Whitehead et al v. Bank of America Corporation et al

Filing 36

ORDER: (1) GRANTING DEFENDANT BOFA'S MOTION TO DISMISS 15 ; (2) GRANTING DEFENDANT GMAC'S MOTION FOR JOINDER 25 ; (3) DISMISSING WITHOUT PREJUDICE PLAINTIFFS' COMPLAINT; AND (4) GRANTING PLAINTIFFS LEAVE TO AMEND THE COMPLAINT. ~ Pla intiffs are GRANTED leave to amend their Complaint and may file an amended Complaint no later than 30 days from the filing of this Order. ~ Signed by JUDGE DAVID ALAN EZRA on 5/13/2011. (afc) CERTIFICATE OF SERVICEP articipants 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 Monday, May 16, 2011.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
JAMES MICHAEL WHITEHEAD
and SIUAFU WHITEHEAD,
Plaintiffs,
vs.
BANK OF AMERICA
CORPORATION; DEUTSCHE
BANK TRUST COMPANY
AMERICAS; GMAC MORTGAGE,
LLC; JOHN DOES 1–10; JANE
DOES 1–10, DOE PARTNERSHIPS
1–10; DOE CORPORATIONS 1–10;
AND DOE ENTITIES 1–10,
Defendants.
_____________________________

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CV. NO. 10-00615 DAE-BMK

ORDER: (1) GRANTING DEFENDANT BOFA’S MOTION TO DISMISS; (2)
GRANTING DEFENDANT GMAC’S MOTION FOR JOINDER; (3)
DISMISSING WITHOUT PREJUDICE PLAINTIFFS’ COMPLAINT; AND (4)
GRANTING PLAINTIFFS LEAVE TO AMEND THE COMPLAINT
On May 13, 2011, the Court was scheduled to hear Defendant Bank of
America Corporation (“BofA”)’s Motion to Dismiss (Doc. # 15) and Defendant
GMAC Mortgage, LLC (“GMAC”)’s Motion for Joinder (Doc. # 25). Plaintiffs
James Michael Whitehead and Siuafu Whitehead, pro se, did not appear at the

hearing on behalf of themselves1; Patricia J. McHenry, Esq., appeared at the
hearing on behalf of BofA; Gary Y. Okuda, Esq., appeared at the hearing on behalf
of GMAC. Because Plaintiff did not appear at the hearing, and because the matter
has been sufficiently briefed, pursuant to Local Rule 7.2(d), the Court finds this
matter suitable for disposition without a hearing. After reviewing the supporting
and opposing memoranda, the Court GRANTS Defendant BofA’s Motion to
Dismiss (Doc. # 15), GRANTS Defendant GMAC’s Motion for Joinder (Doc. #
25), DISMISSES WITHOUT PREJUDICE Plaintiffs’ Complaint, and GRANTS
Plaintiffs leave to amend the Complaint.
BACKGROUND
On October 20, 2010, Plaintiffs James Michael Whitehead and Siuafu
Whitehead (“Plaintiffs”) filed a Complaint against Defendants BofA, Deutsche
Bank Trust Company Americas (“Deutsche Bank”), GMAC, John Does 1–10, Jane
Does 1–10, Doe Partnerships 1–10, Doe Corporations 1–10, and Doe Entities 1–10
(collectively, “Defendants”) asserting claims pursuant to the Real Estate Settlement
Procedures Act of 1974, 12 U.S.C. § 2501, et seq. (“RESPA”) and state law.
(“Compl.,” Doc # 1.)

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Three calls were made in the hallway for Plaintiffs with no response.
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As alleged in the Complaint, Plaintiffs signed a mortgage agreement
on December 20, 20062, and were never provided a copy of the mortgage
agreement or note, or a notice of assignment, sale, or transfer of the servicing
rights or note. (Compl. ¶¶ 11–13.) The Complaint further alleges that Defendants
“would preempt Plaintiffs [sic] right to buy insurance on the above referenced
property by setting up an escrow account and charged far in excess of the market
value for insurance,” (id. ¶ 16), and “failed to provide a detailed breakdown of fees
in violation of their contractual obligations,” (id. ¶ 20).
On December 21, 2010, Defendant BofA filed a Motion to Dismiss or
in the Alternative, for a More Definite Statement (“Motion”). (Mot., Doc. # 15.)
On March 14, 2011, Defendant GMAC filed a Motion for Joinder regarding
BofA’s Motion (“Motion for Joinder”). (Joinder, Doc. # 25.) On March 14, 2011,

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Plaintiffs’ Complaint only alleges that the loan was entered into in 2006,
but does not specify a month or date. However, BofA’s Motion to Dismiss
attaches the mortgage as Exhibit B, which clearly states that the note was signed on
December 20, 2006. Pursuant to Federal Rule of Evidence 201, the Court takes
judicial notice of the mortgage attached to BofA’s Motion to Dismiss, as it is a
“matter of public record” and may be considered on a motion to dismiss. See Lee
v. City of Los Angeles, 250 F.3d 668, 688-689 (9th Cir. 2001). “Therefore, on a
motion to dismiss a court may properly look beyond the complaint to matters of
public record and doing so does not convert a Rule 12(b)(6) motion to one for
summary judgment.” Mack v. South Bay Beer Distrib., Inc., 798 F.2d 1279, 1282
(9th Cir. 1986), overruled on other grounds by Astoria Fed. Sav. and Loan Ass’n v.
Solimino, 501 U.S. 104, 111 (1991).
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Plaintiffs filed a Memorandum in Opposition to BofA’s Motion (“Opposition”).
(Opp’n, Doc. # 26.) On March 21, 2011, BofA filed a Reply in support of its
Motion. (Reply, Doc. # 28.)
STANDARD OF REVIEW
Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure
(“Rule”), a motion to dismiss will be granted where the plaintiff fails to state a
claim upon which relief can be granted. Review is limited to the contents of the
complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir.
1994). A complaint may be dismissed as a matter of law for one of two reasons:
“(1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable
legal claim.” Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir.
1984) (citation omitted). Allegations of fact in the complaint must be taken as true
and construed in the light most favorable to the plaintiff. See Livid Holdings Ltd.
v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005).
A complaint need not include detailed facts to survive a Rule 12(b)(6)
motion to dismiss. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56 (2007).
In providing grounds for relief, however, a plaintiff must do more than recite the
formulaic elements of a cause of action. See id. at 556–57; see also McGlinchy v.
Shell Chem. Co., 845 F.2d 802, 810 (9th Cir. 1988) (“[C]onclusory allegations
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without more are insufficient to defeat a motion to dismiss for failure to state a
claim.”) (citation omitted). “The tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal conclusions,” and
courts “are not bound to accept as true a legal conclusion couched as a factual
allegation.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotations
and citations omitted). Thus, “bare assertions amounting to nothing more than a
formulaic recitation of the elements” of a claim “are not entitled to an assumption
of truth.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (“[T]he
non-conclusory ‘factual content,’ and reasonable inferences from that content,
must be plausibly suggestive of a claim entitling the plaintiff to relief.”) (internal
quotations and citations omitted).
A court looks at whether the facts in the complaint sufficiently state a
“plausible” ground for relief. See Twombly, 550 U.S. at 570. A plaintiff must
include enough facts to raise a reasonable expectation that discovery will reveal
evidence and may not just provide a speculation of a right to relief. Id. at 586.
When a complaint fails to adequately state a claim, such deficiency should be
“exposed at the point of minimum expenditure of time and money by the parties
and the court.” Id. at 558 (citation omitted). If a court dismisses the complaint or
portions thereof, it must consider whether to grant leave to amend. Lopez v.
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Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (finding that leave to amend should be
granted “if it appears at all possible that the plaintiff can correct the defect”)
(internal quotations and citations omitted).
DISCUSSION
To determine whether a complaint states a claim, the Court must first
disregard “[t]hreadbare recitals of the elements of a cause of action, supported by
mere conclusory statements,” and then second, “identify ‘well-pleaded factual
allegations,’ which we assume to be true, ‘and then determine whether they
plausibly give rise to an entitlement of relief.’” Telesaurus VPC, LLC v. Power,
623 F.3d 998, 1003 (9th Cir. 2010) (quoting Iqbal, 129 S. Ct. at 1949–50). The
instant Complaint, however, includes only legal conclusions and threadbare recitals
of the elements of the causes of action: that Defendants allegedly violated 12
U.S.C. § 2601 – RESPA, charged Plaintiffs unconscionable rates, and failed to
provide a detailed breakdown of fees in violation of their contractual obligations.
The Complaint entirely lacks specific allegations providing the basis of these legal
conclusions or giving Defendants fair notice of the wrongs they have allegedly
committed. Indeed, nothing in Plaintiffs’ Complaint shows that these claims are
“plausible on [their] face.” See Iqbal, 129 S. Ct. at 1949 (citation and quotations
omitted). Once the Court disregards the conclusions and threadbare recitals in the
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Complaint, no allegations remain that would support any claims against
Defendants. As such, the Complaint is wholly deficient in carrying Plaintiffs’
pleading obligations under Federal Rules of Civil Procedure 8 and 12(b)(6).
For example, in Count I of the Complaint, Plaintiffs’ RESPA claim,
Plaintiffs contend that they were never provided copies of the mortgage agreement
or note, notification of assignment and/or sale of the note, or notification of the
servicing rights. (Compl. ¶¶ 15–17.) These allegations entirely fail to include
even the basic elements of a RESPA violation, and fall well below the standard of
providing “factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Iqbal, S. Ct. at 1949
(citing Twombly, 550 U.S. at 556). Specifically, RESPA provides that “[e]ach
servicer of any federally related mortgage loan shall notify the borrower in writing
of any assignment, sale, or transfer of the servicing of the loan to any other
person,” 12 U.S.C. § 2605, but the Complaint fails to allege that Plaintiffs received
a federally related mortgage loan or that the servicing of the loan was assigned,
sold, or transferred.3 The Complaint also leaves completely unanswered how each
Defendant is related to the mortgage agreement and/or note and the servicing of

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Further, it is not a RESPA violation to fail to provide copies of the
mortgage agreement or note. See 12 U.S.C. §§ 2605-2608.
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them, which Defendants allegedly committed these wrongs, when the wrongs were
committed, or even the identity of the real property at issue and that Plaintiffs have
an interest in that property.
Additionally, Plaintiffs seek rescission of the loan in Count I of their
Complaint under RESPA. Defendant BofA correctly argues in their Motion that
rescission is not an available remedy under RESPA. Indeed, rescission is not a
form of relief offered by the RESPA statute. See 12 U.S.C. § 2601–2617.
As to Plaintiffs’ allegation in Count II of the complaint that
Defendant[s] “would preempt Plaintiffs [sic] right to buy insurance on the above
referenced property by setting up an escrow account and charged far in excess of
the market value for insurance,” (Compl. ¶ 20), this allegation is so bare that the
Court is unable to discern what type of claim Plaintiffs are trying to assert.
Although FRCP Rule 8 requires only that a complaint include a “short and plain
statement of the claim showing that the pleader is entitled to relief,” the Complaint
must sufficiently put Defendants on fair notice of the claim asserted and the ground
upon which it rests. Defendants, nor the Court, are required to speculate as to
which provisions Plaintiffs are suing under or how Defendants violated such
provisions. Vague allegations containing mere labels and conclusions are
insufficient to survive a motion to dismiss. See Twombly, 550 U.S. at 555. Thus,
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without any facts explaining when and why Defendants allegedly purchased
insurance for the property at issue, the Complaint fails to state a claim.
Finally, as to Plaintiffs’ contention in Count III4 of the Complaint that
Defendants “failed to provide a detailed breakdown of fees in violation of their
contractual obligations,” (Compl. ¶ 20), Plaintiffs again fail to assert even the basic
elements of a breach of contract claim, much less factual allegations supporting
these claims. See Iqbal, 129 S. Ct. at 1949 (stating that Rule 8 requires more than
“the-defendant-unlawfully-harmed-me accusation[s]” and “[a] pleading that offers
labels and conclusions or a formulaic recitation of the elements of a cause of action
will not do”). The Complaint fails to identify the contract at issue, the parties to
the contract, whether Plaintiffs performed under the contract, the particular
provision of the contract allegedly violated by Defendants, and when and how
Defendants allegedly breached the contract. See Otani v. Stae Farm Fire & Cas.
Co., 927 F. Supp. 1330, 1335 (D. Haw. 1996) (“In breach of contract actions, [] the
complaint must, at minimum, cite the contractual provision allegedly violated.
Generalized allegations of a contractual breach are not sufficient.”).

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The Complaint actually labels the third cause of action as “Count II,” but
the Court assumes this was a typo and construes this cause of action as Count III.
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In sum, the Complaint, including only “labels and conclusions,” fails
to state a claim upon which relief may be granted and fails to provide Defendants
notice of the bases of Plaintiffs’ claims against them. Accordingly, the Court
GRANTS BofA’s Motion and DISMISSES WITHOUT PREJUDICE Counts I, II,
and III of Plaintiffs’ Complaint.
CONCLUSION
For the aforementioned reasons, the Court GRANTS BofA’s Motion
(Doc. # 15), GMAC’s Motion for Joinder (Doc. # 25), and DISMISSES
WITHOUT PREJUDICE Plaintiffs’ Complaint. However, the Court recognizes
that it may be possible for Plaintiffs to state a claim if provided the opportunity to
amend their Complaint. Accordingly, Plaintiffs are GRANTED leave to amend
their Complaint and may file an amended Complaint no later than 30 days from the
filing of this Order. Failure to do so and to cure the pleading deficiencies will
result in dismissal of this action with prejudice. Additionally, Plaintiffs are
advised that the amended complaint must clearly state how each of the named

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defendants have injured them, and it must also clearly identify the statutory
provisions under which Plaintiffs’ claims are brought.

IT IS SO ORDERED.
DATED: Honolulu, Hawaii, May 13, 2011.

_____________________________
David Alan Ezra
United States District Judge

Whitehead v. Bank of America Corporation et al., Cv. No. 10-00615 DAE-BMK;
ORDER: (1) GRANTING DEFENDANT BOFA’S MOTION TO DISMISS; (2)
GRANTING DEFENDANT GMAC’S MOTION FOR JOINDER; (3)
DISMISSING WITHOUT PREJUDICE PLAINTIFFS’ COMPLAINT; AND (4)
GRANTING PLAINTIFFS LEAVE TO AMEND THE COMPLAINT

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