White v. Indymac Bank, FSB et al

Filing 188

ORDER: (1) Denying Without Prejudice 150 Defendant's Motion for Summary Judgment and (2) Denying Plaintiff's Request for a TRO or Preliminary Injunction. Signed by JUDGE DAVID ALAN EZRA on 1/18/2012. (gab, )CERTIF ICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII

BRUCE WHITE,

)
)
Plaintiff,
)
)
vs.
)
)
INDYMAC BANK, FSB;
)
ONEWEST BANK, FSB; DOES 1 )
THROUGH 20, inclusive,
)
)
Defendants.
)
_____________________________ )

CV. NO. 09-00571 DAE-KSC

ORDER: (1) DENYING WITHOUT PREJUDICE DEFENDANT’S MOTION
FOR SUMMARY JUDGMENT AND (2) DENYING PLAINTIFF’S REQUEST
FOR A TRO OR PRELIMINARY INJUNCTION
On January 17, 2012, the Court heard Defendant’s Motion for
Summary Judgment. Bruce White, appeared by telephone on behalf of himself;
Charles Gall, Esq., appeared at the hearing on behalf of Defendant Onewest Bank,
FSB. After reviewing the motion and the supporting documents, the Court
DENIES WITHOUT PREJUDICE Defendant’s Motion and DENIES Plaintiff’s
request for a temporary restraining order or preliminary injunction. (Doc. # 150.)

BACKGROUND
I.

Factual Background
This action stems from the foreclosure of Plaintiff Bruce White’s real

property designated as Lot 53B Nahiku Homesteads, located at Hana, Maui,
Hawaii, 96713 (TMK: (2) 1-2-003-059) (“Subject Property”). On January 30,
2006, Plaintiff entered into a loan transaction by executing an Adjustable Rate
Note for the principal amount of $1,000,000.00, which was secured by a Mortgage
recorded on the same day in the Bureau of Conveyances as Document No. 2006021984. (“Note,” Doc. # 121-2; “Mortgage,” Doc. # 121-3.) Defendant IndyMac
Bank, FSB (“IndyMac”) is listed as the originating lender on the Mortgage.
(Mortgage at 2.) Pursuant to the terms of the Note and Mortgage, Plaintiff was
obligated to make scheduled payments of principal and/or interest beginning on
March 1, 2006. (Note at 1–2; Mortgage at 4–5.) After approximately 16 months,
Plaintiff stopped making payments on the loan as a result of financial hardship.
(“White Depo.,” Doc. # 143-1 at 60; Doc. # 121 ¶¶ 19–20.)
On December 20, 2007, IndyMac filed a foreclosure action in the
Circuit Court of the Second Circuit, State of Hawaii. (Doc. # 142-2.) On

2

December 1, 2008, the state court issued an Order finding Plaintiff in default under
the Note and Mortgage and entered a Judgment for the foreclosure of the Subject
Property. (Doc. # 142-4.)
II.

The Instant Action
Plaintiff commenced this action on December 4, 2009 against

IndyMac Bank, FSB (“IndyMac”), OneWest Bank, FSB (“OneWest”),1 and Does 1
through 20, (collectively, “Defendants”) alleging: (1) unfair trade practices
involving non compliance under 15 U.S.C. § 1802, et seq. (Count 1); (2) failure to
obtain signed loan documents in violation of 15 U.S.C. § 1601, et seq., and Title
12, Regulation Z Part 226, et seq. (Count 2); (3) failure to give 3 day cooling
period in violation of 15 U.S.C. § 1601, et seq., and Regulation Z (Count 3); (4)
failure to give conspicuous writings in violation of 15 U.S.C. § 1601, et seq., and
Title 12 of the Federal Regulations, Sec. 226.18 (Count 4); and (5) unfair and
deceptive acts and practices in violation of Hawaii Revised Statutes (“HRS”)
Chapter 480 (Count 5). Plaintiff also requested the following: (1) a declaratory

1

On July 11, 2008, IndyMac Bank, FSB was closed by the Office of Thrift
Supervision and went into receivership with the Federal Deposit Insurance
Corporation (FDIC). (Doc. # 35-5.) On March 19, 2009, the FDIC transferred
IndyMac’s assets to OneWest Bank, FSB, a newly formed federal savings bank
based in Pasadena, California. (Id.)
3

judgment regarding fraud and rescission and common law damages (Count 6); (2)
injunctive relief (Count 7); and (3) punitive damages (Count 8).
On April 18, 2011, this Court issued an Order: (1) Sua Sponte
Dismissing Plaintiff’s Complaint; (2) Denying as Moot OneWest’s Motion for
Summary Judgment; (3) Denying as Moot Plaintiff’s Motion for Summary
Judgment; and (4) Denying as Moot OneWest’s Second Motion for Summary
Judgment. (Doc. # 97.) Pursuant to that Order, the Court dismissed the entire
Complaint, but granted Plaintiff leave to amend (1) the Truth in Lending Act
(“TILA”) claims asserted in Counts 1-4 of the Complaint to the extent Plaintiff
seeks damages and (2) the HRS Chapter 480 unfair and deceptive acts and
practices claim. (Id.) The Court also noted that Plaintiff had previously attempted
to amend his Complaint (Docs. ## 23–24) and was denied that opportunity for
failure to comply with Court deadlines after being given a two-week extension of
time to file a motion for leave to amend. For this reason, the Court found that:
[T]his Order in no way grants Plaintiff leave to add claims, allegations
or Defendants to those articulated in the Complaint. Rather, an
amended complaint shall only constitute a formal representation of the
allegations and claims that remain. Failure to comply with this Order
may result in dismissal of this action.
(Id. at 24.)

4

On May 18, 2011, Plaintiff filed a First Amended Complaint (“FAC”)
asserting the following claims: (1) deceptive and unfair business practices - civil
RICO; (2) deceptive and unfair business practices - pattern of racketeering activity;
(3) deceptive and unfair business practices - violations of the Fair Debt Collection
Practices Act; (4) deceptive and unfair business practices - fraud; and (5) deceptive
and unfair business practices.
On July 12, 2011, Magistrate Judge Kevin S.C. Chang issued an
Order Granting Defendant OneWest Bank’s Motion to Strike the FAC on the
ground that Plaintiff violated this Court’s April 18, 2011 Order by adding to the
FAC a host of claims not raised in the original Complaint. (Doc. # 118.)
However, in an abundance of caution, and because Plaintiff is proceeding pro se,
Judge Chang gave him “one final opportunity to properly amend his complaint.”
(Id. at 5.) With regard to filing a Second Amended Complaint, Plaintiff was
specifically advised as follows:
[T]he only claims that may be raised are TILA claims seeking
damages and HRS Chapter 480 claims . . . Plaintiff is prohibited from
asserting any claims that the Court has not expressly authorized,
including but not limited to a) allegations of RICO violations
(particularly because he relies on federal criminal statutes) or any
other criminal violations b) allegations related to the Fair Debt
Collection Practices Act c) allegations of fraud or d) allegations of
unjust enrichment.

5

Plaintiff is cautioned that his failure to comply with this order and
with Judge Ezra’s Order will result in the dismissal of this action. The
Court has extended Plaintiff many courtesies and opportunities during
the course of this protracted litigation, and the Court will not allow
Plaintiff to continue to impede the judicious and expeditious
resolution of this action.
(Id. at 6–7.)
On July 26, 2011, Plaintiff filed a Second Amended Complaint
asserting a single cause of action for Unfair and Deceptive Acts or Practices
(“UDAP”) pursuant to HRS Chapter 480-2 and HRS 480-13. (“SAC,” Doc.
# 121.) In his prayer for relief, Plaintiff seeks: (1) damages, (2) an order striking
the state court foreclosure judgment, (3) a permanent injunction enjoining
OneWest Bank from selling Plaintiff’s property without proof of a valid claim
against his property before the court, (4) reconveyance of the property to Plaintiff,
and (5) an injunction enjoining OneWest Bank from selling any currently seized
Hawaiian private property until proving a valid claim supported by original
documented proof before the court. (Id.)
On November 30, 2011, Defendant OneWest Bank filed the instant
Motion for Summary Judgment. (“Mot.,” Doc. # 150 at 30.) On December 29,
2011, Plaintiff filed an Opposition to the Motion. (“Opp.,” Doc. # 173.)
Defendant filed a Reply on January 6, 2012. (“Reply,” Doc. # 174.)

6

STANDARD OF REVIEW
I.

Motion to Dismiss for Lack of Subject Matter Jurisdiction
Pursuant to Federal Rule of Civil Procedure 12(b)(1), a defendant may

move to dismiss a complaint for lack of subject matter jurisdiction. In a motion to
dismiss for lack of subject matter jurisdiction, the plaintiff bears the
initial burden of proving that subject matter jurisdiction exists. Robinson v. United
States, 586 F.3d 683, 685 (9th Cir. 2009); Rattlesnake Coalition v. U.S. Env’t Prot.
Agency, 509 F.3d 1095, 1102 n. 1 (9th Cir. 2007). “In considering the jurisdiction
questions, it should be remembered that ‘it is a fundamental principle that federal
courts are courts of limited jurisdiction.’” Stock West, Inc. v. Confederated Tribes
of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989) (quoting Owen
Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978)). Upon a motion to
dismiss, a party may make a jurisdictional attack that is either facial or factual.
Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A facial
attack occurs when the movant “asserts that the allegations contained in a
complaint are insufficient on their face to invoke federal jurisdiction.” Id. By
contrast, a factual attack occurs when the movant “disputes the truth of the
allegations, that by themselves, would otherwise invoke federal jurisdiction.” Id.

7

When a defendant challenges jurisdiction “facially,” all material
allegations in the complaint are assumed true, and the question for the court is
whether the lack of federal jurisdiction appears from the face of the pleading itself.
See Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004); see also Meyer, 373
F.3d at 1039. “Unlike a Rule 12(b)(6) motion, however, the court will not
reasonably infer allegations sufficient to support federal subject matter jurisdiction
because a plaintiff must affirmatively allege such jurisdiction.” Mason, 260 F.
Supp. 2d at 815.
II.

Motion for Summary Judgment
Summary judgment is granted under Federal Rule of Civil Procedure

56 when “the pleadings, the discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); see also
Porter v. Cal. Dep’t of Corr., 419 F.3d 885, 891 (9th Cir. 2005); Addisu v. Fred
Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). A main purpose of summary
judgment is to dispose of factually unsupported claims and defenses. Celotex
Corp. v. Catrett, 477 U.S. 317, 323–24 (1986).
Summary judgment must be granted against a party that fails to
demonstrate facts to establish what will be an essential element at trial. See id. at
8

323. A moving party without the ultimate burden of persuasion at trial—usually,
but not always, the defendant—has both the initial burden of production and the
ultimate burden of persuasion on a motion for summary judgment. Nissan Fire &
Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). The burden
initially falls upon the moving party to identify for the court those “portions of the
materials on file that it believes demonstrate the absence of any genuine issue of
material fact.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d
626, 630 (9th Cir. 1987) (citing Celotex Corp., 477 U.S. at 323).
Once the moving party has carried its burden under Rule 56, the
nonmoving party “must set forth specific facts showing that there is a genuine
issue for trial” and may not rely on the mere allegations in the pleadings. Porter,
419 F.3d at 891 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986)). In setting forth “specific facts,” the nonmoving party may not meet its
burden on a summary judgment motion by making general references to evidence
without page or line numbers. S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885,
889 (9th Cir. 2003); Local Rule 56.1(f) (“When resolving motions for summary
judgment, the court shall have no independent duty to search and consider any part
of the court record not otherwise referenced in the separate concise statements of
the parties.”). “[A]t least some ‘significant probative evidence’” must be
9

produced. T.W. Elec. Serv., 809 F.2d at 630 (quoting First Nat’l Bank of Ariz. v.
Cities Serv. Co., 391 U.S. 253, 290 (1968)). “A scintilla of evidence or evidence
that is merely colorable or not significantly probative does not present a genuine
issue of material fact.” Addisu, 198 F.3d at 1134. Further, the Ninth Circuit has
“refused to find a ‘genuine issue’ where the only evidence presented is
‘uncorroborated and self-serving’ testimony.” Villiarimo v. Aloha Island Air, Inc.,
281 F.3d 1054, 1061 (9th Cir. 2002) (citing Kennedy v. Applause, Inc., 90 F.3d
1477, 1481 (9th Cir. 1996)). “Conclusory allegations unsupported by factual data
cannot defeat summary judgment.” Rivera v. Nat’l R.R. Passenger Corp., 331 F.3d
1074, 1078 (9th Cir. 2003).
When “direct evidence” produced by the moving party conflicts with
“direct evidence” produced by the party opposing summary judgment, “the judge
must assume the truth of the evidence set forth by the nonmoving party with
respect to that fact.” T.W. Elec. Serv., 809 F.2d at 631. In other words, evidence
and inferences must be construed in the light most favorable to the nonmoving
party. Porter, 419 F.3d at 891. The court does not make credibility determinations
or weigh conflicting evidence at the summary judgment stage. Id.; see also Nelson
v. City of Davis, 571 F.3d 924 (9th Cir. 2009) (“[C]redibility determinations, the
weighing of the evidence, and the drawing of legitimate inferences from the facts
10

are jury functions, not those of a judge.”) (citations omitted). However, inferences
may be drawn from underlying facts not in dispute, as well as from disputed facts
that the judge is required to resolve in favor of the nonmoving party. T.W. Elec.
Serv., 809 F.2d at 631.
DISCUSSION
I.

Motion to Dismiss for Lack of Subject Matter Jurisdiction
Defendant first asserts that this action should be dismissed for lack of

subject matter jurisdiction. (Mot. at 17–18, 20.) Specifically, Defendant asserts
that the allegations contained in a complaint are insufficient on their face to invoke
federal jurisdiction. (Id. at 20.)
The Court notes that a pro se litigant’s pleadings must be read more
liberally than pleadings drafted by counsel. Wolfe v. Strankman, 392 F.3d 358,
362 (9th Cir. 2004). When a plaintiff proceeds pro se and technically violates a
rule, the court should act with leniency toward the pro se litigant. Draper v.
Coombs, 792 F.2d 915, 924 (9th Cir.1986). However, “a pro se litigant is not
excused from knowing the most basic pleading requirements.” American Ass’n of
Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1107-08 (9th Cir. 2000)
(citations omitted). Moreover, “[p]ro se litigants must follow the same rules of

11

procedure that govern other litigants.” King v. Atiyeh, 814 F.2d 565, 567 (9th Cir.
1987).
Here, Plaintiff initially alleged subject matter jurisdiction on the basis
of alleged violations of federal law. (Doc. # 1 at 2.) However, all of the claims
arising under federal law have since been dismissed and the only remaining cause
of action in the SAC arises under state law. Therefore, Plaintiff amended his
complaint to allege diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(3).
Section 1332(a)(3) provides the court with original jurisdiction over all civil
actions where the matter in controversy exceeds $75,000 and is between citizens of
different States and in which citizens or subjects of a foreign state are additional
parties. According to Defendant, this action should be dismissed for lack of
subject matter jurisdiction because: (1) none of the parties are citizens of foreign
states, and (2) Plaintiff has failed to allege that his damages exceed the $75,000
threshold for diversity jurisdiction. The Court disagrees and concludes that the
action should not be dismissed on these grounds.
First, although Plaintiff inadvertently cites to § 1332(a)(3) regarding
citizens of foreign states, it appears that he intended to cite to § 1332(a)(1), which
pertains to actions between citizens of different states. Plaintiff expressly alleges
that he is a resident and citizen of Florida and that both IndyMac and OneWest are
12

federally chartered banks with their principal place of business in California.
Therefore, the diversity of citizenship requirement of § 1332(a)(1) is clearly
satisfied here.
Second, while Plaintiff has not alleged the specific dollar amount in
controversy, the Court concludes that the facts alleged in the SAC and the record
are sufficient to demonstrate that the amount in controversy exceeds $75,000. See
Gerritsen v. de la Madrid Hurtado, 819 F.2d 1511, 1515 (9th Cir. 1987) (“[T]he
court may sustain jurisdiction when an examination of the entire complaint reveals
a proper basis for assuming jurisdiction other than one that has been improperly
asserted.”); 5 Wright & Miller, Federal Practice and Procedure § 1206 (3d ed.
2011) (same); see also Steel v. United States, 813 F.2d 1545, 1547–48 (9th Cir.
1987) (holding that the district court had subject-matter jurisdiction
notwithstanding the fact that the plaintiff failed to allege the amount in controversy
where the record revealed that the amount in controversy exceeded the
jurisdictional requirement). Specifically, Plaintiff brings this action to challenge
the allegedly “deceptive and fraudulent foreclosure action enacted by INDYMAC
and [] the continued threats to seize and auction his property by ONEWEST.”
(SAC ¶ 97.) Based on the SAC, Plaintiff seeks general, compensatory, and treble
damages as well as an injunction enjoining the foreclosure sale of the Subject
13

Property and an order reconveying the Subject Property to Plaintiff for purposes of
unclouding title. While the specific value of the Subject Property is not clear, the
record indicates that Plaintiff purchased the property for $2,372,356 on February 2,
2006, executed a loan in the amount of $1,000,000, and owed approximately
$1,233,909.62 on the loan as of December 3, 2009. See Chapman v. Deutsche Bak
Nat’l Trust Co., 651 F.3d 1039, 1045 (9th Cir. 2011) (noting that the amount in
controversy in an action to enjoin foreclosure sale is the value of the real property);
see also Ngoc Nguyen v. Wells Fargo Bank, N.A., 749 F. Supp. 2d 1022, 1028–29
(noting that for purposes of valuing wrongful foreclosure claims, some courts have
relied on the amount of indebtedness while others have looked to the fair market
value of the property). Under these circumstances, it does not “appear to a legal
certainty” that the amount in controversy is less than the jurisdictional amount of
$75,000.01 required by § 1332(a). See Crum v. Circus Circus Enterprises, 231
F.3d 1129, 1131–32 (9th Cir. 2000).
Accordingly, the Court concludes that the allegations in the Complaint
are sufficient to invoke federal diversity jurisdiction.

14

II.

Motion for Summary Judgment
Defendant next asserts that it is entitled to judgment as a matter of law

on the ground that Plaintiff cannot establish any of the elements of his sole cause
of action for unfair and deceptive trade practices. However, upon further review,
the Court has discerned that there remain some outstanding discovery disputes in
this case. The Court therefore finds the instant Motion for Summary Judgment to
be premature. Defendant’s Motion is DENIED WITHOUT PREJUDICE to
Defendant’s right to renew the Motion after all outstanding discovery issues have
been resolved. If Defendant later moves for summary judgment on the same bases
as set forth in the instant Motion, then the Court will be inclined to rely on the
appropriate briefing and take the matter under advisement without further oral
argument.
III.

Temporary Restraining Order and Preliminary Injunction
The Court also notes that in his Memorandum in Opposition to the

instant Motion, Plaintiff requests a temporary restraining order (“TRO”) or
preliminary injunction enjoining Defendant from conducting a trustee’s sale of the
property during the pendency of this action. (Oppo. at 15.) However, Plaintiff’s
request is limited to a single passing reference in his brief and he provides no
explanation or authority to support his request. This fails to comply with Local
15

Rule 10.2(g), which contemplates that an application for TRO or preliminary
injunction be filed as a separate document with its own supporting points and
authorities. See Local Rule 10.2(g). The Court therefore DENIES Plaintiff’s
request for a TRO or preliminary injunction.
CONCLUSION
For the reasons set forth above, the Court DENIES WITHOUT
PREJUDICE Defendant’s Motion for Summary Judgment and DENIES
Plaintiff’s request for a temporary restraining order or preliminary injunction.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, January 18, 2012.

_____________________________
David Alan Ezra
United States District Judge

White v. IndyMac Bank, et al., CV No. 09-00571; ORDER: (1) DENYING
WITHOUT PREJUDICE DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT AND (2) DENYING PLAINTIFF'S REQUEST FOR A TRO OR
PRELIMINARY INJUNCTION

16