trust in the future and it used an allegedly
wrongful calculation of the optional termination price. Any opinion rendered by the district
court would have been advisory only, and we therefore conclude that it did not err in
dismissing Procure’s claims as moot. See McCaughtry v. City of Red Wing , 808 N.W.2d
331, 336 (Minn. 2011) (stating that judicial controversy requires claim that “is capab le of
specific resolution by judgment rather than presenting hypothetical facts that would form
an advisory opinion”).
Procure argues that an exception to the mootness doctrine applies because
Nationstar’s alleged wrongful calculation of the optional termination price is likely to occur
again. In Dean, the supreme court held that “issues that are capable of repetition, yet evade
review,” present an exception to the mootness doctrine. 868 N.W.2d at 5. This exception
applies “whe n there is a reasonable expectation that a complaining party would be
subjected to the same action again and the duration of the challenged action is too short to
be fully litigated before it ceases or expires.” Id. at 5 (emphasis omitted).
We conclude that this exception to the mootness doctrine does not apply here. First,
the record contains no evidence that Nationstar will again try to terminate the trust with an
allegedly wrongful calculation of the optional termination price, and Procure provides no
factual assertions beyond speculation that Nationstar will do so. Second, this case does not
present an issue that will likely evade review, because Procure, as a trust-beneficiary, will
have the opportunity to challenge Nationstar’s alleged wrongful calculation of the optional
termination price, as it did here, if Nationstar invokes its option to terminate the trust in the
future. See id . at 5 (stating that “cases that have been found to evade review involve

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disputes of an inherently limited duration, such as prior restraints on speech,” and “short -
term mental-health confinement orders” (emphasis added)).
Procure also argues that “Minnesota should follow analogous federal precedent
establishing the circumstances in which a party’s voluntary cessation of challenged conduct
can render a case moot.” Under the voluntary-cessation doctrine, “a defendant’s voluntary
cessation of a challenged practice ordinarily does not deprive a federal court of its power
to determine the legality of the practice.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.,
Inc., 528 U.S. 167, 169–71, 120 S. Ct. 693, 709 (2000) (concluding that factory could not
avoid litigation regarding its pollution of a river where it voluntarily ceased wrongfully
discharging mercury into the river during case and could restart pollution at any time). But
the Minnesota Supreme Court has not adopted this doctrine, and we decline to do so here.
Because no exception to the mootness doctrine applies, the district court did not err
in dismissing this action a s moot. We therefore need not address Procure’s claim that the
district erred in concluding that its claims lacked ripeness. See Court Park Co. v. County
of Hennepin , 907 N.W.2d 641, 645 n.4 (Minn. 2018) (declining to address issue when
deciding case on other grounds and addressing issue would not alter outcome of case).
Affirmed.