White v. Indymac Bank, FSB et al
Filing
229
ORDER: (1) GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT 209 AND (2) DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT 208 . Signed by JUDGE DAVID ALAN EZRA on 3/20/2012. Excerpt of Conclusion: ~ &qu ot;The April 10, 2012 trial date is hereby VACATED and all pending Motions in Limine (docs. ## 182-186) are DENIED AS MOOT." ~ Order terminates Motions in Limine, doc nos. 182 , 183 , 184 , 185 , 186 . < font size=3> (afc)CERTIFICATE 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 will be served by first class mail on March 21, 2012.
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) GRANTING DEFENDANT’S MOTION FOR SUMMARY
JUDGMENT AND (2) DENYING PLAINTIFF’S MOTION FOR
SUMMARY JUDGMENT
Pursuant to Local Rule 7.2(d), the Court finds this matter suitable for
disposition without a hearing.1 After reviewing the parties’ cross motions for
summary judgment and the supporting and opposing memoranda, the Court
GRANTS Defendant’s Motion for Summary Judgment (Doc. # 209) and DENIES
Plaintiff’s Motion for Summary Judgment (Doc. # 208).
1
The Court finds this matter suitable for disposition without a hearing, in
part, because this Court previously heard oral argument from both parties in
connection with Defendant’s prior Motion for Summary Judgment. That Motion
raised largely the same issues as those presently before the Court.
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. # 210, Ex. 4 at 60; Doc. # 121 ¶¶ 19–20.)
On or about March 1, 2006, IndyMac entered into a Pooling and
Servicing Agreement (“PSA”) with Deutsche Bank National Trust Company
(“Deutsche Bank”) whereby IndyMac transferred all right, title, and interest in and
to the Note and Mortgage at issue to Deutsche Bank. (“PSA,” Doc. # 218, Ex. 7
2
§ 2.01.) Plaintiff’s Mortgage was securitized and held by Deutsche bank as trustee
on behalf of the certificate holders of the trust. (Id.)
On December 20, 2007, IndyMac filed a foreclosure action in the
Circuit Court of the Second Circuit, State of Hawaii. (Doc. # 210-3.) On
December 1, 2008, the state court issued an Order finding White in default under
the Note and Mortgage and entered a Judgment for the foreclosure of the Subject
Property. (Doc. # 210-5.) The state court judgment was never appealed or subject
to a motion for reconsideration. (White Depo. at 73; Doc. # 210-11.)
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, OneWest Bank, FSB
purchased the servicing rights to the Subject Loan from the FDIC. (“Boyle Decl.,”
Doc. # 210-2 ¶ 3.) On or about December 2009, Plaintiff allegedly received a
letter from OneWest stating that an auction date was set for the Subject Property.
(SAC ¶ 43.)
II.
The Instant Action
Plaintiff commenced this action on December 4, 2009 against
IndyMac Bank, FSB (“IndyMac”), OneWest Bank, FSB (“OneWest”), and Does 1
through 20, (collectively, “Defendants”) alleging: (1) unfair trade practices
3
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 three 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
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
4
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.)
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.”
5
(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.
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 against Defendant
OneWest.2 (“SAC,” Doc. # 121.) Plaintiff also added a host of new allegations to
support that claim. (Id.) In his prayer for relief, Plaintiff seeks: (1) damages, (2)
2
To date, Defendant IndyMac has not made an appearance in this action.
Although Plaintiff continues to identify IndyMac as a defendant, he does not allege
any claims against Indymac in the SAC. The sole cause of action in the SAC is
alleged against OneWest only. (See SAC ¶ 74.)
6
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.3 (Id.)
On November 30, 2011, Defendant OneWest Bank filed a Motion for
Summary Judgment, or in the alternative, for Dismissal of this Action With
Prejudice. (Doc. # 150 at 30.) At the hearing on Defendant’s Motion, Plaintiff
stated that he had filed some discovery motions and there remained outstanding
discovery issues that needed to be resolved. Therefore, on January 18, 2012, this
Court issued an Order denying Defendant’s Summary Judgment Motion without
prejudice to Defendant’s right to renew its Motion after all outstanding discovery
issues had been resolved. (Doc. # 188.)
On January 18, 2012, Magistrate Judge Chang issued an Order
striking Plaintiff’s discovery motions on the ground that the motions were
untimely. Judge Chang explained as follows:
3
In his Motion for Summary Judgment, Plaintiff asks that the Court drop or
disregard his requests to reverse the state court judgment and to reconvey his
property. (Doc. # 298 at 28.)
7
Although Plaintiff recently sought relief from the dispositive motions,
non-dispositive motions, and discovery deadlines, the Court denied
his request. As such, the foregoing motions are untimely and they
should not have been filed without leave of court. Of note, the Court
previously denied Plaintiff’s motion for investigation of alleged ethics
violations. Moreover, even if the Court were to allow Plaintiff to
proceed with his motion to compel, the motion would be denied.
Plaintiff has not certified compliance with Local Rule 37.1 and/or
Federal Rule of Civil Procedure 37. The Court has, on at least one
previous occasion, advised Plaintiff of this requirement but he
continues to violate the rules. Plaintiff’s pro se status does not excuse
his compliance with all applicable rules and/or statutes.
(Doc. # 196 (internal citations omitted).) At a scheduling conference held on
January 20, 2012, Judge Chang advised Plaintiff that he had a right to appeal the
Order denying his discovery motions. Plaintiff never appealed Judge Chang’s
Order and the time for appeal has since expired. See Local Rule 74.1. There are
no outstanding discovery issues remaining in this action.
Pursuant to the Third Amended Rule 16 Scheduling Order issued on
January 20, 2012, the parties were given an opportunity to file a Motion for
Summary Judgment or Renewed Motion for Summary Judgment by no later than
February 10, 2012. (Doc. # 205.) On February 10, 2012, the parties filed cross
Motions for Summary Judgment.4 (Docs. ## 208, 209.) On March 2, 2012,
4
Plaintiff failed to submit a Concise Statement of Material Facts in Support
of his Motion for Summary Judgment in violation of Federal Rule of Civil
Procedure 56 and Local Rule 56.1(a).
8
Defendant filed an Opposition to Plaintiff’s Motion for Summary Judgment. (Doc.
# 219.) On March 12, 2012, Plaintiff filed an untimely Opposition to Defendant’s
Motion and Defendant filed a Reply in support of its Motion on March 16, 2012.
(Docs. ## 222, 224.) On March 19, 2012, Plaintiff filed an untimely Response to
Defendant’s Concise Statement of Facts in Opposition to Plaintiff’s Motion. (Doc.
# 227.)
STANDARD OF REVIEW
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
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
9
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
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
10
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
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
11
that the judge is required to resolve in favor of the nonmoving party. T.W. Elec.
Serv., 809 F.2d at 631.
DISCUSSION
As a preliminary matter, Defendant asserts that Plaintiff has violated
this Court’s prior Orders by adding numerous new allegations to the SAC that were
not in the original Complaint.5 Defendant requests that the Court strike or ignore
these new allegations for purposes of ruling on the instant Motion. However, the
Court need not reach this issue because it does not affect the outcome on the
instant Motions for Summary Judgment. In other words, even were the Court to
consider these new allegations, Defendant would still prevail on its Motion for the
reasons discussed below.
In the SAC, Plaintiff alleges that Defendant OneWest and Does 1-20
engaged in unfair and deceptive business practices in violation of sections 480-2
and 480-13 of the Hawaii Revised Statutes. (SAC ¶ 74.) This claim appears to be
based on his allegations that IndyMac fraudulently obtained a foreclosure
judgment against him and that OneWest wrongfully held itself out to be the lender
5
The Court notes that while Plaintiff did in fact add new allegations to the
SAC, he did not add any new causes of action. Plaintiff merely added new
jurisdictional allegations and allegations to further support his UDAP claim, which
is a cause of action that the Court expressly permitted him to re-allege. (See Docs.
## 97, 118.)
12
and holder in due course of the Note for the purpose of seizing the Subject
Property pursuant to the fraudulently obtained foreclosure judgment. (SAC ¶ 90.)
Based on these allegations, Plaintiff seeks damages and an injunction enjoining the
foreclosure sale of the Subject Property. (SAC ¶¶ 100(a)–(c), (e).)
The Hawaii Unfair and Deceptive Trade Practice Act states that “any
person who is injured in the person’s business or property by reason of anything
forbidden or declared unlawful by this chapter . . . [m]ay sue for damages sustained
by the person,” including treble damages, and “[m]ay bring proceedings to enjoin
the unlawful practice.” Haw. Rev. Stat. § 480-13(a)(1), (2). Section 480-13 of the
Hawaii Revised Statues “establishes four essential elements: (1) a violation of
chapter 480; (2) injury to plaintiff’s business or property resulting from such
violation; (3) proof of the amount of damages; and (4) a showing that the action is
in the public interest or that the defendant is a merchant.” Davis v. Four Seasons
Hotel Ltd., 228 P.3d 303, 335 (Haw. 2010).
Section 480-2 provides that “[u]nfair methods of competition and
unfair or deceptive acts or practices in the conduct of any trade or commerce is
unlawful.” Id. § 480-2(a). A practice is unfair when it “offends established public
policy and when the practice is immoral, unethical, oppressive, unscrupulous or
substantially injurious to consumers.” Balthazar v. Verizon Hawaii, Inc., 123 P.3d
13
194, 202 (Haw. 2005). An act is deceptive when it has “the capacity or tendency
to mislead or deceive.” Courbat v. Dahana Ranch, Inc., 141 P.3d 427, 434 (Haw.
2006).
This Court concludes that Plaintiff has not shown that Defendant
engaged in any unfair or deceptive acts or practices, nor has he submitted any
evidence to raise a triable issue of fact as to this issue. In other words, while the
allegations in the SAC might amount to conduct that has “the capacity or tendency
to mislead or deceive,” Plaintiff cannot simply rest on his allegations at this stage
of the proceedings. Balthazar, 123 P.3d at 202. To defeat summary judgment,
Plaintiff must set forth “significant probative evidence” tending to support his
position and he has failed to do so here. T.W. Elec. Serv., 809 F.2d at 630.
The first part of Plaintiff’s UDAP claim appears to be based on the
allegation that IndyMac fraudulently obtained a foreclosure judgment by falsely
representing to the state court that it was the lender and holder of the Note and
Mortgage even though the loan had been securitized well before IndyMac filed the
foreclosure action. (SAC ¶¶ 21, 26, 40.) However, Plaintiff has not proffered any
evidence to support his contention that IndyMac made any misrepresentations to
the state court. Based on IndyMac’s Complaint to Foreclose the Mortgage, it
appears that IndyMac represented to the state court that it was the originating
14
lender on the loan. (Doc. # 142-2 ¶¶ 4–5.) This representation is verified by the
Mortgage and Note, which indicate that IndyMac was the originating lender on the
loan. (Doc. # 142-2 Exs. B, C.) Since Plaintiff has not proffered any evidence to
the contrary, the Court concludes that the undisputed facts establish that IndyMac
did not make any alleged misrepresentations to the state court.
The Court also rejects Plaintiff’s contention that IndyMac lacked the
authority to initiate foreclosure proceedings after the securitization of the loan.6
The argument that parties lose their interest in a loan when it is assigned to a
securitization trust or REMIC has been rejected by numerous courts. See, e.g.,
Hafiz v. Greenpoint Mortgage Funding, Inc., 652 F. Supp. 2d 1039, 1043 (N.D.
Cal. 2009) (argument that “all defendants lost their power of sale pursuant to the
deed of trust when the original promissory note was assigned to a trust pool” is
“both unsupported and incorrect”); Reyes v. GMAC Mortgage LLC, No. 11–0100,
2011 WL 1322775, at *2–3 (D. Nev. Apr. 5, 2011) (“securitization merely creates
6
The Court also notes that this claim may be barred by the doctrine of res
judicata. See Albano v. Norwest Fin. Hawaii, Inc., 244 F.3d 1061 (9th Cir. 2001)
(applying Hawaii law and holding that a state court foreclosure judgment may bar
federal claims that “could have been litigated in the foreclosure action”); Bremer v.
Weeks, 85 P.3d 150, 160 (2004) (observing that under Hawaii law “[t]he judgment
of a court of competent jurisdiction . . . precludes the relitigation, not only of the
issues which were actually litigated in the first action, but also of all grounds of
claim and defense which might have been properly litigated in the first action but
were not litigated or decided”).
15
‘a separate contract, distinct from [p]laintiffs[’] debt obligations’ under the note
and does not change the relationship of the parties in any way”) (citing
Commonwealth Prop. Advocates, LLC v. First Horizon Home Loan Corp., No.
2:10–cv–375, 2010 WL 4788209, at *4 (D. Utah Nov. 16, 2010) (emphasis added)
(quoting Larota–Florez v. Goldman Sachs Mortgage Co., 719 F. Supp. 2d 636, 642
(E.D. Va. 2010)); see also Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886, 898
(D. Haw. 2011) (rejecting the claim that securitization of a loan somehow renders
the note and mortgage unenforceable); Jones v. Countrywide Homeloan, 2011 U.S.
Dist. LEXIS 64647, at *14 (E.D. Cal. June 17, 2011) (stating that securitization
gives “investors an interest in the cash flow from the promissory notes that are the
underlying assets” in the investment vehicle and that “[i]t does not follow that any
of the other entitlements of the lender of the Deeds of Trust, including the power to
declare default, are transferred or lost because of the transfer or sale of the cash
flow due from the mortgage”). Plaintiff has not cited any cases that have reached a
different conclusion. Accordingly, insofar as Plaintiff’s UDAP claim is based on
this contention, the Court concludes that it lacks merit.
Moreover, the record shows that IndyMac retained the authority to
institute foreclosure proceedings in its own name after the securitization of the
loan. The Prospectus for IndyMac Residential Mortgage-Backed Trust Series
16
2006-L1 (“Prospectus”) states that “Indymac bank, as servicer, with respect to the
certificates, will be limited to the servicer’s contractual servicing obligations under
the pooling and servicing agreement.” (Doc. # 222-4.) The Pooling and Service
Agreement (“PSA”) between IndyMac and Deutsche Bank identifies IndyMac as
the “Servicer” and provides that it “shall service and administer the Mortgage
Loans on behalf of the Trust and in the best interests of and for the benefit of the
Certificateholders and the Certificate Insurer . . . .” (PSA §§ 1.01, 3.01.) The PSA
further provides that “the Servicer in its own name or in the name of a SubServicer is hereby authorized and empowered by the Trustee, when the Servicer
believes it appropriate in its best judgment in accordance with the servicing
standards set forth above, . . . to institute foreclosure proceedings or obtain a deedin-lieu of foreclosure so as to convert the ownership of such properties . . . .” (Id. §
3.01 (emphasis added).) Plaintiff has not offered any evidence to suggest that
IndyMac was not the servicer of the loan or that it lacked the authority to institute
foreclosure proceedings. Therefore, based on the undisputed facts set forth in the
record, the Court concludes that IndyMac did not perpetrate any kind of fraud on
the Court by instituting foreclosure proceedings in its capacity as servicer.
The second part of Plaintiff’s UDAP claim is based on his allegation
that OneWest did not obtain a beneficial interest in Plaintiff’s loan when it
17
acquired IndyMac’s assets. (SAC ¶ 84.) According to Plaintiff, OneWest is
“purposely, knowingly, unjustly, and deceptively posing as the holder in due
course, holder of a valid claim, in possession of standing, and as the lender for the
purpose of unjustly and deceptively seizing [the Subject Property].” (SAC ¶ 90.)
However, the undisputed facts do not support this claim.
Contrary to Plaintiff’s contention, the record plainly establishes that
OneWest is the servicer of Plaintiff’s loan. Charles Boyle, the Vice President of
OneWest, states in his declaration that OneWest purchased the servicing rights to
Plaintiff’s loan from the FDIC on or about March 19, 2009.7 (Doc. # 210-2 ¶ 3.)
This fact is verified by the Serving Business Asset Purchasing Agreement (“APA”)
between the FDIC, as receiver for IndyMac, and OneWest, whereby the FDIC
transferred IndyMac’s servicing rights to OneWest. (PSA § 2.01; “APA,” Doc.
# 218-5 § 2.01.) These servicing rights include the right to foreclose on the
Subject Property. (PSA § 3.01; APA § 10.03 (indicating that the servicing of the
Mortgage Loans “include[s] the conduct of foreclosure”).)
The record also demonstrates that OneWest expressly disclosed to
Plaintiff in writing that it was the Servicer of the loan and acting on behalf of
7
Plaintiff’s evidentiary objection to Charles Boyle’s Declaration lacks merit
and is therefore overruled.
18
“securitization trust LOT LOAN 2006-L1 03-24-06, DEUTSCHE BANK
NATIONAL TRUST COMPANY, as Trustee/Master Servicer.” (SAC at Ex. D.)
Plaintiff also acknowledges that OneWest described itself as “a debt collector” in a
letter dated August 19, 2010. (SAC ¶¶ 46–47.) Additionally, Plaintiff was unable
to identify any unfair or deceptive acts or practices engaged in by OneWest when
asked to do so at his deposition. (White Depo. at 67–68.) Indeed, Plaintiff has not
offered any evidence to suggest that OneWest has posed as the lender or holder in
due course of the loan. The Court therefore concludes that the undisputed facts in
the record establish that OneWest did not make any alleged misrepresentations
regarding its purported interest in the loan. Porter, 419 F.3d at 891.
In reaching this conclusion, the Court notes that documents suggesting
that OneWest does not have a beneficial interest in the loan are consistent with
OneWest’s representation that it is merely the servicer of the loan. As explained
by the Ninth Circuit in Cervantes v. Countrywide Home Loans Inc., 656 F.3d
1034, 1038–39 (9th Cir. 2011):
After a borrower takes out a home loan, the original lender may sell all or a
portion of its beneficial interest in the loan and change loan servicers. The
owner of the beneficial interest is entitled to repayment
of the loan. . . . The servicer of the loan collects payments from the
borrower, sends payments to the lender, and handles administrative aspects
of the loan.
19
Here, the record as well as Plaintiff’s own allegations establish that OneWest is the
servicer of the loan that’s handling administrative aspects of the loan on behalf of
the securitization trust. (Doc. # 210-2 ¶ 3; PSA § 3.01; Doc. # 218-5 § 2.01; SAC
¶¶ 21, 46–47, Ex. D.) Plaintiff’s argument that OneWest is wrongfully taking steps
to foreclose on the Subject Property without a beneficial interest in the Note lacks
merit because, as the servicer of the loan on behalf of a trust, OneWest is not
required to have its own beneficial interest in the loan. Accordingly, Plaintiff
cannot establish a UDAP claim based on this contention.
Plaintiff also appears to advance a variation of the “show me the note”
argument, which has been routinely rejected by district courts throughout the Ninth
Circuit. See, e.g., Diessner v. Mortgage Electronic Registration Systems, 618 F.
Supp. 2d 1184, 1187 (D. Ariz. 2009); Wallis v. Indymac Fed. Bank, 717 F. Supp.
2d 1195, 1200–01 (W.D. Wash. 2010); Mansour v. Cal-Western Reconveyance
Corp., 618 F. Supp. 2d 1178, 1181 (D. Ariz. 2009).8 Therefore, insofar as
8
Although the Court does not cite unpublished opinions as precedent, the
following cases from the District of Hawaii also reject the “show me the note”
argument: Krakauer v. IndyMac Mortg. Servs., 2010 WL 5174380, at *9 (D. Haw.
Dec. 14, 2010); Brenner v. Indymac Bank, F.S.B., 2010 WL 4666043, at *7 (D.
Haw. Nov. 9, 2010); Angel v. BAC Home Loan Servicing, 2010 WL 4386775, at
*10 (D. Haw. Oct. 26, 2010).
20
Plaintiff’s UDAP claim is based on this argument, the Court concludes that it lacks
merit.
Plaintiff’s argument regarding its entitlement to a UCC administrative
remedy also lacks merit. In the SAC, Plaintiff asserts that OneWest “is in default
of the UCC administrative remedy with a penalty in the amount of $4,000,000 for
acquiescing and failing to provide documented proof of [a] valid claim against his
property.” (SAC ¶ 62.) The documents submitted by Plaintiff in support of this
claim indicate that Plaintiff is seeking an administrative remedy pursuant to 28
U.S.C. §§ 1333, 1337, 2461, and 2463. (Docs. # 215-2, 215-3, 215-4.) Since these
statutes have no application to the facts of this case, this allegation does not
constitute grounds for relief against Defendant. See 28 U.S.C. § 1333 (establishing
exclusive admiralty jurisdiction of the U.S. District Courts); id. § 1337
(establishing jurisdiction in antitrust cases); id. § 2461 (establishing fines and
penalties for violations of acts of Congress); and id. § 2463 (addressing property
taken under revenue law).
In sum, the Court concludes that each of the allegations advanced by
Plaintiff in support of his UDAP claim either has no legal merit or lacks
evidentiary support sufficient to create a genuine issue of material fact for trial.
21
Accordingly, OneWest is entitled to judgment as a matter of law with respect to
Plaintiff’s sole cause of action.
CONCLUSION
For the reasons set forth above, the Court GRANTS Defendant
OneWest’s Motion for Summary Judgment (doc. # 209) and DENIES Plaintiff’s
Motion for Summary Judgment (doc. # 208). The April 10, 2012 trial date is
hereby VACATED and all pending Motions in Limine (docs. ## 182–186) are
DENIED AS MOOT.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, March 20, 2012.
_____________________________
David Alan Ezra
United States District Judge
White v. IndyMac Bank, et al., CV No. 09-00571 DAE-KSC; ORDER: (1)
GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT, AND
(2) DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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