Sigwart v. U.S. Bank National Association et al
Filing
31
ORDER DENYING THE LAW OFFICE OF DAVID B. ROSEN, A LAW CORPORATION, AND DAVID B. ROSEN'S MOTION TO INTERVENE re 26 . Signed by JUDGE LESLIE E. KOBAYASHI on 05/30/2014. (eps)CERTIFICATE OF SERVICEPartici pants 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
JULIE M. SIGWART,
Individually and as Trustee
of the Revocable Living Trust
Dolphin Star Trust Dated
December 10, 2003,
)
)
)
)
)
)
)
Plaintiff,
)
)
vs.
)
)
U.S. BANK NATIONAL
)
ASSOCIATION, also known as
)
U.S. BANK N.A., a national
)
banking association; and
)
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., a )
)
Delaware corporation,
)
)
Defendants.
_____________________________ )
CIVIL 13-00529 LEK-RLP
ORDER DENYING THE LAW OFFICE OF DAVID B. ROSEN, A LAW
CORPORATION, AND DAVID B. ROSEN’S MOTION TO INTERVENE
Before the Court is the Law Office of David B. Rosen, a
Law Corporation (“Rosen Firm”), and David B. Rosen’s (“Rosen,”
collectively “Movants”) Motion to Intervene (“Motion”), filed on
April 11, 2014.
[Dkt. no. 26.]
Plaintiff Julie M. Sigwart
(“Plaintiff”) filed her memorandum in opposition on April 22,
2014, and Movants filed their reply on April 25, 2014.1
nos. 28, 30.]
[Dkt.
The Court finds this matter suitable for
disposition without a hearing pursuant to Rule LR7.2(d) of the
1
On April 22, 2014, Defendants U.S. Bank National
Association (“U.S. Bank”) and Mortgage Electronic Registration
Systems, Inc. (“MERS,” collectively “Defendants”) filed their
statement of no position regarding the Motion. [Dkt. no 29.]
Local Rules of Practice of the United States District Court for
the District of Hawai`i (“Local Rules”).
After careful
consideration of the Motion, supporting and opposing memoranda,
and the relevant legal authority, Movants’ Motion is HEREBY
DENIED for the reasons set forth below.
BACKGROUND
On March 31, 2014, this Court issued its Order Granting
Defendants’ Motion to Dismiss Complaint (“3/31/14 Order”).
no 25.2]
[Dkt.
Plaintiff’s Complaint consists of a single count for
violation of the Hawai`i Unfair and Deceptive Acts and Practices
(“UDAP”) law, and alleges that Defendants were vicariously liable
for the fraudulent foreclosure practices of Defendants’ agent,
the Rosen Firm, in foreclosing on Plaintiff’s property.
In the
3/31/14 Order, the Court dismissed the Complaint without
prejudice, finding that Plaintiff’s theory of damages was too
vague to state a claim.
2014 WL 1322813, at *10-11.
The Court
found, however, that Plaintiff’s allegation that the Rosen Firm
placed the auction date only twenty-eight days after the first
notice – instead of the required twenty-nine days – in over
seventy-five percent of the U.S. Bank foreclosures it handled
(“the 28-Day Practice”) stated a claim for violation of Haw. Rev.
Stat. § 667-7 (2008).
Id. at *8-9.
2
In the Motion, Movants
The 3/31/14 Order is also available at 2014 WL 1322813.
Defendants filed their motion to dismiss on January 10, 2014.
[Dkt. no. 11.]
2
attempt to intervene for the sole purpose of asking the Court to
reconsider its finding regarding the 28-Day Practice.
[Motion at
2.]
Plaintiff’s attorneys are litigating two cases in state
court against Movants, Sigwart v. Law Office of David B. Rosen,
et al., Civil No. 13-12097-07 ECN (“Sigwart v. Rosen”), and
Hungate v. Law Office of David B. Rosen, Civil No. 13-1-2146-08
RAN (“Hungate”), alleging that Movants violated the UDAP statute
and Haw. Rev. Stat. Chapter 667 by, inter alia, engaging in the
28-Day Practice.
[Motion, Decl. of David B. Rosen (“Rosen
Decl.”)3, Exhs. 1, 2 (complaints).]
On October 29, 2013, the
Circuit Court of the First Circuit, State of Hawai`i (“circuit
court”) dismissed the complaint in Sigwart v. Rosen, finding that
the plaintiffs lacked standing to pursue the UDAP claim.
Decl., Exh. 3 (order) at 2.]
[Rosen
On November 5, 2014, the circuit
court also dismissed the Hungate complaint, but found that
“[w]ith respect to the HRS Chapter 667 claims, based on the
allegations in the Complaint, the Rosen Defendants complied with
the requirements of HRS §§ 667-5 and -7 as a matter of law.”
3
There are two nearly identical Rosen declarations included
in Movants’ filing. The first is the declaration to the Motion,
which attaches, as Exhibit A, the proposed motion for
reconsideration (“the Proposed Motion”). The Proposed Motion
also includes a proposed Rosen declaration. The exhibits to
these declarations (other than Exhibit A) are identical. In this
Order the Court’s citations to specific paragraphs refer to the
declaration attached directly to the Motion.
3
[Rosen Decl., Exh. 4 (order) at 2.]
appeal.
Both decisions are on
Movants are attempting to intervene in this case to, in
essence, avoid inconsistent judgments between the state courts
and this Court on the 28-Day Practice.
They may only do so,
however, if they have a right to intervene.
STANDARD
Movants bring the Motion under Fed. R. Civ. P. 24(a)(2)
for intervention as of right.4
Rule 24(a) states, in pertinent
part,
On timely motion, the court must permit anyone to
intervene who:
. . .
(2) claims an interest relating to the
property or transaction that is the subject
of the action, and is so situated that
disposing of the action may as a practical
matter impair or impede the movant’s ability
to protect its interest, unless existing
parties adequately represent that interest.
To intervene, a movant must prove that it meets the
following four elements:
(1) the intervention application is timely;
(2) the applicant has a significant protectable
interest relating to the property or transaction
that is the subject of the action; (3) the
disposition of the action may, as a practical
4
Movants do not seek to intervene under Fed. R. Civ. P
24(b), and thus the Court does not consider permissive
intervention. See United States v. Alisal Water Corp., 370 F.3d
915, 920 n.4 (9th Cir. 2004) (refusing to analyze permissive
intervention where proposed intervenor “could have applied for
permissive intervention, . . . but did not do so”).
4
matter, impair or impede the applicant’s ability
to protect its interest; and (4) the existing
parties may not adequately represent the
applicant’s interest.
Citizens for Balanced Use v. Mont. Wilderness Ass’n, 647 F.3d
893, 897 (9th Cir. 2011).
These requirements should be “broadly
interpreted in favor of intervention.”
Id. (citation omitted).
DISCUSSION
I.
The Motion Is Timely
“Timeliness is a flexible concept; its determination is
left to the district court’s discretion.”
370 F.3d at 921 (citation omitted).
Alisal Water Corp.,
In determining the
timeliness of a motion to intervene, courts look to “(1) the
stage of the proceeding, (2) the prejudice to other parties, and
(3) the reason for and length of the delay.”
Day v. Apoliona,
505 F.3d 963, 965 (9th Cir. 2007) (citation and internal
quotation marks omitted).
These factors also apply to limited-
purpose motions to intervene.
Empire Blue Cross & Blue Shield v.
Janet Greeson’s A Place For Us, Inc., 62 F.3d 1217, 1219 (9th
Cir. 1995).
“A would-be intervenor’s delay in joining the
proceedings is excusable when the intervenor does not “‘know[] or
ha[ve] reason to know that his interests might be adversely
affected by the outcome of litigation.’”
Day, 505 F.3d at 965
(alterations in Day) (quoting Alisal Water Corp, 370 F.3d at
923).
Prejudice is the “most important consideration in deciding
5
whether a motion to intervene is timely.”
Miller v. Ghirardelli
Chocolate Co., No. C 12-04936 LB, 2013 WL 6776191, at *6 (N.D.
Cal. Dec. 20, 2013) (citing United States v. Or., 745 F.2d 550,
552 (9th Cir. 1984)).
Here, Movants filed the Motion in an early stage of the
litigation, for the limited purpose of challenging the 3/31/14
Order, within fourteen days of the issuance of that order.
This
was before the period for reconsideration of the 3/31/14 Order
lapsed, see Local Rule LR60.1, and before the deadline set by the
Court for Plaintiff to amend her Complaint, see 2014 WL 1322813,
at *12.
Rosen claims that he did not know about this lawsuit
until February 26, 2014 – two days after Defendants filed their
reply to the motion to dismiss – and thus there was a reason for
the delay.
¶ 11).5]
[Mem. in Supp. of Motion at 12 (citing Rosen Decl. at
Finally, Plaintiff does not argue, and the Court does
not see any indication, that the delay prejudiced her.
For these
reasons, the Court FINDS that the Motion is timely.
5
“‘[C]ourts are to take all well-pleaded, nonconclusory
allegations in the motion to intervene, the proposed complaint or
answer in intervention, and declarations supporting the motion as
true absent sham, frivolity or other objections.’” Syngenta
Seeds, Inc. v. Cnty. of Kauai, No. Civ. 14-00014BMK, 2014 WL
1631830, at *3 (D. Hawai`i Apr. 23, 2014) (quoting Sw. Ctr. for
Biological Diversity v. Berg, 268 F.3d 810, 820 (9th Cir. 2001)).
6
II.
Impairment of a Significant Protectable Interest6
“To demonstrate a significant protectable interest, an
applicant must establish that the interest is protectable under
some law and that there is a relationship between the legally
protected interest and the claims at issue.”
Citizens for
Balanced Use, 647 F.3d at 897 (citation omitted).
A movant “need
not show that the interest he asserts is one that is protected by
statute under which litigation is brought.
It is enough that the
interest is protectable under any statute.”
Alisal Water Corp.,
370 F.3d at 919 (citation and internal quotation marks omitted).
The interest, however, may not be “several degrees removed” from
the “backbone of [the] litigation.”
Id. at 920.
Where a court finds that a proposed intervenor has a
significant protectable interest, it may “have little difficulty
concluding that the disposition of [the] case may, as a practical
matter, affect it.”
Cal. ex rel. Lockyer v. United States, 450
F.3d 436, 442 (9th Cir. 2006).
“‘If an absentee would be
substantially affected in a practical sense by the determination
made in an action, he should, as a general rule, be entitled to
intervene . . . .’”
Citizens for Balanced Use, 647 F.3d at 898
6
Since these elements are often intertwined, it is proper
to consider them together. See, e.g., Greene v. United States,
996 F.2d 973 (9th Cir. 1993) (analyzing interest and impairment
elements together); United States v. State of Or., 839 F.2d 635
(9th Cir. 1988) (considering impairment and adequacy of
representation together).
7
(alteration in Citizens) (some citations omitted) (quoting Fed.
R. Civ. P. 24 advisory committee note).
But even if the lawsuit
affects the “proposed intervenors’ interests, their interests
might not be impaired if they have other means to protect them.”
Lockyer, 450 F.3d at 442 (emphasis in Lockyer) (citation and
internal quotation marks omitted).
Movants appear to argue that their significant
protectable interest in this case is avoidance of an adverse
ruling on the 28-Day Practice that could have a “persuasive stare
decisis effect” on the plaintiffs’ appeals in the state cases
against them.
[Mem. in Supp. of Motion at 9-10; Reply at 4-5.]
While this Court acknowledges it must “broadly interpret”
Movants’ significant protectable interest “in favor of
intervention,” see Citizens for Balanced Use, 647 F.3d at 897,
Movants’ interest is too attenuated to permit intervention.
First, as a jurisdictional point, the 3/31/14 Order will have no
binding stare decisis effect on the state cases (or any similar
state cases).
Even where a Hawai`i state court confronts an
issue of federal law or an issue of Hawai`i law that is analogous
to federal law, federal court decisions are not binding.
See,
e.g., Arquero v. Hilton Hawaiian Vill. LLC, 104 Hawai`i 423, 430,
91 P.3d 505, 512 (2004) (“Of course, a federal court’s
interpretation of Title VII is not binding on this court’s
interpretation of civil rights laws adopted by the Hawai`i
8
legislature.” (citation omitted)).
Here, the question of whether
the 28-Day Practice violates § 667-7 is a pure state law
question, so this Court’s decisions would have even less effect.
See, e.g., AlohaCare v. Ito, 126 Hawai`i 326, 349 n.40, 271 P.3d
621, 644 n.40 (2012) (“the decisions of federal courts on matters
of state law are not dispositive”).
Thus, Movants do not have a
significant interest.
Second, even if Movants’ “persuasive stare decisis”
interest was significant, the cases that Movants selectively
quote do not apply to the facts and procedural posture of this
case.
Those opinions recognize that, in cases addressing federal
remedial schemes, intervention may be proper where disposition of
the case without the intervenor could significantly limit the
intervenor’s access to the remedy, or directly undermine earlier
federal court decisions establishing the remedial rights.
In United States v. State of Oregon, 839 F.2d 635 (9th
Cir. 1988) (“Oregon”), the Ninth Circuit reversed the denial of a
motion to intervene by residents of the Fairview Training Center
in a case brought by the United States Attorney General,
challenging the conditions of that same mental institution.
The
court based its decision on two grounds: (1) since the case
directly involved conditions at the residents’ institution it
would “of necessity result in factual and legal determinations
concerning the nature of those conditions” and thus have a
9
“persuasive stare decisis effect in any parallel or subsequent
litigation”; and (2) because the case dealt with a plan that
allocated limited Oregon state funds, denying intervention would
limit resident’s ability to influence the allocation of the
funds.
Id. at 638-39.
Thus, the Ninth Circuit held that the
residents were not adequately represented by the government and
denial would practically impair the residents interests “after
the court-ordered equitable remedies [were] in place.”
Id. at
639.
In Greene v. United States, 996 F.2d 973 (9th Cir.
In that case,
1993), the Ninth Circuit refused to extend Oregon.
the Tulalip tribe attempted to intervene in a dispute between the
Samish tribe and the Department of the Interior regarding federal
recognition of the Samish.
The Tulalip argued that factual
determinations made in the Samish case would threaten Tulalip
treaty fishing rights and earlier federal court cases recognizing
and overseeing those rights.
Id. at 976-78.
The Ninth Circuit
found those “stare de effects” arguments “unpersuasive” since the
Tulalip tribe was party to the other “ongoing” cases and “the
Tulalip’s interest in preserving the favorable effects of stare
decisis is too speculative to warrant intervention.”
Id. at 977.
Oregon and Greene do not support Movants’ arguments.
They clarify that the stare decisis interest only applies in
federal cases determining federal remedial rights.
10
On the other
hand, Movants’ alleged interest is based on state statutory law,
and has nothing to do with a federal remedial scheme.
See
Oregon, 839 F.2d at 639 (limiting stare decisis interest to cases
dealing with “court-ordered equitable remedies” like
desegregation and hazardous waste clean up).
Thus, denying
intervention does not limit Movants’ ability to claim rights in
future litigation.
Further, as in Greene, Movants are actually
parties to the underlying cases where they fear stare decisis
could apply, and thus they can freely litigate their rights
there.
See Greene, 996 F.2d at 977 (finding there could be no
“stare decisis effect” on underlying cases because “the Tulalip
are already parties”).
Similarly, Movants’ interest is “too
speculative to warrant intervention.”
See id. at 977.
For these
reasons, Movants do not have a protectable interest that denial
of the Motion would impair.
III. Adequate Representation
Although Movants’ failure to identify a significant
protectable interest is fatal to the Motion, for the sake of
completeness, the Court now discusses adequacy of representation
as well.
“The burden of showing inadequacy of representation is
minimal and satisfied if the applicant can demonstrate that
representation of its interests may be inadequate.”
Citizens for
Balanced Use, 647 F.3d at 898 (internal quotation marks and
11
citation omitted).
“The most important factor in determining the
adequacy of representation is how the interest compares with the
interests of existing parties.”
1078, 1086 (9th Cir. 2003).
Arakaki v. Cayetano, 324 F.3d
“Where the party and the proposed
intervenor share the same ultimate objective, a presumption of
adequacy of representation applies, and the intervenor can rebut
that presumption only with a compelling showing to the contrary.”
Perry v. Proposition 8 Official Proponents, 587 F.3d 947, 951
(9th Cir. 2009) (internal quotation marks and citation omitted).
In considering whether the proposed intervenor rebuts
the presumption, courts consider “(1) whether the interest of a
present party is such that it will undoubtedly make all of a
proposed intervenor’s arguments; (2) whether the present party is
capable and willing to make such arguments; and (3) whether a
proposed intervenor would offer any necessary elements to the
proceeding that other parties would neglect.”
(citation omitted).
Id. at 952
“[M]ere [] differences in [litigation]
strategy . . . are not enough to justify intervention as a matter
of right.”
Id. at 954 (some alterations in Perry) (citations
omitted).
Movants concede that they and Defendants share the same
ultimate objective, [Mem. in Supp. of Motion at 12,] and thus the
presumption of adequacy applies.
Movants argue, however, that
their interests “are not perfectly aligned” since Defendants did
12
not work with Movants on the briefing and did not “make all of
the relevant arguments” that Movants complied with § 667-7.
at 12-13.]
[Id.
Movants’ arguments are insufficient to compel a
finding that they are inadequately represented.
Movants admit
that Defendants did “address the merits” of the 28-Day Practice
claim and describe three different arguments Defendants made,
based on case law, the plain language of the statute, and
statutory interpretation regarding time calculations.
14.]
[Id. at
In essence, Movants appear to argue that Defendants’
representation was inadequate because Defendants did not cite all
of the case law Movants would have, including the two state cases
against them, and that Defendants did not spend enough time in
their briefs arguing the point.
In reviewing the memorandum and the supporting
documents, the Court concludes that Defendants did make all of
the same arguments.
Compare id. (what Defendants argued); with
Proposed Motion at 2-3, 4-11.
At most, any difference in the
presentation of those arguments was a mere difference in
strategy.
See Perry, 587 F.3d at 954.
And, contrary to Movants’
argument, Defendants did not omit any necessary arguments that
Movants would make that would have “prevent[ed] this Court from
making incorrect conclusions[.]”
14.]
[Mem. in Supp. of Motion at
To the contrary, this Court granted Defendants’ motion to
dismiss, and Plaintiff has chosen not to amend her Complaint.
13
See Mem. in Opp. at 24 (“Plaintiff has no plans to amend her
complaint”).
The Court therefore FINDS Movants’ interests are
adequately represented.
IV.
Summary
Although the Court finds the Motion is timely, since
Movants do not have a significant protectable interest that would
be impaired in their absence, and Defendants adequately represent
Movants’ interests, the Court CONCLUDES that the Motion fails
under Fed. R. Civ. P. 24(a).
The Court also REJECTS Plaintiff’s
other challenges to the Motion and to this Court’s jurisdiction
to rule on the Motion.7
The Ninth Circuit has not so far
7
The Court questions whether the Rooker-Feldman doctrine,
Colorado River abstention, res judicata, and abatement operate as
actual jurisdictional bars as Plaintiff argues, and finds that,
in any event, they do not apply to this case. See, e.g., Skinner
v. Switzer, 131 S. Ct. 1289, 1297 (2011) (“Rooker–Feldman is
confined to cases of the kind from which the doctrine acquired
its name: cases brought by state-court losers . . . inviting
district court review and rejection of [the state court’s]
judgments.” (alterations in Skinner) (emphasis added) (citation
and internal quotation marks omitted)); Holder v. Holder, 305
F.3d 854, 867 (9th Cir. 2002) (“Under Colorado River,
considerations of wise judicial administration, giving regard to
conservation of judicial resources and comprehensive disposition
of litigation, may justify a decision by the district court to
stay federal proceedings pending the resolution of concurrent
state court proceedings involving the same matter.” (emphasis
added) (citations omitted)); Castro v. Melchor, Civil No.
07-00558 LEK-BMK, 2012 WL 4092425, at *9 (D. Hawai`i Sept. 14,
2012) (“The party asserting res judicata/claim preclusion has the
burden of establishing that . . . there was a final judgment on
the merits,” and “judgment is final where the time to appeal has
expired without an appeal being taken.” (citations omitted));
Shelton Eng’g Contractors, Ltd. v. Hawaiian Pac. Indus., Inc., 51
Haw. 242, 249, 456 P.2d 222, 226 (1969) (abatement only lies
(continued...)
14
required an independent analysis of standing beyond the
requirements of Rule 42(a), and thus the Court does not here
perform one.
See Perry, 587 F.3d at 950 n.2 (“we in the past
have resolved intervention questions without making reference to
standing doctrine” (citation omitted)); Portland Audubon Soc’y.
v. Hodel, 866 F.2d 302, 308 n.1 (9th Cir. 1989) (declining “to
incorporate an independent standing inquiry into our circuit’s
intervention test”), abrogated on other grounds by Wilderness
Soc’y v. U.S. Forest Serv., 630 F.3d 1173 (9th Cir. 2011).8
CONCLUSION
On the basis of the foregoing, Movants’ Motion to
Intervene, filed April 11, 2014, is HEREBY DENIED.
IT IS SO ORDERED.
7
(...continued)
where “the party is the same in a pending suit, and the cause is
the same and the relief is the same”).
8
The Court also denies the parties’ informal requests to
either: (1) certify the question that it has already ruled on
regarding § 667-7 (2008) to the Hawai`i Supreme Court; [Mem. in
Opp. at 26-27;] or (2) reconsider the 3/31/14 Order sua sponte
and consider the Proposed Motion as an amicus brief [Reply at
14].
15
DATED AT HONOLULU, HAWAII, May 30, 2014.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
JULIE M. SIGWART VS. U.S. BANK NATIONAL ASSOCIATION, ET AL; CIVIL
NO. 13-00529 LEK-RLP; ORDER DENYING THE LAW OFFICE OF DAVID B.
ROSEN, A LAW CORPORATION, AND DAVID B. ROSEN’S MOTION TO
INTERVENE
16
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