LESLIE E. KOBAYASHI, District Judge.
Before the Court are the following three motions: (1) Plaintiffs Davelyn Aniu, John Aniu, and Linda Molina formerly known as Linda Pacheco's (collectively "Plaintiffs") Motion to Dismiss Counterclaim Complaint, filed April 13, 2012 ("Motion to Dismiss") [dkt. no. 48]; (2) Defendant OneWest Bank, FSB's ("Defendant" or "OneWest") Motion for Summary Judgment Re: Complaint, filed April 20, 2012 ("Motion for Summary Judgment on Complaint") [dkt. no. 50]; and (3) Defendant's Motion for Summary Judgment on Its Counterclaim for Foreclosure and for Interlocutory Decree of Foreclosure, filed April 20, 2012 ("Motion for Summary Judgment on Foreclosure") [dkt. no. 56]. On May 15, 2012, OneWest filed its memorandum in opposition to Plaintiffs' Motion to Dismiss, and on July 31, 2012, Plaintiffs filed their consolidated memorandum in opposition to both of OneWest's motions. OneWest filed its reply in support of both of its motions on August 8, 2012.
The Court finds these matters suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai'i ("Local Rules"). After careful consideration of the motions, supporting and opposing memoranda, and the relevant legal authority, the Court rules as follows: Plaintiffs' Motion to Dismiss is DENIED; Defendant's Motion for Summary Judgment on Complaint is GRANTED; and Defendant's Motion for Summary Judgment on Foreclosure is GRANTED for the reasons set forth below.
Plaintiffs filed the instant action on July 16, 2010 against OneWest and Home Loan Center, Inc., doing business as Lending Tree Loans ("Home Loan," both collectively, "Defendants").
Plaintiffs are the record owners of the subject property located at 15-337 North Puni Makai Loop, Pahoa, Hawai'i, 96778, designated as TMK (3) 1-5-066-028-0000 (the "Property").
OneWest alleges that it is entitled to enforce the Mortgage, and that Plaintiffs are in default as of September 1, 2008. It states that, as a result of the default, the entire amount of the principle obligation of the Note and Mortgage is due and payable. OneWest alleges that, although demand has been made, the Plaintiffs have failed to pay. On July 1, 2009, OneWest sent letters to Plaintiffs advising them of their default under the Note and Mortgage, and providing thirty days to cure. OneWest advised Plaintiffs that failure to cure the default within thirty days may result in the noteholder's option to accelerate the total balance outstanding, and advised them of the right to reinstate after acceleration ("Notices of Acceleration").
Plaintiffs assert that under Haw. Rev. Stat. Chapter 667, OneWest must initiate a civil action for foreclosure by filing in the Third Circuit Court, State of Hawai'i, where the Property is situated. [Mem. in Supp. of Motion to Dismiss at 2-3.] Plaintiffs further allege that OneWest is attempting to bring its "`State' foreclosure action" before this Court by refusing to agree to stipulate to Plaintiffs' voluntary dismissal of their federal action.
OneWest argues that the Court does have subject matter jurisdiction over the claims at issue, and faults Plaintiffs for refusing to dismiss the claims with prejudice as a further stalling tactic. It argues that the Court has diversity jurisdiction over Plaintiffs' Complaint and has supplemental jurisdiction over the state law claims in its Counterclaim Complaint pursuant to 28 U.S.C. § 1367. [Mem. in Opp. to Motion to Dismiss at 6.]
OneWest moves for summary judgment on all of the claims in Plaintiffs' Complaint. It states that it has possession of the indorsed Note and is the current mortgagee under the Mortgage. The Mortgage was assigned by MERS, as nominee for Home Loan, to OneWest in the recorded Assignment. [Mem. in Supp. of Motion for Summary Judgment on Complaint at 4.]
OneWest first argues that Plaintiffs' First, Second, and Eleventh counts for, recoupment, and rescission under TILA, and for equitable tolling, fail as a matter of law. It argues that the claims for damages are time-barred because the loan transaction and alleged violation occurred on July 18, 2007, when the Note was executed by Borrowers and the Mortgage was executed by all Plaintiffs. Plaintiffs' Complaint was filed on July 16, 2010, beyond the one-year limitations period in TILA § 1640(e). It argues that equitable tolling does not apply because Plaintiffs have not actively pursued judicial remedies and were not induced or tricked into allowing the filing deadline to pass. It next argues that, even if the TILA claims are not time-barred, they fail against OneWest as assignee of the loan. [Id. at 7-8.]
As for recoupment, OneWest argues that Plaintiffs are barred from bringing an affirmative recoupment claim, which is only available as a defense in an action to collect a debt. With respect to rescission, OneWest asserts that Plaintiffs' claims are time-barred. It maintains that, because Plaintiffs signed, dated, and acknowledged receipt of all required notices on July 18, 2007, there is a rebuttable presumption that they received these disclosures, and that Plaintiffs present no evidence to overcome the presumption. OneWest further argues that Plaintiffs have not alleged an intent or ability to effectuate rescission; that is, Plaintiffs have provided no evidence of their ability to tender the borrowed funds back to the lender. [Id. at 12-13.]
Next, OneWest argues that Plaintiffs' Third cause of action fails as a matter of law because it is time-barred and without merit. According to OneWest, the only
OneWest moves for summary judgment on Plaintiffs' Chapter 480 claims on the grounds that they are vague, conclusory, and unsupported by facts. First, it argues that Plaintiffs' only remedy against OneWest would be rescission, and as discussed above, Plaintiffs have not alleged an intent or ability to effectuate a rescission. Second, it argues that Plaintiffs cannot show that OneWest targeted them for inappropriate credit products because OneWest, as assignee, was not involved in the origination of the loan, and OneWest did not exist until March 19, 2009; nor could OneWest have made any oral representations involving the loan. It also argues that it has no duty of care to the Borrowers to ensure that they can repay the loan. [Id. at 15-20.]
As to Plaintiffs' Fifth cause of action for fraud, OneWest argues that any allegations of false representations made during the origination of the loan fails against it because it was not a party to the documents, nor did it exist during that time period in 2007. OneWest argues that it could not have made any representations, false or otherwise, to induce Plaintiffs to enter into the Note and Mortgage. It further argues that it did not have knowledge of the alleged fraud on the part of Home Loan during origination because all of the required documents were properly executed and provided to Plaintiffs. Last, it states that the fraud allegations are not plead with the particularity required by Fed.R.Civ.P. 9(b). [Id. at 21-22.]
According to OneWest, Plaintiffs' Sixth cause of action for conspiracy fails as a mater of law because it cannot stand alone as a separate action, but must be the basis for another claim. Here, Plaintiffs appear to allege that their conspiracy claim is based on fraud, which OneWest argues fails as a matter of law. [Id. at 23.]
OneWest next argues that Plaintiffs' Seventh cause of action for aiding and abetting fails as a matter of law because the Complaint provides no factual support and simply states a legal conclusion. To the extent the claim is based on their fraud allegation in the Fifth cause of action, OneWest argues that the claim fails along with the fraud claim. [Id. at 24.]
Plaintiffs' Eighth cause of action seeks injunctive relief to prohibit a non-judicial foreclosure sale of the Property. OneWest argues that it is entitled to summary judgment because: injunctive relief is a remedy, not an affirmative claim; it is an equitable remedy, requiring the seeking party to do equity itself; and OneWest is the current holder of the Note and Mortgage, and therefore has standing to foreclose on the Property due to Borrowers' default on the Note. [Id. at 25-26.]
OneWest argues that Plaintiffs' Ninth and Tenth causes of action relating to improper securitization are unintelligible and
OneWest also seeks summary judgment on its Counterclaim Complaint, and seeks an interlocutory decree of foreclosure. It emphasizes the following facts: (1) Home Loan made the loan to Borrowers; (2) Borrowers executed and delivered the Note to Home Loan; (3) as security for the loan, Plaintiffs executed and delivered to MERS the Mortgage; (4) the Mortgage was assigned to OneWest; (5) Plaintiffs are in default under the Note and Mortgage and no payments have been made since September 1, 2008; (6) OneWest provided Plaintiffs thirty days to cure the default and warned them of the possible of acceleration of the entire amount due, but no payments were made after the Notices of Acceleration were sent; and (7) OneWest is the current holder of the Note with standing to prosecute a foreclosure action, and in possession of the original Note indorsed in blank. [Mem. in Supp. of Motion for Summary Judgment on Counterclaim Complaint, Decl. of Katelin Mann ("Mann Decl.") at ¶¶ 6-9, Exh. A (Mortgage), Exh. B (Notices of Acceleration).]
As of May 4, 2012, the total amount due under the Note and Mortgage, excluding attorneys' fees, was $311,622.91. [Mann Decl., Exh. C (Payoff Calculations).] The Mortgage provides that, in the event of foreclosure, OneWest may be awarded sums secured by the Mortgage, including reasonable attorneys' fees. OneWest states that it engaged The Law Office of David B. Rosen, ALC for the purpose of bringing this action, and that it is entitled to its fees. It asserts that, due to Borrowers' default on the Note, and because it holds the Note and Mortgage, there is no genuine issue of material fact disputing OneWest's right to foreclose on the Property. [Mem. in Supp. of Motion for Summary Judgment on Counterclaim Complaint at 5-7.]
Plaintiffs first argue that the voluntary dismissal of their Complaint should result in the dismissal of OneWest's Counterclaim Complaint. They state that OneWest "is capitalizing on its refusal to enter into a stipulation for voluntary dismissal (without prejudice) as a means to by-pass the statutory authority conferring jurisdiction upon the Circuit Courts of the State of Hawai'i." [Mem. in Opp. to OneWest's Motions at 3.] It again argues that Haw. Rev.Stat. § 667-1 authorizes foreclosure actions only in Hawai'i State circuit courts. [Id. at 4.]
Next, Plaintiffs assert that their request for loan modification is still pending with OneWest. By correspondence dated June 6, 2012, a division of OneWest acknowledged receipt of Plaintiffs' request and informed them that certain information was missing. Plaintiffs contend they have submitted additional information and continue to work on getting approval of their modification request. [Id. at 6.]
In its reply, OneWest first argues that Plaintiffs' allegations regarding their voluntary dismissal of claims are not relevant. Its cites the magistrate judge's order indicating that Plaintiffs have not moved the Court for an order allowing dismissal pursuant to Fed.R.Civ.P. 41(a)(2), but that they should so move if they desired a voluntary dismissal. [Reply at 2-3 (citing Order Granting Defendant OneWest Bank, FSB's Ex Parte Motion to Extend Time to File Dispositive Motions, filed 2/2/12 (dkt. no. 44)).] OneWest asserts that it never agreed to a dismissal without prejudice, and informed Plaintiffs' counsel that any
As to Plaintiffs' request for loan modification, OneWest states that it worked with Plaintiffs and the Court for over two years, but that Plaintiffs "repeatedly delayed and ultimately did not provide the required modification application materials. Thus, Plaintiffs were denied a modification[.]" [Id. at 6 (citing Declaration of David B. Rosen ("Rosen Decl."), Exh. A (3/1/12 Modification Denial Letter).] OneWest states that it has no duty to modify the subject loan, and that failure to grant a modification is not actionable. [Id.]
OneWest notes that Plaintiffs' opposition is largely silent with regard to OneWest's Motion for Summary Judgment on Plaintiffs' Complaint. It states that Plaintiffs do not dispute that they are in default under the Note and Mortgage, nor do they address "the entire substance of the Motion Re: Complaint regarding all eleven counts contained in the Complaint." [Id. at 5.] OneWest requests that its motions be granted as unopposed.
Plaintiffs argue that the Court is without subject matter jurisdiction to hear OneWest's Counterclaim Complaint. The Court has original jurisdiction over Plaintiffs' Complaint on the basis of federal question and diversity jurisdiction. The Court has jurisdiction over OneWest's Counterclaim Complaint under 28 U.S.C. § 1367, which states in pertinent part:
Here, the Complaint seeks to enjoin OneWest from foreclosing and conducting a foreclosure auction sale of the Property. [Complaint ¶ 6.] The Counterclaim Complaint involves the same parties, the same Property, and the overlapping question as to OneWest's right to foreclose on the Property.
Moreover, Plaintiffs' assertion that the Counterclaim Complaint may only be heard in state circuit court is without merit. This district court has previously exercised supplemental jurisdiction under 28 U.S.C. § 1367 to hear counterclaims brought by a defendant mortgagee for foreclosure under Haw.Rev.Stat. § 667-1. In McCarty v. GCP Management, LLC, Civil No. 10-00133 JMS/KSC, 2010 WL 4812763 (D.Hawai'i Nov. 17, 2010), the plaintiffs filed suit in state court and defendants removed the action to federal court and asserted a counterclaim for foreclosure. The district court granted the defendant mortgagee's motion for summary judgment, ruling that the defendant was entitled to issuance of a decree of foreclosure. 2010 WL 4812763, at *8 (citing IndyMac Bank v. Miguel, 117 Haw. 506, 520, 184 P.3d 821, 835 (Haw.App. 2008), and Haw.Rev.Stat. § 667-1); see also BNP Paribas VPG Brookline CRE, LLC v. White Sands Estates, LLC, Civil No. 09-00191 JMS-BMK, 2012 WL 984890, at *3 (D.Hawai'i Mar. 22, 2012) (same).
Plaintiff's Motion to Dismiss is HEREBY DENIED.
Pursuant to Fed.R.Civ.P. 56(a), a party is entitled to summary judgment "if the
To the extent Count I seeks recoupment, it fails to state an affirmative claim.
Enriquez v. Countrywide Home Loans, FSB, 814 F.Supp.2d 1042, 1069 (D.Hawai'i 2011).
With respect to rescission, Plaintiffs' claims are time-barred.
Gamiao v. Bank of Am., CV. No. 10-00311 DAE KSC, 2011 WL 839757, at *4 (D.Hawai'i Mar. 4, 2011). Here, the three-day right of rescission applies because Plaintiffs have not established a TILA violation; the notices and material disclosures were provided and Plaintiffs acknowledged receiving them. [Boyle Decl., Exhs. C-E (7/18/07 Notices of Right to Cancel).] Plaintiffs presented no evidence to the contrary.
Gamiao, 2011 WL 839757, at *5. OneWest is entitled to summary judgment on Count I.
TILA authorizes civil liability in the form of actual damages, statutory damages, costs, and attorneys' fees. 15 U.S.C. § 1640. Pursuant to § 1640(e), there is a one-year statute of limitations for civil liability claims under TILA. Id. § 1640(e). The limitations period generally runs from the date of consummation of the transaction. King, 784 F.2d at 915. Plaintiffs' Complaint was filed on July 16, 2010, and the loan transaction occurred on July 18, 2007, beyond the one-year limitations period in TILA § 1640(e).
The Ninth Circuit in King stated:
Tedder v. Deutsche Bank Nat'l Trust Co., 863 F.Supp.2d 1020, 1035-36 (D.Hawai'i 2012). Plaintiffs present no evidence to support a claim for equitable tolling. Rather, on July 18, 2007, Plaintiffs signed, dated and acknowledged receipt of two such notices. [Decl. of Charles Boyle ("Boyle Decl."), Exhs. C-E (7/18/07 Notices of Right to Cancel).] OneWest is entitled to summary judgment on Count II.
There is no private right of action for alleged RESPA violations. This district court has recognized that:
Caniadido v. Countrywide Bank, FSB, Civil No. 11-00080 SOM/BMK, 2011 WL 2470640, at *8 (D.Hawai'i June 20, 2011). Accordingly, Plaintiffs fail to state a claim in Count III, and OneWest is entitled to summary judgment.
Plaintiffs' claims for violation of Haw.Rev.Stat. Chapter 480 are vague and conclusory, and fail to state a claim against OneWest. Section 480-2(a) states: "Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful." Section 481A-3(a) sets forth various forms of deceptive trade practices. This district court has recognized with respect to nearly identical claims that:
Casino v. Bank of Am., Civil No. 10-00728 SOM/BMK, 2011 WL 1704100, at *12-13 (D.Hawai'i May 4, 2011).
OneWest was not the original lender, and Plaintiffs fail to establish that it breached any duty to them, or that it made any misrepresentations that amount to violations of Haw. Rev. Stat. Chapter 480. OneWest is entitled to summary judgment on Count IV.
Plaintiffs assert that, prior to closing, Home Loan made false representations about the terms of loans and documents. They further allege that Home Loan: knew the representations were false or that it lacked knowledge of their truth or falsity; and made the false representations in contemplation of Plaintiffs' reliance on them. Plaintiffs' allegations regarding fraudulent statements made during the consummation of their loan fail to state a claim against OneWest, the assignee that was not present during loan origination.
Under Hawai'i law, the elements of a fraudulent or intentional misrepresentation claim are: "(1) false representations made by the defendant; (2) with knowledge of their falsity (or without knowledge of their truth or falsity); (3) in contemplation of plaintiff's reliance upon them; and (4) plaintiffs detrimental reliance." Miyashiro v. Roehrig, Roehrig, Wilson & Hara, 122 Haw. 461, 482-483, 228 P.3d 341, 362-63 (Ct.App.2010) (citing Hawaii's Thousand Friends v. Anderson, 70 Haw. 276, 286, 768 P.2d 1293, 1301 (1989)). In order to support a finding of
Stanton v. Bank of Am., N.A., 834 F.Supp.2d 1061, 1085 (D.Hawai'i 2011).
Plaintiffs make no attempt to show that OneWest had knowledge or notice of the fraud allegedly undertaken by Home Loan. OneWest is entitled to summary judgment on Count V.
Plaintiffs' claims for civil conspiracy and aiding and abetting fail without valid underlying claims. "In general, Hawaii does not recognize independent causes of action for civil conspiracy or aiding and abetting — such theories of potential liability are derivative of other wrongs." Long v. Deutsche Bank Nat'l Trust Co., Civil No. 10-00359 JMS/KSC, 2011 WL 2650219, at *8 (D.Hawai'i July 5, 2011) (citing Weinberg v. Mauch, 78 Haw. 40, 49, 890 P.2d 277, 286 (1995); Chung v. McCabe Hamilton & Renny Co., 109 Haw. 520, 530, 128 P.3d 833, 843 (2006)).
Stanton v. Bank of Am., N.A., Cv. No. 09-00404 DAE-LEK, 2010 WL 4176375, at *18 (D.Hawai'i Oct. 19, 2010) (some alterations in Stanton).
As to Plaintiff's aiding and abetting claim, the court in Stanton recognized that:
Id. at *14 (some alterations in Stanton). Further, the court "agree[d] with Television Events & Marketing, Inc. and f[ound] the weight of authority in support of a cause of action for civil aiding and abetting an intentional tort under Hawai'i law as defined by the Restatement (Second) of Torts § 876 subsections (b) and (c)." Id. at *15.
The Restatement (Second) of Torts § 876 states, in pertinent part:
Hele Ku KB, LLC v. BAC Home Loans Servicing, LP, Civil No. 11-00183 LEK-KSC, 2011 WL 5239744, at *15-16 (D.Hawai'i Oct. 31, 2011). For the same reasons stated in Hele Ku KB, LLC, Plaintiffs' civil conspiracy and aiding and abetting claims fail. OneWest is entitled to summary judgment on Counts VI and VII.
Courts in this district have routinely recognized that a request for injunctive relief is not a stand-alone cause of
White v. Indymac Bank, FSB, No. CV. 09-00571 DAE-KSC, 2011 WL 1483928, at *8 (D.Hawai'i Apr. 18, 2011). OneWest is therefore entitled to summary judgment on Count VIII.
This Court has previously held as follows with respect to nearly identical claims regarding improper securitization:
Rodenhurst v. Bank of Am., 773 F.Supp.2d 886, 898-99 (D.Hawai'i 2011). OneWest is entitled to summary judgment on Counts IX and X.
As discussed above, Plaintiffs made no effort to present any evidence of fraudulent concealment to support equitable tolling.
Angel v. BAC Home Loan Servicing, LP, Civ. No. 10-00240 HG-LEK, 2010 WL 4386775, at *4-5 (D.Hawai'i Oct. 26, 2010) (footnote omitted). For these reasons, OneWest is entitled to summary judgment on Count XI.
OneWest's Motion for Summary Judgment on the Complaint is HEREBY GRANTED.
It is undisputed that Plaintiffs are in default of their obligations under the loan documents, and they have presented no evidence refuting OneWest's showing that it is entitled to summary judgment on its Counterclaim Complaint. The Court finds that OneWest has met its summary judgment evidentiary burden to establish a prima facie case that it is entitled to foreclose on the Mortgage. See IndyMac Bank v. Miguel, 117 Haw. 506, 520, 184 P.3d 821, 835 (Ct.App.2008) (explaining that a foreclosure decree is appropriate where four material facts have been established: "(1) the existence of the [loan] Agreement, (2) the terms of the Agreement, (3) default by [mortgagor] under the terms of the Agreement, and (4) the giving
BNP Paribas VPG Brookline CRE, LLC v. White Sands Estates, LLC, Civil No. 09-00191 JMS-BMK, 2012 WL 984890, at *3-4 (D.Hawai'i Mar. 22, 2012).
Here, the evidence is undisputed that OneWest is entitled to the requested declaratory relief, and an interlocutory decree of foreclosure. OneWest's Motion for Summary Judgment on the Counterclaim Complaint is HEREBY GRANTED.
The Court HEREBY DIRECTS OneWest to provide for the Court's approval and signature an appropriate Foreclosure Decree setting forth the necessary terms and conditions to effectuate the foreclosure process. The parties are to meet and confer in the selection of a proposed foreclosure Commissioner with sufficient experience in the County of Hawai'i. If the parties are unable to agree on a foreclosure Commissioner, each party may propose a foreclosure Commissioner and submit their name and qualifications, and the court will make the final selection of a foreclosure Commissioner. A proposed Foreclosure Decree and foreclosure Commissioner should be provided to the Court by
On the basis of the foregoing, Plaintiffs' Motion to Dismiss, filed April 13, 2012, is DENIED; Defendant's Motion for Summary Judgment on Complaint, filed April 20, 2012, is GRANTED; and Defendant's Motion for Summary Judgment on Foreclosure, filed April 20, 2012, is GRANTED.
IT IS SO ORDERED.
