LESLIE E. KOBAYASHI, District Judge.
Before the Court is Intervenor Defendant Wells Fargo Bank, N.A., as Trustee of the Structured Asset Mortgage Investments II Inc. Bear Stearns Mortgage Funding Trust 2007-AR2, Mortgage Pass-Through Certificates, Series 2007-AR2 ("Wells Fargo"), and Defendant EMC Mortgage Corporation's ("EMC," collectively "Defendants"
Plaintiffs filed their original Complaint on March 9, 2011, and their First Amended Complaint on July 25, 2011, against Wells Fargo Home Mortgage of Hawaii, LLC; EMC, the loan servicer; and Greenberry Financial Services, Inc. doing business as Franklin Financial ("Franklin Financial").
Plaintiffs' First Amended Complaint alleges that they applied for and were promised a thirty-year, fixed-rate loan, but that Franklin Financial actually obtained two subprime loans. They allege that the loan application was completed by agents or employees of Franklin Financial, and that Plaintiffs were not provided with a completed, signed and dated copy of the application. Plaintiffs claim that the November 18, 2006 loan application included inflated income amounts, inserted by Franklin Financial, without Plaintiffs' knowledge. They allege that Franklin Financial did not provide signed and dated copies of the following documents, inter alia: Truth in Lending Act Statement, Good Faith Estimate, HUD-1 Settlement Statement, Servicing Disclosure Statement, Notice of Assignment, and Disclosure of Credit Scores. Plaintiffs also claim that Franklin Financial did not disclose the material terms of the loan, including relevant rates and Plaintiffs' right to rescind or cancel.
Plaintiffs approached EMC
Plaintiffs assert the following claims in their First Amended Complaint: Count I — violation of the Home Ownership Equity Protection Act, 15 U.S.C. § 1639 et seq. ("HOEPA"); Count II — violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. ("RESPA"); Count III — violation of the Federal Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"); Count IV — violation of the Fair Credit Reporting Act, in violation of 15 U.S.C. § 1681 et seq. ("FCRA"); Count V — fraudulent misrepresentation; Count VI — breach of fiduciary duty; Count VII — unjust enrichment; Count VIII — civil conspiracy and aiding and abetting; Count IX — quiet title; Count X — fraud; Count XI — violation of Fair Debt Collection Practices Act, 15 U.S.C. § 1692e et seq. ("FDCPA"); Count XII — mistake; Count XIII — unconscionability; Count XIV — unfair and deceptive acts or practices ("UDAPs"), in violation of Haw.Rev. Stat. § 480-2 and § 481A-3; Count XV — failure to act in good faith; Count XVIII — negligent infliction of emotional distress ("NIED"); Count XIX — violation of the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801 et seq. ("GLBA"); Count XX — violation of the right to privacy under the Hawai'i Constitution; and Count XXI — violation of Haw.Rev.Stat. Chapter 667.
Plaintiffs seek: a judgment of rescission; statutory, actual, treble, and punitive damages; a temporary restraining order or injunctive relief; a judgment of recoupment, reimbursement, and/or indemnification; and any other appropriate relief. [First Amended Complaint at pg. 51.]
Defendants move for summary judgment on all of the claims in Plaintiffs' First Amended Complaint. Defendants present evidence that, as part of the subject loan transaction, on October 25 and 26, 2006, Mr. Wood was provided with: (1) an initial Good Faith Estimate; (2) an initial TILA disclosure statement; (3) an Equal Credit Opportunity Act Disclosure; (4) a Patriot Act Information Disclosure; (5) a Credit Score Information Disclosure; and (6) a Privacy Notice Disclosure. [Pike Decl., Exh. D.] On December 18, 2006, as part of the closing process, Mr. Wood was provided with: (1) a TILA Disclosure Statement; (2) a Loan Servicing Disclosure Statement; (3) a Borrower's Certification and Authorization to Release Information; (4) an Equal Credit Opportunity Act Disclosure; and (5) a Consumer Credit Score Disclosure. [Pike Decl., Exh. F.] On December 18, 2006, Mr. Wood received a final HUD-1 Settlement Statement. [Id.] On January 2, 2007, EMC sent Mr. Wood a notice that, effective February 1, 2007, Franklin Financial would no longer service the loan, and that EMC would be the new servicer. [Pike Decl., Exh. H.]
Defendants state that they were not involved in the origination of the loan, did not make any misrepresentations, were not responsible for any non-disclosures at the time of origination, and that Wells Fargo is in possession of the original Note. [Mem. in Supp. of Motion at 2-3.]
Defendants first argue that Counts I and III fail to state claims under HOEPA and TILA because: (1) they are time-barred by the applicable statutes of limitations; (2) Plaintiffs were provided with all necessary disclosures; (3) Plaintiffs were not entitled to a Notice of Right to Cancel, because theirs was a purchase money loan, not a refinance; and (4) Plaintiffs are not able to tender funds to effect a rescission. [Id. at 9-18.]
Next, Defendants argue that Plaintiffs' Count II RESPA claim fails as a matter of law because it is time-barred and without merit. Defendants note that they could not have been involved with excessive fees provided to the broker, because they were not parties to the loan origination. They also argue that Plaintiffs failed to plead actual, pecuniary damages as required by RESPA, and that the August 22, 2010 letter is not a QWR under RESPA because it did not relate to the servicing of the loan or contain a statement of specific reasons why Plaintiffs' account was in error. [Id. at 18-21.]
Defendants claim they are entitled to summary judgment on Count IV because Plaintiffs lack standing to bring a FCRA claim for damages. Plaintiffs have not alleged that Defendants received notification from a credit reporting agency ("CRA") regarding the accuracy of information furnished by Defendants. [Id. at 22.]
According to Defendants, Counts V, X, and XII fail as a matter of law because they did not make any false representations to Plaintiffs. They further argue that the fraud allegations are not alleged with the particularity required by Fed. R.Civ.P. 9(b). As to the claim for mistake, Defendants argue that there are no allegations explaining what facts both Defendants and Plaintiffs misunderstood; rather, Defendants could not have been mistaken about any of the loan terms because
Defendants argue that Count XI fails as a matter of law. As lender and mortgage servicer, they assert that they did not owe Plaintiffs a duty with respect to the loan transaction or foreclosure. [Id. at 27.]
Defendants seek summary judgment on Count VII on the ground that Plaintiffs do not allege that Defendants received and unjustly retained any benefit. [Id. at 30.]
Count VIII fails to state a claim, according to Defendants, because it relies on Plaintiffs' meritless HOEPA, RESPA, TILA, FCRA, fraud, UDAP, and GLBA claims. Again, Defendants note that they were not parties to the loan consummation, and it is impossible for them to have made any of the alleged material representations to Plaintiffs. [Id. at 30-31.]
Defendants argue that, in an action to quiet title, Plaintiffs have the burden to prove that they have paper title to the property or that they hold by adverse possession. Here, Plaintiffs have not effectively rescinded, and they do not have title to the Property pursuant to the Quitclaim Deed. [Id. at 32-33.]
Next, Defendants seek summary judgment on Count XI because Wells Fargo was the holder of the Note and Mortgage at the time of the Foreclosure Sale. They argue that a borrower does not have standing to challenge an indorsement of a note because a borrower is not a party to the indorsement or assignment. Here, the Note was made payable to the order of Franklin Financial, who then properly negotiated the Note by indorsing the Allonge to the Note in blank, thereby converting the Note to a bearer instrument, and transferred it to Wells Fargo. [Id. at 34-37.]
According to Defendants, Count XIII alleging unconscionability fails to state claim against them because they were not parties to the consummation of the loan, and had no part in explaining the terms of the loan to Plaintiffs or providing them with the necessary disclosures. They also argue that Plaintiffs have not identified any unconscionable term in the various agreements. [Id. at 38-39.]
Defendants argue they are entitled to summary judgment on Count XIV because the claim is time-barred, Defendants made no misrepresentations, and because Plaintiffs cannot tender funds to effect a rescission. [Id. at 40-42.]
Next, Defendants state that Count XV fails to state claim because: (1) they were not parties to the loan transaction and cannot have breached any agreement before such agreement was formed; (2) Wells Fargo did provide Plaintiffs with a loan modification, which they defaulted on; and (3) subsequent request for a loan modification was not improperly denied or ignored. [Id. at 43-45.]
As to Count XVIII, Defendants argue that they did not act in an extreme and outrageous manner because they acted within their rights by foreclosing on the Property, nor did they misrepresent any of the terms of the loan because they were
Defendants argue that Counts XIX and XX must be dismissed because there exists no private right of action for either of these claims. [Id. at 48-50.]
Defendants seek summary judgment on Count XXI, arguing that Wells Fargo completed the foreclosure sale in total compliance with Haw.Rev.Stat. Chapter 667, as evidenced by the Mortgagee's Affidavit. They assert that Wells Fargo: (1) was represented by an attorney licensed to practice in Hawai'i; (2) published the required advertisement in The Honolulu Star-Advertiser once in each of three successive weeks, fourteen days before the public auction; (3) timely posted a copy of the NOI on the Property; and (4) recorded the Mortgagee's Affidavit. [Id. at 51.]
Plaintiffs argue that there are genuine issues of material fact precluding summary judgment, including: (1) Defendants are not the holders of the Note, but that the principal creditor is "Bank of America Trust"; (2) the foreclosure was not properly conducted because there is a break in the chain of title; and (3) Plaintiffs did not receive proper notice of the foreclosure because they were not personally served with the NOI. [Mem. in Opp. at 2-6.] Plaintiffs also seek time for additional discovery. [Id. at 5.]
Plaintiffs first argue, without providing evidentiary support, that through "informal discovery Plaintiffs have information that the principal creditor is actually Bank of America Trust." [Id.] They contend that Defendants "are unfairly and deceptively attempting to enforce the note and mortgage when they lack legal or beneficial ownership of the underlying note and mortgage. These disputes are genuine issues that still remain and should be addressed at trial." [Id.]
Next, Plaintiffs assert that the foreclosure was improperly conducted because Franklin Financial improperly transferred the loan. Further, they argue that Defendants did not have proper legal authority to foreclose because Plaintiffs were not personally served with the NOI. [Id. at 6.]
Plaintiffs state that they "are in the process of requesting a loan modification and are under the impression that they would qualify." [Id. at 8.] They also request time "to have movants make required disclosures and that plaintiffs be allowed time to conduct formal discovery." [Id.]
In opposition to Defendants' Motion, Plaintiffs submitted the Affidavit of Richard M. Wood ("Wood Aff.), but did not file a concise statement of facts or any supporting documents. Mr. Wood states in his Affidavit:
[Wood Aff. (dkt. no. 59).]
In their reply, Defendants maintain that Plaintiffs' First Amended Complaint, and their request for more time to conduct discovery, are intended only to "further stall the inevitable eviction of Plaintiffs from the Property." [Reply at 3.] With their reply, Defendants filed Objections to Plaintiffs' opposition, and fault Plaintiffs for not presenting any facts or admissible evidence in opposition to the Motion.
Defendants argue that Plaintiffs have not submitted any admissible evidence in support of their claim that Wells Fargo did not have authority to foreclose. Rather, Defendants claim that Wells Fargo did have such authority, as set forth in the Motion. [Id. at 5.]
They note that Plaintiffs actually received the NOI, despite claiming that they were not personally served. In fact, personal service was made, but Plaintiffs attempted to refuse service, and refused to sign for it. [Id. at 2; Declaration of Derek Wong ("Wong Decl."), Exh. O (7/25/10 Return of Service), Exh. P (9/6/10 Certified Mail Delivery Receipts).] The Mortgagee's Affidavit states that the NOI was served upon Plaintiffs, posted on the Property, and published in The Honolulu Star-Advertiser. [Pike Decl., Exh. M (Mortgagee's Affidavit).] Further, Defendants' foreclosure counsel sent a letter to Plaintiffs' counsel, dated October 4, 2010, confirming that the loan was referred to counsel to conduct a foreclosure of the Property, and enclosed a copy of the Note and Mortgage. [Pike Decl., Exh. L (10/4/10 Letter).]
Next, Defendants argue that Plaintiffs have had ample time to conduct discovery
According to Defendants, Plaintiffs are not currently being considered for a loan modification, and no settlement discussions are pending. "This is because Plaintiffs, despite repeated requests from Defendants, have failed to submit the documents required from them and have not otherwise responded to Defendants' prior settlement communications." [Id. at 12.]
Pursuant to Federal Rule of Civil Procedure 56(a), a party is entitled to summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."
Rodriguez v. Gen. Dynamics Armament & Technical Prods., Inc., 696 F.Supp.2d 1163, 1176 (D.Hawai'i 2010) (some citations omitted).
The Court first notes that, despite Plaintiffs' bare assertion that there are genuine issues of material fact precluding summary judgment, they fail to point to any evidence in the record demonstrating as much. Rather, Defendants have met their burden on summary judgment as to each claim by demonstrating the absence of any genuine issue of material fact. See T.W. Elec. Serv., Inc., 809 F.2d at 630. Even drawing all justifiable inferences in Plaintiffs' favor, the Court concludes that there are no genuine issues of material fact, and that Defendants are entitled to judgment as a matter of law on each claim, as set forth more fully below.
Counts I and III are time-barred. TILA claims seeking damages are subject to a one-year statute of limitations that begins to run from the date the loan is consummated, but the doctrine of equitable tolling may extend that period. 15 U.S.C. § 1640(e); Cannon v. U.S. Bank, NA, Civ. No. 11-00079 HG-BMK, 2011 WL 1637415, at *5 (D.Hawai'i Apr. 29, 2011) (citing King v. Cal., 784 F.2d 910, 915 (9th Cir.1986)). Where the borrower allegedly did not receive the required TILA disclosures, the borrower must bring his rescission claim within three years after the loan consummation. The three-year period is a statute of repose, which is not subject to equitable tolling. 15 U.S.C. § 1635(f); Cannon, 2011 WL 1637415, at *6 (some citations omitted) (citing Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir.2002)). HOEPA is an amendment to TILA and is subject to the same statute of limitations. Herschelman v. New Century Mortg. Corp., Cv. No. 09-00461 DAE-KSC, 2010 WL 4448224, at *4 n. 3 (D.Hawai'i Oct. 29, 2010) (citation omitted).
Insofar as Plaintiffs filed their original Complaint on March 9, 2011, and their loan closing date was December 11, 2006, they filed their HOEPA and TILA rescission claims beyond the three-year statute of repose. Further, Plaintiffs' right of rescission expired when the Property was sold on March 3, 2011. They also failed to file their HOEPA and TILA damages claims within the one-year statute of limitations. Plaintiffs present no argument or evidence regarding equitable tolling. Further, Mr. Wood executed an acknowledgment of receipt of the TILA Disclosure Statement.
The Court GRANTS the Motion as to Counts I and III.
Plaintiffs' Count II RESPA claim is also time-barred. "The statute of limitations for a RESPA claim is either one or three years from the date of the violation, depending on the type of violation." Cannon, 2011 WL 1637415, at *7. Alleged violations of § 2607 are subject to a one-year statute of limitations. 12 U.S.C. § 2614. Plaintiffs failed to bring their RESPA claim within either of the applicable limitations periods. Although equitable tolling may apply to RESPA claims, Plaintiffs have not alleged or presented any facts specific to the RESPA claim that would warrant equitable tolling.
The Motion is GRANTED as to Count II.
This district court has recognized that:
Cootey v. Countrywide Home Loans, Inc., Civil No. 11-00152 JMS/KSC, 2011 WL 2441707, at *7 (D.Hawai'i June 14, 2011) (alteration in Cootey).
In the present case, Plaintiffs' FCRA claim fails to state a claim upon which relief can be granted because they have not alleged that: they notified a credit reporting agency about the allegedly inaccurate information that Defendants furnished; the agency notified Defendants; and Defendants failed to take action. Plaintiffs presented no evidence or argument to the contrary. The Motion is GRANTED as to Count IV.
Defendants seek summary judgment on Plaintiffs' state law claims in Counts V (fraudulent misrepresentation), X (fraud), and XII (mistake).
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) plaintiff's detrimental reliance." Miyashiro v. Roehrig, Roehrig, Wilson & Hara, 122 Haw. 461, 482-83, 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 fraud, the plaintiff must establish these elements by clear and convincing evidence. See, e.g., Hawaii's Thousand Friends, 70 Haw. at 286, 768 P.2d at 1301 (citation omitted). The court in Miyashiro also noted that:
122 Hawai'i at 483 n. 24, 228 P.3d at 363 n. 24 (alteration in Miyashiro).
Plaintiffs assert that, prior to closing, Franklin Financial made false representations about the loan terms and documents. In opposition to Defendants' Motion, Plaintiffs do not dispute that Defendants did not make any false representations to them. Further, Plaintiffs make no attempt to show that Defendants had knowledge or notice of the fraud allegedly undertaken by Franklin Financial. To the extent Plaintiffs seek to hold Defendants liable for alleged misrepresentations made by Franklin Financial, they fail to set forth claims with the particularity required by Fed.R.Civ.P. 9(b), and have made no showing sufficient to survive summary judgment.
The Hawai'i Supreme Court has adopted § 152 of the Restatement (Second) of Contracts as the proper test to determine whether rescission of a contract is warranted based on mutual mistake. Thompson v. AIG Hawai'i Ins. Co., Inc., 111 Haw. 413, 424, 142 P.3d 277, 288 (2006) (citing AIG Hawai'i Ins. Co. v. Bateman, 82 Haw. 453, 457-58, 923 P.2d 395, 399-400 (1996)). Restatement (Second) of Contracts § 152 states:
Here, Plaintiffs do not allege any facts supporting a mistake as to Defendants. Their conclusory allegation that the parties entered into the loan based upon mutual mistake is not sufficient to survive a motion for summary judgment.
The Motion is GRANTED as to Counts V, X, and XII.
This district court has recognized that:
Plaintiffs have not come forward with any evidence on summary judgment to support this claim; that is, there are no facts demonstrating any special circumstances beyond the traditional borrower-lender relationship. The Motion is GRANTED as to Count VI.
This Court has previously held that, as here, where the Note and the Mortgage are express agreements that the Plaintiffs executed in connection with their loan, Plaintiffs can not pursue an unjust enrichment claim.
Caraang v. PNC Mortg., 795 F.Supp.2d 1098, 1118 (D.Hawai'i 2011). Here, Plaintiffs allegations relate to the Note and Mortgage, which were express agreements that they executed in connection with their loan, and Plaintiffs therefore cannot maintain an unjust enrichment claim. Plaintiffs did not come forward with any evidence or argument in opposition to Defendants' request for summary judgment.
The Motion is GRANTED as to Count VII.
Defendants seek summary judgment on Count VIII because it relies on Plaintiffs' meritless HOEPA, RESPA, TILA, FCRA, fraud, UDAP and GLBA claims. The Court finds that Defendants are entitled to summary judgment on these underlying claims, and therefore,
As to Plaintiff's aiding and abetting claim, the court in Stanton recognized that:
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).
Because Defendants are entitled to summary judgment on Plaintiffs' underlying claims, the Motion is GRANTED as to Count VIII.
This district court has construed similar allegations seeking to quiet title as attempts to assert a claim pursuant to Haw. Rev.Stat. § 669-1(a). See, e.g., Phillips v. Bank of Am., Civil No. 10-00551 JMS-KSC, 2011 WL 240813, at *13 (D.Hawai'i Jan. 21, 2011). Section 669-1(a) states: "Action may be brought by any person against another person who claims, or who may claim adversely to the plaintiff, an estate or interest in real property, for the purpose of determining the adverse claim."
In order for a mortgagor to quiet title against the mortgagee, the mortgagor must establish that he or she is the rightful owner of the property and has paid, or is able to pay, the outstanding debt on the property. Phillips, 2011 WL 240813, at *13. Plaintiffs fail to do so here. They do not have title to the Property, pursuant to the Quitclaim Deed, and they have made no attempt to demonstrate an intent or ability to tender the original amount borrowed to effect a rescission.
The Motion is GRANTED as to Count IX.
Section 1692e of the FDCPA provides that "a debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e(1). Defendants seek summary judgment on Count XI because Wells Fargo was the holder of the Note and Mortgage at the time of the Foreclosure Sale, and did not make any false representations with respect to the Note and Mortgage. Plaintiffs did not make any attempt to refute Defendants' showing on summary judgment, and fail to demonstrate that they are entitled to challenge the indorsement of the Note or Mortgage to Wells Fargo.
Further, this district court has previously explained that mortgage lenders
Long v. Deutsche Bank Nat'l Trust Co., Civil No. 10-00359 JMS/KSC, 2011 WL 5079586, at *13-14 (D.Hawai'i Oct. 24, 2011). Plaintiffs made no attempt to show that Defendants are "debt collectors," or that Defendants lack a complete chain of indorsements for the Note or chain of assignments for the Mortgage.
The Motion is GRANTED as to Count XI.
Unconscionability is generally a defense in a contract action, not an affirmative claim for relief. Phillips, 2011 WL 240813, at *12 (citations omitted). "To the extent unconscionability can be addressed affirmatively as part of a different — that is, independent — cause of action, such a claim is asserted to prevent the enforcement of a contract whose terms are unconscionable." Id. (emphasis in original) (citation and internal quotation marks omitted). Dismissal of an unconscionability "claim" is proper where the claim only challenges the defendant's general conduct and does not identify any specific contractual term as unconscionable. Id.
In the present case, Plaintiffs have not attempted to establish that any specific term of the Note or Mortgage was unconscionable. Rather, they allege that they did not understand the loan transaction and that they had inferior bargaining power. Plaintiffs fail to state an affirmative claim for unconscionability.
The Motion is Granted as to Count XIII.
Defendants argue they are entitled to summary judgment on Count XIV because the claim is time-barred, Defendants made no misrepresentations, and because Plaintiffs cannot tender funds to effect a rescission.
Claims under § 480-2 are subject to a four-year statute of limitations. Haw.Rev.Stat. § 480-24(a). None of the tolling provisions in § 480-24(b) apply in the instant case. This district court has ruled "to construe HRS Ch. 480 in accordance with federal cases interpreting similar federal antitrust laws such as 15 U.S.C.
Further, this district court has recognized that:
Casino v. Bank of Am., Civil No. 10-00728 SOM/BMK, 2011 WL 1704100, at *12-13 (D.Hawai'i May 4, 2011). Wells Fargo 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. For these reasons, and because the claims are time-barred, the Motion is GRANTED as to Count XIV.
This district court has characterized similar claims as attempts to allege claims for the tort of bad faith. See, e.g., Phillips, 2011 WL 240813, at *5 (citing Best Place v. Penn Am. Ins. Co., 82 Haw. 120, 128, 920 P.2d 334, 342 (1996) (adopting tort of bad faith for breach of implied covenant of good faith and fair dealing in an insurance contract)).
Id. at *5-6 (some alterations in original).
The majority of the alleged failures to act in good faith deal with pre-loan consummation activities. Even if Hawai'i law did recognize such a claim, a plaintiff cannot establish a breach of the covenant of good faith and fair dealing with actions prior to contract formation. The only post-formation events relate to the foreclosure, however, as discussed below, there is no evidence that Defendants conducted the foreclosure in a manner that violated the terms of the Mortgage. Defendants are entitled to summary judgment on this claim.
The Motion is GRANTED as to Count XIV.
The elements of a claim for negligent infliction of emotional distress ("NIED") are: (1) that the defendant engaged in negligent conduct; (2) that the plaintiff suffered serious emotional
Dowkin v. Honolulu Police Dep't, Civ. No. 10-00087 SOM-LEK, 2010 WL 4961135, at *9 (D.Hawai'i Nov. 30, 2010). Duty and breach of duty are essential elements of a negligence claim under Hawai'i law. See Cho v. Hawai'i, 115 Haw. 373, 379 n. 11, 168 P.3d 17, 23 n. 11 (2007) ("It is well-established that, in order for a plaintiff to prevail on a negligence claim, the plaintiff is required to prove all four of the necessary elements of negligence: (1) duty; (2) breach of duty; (3) causation; and (4) damages.").
As a general rule, lenders do not owe their borrowers a duty of care sounding in negligence. McCarty v. GCP Mgmt., LLC, Civil No. 10-00133 JMS/KSC, 2010 WL 4812763, at *6 (D.Haw. Nov. 17, 2010) (some citations omitted) (citing Champlaie v. BAC Home Loans Servicing, LP, 706 F.Supp.2d 1029, 1061 (E.D.Cal.2009); Nymark v. Heart Fed. Sav. & Loan Ass'n, 231 Cal.App.3d 1089, 283 Cal.Rptr. 53, 56 (1991)). Similar to the special circumstances exception to the general rule that a borrower-lender relationship does not give rise to a fiduciary relationship, "a lender may owe to a borrower a duty of care sounding in negligence when the lender's activities exceed those of a conventional lender." Champlaie, 706 F.Supp.2d at 1060 (discussing Nymark).
For these reasons, and because Plaintiffs make no effort to support their NIED claims, the Motion is GRANTED as to Count XVIII.
Plaintiffs have no private right of action to bring claims under GLBA or the Hawai'i Constitution's right of privacy.
Section 6805(a) of GLBA states, in pertinent part, "[t]his subchapter and the regulations prescribed thereunder shall be enforced by the Federal functional regulators, the State insurance authorities, and the Federal Trade Commission with respect to financial institutions and other persons subject to their jurisdiction under applicable law[.]" Thus, "[t]he Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801 et seq., does not provide for a private right of action." Cannon v. Zurich N. Am., No. CV-07-0927-PHX-FJM, 2007 WL 2875500, at *1 (D.Ariz. Oct. 3, 2007) (citing 15 U.S.C. § 6805(a); Rowland v. Prudential Fin., Inc., No. CV-04-2287, 2007 WL 1893630, at *6 (D.Ariz. July 2, 2007)).
Insofar as there is no private right of action under GLBA, Count XIX fails to state a claim upon which relief can be granted. The Motion is GRANTED as to Count XIX.
This district court has recognized that there is "no independent state law claim for a violation of privacy in bank records under the Hawai'i State Constitution." Flowers v. First Hawaiian Bank, 289 F.Supp.2d 1213, 1221 (D.Hawai'i 2003) (citing State v. Klattenhoff, 71 Haw. 598, 801 P.2d 548, 552 (1990) ("we adopt the rule set forth in United States v. Miller, [425 U.S. 435, 440-43, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976),] and follow the majority of states in finding no reasonable expectation of privacy in personal bank records")).
Defendants seek summary judgment on Count XXI, arguing that Wells Fargo completed the foreclosure sale in complete compliance with Haw.Rev.Stat. Chapter 667, as evidenced by the Mortgagee's Affidavit. They assert that Wells Fargo: (1) was represented by an attorney licensed to practice in Hawai'i; (2) published the required advertisement in The Honolulu Star-Advertiser once in each of three successive weeks, fourteen days before the public auction; (3) timely posted a copy of the NOI on the Property; and (4) recorded the Mortgagee's Affidavit. Plaintiffs present no evidence to the contrary and fail to establish a genuine issue of material fact with respect to Defendants' foreclosure-related conduct.
This district court has explained that a wrongful foreclosure claim will not lie where all required notices have been procedurally proper.
Matsumura v. Bank of Am., N.A., CIV. No. 11-00608 JMS-BMK, 2012 WL 463933, at *3 (D.Hawai'i Feb. 10, 2012). Plaintiffs have not established a genuine issue of material fact with respect to their Chapter 667 claim and further fail to state a claim for wrongful foreclosure.
The Motion is GRANTED as to Count XXI.
To the extent Plaintiffs ask the Court for more time to conduct discovery, they have not complied with Fed.R.Civ.P. 56(d). Rule 56(d) provides that:
Fed.R.Civ.P. 56(d). Whether to deny a Rule 56(d) request for further discovery by a party opposing summary judgment is within the discretion of the district court. Nidds v. Schindler Elevator Corp., 113 F.3d 912, 920-21 (9th Cir.1996).
"A party requesting a continuance pursuant to Rule [56(d)] must identify by affidavit the specific facts that further discovery would reveal, and explain why those facts would preclude summary judgment." Tatum v. City & Cnty. of San Francisco, 441 F.3d 1090, 1100 (9th Cir.
"Failure to comply with the requirements of Rule [56(d)] is a proper ground for denying discovery and proceeding to summary judgment." Brae Transp., Inc. v. Coopers & Lybrand, 790 F.2d 1439, 1443 (9th Cir.1986); see also Tatum, 441 F.3d at 1100-01 (finding that an attorney declaration was insufficient to support a Rule 56 continuance where the declaration failed to specify specific facts to be discovered or explain how a continuance would allow the party to produce evidence precluding summary judgment).
Plaintiffs fail to comply with the requirements of Rule 56(d), and have not met their burden to proffer sufficient facts to show that the evidence sought exists. The Court DENIES Plaintiffs' request for time to conduct additional discovery.
On the basis of the foregoing, Defendants' Motion for Summary Judgment on Plaintiffs' First Amended Complaint, filed on July 5, 2012, is HEREBY GRANTED.
IT IS SO ORDERED.
