Goya et al v. Wells Fargo Bank, N.A. et al
ORDER DISMISSING COMPLAINT; WARNING TO PLAINTIFFS' COUNSEL 21 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 6/27/11. ("Plaintiffs are given leave to submit a motion to Magistrate Judge Kevin S.C. Chang that seeks permission to file an Amended Complaint. The proposed Amended Complaint must be attached to the motion. Any such motion shall be filed no later than July 18, 2011. If Plaintiffs fail to timely file a motion seeking leave to file an attached Amended Complaint, j udgment will be automatically entered in favor of Defendants.") (emt, )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 were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
GLEN KAMEJI GOYA,
DINA CALUBAQUIB GOYA,
WAYNE FUMIO KOISHIGAWA,
KAREN AYAKO KOISHIGAWA,
WELLS FARGO BANK, N.A.,
WELLS FARGO HOME MORTGAGE,
JOHN AND MARY DOES 1-50,
CIV. NO. 11-00048 SOM/KSC
ORDER DISMISSING COMPLAINT;
WARNING TO PLAINTIFFS’
ORDER DISMISSING COMPLAINT
INTRODUCTION AND FACTUAL BACKGROUND.
On April 15, 2011, Plaintiffs Glen Kameji Goya, Dina
Calubaquib Goya, Wayne Fumio Koishigawa, and Karen Ayako
Koishigawa filed their First Amended Complaint in this matter.
Plaintiffs allege that Well Fargo Bank, N.A. (“Wells Fargo”), and
Wells Fargo Home Mortgage (“WFHM”) violated state and federal
statutes in connection with a residential mortgage loan.
Because the Amended Complaint does not state a claim
against Defendants, Defendants’ motion to dismiss is granted
without a hearing pursuant to Local Rule 7.2(d), and the
Complaint is dismissed.
On February 4, 2009, Plaintiffs executed a mortgage and
note in favor of Wells Fargo for $550,987.
See First Am. Compl.
¶¶ 49-50, ECF No. 11.
On January 21, 2011, Plaintiffs filed a
pro se Complaint in the instant action that was never served on
See ECF No. 1.
On February 25, 2011, the property
was sold by public auction to Wells Fargo and WFHM for
See First Am. Compl. ¶ 67.
On April 15, 2011,
Plaintiffs filed a First Amended Complaint.
the following seven claims in their Amended Complaint:
violation of the Unfair and Deceptive Acts and Practices; (2)
violations of the Fair Debt Collection Practices Act; (3) breach
of fiduciary duty; (4) violations of federal and Hawaii antitrust
statutes; (5) unjust enrichment; (6) violations of Hawaii
antitrust and antimonopoly acts; and (7) negligent and/or
intentional infliction of emotional distress.
The Complaint in this case appears to be largely copied
and pasted from the one dismissed in Radford v. Wells Fargo Bank,
Civ. No. 10-00767 SOM-KSC, 2011 WL 1833020 (D. Haw. May 13,
Counsel for the plaintiff in that case is Plaintiffs’
counsel in the present case.
At the motion to dismiss hearing in
Radford, counsel admitted that the Complaint was “terrible” and
that an Amended Complaint “need[ed] to be radically different.”
Plaintiffs’ counsel appears to have filed nearly the same
Complaint in Franco v. Federal National Mortgage Association,
Civ. No. 10-00735 DAE-KSC. Another judge from this district
rejected that Complaint on the same day that this judge dismissed
the Radford complaint. See Franco, 2011 WL 1842970 (D. Haw. May
See id. at *2 n.2.
Yet, counsel has failed to amend the nearly
indentical Complaint in the present case.
In addition, the Oppositions for Radford and the
present case make similar arguments and concessions.
Opposition in Radford acknowledged that most of the claims were
“unlikely to prevail as written.”
Similarly, the Opposition
in the present case admits that the “causes of action for FDCPA
violation and unjust enrichment are unlikely to prevail as
Opp’n at 10, ECF No. 25.
With respect to their
intentional and negligent infliction of emotional distress
claims, Plaintiffs concede that “it may be difficult for the
court to discern the precise placement of each necessary
Opp’n at 8.
Moreover, while Count IV (Violation of
Federal and Hawaii Antitrust Statutes) claims to be asserted
against all Defendants, it only makes allegations against and
reference to Mortgage Electronic Registration Systems (“MERS”),
see First Am. Compl. at 33-35, which has been dismissed from this
See ECF No. 23.
Plaintiffs appear to concede that their Amended
Complaint is insufficient.
Throughout the Opposition, Plaintiffs
request leave to amend their complaint “to provide the necessary
detail,” Opp’n at 6, and “to rectify such deficiencies.”
Defendants seek dismissal of the Complaint, arguing
that it fails to sufficiently allege a claim therein.
this challenge, Plaintiffs’ factual allegations must be enough to
raise a right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true
even if doubtful in fact.
See Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007); accord Ashcroft v. Iqbal, 129 S. Ct. 1937,
1949 (2009) (“the pleading standard Rule 8 announces does not
require ‘detailed factual allegations,’ but it demands more than
an unadorned, the-defendant-unlawfully-harmed-me accusation”).
“While a complaint attacked by a Rule 12(b)(6) motion to dismiss
does not need detailed factual allegations, a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitlement to
relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will
Twombly, 550 U.S. at 555.
The complaint must “state a
claim to relief that is plausible on its face.”
Id. at 570.
claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Iqbal,
129 S. Ct. at 1949.
As this court has already noted, Plaintiffs appear to
have conceded that their claims for a FDCPA violation (Count II),
unjust enrichment (Count V), and negligent and/or intentional
infliction of emotional distress (Count VII) are insufficiently
Their claim for violations of federal and Hawaii
antitrust statutes (Count IV) only makes allegations as to a
Defendant that has been dismissed from the case.
this court dismisses these claims.
As stated in the reasons
below, the court dismisses the remaining claims (Counts I, III,
and VI) in their entirety as well.
Count I (Violation of Unfair and Deceptive Acts
Count I alleges that all Defendants are liable for
unfair and deceptive acts and practices because, among other
things, they allegedly made “material representations, omissions
or practices that were likely to mislead consumers acting
reasonably under the circumstances[.]”
First Am. Compl. ¶ 77.
Count I is brought under section 480-2(a) of Hawaii Revised
Statutes, which states, “Unfair methods of competition and unfair
or deceptive acts or practices in the conduct of any trade or
commerce are unlawful.”
Plaintiffs do not state a claim under section 480-2 of
the Hawaii Revised Statutes because lenders like Wells Fargo
generally owe no duty to a borrower “not to place borrowers in a
loan even where there was a foreseeable risk borrowers would be
unable to repay.”
McCarty, 2010 WL 4812763, at *6 (quoting
Champlaie v. BAC Home Loans Servicing, LP, 706 F. Supp. 2d 1029,
1061 (E.D. Cal. 2009)).
See also Sheets v. DHI Mortg. Co., 2009
WL 2171085, at *4 (E.D. Cal. July 20, 2009) (reasoning that no
duty exists “for a lender ‘to determine the borrower’s ability to
repay the loan. . . .
The lender’s efforts to determine the
creditworthiness and ability to repay by a borrower are for the
lender’s protection, not the borrower’s.’” (quoting Renteria v.
United States, 452 F. Supp. 2d 910, 922-23 (D. Ariz. 2006)
(finding that borrowers “had to rely on their own judgment and
risk assessment to determine whether or not to accept the
“[A]s a general rule, a financial institution owes no
duty of care to a borrower when the institution’s involvement in
the loan transaction does not exceed the scope of its
conventional role as a mere lender of money.”
Nymark v. Heart
Fed. Sav. & Loan Ass’n, 283 Cal. Rptr. 53, 56 (Cal. App. 1991).
Nothing in the Complaint indicates that any Defendant “exceed[ed]
the scope of [a] conventional role as a mere lender of money.”
Count I fails on that basis.
Count III (Breach of Fiduciary Duties).
Count III alleges that Defendants “breached [their]
fiduciary duties to Plaintiffs by fraudulently inducing
Plaintiffs to enter into a mortgage transaction which was
contrary to the Plaintiffs’ stated intentions.”
First Am. Compl.
Defendants also allegedly breached a fiduciary duty owed
to Plaintiffs by “taking positions in the highly leveraged
futures or options market[.]”
Id. ¶ 92.
These allegations fail to state a claim.
In McCarty v.
GCP Mgmt., LLC, 2010 WL 4812763 (D. Haw. Nov. 17, 2010), the
court held that a borrower-lender relationship is not fiduciary
Lenders generally owe no fiduciary duties to
their borrowers. See, e.g., Spencer v. DHI
Mortg. Co., 642 F. Supp. 2d 1153, 1161 (E.D.
Cal. 2009) (“Absent ‘special circumstances’ a
loan transaction ‘is at arms-length and there
is no fiduciary relationship between the
borrower and lender.’”) (quoting Oaks Mgmt.
Corp. v. Super. Ct., 51 Cal. Rptr. 3d 561
(Cal. App. 2006)); Ellipso, Inc. v. Mann, 541
F. Supp. 2d 365, 373 (D.D.C. 2008) (“[T]he
relationship between a debtor and a creditor
is ordinarily a contractual relationship
. . . and is not fiduciary in nature.”)
(citation omitted); Nymark v. Heart Fed. Sav.
& Loan Ass’n, 283 Cal. Rptr. 53, 54 n.1 (Cal.
App. 1991) (“The relationship between a
lending institution and its borrower-client
is not fiduciary in nature.”).
2010 WL 4812763, at *5.
Plaintiffs make no allegations suggesting that their
relationship to Defendants is anything other than an ordinary,
arm’s-length, lender-borrower relationship.
Simply stating that
Defendants “breached their fiduciary duties to Plaintiff” is
insufficient to establish the existence of a fiduciary duty.
Plaintiffs’ allegations in Count III are conclusory and without
Plaintiffs may have claims based on alleged
fraudulent inducement or alleged disregard of Plaintiffs’
application, but no viable claim is stated for breach of
Count VI (Violations of Hawaii Antitrust and
In Count VI, Plaintiffs assert violations of state
Plaintiffs state generally that “[m]ortgage
lending and servicing in Hawaii is an activity in or affecting
First Am. Compl. ¶ 123.
allege that Defendants violated “the Hawaii Monopolization Act,
Hawaii Revised Statutes § 480-9.”
Id. ¶ 124.
completely fail to make factual allegations suggesting that
Defendants made an agreement to diminish competition.
assertions of state antitrust law violations do not give
Defendants an opportunity to properly defend themselves.
VI is dismissed.
WARNING TO PLAINTIFFS’ COUNSEL
Plaintiffs’ counsel has a significant federal court
He is counsel of record in about 14 cases filed with
the court in the last year.
In these cases, he has ignored court
rules, missed deadlines, and used rejected boilerplate
In Caraang v. PNC Mortgage, Civ. No. 10-00594 LEK-BMK,
2011 WL 1326959 (D. Haw. Apr. 5, 2011), for example, an amended
Complaint was filed in lieu of an opposition after the defendant
filed its motion to dismiss.
Judge Leslie Kobayashi warned
Plaintiffs’ counsel that he could not “file an untimely amended
complaint and assume that the Court will construe it as as a form
of opposition to the pending motion to dismiss.”
See id. at *2.
In Duarte v. Bank of America, Civil No. 10-00372 JMS-BMK, 2011 WL
1399127 (D. Haw. Apr. 12, 2011), counsel failed to abide by the
court’s specific requirement that he contact defense counsel
regarding an Amended Complaint.
Instead, he “belatedly and
improperly” sought an extension of the Amended Complaint
Id. at *2 n.3.
In this case, Plaintiffs’ counsel missed his Opposition
deadline by over a week.
The hearing on the present motion to
dismiss was set for July 5, 2011.
was due on June 14, 2011.
The opposition to the motion
Plaintiffs did not file their
opposition until June 22, 2011, after court staff called twice to
inquire about the late opposition.
Local Rule 7.4 requires oppositions to motions set for
hearing to be “filed not less than twenty-one (21) days prior to
the date of the hearing.”
The reason that the opposition
deadline is 21 days before the hearing is to allow the moving
party time to file a reply.
prepare for the hearing.
It also gives the court time to
Because Plaintiffs’ opposition was
filed late, this court extended Defendants’ reply deadline and
took the hearing off calendar.
Plaintiffs’ counsel’s disregard
of the local rules governing the filing of oppositions has forced
this court and opposing counsel to do extra work.
In addition to his disregard of deadlines and rules,
Plaintiffs’ counsel has used nearly the same rejected boilerplate
Complaint in the instant case.
Counsel appears to have violated
Rule 11(b)’s mandate that parties present arguments that are
warranted by the law and that are nonfrivolous.
See Fed. R. Civ.
P. 11(c)(3) (“On its own, the court may order an attorney, law
firm, or party to show cause why conduct specifically described
in the order has not violated Rule 11(b).”).
has resulted in a waste of judicial resources.
The court should
not be required to review counsel’s facially deficient form
complaints for failure to state a claim.
This court has already
informed counsel that there is no need to wait for a court order
dismissing a Complaint before filing an Amended Complaint.
See Radford, 2011 WL 1833020, at *2 n.2.
Plaintiffs’ counsel is warned that he is risking
For the foregoing reasons, the court dismisses the
Plaintiffs are given leave to submit a motion to
Magistrate Judge Kevin S.C. Chang that seeks permission to file
an Amended Complaint.
The proposed Amended Complaint must be
attached to the motion.
than July 18, 2011.
Any such motion shall be filed no later
If Plaintiffs fail to timely file a motion
seeking leave to file an attached Amended Complaint, judgment
will be automatically entered in favor of Defendants.
In their Opposition, Plaintiffs request leave to amend
their Complaint to add additional causes of actions.
takes no position on this request but strongly cautions
Plaintiffs to seriously consider whether they have a viable claim
they can assert against specific Defendants.
Counsel is reminded
that he must have a good faith basis for bringing specific claims
to avoid possible sanctions.
See, e.g., Holgate v. Baldwin, 425
F.3d 671, 676–77 (9th Cir. 2005); Buster v. Greisen, 104 F.3d
1186, 1190 (9th Cir. 1997).
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, June 27, 2011.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Goya v. Wells Fargo, et al., Civil No. 11-00048 SOM/KSC; ORDER DISMISSING COMPLAINT;
WARNING TO PLAINTIFFS’ COUNSEL.
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