Miller v. Deutsche Bank Trust Company et al
Filing
15
ORDER DENYING PLAINTIFF'S 5 MOTION FOR PRELIMINARY INJUNCTION / 5 TEMPORARY RESTRAINING ORDER. Signed by District JUDGE LESLIE E. KOBAYASHI on May 5, 2011. (bbb, )CERTIFICATE OF SERVICEParticipants registere d 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
JEFFREY IAN MILLER,
)
)
Plaintiff,
)
)
vs.
)
)
DEUTSCHE BANK TRUST COMPANY, )
a national banking
)
association, et al.,
)
)
Defendants.
)
_____________________________ )
CIVIL NO. 11-00264 LEK-RLP
ORDER DENYING PLAINTIFF’S MOTION
FOR PRELIMINARY INJUNCTION/TEMPORARY RESTRAINING ORDER
On April 20, 2011, Plaintiff Jeffrey Ian Miller
(“Plaintiff”) filed a Verified Complaint (“Complaint”) [dkt. no.
1] and Motion for Preliminary Injunction/Temporary Restraining
Order(“Motion”) [dkt. no. 5].1
May 2, 2010.
The Motion came on for hearing on
Appearing for Plaintiff was Steven Geshell, Esq.
Charles Prather, Esq., made a special appearance for Defendant.
After careful consideration of the Motion, supporting memoranda,
and the arguments of counsel, Plaintiff’s Motion is HEREBY DENIED
for the reasons set forth below.
BACKGROUND
Plaintiff seeks a temporary restraining order (“TRO”)
1
The certificate of service appended to the Motion
indicates that Plaintiff served it upon foreclosure counsel for
Defendant Deutsche Bank Trust Company (“Defendant”) via hand
delivery on April 20, 2011. [Dkt. no. 5-1.]
prohibiting Defendant from proceeding with non-judicial
foreclosure against several properties owned by Plaintiff,
described in the Motion as: (a) Kapolei House; (b) Ko‘olina
Apartment M42-1; (c) Ko‘olina Villas Apartment M10-3;
(d) Nihilani Apartment No. 24B; and (e) Nihilani Apartment No.
18A.
[Motion at 2-3.]
Properties (a), (b), and (c) are Land
Court properties, while properties (d) and (e) are in the Regular
System of the Bureau of Conveyances.
Four of the properties are
set to be sold at public auction on May 6, 13, 20, 24.2
[Complaint ¶¶ 7, 12, 16, 19.]
The Complaint alleges the following three counts:
(1) Injunctive Relief; (2) Declaratory Judgment under Hawai‘i
Revised Statutes § 632-1; and (3) Quiet Title under Hawai‘i
Revised Statutes § 669-1.
Attached to the Complaint are Land
Court Certificates of Title for the three Land Court properties;
each bears a seal from the Assistant Land Court Registrar,
attesting that each Certificate of Title is “[a] true copy as of”
March 10, 2008.
[Complaint, Exhs. 1, 3, 5.]
None of the Land
Court Certificates of Title show an assignment of mortgage to
Defendant.
Plaintiff challenges Defendant’s right to non-
2
Property (b), the Ko‘olina Apartment M42-1, is currently
“in process for a short sale.” [Suppl. Geshell Decl., filed
05/01/11 (dkt. no. 11), at ¶ 6.] Property (e), Nihilani
Apartment No. 18A, is not currently the subject of judicial or
non-judicial foreclosure, but Plaintiff has received a collection
letter from an attorney claiming to represent Defendant, claiming
there is a balance due on that mortgage. [Complaint ¶ 22.]
2
judicially foreclose on the subject properties.
I.
Procedural Background
The Court held a status conference on the Motion on
April 29, 2011.
Appearing for Plaintiff was Mr. Geshell.
Mr. Prather and David Rosen, Esq., each made a special appearance
for Defendant.
Messrs. Prather and Rosen stated that they have
not been retained by Defendant in this matter.
On May 1, 2011, Plaintiff filed a supplemental
memorandum in support [dkt. no. 12] and Supplemental Declaration
of R. Steven Geshell Supporting Plaintiff’s Motion for
Preliminary Injunction (“Supplemental Geshell Declaration”) [dkt.
no. 11].
On May 2, 2011, Plaintiff filed a Second Supplemental
Declaration of R. Steven Geshell.
[Dkt. no. 13.]
Defendant has
not filed an opposition.
II.
Plaintiff’s Motion
The Motion asks for a preliminary injunction, and,
alternatively, for a temporary restraining order enjoining
Defendant from pursuing a non-judicial foreclosure against
Plaintiff’s properties.
The crux of Plaintiff’s argument in
support of the Motion is that, although Defendant is not the
record title owner of the mortgages, it is pursuing non-judicial
foreclosures of the properties without filing proper notices with
the Hawai‘i Bureau of Conveyances.
3
In his memorandum in support, Plaintiff asserts that
Defendant “is not the record title owner of the mortgages of the
subject properties,” [Mem. in Supp. at 2,] and that any
assignment of mortgage from lender American Home Mortgage or its
nominee Mortgage Electronic Registration Systems (“MERS”) have
not been recorded at the Bureau of Conveyances, either in the
Regular System or Land Court System [id. at 3].
Therefore,
“Defendant has no right to foreclose on the mortgages, in that it
has not established of record that it acquired ownership of the
mortgages upon which non-judicial foreclosure is being sought
presumably under HRS § 667-5, et seq.”
[Id.]
On April 29, 2011, the Court entered an order
instructing the parties to address whether Defendant must record
the assignments in question in order to proceed with non-judicial
foreclosure pursuant to Haw. Rev. Stat. § 667-5.
[Dkt. no. 10.]
In response, Plaintiff provided argument and authorities
attempting to show “that the Defendant must record a valid
assignment with the Bureau of Conveyances in order to proceed
with a non-judicial foreclosure.”
[Suppl. Mem. in Supp. at 2.]
With respect to Hawaii’s non-judicial foreclosure law, Plaintiff
states that:
HRS § 667-5 authorizes mortgagee successors to
proceed with non-judicial foreclosures but
requires the mortgagee, within 30 days after
selling the property, to file a copy of the notice
of sale and the mortgagee’s affidavit setting
forth mortgagee’s acts fully and particularly,
4
which affidavit must be filed with the Bureau of
Conveyances. HRS § 667-5(d).
[Id.]
Plaintiff next asserts that Haw. Rev. Stat. § 501-82
“provides that unrecorded documents pertaining to title or
encumbrances are ineffective if not noted on the certificate of
title as against a subsequent purchaser who takes the certificate
of title for value in good faith.”
[Id.]
Further, Plaintiff
argues that Haw. Rev. Stat. § 501-101 “makes unregistered
documents inoperative as a conveyance or binding the land but
such documents are operative between the parties only.”
3.]
[Id. at
Plaintiff cites City & County of Honolulu v. A. S. Clarke,
Inc., 60 Haw. 40, 587 P.2d 294 (1978), arguing that “unrecorded
interests in Land Court property are invalid as to others dealing
with the Transfer Certificate of Title.”
[Id.]
Interpreting
Haw. Rev. Stat. § 501-101, A. S. Clarke, Inc., explained that
“[t]his statute thus provides that any Unregistered instrument
purporting to convey or affect registered land shall not bind or
affect the land but shall only be regarded as a contract between
the parties.”
60 Haw. at 47, 587 P.2d at 299.
Plaintiff next argues that “one taking title under a
certificate of title, takes free of unregistered encumbrances of
record because the certificate of title is conclusive and
unimpeachable so that one taking title for value . . . is
entitled to hold the land and title free of all encumbrances
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except those noted on the TCT.”
[Suppl. Mem. in Supp. at 4.]
Finally, Plaintiff argues that the Hawai‘i Intermediate
Court of Appeals’ holding in IndyMac Bank v. Miguel, 117 Hawai‘i
506, 184 P.3d 821 (Ct. App. 2008), does not apply in the instant
matter because Plaintiff filed a lis pendens with the Bureau of
Conveyances on April 21, 2011, “so if the Defendant Bank tries to
file the assignment after that date, it is inferior to the lis
pendens by virtue of the case and statutory authority because
first in time is first in right on the transfer certificate of
title (TCT).”
[Id.]
According to Plaintiff, IndyMac Bank held
that a “bank’s failure to record its interest in the mortgage
prior to filing suit did not prevent it from having standing do
judicially foreclose.”
[Id.]
Attached to the Supplemental Geshell Declaration are
copies of various notes, mortgages, and assignments of mortgage
provided to Plaintiff’s counsel via email by Mr. Rosen on
April 27, 2011.
Specifically, Exhibit A3 is an assignment of
mortgage from MERS to Defendant relating to property (a), the
Kapolei House, dated March 14, 2011, and recorded in Land Court
on March 23, 2011.
[Suppl. Geshell Decl., Exh. A3.]
Exhibit B
is an assignment of mortgage from MERS to Defendant relating to
property (b), Ko‘olina Apartment M42-1, dated March 16, 2011, and
recorded in Land Court on March 23, 2011.
Exh. B.]
[Suppl. Geshell Decl.,
Exhibit C3 is an assignment of mortgage from MERS to
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Defendant relating to property (c), Ko‘olina Villas Apartment
M10-3, dated March 16, 2011, and recorded in Land Court on
March 28, 2011.
[Suppl. Geshell Decl., Exh. C3.]
Exhibit D3 is
an assignment of mortgage from MERS to Defendant relating to
property (d), Nihilani Apartment No. 24B, dated March 14, 2011,
and recorded in Land Court on March 23, 2011.
[Suppl. Geshell
Decl., Exh. D3.]
Plaintiff did not contest the authenticity or veracity of these
exhibits in his pleadings or at the hearing on May 2, 2011.
STANDARD
The standard for issuing a temporary restraining order
(“TRO”) is identical to the standard for issuing a preliminary
injunction.
Brown Jordan Int’l, Inc. v. Mind’s Eye Interiors,
Inc., 236 F. Supp. 2d 1152, 1154 (D. Hawai‘i 2002).
In Winter v.
Natural Resources Defense Council, Inc., 129 S. Ct. 365, 374
(2008), the Supreme Court explained that “[a] plaintiff seeking a
preliminary injunction must establish that he is likely to
succeed on the merits, that he is likely to suffer irreparable
harm in the absence of preliminary relief, that the balance of
equities tips in his favor, and that an injunction is in the
public interest.”
So long as all four parts of the Winter test
are applied, “a preliminary injunction [may] issue where the
likelihood of success is such that ‘serious questions going to
the merits were raised and the balance of hardships tips sharply
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in [plaintiff’s] favor.’”
Alliance for Wild Rockies v. Cottrell,
622 F.3d 1045, 1049 (9th Cir. 2010) (quoting Clear Channel
Outdoor, Inc. v. City of Los Angeles, 340 F.3d 810, 813 (9th Cir.
2003)).
DISCUSSION
As set forth below, the Court finds that Plaintiff has
not made a sufficient showing to satisfy the four parts of the
Winter test for injunctive relief: (1) that he is likely to
succeed on the merits; (2) that he is likely to suffer
irreparable harm in the absence of preliminary relief; (3) that
the balance of equities tips in his favor; and (4) that an
injunction is in the public interest.
I.
Winter, 129 S. Ct. at 374.
Likelihood of Success on the Merits
The Court first discusses the merits of each of the
three claims for relief in Plaintiff’s Complaint.
A.
First Claim – Injunctive Relief
Plaintiff’s first claim for injunctive relief does not
state a stand-alone claim, but is derivative of his other claims.
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”); Marzan v. Bank of Am.,
Civ. No. 10-00581 JMS/BMK, 2011 WL 915574, at *3 (D. Hawai‘i
Mar. 10, 2011) (“[T]he court follows the well-settled rule that a
claim for ‘injunctive relief’ standing alone is not a cause of
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action.”).
Injunctive relief, however, may be available if
Plaintiff is entitled to such a remedy on an independent cause of
action.
B.
Second Claim – Declaratory Judgment and Third Claim –
Quiet Title
Plaintiff’s second claim seeks a declaratory judgment
pursuant to Haw. Rev. Stat. § 632-1 that: (1) Defendant is not
the holder and owner of the mortgages and notes; and
(2) Defendant is not entitled to pursue non-judicial foreclosure.
Plaintiff’s third claim states that he is entitled to have his
legal title quieted against the claims of Defendant.
In support, Plaintiff argues that the assignments of
mortgage in favor of Defendant are ineffective because they have
not been recorded with the Bureau of Conveyances, and as a
result, Defendant is not entitled to foreclose.
Plaintiff,
however, has not established that Defendant lacks authority to
foreclose on the subject properties.
Hawaii’s non-judicial foreclosure law, Haw. Rev. Stat.
§ 667-5, does not appear to mandate registration of an assignment
of mortgage in the manner suggested by Plaintiff.
Rather, the
statute states in pertinent part that:
(a) When a power of sale is contained in a
mortgage, and where the mortgagee, the mortgagee’s
successor in interest, or any person authorized by
the power to act in the premises, desires to
foreclose under power of sale upon breach of a
condition of the mortgage, the mortgagee,
successor, or person shall be represented by an
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attorney who is licensed to practice law in the
State and is physically located in the State. The
attorney shall:
(1) Give notice of the mortgagee’s,
successor’s, or person’s intention to
foreclose the mortgage and of the sale of the
mortgaged property, by publication of the
notice once in each of three successive weeks
(three publications), the last publication to
be not less than fourteen days before the day
of sale, in a newspaper having a general
circulation in the county in which the
mortgaged property lies; and
(2) Give any notices and do all acts as are
authorized or required by the power contained
in the mortgage.
(b) Copies of the notice required under subsection
(a) shall be:
(1) Filed with the state director of
taxation; and
(2) Posted on the premises not less than
twenty-one days before the day of sale.
. . . .
Haw. Rev. Stat. § 667-5.
On its face, the statute does not
expressly require the mortgagee or its successor in interest to
register an assignment of mortgage before commencing foreclosure.
Further, the Land Court registration statutes cited by
Plaintiff, Haw. Rev. Stat. §§ 501-82 and -101, do not on their
face impede Defendant’s ability to foreclose under § 667-5.
Plaintiff argues only that § 501-82 “in essence, provides that
unrecorded documents pertaining to title or encumbrances are
ineffective if not noted on the certificate of title as against a
subsequent purchaser who takes the certificate of title for value
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in good faith.”
added).]
[Suppl. Mem. in Supp. of Motion at 2 (emphasis
Plaintiff does not allege that Defendant is a
subsequent purchaser or that the statute applies to parties who
are not subsequent purchasers.
Further, Plaintiff asserts that § 501-101 “makes
unregistered documents inoperative as a conveyance or binding the
land but such documents are operative between the parties only.”
[Id. at 3.]
Plaintiff cites City & County of Honolulu v. A. S.
Clarke, Inc., 60 Haw. 40, 587 P.2d 294 (1978), arguing that
“unrecorded interests in Land Court property are invalid as to
others dealing with the Transfer Certificate of Title.”
[Id.]
Interpreting Haw. Rev. Stat. § 501-101, A. S. Clarke, Inc.,
explained that “This statute thus provides that any Unregistered
instrument purporting to convey or affect registered land shall
not bind or affect the land but shall only be regarded as a
contract between the parties.”
47, 587 P.2d at 299.
A. S. Clarke, Inc., 60 Haw. at
The assignments of mortgage at issue here
would remain valid contracts between the parties, even if not
registered.
Assuming the assignments of mortgage are valid
contracts between the mortgagee or nominee and Defendant, the
Court does not comprehend Plaintiff’s claim that Defendant is not
entitled to foreclose under the plain language of Haw. Rev. Stat.
§ 667-5.
In any event, shortly before the hearing on the Motion,
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Plaintiff filed with the Court the assignments of mortgage that
indicate the assignments apparently were, in fact, registered in
the Land Court system.
Exhibits A3, B, C3, and D3 are the
assignments of mortgage relating to the subject properties with
notations signifying their recordation with the Bureau of
Conveyances.
Exhibits A3 and D3 bear a form of notation stating
“CERTIFIED BY FIRST AMERICAN TITLE INSURANCE COMPANY TO BE A COPY
OF THE DOCUMENT RECORDED ON 03/23/2011” and Exhibit C bears the
same notation with a recording date of “03/23/2011.”
Exhibit B
includes the stamp of the “Office of the Assistant Registrar,
Land Court, State of Hawaii (Bureau of Conveyances)” indicating
“The original of this document was recorded as follows: . . .” on
March 23, 2011.
Plaintiff failed to address these documents in
supplemental briefing or at the hearing, and has not otherwise
questioned their authenticity or trustworthiness.3
In the face
of these apparently registered assignments, the Court cannot say
that Plaintiff is likely to succeed on the merits of his claims
3
On their face, the exhibits appear to be Bureau of
Conveyances Land Court system registration documents; neither
party has indicated that the documents are not what they purport
to be. The Court makes no findings as to the admissibility of
these documents in any subsequent proceedings. “[T]he court’s
findings of fact and conclusions of law with regard to the
preliminary injunction are not binding at trial. Based, as they
usually are, on incomplete evidence and a relatively hurried
consideration of the issues, these provisional decisions should
not be used outside the context in which they originally were
rendered.” 11A Charles Alan Wright, Arthur R. Miller, Mary Kay
Kane, Richard L. Marcus, Federal Practice & Procedure § 2950 (2d
ed.).
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for declaratory judgment or to quiet title.
“[A] preliminary injunction is an extraordinary and
drastic remedy, one that should not be granted unless the movant,
by a clear showing, carries the burden of persuasion.”
Mazurek
v. Armstrong, 520 U.S. 968, 972 (1997) (quotation omitted).
Plaintiff has not met this burden.
The Court therefore finds
that Plaintiff is not likely to succeed on the merits of his
second and third claims based on the current record before the
Court.
II.
Irreparable Harm
Plaintiffs seeking preliminary injunctive relief
must “demonstrate that irreparable injury is
likely in the absence of an injunction[,]” the
mere possibility of irreparable harm is
insufficient. Winter, 129 S. Ct. at 375 (finding
the Ninth Circuit’s standard of a “possibility” of
harm too lenient). “To seek injunctive relief, a
plaintiff must show that he is under threat of
suffering ‘injury in fact’ that is concrete and
particularized; the threat must be actual and
imminent, not conjectural or hypothetical; it must
be fairly traceable to the challenged action of
the defendant; and it must be likely that a
favorable judicial decision will prevent or
redress the injury.” Summers v. Earth Island
Inst., 129 S. Ct. 1142, 1149 (2009).
Sakala v. BAC Home Loans Servicing, LP, Civ. No. 10-00578
DAE-LEK, 2011 WL 719482, at *4 (D. Hawai‘i Feb. 22, 2011)
(emphases added) (alteration in original).
“Since real property is considered unique, foreclosure
on one’s property may constitute irreparable harm.”
Gonzalez v.
Wells Fargo Bank, Civ. No. 09-03444 MHP, 2009 WL 3572118, at *3
13
(N.D. Cal. Oct. 30, 2009).
In the Court’s view, it is clear that
Plaintiff would suffer irreparable harm if he were to be evicted
from his residence or lose possession of his residence.
The
closer question is whether Plaintiff has established that the
threat of irreparable harm is actual and imminent.
There is no
indication that any of the subject properties are Plaintiff’s
residence or that he will be forced to vacate immediately upon
sale at public auction.4
The Court finds that Plaintiff has not
made a sufficient showing of irreparable harm that is actual and
imminent.
III. Balance of Equities and Public Interest
Plaintiff argues that the balance of equities tips in
his favor because “[s]elling the properties at non-judicial
foreclosure will divest Plaintiff of his title by a party who has
no legal or equitable right or interest to do so[.]”
Supp. of Motion at 5.]
[Mem. in
The Court finds that Plaintiff has not
met his burden of demonstrating that the balance of equities tips
in her favor.
Finally, the Court must weigh the public interest, if
4
Because the record is not clear in this case, the Court
cannot discern whether any of the five subject properties are
Plaintiff’s residence or are investment properties. Courts have
found that where the foreclosure is against investment property,
the property interest is not sufficiently unique to justify a
finding of irreparability. See, e.g., Jessen v. Keystone Sav. &
Loan Ass’n, 191 Cal. Rptr. 104, 106-07 (Ct. App. 1983) (holding
that investment units could be adequately compensated in damages
because their price would be fixed by the open market).
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any, implicated by the injunction.
Winter, 129 S. Ct. at 374.
When the reach of an injunction is narrow, limited only to the
parties, and has no impact on nonparties, the public interest
will be “at most a neutral factor in the analysis rather than one
that favor[s][granting or] denying the preliminary injunction.”
Bernhardt v. Los Angeles County, 339 F.3d 920, 931 (9th Cir.
2003).
In sum, Plaintiff has not made the requisite showing
under Winter.
Alternatively, the Court concludes that the
likelihood of success is not such that “serious questions going
to the merits were raised and the balance of hardships tips
sharply in [plaintiff’s] favor.”
Alliance for Wild Rockies v.
Cottrell, 622 F.3d 1045, 1049 (9th Cir. 2010).
CONCLUSION
On the basis of the foregoing, Plaintiff’ Motion for
Injunctive Relief/Temporary Restraining Order, filed on April 20,
2011, is HEREBY DENIED.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, May 5, 2011.
/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
JEFFREY IAN MILLER V. DEUTSCHE BANK TRUST CO., ET AL; CIVIL NO.
11-00264 LEK-RLP; ORDER DENYING PLAINTIFF’S MOTION FOR
PRELIMINARY INJUNCTION/TEMPORARY RESTRAINING ORDER
15
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