Northern Trust, NA v. Wolfe

Filing 75

ORDER GRANTING NORTHERN TRUST'S MOTION FOR SUMMARY JUDGMENT AS TO THE COMPLAINT, INTERLOCUTORY DECREE OF FORECLOSURE, AND ORDER OF SALE 41 AND GRANTING NORTHERN TRUST'S MOTION TO DISMISS DEFENDANT KENNETH I. WOLFE'S FIRST AMENDED COU NTERCLAIM 57 . Signed by JUDGE LESLIE E. KOBAYASHI on 1/31/2013. Excerpt of Order: re: Defendant Kenneth I. Wolfe's request for extension of time to respond to the motions [Rule 56(d) Continuance]: Denied (pp. 37-38). Ex cerpt of Conclusion: "Northern Trust is directed to provide a proposed Foreclosure Decree and foreclosure Commissioner to the Court by March 1, 2013." [Order follows hearing held 1/22/2013. Minutes of hearing: doc no. 74 ]. (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). 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
NORTHERN TRUST, NA,
Plaintiff,
vs.
KENNETH I. WOLFE,
Defendant.
____________________________

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CIVIL NO. 11-00531 LEK-BMK

ORDER GRANTING NORTHERN TRUST’S MOTION FOR SUMMARY JUDGMENT AS TO
THE COMPLAINT, INTERLOCUTORY DECREE OF FORECLOSURE, AND ORDER OF
SALE AND GRANTING NORTHERN TRUST’S MOTION TO DISMISS
DEFENDANT KENNETH I. WOLFE’S FIRST AMENDED COUNTERCLAIM
Before the Court are: Plaintiff/Counterclaim Defendant
Northern Trust, NA’s (“Northern Trust”) Motion for Summary
Judgment as to the Complaint Filed on August 30, 2011,
Interlocutory Decree of Foreclosure, and Order of Sale (“Motion
for Summary Judgment”), filed on August 15, 2012; and Northern
Trust’s Motion to Dismiss Defendant Kenneth I. Wolfe’s First
Amended Counterclaim (“Motion to Dismiss”), filed on September
27, 2012.

Defendant/Counterclaimant Kenneth I. Wolfe (“Wolfe”)

filed a memorandum in opposition to each motion on December 6,
2012.

Northern Trust filed a reply in support of each motion on

December 13, 2012.
These matters came on for hearing on January 22, 2013.
Appearing on behalf of Northern Trust were Jonathan Lai, Esq.,
and Michael Bird, Esq., and appearing on behalf of Wolfe was John

Harris Paer, Esq.

After careful consideration of the motions,

supporting and opposing memoranda, and the arguments of counsel,
both motions are HEREBY GRANTED for the reasons set forth below.
BACKGROUND
Northern Trust filed the instant action on August 30,
2011 based on diversity jurisdiction.

[Complaint at ¶ 3.]

The

Complaint seeks foreclosure of property securing a loan that
Northern Trust made to Wolfe.
Wolfe filed his Answer to Complaint (“Answer”), with a
Setoff and Counterclaim (“Counterclaim”), on November 17, 2011.
[Dkt. no. 12.]

On May 31, 2012, this Court issued its Order

Granting Northern Trust’s Motion to Dismiss Defendant Kenneth I.
Wolfe’s Counterclaim and Denying Northern Trust’s Motion for
Summary Judgment as to the Complaint Filed Herein on August 30,
2011, Interlocutory Decree of Foreclosure, and Order of Sale,
filed May 31, 2012 (“5/31/12 Order”).

2012 WL 1983339.

In the

5/31/12 Order, the Court dismissed all counts in the Counterclaim
without prejudice, with the exception of Wolfe’s breach of
contract claim, and the portions of Wolfe’s negligence claim
based on the implied duty of good faith and fair dealing in the
alleged oral forbearance agreement, which the Court dismissed
with prejudice.

Id. at *24-25.

Wolfe filed his First Amended Answer and Counterclaim

2

on September 6, 2012 (“Amended Counterclaim”).1

[Dkt. no. 53.]

The Counterclaim asserts the following claims: unfair and
deceptive acts and practices (“UDAP”), in violation of Haw. Rev.
Stat. Chapter 480 (“Count I”); unconscionability (“Count II”);
fraud and misrepresentation (“Count III”); negligence (“Count
IV”); violation of the duty of good faith and fair dealing
(“Count V”); and promissory estoppel (“Count VI”).
I.

Motion for Summary Judgment
Wolfe executed a Promissory Note in favor of Northern

Trust in the principal amount of $1,080,000.00, at an interest
rate of 7.000% (“the Note”).
2007.2

The date of the Note is August 22,

[Motion for Summary Judgment, Aff. of Shawn T. Roland

(“Roland Aff.”), Exh. A at 1.]

The Note states, in pertinent

part:
PAYMENT. I will pay this loan in one principal
payment of $1,080,000.00 plus interest on
August 22, 2010. This payment due on August 22,
2010, will be for all principal and all accrued

1

In the 5/31/12 Order, the Court granted Wolfe until June
28, 2012 to file a motion seeking permission to file an amended
counterclaim to address the deficiencies noted in the 5/31/12
Order. On June 5, 5012, the deadline for Wolfe to file his
motion to amend his counterclaim was continued to August 15,
2012. [Dkt. no. 37.] Wolfe filed a Motion to Amend Answer and
Counterclaim on August 15, 2012 [dkt. no. 44,] and Magistrate
Judge Barry M. Kurren granted the motion on August 30, 2012.
[Dkt. no. 50.]
2

Wolfe, however, alleges that the date of the transaction
at issue in this case was “[o]n or about August 29, 2007[.]”
[Mem. in Opp. to Motion for Summary Judgment, Decl. of Kenneth I.
Wolfe (“Def. Decl.”) at ¶ 3.]
3

interest not yet paid. In addition, I will pay
regular monthly payments of all accrued unpaid
interest due as of each payment date, beginning
September 22, 2007, with all subsequent interest
payments to be due on the same day of each month
after that. . . .
[Id.]

The Note is secured by a Mortgage on Maniniowali Phase II,

Lot 17, Kailua-Kona, Hawai`i (“the Property”).

The Mortgage was

recorded in the Bureau of Conveyances on September 7, 2007 as
Document Number 2007-159365.

[Roland Aff., Exh. B at 1.]

Northern Trust presented an affidavit from Shawn T.
Roland, the Second Vice President for “The Northern Trust Company
as successor by merger to Northern Trust, NA (‘Northern Trust
[Company]’).”

[Roland Aff. at ¶ 1.]

Roland states that Wolfe is

in default under the terms of the Note and Mortgage because Wolfe
has refused to make his required full payment, in spite of “due
and proper demand made upon Defendant Wolfe for payment of the
amounts due and owing to [Northern Trust ]”

[Id. at ¶¶ 6-10.]

Roland certifies that Northern Trust Company is still the holder
of the Note and Mortgage and that, as of August 6, 2012, Wolfe
owed Northern Trust Company the following amounts:
Principal Balance:
Interest to 08/30/11:
Interest from 08/31/11 to 08/6/12: $
TOTAL:

$ 1,069,079.32
$
59,311.93
80,137.01
$ 1,208,528.26

[Id. at ¶ 11, Exh. D (Pay-Off Statement).]

Roland states that

the pay-off amounts were calculated based upon his personal
knowledge, review of copies of Wolfe’s Monthly Loan Statements,
4

review of the current customer account activity statement (the
“Loan Ledger”) for Wolfe’s account, and review of the “entire
records and files kept in the ordinary course of [Northern
Trust’s] business in connection with the Loan.”
¶¶ 12-14, Exhs. E and F.]

[Roland Aff. at

Roland states that, under the terms of

the Note and Mortgage, Northern Trust Company is entitled to
foreclose upon its first mortgage lien.

[Id. at ¶ 24.]

In the instant Motion for Summary Judgment, Northern
Trust first addresses this Court’s findings in the 5/31/12 Order
that (1) Northern Trust failed to establish that it was the
proper party to bring the foreclosure action; and (2) Northern
Trust failed to establish the amounts due under the Note and
Mortgage.
As to the first issue, Northern Trust argues that it is the
holder of the Note and Mortgage and the proper party to conduct
the foreclosure proceeding.

Northern Trust asserts that,

effective October 1, 2011, Northern Trust, NA, merged with and
into The Northern Trust Company, with the resulting bank
operating under the name of The Northern Trust Company, as
evidenced by a Certificate of Merger Number 3485, dated October
1, 2011, and issued by the State of Illinois Department of
Financial and Professional Regulation (the “Certificate of

5

Merger”).3

Northern Trust argues that, pursuant to the merger,

The Northern Trust Company succeeds to all of the rights and
responsibilities of Northern Trust, NA, as well as all loans
formerly maintained by Northern Trust, NA.
Motion for Summary Judgment at 2, 7-8.]

[Mem. in Supp. of

To support this

assertion, Northern Trust relies upon the Affidavit of Elisa
Mangual, Senior Legal Counsel for Northern Trust.

Mangual states

that she “ha[s] personal knowledge of and [is] competent to
testify” as to the existence and terms of the mortgage, and that
as Senior Legal Counsel, she is “involved with negotiations,
drafting and strategic input” in connection with Northern Trust’s
mergers.

[Motion for Summary Judgment, Mangual Aff. at ¶¶ 1-2.]

Northern Trust argues that Wolfe’s failure to make the
full payment required under the Note and Mortgage, and Wolfe’s
failure to respond to due and proper demand for the payment of
the amounts owed, constitute default under the Note and Mortgage.
[Mem. in Supp. of Motion for Summary Judgment at 10-12.]
Northern Trust argues that it is entitled to foreclose upon its
first mortgage lien and its interest in the Property and that it
is entitled to its reasonable attorneys’ fees and costs
[Id. at 15-16.]

associated with the foreclosure.

3

Northern Trust provides a copy of the Certificate of
Merger as Exhibit A to the Affidavit of Elisa Mangual (“Mangual
Aff.”).
6

Northern Trust argues that Haw. Rev. Stat. §§ 667-1
through 667-4 provide for judicial foreclosure of a mortgage and,
based on the pleadings and submissions with the Motion for
Summary Judgment, Northern Trust has an enforceable claim.
Northern Trust also argues that there are no genuine issues of
material fact, and therefore it is entitled to judgment as a
matter of law.

In addition, Northern Trust requests the entry of

final judgment in its favor on the Complaint pursuant to Fed. R.
Civ. P. 54(b), and the entry of a separate judgment on the
Counterclaim pursuant to Fed. R. Civ. P. 58.
A.

[Id. at 18.]

Wolfe’s Opposition
In his memorandum in opposition, Wolfe first argues

that Northern Trust is not the proper party in this suit.

Wolfe

argues that Fed. R. Civ. P. 25(c) is not controlling because the
merger occurred before the Complaint was first served upon Wolfe.
As such, Wolfe argues that Rule 17 applies and Northern trust has
had more than enough time to “ratify, join or be substituted into
the action.”

Wolfe therefore argues that Northern Trust does not

have standing to prosecute the foreclosure action.

Wolfe

emphasizes that Northern Trust has still not provided the Court
with a copy of the merger agreement and has thus failed to cure
the defects pointed out by the Court in its 5/31/12 Order.

[Mem.

in Opp. to Motion for Summary Judgment at 3-4.]
Wolfe next appears to argue that the Court should deny

7

the Motion for Summary Judgment because of the claims in the
Amended Counterclaim.

With respect to his UDAP claim under Haw.

Rev. Stat. Chapter 480 (Count I), Wolfe makes several arguments.
Wolfe first argues that Kurt Nielson, the loan broker for the
transaction at issue, was an agent of Northern Trust.

Wolfe

claims that Northern Trust “vouched” for Nielson and told Wolfe
that he could rely on Nielson’s representation regarding the
loan.

[Id. at 4-5; Declaration of Kenneth I. Wolfe (“Wolfe

Decl.”) at ¶¶ 5-7.]

Wolfe further argues that the following

representations by Northern Trust created a likelihood of
confusion for a reasonable consumer: 1) Northern Trust
represented that Wolfe could obtain permanent financing without
having to re-qualify; and 2) Northern Trust represented that it
did not intend to foreclose.

Northern Trust failed to honor its

representations, and its actions constituted a “bait and switch”.
[Id. at 5.]

Wolfe argues that Northern Trust could have

mitigated the damages by selling the Mortgage Property, but
refused to do so.
injurious.”

Wolfe claims this was “unfair, oppressive and

[Id. at 5-6.]

Wolfe further claims that Northern Trust proceeded with
foreclosure “while evaluating Defendant’s request for
modification in violation of” the Home Affordable Modification
Program (“HAMP”) guidelines, and that this was an unfair and
deceptive practice.

[Id. at 7.]

Wolfe argues that Northern

8

Trust promised Wolfe that it would not foreclose, but did so
notwithstanding that promise and the promise of permanent
financing.

[Id. at 6.]

Wolfe argues that, in light of Northern

Trust’s violations of § 480-2, the Note and Mortgage are void
pursuant to Haw. Rev. Stat. § 480-12.

[Id. at 8-9.]

As to the unconscionability claim, Wolfe states that
this is a defense.

The unconscionable term was the false promise

to provide Wolfe with permanent financing without requalification.

[Id. at 9.]

As to the fraud and misrepresentation claim, the
fraudulent misrepresentations were the 2007 promise of permanent
financing without re-qualification and the 2010 representation
that Northern Trust was not going to foreclose.

Wolfe argues

that these promises were made recklessly and without the intent
to fulfill them.

[Id. at 9-10, Wolfe Decl. ¶ 8.]

As to the negligence claim, Wolfe asserts that Northern
Trust owed him a duty to be truthful when making representations
to solicit his business.

Wolfe argues that, when a bank makes

false promises to its customers, it exceeds its role as a mere
money lender.

Wolfe further argues that Northern Trust’s

agreement to undertake Wolfe’s loan modification review gave rise
to a duty of ordinary care in carrying out that review.

He

argues that the fact that there is no private right of action
under HAMP does not give Northern Trust a defense to a claim for

9

negligence.

[Id. at 10-11.]

Wolfe further argues that Northern Trust’s actions were
not in good faith, and he contends that there is a special
relationship in this case because of the public interest and the
fact that the loan agreement was a contract of adhesion.

Wolfe

argues that the Ninth Circuit has recognized, albeit in the
context of a Truth-in-Lending Act (“TILA”) violation, that all
consumers are inherently at a disadvantage in loan and credit
transactions.

Wolfe contends that this principle applies even

when the case does not involve a TILA violation.

[Id. at 11-12

(citing Semar v. Platte Valley Savings and Loan Ass’n, 791 F.2d
699, 705 (9th Cir. 1986)).]

Wolfe argues that he has corrected

the counterclaim to “properly allege agency,” and that, thus,
Northern Trust’s breach of good faith and fair dealing is a
defense to the Motion for Summary Judgment.
The promissory estoppel claim is based on Northern
Trust’s oral promises of that it would grant permanent financing
and that it would not foreclose.

Wolfe alleges he justifiably

relied on those promises to his detriment.

Wolfe argues that he

would not have entered into the transaction if not for the
promise of permanent financing without additional qualification
requirements.

Wolfe argues that his promissory estoppel claim is

a defense to the Motion for Summary Judgment.
Wolfe Decl. at ¶ 9.]

10

[Id. at 12-13;

Finally, Wolfe argues that the Roland Affidavit is
defective.

Wolfe argues that Roland does not explain why he is

competent to testify as to the amounts outstanding, does not say
that he routinely prepares pay-off statements, and does not
identify the records he reviewed.

Roland states that his

calculations were based on “review of the entire records and
files,” but Northern Trust only attached some records to its
Motion for Summary Judgment.

Further, Roland does not identify

who made the records, or how he knows that they had personal
knowledge of the information in the entries.
B.

[Id. at 14-15.]

Northern Trust’s Reply
In its reply in support of the Motion for Summary

Judgment (“Summary Judgment Reply”), Northern Trust argues that
Wolfe has not identified any genuine disputes as to material
facts in this case.

It emphasizes that Wolfe’s allegations of an

alleged oral forbearance agreement are barred by the statute of
frauds and were already dismissed by this Court with prejudice in
the 5/31/2012 Order.

[Id. at 4-5.]

Northern Trust further argues that Wolfe’s claim that
it lacks standing to foreclose is without merit.

Northern Trust

notes that Fed. R. Civ. P. Rule 17, upon which Wolfe relies, is
inapplicable in the instant case, where the interest was
transferred after the complaint was filed.
R. Civ. P. 25(c) is the relevant provision.

11

In such a case, Fed.
[Id. at 6 (citing 7C

C. Wright & A. Miller, Federal Practice and Procedure § 1958 at
553 (1986) (“If an interest has been transferred prior to
commencement of the suit Rule 17, . . . is controlling.

After

suit is brought, Rule 25(c) becomes the relevant provision.”)]
Northern Trust notes that under Rule 25(c) substitution is
permissive rather than mandated, and the fact that no
substitution was made does not affect Northern Trust’s
substantive right to foreclose under Hawai`i state law.

[Id. at

8-9.]
Northern Trust next addresses Wolfe’s argument that
failure to produce the merger agreement itself amounts to a
failure to prove that Northern Trust is the correct party to
litigate the foreclosure.

Northern Trust emphasizes that the

5/31/12 Order did not state that the merger agreement is
required, but rather stated that the Court needed evidence
regarding when the merger occurred and the terms thereof.
Northern Trust argues that the Mangual Affidavit sets forth
sufficient admissible evidence of the date and relevant terms of
the merger.

Mangual is competent to testify on such matters

because, as she states in her affidavit, she is Senior Legal
Counsel for Northern Trust.

[Id. at 10-11 (citing Mangual Aff.

at ¶¶ 1-4).]
As to Wolfe’s arguments regarding Roland’s lack of
personal knowledge about the documents and failure to identify

12

those who prepared the documents who did have personal knowledge
of them, Northern Trust argues that, in his capacity as Second
Vice-President, and consistent with FRCP Rule 56(c) and Federal
Rule of Evidence 803(6) regarding authentication of regularly
conducted activities, Roland confirms that all documents attached
to his affidavit are regularly kept business records made at or
near the time of such acts by someone with personal knowledge or
from information transmitted by someone with personal knowledge
thereof.

As such, Northern Trust has set forth admissible

evidence of the amounts owed by Wolfe under the Note and
Mortgage.

[Id. at 15-16 (citing Roland Aff. at ¶ 58(a)-(c)).]
Finally, Northern Trust reiterates that Wolfe has

failed to raise a genuine issue of material fact as to his
default and Northern Trust’s right to foreclose.

Northern Trust

reiterates that its claim is enforceable under the terms of the
Note and Mortgage and pursuant to Haw. Rev. Stat. §§ 667-1
through 667-4.
II.

[Id. at 16-17.]

Motion to Dismiss
In the Motion to Dismiss, Northern Trust argues that

Wolfe’s Amended Counterclaim makes essentially the same
allegations as the original Counterclaim, fails to address the
pleading deficiencies this Court noted in its 5/31/12 Order, and
fails to state a plausible claim for relief.

As such, Northern

Trust urges the Court to dismiss the Amended Counterclaim.

13

[Mem.

in Supp. of Motion to Dismiss at 2.]
Northern Trust first argues that Count I (UDAP) is not
sufficiently pled.

Wolfe’s UDAP claim appears to sound in fraud;

however, Count I does not satisfy the heightened pleading
requirements of Fed. R. Civ. P. 9(b).

Further, Wolfe has failed

to demonstrate that an agency relationship existed between Wolfe
and Northern Trust.

Wolfe does not allege that an oral or

written agreement existed between Northern Trust and Nielson,
thus failing to allege that Nielson was acting under the express
actual authority of Northern Trust.

[Id. at 12 (citing Cho Mark

Oriental Food Ltd. v. K & K Int’l, 73 Hawai`i 509, 515, 839 P.2d
1057, 1061 (1992)).]

Wolfe has also not alleged that Nielson

believed Northern Trust had authorized him to act on its behalf.
Any remaining allegations in Count I were already rejected by
this Court in the 5/31/12 Order.

To the extent the Amended

Counterclaim relies on the argument that Northern Trust breached
an alleged oral agreement not to foreclose, such a forbearance
agreement is subject to the statute of frauds, and any claims
relying on such allegations must fail as a matter of law and have
already been rejected by this Court in the 5/31/12 Order.
Northern Trust urges the Court to dismiss Count I with prejudice.
[Id. at 14-16.]
As to Count II, Northern Trust emphasizes that
unconscionability is not an affirmative claim for relief, but

14

merely a defense to the enforcement of a contract or other legal
claim.

Even if Wolfe only asserts unconscionability as a

defense, he has not identified the specific terms of the mortgage
that are unconscionable.

[Id. at 17-18.]

Northern Trust argues that Wolfe failed to plead Count
III (fraud and misrepresentation) with particularity.

Count III

is presumably based on the same insufficient allegations of
misrepresentations set forth in Count I.

The only allegedly

false representations identified in the Amended Counterclaim are
based upon the claim of an alleged breach of an oral forbearance
agreement that was previously dismissed by the Court with
prejudice.

[Id. at 19-20; Amended Counterclaim at ¶¶ 7, 20;

Wolfe, 2012 WL 1983339, at *12.]
Northern Trust argues that Count IV (negligence) fails
because the Amended Counterclaim merely reasserts the allegations
set forth in the original Counterclaim that was dismissed by this
Court.

Wolfe fails to establish that Northern Trust owed him a

duty of care, making only a conclusory allegation that “as agent
for both parties, Mr. Nielson and Plaintiff owed Defendant a
fiduciary duty as well as a general duty of ordinary care not to
make false representations.”
Counterclaim at ¶ 57).]

[Id. at 21 (quoting Amended

Lenders generally do not owe their

borrowers a duty of care because there is no fiduciary duty and
no duty sounding in negligence, and the Amended Counterclaim does

15

not set forth any allegations establishing an exception to these
general rules.

Northern Trust and Wolfe merely had an arms-

length business relationship.

[Id. at 22-24.]

Finally, even if

Wolfe could establish that Northern Trust owed him a duty, he
failed to sufficiently plead the remaining requirements of a
negligence claim.

Northern Trust therefore urges the Court to

dismiss Count IV.

[Id. at 25-26.]

As to Count V (breach of duty of good faith and fair
dealing), Northern Trust notes that this Court has previously
characterized similar claims for breach of duty of good faith and
fair dealing as claims for the tort of bad faith.

The Hawai`i

Supreme Court has recognized that, although there is an
obligation of good faith in the performance of commercial
contracts, the obligation does not create an independent cause of
action.

[Id. at 26-27 (citing Wolfe, 2012 WL 1983339, at *23).]

To the extent Wolfe’s claim in Count V is based on the alleged
oral forbearance agreement, this Court has already dismissed that
portion of the claim.

[Id.]

With respect to the portion of

Count V based upon Northern Trust’s failure to honor Nielson’s
promise that it would give Wolfe permanent financing, the Amended
Counterclaim fails to sufficiently plead an agency relationship
between Nielson and Northern Trust.
dismissed.

As such, Count V should be

[Id. at 27.]
As to Count VI (promissory estoppel), Northern Trust

16

argues that Wolfe has only alleged vague and indefinite promises
regarding future refinancing and the lack of foreclosure
proceedings.

The promises for a promissory estoppel claim must

be clear and unambiguous.

[Id. at 28-29 (citing Aguilar v.

International Longshoremen’s Union Local #10, 966 F.2d 443, 446
(9th Cir. 1992)).]
dismiss Count VI.
A.

Northern Trust therefore urges the Court to
[Id. at 29.]

Wolfe’s Opposition
Wolfe’s memorandum in opposition to the Motion to

Dismiss raises the same arguments as in his memorandum in
opposition to the Motion for Summary Judgment.
B.

Northern Trust’s Reply
In its reply in support of the Motion to Dismiss

(“Dismissal Reply”), Northern Trust argues that all of Wolfe’s
claims rely upon the same allegation that Spenser told Wolfe he
could rely upon Nielson, that Nielson and Spenser told Wolfe he
would get permanent financing when his loan terminated, and that
Nielson “was an agent of [Northern Trust.]”

[Dismissal Reply at

4-5 (citing Amended Counterclaim at ¶¶ 6, 7, 41, 46, 49, 55, 64,
69).]

First, Northern Trust reiterates that Wolfe has failed to

plead any facts demonstrating that Nielson was Northern Trust’s
agent, or that Wolfe conducted due diligence to ascertain whether
such an agency relationship existed.

[Id. at 5 (citing Cho Mark

Oriental Food Ltd., 73 Hawai`i at 518, 836 P.2d at 1063).]
17

Second, to the extent Wolfe’s claims rely upon the
breach of an alleged oral forbearance contract, this Court has
already found that any such agreement would be subject to the
statute of frauds and, thus, any claims relying upon such
allegations must fail as a matter of law.

[Id. at 6 (citing

Wolfe, 2012 WL 1983339, at *22.]
Third, Northern Trust argues that the only authority
cited in Wolfe’s Memorandum in Opposition to the Motion to
Dismiss in support of his negligence claim (Count IV) was
rejected by this Court in the 5/31/12 Order.

Specifically, in

the 5/31/12 Order, this Court stated that Hawai`i courts have
stated that only violations of Hawai`i law may constitute
evidence of negligence.

Wolfe has failed to allege any such

violations, or any authority supporting a negligence claim based
upon a violation of a federal statute or regulation that does not
provide for a private right of action.
2012 WL 1983339, at *21).

[Id. at 9 (citing Wolfe,

Northern Trust thus urges the Court to

grant the Motion to Dismiss.
DISCUSSION
I.

Motion for Summary Judgment
In the Motion for Summary Judgment, Northern Trust

argues that there are no genuine issues of material fact
regarding: Wolfe’s breach of the Note, Wolfe’s breach of the
Mortgage, and Northern Trust’s entitlement to relief under the
18

terms of those documents.

Northern Trust therefore argues that

it is entitled to judgment as a matter of law.

See Fed. R. Civ.

P. 56(a) (stating that summary judgment is warranted “if 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”).
A.

Northern Trust’s Merger
In the 5/31/12 Order, the Court found that it could not

make a ruling as to whether Northern Trust is the proper party to
litigate the claims at issue based on the evidence proffered by
Northern Trust.

Specifically, the Court found that, while the

Court could infer Shawn T. Roland’s personal knowledge and
competence to testify from his position, and could accept his
testimony that a merger occurred between Northern Trust, N.A. and
The Northern Trust Company, his statements did not specify when
the merger occurred or the terms thereof.
1983339, at *10-11.

Wolfe, 2012 WL

Without such information, the Court could

not make a ruling as to whether Northern Trust is the proper
party to foreclose.
To support the instant motion, Northern Trust relies
upon the affidavit of Elisa Mangual and a copy of the Certificate
of Merger issued by the State of Illinois Department of Financial
and Professional Regulation.
Mangual Aff., Exh. A.]

[Motion for Summary Judgment,

In her affidavit, Mangual asserts that

she has personal knowledge and can testify as to the existence

19

and terms of the merger because she is “Senior Legal Counsel
[for] The Northern Trust Company, as successor by merger to
Northern Trust, N.A.”

[Mangual Aff. at ¶ 1.]

Further, as Senior

Legal Counsel, Mangual states that her duties include “providing
regulatory advice regarding Northern Trust’s day to day
operations and mergers and acquisitions.

In connection with

Northern Trust’s mergers and acquisitions, [she is] involved with
negotiations, drafting and strategic input.”

[Id. at ¶ 2.]

Mangual’s “personal knowledge and competence to testify
are reasonably inferred from [her] position[] and the nature of
[her] participation in the matters to which [she] swore.”

See

Barthelemy v. Air Lines Pilots Ass’n, 897 F.2d 999, 1018 (9th
Cir. 1990); see also Fed. R. Civ. P. 56(c).

Based on Mangual’s

testimony and the copy of the Certificate of Merger provided with
her affidavit, this Court can accept that the merger occurred on
October 1, 2011.
Merger).]

[Mangual Aff. at ¶ 3, Exh. A (Certificate of

Further, in light of Mangual’s position as an attorney

for Northern Trust, this Court can accept Mangual’s testimony
that, “as the resulting bank, The Northern Trust Company succeeds
by operation of law to all the rights and responsibilities
arising from outstanding litigation involving Northern Trust,
N.A. [and] all loans formerly maintained by Northern Trust, N.A.”
[Id. at ¶ 4.]

20

Wolfe argues that, because Northern Trust has failed to
attach the merger agreement itself to the Motion for Summary
Judgment, the Court cannot determine the terms of the merger.

It

is true that Northern Trust has not produced a copy of the actual
merger agreement; however, the Court disagrees that the merger
agreement itself is the only way to prove the terms of the
merger.

See Home Sav. Of America, F.A. v. Lacher, 159 A.D.2d

235, 236, 552 N.Y.S.2d 214, 215 (N.Y.A.D. 1st Dep’t 1990)
(acknowledging that “ . . . a copy of the merger agreement, or
any official document, or an affidavit by anyone with personal
knowledge of the facts to attest to the merger” would be
sufficient to demonstrate that a merger occurred and the terms
thereof.)

In any event, Wolfe has failed to cite any authority

to support his assertion that Mangual’s affidavit is insufficient
to prove the existence, date, and terms of the merger.

As such,

because Mangual is competent to testify as to the date and terms
of the merger, Northern Trust need not produce an actual copy of
the merger agreement for purposes of the instant Motion for
Summary Judgment.
The Court therefore FINDS that Northern Trust is the
current holder of the Note and Mortgage and, thus, the proper
party to litigate the instant foreclosure.
The Court notes that Wolfe further appears to argue
that Northern Trust lacks standing because it failed to ratify,

21

join, or be substituted into the action in accordance with
Federal Rule of Civil Procedure 17(a).

Because the merger

occurred on October 1, 2011, after the complaint was filed on
August 20, 2011, [dkt. no. 1,] however, Federal Rule of Civil
Procedure 25(c) is controlling.

See 7C C. Wright & A. Miller,

Federal Practice and Procedure § 1958 at 553 (1986) (“If an
interest has been transferred prior to commencement of the suit
Rule 17 [is] controlling.

After suit is brought, Rule 25(c)

becomes the relevant provision.”).

Under Rule 25(c) substitution

is permissive, rather than mandated.

Thus, the fact that no

substitution was made does not affect Northern Trust’s right to
foreclose.
B.

Default
In its 5/31/12 Order, the Court found that there are no

genuine issues of material fact as to Wolfe’s default under the
terms of the Note and Mortgage.
13.

Wolfe, 2012 WL 1983339, at *12-

Wolfe does not contest that finding in his opposition or in

his Amended Counterclaim.

Thus, based on the record before the

Court, and for the reasons set forth in the 5/31/12 Order, the
Court FINDS that Wolfe is in default under the terms of the
Mortgage and the Note.
C.

Amounts Due and Decree of Foreclosure
The Motion for Summary Judgment seeks judgment in favor

of Northern Trust on all claims in the Complaint.
22

[Motion for

Summary Judgment at 2.]

The Complaint seeks, inter alia: 1) a

money judgment equal to “the total amount of all principal,
interest, advances, costs, expenses, attorneys’ fees, and late
fees, pursuant to the Note and Mortgage[;]” [Complaint at pgs. 45;] and 2) an order directing the sale of the Property and
directing the distribution of the proceeds of the sale, first to
the reasonable and necessary expenses of the sale, and then to
the payment of the amounts due to Northern Trust under the Note
and Mortgage [id. at pg. 5].
As evidence of the amount due, Northern Trust submits a
Pay-off Statement, dated August 6, 2012 and signed by Roland.

It

states that:
The payoff amount according to the business
records and files of [Northern Trust] as of August
6, 2012 . . . is as follows:
Principal Balance

$ 1,069,079.32

Unpaid Accrued Interest at 5%,
From 7/22/10 Through 8/30/11 $

59,311.93

Unpaid Interest Accrued at 8%,
From 8/31/11 Through 8/06/12 $

80,137.01

Total

$ 1,208,528.26

[Roland Aff., Exh. D (footnotes omitted).]
attorneys’ fees and other costs.

This amount excludes

[Id. at n.3.]

The Roland Affidavit states that the Pay-off Statement
“reflects the current amount due and owing to [Northern Trust]
under the Note and Mortgage.”

[Roland Aff. at ¶ 12.]
23

The Roland

Affidavit states that the amounts in the Pay-off Statement were
calculated based upon Roland’s “personal knowledge, review of the
Monthly Loan Statements, review of the Loan Ledger, and review of
the entire records and files kept in the ordinary course of
[Northern Trust’s] business in connection with the Loan and
servicing of said Loan.”

[Id.]

In addition, Northern Trust

submits (1) copies of Wolfe’s Loan Statements dated September 6,
2007 through September 3, 2010; and (2) a copy of the current
customer account activity statement (the “Loan Ledger”) for
Wolfe’s loan.

[Id. at ¶¶ 13-14, Exhs. E & F.]

The Court finds that Roland’s authentication of the
Pay-off Statement, Monthly Loan Statements, and Loan Ledger is
sufficient evidence of the amount outstanding under the Note and
Mortgage.

Fed. R. Civ. P. 56(c)(4) states: “An affidavit or

declaration used to support or oppose a motion must be made on
personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant or declarant is competent to
testify on the matters stated.”

In his affidavit, Roland states

that both the Monthly Loan Statements and the Loan Ledger are
“records of acts kept in the course of [Northern Trust’s]
regularly conducted business and are made at or near the time by
someone with personal knowledge or from information transmitted
by someone with personal knowledge thereof.”
13-14.]

[Roland Aff. at ¶¶

Roland further states he “serves as a custodian of

24

records responsible for keeping and maintaining” the Monthly Loan
Statements and the Loan Ledger.

[Id.].

This Court therefore

concludes that Northern Trust has established that Roland is
competent to testify as to the amounts outstanding under the Note
and Mortgage.

The Court thus FINDS that Northern Trust has

established the amounts outstanding under the Note and Mortgage,
as set forth in the Pay-off Statement.
In light of the foregoing, the Court finds that
Northern Trust has met its burden and established a prima facie
case that it is entitled to foreclose on the Mortgage.

See

Indymac Bank v. Miguel, 117 Hawai`i 506, 520, 184 P.3d 821, 835
(Ct. App. 2008) (explaining that a foreclosure decree is
appropriate where four material facts have been established: “(1)
the existence of the [loan] Agreement, (2) the terms of the
Agreement, (3) default by [mortgagor] under the terms of the
Agreement, and (4) the giving of the cancellation notice and
recordation of an affidavit to such effect”); see also Haw. Rev.
Stat. § 667–1 (providing for foreclosure by court action).
Under Hawai`i law, foreclosure proceedings are normally
bifurcated.

See, e.g., BNP Paribas VPG Brookline CRE, LLC v.

White Sands Estates, LLC, Civil No. 09–00191 JMS–BMK, 2012 WL
984890, at *3–4 (D. Hawai`i Mar. 22, 2012); City Bank v. Abad,
106 Hawai`i 406, 412–13, 105 P.3d 1212, 1218–19 (Haw. App. 2005)
(“[F]oreclosure cases are bifurcated into two separately

25

appealable parts: (1) the decree of foreclosure and the order of
sale, if the order of sale is incorporated within the decree; and
(2) all other orders.”) (quoting Sec. Pac. Mortg. Corp. v.
Miller, 71 Haw. 65, 70, 783 P.2d 855, 857 (1989)).
Here, the evidence is undisputed that Northern Trust is
entitled to the requested declaratory relief and an interlocutory
decree of foreclosure.

Northern Trust’s Motion for Summary

Judgment as to the Complaint Filed on August 30, 2011 is HEREBY
GRANTED.
The Court HEREBY DIRECTS Northern Trust to provide for
the Court’s approval and signature an appropriate Foreclosure
Decree setting forth the necessary terms and conditions to
effectuate the foreclosure process.

The parties are to meet and

confer in the selection of a proposed foreclosure Commissioner
with sufficient experience.

If the parties are unable to agree

on a foreclosure Commissioner, each party may propose a
foreclosure Commissioner and submit their name and
qualifications, and the Court will make the final selection of a
foreclosure Commissioner.

A proposed Foreclosure Decree and

foreclosure Commissioner should be provided to the Court by March
1, 2013.

II.

Motion to Dismiss
In the Motion to Dismiss, Northern Trust urges the

26

Court to dismiss each of the counts in the Amended Counterclaim
because Wolfe makes essentially the same allegations as the
original Counterclaim, fails to address the pleading deficiencies
this Court noted in its 5/31/12 Order, and fails to state a
plausible claim for relief.
U.S. 544, 570 (2007).

See Bell Atl. Corp. v. Twombly, 550

Further, to the extent that some of the

counts in the Amended Counterclaim sound in fraud, Wolfe has
failed to plead these counts with the required particularity.
See Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake.”).

The Court addresses each of the counts in

the Amended Counterclaim in turn.
A.

Count I - UDAP
Count I alleges:
The false representations as to the terms of the
loan as well as the loan application, the
misrepresentations regarding loan modification and
foreclosure, the failure to give documents timely,
and the excessive charges, all in connection with
the above-described extension of credit were
immoral, unethical, oppressive, unscrupulous, and
substantially injurious to [Wolfe] as a consumer,
in violation of H.R.S. Chapter 480.

[Amended Counterclaim at ¶ 44.]
First, Count I alleges that Kurt Nielson, the loan
broker Wolfe worked with, was an agent of Northern Trust.
Nielson represented that, when the term of the instant loan
terminated, Northern Trust would give Wolfe permanent financing

27

without requiring Wolfe to re-qualify.

[Id. at ¶ 7.]

This

district court has recognized:
In general, a lender is not liable for the
actions of a mortgage broker unless there “there
is an agency relationship between the lender and
the broker.” Gonzalez v. First Franklin Loan
Servs., 2010 WL 144862, at *13 (E.D. Cal. Jan. 11,
2010); see also Kennedy v. Wells Fargo Bank, N.A.,
2011 WL 3359785, at *2 n.5 (N.D. Cal. Aug. 2,
2011) (noting that mortgage broker is generally an
agent of the borrower, and not that of the lender,
unless there is an agency relationship); Mangindin
v. Wash. Mut. Bank, 637 F. Supp. 2d 700, 710 (N.D.
Cal. 2009) (explaining that “courts have rejected
a bright line rule that a mortgage broker may
never be the agent of a lender”).
Under Hawaii law, “[a]n agency relationship
may be created through actual or apparent
authority.” See [State v.] Hoshijo ex rel. White,
102 Hawai`i [307,] 318, 76 P.3d [550,] 561
[(2003)] (quoting Cho Mark Oriental Food, Ltd. v.
K & K Int’l, 73 Haw. 509, 515, 836 P.2d 1057, 1061
(1992)). To establish actual authority, there
must be “a manifestation by the principal to the
agent that the agent may act . . . , and may be
created by express agreement or implied from the
conduct of the parties or surrounding
circumstances.’” Id. (quoting State Farm Fire &
Cas. Co. v. Pac. Rent–All, Inc., 90 Hawai`i 315,
325, 978 P.2d 753, 763 (1999)). In comparison,
“[a]pparent authority arises when ‘the principal
does something or permits the agent to do
something which reasonably leads another to
believe that the agent had the authority he was
purported to have.’” Cho Mark Oriental Food,
Ltd., 73 Haw. at 515, 836 P.2d at 1061 (quoting
Hawaiian Paradise Park Corp. v. Friendly Broad.
Co., 414 F.2d 750, 756 (9th Cir. 1969)).
Menashe v. Bank of New York, Civil No. 10-00306 JMS/BMK, 2012 WL
397437, at *11 (D. Hawai`i Feb. 6, 2012) (some alterations in
Menashe).

28

To support his claim that an agency relationship
existed between Northern Trust and Nielson, Wolfe states in the
Amended Counterclaim that, in an August 2007 telephone
conversation with Donna Spencer, “an employee of [Northern Trust]
and [Northern Trust’s] lead broker on the subject loan,” Spencer
“confirmed that Kurt Nielson was a good friend of hers, a ‘good
guy’, and a ‘high quality’ person, that the bank had done a lot
of business with him and that [Wolfe] could rely on him and on
what he said, in general, and particularly regarding the subject
loan.”

[Amended Counterclaim at ¶¶ 5-6.]

Wolfe further claims

that Spencer repeated these statements about Nielson in
subsequent telephone conversations during “the fall of 2008 and
winter of 2009,” and that Spencer “thereby ratified the promises
of Mr. Nielson and ratified the agency relationship between
Mr. Nielson and [Northern Trust.]”

[Id. at ¶ 19.]

These bare allegations, however, fail to state facts
“plausibly suggesting that any type of agency relationship
existed between” Northern Trust and the loan broker.
Menashe, 2012 WL 397437 at *11.

See

The mere fact that a Northern

Trust employee called Nielson a “good guy” and told Wolfe that he
could “rely on him” is simply not enough to establish the actual
or apparent authority required to demonstrate an agency
relationship.

See Hoshijo ex rel. White, 102 Hawai`i at 318, 76

29

P.3d at 561.

Thus, the Court FINDS that Wolfe has failed to

adequately allege an agency relationship between Northern Trust
and Nielson, and therefore must dismiss Count I to the extent
that it relies upon alleged misrepresentations by Nielson.
The remainder of Count I is based upon Wolfe’s attempt
to modify the loan after the Note matured.

These allegations are

unchanged from those rejected by this Court in its 5/31/12 Order.
As this Court found in the 5/31/12 Order, nothing in Wolfe’s
Amended Counterclaim indicates that Northern Trust exceeded its
conventional role as a money lender.

Thus, the portions of Count

I based on representations or demands that Northern Trust made
when Wolfe sought to modify his loan also fail for the reasons
stated in the 5/31/12 Order.

See Wolfe, 2012 WL 1983339, at *16-

17.
This Court therefore GRANTS the Motion to Dismiss as to
Count I.
B.

The dismissal is WITH PREJUDICE.
Count II - Unconscionability
Count II of the Amended Counterclaim relies on the same

allegations set forth in Wolfe’s original Counterclaim, with the
additional conclusory allegation, discussed above, that Nielson
was an agent of Northern Trust.
48.]

[Amended Counterclaim at ¶¶ 47-

Wolfe alleges that Northern Trust obtained his mortgage

under false pretenses and that Northern Trust made unreasonable
demands when he tried to modify his loan.

30

As this Court found in

its 5/31/12 Order, Wolfe has failed to allege a plausible
independent claim for relief based on unconscionability.

See

Wolfe, 2012 WL 1983339, at *17-18; see also Phillips v. Bank of
Am., Civil No. 10-00551 JMS-KSC, 2011 WL 240813, at *12 (D.
Hawai`i Jan. 21, 2011) (stating that unconscionability is
generally a defense to the enforcement of a contract, and is not
a proper claim for affirmative relief); Skaggs v. HSBC Bank USA,
N.A., 2010 WL 5390127, at *3 (D. Hawai`i Dec. 22, 2010)
(dismissing a “claim” for unconscionability because it challenged
only conduct such as “obtaining mortgages under false pretenses
and by charging Plaintiff inflated and unnecessary charges,” and
“failing to give Plaintiff required documents in a timely
manner,” and not any specific contractual term).
This Court therefore GRANTS the Motion to Dismiss as to
Count II.
C.

Count II is dismissed WITH PREJUDICE.
Count III - Fraud and Misrepresentation
Count III alleges:
50. At all times relevant herein, Kurt
Nielson was an agent of [Northern Trust] for
purposes of this transaction, and his
representations were ratified by [Northern Trust.]
51. During the calendar years 2007 and 2010,
[Northern Trust] made numerous false
representations to [Wolfe] as described in the
FACTS above.
52. [Northern Trust] knew or should have
known that the (sic) these representations were
false and misleading, and that [Wolfe] would rely
on these representations and failures to his
detriment.
53. [Wolfe] did rely on these
31

representations to his detriment, and was
justified in his reliance.
54. As a result, [Wolfe] has been damaged in
an amount to be proved at trial.
[Counterclaim at pg. 8.]

In spite of the allegation of

“numerous” misrepresentations, the only allegedly false
representations identified in the Counterclaim are: Nielson’s
representation that Wolfe would receive permanent financing
without having re-qualify, and Northern Trust’s representation
that it could work out a new loan with Wolfe because it did not
intend to foreclose.

[Id. at ¶¶ 7, 20.]

This is merely a

reassertion of the same allegations dismissed by this Court in
the 5/31/12 Order.
As to the portions of Count III that are based upon
Northern Trust’s alleged breach of an oral forbearance agreement,
this Court dismissed all such claims as barred by the statute of
frauds in the 5/31/12 Order.

See Wolfe, 2012 WL 1983339, at *22.

As to the remaining portion of Count III, based upon
the alleged oral promises made by Nielson, as this Court stated
in the 5/31/12 Order, the false statements forming the basis of a
fraud claim cannot be predicated on statements that are
promissory in nature, and “must relate to a past or existing
material fact.”

Id. at *19 (quoting Joy A. McElroy, M.D., Inc.

v. Maryl Group, Inc., 107 Hawai`i 423, 433, 114 P.3d 929, 939
(Ct. App. 2005)).
Wolfe has failed to cure the defects identified by this
32

Court in the 5/31/12 Order, and again makes only conclusory
allegations lacking the particularity required for allegations of
fraud.

See Shroyer v. New Cingular Wireless Servs., Inc., 622

F.3d 1035, 1042 (9th Cir. 2010).
This Court therefore GRANTS the Motion to Dismiss as to
Count III.

D.

The dismissal is WITH PREJUDICE.

Count IV - Negligence
Count IV alleges that: Northern Trust was negligent in

making the previously described representations; Kurt Nielson was
a dual agent of both Northern Trust and Wolfe; during calendar
years 2007 through 2010 Northern Trust made numerous false
representations; Northern Trust and Nielson owed Wolfe a
fiduciary duty; Wolfe relied on the previously described
representations; Northern Trust owed Wolfe a duty of ordinary
care in processing his request for loan modification; and
Northern Trust had a duty under HAMP guidelines not to go forward
with foreclosure proceedings while it was evaluating Wolfe’s loan
modification; and Northern Trust’s breach of these duties caused
Wolfe to suffer damages.

[Counterclaim at ¶¶ 56-63.]

As previously stated, Wolfe has not presented a
plausible basis for his claim that Nielson was Northern Trust’s
agent.

He therefore cannot maintain a negligence claim against

Northern Trust based on representations that Nielson allegedly

33

made.

Further, as this Court stated in its 5/31/12 Order,

Northern Trust’s alleged representations that it would work out a
new loan with Wolfe and that it did not intend to foreclose
occurred in the course of Northern Trust’s consideration of
Wolfe’s loan modification application, a transaction that
occurred within the scope of Northern Trust’s conventional role
as a money lender.

Wolfe’s Amended Counterclaim fails to

sufficiently allege that Northern Trust owed him a duty of care
as to the alleged negligent misrepresentations during the loan
modification process.

See Wolfe, 2012 WL 1983339, at *20.

Wolfe’s argument that the Ninth Circuit has recognized,
in the context of a TILA violation, that all consumers are
inherently at a disadvantage in loan and credit transactions, and
that this principle should apply even in non-TILA cases, while
imaginative, is likewise unpersuasive.

Wolfe fails to cite a

single authority supporting the proposition that this principle
should be expanded and applied outside the TILA context.
As such, and for the reasons stated in this Court’s
5/31/12 Order, Wolfe’s negligence claim must fail.

This Court

therefore GRANTS the Motion to Dismiss as to Count IV and
dismisses Count IV WITH PREJUDICE.
F.

Count V - Good Faith and Fair Dealing
Count V alleges that Nielson acted as an agent of

Northern Trust, and that every contract imposes an implied duty

34

of good faith and fair dealing on the parties to the contract.
Wolfe alleges that Northern Trust violated its duty of good faith
and fair dealing, causing Wolfe to suffer damages.
at ¶¶ 65-67.]

[Counterclaim

Count V does not clearly state which of Northern

Trust’s actions constituted a breach of its duty of good faith
and fair dealing.
This district court has characterized similar claims as
attempts to allege claims for the tort of bad faith.

See, e.g.,

Phillips v. Bank of Am., Civil No. 10–00551 JMS–KSC, 2011 WL
240813, at *5 (D. Hawai‘i Jan. 21, 2011) (citing Best Place v.
Penn Am. Ins. Co., 82 Haw. 120, 128, 920 P.2d 334, 342 (1996)
(adopting tort of bad faith for breach of implied covenant of
good faith and fair dealing in an insurance contract)).

While

commercial contracts generally involve an obligation of good
faith in their performance and enforcement, this district court
has made clear that the obligation does not give rise to an
independent cause of action outside the insurance contract
context.

See Stoebner Motors, Inc. v. Automobili Lamborghini

S.P.A., 459 F. Supp. 2d 1028, 1037-38 (D. Hawai`i 2006).
Wolfe has failed to cure the defects in this claim set
forth in this Court’s 5/31/12 Order; the Amended Counterclaim is
unchanged except for the addition of the conclusory allegation
that Nielson acted as an agent to Northern Trust.

The Court

therefore GRANTS the Motion to Dismiss as to Count VI for the

35

foregoing reasons and the reasons set forth in the 5/31/12 Order.
Count V is DISMISSED WITH PREJUDICE.
G.

Count VI - Promissory Estoppel
Count VI reiterates the allegation that Nielson acted

as Northern Trust’s agent and alleges that Northern Trust “made
numerous promises to [Wolfe], including, but not limited to, the
promise that it would refinance his loan when it came due and
would not institute foreclosure proceedings.”
Counterclaim at ¶ 71.]

[Amended

Count VI alleges that Wolfe justifiably

relied on these promises to his detriment and that Northern Trust
failed to honor these promises, causing Wolfe to suffer damages.
[Id. at ¶¶ 72-73.]
As previously stated, Wolfe failed to plead a plausible
basis for his claim that there was an agency relationship between
the loan broker and Northern Trust.

Wolfe’s allegations in Count

VI are otherwise identical to the allegations in his promissory
estoppel claim that this Court previously dismissed in its
5/31/12 Order.

Thus, for the reasons stated in the 5/31/12

Order, Wolfe’s promissory estoppel claim fails.
This Court therefore GRANTS the Motion to Dismiss as to
Count VI and dismisses Count VI WITH PREJUDICE.
To the extent that there are allegations in the Amended
Counterclaim which this Court has not specifically addressed, the
Court finds that those allegations do not provide sufficient

36

support for the counts in the Amended Counterclaim to survive the
Motion to Dismiss.
III. Rule 56(d) Continuance
Finally, the Court notes that during the hearing on
January 22, 2013, counsel for Wolfe requested that the Court
grant an extension of time for Wolfe to respond to the instant
motions.

Counsel explained that a large number of new documents

were turned over by Northern Trust after Wolfe’s oppositions to
the instant motions were due.

This request for a continuance was

apparently made pursuant to Federal Rule of Civil Procedure
56(d).
Rule 56(d), formerly Rule 56(f), permits a court to
continue a summary judgment motion when a “nonmovant shows by
affidavit or declaration that, for specified reasons, it cannot
present facts essential to justify its opposition.”

A party

requesting a Rule 56(d) continuance bears the burden of (1)
filing a timely application that specifically identifies relevant
information; (2) demonstrating that there is some basis to
believe that the information sought exists; and (3) establishing
that such information is essential to resist the summary judgment
motion.

See Employers Teamsters Local Nos. 175 & 505 Pension

Trust Fund v. Clorox Co., 353 F.3d 1125, 1130 (9th Cir. 2004).
Wolfe requests a continuation of the motions to allow
him time to review the documents, some of which he claims may

37

contain statements by Spencer related to the issue of whether
Nielson was acting as an agent for Northern Trust.

As a

preliminary matter, this Court notes that, by the rule’s own
terms, a continuation under Rule 56(d) is only available for the
Motion for Summary Judgment, and not the Motion to Dismiss.

As

to the Motion for Summary Judgment, Wolfe has failed to establish
that the newly produced documents are essential to opposing the
summary judgment motion; there is no indication that granting
Wolfe’s motion for a continuance would allow for discovery of
evidence that would give rise to disputed issues of material fact
in the instant case.

As such, this Court DENIES Wolfe’s request

for a Rule 56(d) continuance.
CONCLUSION
On the basis of the foregoing, Northern Trust’s Motion
for Summary Judgment as to the Complaint Filed August 30, 2011,
Interlocutory Decree of Foreclosure, and Order of Sale, filed
August 15, 2012, is HEREBY GRANTED, and Northern Trust’s Motion
to Dismiss Defendant Kenneth I. Wolfe’s First Amended
Counterclaim Filed on September 6, 2012, filed September 27,
2012, is HEREBY GRANTED.

The Court DISMISSES all of the counts

in the Amended Counterclaim WITH PREJUDICE.
As stated above, Northern Trust is directed to provide
a proposed Foreclosure Decree and foreclosure Commissioner to the
Court by March 1, 2013.

38

IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, January 31, 2013.

/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

NORTHER TRUST, NA V. KENNETH I. WOLFE; CIVIL NO. 11-00531 LEK;
ORDER GRANTING NORTHER TRUST’S MOTION FOR SUMMARY JUDGMENT AS TO
THE COMPLAINT, INTERLOCUTORY DECREE OF FORECLOSURE, AND ORDER OF
SALE AND GRANTING NORTHER TRUST’S MOTION TO DISMISS DEFENDANT
KENNETH I. WOLFE’S FIRST AMENDED COUNTERCLAIM

39