Del Piano et al v. Mortgage Electronic Registration Systems, Inc. et al
Filing
99
ORDER GRANTING (1) DEFENDANTS MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S,ONEWEST BANK, FSB'S, HSBC BANK USA, N.A., A NATIONAL ASSOCIATION, AS TRUSTEE FOR BCAP 2008-IN1'S, SUCHAN MURRAY'S, AND INDYMAC FINANCIAL SERVICES, INC. 'S(INCORRECTLY NAMED IN THE AMENDED COMPLAINT AS INDYMAC FINANCIAL SERVICES) MOTION FOR SUMMARY JUDGMENT (RE: AMENDED COMPLAINT FOR VERIFICATION OF DEBT ELSE RELEASE OF CLAIM AND FOR DECLARATORY AND INJUNCTIVE RELIEF, FILED MAY 20, 2011); (2) DE FENDANT FIRST AMERICAN TITLE INSURANCE CO.'S JOINDER; AND (3) HSBC BANK USA, N.A., A NATIONAL ASSOCIATION, AS TRUSTEE FOR BCAP 2008-IN1'S MOTION FOR SUMMARY JUDGMENT (RE: HSBC'S BANK USA, N.A.S COUNTERCLAIM FOR FORECLOSURE), AND FOR IN TERLOCUTORY DECREE OF FORECLOSURE 75 ; 77 ; 83 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 2/24/12. (" For the foregoing reasons, the MERS Motion is GRANTED as to all counts. Because all arguments made by MERS Defendants ar e applicable to all Defendants, the court grants summary judgment as to all Defendants. Summary judgment is also GRANTED as to the HSBC Motion. HSBC is directed to submit a proposed order and foreclosure decree to all parties and the court within 14 days of the date of this order.") (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). Linda Wunder Del Piano, Douglas B. Hackett, Bradley R. Pulice, Esq. and Franklin D. Pacarro, Esq. served by first class mail at the addresses of record on February 24, 2012.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
LINDA WUNDER DEL PIANO, and
DOUGLAS B. HACKETT, as
Trustee of the Paulehia
Street Trust,
Plaintiffs, Pro Se,
vs.
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
“MERS,” its successors in
interest and/or assigns,
INDYMAC FINANCIAL SERVICES, a
division of ONEWEST BANK,
FSB, its successors in
interest and/or assigns,
ONEWEST BANK, FSB, its
successors in interest and/or
assigns, EXPRESS CAPITAL
LENDING, its successors in
interest and/or assigns, HSBC
BANK USA, N.A., a National
Association, as Trustee for
BCAP 2008-IN1, its successors
in interest an/or assigns,
FIRST AMERICAN TITLE
INSURANCE CO., its successors
in interest and/or assigns,
SUCHAN MURRAY, employee of
OneWest Bank, ROUTH CRABTREE
OLSEN, P.S., PETER T. STONE,
AND DOES 1 TO 10,
Defendants.
_____________________________
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CIVIL NO. 11-00140 SOM/BMK
ORDER GRANTING (1) DEFENDANTS
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.’S,
ONEWEST BANK, FSB’S, HSBC
BANK USA, N.A., A NATIONAL
ASSOCIATION, AS TRUSTEE FOR
BCAP 2008-IN1’S, SUCHAN
MURRAY’S, AND INDYMAC
FINANCIAL SERVICES, INC.’S
(INCORRECTLY NAMED IN THE
AMENDED COMPLAINT AS INDYMAC
FINANCIAL SERVICES) MOTION
FOR SUMMARY JUDGMENT (RE:
AMENDED COMPLAINT FOR
VERIFICATION OF DEBT ELSE
RELEASE OF CLAIM AND FOR
DECLARATORY AND INJUNCTIVE
RELIEF, FILED MAY 20, 2011);
(2) DEFENDANT FIRST AMERICAN
TITLE INSURANCE CO.’S
JOINDER; AND (3) HSBC BANK
USA, N.A., A NATIONAL
ASSOCIATION, AS TRUSTEE FOR
BCAP 2008-IN1’S MOTION FOR
SUMMARY JUDGMENT (RE: HSBC’S
BANK USA, N.A.’S COUNTERCLAIM
FOR FORECLOSURE), AND FOR
INTERLOCUTORY DECREE OF
FORECLOSURE
ORDER GRANTING (1) DEFENDANTS MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.’S, ONEWEST BANK, FSB’S, HSBC
BANK USA, N.A., A NATIONAL ASSOCIATION, AS TRUSTEE FOR
BCAP 2008-IN1’S, SUCHAN MURRAY’S, AND INDYMAC FINANCIAL
SERVICES, INC.’S (INCORRECTLY NAMED IN THE AMENDED
COMPLAINT AS INDYMAC FINANCIAL SERVICES) MOTION FOR
SUMMARY JUDGMENT (RE: AMENDED COMPLAINT FOR VERIFICATION
OF DEBT ELSE RELEASE OF CLAIM AND FOR DECLARATORY
AND INJUNCTIVE RELIEF, FILED MAY 20, 2011);
(2) DEFENDANT FIRST AMERICAN TITLE INSURANCE CO.’S JOINDER;
AND (3) HSBC BANK USA, N.A., A NATIONAL ASSOCIATION, AS
TRUSTEE FOR BCAP 2008-IN1’S MOTION FOR SUMMARY JUDGMENT
(RE: HSBC’S BANK USA, N.A.’S COUNTERCLAIM FOR FORECLOSURE),
AND FOR INTERLOCUTORY DECREE OF FORECLOSURE
I.
INTRODUCTION.
On January 25, 2011, Plaintiff Linda Wunder Del Piano
(“Del Piano”) commenced this action in the Circuit Court of the
Third Circuit, State of Hawaii, against Defendants Mortgage
Electronic Registration Systems, Inc. (“MERS”), IndyMac Financial
Services, Inc. (“IndyMac”), OneWest Bank, FSB (“OneWest”),
Express Capital Lending (“Express Capital”), HSBC Bank USA, N.A.
(“HSBC”), First American Title Insurance Co. (“First American”),
Suchan Murray (“Murray”), Routh Crabtree Olsen, P.S. (“RCO”), and
Peter T. Stone (“Stone”) (collectively, “Defendants”) in
conjunction with pending foreclosure proceedings against her
home.
Del Piano asserts a variety of state and federal claims
against Defendants, primarily alleging that Defendants lack
standing to foreclose on her property because they allegedly
cannot produce the original promissory note and mortgage.
MERS, OneWest, HSBC, Murray, and IndyMac (collectively,
“MERS Defendants”) now move for summary judgment on all counts.
2
First American joins in the motion.
See Defs. Mortgage
Electronic Registration Systems, Inc.’s, OneWest Bank, FSB’s,
HSBC Bank USA, N.A., a National Association, as Trustee for BCAP
2008-IN1’s, Suchan Murray’s and IndyMac Financial Services,
Inc.’s (Incorrectly Named in the Am. Compl. as IndyMac Financial
Services) Mot. for Summ. J. (Re: Am. Compl. for Verification of
Debt Else Release of Claim and for Declaratory and Inj. Relief,
Filed May 20, 2011), ECF No. 77; Mem. of Points of Authorities in
Supp. of Mot. for Summ. J., ECF No. 78 (“MERS Motion”); Def.
First American Title Insurance Co.’s Joinder in Mot. for Summ.
J., ECF No. 83.
HSBC also moves for summary judgment on its
Counterclaim, seeking judicial foreclosure against Del Piano.
See Def. HSBC Bank USA, N.A., a National Association, as Trustee
for BCAP 2008-IN1’s Mot. for Summ. J. (Re: HSBC Bank USA, N.A.’s
Counterclaim for Foreclosure), and for Interlocutory Decree of
Foreclosure, ECF No. 75 (“HSBC Motion”).
II.
BACKGROUND.
In March 2007, in conjunction with the purchase of real
property located at 75-6116 Paulehia Street, Kailua-Kona, Hawaii,
96740, Del Piano executed an adjustable rate note (the “Note”)
for the principal amount of $453,250.00 in favor of Express
Capital.
See Am. Compl. For Verification of Debt Else Release of
Claim and for Declaratory and Injunctive Relief (“Am. Compl.”)
3
¶ 4.2, ECF No. 45; MERS Motion at 4, ECF No. 78.
The Note is
secured by a first priority mortgage (the “Mortgage”) in favor of
MERS, solely as nominee for Express Capital.
The Mortgage was
assigned to HSBC pursuant to an assignment recorded on December
9, 2010.
Am. Compl. ¶ 4.15, ECF No. 45; Assignment of Mortgage,
attached as Exhibit “C” to MERS Motion, ECF No. 79.
At some
unspecified time, HSBC also took possession of the Note by mesne
indorsement of the Note, including an indorsement in blank, which
converted the Note to a bearer instrument.
¶ 6, ECF No. 79-1.
See Decl. of C. Boyle
OneWest represents that it currently holds
the Note as HSBC’s agent.
Id.
In or around 2008, Del Piano began suffering financial
hardship and successfully filed for bankruptcy protection.
Compl. ¶¶ 4.7, 4.9, ECF No. 45.
on her loan.
Am.
In May 2009, Del Piano defaulted
Decl. of C. Boyle ¶ 9, ECF No. 79-1.
MERS
Defendants allege that although they made a demand for the
principal and interest due under the Note, Del Piano failed to
pay those amounts.
Id. ¶¶ 9-10.
Del Piano represents that the
current market value of her property has dropped to approximately
$350,000.00.
Am. Compl. ¶ 4.6, ECF No. 45.
On or around April 28, 2010, Del Piano allegedly sent a
document to Defendants with the heading “Qualified Written
Request, Complaint, Dispute of Debt and Validation of Debt
Letter, TILA Request,” purportedly in compliance with 12 U.S.C.
4
§ 2605(e).
See Letter from L. Del Piano to Express Capital
Lending et al. (Apr. 28, 2010), attached as Exhibit “A” to Pl.
Response to Def. Mot. for Summ. J. (Re: Am. Compl. for
Verification of Claim and for Declaratory and Injunctive Relief,
Filed May 20, 2011) (“Opposition”), ECF No. 93.
Del Piano
essentially questioned the validity of Defendants’ ownership of
the Note and demanded proof relating to various loan origination
documents and the assignment of the Note.
Id.
This and other
documents are not properly authenticated by Del Piano for
purposes of the present motions.
Although Del Piano does not
present evidence in admissible form, this court considers Del
Piano’s exhibits and allegations with the thought that, if this
case were tried, Del Piano would authenticate the documents
herself and testify to certain factual allegations.
See Fraser
v. Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003).
Also on or around April 28, 2010, Del Piano purportedly
sent Defendants a letter she refers to as a “Self-Executing
Agreement.”
See Am. Compl. ¶ 4.11, ECF No. 45; Exhibit “D” to
Compl., ECF No. 1-1.
The Self-Executing Agreement purported to
offer full payment on the Note in exchange for Defendants’
surrender of the “Original unaltered instrument, or wet-ink
Note.”
Am. Compl. ¶ 4.11.c, ECF No. 45.
Del Piano also demanded
copies of a number of mortgage documents verifying Defendants’
standing to foreclose.
Id. ¶ 4.11.d.
5
The Self-Executing
Agreement provided that Defendants’ failure to respond within 15
days would be treated as an agreement “that they were committing
illegal activities and participating in an illegal scheme to take
from Plaintiff Del Piano her monies and property.”
Id. ¶ 4.12.
Defendants did not respond to the Self-Executing Agreement or any
subsequent correspondence regarding the same.
Id. ¶¶ 4.12-4.14.
On December 9, 2010, HSBC commenced a nonjudicial
foreclosure of Del Piano’s property by recording a Notice of
Mortgagee’s Intention to Foreclose Under Power of Sale.
¶ 4.17.
Id.
Shortly thereafter, on January 25, 2011, Del Piano filed
suit in state court.
It is that action that is now before this
court pursuant to a removal by MERS.
See Notice of Removal of
Action to Federal Court Based on Federal Question Jurisdiction,
ECF No. 1.
On April 25, 2011, Del Piano recorded a Quitclaim
Deed in the Bureau of Conveyances, purporting to convey Del
Piano’s interest in the property to the Paulehia Street Trust,
with Douglas B. Hackett as trustee.
See MERS Motion at 6, ECF
No. 78; Quitclaim Deed, attached as Exhibit “F” to MERS Motion,
ECF No. 79.
Plaintiff Douglas B. Hackett, as trustee of the
Paulehia Street Trust, was previously prohibited from proceeding
as a plaintiff, barring any real interest in this proceeding, or
from representing Del Piano.
See Mot. to Strike Douglas B.
Hackett, as Trustee of The Paulehia Street Trust, as Pl., and for
6
Award of Appropriate Sanctions, ECF No. 55; EP, ECF No. 62; Order
Granting in Part and Denying in Part Defs. Mot. to Strike Douglas
B. Hackett, As Trustee of The Paulehia Street Trust, as Pl. and
for Award of Appropriate Sanctions, ECF No. 70; Tr. of
Proceedings Before the Honorable Susan Oki Mollway (June 13,
2011), ECF No. 72.
Hackett has not subsequently asserted any
interest in this action.
At the hearing on the Motion to Strike,
the court put on the record its findings as to Hackett’s lack of
any interest in the property and the legal authorities on which
the court was relying.
See Tr. of Proceedings, ECF No. 72.1
Pursuant to this court’s order dismissing the original
complaint, see EP, ECF No. 19, Del Piano filed her Amended
Complaint on May 20, 2011.
See Am. Compl., ECF No. 45.
The
Amended Complaint contains a total of ten claims, each identified
either as a “cause of action” (“COA”) or a “claim for relief”
(“CFR”).
Id.
Many of the claims duplicate each other and some
assert multiple or incomplete claims within a single count:
(1) First Cause of Action: Violation of
U.C.C. §§ 3-603 and 3-604 Discharging and
Settling the Alleged Debt in Full;
1
Having sought an order striking Hackett, MERS Defendants
then argued at the hearing on the present motions that Del Piano
is not the proper owner of the subject property and that only
Hackett can attack the foreclosure. MERS Defendants cannot
argue, on the one hand, that Hackett lacks standing to pursue
claims in this case, yet, on the other hand, that he is the
proper party to challenge the foreclosure.
7
(2) Second Cause of Action: Violation of
Not Holding Possession of the Original
Promissory Note; Possession is Necessary;
Broken Chain of Title;
(3) Third Cause of Action: Violations of
28 U.S.C. § 2201 Create No Standing for
Enforcement of Power of Sale of the Mortgage;
Improper Assignment of Mortgage;
(4) Fourth Cause of Action: Violations
of the Uniform Commercial Code;
(5) First Claim for Relief: Temporary
and Permanent Injunctive Relief to Cancel and
Enjoin Any Foreclosure Sale;
(6) Second Claim for Relief: Declaratory
Relief;
(7) Third Claim for Relief: As a
Violation of an Attempt to Foreclose Without
Proof of Real Party in Interest, Defendants
Have No Right to Foreclose; Foreclosure Sale
Must be Stopped and Plaintiffs Given
Sufficient Discovery to Prove Their Case;
(8) Fourth Claim for Relief: Breach of
Contract (against MERS and HSBC);
(9) Fifth Claim for Relief: Violation of
12 U.S.C. § 2605(e) (against IndyMac);
(10) Sixth Claim for Relief: Due to
Violations of Law by All Defendants, the
Alleged Debt is Settled in Full; No Debt is
Owed; Debt Must be Expunged and Reported as
Such; Reconveyance of Deed; Reporting.
On June 3, 2011, HSBC filed a Counterclaim for
Foreclosure and Tortious Interference with Contractual Relations
(the “Counterclaim”) against Del Piano.
54-1.
See Countercl., ECF No.
On or around June 9, 2011, HSBC cancelled the pending
nonjudicial foreclosure by recording a Notice of Rescission of
8
Mortgagee’s Intention to Foreclosure Under Power of Sale.
MERS
Motion at 6, ECF No. 78; Notice of Rescission, attached as
Exhibit “G” to MERS Motion, ECF No. 79.
III. STANDARD OF REVIEW.
Summary judgment shall be granted when “the movant
shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.”
R. Civ. P. 56(a) (2010).
Fed.
See Addisu v. Fred Meyer, Inc., 198
F.3d 1130, 1134 (9th Cir. 2000).
The movants must support their
position that a material fact is or is not genuinely disputed by
either “citing to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including
those made for the purposes of the motion only), admissions,
interrogatory answers, or other materials”; or “showing that the
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.”
Fed. R. Civ. P. 56(c).
One of the principal purposes of summary judgment is to identify
and 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.
9
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., Ltd. v. Fritz Cos., Inc., 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).
“When the moving party has carried its burden
under Rule 56(c), its opponent must do more than simply show that
there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 586 (1986) (footnote omitted).
The nonmoving party may not rely on the mere
allegations in the pleadings and instead must set forth specific
facts showing that there is a genuine issue for trial.
Elec. Serv., Inc., 809 F.2d at 630.
T.W.
At least some “‘significant
probative evidence tending to support the complaint’” must be
produced.
Id. (quoting First Nat’l Bank of Ariz. v. Cities Serv.
Co., 391 U.S. 253, 290 (1968)).
See Addisu, 198 F.3d at 1134 (“A
scintilla of evidence or evidence that is merely colorable or not
significantly probative does not present a genuine issue of
10
material fact.”).
“[I]f the factual context makes the non-moving
party’s claim implausible, that party must come forward with more
persuasive evidence than would otherwise be necessary to show
that there is a genuine issue for trial.”
Cal. Arch’l Bldg.
Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468
(9th Cir. 1987) (citing Matsushita Elec. Indus. Co., 475 U.S. at
587).
Accord Addisu, 198 F.3d at 1134 (“There must be enough
doubt for a ‘reasonable trier of fact’ to find for plaintiffs in
order to defeat the summary judgment motion.”).
All evidence and inferences must be construed in the
light most favorable to the nonmoving party.
Inc., 809 F.2d at 631.
T.W. Elec. Serv.,
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.
Id.
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.”
IV.
Id.
THE MERS MOTION FOR SUMMARY JUDGMENT.
Many of Del Piano’s COAs and CFRs repeat allegations.
In the interest of addressing the claims efficiently, the court
adopts MERS Defendants’ grouping of similar claims.
11
A.
Discharge Of Debt (First COA, Sixth CFR).
Del Piano seeks the discharge of her mortgage, arguing
in her Sixth CFR that her debt was settled in full because
“(1) Plaintiff tendered full payment with a third party escrow
agent conditioned on Defendants producing verification of
debt . . . ; (2) Conversion of the original Promissory Note to a
‘check’ by stamping it “Pay to the Order of (...) without
Recourse” and have [sic] been paid in full; (3) there was
misrepresentation, and/or misleading information, and/or false
statements in the mortgage documents, which vitiates a contract,
hence there is no debt[.]”
Am. Compl. ¶ 14.2, ECF No. 45.
None
of these theories, also alleged in her First COA, entitles Del
Piano to the relief she seeks.
The court begins by examining the Self-Executing
Agreement that Del Piano sent to Defendants.
Del Piano says the
document was a tender of full payment entitling her to a
discharge of her debt under U.C.C. section 3-603, codified in
Hawaii as section 490:3-603 of the Hawaii Revised Statutes.
section states:
(b) If tender of payment of an
obligation to pay an instrument is made to a
person entitled to enforce the instrument and
the tender is refused, there is discharge, to
the extent of the amount of the tender, of
the obligation of an indorser or
accommodation party having a right of
recourse with respect to the obligation to
which the tender relates.
12
That
Haw. Rev. Stat. § 490:3-603(b) (1991).
A tender is defined as
“an unconditional offer of money or performance to satisfy a debt
or obligation.”
Black’s Law Dictionary 1608 (9th ed. 2009).
See
Arnolds Mmgt. Corp. v. Eischen, 158 Cal. App. 3d 575, 580, 205
Cal. Rptr. 15, 18 (Cal. App. 1984) (under California statutes, “a
tender must be one of full performance and must be unconditional
to be valid” (citations omitted)).
Del Piano does not establish that the Self-Executing
Agreement was an actual tender of payment under section 490:3603.
The document said that Del Piano would put $500,000.00 into
“escrow,” which was apparently a notary public.
Defendants were to surrender the Note.
In exchange,
See Self-Executing
Agreement, attached as Exhibit “D” to Compl., ECF No. 1-1.
Specifically, Del Piano proposed: “I will accept your offer and
tender full payment to be held in escrow by JAN SCHIEBERL a third
party NOTARY PUBLIC (address above).
In return you will agree to
have your client LENDER/AGENTS immediately produce the original
note which it claims to be holding and to which I am entitled
upon payment.”
Id.
Del Piano further provided that a failure to
produce the Note upon the notary’s receipt of the tender would
effect a release of the mortgage: “you agree that once the
notary/escrow agent is in receipt of my tender of payment in the
amount of $500,000.00, if you and LENDER/AGENTS should fail to
immediately produce the original note or contract, you agree to
13
immediately release your claim for $500,000.00 due to your
fraud.”
Id.
Defendants.
The offer was not an unconditional payment to
Nor did it provide Defendants with any assurance
that they would receive payment in full; Defendants were supposed
to surrender the Note once a notary was in receipt of Del Piano’s
“tender of payment.”
Del Piano’s reference to her “tender of payment,” as
opposed to the actual payment of money, would surely have given
Defendants pause, as Del Piano may have thought her submission of
a letter offering or promising payment sufficed as a “tender.”
Defendants understandably would have wondered why a notary public
who was presumably unknown to them was involved.
No law requires
Defendants to discharge a note or mortgage based on a borrower’s
mere words.
The United States District Court for the District of
Nevada was recently presented with a similar scenario and
surveyed decisions nationwide:
Next, Plaintiffs allege that Defendants
violated U.C.C. § 3–603 by failing to settle
their account after they submitted an
“acceptance of offer/claim upon the
presentment of original note” offering “full
legal tender” of $433,471.04 in exchange for
the original, “wet ink” promissory note.
(Pls.’ Am. Compl. 7:28, 8:1–9, ECF No. 8.)
U.C.C. § 3–603 outlines when tender of a
payment discharges a debt owed. Plaintiffs’
argument is known as the “bill of exchange”
theory and has not yet been presented in
foreclosure cases in the District of Nevada.
However, it has been rejected across the
14
country by district courts in other circuits.
Hennis v. Trustmark Bank, No.
2:10CV20–KS–MTP, 2010 WL 1904860, *5 (S.D.
Miss. May 10, 2010) (“From coast to coast,
claims that debts have been paid under the
redemption theory by the plaintiffs' issuance
of ‘bills of exchange’ have been dismissed as
frivolous.”); Santarose v. Aurora Bank, No.
H–10–0720, 2010 WL 3064047, at *4 (S.D. Tex.
Aug. 3, 2010) (court rejected plaintiff's
“bill of exchange” theory in settling a
mortgage debt because plaintiffs failed to
provide any legal authority to support the
claim); Tesi v. Chase Home Finance, No.
4:10–cv–272–Y, 2010 WL 2293177, at *6 (N.D.
Tex. June 7, 2010) (plaintiff's “bonds”
rejected as full payment of amount due on
mortgage).
Potter v. BAC Home Loans Servicing, LP., No. 2:10-cv-02095-GMNLRL, 2011 WL 2971204, *6 (D. Nev. July 19, 2011).
Del Piano’s
reliance on this argument is as unavailing here as the
plaintiff’s argument in the Potter case.
Del Piano additionally argues that Defendants
discharged the Note when they stamped the words “Pay To The Order
Of ( ) Without Recourse” on the Note.
Del Piano alleges that
“Defendants knowingly, intelligently and willfully converted the
Original Promissory Note to a ‘CHECK’ and then ‘cashed’ and/or
monetized the Original Promissory Note/CHECK and gave Plaintiff
Del Piano the Federal Reserve Notes as a ‘currency exchange’ and
NOT as a loan.”
Am. Compl. ¶ 5.2, ECF No. 45.
Del Piano
attaches as Exhibit “C” to the Amended Complaint a more detailed
explanation of her claim.
15
In Exhibit “C,” Del Piano describes what she says were
the steps taken during her loan origination, starting with the
premise that Defendants altered the promissory note, allegedly
converting it into a “check”:
3.
Upon information and belief, Defendants,
jointly and/or separately, then sold the
“check.” Defendants, jointly and/or
separately, then gave the funds
Defendants, jointly and/or separately,
received for the sale of the check to a
third party (escrow agent).
4.
The third party (escrow agent) then gave
the real property to Plaintiff Del
Piano.
5.
Upon information and belief, pursuant to
U.C.C. § 3-604 these events caused the
sales of the Promissory Note to be
completed and perfected.
6.
Defendants, jointly and/or separately,
then committed an illegal transaction
upon Plaintiff Del Piano by claiming
that Defendants, jointly and/or
separately, would “loan” Plaintiff Del
Piano money.
7.
Plaintiff Del Piano then started paying
Defendants, jointly and/or separately,
monthly in accordance with the agreement
known in this instant case as the
“Mortgage.”
8.
Upon information and belief, Defendants,
jointly and/or separately, have failed
to supply Plaintiff Del Piano with any
of the money Defendants, jointly and/or
separately, claimed Defendants, jointly
and/or separately, would “loan” to
Plaintiff Del Piano.
9.
Plaintiff Del Piano ceased paying
Defendants, jointly and/or separately,
16
for Defendants’, jointly and/or
separately, DISHONOR and/or DEFAULT of
said agreement.
10.
Upon information and belief, to date,
Plaintiff Del Piano still has not
received ANY money from Defendants,
jointly and/or separately, for said
agreement.
11.
Upon information and belief, the ONLY
money received by Plaintiff Del Piano
from Defendants, jointly and/or
separately, was the money and/or
property Plaintiff Del Piano received
from Defendants, jointly and/or
separately, for the sale of the
Promissory Note from Plaintiff Del Piano
to Defendants, jointly and/or
separately.
Material Facts and Material Issues, attached as Exhibit “C” to
Am. Compl., ECF No. 45-3.
Del Piano misconstrues a loan origination.
Similarly
mistaken is her assertion that the sale or assignment of her Note
to another entity satisfies her debt and entitles her to periodic
payments from Defendants.
The argument that the sale or transfer
of a note satisfies a mortgage has already been rejected by this
district:
Defendants argue that the first mortgage is
no longer enforceable because the first
mortgage note was satisfied when Plaintiff
sold it to a third party. Defs.’ Appeal
10–12, 27–28. Defendants’ argument is
absurd. The sale of the note underlying the
first mortgage does not extinguish the debt
owed; rather, the buyer of the note takes the
place of the original mortgagee and is
“vested with all the powers and rights of the
[original mortgagee].” Beneficial Haw., Inc.
17
v. Kida, 96 Hawaii 289, 314 n.9, 30 P.3d 895,
920 n.9 (2001) (quotations omitted).
In re O’Kelley, 420 B.R. 18, 26 (D. Haw. 2009).
Del Piano’s
Opposition provides no further guidance or clarification on this
issue.
Finally, Del Piano appears to superficially assert that
Defendants breached a contract based on the Mortgage and Note.
As discussed later in this order, Del Piano fails to establish a
breach of contract.
The court grants summary judgment to all
Defendants as to the First and Sixth CFR.
B.
Lack Of Standing (Second COA, Third COA, Fourth COA,
Third CFR).
Four of Del Piano’s claims essentially assert that MERS
lacked standing to foreclose and that foreclosure proceedings
should be stayed to allow Del Piano to conduct discovery.
The
Second COA argues that Defendants must prove that they hold the
Note; the Third COA alleges that MERS did not own the underlying
Note and therefore could not assign it to HSBC; the Fourth COA
mimes the Second COA and demands that Defendants surrender the
original Note; and the Third CFR asks the court to allow further
discovery to determine the identity of the real party in interest
that has standing to foreclose.
The court reads these four claims in combination as a
challenge to MERS’s ability to validly possess and assign Del
Piano’s Note.
MERS’s participation in the mortgage loan process
18
was recently addressed by the Ninth Circuit in Cervantes v.
Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir. 2011):
MERS is a private electronic database,
operated by MERSCORP, Inc., that tracks the
transfer of the “beneficial interest” in home
loans, as well as any changes in loan
servicers. 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. For simplicity, we
will refer to the owner of the beneficial
interest as the “lender.” The servicer of
the loan collects payments from the borrower,
sends payments to the lender, and handles
administrative aspects of the loan. Many of
the companies that participate in the
mortgage industry--by originating loans,
buying or investing in the beneficial
interest in loans, or servicing loans--are
members of MERS and pay a fee to use the
tracking system.
Id. at 1038-39.
Cervantes discussed the need for a foreclosing
party to hold both the note and mortgage:
In the event of a default on the loan,
the lender may initiate foreclosure in its
own name, or may appoint a trustee to
initiate foreclosure on the lender’s
behalf. However, to have the legal power
to foreclose, the trustee must have
authority to act as the holder, or agent of
the holder, of both the deed and the note
together. . . . The deed and note must be
held together because the holder of the
note is only entitled to repayment, and
does not have the right under the deed to
use the property as a means of satisfying
repayment. . . . Conversely, the holder of
the deed alone does not have a right to
repayment and, thus, does not have an
interest in foreclosing on the property to
satisfy repayment. . . . One of the main
19
premises of the plaintiffs’ lawsuit here is
that the MERS system impermissibly “splits”
the note and deed by facilitating the
transfer of the beneficial interest in the
loan among lenders while maintaining MERS
as the nominal holder of the deed.
Id. at 1039 (internal citations omitted).
The Ninth Circuit, addressing arguments very much like
Del Piano’s, went on to say:
The plaintiffs’ lawsuit is also premised
on the fact that MERS does not have a
financial interest in the loans, which,
according to the plaintiffs, renders MERS’s
status as a beneficiary a sham. MERS is not
involved in originating the loan, does not
have any right to payments on the loan, and
does not service the loan. MERS relies on
its members to have someone on their own
staff become a MERS officer with the
authority to sign documents on behalf of
MERS. . . . As a result, most of the actions
taken in MERS’s own name are carried out by
staff at the companies that sell and buy the
beneficial interest in the loans.
Id. at 1039-40 (internal citations omitted).
Ultimately, in connection with the plaintiffs’ claim
for “wrongful foreclosure,” the Ninth Circuit held,
Even if we were to accept the
plaintiffs’ premises that MERS is a sham
beneficiary and the note is split from the
deed, we would reject the plaintiffs’
conclusion that, as a necessary consequence,
no party has the power to foreclose. The
legality of MERS’s role as a beneficiary may
be at issue where MERS initiates foreclosure
in its own name, or where the plaintiffs
allege a violation of state recording and
foreclosure statutes based on the
designation. See, e.g., Mortgage Elec.
Registration Sys. v. Saunders, 2 A.3d 289,
20
294–97 (Me. 2010) (concluding that MERS
cannot foreclose because it does not have an
independent interest in the loan because it
functions solely as a nominee); Landmark
Nat’l Bank, 216 P.3d at 165–69 (same); Hooker
v. Northwest Tr. Servs., No. 10–3111, 2011 WL
2119103, at *4 (D. Or. May 25, 2011)
(concluding that the defendants’ failure to
register all assignments of the deed of trust
violated the Oregon recording laws so as to
prevent non-judicial foreclosure). But see
Jackson, 770 N.W.2d at 501 (concluding that
defendants’ failure to register assignments
of the beneficial interest in the mortgage
loan did not violate Minnesota recording laws
so as to prevent non-judicial foreclosure).
This case does not present either of these
circumstances and, thus, we do not consider
them.
. . . . Even if MERS were a sham
beneficiary, the lenders would still be
entitled to repayment of the loans and would
be the proper parties to initiate foreclosure
after the plaintiffs defaulted on their
loans. The plaintiffs’ allegations do not
call into question whether the trustees were
agents of the lenders. . . .
Further, the notes and deeds are not
irreparably split: the split only renders the
mortgage unenforceable if MERS or the
trustee, as nominal holders of the deeds, are
not agents of the lenders. See Landmark Nat’l
Bank, 216 P.3d at 167. Moreover, the
plaintiffs have not alleged violations of
Arizona recording and foreclosure statutes
related to the purported splitting of the
notes and deeds.
Id. at 1044.
Echoing the borrowers in Cervantes, Del Piano alleges
that MERS has no standing to foreclose on her loan, because it is
not the proper holder of her Note: “Since MERS was not the owner
21
of the underlying note, MERS can not transfer the note or the
beneficial interest in the mortgage.
Therefore, the assignment
of the mortgage to HSBC BANK USA, N.A., Doc #2010-190976, was
ineffective and/or void.”
Am. Compl. ¶ 7.3, ECF No. 45.
Del
Piano further alleges, “Since MERS has never been the owner of
the underlying note, MERS is not a Creditor in due course, or a
true party in interest.”
Id. ¶ 7.5.
Del Piano misunderstands MERS’s role in the mortgage
loan process.
As explained by the Ninth Circuit in Cervantes,
MERS is an agent of the lender.
Acting as the lender’s nominee
of record, MERS is a vehicle for the lender’s transfer of
ownership or servicing rights without public recordation of those
transfers.
MERS, as a nominee, holds Del Piano’s Note on behalf
of the lender (originally Express Capital and currently HSBC),
which also holds the Mortgage.
Even if MERS cannot independently
foreclose, the Note and Mortgage are not split such that HSBC
cannot foreclose.
See Cervantes, 656 F.3d at 1044.
Moreover, Del Piano’s “show-me-the-note” defense to
foreclosure is baseless.
Del Piano cites no provision requiring
the lender to show her the original note.
What Del Piano does
cite is the U.C.C. provision concerning presentment, codified at
section 490:3-501 of Hawaii Revised Statutes.
However, Del Piano
agreed to waive her right to presentment when she executed the
Note.
See Adjustable Rate Note at 3, attached as Exhibit “A” to
22
MERS Motion, ECF No. 79 (“I and any other person who has
obligations under this Note waive the rights of Presentment and
Notice of Dishonor.
‘Presentment’ means the right to require the
Note Holder to demand payment of amounts due.”).
Del Piano’s
Opposition also cites inapposite cases, none of which stands for
the proposition that a lender must produce the “original,” “wetink note” before foreclosing.
Rather, the cases stand for the
unchallenged proposition that the foreclosing party must be the
proper holder of the mortgage and note at the time of
foreclosure.
See Opposition at 8-11, ECF No. 93.
This district has explicitly rejected the “show-me-thenote” theory:
This so-called show me the note theory
has been routinely rejected by district
courts throughout the Ninth Circuit.
Although the Court does not cite unpublished
opinions as precedent, the following cases
from the District of Hawaii 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).
Foth v. BAC Home Loans Servicing, LP, No. CV 11-00114 DAE-BMK,
2011 WL 3439134, *8 n.4 (D. Haw. Aug. 4, 2011).
Del Piano cannot
avoid foreclosure by repeatedly demanding the original Note.
Nor does Del Piano’s reference to a “robo-signer”
invalidate her mortgage or discharge her debt.
23
Del Piano does
not offer any evidence that the Assignment was signed by a person
without authority to act or without knowledge of the contents of
the Assignment or its validity.
See Assignment of Mortgage,
attached as Exhibit “C” to MERS Motion, ECF No. 79.
Del Piano
baldly asserts that Murray, who was employed by OneWest Bank, an
HSBC agent, had a conflict of interest or engaged in fraud in
signing a document on behalf of MERS, the assignor.
Opposition at 18, ECF No. 93.
See
She cites no authority for this
proposition and does not indicate how she could have been harmed
by Murray’s signing on behalf of MERS.
Finally, Del Piano argues in her Third CFR that the
court should allow her to conduct discovery “that includes
evidence that these Defendants are or are not the real party in
interest, and/or other irregularities, making enforcement by
Defendants, and/or the true party in interest impossible.
Then,
Plaintiffs will likely seek to amend this Amended Complaint
alleging various additional causes of action, which may include a
quiet title action.”
Am. Compl. ¶ 11.2, ECF No. 45.
The Third CFR seeks leave of court to do that which she
could have done pursuant to court rules without leave of court.
This is not a viable claim at all.
Moreover, Del Piano offers no
reason that she could not seek discovery from Defendants to
ensure “that the true party in interest be established, through
discovery, by strict and credible proof.”
24
Id. ¶ 11.3.
MERS
Defendants state that “the Motion was filed more than 3 months
ago, the original Complaint was filed more than 1 year ago, the
Amended Complaint was filed more than 8 months ago, and during
this entire time, Plaintiff has not propounded a single set of
discovery on Defendants.”
Reply to Plaintiff’s “Response” to
Defendants [77] Mot. for Summ. J. (Re: Am. Compl. for
Verification of Debt Else Release of Claim and for Declaratory
and Inj. Relief, Filed May 20, 2011) at 10, ECF No. 95 (emphasis
in original).
At the hearing on the present motion, Del Piano
referred to written questions she had sent to all Defendants but
that Defendants had failed to answer.
Del Piano argued that
these questions were necessary to prosecute her claims and
insisted that Defendants have wrongfully withheld answers to
those questions.
If Del Piano was referring to questions
attached to her Opposition as Exhibit “A,” those questions did
not constitute discovery requests propounded in this lawsuit.
They appear to have been sent on or around April 28, 2010, well
before Del Piano filed her Complaint on January 25, 2011.
Court
rules governing discovery during litigation therefore did not
apply to those questions.
As Del Piano did not propound the
questions as discovery requests, she may not rely on discovery
rules in asking the court to order Defendants to respond to them.
25
Del Piano gives the court no reason to delay
disposition of her claims.
The court grants summary judgment to
all Defendants as to the Second COA, Third COA, Fourth COA, and
Third CFR.
C.
Injunctive And Declaratory Relief (First CFR, Second
CFR).
MERS Defendants argue that the First CFR and Second
CFR, which seek injunctive and declaratory relief, are moot and
do not provide proper vehicles for relief.
The court agrees.
To the extent Del Piano is seeking to enjoin the nonjudicial foreclosure instituted on December 9, 2010, and
subsequently postponed, that matter is moot.
On June 9, 2011,
HSBC recorded a Notice of Rescission terminating the pending
foreclosure.
See Notice of Rescission, attached as Exhibit “G”
to MERS Motion, ECF No. 79.
With respect to any nonjudicial
foreclosure, the court is no longer faced with the live case or
controversy required by the United States Constitution, article
III, section 2.
See Saiki v. LaSalle Bank Nat’l Ass’n as Tr. for
Structured Asset Investment Loan Trust Series 2003-BC2, Civil No.
10-00085 JMS/LEK, 2011 WL 601139, *3 (D. Haw. Feb. 10, 2011)
(“The court agrees that the Notice of Rescission moots
Plaintiff's claims based on Notice of Foreclosure--there is no
existing controversy based on the Notice of Foreclosure because
Cal-Western rendered the Notice of Foreclosure void by rescinding
26
it.
In other words, Defendants cannot foreclose on the subject
property unless they issue a new Notice of Foreclosure.”).
To the extent Del Piano is seeking declaratory relief
“forever barring Defendants from ever seeking to foreclose on the
Property,” Am. Compl. ¶ 10.2, the court grants MERS Defendants’
Motion because, as alleged in the Amended Complaint, it is not
cognizable as an independent cause of action.
See Seattle
Audubon Soc. v. Moseley, 80 F.3d 1401, 1405 (9th Cir. 1996) (“A
declaratory judgment offers a means by which rights and
obligations may be adjudicated in cases brought by any interested
party involving an actual controversy that has not reached a
stage at which either party may seek a coercive remedy and in
cases where a party who could sue for coercive relief has not yet
done so.” (citation and quotation signals omitted)).
Del Piano’s
declaratory relief claim is based on arguments regarding
Defendants’ lack of standing.
Because the court rejects those
arguments, the court rejects the declaratory relief claim.
Regarding Del Piano’s claim for injunctive relief, the
court agrees with MERS Defendants that a claim for “injunctive
relief” alone is not a cause of action.
See, e.g., Jensen v.
Quality Loan Serv. Corp., 702 F. Supp. 2d 1183, 1201 (E.D. Cal.
2010) (“A request for injunctive relief by itself does not state
a cause of action”); Henke v. Arco Midcon, L.L.C., 2010 WL
4513301, at *6 (E.D. Mo. Nov. 2, 2010) (“Injunctive relief,
27
however, is a remedy, not an independent cause of action.”); Plan
Pros, Inc. v. Zych, 2009 WL 928867, at *2 (D. Neb. Mar. 31, 2009)
(“no independent cause of action for injunction exists”); Motley
v. Homecomings Fin., LLC, 557 F. Supp. 2d 1005, 1014 (D. Minn.
2008) (same).
Injunctive relief would only be available if Del
Piano were entitled to such a remedy on an independent cause of
action.
The court grants summary judgment to all Defendants as
to the First CFR and Second CFR.
D.
Breach Of Contract (Fourth CFR).
Del Piano alleges breach of contract against MERS and
HSBC, apparently based on their attempts to foreclose on her
property.
To prevail on a breach of contract claim, Del Piano
must establish “(1) the contract at issue; (2) the parties to the
contract; (3) whether Plaintiff performed under the contract; (4)
the particular provision of the contract allegedly violated by
Defendants; and (5) when and how Defendants allegedly breached
the contract.”
Honold v. Deutsche Bank Nat’l Trust Co., Civ. No.
10-00625 JMS/BMK, 2010 WL 5174383 (D. Haw. Dec. 15, 2010) (citing
Otani v. State Farm Fire & Cas. Co., 927 F. Supp. 1330, 1335 (D.
Haw. 1996) (“In breach of contract actions, [] the complaint
must, at a minimum, cite the contractual provision allegedly
violated.
Generalized allegations of a contractual breach are
not sufficient.”)).
28
Del Piano fails to plead any of these elements in the
Amended Complaint, other than to generally allege that MERS and
HSBC “have breached their contract with Plaintiff Del Piano by
attempting to foreclose the property in violation of Hawaii law
and the Deed of Trust and Promissory Note.”
ECF No. 45.
Am. Compl. ¶ 12.2,
Del Piano moreover fails to offer supporting facts
or argument in her Opposition, which does not appear to address
the Fourth CFR at all.
Even assuming that the supposedly invalid transfer and
any threatened foreclosure violated a state statute, Del Piano
fails to sufficiently explain what contractual provision is at
issue and how that contract was breached by the foreclosure
action.
The court grants summary judgment to MERS and HSBC as to
the Fourth CRF.
E.
RESPA (Fifth CFR).
Del Piano’s final claim, against IndyMac for an alleged
violation of the Real Estate Settlement Practices Act (“RESPA”),
alleges that IndyMac, the servicer, failed to respond to her
inquiries, as required by 12 U.S.C. § 2605(e).
That section
provides, in relevant part, that when a servicer receives a
qualified written request from a borrower regarding the servicing
of a loan, it has a duty to respond to the inquiry:
(e) Duty of loan servicer to respond to
borrower inquiries
(1) Notice of receipt of inquiry
29
(A) In general
If any servicer of a federally
related mortgage loan receives a
qualified written request 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
(excluding legal public holidays,
Saturdays, and Sundays) unless the
action requested is taken within
such period.
(B) Qualified written request
For purposes of this subsection, a
qualified written request shall be
a written correspondence, other
than notice on a payment coupon or
other payment medium supplied by
the servicer, that–
(i) includes, or otherwise
enables the servicer to
identify, the name and account
of the borrower; and
(ii) includes a statement of
the reasons for the belief of
the borrower, to the extent
applicable, that the account is
in error or provides sufficient
detail to the servicer
regarding other information
sought by the borrower.
12 U.S.C. § 2605(e)(1).
If the servicer receives a qualified
written request, it is obligated to respond within a statutorily
prescribed period of time.
12 U.S.C. § 2605(e)(2).
The statute only concerns requests “for information
relating to the servicing of such loan.”
30
12 U.S.C.
§ 2605(e)(1)(A).
Servicing is defined as “receiving any
scheduled periodic payments from a borrower pursuant to the terms
of any loan . . . and making the payments of principal and
interest and such other payments with respect to the amounts
received from the borrower as may be required pursuant to the
terms of the loan.”
12 U.S.C. § 2605(i)(3).
Correspondence that does not address the servicing of
the loan does not require a response under this statute.
See
Williams v. Wells Fargo Bank, N.A., Inc., No. C 10-00399 JF
(HRL), 2010 WL 1463521, *3 (N.D. Cal. 2010) (“Plaintiffs’ request
was unrelated to the servicing of the loan. . . . Not all
requests that relate to the loan are related to the servicing of
the loan.”); Jensen v. Quality Loan Serv. Corp., 702 F. Supp. 2d
1183, 1196 (E.D. Cal. 2010) (“The FAC also fails to allege facts
indicating that the written correspondence served on JPMorgan
concerned the servicing of Plaintiff’s loan, which is required to
qualify the correspondence as a ‘qualified written request’ under
RESPA.
A conclusory allegation that the correspondence was a
‘Qualified Written Request’ is insufficient.”); MorEquity, Inc.
v. Naeem, 118 F. Supp. 2d 885, 901 (N.D. Ill. 2000) (“None of the
irregularities . . . relate in any way to the ‘servicing’ of the
loan, as that term is defined in the statute.
The counterclaim
alleges a forged deed, and irregularities with respect to the
recording of the two loans, but makes no claim with respect to
31
improper servicing.
There are no claims, for example, that
MorEquity did not give the Naeems credit for any periodic
payments made, which is how the statute defines servicing.
According to the allegations of the counterclaim, the letter
sought information about the validity of the loan and mortgage
documents, but made no inquiry as to the status of the Naeem
account balance.”).
Del Piano’s letter to Defendants of April 28, 2010, was
correspondence that identified “the name and account of the
borrower,” 12 U.S.C. § 2605(e)(1)(B)(i), and sufficiently
identified the “information sought by the borrower,” 12 U.S.C.
§ 2605(e)(1)(B)(ii), but it otherwise is not a valid qualified
written request.
Del Piano’s letter took issue with Defendants’
standing to foreclose and demanded a return of the Note, but did
not dispute any servicing-related issues.
See Letter from L. Del
Piano to Express Capital et al., attached as Exhibit “A” to
Opposition, ECF No. 93.
Del Piano’s 17-page letter appears to be
based on a form document, as many of the questions and requests
concern unrelated and irrelevant issues.
The letter contains
hundreds of questions and requests for documents, including 24
questions related to servicing.
Id. at 14-15.
None of the 24
questions, however, disputes the status of Del Piano’s account or
requests an accounting of her loan.
See id.
At most, the
questions pertain to the loan origination and subsequent
32
assignments, rather than payments on her account.
That is, Del
Piano’s demand that Defendants answer her questions and provide
documentation did not compel a response from IndyMac under 12
U.S.C. § 2605(e).
IndyMac also argues that Del Piano did not establish
any injury based on IndyMac’s failure to respond to her letter.
Section 2605(f)(1) provides for the recovery of damages:
Whoever fails to comply with any provision of
this section shall be liable to the borrower
for each such failure in the following
amounts:
(1) Individuals
In the case of any action by an
individual, an amount equal to the sum
of—
(A) any actual damages to the
borrower as a result of the
failure; and
(B) any additional damages, as the
court may allow, in the case of a
pattern or practice of
noncompliance with the requirements
of this section, in an amount not
to exceed $1,000.
12 U.S.C. § 2605(f).
IndyMac contends that Del Piano’s alleged emotional
distress is insufficient to establish “actual damage” under the
statute.
See, e.g., Soriano v. Countrywide Home Loans, Inc., No.
09-CV-02415-LHK, 2011 WL 1362077, at *6 (N.D. Cal. Apr. 11, 2011)
(reasoning that “even if a RESPA violation exists, Plaintiff must
33
show that the losses alleged are causally related to the RESPA
violation itself to state a valid claim under RESPA”); Shepherd
v. Am. Home Mortg. Servs., Inc., No. Civ. 2:09-1916 WBS GGH, 2009
WL 4505925, at *3 (E.D. Cal. Nov. 20, 2009) (“[A]lleging a breach
of RESPA duties alone does not state a claim under RESPA.
Plaintiff must, at a minimum, also allege that the breach
resulted in actual damages.”) (quoting Hutchinson v. Del. Sav.
Bank FSB, 410 F. Supp. 2d 374, 383 (D.N.J. 2006)).
The Amended Complaint only alleges that “[a]s a result
of INDYMAC FINANCIAL SERVICES Home Loans Servicing, LP’s failure
to respond, Plaintiff has suffered emotional distress in an
amount to be determined at trial.
Plaintiff is further entitled
to recover ‘actual damages’ to be proven at trial . . . .”
Compl. ¶ 13.3, ECF No. 45.
Am.
Del Piano does not address the issue
of damages in her Opposition.
In this summary judgment proceeding, Del Piano presents
no evidence of “actual damages” under § 2605(f)(1)(A).
It is
unclear whether her alleged emotional distress constitutes
“actual damages”:
The Ninth Circuit has not decided whether
emotional distress can constitute “actual
damages” for purposes of § 2605(f), and cases
are split. See, e.g., Hutchinson, 410 F.
Supp. 2d at 383 n.14 (“It is unclear whether
‘actual damages’ under RESPA encompasses
emotional distress. The district courts are
split and no Court of Appeals has addressed
the issue.”). Other caselaw indicates that
the “majority of . . . federal courts . . .
34
[find] that such emotional damages are a part
and parcel of the ‘actual damages’ “under
§ 2605(f). Wienert v. GMAC Mortg. Corp.,
2009 WL 3190420, at *10 (E.D. Mich. Sept. 29,
2009). “[C]ourts that ‘have examined
§ 2605(f) have consistently found that
‘actual damages’ includes emotional distress
damages.” Moon v. GMAC Mortg. Corp., 2009 WL
3185596, at *5 (W.D. Wash. Oct. 2, 2009).
Skaggs v. HSBC Bank USA, N.A., Civil No. 10-00247 JMS/KSC, 2011
WL 3861373, *16 (D. Haw. Aug. 31, 2011).
As in Skaggs, this court does not here determine
whether Del Piano’s emotional distress qualifies as “actual
damages.”
Even assuming emotional distress does qualify, Del
Piano fails to establish that she was distressed “as a result of”
IndyMac’s failure to respond to her April 28, 2010 letter.
She
does not support her Sixth CFR in her Opposition or otherwise
offer any factual or legal basis upon which the court could find
that she was indeed distressed, much less that any distress
resulted from a lack of response.
Because, even assuming Del
Piano’s April 28, 2010, letter is a qualified written request,
she fails to establish that she suffered actual damages as a
result of IndyMac’s failure to respond to her letter, summary
judgment is granted to IndyMac as to the Fifth CFR.
V.
THE HSBC MOTION FOR SUMMARY JUDGMENT.
Having rescinded the nonjudicial foreclosure notice,
HSBC now moves for a judicial decree of foreclosure and an order
that the property be sold pursuant to the terms of the Mortgage.
35
Del Piano relies on the same arguments that she presented in
opposition to the MERS Motion.
Thus, for the reasons discussed
earlier in this order, the HSBC Motion is granted.
HSBC represents that, as of May 1, 2009, Del Piano was
in default under the Note and Mortgage.
See Decl. of C. Boyle
¶ 9, attached as Exhibit “1” to HSBC’s Separate and Concise
Statement of Fact (“HSBC CSF”), ECF No. 79-1.
On October 15,
2009, OneWest sent Del Piano a letter advising her of her default
under the Note and Mortgage and provided her with 30 days to cure
the default.
See Letter from IndyMac to L. Del Piano (Oct. 15,
2009), attached as Exhibit “D” to HSBC CSF, ECF No. 79-5.
says that Del Piano failed to cure the default.
Boyle ¶ 9, ECF No. 79-1.
HSBC
See Decl. of C.
According to HSBC, as of March 8, 2011,
the total amount owed by Del Piano is $474,890.57, plus
attorneys’ fees and costs.
See Customer Account Activity
Statement, attached as Exhibit “H” to HSBC CSF, ECF No. 79-9.
Del Piano’s untimely opposition to the HSBC Motion
merely restates her arguments to the MERS Motion and fails to
directly contest any of the evidence HSBC presents.
Because her
defenses fail, as discussed earlier in this order, summary
judgment is granted in favor of HSBC.
HSBC is directed to submit
a proposed order and foreclosure decree to all parties and the
court.
36
VI.
CONCLUSION.
For the foregoing reasons, the MERS Motion is GRANTED
as to all counts.
Because all arguments made by MERS Defendants
are applicable to all Defendants, the court grants summary
judgment as to all Defendants.
Summary judgment is also GRANTED as to the HSBC Motion.
HSBC is directed to submit a proposed order and foreclosure
decree to all parties and the court within 14 days of the date of
this order.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, February 24, 2012.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Del Piano et al. v. Mortgage Electronic Registration Systems, Inc. et al., Civ. No. 1100140 SOM/BMK; ORDER GRANTING (1) DEFENDANTS MORTGAGE ELECTRONIC REGISTRATION SYSTEMS,
INC.’S, ONEWEST BANK, FSB’S, HSBC BANK USA, N.A., A NATIONAL ASSOCIATION, AS TRUSTEE
FOR BCAP 2008-IN1’S, SUCHAN MURRAY’S, AND INDYMAC FINANCIAL SERVICES, INC.’S
(INCORRECTLY NAMED IN THE AMENDED COMPLAINT AS INDYMAC FINANCIAL SERVICES) MOTION FOR
SUMMARY JUDGMENT (RE: AMENDED COMPLAINT FOR VERIFICATION OF DEBT ELSE RELEASE OF CLAIM
AND FOR DECLARATORY AND INJUNCTIVE RELIEF, FILED MAY 20, 2011); (2) DEFENDANT FIRST
AMERICAN TITLE INSURANCE CO.’S JOINDER; AND (3) HSBC BANK USA, N.A., A NATIONAL
ASSOCIATION, AS TRUSTEE FOR BCAP 2008-IN1’S MOTION FOR SUMMARY JUDGMENT (RE: HSBC’S
BANK USA, N.A.’S COUNTERCLAIM FOR FORECLOSURE), AND FOR INTERLOCUTORY DECREE OF
FORECLOSURE
37
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