J. MICHAEL SEABRIGHT, District Judge.
This is the latest installment in this protracted litigation brought by pro se Plaintiff Ronald Au ("Plaintiff" or "Au")
The court decides the Motions without an oral hearing under Local Rule 7.2(d). Based on the following, (1) Plaintiff's Renewed Motions for Partial Summary Judgment (Doc. Nos. 175, 181, and 240) are DENIED; (2) Moving Defendants' Motion for Summary Judgment (Doc. No. 245) is GRANTED; and (3) Plaintiff's Cross-Motion for Summary Judgment (Doc. No. 282) against Wells Fargo is DENIED. The court, however, declines to certify judgment against Wells Fargo and Homeward as final under Federal Rule of Civil Procedure 54(b).
The court has issued multiple Orders over the past two years as to various Defendants, and as to different aspects and versions of Plaintiff's Complaints. Among them are the following dispositive Orders, which the court refers to in this Order:
The parties are thus more than familiar with the factual background and confusing procedural history of this case. And because the present Motions concern only Plaintiff's remaining claims against Wells Fargo and Homeward, the court reiterates only the facts necessary to resolve specific claims against those Defendants.
The action arises from Plaintiff's February 2, 2007 refinancing transaction on the subject property. During the transaction, Plaintiff dealt with Defendant Chad Cotton ("Cotton"), who was, or represented himself to be, associated with Republic. Doc. No. 128, Fourth AC ¶ 3. Cotton allegedly told Plaintiff that Republic could refinance the subject property for $680,000 at a rate of 7.5% per annum as long as the loan closed by the first week of February 2007. Id. ¶ 9. At closing on February 2, 2007, however, Plaintiff was presented with loan documents indicating an adjustable rate loan, with an initial rate of 8.925% for $700,000 (which included closing costs of over $19,000). Au V, 2013 WL 1339738, at *2.
Plaintiff questioned the figures at closing, and called or attempted to call Cotton. Cotton or another Republic representative told Plaintiff by telephone that (1) Republic had "misunderstood" that there was a loan commitment for 7.5%; and (2) after closing, Republic would "adjust" or modify the mortgage and promissory note to reflect the correct interest rate, and rebate certain closing costs. Id. Allegedly relying on these representations, Plaintiff proceeded to close escrow. Plaintiff knowingly and admittedly signed various closing documents clearly listing the terms of an adjustable rate loan amount of $700,000 at 8.925%. See, e.g., Doc. No. 246-6, Moving Defs.' Ex. 4; Au V, 2013 WL 1339738, at *2.
According to one of Plaintiff's theories, Republic or Cotton
On February 8, 2007, Republic assigned the note and mortgage to Sand Canyon (known at that time as Option One Mortgage Corporation ("Option One")).
Plaintiff's loan was initially serviced by Sand Canyon. Au III, 2012 WL 3113147, at *2. As noted above, the undisputed record establishes that Sand Canyon later sold its mortgage servicing business to Homeward, effective on April 30, 2008. Doc. No. 155-1, Sugimoto Decl. ¶ 8. Homeward began servicing Plaintiff's loan effective on July 1, 2008. Doc. No. 246-13, Moving Defs.' Ex. 11. The record confirms that Plaintiff was notified in writing, by letter of June 16, 2008, of this change in loan servicers. Id.
At times in 2009, Plaintiff apparently experienced some difficulty making timely loan payments and was often assessed for late charges. See Doc. No. 246-14, Moving Defs.' Ex. 12 at 6; Doc. No. 246-15, Moving Defs.' Ex. 13; Doc. No. 283-15, Pl.'s Ex. 14 at 7. On February 6, 2009, Plaintiff wrote a letter to Republic and Homeward stating that "I believe that I am entitled to a loan modification in the interest rate and principal that you are assessing monthly." Au V, 2013 WL 1339738, at *2. Plaintiff wrote, in part:
Id. at *2-3.
Plaintiff subsequently had numerous other similar telephone and email communications with Republic regarding the loan. Id. at *3. He also wrote numerous letters to Republic and Homeward, leading to the allegations against Homeward in this action
Doc. No. 128, Fourth AC ¶ 72. It further alleges:
Id. ¶ 72A. And it makes other similar allegations that Homeward failed to respond to Au's letters. For example:
Id. ¶¶ 72B-D.
In all, Plaintiff's Motion against Homeward, and his Opposition to Wells Fargo and Homeward's Motion, together reference at least twenty five letters from Plaintiff to Republic and/or Homeward in the 2009 to 2011 period (although not all are plead in the operative Complaint, and some post-date the initiation of this action) regarding issues related to his loan (and a like number of letters from Homeward to Plaintiff). See Doc. No. 182-1, Pl.'s CSF; Doc. No. 246, Moving Defs.' CSF; Doc. No. 283, Pl.'s CSF in Opp'n. These letters — and the relevant history of Homeward's servicing of Plaintiff's loan from 2008 to 2011 — are detailed separately in Section IV.B.1.c. below when analyzing Plaintiff's RESPA claims against Homeward. In this regard, the record indicates that Plaintiff last made a mortgage payment
This action was originally filed in state court on March 15, 2011. Doc. No. 246-36, Moving Defs.' Ex. 34. Plaintiff's First Amended Complaint, filed in state court on March 24, 2011, was then removed to this court on April 14, 2011. Doc. No. 1, Notice of Removal at 1. After substantial motions activity and two further amendments, Plaintiff filed the Fourth AC on April 16, 2012. Doc. No. 128. The thirty-nine page Fourth AC alleges the following twelve Counts against Republic, Cotton, Sand Canyon, Homeward, and Wells Fargo:
Id.
On July 31, 2012, the court granted in part and denied in part various motions to dismiss, defining and limiting the scope of the Fourth AC. Doc. No. 173, Au III, 2012 WL 3113147. As relevant here, the court dismissed Counts Three, Six, Seven, Eight, and Twelve as to Homeward (and Counts One, Two, Four, Five and Eleven were not asserted against Homeward). Id. at *18.
As to Count Ten against Homeward, asserting a violation of HRS § 480-2, the court determined that
Au III, 2012 WL 3113147, at *8.
As to Wells Fargo, Au III dismissed Counts Three, Six, Eight, Ten (in part), Eleven, and Twelve. Id. at *19. (Counts One, Two, and Nine were not asserted against Wells Fargo; and Wells Fargo did not move as to Counts Four, Five, and Seven.) Three of the counts — Counts Four, Five, and Ten (in part) — sought rescission of the loan transaction: (1) Count Four alleged a claim against Republic for violating HRS Ch. 454 — and, under the prior HRS § 454-8, "[a]ny contract entered into by any person with any unlicensed mortgage broker or solicitor shall be void and unenforceable;" (2) Count Five asserted violations of the Truth in Lending Act ("TILA") against Republic, Cotton, and Sand Canyon — and, under certain circumstances, TILA allows a claim for rescission (although the court had determined that Plaintiff's TILA-based rescission claim was time-barred); and (3) Count Ten had, among other claims, sought rescission under HRS § 480-12, which provides that "[a]ny contract or agreement in violation of this chapter is void and is not enforceable at law or in equity." Thus, given the possibility — at the time — that rescission of the loan transaction might be a viable remedy, Wells Fargo (as the current holder of the note and mortgage) was a required party to the litigation. See Au II, 2012 WL 760316, at *1 ("[I]t would not be possible to void the note and/or mortgage without the presence of Wells Fargo.... That is, Wells Fargo should be added as a required party under Federal Rule of Civil Procedure 19.").
To summarize, after Au III, the only counts remaining against Homeward are Counts Nine (RESPA & parts of HRS Ch. 454M) and Ten (HRS Ch. 480). The only counts remaining against Wells Fargo are Counts Four (the former HRS Ch. 454), Five (TILA), Seven (Fraud), and Ten (HRS Ch. 480) — and, as to Wells Fargo, Counts Four, Five, and Ten primarily were still viable because Wells Fargo is a required party to claims seeking rescission of the loan transaction. These are the counts at issue in the present Motions and addressed in this Order.
Before ruling on the present Motions, however, it is also important to reiterate the primary conclusions from Au V — the court's subsequent March 29, 2013 Order, which granted in part and denied in part Republic's Motion for Summary Judgment (and denied Plaintiff's Motion for Partial Summary Judgment against Republic).
In particular, Au V granted summary judgment in favor of Republic on Counts
On February 26, 2013, Plaintiff filed his "Second Motion for Renewal of Motion[s] for Partial Summary Judgment," Doc. No. 240, which renewed for a second time two underlying Motions: (1) Plaintiff's Motion for Partial Summary Judgment as to Wells Fargo, Doc. No. 175; and (2) Plaintiff's Motion for Partial Summary Judgment as to Homeward, Doc. No. 181. These two underlying Motions are now before the court (in part), although some explanation is necessary to understand the issues and claims that the court needs to decide.
Plaintiff had filed the two underlying Motions for Partial Summary Judgment in August 2012, shortly after he filed the Fourth AC. The court denied them without prejudice because Plaintiff had, in the interim, filed a Motion seeking leave to amend to file a Fifth Amended Complaint. Doc. No. 186. The court indicated that Plaintiff could re-notice the underlying Motions, if appropriate, after the court resolved Plaintiff's Motion seeking leave to amend. Id. After the court denied further leave to amend (see Au IV, 2012 WL 6726384, at *5), Plaintiff filed a "Motion for Renewal of Motion[s] for Partial Summary Judgment," Doc. No. 216, seeking to renotice the underlying Motions, as he had been allowed to do. The court granted the Motion for Renewal in part, issuing a minute order providing:
Doc. No. 217, Minutes of January 9, 2013. Thereafter, upon a joint request, the underlying Motions were deemed withdrawn without prejudice, while the parties engaged in settlement discussions. Doc. No. 227. After those settlement discussions failed, the underlying Motions were renewed for a second time, as sought in Plaintiff's February 26, 2013 "Second Motion for Renewal of Motion for Partial Summary Judgment." Doc. No. 240. Although the court did not repeat that this second renewal of Plaintiff's Motion at Doc. No. 175 was only as to Wells Fargo, the record plainly indicates that this Motion cannot apply to Sand Canyon (which has been dismissed and is no longer a party to this action) and thus the Motion here is limited to any remaining claims against Wells Fargo only.
Oppositions to Plaintiff's Motion as to Wells Fargo, Doc. No. 175, were filed on April 8, 2013. See Doc. No. 272, Opp'n of Wells Fargo; and Doc. No. 276, Opp'n of Sand Canyon. An Opposition to Plaintiff's Motion as to Homeward, Doc. No. 181, was also filed on April 8, 2013. See Doc. No. 274, Opp'n of Homeward. Plaintiff filed a combined Reply on April 16, 2013. Doc. No. 289.
On March 6, 2013, Moving Defendants filed their Motion for Summary Judgment on all Remaining Claims. Doc. No. 245. Plaintiff filed his Opposition on April 9, 2013. Doc. No. 281. Moving Defendants filed their Reply on April 15, 2013. Doc. No. 287.
In conjunction with his Opposition, on April 9, 2013, Plaintiff also filed a separate "Cross-Motion for Summary Judgment against Defendant Wells Fargo Bank, N.A.," Doc. No. 282, which the court construes as a related counter-motion under Local Rule 7.9. Wells Fargo filed an Opposition to this counter-motion on April 15, 2013. Doc. No. 286.
Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Rule 56(a) mandates summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Broussard v. Univ. of Cal. at Berkeley, 192 F.3d 1252, 1258 (9th Cir.1999).
"A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact." Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir.2007) (citing Celotex, 477 U.S. at 323, 106 S.Ct. 2548); see also Jespersen v. Harrah's Operating Co., 392 F.3d 1076, 1079 (9th Cir.2004). "When the moving party has carried its burden under Rule 56[(a)] its opponent must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forward with specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and internal quotation signals omitted);
"An issue is `genuine' only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party, and a dispute is `material' only if it could affect the outcome of the suit under the governing law." In re Barboza, 545 F.3d 702, 707 (9th Cir.2008) (citing Anderson, 477 U.S. at 248, 106 S.Ct. 2505). When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348; see also Posey v. Lake Pend Oreille Sch. Dist. No. 84, 546 F.3d 1121, 1126 (9th Cir.2008) (stating that "the evidence of [the nonmovant] is to be believed, and all justifiable inferences are to be drawn in his favor" (citations omitted)).
First, Moving Defendants seek summary judgment on all claims remaining against Wells Fargo after Au III narrowed the scope of the Fourth AC. Specifically, they move for summary judgment as to Counts Four (the former HRS Ch. 454), Five (TILA), Seven (Fraud), and Ten (HRS Ch. 480) against Wells Fargo.
As described above, after Moving Defendants filed their Motion for Summary Judgment, Au V granted summary judgment as to Republic on Counts Four, Five, and Ten. Thus, it is no longer possible for Plaintiff to obtain rescission on these Counts. It follows that — because Wells Fargo, as the current holder of the loan, only remains as a Defendant on those Counts for purposes of possible rescission of the loan transaction — these Counts now necessarily fail as to Wells Fargo. That is, because Plaintiff may not rescind the loan transaction under theories pled in Counts Four, Five, or Ten, Wells Fargo's presence is superfluous. Accordingly, Moving Defendants' Motion for Summary Judgment, Doc. No. 245, is thus GRANTED as to those Counts against Wells Fargo (and, to the extent Plaintiff sought summary judgment in his favor on those Counts, Plaintiff's Motion, Doc. No. 175, is DENIED).
The final remaining Count against Wells Fargo is Count Seven alleging fraud. In relevant part, Count Seven alleges:
Doc. No. 128, Fourth AC ¶¶ 61-62. Plaintiff appears to argue that the assignment of the note and mortgage was invalid — either because a PSA was used (resulting in the non-disclosure of the assignment) or because the assignment violated the terms of the PSA — and thus Wells Fargo "should
2012 WL 3113147, at *4 n. 6. Abubo rejected a claim for fraud based on an allegedly invalid assignment, reasoning as follows:
2011 WL 6011787, at *8 (citing numerous cases).
Likewise, Au III rejected Plaintiff's claim in Count Ten (HRS § 480-2) against Wells Fargo (nearly identical to his remaining claim in Count Seven), as follows:
2012 WL 3113147, at *11. By the same logic, Wells Fargo is now entitled to summary judgment on Count Seven's theory of fraud. Even if the assignments via a PSA were not disclosed or recorded earlier, there is nothing in the record to indicate fraud. See, e.g., Menashe, 850 F.Supp.2d at 1142-43.
Moreover, construed liberally in favor of Plaintiff, Count Seven pleads fraud in the inducement, not fraud in the factum. Accordingly, at most the loan would be voidable (not void) under Count Seven's theory — and thus rescission as to Wells Fargo, which was not involved in the loan origination, is not possible. See, e.g., Beazie v. Amerifund Fin., Inc., 2011 WL 2457725, at *10 (D.Haw. June 16, 2011) ("To establish that the loan transaction is void as to Moving Defendants — who were not a party to the loan transaction — Plaintiff must establish that the transaction is void, and not
Au V also concluded, when dismissing Plaintiff's claim for rescission under HRS § 480-12, that Plaintiff had not provided evidence of an ability to tender the loan proceeds so as to unwind the loan transaction. 2013 WL 1339738, at *13. And on April 16, 2013, the court denied Plaintiff's Motion for Reconsideration of Au V, Doc. No. 288, despite Plaintiff's belated and insufficient statement that he "believes following a rescission order that he is financially capable of paying the balance of $400,000.00 within a minimum of 30 days and a maximum of 60 days." Doc. No 284-2, Au Decl. ¶ 2. Likewise, Plaintiff's statement in opposing the Motion for Summary Judgment here as to Count Seven that "Au is financially capable of paying the $400,000.00 after an order of rescission with a minimum of 30 days and a maximum of 60 days," Doc. No. 283-1, Au Decl. ¶ 2, does not establish that he can unwind the loan transaction under a fraud theory.
It is insufficient because the amount financed minus origination charges was approximately $682,000 (Doc. No. 246, Moving Defs.' Ex. 4), and so the tender amount would be approximately $599,000 (subtracting the payments already made of approximately $83,000, Doc. No. 246, Moving Defs.' Ex. 13 at 11). Thus, even considering Plaintiff's vague statement that he believes he could tender $400,000, he has not established any ability to unwind the loan transaction as necessary for any rescission claim. Cf. Williams v. Rickard, 2011 WL 2116995, at *7 (D.Haw. May 25, 2011) (finding declaration proposing loan modification insufficient substitute for unwinding loan transaction for purposes of rescission claim).
In sum, for several reasons, as to Count Seven alleging fraud, Plaintiff's Motion for Partial Summary Judgment as to Wells Fargo, Doc. No. 175, is DENIED. Moving Defendants' corresponding Motion for Summary Judgment, Doc. No. 245, as to Count Seven is GRANTED.
Next, Moving Defendants seek summary judgment against Homeward on Counts Nine and Ten, which — after Au III — are limited to (1) allegations of violations of RESPA, and a related state-law claim for violations of HRS Ch. 454M; and (2) violations of HRS § 480-2. The court addresses each Count in turn.
Plaintiff argues three theories under RESPA. First, he contends he was not provided with notice that the servicer of his loan had changed from Sand Canyon to Homeward, in violation of 12 U.S.C. § 2605(b). Doc. No. 181-1, Pl.'s Mot. at 1, 4, 7. He also contends that Homeward failed to provide him an annual escrow statement as required under 12 U.S.C. § 2609(c) and 24 C.F.R. § 3500.17. Id. at 4-6, 11. And he alleges that Homeward violated 12 U.S.C. §§ 2605(e)(1) & 2605(e)(2), and HRS § 454 M-6, by "failure to provide information and clarification
Plaintiff's claim of a lack of notice under § 2605(b)
Next, Plaintiff's claim under § 2609 and 24 C.F.R. § 3500.17 for Homeward's alleged failure to provide annual escrow statements also fails. His RESPA claim is based on § 2609(c), which requires an annual statement detailing certain escrow information by "[a]ny servicer that has established or continued an escrow account in connection with a federally related mortgage loan." The corresponding regulations detail "the requirements for an escrow account that a lender establishes in connection with a federally related mortgage loan." 24 C.F.R. § 3500.17(a).
Most importantly, even assuming that the record contains conflicting evidence as to whether Homeward was required to
Nor is there a private right of action under 24 C.F.R. § 3500.17, as that regulation was promulgated under § 2609. Hardy so held, reasoning as follows:
449 F.3d at 1360 (quoting Alexander v. Sandoval, 532 U.S. 275, 290, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001)). See also, e.g., Gusenkov v. Washington Mut. Bank, 2010 WL 2612349, at *5 (N.D.Cal. June 24, 2010); Hilton v. Washington Mut. Bank, 2010 WL 727247, at *4 (N.D.Cal. Mar. 1, 2010).
Accordingly, Moving Defendants' Motion for Summary Judgment as to 12 U.S.C. § 2609 and 24 C.F.R. § 3500.17 is GRANTED, and Plaintiff's Motion for Summary Judgment is DENIED.
Next, Plaintiff argues that Homeward violated § 2605(e) by failing to respond properly to many of the numerous letters that he sent to Homeward from 2009 to 2011.
The court first sets forth applicable RESPA principles, and then analyzes Plaintiff's proffered violations.
RESPA provides that "[i]f any servicer of a federally related mortgage loan receives a qualified written request [`QWR'] from the borrower (or an agent of the borrower) for information relating to the servicing of such loan, the servicer shall provide a written response acknowledging receipt of the correspondence within 20 days[.]" 12 U.S.C. § 2605(e)(1)(A).
Id. § 2605(e)(1)(B). Not later than 60 days after a loan servicer receives a QWR, it must (if the servicer determines an error in the account) make appropriate corrections to the borrower's account and notify the borrower of the correction in writing. Id. § 2605(e)(2)(A). If a servicer determines that the account is not in error, it must provide the borrower with a written explanation or clarification stating the reasons why the servicer believes the borrower's account is correct. Id. § 2605(e)(2)(B). And if the QWR pertains to a request for information, the servicer must either provide the information to the borrower or explain why such information is unavailable. Id. § 2605(e)(2)(C).
Not all written requests from a borrower to a servicer require a response. Rather, "[u]nder § 2605(e)(1)(A), a servicer must respond to such a letter if it requests or challenges `information relating to the servicing of such loan.'" Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 665 (9th Cir.2012) (citing 12 U.S.C. §§ 2605(e)(1)(A), (e)(2)). And RESPA defines "servicing" as:
12 U.S.C. § 2605(i)(3). The requirement that a letter must request information "related to servicing" "ensures that the statutory duty to respond does not arise with respect to all inquiries or complaints from borrowers to servicers." Medrano, 704 F.3d at 666. That is, "servicing:"
Id. at 666-67. Accordingly, "letters challenging only a loan's validity or its terms are not qualified written requests that give rise to a duty to respond under § 2605(e)." Id. at 667; see, e.g., Sipe v. Countrywide Bank, 690 F.Supp.2d 1141, 1154 (E.D.Cal. 2010) (concluding that a demand for rescission of the loan agreement does not relate to servicing under § 2605(e) (cited with approval in Medrano, 704 F.3d at 667 n. 5)); Thurman v. Barclays Capital Real Estate Corp., 2011 WL 846441, at *4 (E.D.Cal. Mar. 7, 2011) ("A QWR must seek information relating to the servicing of the loan; a request for loan origination documents is not a QWR.").
With these principles in mind, the court addresses the many letters that Plaintiff contends implicate § 2605(e). And as explained to follow, for several reasons, none of the letters is actionable in this case. They either (1) require no response under RESPA; (2) were not mentioned in any version of the Complaint; (3) were filed after this action was initiated, and/or (4) were properly responded to by Homeward, whether or not a response was required under RESPA. And, finally,
According to Plaintiff, "[m]y purpose for writing this letter is because I believe I am entitled to a loan modification in the interest rate and principal that you are assessing monthly." Id. at 1. The letter explains Plaintiff's version of the promised loan terms: "The interest rate on the current loan you are servicing I believe to be at 8.9%. The representative of Republic State Mortgage advised me by telephone that the rate would not exceed 7.5%." Id. After further details, he states, "I was never provided a good faith estimate although I requested a copy." Id. In addition to "demanding a loan modification as to the interest rate and to the excessive settlement charges," he asks Republic and/or AHSMI to "provide to me any good faith estimate on the loan prior to closing [and] a copy of the settlement charges that correspond with the final closing." Id. at 2.
This letter does not ask for servicing information. It challenges the loan's terms, asks for a loan modification, and asks for loan documents. It is thus not a QWR, and Homeward had no obligation under RESPA to respond. See Medrano, 704 F.3d at 667 ("letters challenging only a loan's validity or its terms are not qualified written requests that give rise to a duty to respond under § 2605(e)."); Thurman, 2011 WL 846441, at *4 ("[A] request for loan origination documents is not a QWR.").
This letter, referencing the February 6, 2009 letter, repeats the claim that "the mortgage rate quoted would not exceed 7.5%, and the total settlement charges would not exceed $15,000." Doc. No. 246-16, Moving Defs.' Ex. 14 at 1. It again requests "a good faith estimate showing the mortgage amount to be 8.9% and total settlement charges of $19,000, which was executed by me prior to and preceding the loan closing." Id. at 1-2.
Like the February 6, 2009 letter, this letter is not a QWR. It challenges the loan terms, and asks for loan documents. Homeward had no obligation under RESPA to respond. Medrano, 704 F.3d at 667. And, in any event, Homeward responded by letter dated April 6, 2009. See Doc. No. 246-17, Moving Defs.' Ex. 15 (setting forth a record of a letter that states "[i]n accordance with your request, enclosed is: A copy of Good Faith Estimate.").
This letter is directed to Republic (although it is also addressed to Homeward) and states in relevant part:
Id. at 1.
As with the February and March 2009 letters, this letter is not a QWR. It continues to challenge the loan terms and ask for a loan document. Again, it triggered no duty under RESPA. Medrano, 704 F.3d at 667. And Homeward responded by letter of June 25, 2009 (referring to written correspondence "received ... on April 7, 2009"). See Doc. No. 246-18, Moving Defs.' Ex. 16. That letter to Plaintiff enclosed copies of the executed note and mortgage, and states (appropriately) that:
Id. The April 7, 2009 letter is not actionable.
Plaintiff provides a letter from Homeward to Plaintiff, dated May 11, 2009, stating in pertinent part:
Doc. No. 182-6, Pl.'s Ex. D. The record, however, does not contain a copy of the referenced "5/8/9" letter from Au to Homeward. There is thus no proof that it was a QWR. And even assuming such a letter from Au requested servicing information, the May 11, 2009 letter from Homeward fulfilled the requirement under § 2605(e)(1)(A) to respond within 20 days. And Plaintiff has presented no evidence that any other response regarding a May 8, 2009 letter to Homeward was insufficient. Plaintiff has not met his burden to create a question of fact as to a RESPA violation here.
By letter of May 29, 2009, Homeward informed Plaintiff that tax records indicated he had not paid his property taxes on the subject property, and requested that Plaintiff pay the taxes or provide proof that he had paid them. (Homeward apparently did not normally collect payments for taxes or insurance from Plaintiff, but rather, he was responsible for such payments directly. See, e.g., Doc. No. 275-1, Ellis Decl. ¶ 4 ("The Loan was a non-escrowed loan. Accordingly, the borrowers were responsible for providing proof of insurance to the lender under paragraph 5 of the Mortgage.")).
Doc. No. 283-7, Pl.'s Ex. 6.
Thus, Plaintiff wrote on June 29, 2009 to Homeward: "I am enclosing payment in full for real property taxes paid to the City & County of Honolulu[.]" Doc. No. 283-8, Pl.'s Ex. 7. The letter simply states "I trust you will find this satisfactory," and attaches a copy of a $8,878.20 check payable to the City and County of Honolulu dated March 30, 2009 for Plaintiff's real property taxes. Id. at 2.
Although arguably this June 29, 2009 letter pertains to "servicing," it does not request any information from Homeward, and, indeed, does not ask for a response at all. It does not indicate that the account is in error. It simply submits proof of payment. It was thus not a QWR that required a specific response from Homeward under RESPA. (There is no other reference in the record to unpaid taxes, nor any indication that Homeward established an impound account or paid property taxes on Plaintiff's behalf.) In short, this letter does not implicate § 2605(e).
This letter (which, as submitted to the court, is unsigned) from Plaintiff to Republic and Homeward, refers to the February 6, 2009 and March 3, 2009 letters described above. Similar to those letters, it again complains that the rate on Plaintiff's loan has not been corrected from 8.9% to 7.5%, and states that an attorney for Republic has assured him Republic would provide a "good faith estimate commitment signed by me for 8.9% and settlement charges of $19,000 prior to closing." Id. It concludes that the letter "formally advises your company that if the rate is not adjusted immediately to reflect a 7.5% simple interest loan ... that I will be initiating a lawsuit against Republic State Mortgage Co. for fraud, non-disclosure and misrepresentation." Id. at 2.
Homeward appears to have responded within 20 business days. Although not clearly responsive to this particular letter, the record contains three letters from Homeward to Plaintiff that responded to this or similar letters: (1) a July 21, 2009 letter referring to "your letter dated 07/20/09," stating in part "[w]e are currently in the process of researching your concerns," Doc. No. 182-7, Pl.'s Ex. E; (2) a July 23, 2009 letter from Homeward to Plaintiff referring to "your letter dated 07/22/09," also stating in part "[w]e are currently in the process of researching your concerns," Doc. No. 182-8, Pl.'s Ex. F; and (3) an August 4, 2009 letter stating "[p]ursuant to your request we have attached
More importantly, this July 8, 2009 letter is not a QWR. Like the February, March, and April 2009 letters, it continues to challenge the loan terms and ask for a loan document. It thus triggered no duty under § 2605(e).
On August 4, 2009, Plaintiff wrote yet another letter (referencing his letter of July 8, 2009) to Republic and Homeward, again stating that "as of this date I have never received the good faith estimate signed by myself as borrower, agreeing to an interest rate of 8.9% and $19,000 in settlement charges." Id. at 2. He acknowledges that Homeward has responded to the July 8, 2009 letter, stating "[t]he only response I have received thus far is from [Homeward] which claims they have no responsibility for misrepresentations made by [Republic]." Id. at 1. And again, he seeks a lower interest rate loan: "[t]o date no affirmative conduct by [Republic] or [Homeward] has reduced the interest rate or refunded the excess closing costs." Id. Plaintiff stated that "[t]his letter is to formally advise [Republic] and [Homeward] that if I do not receive the good faith estimate requested by me within 10 days ... a lawsuit will be commenced in the State of Hawaii." Id. at 2.
Like the letters from February, March, April, and July 2009, this letter challenges the loan terms and asks for loan documentation. Like those letters, this letter is not a QWR. And like those letters, Homeward responded in a timely fashion to Plaintiff's various requests. See Doc. No. 246-28, Moving Defs.' Ex. 26 (August 4, 2009 letter from Homeward stating "[p]ursuant to your request we have attached hereto collectively a copy of the following documents incorporated by reference herein[:] Good Faith Estimate Statements"); Doc. No. 246-19, Moving Defs.' Ex. 17 (September 3, 2009 letter from Homeward to Au stating "[p]lease be advised, [Homeward] is not affiliated with the mortgage lender or mortgage broker involved and we played no role in the origination of your loan. Your concerns should be directed to the original mortgage lender[.] ... Although we are unable to adjust the interest rate on your loan, [Homeward] offers a variety of work out options including, but not limited to, Loan Modifications, Repayment Plans, Deed-in-Lieu of Foreclosures, and Short Sales."). Accordingly, this letter is not actionable under § 2605(e).
On September 13, 2010, Plaintiff followed the August 4, 2009 letter with another letter (again "enclosing a letter written to you on July 8, 2009") stating that "[a]s of today, I have received no good faith estimate from Republic State Mortgage or their loan broker establishing that I agreed to an 8.9% rate and $19,000 in settlement charges.... This letter is a formal demand that if I do not receive the good faith estimate establishing a loan at 8.9% and $19,000 in settlement charges that I will be commencing a lawsuit in the State of Hawaii against Republic State Mortgage, and the servicing company, American Home Mortgage." Id. at 1-2.
Homeward responded by letter dated September 22, 2010, stating that "[w]e are currently in the process of researching your concerns." Doc. No. 182-11. Pl.'s Ex. I. And, on September 28, 2009, it sent another response to Au, enclosing a copy of its September 3, 2009 letter. Doc. No. 246-20, Moving Defs.' Ex. 18. Moreover,
Under the terms of this loan agreement, it is Plaintiff's responsibility to provide proof of insurance coverage for the subject property. See, e.g., Doc. No. 246-24, Moving Defs.' Ex. 22. Plaintiff apparently did not provide such proof to Homeward in April 2010. Thus, Homeward secured "lender-placed" insurance coverage, advanced payment of $7,568.60, established an escrow account, and increased Plaintiff's monthly payments accordingly. Id. Apparently in response to this, Plaintiff wrote an August 19, 2010 letter to Homeward, stating:
Doc. No. 283-9, Pl.'s Ex. 8. The record does not indicate whether Homeward responded to this letter within 20 business days, but (assuming it was a QWR), Plaintiff has no evidence of any actual damages resulting from a failure to respond within that period. See, e.g., Menashe, 850 F. supp.2d at 1134 (setting forth requirement of pleading and proving actual damages to establish a violation of § 2605).
He followed this letter with a letter to Homeward's "Insurance Dept." of October 19, 2010, stating,
Doc. No. 283-10, Pl.'s Ex. 9 (unsigned copy). Although it is unclear what documents were enclosed in that letter, Plaintiff has supplied the court with insurance declaration pages covering a period from April 25, 2010 to April 25, 2011 indicating that there indeed was fire and hurricane insurance coverage for the subject property. See Doc. No. 283-19, Pl.'s Ex. 18 (fire); Doc. No. 283-20, Pl.'s Ex. 19 (hurricane).
Assuming this October 19, 2010 letter was a QWR (as it was related to servicing and requested information), however, Homeward quickly responded by letter of November 2, 2010. See Doc. No. 246-22, Moving Defs.' Ex. 20. That letter to Plaintiff states,
Having completed its investigation, by letter of February 9, 2011 (within 60 business days of December 23, 2010), Homeward wrote to Plaintiff and gave a detailed explanation of what had occurred regarding the lender-placed insurance. See Doc. No. 246-24, Moving Defs.' Ex. 22. As explained by Homeward, it had not received notice of insurance in April 2010, but after it had received proof of insurance from Plaintiff, it refunded the $7,568.60 paid for the lender-placed insurance and applied that amount to Plaintiff's escrow account (and then was to "delete" the escrow account for such insurance). Id. at 2. This resulted in an overage of $6,601.66, which would be refunded to Plaintiff after the next escrow analysis, which was to occur in 30 days. Homeward also "corrected the derogatory credit information reported for the month[s] of September 2010 through January 2011." Id. Homeward then reminded Plaintiff that his account "is currently due for the January 1, 2011 payment and subsequent payment in the amount of $11,189.24, with the outstanding late charges of $2,349.76." Id.
Given that history regarding the 2010 insurance, Homeward fulfilled any duties it had under RESPA to respond to Plaintiff's written requests regarding servicing. It responded and corrected any errors within a 60-day period under § 2605(e)(2)(A). There is thus no RESPA violation here.
On November 22, 2010, Homeward wrote to Plaintiff, informing him that his loan was delinquent. Homeward told Plaintiff, among other matters, that:
Doc. No. 182-12, Pl.'s Ex J. Plaintiff responded with several letters to Homeward, challenging that his account was delinquent, and requesting "a complete summary of all payments, to include credits and charges, from January 1, 2010[.]" Doc. No. 182-13, Pl.'s Ex. K. These letters,
The record is unclear as to whether Homeward responded within 20 days to the November 29, 2010 and December 14, 2010 letters. Moving Defendants argue that the letter of December 28, 2010 from Homeward to Plaintiff was responsive. See Doc. No. 246-23, Moving Defs.' Ex. 21. That letter states that Homeward is researching Plaintiff's concerns, but it refers to Plaintiff's "correspondence dated 12/23/2010" — not to a November 29, 2010 or December 14, 2010 letter. In this regard, the court must construe the record in Plaintiff's favor and assume that Homeward did not acknowledge receipt of those letters within 20 business days. But even if this is a violation, however, Plaintiff has presented no evidence of damages resulting from a failure to acknowledge these particular letters within 20 business days. See, e.g., Menashe, 850 F.Supp.2d at 1134.
Nevertheless, on February 4, 2011 (within 60 business days of either letter), Homeward wrote to Plaintiff "in reference to the correspondence received by [Homeward]" and his "recent inquiry regarding a credit correction" and concluded that "[a]fter reviewing all pertinent information, [Homeward] has sent notice to the credit bureaus confirming" that his loan was current from September 2010 to January 2011. Doc. No. 246-25, Moving Defs.' Ex. 23; Doc. No. 283-2, Pl.'s Ex. 1. Essentially, Homeward corrected any error it made in asserting that the loan was delinquent.
As for the March 1, 2011 and March 17, 2011 letters from Plaintiff, again requesting loan information (payment history and tax information), Homeward appears to have responded by acknowledging receipt
Thus, Homeward has demonstrated that it complied with RESPA requirements under § 2605(e). And, again, even if there is some question as to whether Plaintiff received these responses from Homeward in a timely manner, Plaintiff has not provided any evidence of damages from a failure on Homeward's part to acknowledge these particular letters within 20 days. See, e.g., Menashe, 850 F.Supp.2d at 1134.
Plaintiff next cites several letters written after the First Amended Complaint ("FAC") was filed and removed to this court.
All of the post-March 24, 2011 letters to Homeward, however, are not actionable in this suit — they post-date the filing of the FAC, and Plaintiff did not have permission under Federal Rule of Civil Procedure 15(d) to incorporate post-filing events in this suit.
Next, Plaintiff asserts Homeward violated HRS Ch. 454M (specifically HRS § 454M-6) in its role as servicer for Plaintiff's loan. Effective July 1, 2010, § 454M-6 provides:
Initially, because Au III previously dismissed Counts Three (misrepresentation) and Seven (fraud/nondisclosure) against Homeward, there is no basis for a similar claim for misrepresentation or concealment under § 454M6(1) (misrepresentation/concealment). Further, as demonstrated by the court's review and analysis of Homeward's various responses to the numerous letters from Plaintiff to Homeward, there is no possible basis for a claim that Homeward engaged in any practice that "is not in good faith, does not constitute fair dealing, or that constitutes a fraud upon any person, in connection with the servicing, purchase, or sale of any mortgage loan" under § 454M-6(2). And, likewise, because the court has granted summary judgment in favor of Homeward for claims under 12 U.S.C. § 2605, there is no basis for liability under § 454M-6(3) or § 454M-6(4) for a violation of that section of RESPA.
The court recognizes that § 454M-6(3) also provides for a private cause of action under state law for a violation of 12 U.S.C. § 2609 and/or 24 C.F.R. § 3500.17 (where, as analyzed above in section IV.B.1.b, the court granted summary judgment in favor of Homeward because RESPA itself does not allow private enforcement of § 2609 and/or § 3500.17). Assuming § 454M-6(3) is not preempted (a question neither raised or briefed), the court briefly addresses whether Plaintiff may proceed past this summary judgment stage on a claim under § 454M-6(3) based on Homeward's alleged violations of § 2609 and/or § 3500.17 — mindful that § 454M-6 only potentially applies to Homeward's actions or omissions occurring after § 454M-6's effective date of July 1, 2010.
In this regard, Plaintiff's claim is based on allegations that Homeward failed to compile and/or provide annual escrow account statements after he repeatedly asked for them. Homeward provides evidence, however, that "[t]he loan was a non-escrowed loan." Doc. No. 275-1, Ellis Decl. ¶ 4. That is, Plaintiff was responsible for securing his own hazard insurance on the subject property and for paying property taxes — outside of an escrow account. Id. Plaintiff has not challenged that "the loan was a non-escrowed loan," and the evidence of the loan servicing history supports Homeward's assertion — Plaintiff paid his real property taxes and hazard insurance directly. See, e.g., Doc. No. 283-8, Pl.'s Ex. 7; Doc. No. 246-24, Moving Defs.' Ex. 22.
And in 2010, when Homeward secured lender-placed insurance on Plaintiff's behalf (after not having received proof of insurance), Homeward established an escrow account to arrange for payment, Doc. No. 246-24, Moving Defs.' Ex. 22, and subsequently closed the escrow account at Plaintiff's direction. Id.; see also Doc. No. 246-20, Moving Defs.' Ex. 20 ("As requested, we have removed the escrow account for wind insurance[.]"). Most importantly, Homeward created and provided Plaintiff with an annual escrow statement — in accordance with § 2609 and/or § 3500.17 — for 2010, the year it actually conducted escrow activity. See Doc. No. 246-26, Moving Defs.' Ex. 24.
In short, for 2010 — the only year in question given § 454M's effective date — Homeward complied with RESPA, and thus there is no basis for a claim under § 454M-6(3).
Lastly, the court addresses Plaintiff's claim under HRS § 480-2. To review, Au III allowed non-preempted § 480-2 claims to proceed against Homeward (in part) based on general allegations that Homeward:
Doc. No. 128, Fourth AC ¶ 80; see Au III, 2012 WL 3113147, at *8. Now, to withstand Moving Defendant's Motion for Summary Judgment, Plaintiff has the burden of providing evidence to support his claim. HRS § 480-2 requires proof of (1) an unfair or deceptive trade practice, (2) injury to the plaintiff's business or property resulting from that practice, and (3) actual damages. See, e.g., Hawai'i Med. Ass'n v. Haw. Med. Serv. Ass'n, Inc., 113 Haw. 77, 113-14, 148 P.3d 1179, 1215-16 (2006).
But, as explained in ruling on other claims alleged against Homeward in this Order, the evidence establishes that Homeward responded in a timely manner to almost every one of Plaintiff's numerous written requests for information (whether or not responses were required under RESPA) for the relevant time periods (prior to the filing of the FAC on March 24, 2011). When given the opportunity, Homeward investigated Plaintiff's claims regarding hazard insurance, refunded the premium it charged for lender-placed insurance, and credited his escrow account over $6,600. Doc. No. 246-24, Moving Defs.' Ex. 22. Homeward investigated Plaintiff's claims that his loan was current in 2010, and issued a letter in January 2011 informing the credit bureaus that this account was current for September 2010 to January 2011. Doc. No. 245-25, Moving Defs.' Ex. 23.
There is thus no basis for any unfair or deceptive act or practice against Homeward. And, even assuming a question of fact exists as to whether any acts of Homeward were misleading or deceptive, Plaintiff has no evidence of actual damages resulting from any such act. Accordingly, there being no genuine issue of material fact, Homeward is entitled to summary judgment in its favor on Count Ten. See Hawai'i Med. Ass'n, 113 Hawai'i at 113-14, 148 P.3d at 1215-16.
Moving Defendants, having obtained summary judgment in their favor on all remaining claims, also seek certification of a final judgment under Federal Rule of Civil Procedure 54(b). Rule 54(b) regarding
As stated by the Ninth Circuit, a district court may direct entry of final judgment as to one party in a multi-party suit as follows:
Wood v. GCC Bend, LLC, 422 F.3d 873, 878 (9th Cir.2005). The court should "consider such factors as whether the claims under review were separable from the others remaining to be adjudicated and whether the nature of the claims already determined was such that no appellate court would have to decide the same issues more than once even if there were subsequent appeals." Curtiss-Wright, 446 U.S. at 8, 100 S.Ct. 1460. See also Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 797 (9th Cir. 1991) (stating that certification under Rule 54(b) "is proper if it will aid `expeditious decision' of the case" (quoting Sheehan v. Atlanta Int'l Ins. Co., 812 F.2d 465, 468 (9th Cir.1987))).
Here, although the court has now adjudicated all remaining claims against both Wells Fargo and Homeward, the court declines to certify the decision against them as final under Rule 54(b). This case involves numerous claims against numerous Defendants. It is complicated — factually, procedurally, and substantively. It involves both federal and state law. It is thus readily apparent that the claims against Wells Fargo and Homeward are not separable from the remaining claims against Republic and Cotton (and from the already decided claims against Sand Canyon) "such that no appellate court would have to decide the same issues more than once even if there were subsequent appeals." Curtiss-Wright, 446 U.S. at 8, 100 S.Ct. 1460. If the court were to certify the action as final as to Wells Fargo and Homeward, Plaintiff could then appeal this Order while proceedings continue as to other Defendants. The Ninth Circuit
For the foregoing reasons, Plaintiff's Renewed Motions for Partial Summary Judgment are DENIED. See Doc. No. 240 (incorporating Doc. Nos. 175 & 181). Moving Defendants' Motion for Summary Judgment, Doc. No. 245, is GRANTED, and Plaintiff's Cross-Motion for Summary Judgment against Wells Fargo, Doc. No. 282, is DENIED. Finally, although there are no claims remaining against Wells Fargo and Homeward, the court DENIES their request to certify a judgment against as final under Rule 54(b). The only claims remaining in the action are Counts One, Two, and Three as to Republic (with the status of Cotton still uncertain). See Au V, 2013 WL 1339738, at *14.
IT IS SO ORDERED.
24 C.F.R. § 3500.17(b).
Id. at 925 n. 8 (citations omitted). The Sixth Circuit, however, stands alone in this view, and "it is unclear whether the holding in footnote 8 of Vega still has vitality," because of subsequent amendments. In re Johnson, 384 B.R. 763, 773 (Bankr.E.D.Mich.2008). "At the time the Sixth Circuit issued the Vega decision, the statute was limited to the substance of what now appears in § 2609(a), dealing with limits on the amount that a lender may require a borrower to deposit. Subsections 2609(b)-(d) were not added until 1990." Id. (internal citations omitted). Indeed, "Congress subsequently added subsection (d), providing specifically for any enforcement action for violations of § 2609(c) to be brought by the Secretary," id., further indicating that there is no private cause of action for violations of § 2609(c), which is the provision Au contends was violated.
