Sigwart v. U.S. Bank National Association et al
Filing
90
ORDER DENYING PLAINTIFF'S APPEAL AND AFFIRMING THE MAGISTRATE JUDGE'S SEPTEMBER 26, 2018 ORDER DENYING PLAINTIFF'S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT re 69 , 72 - Signed by JUDGE LESLIE E. KOBAYASHI on 12/28/2018. (emt, )
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
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MORTGAGE ELECTRONIC
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REGISTRATION SYSTEMS, INC., a )
Delaware corporation,
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Defendants.
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_____________________________ )
CIVIL 13-00529 LEK-RLP
ORDER DENYING PLAINTIFF’S APPEAL AND AFFIRMING
THE MAGISTRATE JUDGE’S SEPTEMBER 26, 2018 ORDER DENYING
PLAINTIFF’S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
On September 26, 2018, the magistrate judge issued an
Order Granting in Part and Denying in Part Plaintiff’s Motion for
Leave to File First Amended Complaint (“9/26/18 Order”).
[Dkt. no. 69.]
On October 10, 2018, Plaintiff Julie M. Sigwart,
individually and as Trustee of the Revocable Living Trust Dolphin
Star Trust Dated December 10, 2003 (“Plaintiff”), filed an appeal
from the 9/26/18 Order (“Appeal”).
[Dkt. no. 72.]
Defendants
U.S. Bank National Association and Mortgage Electronic
Registration Systems, Inc. (“Defendants”) filed their memorandum
in opposition on October 30, 2018, and Plaintiff filed her reply
on November 13, 2018.
[Dkt. nos. 75, 78.]
The Court has
considered the Appeal as a non-hearing matter pursuant to Rule
LR7.2(e) of the Local Rules of Practice of the United States
District Court for the District of Hawai`i (“Local Rules”).
Plaintiff’s Appeal is hereby denied for the reasons set forth
below.
BACKGROUND
The relevant factual and procedural background of this
case is familiar to the parties, and the Court will only discuss
the portions relevant to the Appeal.
The instant Appeal stems
from the Ninth Circuit’s recent decision that, inter alia,
reversed in part this Court’s order dismissing all of Plaintiff’s
claims with prejudice.
See Memorandum, filed 11/8/17
(dkt. no. 42); Order Granting Defs.’ Motion to Dismiss Complaint,
filed 3/31/14 (dkt. no. 25) (“3/31/14 Order”);1 Order Dismissing
Remaining Claims With Prejudice, filed 6/17/14 (dkt. no. 32)
(“6/17/14 Order”).
Plaintiff’s original complaint alleged Defendants had
committed unfair or deceptive acts and practices (“UDAP”), in
violation of Haw. Rev. Stat. § 480-2, based on four separate
1
The Ninth Circuit’s memorandum disposition is also
available at 713 F. App’x 535, and the 3/31/14 Order is also
available at 2014 WL 1322813.
2
theories: 1) Defendants scheduled the auction date for her
property less than twenty-nine days after it was first
advertised, in violation of Haw. Rev. Stat. § 667-7(a)(2) (“the
28-Day Practice”);2 2) Defendants did not publish notice of a new
sale date and time when they postponed the foreclosure sale, in
violation of the mortgage agreement and Haw. Rev. Stat. § 6675(a)(2) (“the Postponement Practice”); 3) Defendants only
advertised the sale of the property by quitclaim deed, and not a
warranty deed (“the Quitclaim Practice”); and 4) Defendants
advertised the sale of the property in the County of Hawai`i,
instead of the County of Maui, where the property was located
(“the Hawai`i County Publication”).
See 3/31/14 Order, 2014
WL 1322813, at *2, *3 n.4.
In ruling on Plaintiff’s appeal, the Ninth Circuit
considered the Hawai`i Supreme Court’s recent decision in Hungate
v. Law Office of David B. Rosen, 139 Hawai`i 394, 391 P.3d 1
(2017).
Sigwart, 713 F. App’x at 538.
In Hungate, the Hawai`i
Supreme Court held it was unfair and deceptive for a mortgagee
to: fail to schedule an auction date for the property at least
twenty-nine days after the sale was first advertised, in
violation of § 667-7(a)(2); or fail to postpone the foreclosure
2
Haw. Rev. Stat. Chapter 667 was revised in 2012, 2012 Haw.
Sess. Laws Act 182, so an earlier, now-outdated version was
operative at the time of the foreclosure. All citations to
Chapter 667 in this Order are to the 2008 version.
3
sale without publishing notice of the new date and time in
violation of the mortgage agreement and § 667-5(a)(2).
139 Hawai`i at 411-12, 391 P.3d at 18-19.
Hungate,
Based on Hungate, the
Ninth Circuit reversed this Court’s ruling as to Plaintiff’s UDAP
claims with respect to the 28-Day and Postponement Practices, but
affirmed this Court’s dismissal with prejudice of Plaintiff’s
remaining UDAP claims.
The Ninth Circuit also rejected
Plaintiff’s argument that, in her original complaint, Plaintiff
had properly alleged a claim for wrongful foreclosure, which this
Court allegedly failed to rule on.
39.
Sigwart, 713 F. App’x at 538-
In doing so, the Ninth Circuit stated:
While the Complaint does not specifically mention
wrongful foreclosure, [Plaintiff] argues for the
first time on appeal she has stated a claim based
on her allegation that she was “entitled [to
relief] under any and all applicable tort or
recovery theories.” Complaint ¶ 65 (emphasis
added). Such “[c]onclusory allegations of law,
however, are insufficient to defeat a motion to
dismiss.” Lee v. City of Los Angeles, 250 F.3d
668, 679 (9th Cir. 2001) (citation omitted). And
the district court did not abuse its discretion
here in dismissing the Complaint with prejudice,
where [Plaintiff] failed to file a motion for
leave to amend her Complaint to add the claim and
failed to assert it below. See Cervantes v.
Countrywide Home Loans, Inc., 656 F.3d 1034, 1043
(9th Cir. 2011).
Id. (some alterations in mem. dispo.).
On July 30, 2018, Plaintiff filed her Motion for Leave
to File First Amended Complaint (“Leave Motion”) to reallege and
clarify her wrongful foreclosure claim, and conform her proposed
4
first amended complaint to the Ninth Circuit’s decision as to
Plaintiff’s UDAP claims based on the 28-Day and Postponement
Practices.
See Pltf.’s Mem. in Supp. of Leave Motion, filed
6/30/18 (dkt. no. 59-1), at 1.
In denying Plaintiff leave to add
her foreclosure claim, the magistrate judge found, inter alia,
that this Court had previously dismissed all of Plaintiff’s
claims with prejudice, and the Ninth Circuit affirmed this
decision; therefore, the law of the case precluded Plaintiff from
realleging her wrongful foreclosure claim.
[9/26/18 Order at 4.]
In the instant Appeal, Plaintiff asserts the magistrate
judge erred in denying her request to reallege, support, or
clarify her wrongful foreclosure claim because this claim falls
under at least one of the exceptions to the law of the case
doctrine.
Plaintiff also asserts the magistrate judge failed to
address Defendants’ alleged violation of the Rules of the Supreme
Court of the State of Hawai`i, Rule 6, by their counsel of
record, Dentons US LLP (“Dentons”).
STANDARD
I.
Appeal of a Magistrate Judge’s Order
This district court has stated:
Pursuant to 28 U.S.C. § 636(b)(1)(A), Federal
Rule of Civil Procedure 72(a), and LR 74.1, any
party may appeal to the district court any
pretrial nondispositive matter determined by a
magistrate judge. Such an order may be reversed
by the district court judge only when it is
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“clearly erroneous or contrary to law.” 28 U.S.C.
§ 636(b)(1)(A); LR 74.1. An order is “contrary to
law” when it “fails to apply or misapplies
relevant statutes, case law, or rules of
procedure.” Akey v. Placer Cty., 2017 WL 1831944,
at *10 (E.D. Cal. May 8, 2017) (citation and
quotation marks omitted). And an order is
“clearly erroneous” if, after review, the court
has a “definite and firm conviction that a mistake
has been committed.” Easley v. Cromartie, 532
U.S. 234, 242 (2001); Fisher v. Tucson Unified
Sch. Dist., 652 F.3d 1131, 1136 (9th Cir. 2011);
Cochran v. Aguirre, 2017 WL 2505230, at *1 (E.D.
Cal. June 9, 2017) (citing cases). “[R]eview
under the ‘clearly erroneous’ standard is
significantly deferential.” Concrete Pipe &
Prods. v. Constr. Laborers Pension Tr., 508 U.S.
602, 623 (1993). Thus, the district court “may
not simply substitute its judgment for that of the
deciding court.” Grimes v. City & Cty. of S.F.,
951 F.2d 236, 241 (9th Cir. 1991); Cochran, 2017
WL 2505230, at *1.
“‘Pretrial orders of a magistrate’ judge
‘under § 636(b)(1)(A) . . . are not subject to a
de novo determination.’” Hypolite v. Zamora, 2017
WL 68113, at *1 (E.D. Cal. Jan. 6, 2017) (quoting
Merritt v. Int’l Bhd. of Boilermakers, 649 F.2d
1013, 1017 (5th Cir. 1981)). Consideration by the
reviewing court of new evidence, therefore, is not
permitted. United States ex rel. Liotine v. CDW
Gov’t, Inc., 2013 WL 1611427, at *1 (S.D. Ill.
Apr. 15, 2013) (“If the district court allowed new
evidence [on review of a magistrate judge’s
non-dispositive order], it would essentially be
conducting an impermissible de novo review of the
order.”); cf. United States v. Howell, 231 F.3d
615, 621 (9th Cir. 2000) (determining that “a
district court has discretion, but is not
required, to consider evidence presented for the
first time” in a de novo review of a magistrate
judge’s dispositive recommendation).
6
McAllister v. Adecco USA Inc., Civ. No. 16-00447 JMS-KJM, 2017
WL 2818198, at *2 (D. Hawai`i June 29, 2017) (alterations in
McAllister).
However, when a magistrate judge denies leave to amend
to add a new claim or new party, this is considered a dispositive
order.
See, e.g., JJCO, Inc. v. Isuzu Motors America, Inc.,
Civ. No. 08-00419 SOM/LEK, 2009 WL 3818247, at *2-3 (D. Hawai`i
Nov. 12, 2009) (citations omitted).
In such cases, the ruling of
the magistrate judge is reviewed under the de novo standard.
Id.
None of the parties assert that the 9/26/18 Order is a
dispositive order; however, under either standard this Court
affirms the magistrate judge’s ruling on other grounds.
DISCUSSION
I.
The Law of the Case Doctrine
The Ninth Circuit has stated
“The law of the case doctrine is a judicial
invention designed to aid in the efficient
operation of court affairs.” Milgard Tempering,
Inc. v. Selas Corp. of Am., 902 F.2d 703, 715 (9th
Cir. 1990). Under the doctrine, a court is
generally precluded from reconsidering an issue
previously decided by the same court, or a higher
court in the identical case. See id. For the
doctrine to apply, the issue in question must have
been “decided explicitly or by necessary
implication in [the] previous disposition.”
Liberty Mutual Ins. Co. v. EEOC, 691 F.2d 438, 441
(9th Cir. 1982). Application of the doctrine is
discretionary. See United States v. Mills, 810
F.2d 907, 909 (9th Cir. 1987). A trial judge’s
decision to apply the doctrine is thus reviewed
7
for an abuse of discretion.
Tempering, 902 F.2d at 715.
See Milgard
U.S. v. Lummi Indian Tribe, 235 F.3d 443, 452 (9th Cir. 2000)
(alteration in Lummi Indian Tribe).
District courts are
otherwise free to decide issues not resolved on a prior appeal.
Casumpang v. Int’l Longshore, & Warehouse Union, Local 142,
297 F. Supp. 2d 1238, 1249 (D. Hawai`i 2003) (citing Liberty Mut.
Ins., 691 F.2d at 441).
Based on the factual allegations in Plaintiff’s
original complaint, the Ninth Circuit found Plaintiff had not
specifically alleged a wrongful foreclosure claim.
F. App’x at 538-39.
Sigwart, 713
The Ninth Circuit also disagreed that
Plaintiff’s catch-all allegation that she was “entitled [to
relief] under any and all applicable tort or recovery theories”
was sufficient to assert a wrongful foreclosure claim that would
survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6).
Id.
at 539 (alteration and emphasis in mem. dispo.) (noting
“[c]onclusory allegations of law . . . are insufficient to defeat
a motion to dismiss” (citing Lee v. City of Los Angeles, 250 F.3d
668, 679 (9th Cir. 2001))).
Finally, the Ninth Circuit held
that, “the district court did not abuse its discretion here in
dismissing the Complaint with prejudice, where [Plaintiff] failed
to file a motion for leave to amend her Complaint to add the
claim and failed to assert it below.”
8
Id. at 538 (citing
Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1043
(9th Cir. 2011)).
This Court does not infer from the language of the
memorandum disposition that Plaintiff’s wrongful foreclosure
claim was ruled on, either specifically or by necessary
implication, by the Ninth Circuit.
Instead, the Ninth Circuit’s
ruling addressed Plaintiff’s point on appeal that this Court
“erred when it dismissed with prejudice [Plaintiff’s] Complaint
without considering her claim for wrongful foreclosure.”
Id.
While the Ninth Circuit held this Court had properly dismissed
Plaintiff’s original complaint with prejudice, id. at 539, the
Ninth Circuit was silent as to whether Plaintiff should be
allowed to add her claim for wrongful foreclosure.
See, e.g.,
Liberty Mut. Ins., 691 F.2d at 441 (stating the Ninth Circuit’s
silence as to an issue leaves the matter “open for consideration
by the district court on remand” (citing Perkins v. Standard Oil
of California, 399 U.S. 222, 223, 90 S. Ct. 1989, 1990, 26 L. Ed.
2d 534, 536 (1970) (per curiam))).
Thus, this Court concludes the magistrate judge erred
in determining the law of the case doctrine applies.
Nevertheless, for the reasons below, this Court concludes that
denial of leave to amend is proper because Plaintiff has unduly
delayed adding her wrongful foreclosure claim.
Davis, 371 U.S. 178, 182 (1962).
9
See Foman v.
II.
Denial of Leave to Amend
At the outset, the Court notes that the new deadline
for the parties to file any amended pleadings was August 3, 2018.
See Amended Rule 16 Scheduling Order, filed 12/21/17
(dkt. no. 48), at 2.
Plaintiff filed the underlying Leave Motion
on July 30, 2018; therefore, this Court examines her request for
leave to amend to add her wrongful foreclosure claim under Fed.
R. Civ. P. 15.
See AmerisourceBergen Corp., Dialysis West, Inc.,
465 F.3d 946, 951-52 (9th Cir. 2006) (concluding that Rule 15,
not Fed. R. Civ. P. 16 applied where plaintiff filed its motion
for leave to amend within the deadline set by the district
court).
With regard to amendments, Rule 15(a)(2) provides that
“[t]he court should freely give leave when justice so requires.”
This Court has previously stated:
If the facts and circumstances a plaintiff relies
upon may be the basis of relief, the plaintiff
should be afforded an opportunity to test his
claims on the merits. Foman [v. Davis], 371 U.S.
[178,] 182 [(1962)]. In determining whether to
grant leave to amend, courts consider factors such
as: futility of the amendment; bad faith by the
plaintiff; whether there was undue delay in
seeking the amendment; whether it will prejudice
the opposing party; and whether the plaintiff
failed to cure deficiencies in prior amendments.
Id.; see also In re W. States Wholesale Natural
Gas Antitrust Litig., 715 F.3d 716, 738 (9th Cir.
2013) (the court weighs five factors in
determining whether justice requires that leave to
amend be granted: “(1) bad faith, (2) undue delay,
(3) prejudice to the opposing party, (4) futility
10
of amendment; and (5) whether plaintiff has
previously amended his complaint”).
Chun v. Simpson, CIVIL 15-00102 LEK-RLP, 2015 WL 8492025, at *3
(D. Hawai`i Dec. 9, 2015) (alterations in Chun) (some citations
omitted).
With regard to undue delay, the Ninth Circuit has
stated:
In assessing timeliness, we do not merely ask
whether a motion was filed within the period of
time allotted by the district court in a Rule 16
scheduling order. Rather, in evaluating undue
delay, we also inquire “whether the moving party
knew or should have known the facts and theories
raised by the amendment in the original pleading.”
Jackson [v. Bank of Hawaii], 902 F.2d[, 1385,]
1388 [(9th Cir. 1990)]; see also Sierra Club v.
Union Oil Co. of California, 813 F.2d 1480,
1492–93 (9th Cir. 1987), vacated on other grounds
by Union Oil Co. of California v. Sierra Club, 485
U.S. 931, 108 S. Ct. 1102, 99 L. Ed. 2d 264
(1988). We have held that an eight month delay
between the time of obtaining a relevant fact and
seeking a leave to amend is unreasonable. See
Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 799
(9th Cir. 1991) (citing Jackson, 902 F.2d at
1388).
AmerisourceBergen, 465 F.3d at 953.
Plaintiff has argued - both to the Ninth Circuit and in
the instant Appeal - that her original complaint contained
factual allegations of a common law wrongful foreclosure claim.3
See, e.g., Mem. in Supp. of Appeal at 4-5.
3
Thus, Plaintiff
Plaintiff argues she had alleged a claim for wrongful
foreclosure in her original complaint; but neither this Court nor
the Ninth Circuit were able to decipher such a claim. See
Sigwart, 713 F. App’x at 539.
11
appears to have been fully aware of her wrongful foreclosure
claim at the time she filed her original complaint.
Further,
unlike Plaintiff’s 28-Day and Postponement Practices UDAP claims,
which were only recognized by the Hawai`i Supreme Court in 2017,
this district court unequivocally permitted a right of action
based on wrongful foreclosure in 2013.
See, e.g., Matsumura v.
Bank of America, N.A., CIV. No. 11-00608 JMS-BMK, 2012 WL 463933,
at *3 (D. Hawai`i Feb. 10, 2012) (citing Cervantes v. Countrywide
Home Loans, 656 F.3d 1034, 1043 (9th Cir. 2011)).
To the extent Plaintiff believed her claim had been
alleged, Plaintiff was put on notice in the 3/31/14 Order that
this Court only recognized Plaintiff’s UDAP claim based on four
separate theories of liability.
See 2014 WL 1322813, at *12.
At
this point, Plaintiff could have filed a separate motion for
leave to amend to add her wrongful foreclosure claim.
Plaintiff
also appears to argue that, because this Court dismissed all of
Plaintiff’s claims with prejudice, including her 28-Day and
Postponement Practices “common law claims,” and warned Plaintiff
not to add any new claims or new parties, Plaintiff could not
assert a wrongful foreclosure claim since it would be a “new
claim.”
[Mem. in Supp. of Appeal at 5.]
This is incorrect.
the 3/31/14 Order, this Court stated:
To the extent that Plaintiff’s claim has been
dismissed without prejudice, this Court GRANTS
Plaintiff leave to file a First Amended Complaint
12
In
consistent with the terms of this Order.
Plaintiff must file her First Amended Complaint by
no later than April 30, 2014. This Court CAUTIONS
Plaintiff that, if she fails to file her First
Amended Complaint by April 30, 2014, the portions
of the claim which this Order dismissed without
prejudice may be dismissed with prejudice.
Further, if Plaintiff’s First Amended Complaint
fails to cure the defects identified in this Order
or adds new parties, claims, or theories of
liability, this Court may dismiss those claims
with prejudice.
2014 WL 1322813, at *12 (emphasis in original).
Although this
Court did not grant Plaintiff leave to freely amend her complaint
in any fashion she chose, it did not preclude Plaintiff from
timely seeking leave to add her wrongful foreclosure claim.
See,
e.g., Fed. R. Civ. P. 15(c) (“[A] party may amend its pleading
only with the opposing party’s written consent or the court’s
leave.
The court should freely give leave when justice so
requires.”); Fed. R. Civ. P. 16(b) (the court may modify
scheduling deadlines to permit a party to file amended pleadings
if good cause is shown); see also Sigwart, 713 F. App’x at 539
(noting Plaintiff did not file a motion for leave to amend her
complaint to add a wrongful foreclosure claim).
Finally,
Plaintiff failed to file any amended complaint to save her case
from dismissal with prejudice.
See 6/17/14 Order at 2.
Since
Plaintiff was aware of her wrongful foreclosure claim at the time
she filed her original complaint on October 11, 2013, but failed
to amend or seek leave to amend to add the cause of action prior
13
to her case being dismissed on June 17, 2014, this Court
concludes Plaintiff has unduly delayed adding her wrongful
foreclosure claim.
See Texaco, Inc. v. Ponsoldt, 939 F.2d 794,
799 (9th Cir. 1991) (eight month delay from the time party knew
of facts that would give rise to amend a pleading constituted
delay) (citing Jackson, 902 F.2d at 1388); Contact Lumber Co. v.
P.T. Moges Shipping Co., 918 F.2d 1446, 1454 (9th Cir. 1990)
(“Undue delay is a valid reason for denying leave to amend.”).
This Court therefore affirms the magistrate judge’s denial of
Plaintiff’s request for leave to add a wrongful foreclosure
claim, although on the alternate ground of undue delay.
III. Rule 6
Plaintiff also contends the magistrate judge erred when
he failed to address her argument as to Dentons’s alleged
violation of Rule 6 of the Rules of the Supreme Court of the
State of Hawai`i (“the Rule 6 issue”).
[Appeal at 2.]
However,
Plaintiff makes no further argument in her memorandum in support
of the Appeal with regard to Dentons or Rule 6, and does not
identify how the magistrate judge committed clear error in
declining to address this point.
Accordingly, this Court DENIES
Plaintiff’s Appeal as to her dispute regarding the Rule 6 issue
where it is not supported by any argument or law.
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CONCLUSION
On the basis of the foregoing, “Plaintiffs’ [sic]
Appeal of the Magistrate Judge’s September 26, 2018 Order
Granting in Part and Denying in Part Plaintiff’s Motion for Leave
to File First Amended Complaint [ECF 69],” filed October 10,
2018, is HEREBY DENIED, and the magistrate judge’s 9/26/18 Order
is AFFIRMED on other grounds.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, December 28, 2018.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
JULIE M. SIGWART, ETC. VS. U.S. BANK NATIONAL ASSOCIATION, ET AL;
CIVIL 13-00529 LEK-RLP; ORDER DENYING PLAINTIFF’S APPEAL AND
AFFIRMING THE MAGISTRATE JUDGE’S SEPTEMBER 26, 2018 ORDER DENYING
PLAINTIFF’S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
15
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