Takushi v. BAC Home Loans Servicing, LP et al
Filing
19
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT BAC HOME LOANS SERVICING, LP'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT 6 ~ excerpts of conclusion: "The Motion is GRANTED insofar as: 1. Count I I is DISMISSED WITH PREJUDICE; and 2. the portion of Count I concerning BAC's alleged past wrongs is DISMISSED WITH PREJUDICE." The Motion is DENIED insofar as the portion of Count I concerning Plaintiff's present ownership rights to t he Property is DISMISSED WITHOUT PREJUDICE. Plaintiff has until July 12, 2011 to file an amended complaint in accordance with this order. The Court CAUTIONS Plaintiff that, if he fails to file his amended complaint by July 12, 2011, this Court will a mend this order to dismiss all of Plaintiffs claims with prejudice." ~ Signed by JUDGE LESLIE E. KOBAYASHI on 7/1/2011. (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). All Participants are registered to receive electronic notifications.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
ROCKY FUJIO TAKUSHI,
Individually and as Trustee
of the Albert G. Takushi
Revocable Living Trust Dated
April 11, 2007,
)
)
)
)
)
)
)
Plaintiff,
)
)
vs.
)
BAC HOME LOANS SERVICING, LP, )
a Texas Limited Partnership; )
)
ALOHA ASSET SERVICING, LLC;
)
DOES 1-50,
)
)
Defendants.
_____________________________ )
CIVIL NO. 11-00189 LEK-KSC
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT BAC HOME
LOANS SERVICING, LP’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT
Before the Court is Defendant BAC Home Loans Servicing,
LP’s (“BAC”) Motion to Dismiss Plaintiff’s Complaint (“Motion”),
filed March 30, 2011.
Plaintiff Rocky Fujio Takushi
(“Plaintiff”), individually and as trustee of the Albert G.
Takushi Revocable Living Trust Dated April 11, 2007 (“Trust”),
filed his memorandum in opposition on May 23, 2011.
its reply on May 27, 2011.
June 13, 2011.
BAC filed
This matter came on for hearing on
Andrew Lautenbach, Esq., appeared on behalf of
BAC, and Gary Dubin, Esq., appeared on behalf of Plaintiff.
After careful consideration of the Motion, supporting and
opposing memoranda, and the arguments of counsel, BAC’s Motion is
HEREBY GRANTED for the reasons set forth below.
BACKGROUND
I.
Factual History
On an unspecified date in April 2007, Plaintiff’s
parents, Albert Goro Takushi and Shirley Motoko Takushi, conveyed
to Plaintiff, individually and as trustee of the Trust, real
property located at 98-1868 Nahele Street, Aiea, Hawai`i 96701
(“the Property”).
[Complaint at ¶ 7;1 Warranty Deed (to Trust)
(“Warranty Deed”) at 1.2]
On or about September 19, 2007, Plaintiff’s father
obtained a refinance loan from MortgageIT, Inc. (“MortgageIT”)
for $230,000 and entered into a mortgage agreement (“Mortgage”)
with MortgageIT regarding the Property.3
at 2.]
[Id. at ¶ 9; Mortgage
On September 21, 2007, Plaintiff allegedly conveyed the
Property back to his father through a Warranty Deed.
at ¶ 10; Warranty Deed at 1.]
[Complaint
The Mortgage was recorded on
September 27, 2007 in the Land Court, State of Hawai`i, as
document number 3660910 on certificate of title number 878,571.
[Complaint at ¶ 9; Mortgage at 1.]
The Warranty Deed, however,
was not recorded until September 9, 2008.
[Warranty Deed at 1.]
1
The Complaint is attached to BAC’s Notice of Removal as
Exhibit 1 to the Declaration of Brandi J. Buehn. [Dkt. no. 1-2.]
2
The Warranty Deed is attached to BAC’s Motion as Exhibit B
to the Declaration of Brandi J. Buehn. [Dkt. no. 6-4.]
3
The Mortgage is attached to BAC’s Motion as Exhibit A to
the Declaration of Brandi J. Buehn. [Dkt. no. 6-3.]
2
On September 29, 2007, Plaintiff’s father died.
[Complaint at ¶
12.]
On December 31, 2009, BAC recorded a Notice of
Mortgagee’s Intention to Foreclose Under Power of Sale
(“Foreclosure Notice”) in the Bureau of Conveyances, State of
Hawai`i, as document number 2009-198743.4
1.]
[Foreclosure Notice at
BAC served both Plaintiff and Plaintiff’s father with the
Foreclosure Notice on an unspecified date.
[Complaint at ¶ 15.]
On May 24, 2010, Plaintiff’s lawyer, Gary Dubin, sent a
letter to BAC (“Dubin Letter”) stating, inter alia, that
Plaintiff sought to exercise his right to rescind the loan
transaction entered into by his father.5
[Dubin Letter at 1.]
The letter accused BAC of:
(1) unfair and deceptive acts and practices, (2)
fraudulent acts in the inducement, including
misrepresentations throughout said loan
transaction as to confusing, ambiguous, and
contradictory loan disclosures and excessive
closing costs, and (3) TILA violations, including
but not limited to the failure to provide two
completed copies of the notice of right to cancel
at closing or at any other time.
The letter demanded that BAC “cease and desist from
[Id.]
4
The Foreclosure Notice is attached to Plaintiff’s
memorandum in opposition at Exhibit 5. [Dkt. no. 15-5.] In
contrast to the recording date and document number listed on the
Foreclosure Notice, Plaintiff claims that BAC recorded said
notice on January 15, 2010 as document number 2010-006928.
[Complaint at ¶ 14; Mem. in Opp. at 3.]
5
The Dubin Letter is attached to Plaintiff’s Complaint as
Exhibit A.
3
proceeding with any wrongful foreclosure proceedings, including
your wrongful nonjudicial foreclosure auction noticed for today
at noon . . . .”
[Id. at 2.]
In a letter dated June 8, 2010,
BAC allegedly denied Plaintiff’s request for rescission.
[Complaint at ¶ 18.]
On July 12, 2010, BAC foreclosed on the Property and
purchased it at auction.
[Id. at ¶ 20 (citing Mortgagee’s
Affidavit of Foreclosure Under Power of Sale (“Foreclosure
Affidavit”), recorded 7/15/10 as doc. no. 3979799).]
On
January 21, 2011, Defendant Aloha Asset Servicing, LLC (“Aloha
Asset Servicing”) filed a Complaint for Ejectment in the District
Court for the First Circuit, State of Hawai`i, claiming to be the
owner of the Property.6
II.
[Id. at ¶ 21.]
Procedural History
On February 9, 2011, Plaintiff filed his two-count
Complaint in the District Court for the First Circuit seeking:
(1) declaratory judgment as to the title of the Property (“Count
I”); and (2) rescission and cancellation under the Truth in
Lending Act (“TILA”), 15 U.S.C. § 1601 et. seq. (“Count II”).
[Id. at p. 6.]
Pursuant to 28 U.S.C. §§ 1331, 1367, 1441, and
1446, BAC timely removed the case to this district court on
March 23, 2011.
[Notice of Removal at 2.]
6
It is not clear from the existing record how Aloha Asset
Servicing obtained the Property.
4
A.
Motion
In its Motion, BAC argues that the Court should dismiss
the Complaint with prejudice because Plaintiff fails to state a
claim upon which relief can be granted.
As an initial matter, BAC argues that Plaintiff lacks
standing to assert a TILA claim because he is neither the
borrower nor the mortgagor under the Mortgage.
[Mem. in Supp. of
Motion at 4 (citing Nash v. Long Beach Mortg. Co., 158 Fed. Appx.
843 (9th Cir. 2005); In re Crevier, 820 F.2d 1553 (9th Cir.
1987)).]
BAC contends that, in Nash, “[t]he Ninth Circuit
affirmed dismissal of the plaintiff’s TILA claims on the grounds
that the plaintiff was ‘neither the borrower nor the owner of the
property at the time of the contested transactions.’”
[Id. at 4-
5 (quoting Nash, 158 Fed. Appx. at 843 (emphasis omitted)).]
BAC
argues that Plaintiff, similar to the plaintiff in Nash, asserts
violations regarding property that solely belonged to his father
at the time of the contested transactions.
Additionally, BAC argues that Plaintiff does not have
standing because of his role as trustee of the Trust.
According
to BAC, a trustee of a trust holding title to property does not
have standing to assert a TILA claim.
[Id. at 5 (citing Pico v.
Bank of Am., Civil No. 10-00583 SOM/KSC, Order Vacating Order
Granting Plaintiff’s Motion to Proceed in Forma Pauperis and
Denying Plaintiff’s Request for Appointment of Counsel (ECF No.
5
18); Order to Show Cause Why Complaint Should Not Be Dismissed,
filed 11/12/2010 (dkt. no. 26); id., Order Dismissing Action,
filed 12/21/2010 (dkt. no. 41) (finding that the plaintiff in
that matter lacked standing to pursue TILA claims where she was
not the borrower or the mortgagor under the subject transaction,
even though she was trustee of the trust that purportedly held
title to the subject property)).]
Finally, BAC argues that Plaintiff’s claim for
declaratory relief fails for three reasons.
First, BAC argues
that declaratory relief is inapplicable in this case because it
“is a remedy, not an independent cause of action[.]”
[Mem. in
Supp. of Motion at 11 (emphasis and some citations omitted)
(citing Morongo Band of Mission Indians v. Cal. State Bd. of
Equalization, 849 F.2d 1197, 1201 (9th Cir. 1988)).]
Second, BAC
argues that, “because declaratory relief operates prospectively,
and not for the redress of past wrongs, Plaintiff’s request for
declaratory relief based on alleged violations of TILA during
loan consummation is inappropriate.”
[Id. at 12 (some citations
omitted) (citing Seattle Audubon Soc. v. Moseley, 80 F.3d 1401,
1405 (9th Cir. 1996)).]
Third, BAC argues that, since
declaratory relief requires an “actual controversy relating to
the legal rights and duties of the respective parties” and
Plaintiff failed to allege facts sufficient to support his TILA
claim, the Court must also dismiss Plaintiff’s claim for
6
declaratory relief.
[Id. at 12-13 (citing Phillips v. Bank of
Am., Civil No. 10-00551 JMS-KSC, 2011 WL 240813, at *4 (D.
Hawai`i Jan. 21, 2011)).]
B.
Memorandum in Opposition
Plaintiff refutes BAC’s lack of standing argument and
contends that he has standing as both an heir and a
successor-in-interest to the Property.
(citation omitted).]
[Mem. in Opp. at 6
Plaintiff contends that the right to
rescind under TILA survives the original consumer’s death, and
that both the decedent’s estate and the successors-in-interest to
the decedent-borrower’s property may bring rescission claims
after the death.
[Id. at 6-7 (some citations omitted) (citing
James v. Home Construction Company of Mobile, Inc., 621 F.2d 727,
729-730 (5th Cir. 1980) (“we find that a Truth-in-Lending Act
action under § 1635 survives the death of the plaintiff”); Smith
v. Fidelity Consumer Discount Co., 898 F.2d 896, 902-903 (3rd
Cir. 1990) (right of rescission invoked after borrower’s death
held to survive in favor of decedent’s heirs – son and daughterin-law – although found not applicable in that case)).]
Plaintiff does not address BAC’s declaratory relief arguments in
his memorandum.
C.
Reply
In its reply, BAC contends that Plaintiff exclusively
relies on authority outside of the Ninth Circuit to support his
7
argument that heirs and successors-in-interest have standing to
bring TILA claims.
BAC argues that, since Plaintiff fails to
refute its claim that he lacks standing under Ninth Circuit
authority, the Court should dismiss Plaintiff’s Complaint with
prejudice.
[Reply at 3-4.]
BAC also argues that Plaintiff
conceded that his claim for declaratory relief is improper by not
addressing BAC’s argument in his memorandum in opposition.
[Id.
at 12.]
STANDARD
Federal Rule of Civil Procedure 12(b)(6) permits a
motion to dismiss a claim for “failure to state a claim upon
which relief can be granted[.]”
“To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’”
Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955 (2007)); see also
Weber v. Dep’t of Veterans Affairs, 521 F.3d 1061, 1065 (9th Cir.
2008).
This tenet – that the court must accept as true all of
the allegations contained in the complaint – “is inapplicable to
legal conclusions.”
Iqbal, 129 S. Ct. at 1949.
Accordingly,
“[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.”
(citing Twombly, 550 U.S. at 555, 127 S. Ct. 1955).
8
Id.
Rather, “[a]
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.”
(citing Twombly, 550 U.S. at 556, 127 S. Ct. 1955).
Id.
Factual
allegations that only permit the court to infer “the mere
possibility of misconduct” do not show that the pleader is
entitled to relief.
Id. at 1950 (citation omitted).
“Dismissal without leave to amend is improper unless it
is clear that the complaint could not be saved by any amendment.”
Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009)
(citations and quotation marks omitted).
DISCUSSION
I.
TILA Claim for Rescission
As a threshold matter, BAC contends that Plaintiff
lacks standing to assert a TILA claim for rescission because he
is neither the borrower nor the mortgagor under the Mortgage.
BAC argues that neither Plaintiff’s role as trustee of the Trust
nor his alleged status as an heir or successor-in-interest to the
Property support a finding of standing.
Plaintiff argues that he has standing to assert his
TILA claim for rescission as both an heir and a
successor-in-interest to the Property.
According to Plaintiff,
the right of rescission survives the original consumer’s death
and may be brought by either the decedent’s estate or
9
successors-in-interest to a given property.
As recently explained by this district court in
Santiago v. Bismark Mortgage Co.:
Article III standing exists only when the
plaintiff has suffered an injury-in-fact, i.e., an
“invasion of a legally protected interest” that is
“concrete and particularized.” Lujan v. Defenders
of Wildlife, 504 U.S. 555, 560 (1992). It is
well-settled that a plaintiff who is not a party
to a mortgage loan cannot assert a claim against
the lender for asserted violations of RESPA
stemming from the loan settlement process. See,
e.g., Thomas v. Guild Mortg. Co., No. CV
09-2687-PHX-MHM, 2011 WL 676902, at *4 (D. Ariz.
Feb. 23, 2011) (granting summary judgment on RESPA
and TILA claims for lack of standing because the
plaintiff was not a party to the mortgage, citing
cases); Cleveland v. Deutsche Bank Nat’l Trust
Co., No. 08cv0802 JM(NLS), 2009 WL 250017 (S.D.
Cal. Feb. 2, 2009) (dismissing TILA, RESPA, fraud,
and other claims of a plaintiff whose wife took
out a mortgage, reasoning that “someone who is not
a party to [a] contract has no standing to enforce
the contract or to recover extra-contract damages
for wrongful withholding of benefits to the
contracting party”).
Similarly, to have standing to bring a claim
under TILA, a plaintiff must have been deprived of
a statutory right to disclosures that existed at
the time of the contested transaction. See
DeMando v. Morris, 206 F.3d 1300, 1303 (9th Cir.
2000); Crevier v. Welfare & Pension Fund for Local
701 (In re Crevier), 820 F.2d 1553, 1555-56 (9th
Cir. 1987); see, e.g., Thomas, 2011 WL 676902, at
*4.
Civil No. 10-00467 SOM/KSC, 2011 WL 839762, at *4-5 (D. Hawai`i
Mar. 4, 2011) (alteration in original).
In Pico, this district court was presented with one of
the same questions presently before this Court: whether a trustee
10
who was not a party to a mortgage loan transaction can make TILA
claims on behalf of a decedent-borrower.
The court in Pico found
that, where a trustee-plaintiff is “not a borrower or mortgagee
on the loan at issue[,] . . . she cannot assert [TILA] claims on
behalf of [the borrower], regardless of whether she is his
trustee or ‘attorney in fact.’”
Order Dismissing Action, at 3.
Civil No. 10-00583 SOM/KSC,
As further explained by the court
in Pico:
Pico herself does not have standing to sue under
TILA because she is not the borrower or mortgagee
on the loan. . . . [I]t appears that only [the
borrower] has standing to sue because he alone
entered into the mortgage transaction. As a
trustee, Pico is not injured by the mortgage
foreclosure and thus lacks standing. See also
Nash v. Long Beach Mortg. Co., 158 Fed. Appx. 843
(9th Cir. 2005) (affirming district court’s
dismissal for lack of standing because plaintiff
was neither the borrower nor the owner of the
property at the time of the contested
transaction); In re Crevier, 820 F.2d 1553 (9th
Cir. 1987) (finding that property ownership or a
right to convey is needed to state a claim under
TILA).
Id., Order Vacating Order Granting Plaintiff’s Motion to Proceed
in Forma Pauperis and Denying Plaintiff’s Request for Appointment
of Counsel (ECF No. 18); Order to Show Cause Why Complaint Should
Not Be Dismissed, at 3-4.
While the Court is unaware of any case in the Ninth
Circuit or this district court that has considered whether an
heir or successor-in-interest has standing to pursue TILA claims
on behalf of a decedent-borrower, at least one district court in
11
the Ninth Circuit has dismissed such a claim due to a lack of
standing.
In White v. Deutsche Bank National Trust Co., No. 09
CV 1807 JLS (JMA), 2010 WL 3420766 (S.D. Cal. Aug. 30, 2010), the
United States District Court for the Southern District of
California had to determine whether children that inherited real
property intestate had standing to bring TILA claims on behalf of
the decedent-borrower.
While the court found that the children-
plaintiffs had constitutional standing to bring their suit, the
court concluded that the plaintiffs “have not adequately
established standing to pursue a cause of action for violation of
TILA.”
White, 2010 WL 3420766, at *3.
As explained by the
court:
Plaintiffs are not a party to the loan contract;
only [decedent] entered into the loan transaction
and was a borrower pursuant to the loan. There is
no allegation in the complaint that credit was
extended to Plaintiffs, nor were Plaintiffs the
owners of the property encumbered by the loan. As
such, Plaintiffs are not “obligors” or “consumers”
sufficient to establish a right to rescind or for
damages under TILA. See 15 U.S.C. § 1635(a); see
also Wilson v. JPMorgan Chase Bank, NA, 2010 WL
2574032, at *6 (E.D. Cal. June 25, 2010) (citing
Johnson v. First Fed. Bank of Cal., 2008 WL
2705090, at *5 (N.D. Cal. Jul. 8, 2008)). The
Court finds no authority for the proposition that
Plaintiffs who are not a party to the loan may sue
Defendants for a violation of TILA.
Id. (footnote and some citations omitted).
As a result, the
court in White dismissed the plaintiffs’ TILA claim with
prejudice.
Id. at *4.
In contrast to the district court’s finding in White,
12
the Fifth Circuit held in James v. Home Construction Co. of
Mobile, Inc. that a TILA action for recession survives the death
of the borrower.
omitted).
621 F.2d 727, 729-30 (5th Cir. 1980) (footnote
In James, a woman entered into a contract with a
construction company for improvements and repairs on her home.
Approximately three years later, the woman died and her
plaintiff-son, who made several payments on the contract after
his mother’s death, requested rescission and cancellation of his
mother’s contract from the construction company.
The plaintiff-
son then filed suit seeking rescission under TILA.
F.2d at 728.
James, 621
The Fifth Circuit found that, while “the rule has
been that actions for penalties do not survive the death of the
plaintiff[,]” TILA’s rescission remedy was “remedial” rather than
“penal”.
Id. at 730 (citations omitted).
As a result, the Fifth
Circuit permitted the plaintiff-son to proceed with his TILA
action against the construction company.
Id. at 731.
The Third Circuit made a similar finding in Smith v.
Fidelity Consumer Discount Co., 898 F.2d 896 (3d Cir. 1990).
In
Smith, a man entered into a loan transaction with Fidelity
Consumer Discount Corporation (“Fidelity”) to purchase a car,
offering his home as a security for said loan.7
7
898 F.2d at 902.
The Smith case originally involved five plaintiffs and
three distinct loan transactions. Only two of the plaintiffs,
the successors-in-interest to the decedent’s home, and one of the
loan transactions, the October 31, 1984 loan from Fidelity to
(continued...)
13
Approximately one year after the October 31, 1984 transaction,
the man died and his son and daughter-in-law, as successors-ininterest to the man’s home, requested rescission of said loan.
When Fidelity denied their request for rescission, they filed
suit seeking rescission and statutory damages under TILA.
The
district court awarded plaintiffs both rescission and statutory
damages, and Fidelity appealed.
Id.
While the Third Circuit
reversed and remanded the district court’s finding that the
plaintiffs were entitled to summary judgment, id. at 907, the
court addressed the parties’ arguments regarding rescission and
damages on the merits and did not raise the issue of standing,
see id. at 902-07.
In fact, the Third Circuit expressly stated
that the plaintiffs’ TILA rescission claim was timely because
they filed within three years of the of the October 31, 1984
transaction.
Id. at 903.
Further, the Third Circuit noted that,
if the plaintiffs were “correct in their assertion that they were
entitled to rescind the instant transaction, then Fidelity is
liable for statutory damages based on the [plaintiffs’] timely
claim that Fidelity wrongfully denied their request to rescind
the transaction.”
Id.
It could therefore be said that the Third
Circuit recognized, by implication, that successors-in-interest
to property have standing to bring timely TILA actions.
7
(...continued)
decedent, are relevant to the instant Motion.
14
The Court declines to decide the issue of Plaintiff’s
standing in the instant case because, even assuming, arguendo,
that Plaintiff has standing as a trustee, heir, or successor-ininterest to bring his TILA claim, rescission is unavailable
because the Property has already been sold.
See 15 U.S.C. §
1635(f) (“An obligor’s right of rescission shall expire three
years after the date of consummation of the transaction or upon
the sale of the property, whichever occurs first . . . .”); see
also 12 C.F.R. § 226.23(a)(3) (“If the required notice or
material disclosures are not delivered, the right to rescind
shall expire 3 years after consummation, upon transfer of all of
the consumer’s interest in the property, or upon sale of the
property, whichever occurs first.”).
As explained by this Court
in Rodenhurst v. Bank of America:
Even an involuntary sale of the subject property
terminates a borrower’s right to rescind.
According to the Official Staff Commentary to
Regulation Z, “[a] sale or transfer of the
property need not be voluntary to terminate the
right to rescind. For example, a foreclosure sale
would terminate an unexpired right to rescind.”
--- F. Supp. 2d ----, Civil No. 10–00167 LEK–BMK, 2011 WL 768674,
at *7 (D. Hawai`i Feb. 23, 2011) (alteration in original)
(quoting Official Staff Commentary to Reg. Z, 12 C.F.R. §
226.23(a)(3)).
In the instant case, the Property was sold at a
foreclosure auction on July 12, 2010, over six months before
15
Plaintiff filed this lawsuit.
omitted).]
[Complaint at ¶ 20 (citation
The Court therefore FINDS that, even if Plaintiff has
standing to bring his claim for rescission under TILA, Count II
fails to state a claim upon which relief can be granted.8
Since
Plaintiff’s claim for rescission cannot be “saved by any
amendment[,]” Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir.
2009) (citations and quotation marks omitted), the Court GRANTS
BAC’s Motion as to Count II and DISMISSES Count II WITH
PREJUDICE.
II.
Declaratory Relief
Count I seeks a “declaratory judgment from this Court
declaring that Plaintiff, either individually or as Trustee, is
presently the owner of title to the subject property, and
declaring that any titles held by Defendants BAC and [Aloha Asset
Servicing] are void as being improperly transferred and
improperly recorded.”
[Complaint at pg. 6.]
BAC opposes Plaintiff’s claim for declaratory relief.
BAC argues that, because declaratory relief is not an independent
cause of action and cannot be premised on an invalid TILA claim,
8
The Court notes that, where a borrower timely notified the
lender that he was exercising his right to rescind but did not
file his civil action within the three-year statute of repose,
there may be an independent TILA claim for damages based on the
attempt to rescind the loan. Peyton v. Option One Mortg. Corp.,
Civil No. 10–00186 SOM/KSC, 2011 WL 1327028, at *5 (D. Hawai`i
Mar. 31, 2011). Plaintiff’s Complaint, however, does not allege
such a claim, and the Court does not express an opinion as to
whether Plaintiff could allege such a claim.
16
the Court must dismiss Plaintiff’s claim for declaratory relief.
The Court construes Count I as a claim for relief under
the Declaratory Judgment Act, 28 U.S.C. § 2201.
Section 2201(a)
provides, in pertinent part:
In a case of actual controversy within its
jurisdiction . . . any court of the United
States, upon the filing of an appropriate
pleading, may declare the rights and other legal
relations of any interested party seeking such
declaration, whether or not further relief is or
could be sought. Any such declaration shall have
the force and effect of a final judgment or
decree and shall be reviewable as such.
As explained by the Ninth Circuit in Seattle Audubon Society v.
Moseley, a declaratory judgment under § 2201 is a means of
adjudicating “rights and obligations” in cases “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.”
1401, 1405 (9th Cir. 1996) (citations omitted).
80 F.3d
Since a
declaratory judgment is not a corrective action, it should not be
used to remedy past wrongs.
See, e.g., Marzan v. Bank of Am., --
- F. Supp. 2d ----, Civil No. 10–00581 JMS/BMK, 2011 WL 915574,
at *3 (D. Hawai`i Mar. 10, 2011) (“[B]ecause Plaintiffs’ claims
are based on allegations regarding Defendants’ past wrongs, a
claim under the Declaratory Relief Act is improper and in essence
duplicates Plaintiffs’ other causes of action.” (citations
omitted)); Mangindin v. Wash. Mut. Bank, 637 F. Supp. 2d 700,
17
707-08 (N.D. Cal. 2009) (“[T]he Court finds that the declaratory
relief Plaintiffs seek is entirely commensurate with the relief
sought through their other causes of action.
Thus, Plaintiffs’
declaratory relief claim is duplicative and unnecessary.”).
Rather, the purpose of a declaratory judgment is to set forth a
declaration of present and future rights.
Societe de
Conditionnement en Aluminum v. Hunter Eng’g Co., 655 F.2d 938,
943 (9th Cir. 1981) (“[The Declaratory Judgment Act] brings to
the present a litigable controversy, which otherwise might only
by (sic) tried in the future.”); Edejer v. DHI Mortg. Co., No. C
09-1302 PJH, 2009 WL 1684714, at *11 (N.D. Cal. June 12, 2009)
(“The purpose of a declaratory judgment is to set controversies
at rest before they cause harm to the plaintiff, not to remedy
harms that have already occurred.” (citations omitted)).
To the extent that Plaintiff’s claim for declaratory
relief alleges that BAC’s title to the Property is “void as being
improperly transferred and improperly recorded[,]” [Complaint at
pg. 6,] Plaintiff fails to state a claim upon which relief can be
granted.
A claim for declaratory relief based on allegations of
past wrongs is improper under the Declaratory Relief Act.
Marzan, 2011 WL 915574, at *3 (citations omitted).
See
Since this
portion of Count I cannot be “saved by any amendment[,]” Harris,
573 F.3d at 737 (citations and quotation marks omitted), the
Court GRANTS BAC’s Motion as to Count I insofar as the Court
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DISMISSES WITH PREJUDICE Count I’s request for declaratory relief
based on BAC’s alleged past wrongs.
To the extent that Plaintiff’s claim for declaratory
relief seeks to establish that he “is presently the owner of
title to the subject property,” [Complaint at pg. 6,] Plaintiff
still fails to state a claim upon which relief may be granted.
The Court has rejected Plaintiff’s claim for rescission under
TILA, and Plaintiff presents no evidence that he is otherwise
entitled to a judgment that he is the present owner of the
Property.
Although Plaintiff cannot save his declaratory relief
claim based on TILA rescission by amendment, see Harris, 573 F.3d
at 737 (citations and quotation marks omitted), it is arguably
possible for Plaintiff to allege another basis to support a
declaration that he is entitled to the Property.
The Court
therefore GRANTS BAC’s Motion as to Count I insofar as the Court
DISMISSES WITHOUT PREJUDICE Count I’s request for declaratory
relief as to Plaintiff’s present ownership rights to the
Property.
CONCLUSION
On the basis of the foregoing, BAC’s Motion to Dismiss
Plaintiff’s Complaint, filed March 30, 2011, is HEREBY GRANTED IN
PART AND DENIED IN PART.
The Motion is GRANTED insofar as:
1.
Count II is DISMISSED WITH PREJUDICE; and
2.
the portion of Count I concerning BAC’s alleged past
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wrongs is DISMISSED WITH PREJUDICE.
The Motion is DENIED insofar as the portion of Count I concerning
Plaintiff’s present ownership rights to the Property is DISMISSED
WITHOUT PREJUDICE.
Plaintiff has until July 12, 2011 to file an amended
complaint in accordance with this order.
The Court CAUTIONS
Plaintiff that, if he fails to file his amended complaint by
July 12, 2011, this Court will amend this order to dismiss all of
Plaintiff’s claims with prejudice.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, July 1, 2011.
/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
ROCKY FUJIO TAKUSHI V. BAC HOME LOANS SERVICING; CIVIL NO. 1100189 LEK-RLP; ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT BAC HOME LOANS SERVICING, LP’S MOTION TO DISMISS
PLAINTIFF’S COMPLAINT
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