Au v. The Association of Apartment Owners of the Royal Iolani et al
Filing
55
ORDER GRANTING DEFENDANT R. LAREE MCGUIRE'S MOTION FOR SUMMARY JUDGEMENT re 37 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 12/9/2014. "McGuire's motion for summary judgment is granted. This disposes of all clai ms against McGuire in this action." (emt, )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). Ronald Git Sum Au served by first class mail at the address of record on December 9, 2014.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
RONALD GIT SUM AU,
)
)
Plaintiff,
)
)
vs.
)
)
THE ASSOCIATION OF APARTMENT )
OWNERS OF THE ROYAL IOLANI,
)
et al.,
)
)
Defendants.
)
_____________________________ )
CIVIL NO. 14-00271 SOM/BMK
ORDER GRANTING DEFENDANT R.
LAREE MCGUIRE’S MOTION FOR
SUMMARY JUDGMENT
ORDER GRANTING DEFENDANT R. LAREE MCGUIRE’S
MOTION FOR SUMMARY JUDGMENT
I.
INTRODUCTION.
Defendant R. Laree McGuire moves for summary judgment
as to all remaining claims asserted against her by Plaintiff
Ronald Git Sum Au.
McGuire’s motion for summary judgment is
granted.
II.
FACTUAL BACKGROUND.
On January 16, 2014, and January 21, 2014, Defendant
Association of Apartment Owners of the Royal Iolani (the “AOAO”),
through its attorney, Defendant R. Laree McGuire, filed Notices
of Default and Intention to Foreclose (the “Notices”) with the
Land Court for “Unit A” and “Unit B,” respectively, owned by Au
in the Royal Iolani condominium project (“Royal Iolani”) in
Honolulu.
ECF No. 1-1, PageID # 4, 15.
The Notices were
triggered by Au’s failure to pay amounts owed to the AOAO.
PageID # 15.
Id.,
The Notice filed on January 16, 2014, stated that
the default for Unit A had to be cured by March 17, 2014.
No. 10-5, PageID # 168.
ECF
The Notice filed on January 21, 2014,
stated that the default for Unit B had to be cured by March 22,
2014.
ECF No. 10-4, PageID # 162.
On February 25, 2014, Au submitted a payment plan to
McGuire and the AOAO’s president.
ECF No. 12-9.
The February 25
payment plan proposed payment of all amounts owed to the AOAO for
Unit A and Unit B except attorneys’ fees, which Au sought to
mediate.
Id.
On March 21, 2014, Au sent a letter to the AOAO’s
new president, again enclosing his February 25 proposal.
ECF No.
12-10.
On March 24, 2014, McGuire, on behalf of the AOAO,
declined Au’s February 25 proposal because it failed to include
payment of attorneys’ fees and costs.
ECF No. 17-3.
On April 25, 2014, Au filed a Complaint in state court
against the AOAO, Hawaiiana Management Company, Ltd.
(“Hawaiiana”), which was the AOAO’s management agent, and McGuire
(collectively, “Defendants”).
Au asserted claims for: (1)
intentional or negligent conduct (Count I); (2) intentional or
negligent misrepresentation (Count II); (3) fraud and concealment
(Count III); (4) violation of chapter 480D of Hawaii Revised
Statutes and 15 U.S.C. § 1692 (Count IV); and (5) violation of
chapter 480 of Hawaii Revised Statutes (Count V).
ECF No. 1-1.
The action was removed to federal court pursuant to 28 U.S.C.
2
§ 1441 on June 10, 2014.
ECF No. 1.
On June 9, 2014, Au submitted another payment plan to
the AOAO purporting to account for all amounts owed for Unit B.
ECF No. 12-11.
On August 7, 2014, this court dismissed Count IV of
Au’s Complaint to the extent it asserted a claim against McGuire
for violation of chapter 480D of Hawaii Revised Statutes.
See
ECF No. 25.
On August 12, 2014, this court denied Au’s motion to
expunge the Notices, motion to set aside nonjudicial power of
sale, and motion for a temporary restraining order.
26.
See ECF No.
The court noted that Au had failed to establish a basis for
expunging the Notices and had failed to demonstrate a likelihood
of success on the merits of any claim.
Id., PageID # 1184.
On September 9, 2014, this court denied Au’s motion for
reconsideration of the dismissal of part of Count IV, and the
denial of his motion to expunge, motion to set aside nonjudicial
power of sale, and motion for temporary restraining order.
See
ECF No. 35.
McGuire now seeks summary judgment as to all remaining
claims against her.
III.
ECF No. 37, PageID # 1306.
STANDARD.
Summary judgment shall be granted when “the movant
shows that there is no genuine dispute as to any material fact
3
and the movant is entitled to judgment as a matter of law.”
Fed.
R. Civ. P. 56(a); see Addisu v. Fred Meyer, Inc., 198 F.3d 1130,
1134 (9th Cir. 2000).
The movant must support his or her
position that a material fact is or is not genuinely disputed by
either “citing to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including
those made for the purposes of the motion only), admissions,
interrogatory answers, or other materials” or “showing that the
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.”
Fed. R. Civ. P. 56(c).
One of the principal purposes of summary judgment is to identify
and dispose of factually unsupported claims and defenses.
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
Summary
judgment must be granted against a party that fails to
demonstrate facts to establish what will be an essential element
at trial.
See id. at 323.
A moving party without the ultimate
burden of persuasion at trial--usually, but not always, the
defendant--has both the initial burden of production and the
ultimate burden of persuasion on a motion for summary judgment.
Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102
(9th Cir. 2000).
The burden initially falls on the moving party to
4
identify for the court those “portions of the materials on file
that it believes demonstrate the absence of any genuine issue of
material fact.”
T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors
Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp.,
477 U.S. at 323).
“When the moving party has carried its burden
under Rule 56(c), its opponent must do more than simply show that
there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986) (footnote omitted).
The nonmoving party must set forth specific facts
showing that there is a genuine issue for trial.
Serv., Inc., 809 F.2d at 630.
T.W. Elec.
At least some “‘significant
probative evidence tending to support the complaint’” must be
produced.
Id. (quoting First Nat’l Bank of Ariz. v. Cities Serv.
Co., 391 U.S. 253, 290 (1968)); see also Addisu, 198 F.3d at 1134
(“A scintilla of evidence or evidence that is merely colorable or
not significantly probative does not present a genuine issue of
material fact.”).
“[I]f the factual context makes the non-moving
party’s claim implausible, that party must come forward with more
persuasive evidence than would otherwise be necessary to show
that there is a genuine issue for trial.”
Cal. Arch’l Bldg.
Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468
(9th Cir. 1987) (citing Matsushita Elec. Indus. Co., 475 U.S. at
587); accord Addisu, 198 F.3d at 1134 (“There must be enough
5
doubt for a ‘reasonable trier of fact’ to find for plaintiffs in
order to defeat the summary judgment motion.”).
All evidence and inferences must be construed in the
light most favorable to the nonmoving party.
Inc., 809 F.2d at 631.
T.W. Elec. Serv.,
Inferences may be drawn from underlying
facts not in dispute, as well as from disputed facts that the
judge is required to resolve in favor of the nonmoving party.
Id.
When “direct evidence” produced by the moving party
conflicts with “direct evidence” produced by the party opposing
summary judgment, “the judge must assume the truth of the
evidence set forth by the nonmoving party with respect to that
fact.”
IV.
Id.
ANALYSIS.
A.
An Attorney Ordinarily Owes No Duty to a Nonparty
Third Party.
Au seeks to hold McGuire liable for conduct undertaken
in McGuire’s capacity as the AOAO’s attorney.
However, an
attorney is not ordinarily liable to a third party for conduct
undertaken through representation of a client unless the
attorney’s conduct itself involves wrongdoing outside the scope
of legitimate representation.
Thus, for example, an attorney’s
fraud or independent statutory violation committed in the course
of representing a client might give rise to a claim by a third
party against the attorney, but the attorney could not be liable
to the third party simply for having intentionally foreclosed on
6
the third party’s property.
Underlying this principle is the
usual absence of any duty flowing from the attorney to a
nonclient, except in circumstances narrowly defined by law.
See
Johnson v. Ass’n of Apartment Owners of Ke Aina Kai Townhomes,
Civ. No. 06-00106 HG-KSC, 2006 WL 7136685, at *7 (D. Haw. Aug.
25, 2006).
Absent exceptional circumstances, the third party’s
remedy must be sought from the attorney’s client, not the
attorney in his or her individual capacity.
Otherwise, attorneys
could routinely be sued just for representing clients.
Because McGuire owed no duty to Au with respect to
conduct undertaken in her capacity as the AOAO’s attorney,
McGuire is entitled to summary judgment on all of Au’s claims
premised on the existence of such a duty.
Only Au’s fraud claim
and his claims under chapter 480 of Hawaii Revised Statutes and
the Fair Debt Collection Practices Act (“FDCPA”) might
conceivably escape this general bar.
However, whether protected by the general bar or not,
McGuire is entitled to summary judgment on all claims remaining
against her for the reasons set forth later in this order.
The
claims barred by McGuire’s status as the AOAO’s attorney are
based on conduct addressed in the remainder of this court’s
order, and the reasoning there applies equally to the fraud and
statutory claims.
Thus, even if McGuire’s status as the AOAO’s
attorney provides no protection from claims based on acts she
7
took while representing the AOAO, McGuire, as discussed in the
following sections, is entitled to summary judgment on all
remaining claims against her, no matter the nature of those
claims.
B.
McGuire is Entitled to Summary Judgment On Claims
That Are Based On Au’s Objections to Her
Attorneys’ Fees and Costs.
In Counts I, II, III, and V of his Complaint, Au
objects to McGuire’s attorneys’ fees and costs on the grounds
that they are: (1) excessive and unreasonable; (2) not itemized;
and (3) incurred and paid by the AOAO without his consent.
Although Au asserts that McGuire’s fees are excessive
and unreasonable, he offers no evidence suggesting that McGuire’s
fees reflect an unreasonable hourly rate or unwarranted
expenditure of time.
Nor is there any evidence that McGuire has
misstated or misrepresented her fees.
Au argues that McGuire has requested payment of “prior”
attorneys’ fees in violation of chapters 514A and 514B, and of
section 667-92, of Hawaii Revised Statutes.
# 1654.
ECF No. 46, PageID
However, as this court has previously noted, nothing in
those portions of Hawaii Revised Statutes suggests that an
association may not collect prior attorneys’ fees.
Au appears to
be asserting that attorneys’ fees incurred in the past are not
recoverable from him because only “estimated” attorneys’ fees and
costs are statutorily permitted.
Id.
8
As the court understands
it, Au’s argument is that estimated amounts must be future
amounts, presumably because amounts incurred in the past are
determinable and not the subject of estimation.
Au bases this
argument on section 667-92(a)(5) of Hawaii Revised Statutes,
which merely states that “the estimated amount of the
association’s attorney’s fees and costs, and all other fees and
costs related to the default estimated to be incurred by the
association by the deadline date” must be included in a Notice of
Default and Intention to Foreclose.
Nowhere does section 667-
92(a)(5) limit an association to recovery of future attorneys’
fees.
An estimate may well involve fees and costs already
incurred but not yet invoiced so not yet precise in amount.
One
may, for instance, not have on hand a photocopier’s bill or not
have input an attorney’s time for the immediately previous day
into the computer.
Alternatively, an estimate may be a
combination of past and future fees and costs.
would not be presently determinable.
Such a total
Even if the AOAO sought
only prior fees and costs, instead of a combination of prior and
future fees and costs, Au could hardly complain, as any such
limitation would benefit Au.
The provisions Au cites simply do
not bar the AOAO from recovering attorneys’ fees actually
incurred, including those fees previously incurred but as yet
unpaid by Au.
9
Au also complains that McGuire has not itemized or
otherwise explained her fees.
46, PageID # 1650.
ECF No. 1-1, PageID # 6; ECF No.
Au fails, however, to show the existence of
any requirement that an association’s attorney explain or itemize
his or her fees and costs before those fees and costs can be
recovered from Au or before a nonjudicial foreclosure may
proceed.
After all, those fees and costs were payable by the
AOAO or its agent to McGuire because of Au’s default, not because
Au retained McGuire.
And, of course, Au has had ample time to
conduct discovery to obtain such an itemization.
In support of his fraud and chapter 480 claims, Au
alleges that McGuire has obtained attorneys’ fees and costs from
Defendant Hawaiiana without “authority, consent, or notification
to Plaintiff Au.”
ECF No. 1-1, PageID # 14, 18.
As with his
other arguments relating to McGuire’s fees, Au fails to cite any
requirement that a homeowner consent to the legal fees incurred
by the AOAO or its agent in collecting amounts owed by that
homeowner, or that the defaulting homeowner be given notice that
the AOAO is paying or has paid legal fees.
The legal fees to
which Au objects result from a relationship between the AOAO and
McGuire, and no fraud or unfair or deceptive act or practice
results from Au’s inability to oversee that fee arrangement.
Further, Au consented, through the Bylaws of the Royal Iolani, to
pay attorneys’ fees incurred by the AOAO in collecting any
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delinquent assessments.
See ECF No. 15-13, PageID # 478
McGuire is entitled to summary judgment on all claims
based on Au’s objections to McGuire’s attorneys’ fees and costs.
Au fails to demonstrate that there is a genuine issue of material
fact with respect to any of those claims.
C.
McGuire is Entitled to Summary Judgment On All
Claims Relating to the Notices of Default and
Intention to Foreclose.
In Counts I and V of his Complaint, Au argues that the
Notices of Default and Intention to Foreclose misstated the dates
by which Au had to cure the defaults on his Royal Iolani units,
thereby giving him less than the sixty days to cure provided to
him by statute and resulting in the recordation of erroneous
information about his properties.
ECF No. 1-1, PageID # 8, 17-
18; ECF No. 46, PageID # 1651.
As this court has previously noted, Au was actually
provided with the sixty days he claims he was owed under section
667-92 of Hawaii Revised Statutes.
Au was served with the
Notices on March 7, 2014, and the AOAO gave him until May 7,
2014, to cure the defaults.
ECF No. 15, PageID # 299.
Thus, any
misstated deadlines caused no injury to Au, and he points to no
right to relief of any kind in the absence of an injury.
Au also contends that McGuire, by recording the Notices
and by refusing to correct them after recordation, intentionally
or negligently recorded erroneous information about his
11
properties, resulting in slander of his title.
PageID # 17-18.
ECF No. 1-1,
Nothing in the statutory foreclosure provisions
suggests that the legislature intended to give a homeowner a
cognizable claim based on the recordation of, or the failure to
correct, a Notice of Default and Intention to Foreclose with an
incorrect cure date when the homeowner, having actually had the
benefit of the required cure period, suffered no injury from the
error.
While the recorded Notices burden Au’s property, the
burden results from the AOAO’s intention to foreclose, not from
any incorrect cure date.
McGuire recorded the Notices pursuant
to section 667-93, and the present record, reflecting no injury
to Au flowing from the incorrect cure dates, does not support any
statutory or common-law claim based on those dates.
D.
McGuire is Entitled to Summary Judgment On All
Claims Relating to Alleged Misrepresentation of
the Amount Au Owes to the AOAO.
In Count I (intentional and negligent conduct) and
Count V (chapter 480) of his Complaint, Au alleges that the
amount he owes to the AOAO has been misrepresented.
PageID # 6, 17.
ECF No. 1-1,
According to Au, the alleged misrepresentation
arises out of a failure to properly credit his account for
payments made.
ECF No. 1-1, PageID # 17.
Au fails, however, to
provide any evidence that McGuire failed to account for payments.
To survive summary judgment, Au may not simply rely on
his bare assertion of accounting failures.
12
See T.W. Elec. Serv.,
Inc., 809 F.2d at 630 (“[T]he nonmoving party may not rely on the
mere allegations in the pleadings in order to preclude summary
judgment. . . . [T]he nonmoving party may not merely state that
it will discredit the moving party’s evidence at trial and
proceed in the hope that something can be developed at trial in
the way of evidence to support its claim.
Instead, it must
produce at least some ‘significant probative evidence tending to
support the complaint.’” (citation omitted)).
Au’s only attempt to support his allegation that the
amount he owes to the AOAO has been misrepresented is his
notation of perceived inconsistencies in the delinquency amounts
quoted by McGuire and others.
ECF No. 46, PageID # 1652-54.
However, Au’s discussion of changes in the delinquency amount is
not demonstrative of negligence, fraud, a violation of chapter
480 of Hawaii Revised Statues, or other wrongdoing.
The
inconsistent amounts Au points to were communicated on different
dates.
As this court has noted in earlier rulings, the amount Au
owes to the AOAO may permissibly change over time, through, for
example, the accrual of maintenance fees, penalties, and
attorneys’ fees.
Contrary to Au’s assertions, a Notice of
Default and Intention to Foreclose does not lock in a cure amount
beyond the Notice’s cure period.
Thus, changes in the
delinquency amount over time do not, without more, demonstrate
wrongdoing and, given the absence of evidence supporting Au’s
13
misrepresentation claim, do not support Au’s claims.
E.
McGuire is Entitled to Summary Judgment On All
Claims Based On the Refusal of Reasonable Payment
Plans.
In support of Counts I and V of his Complaint, Au
argues that McGuire improperly rejected his reasonable payment
plans under section 667-92 of Hawaii Revised Statutes.
1-1, PageID # 6, 18-19.
ECF No.
However, as this court has already
explained in its order of August 12, 2014, the payment plans Au
submitted were not “reasonable payment plans” under section 66792(c).
The first payment plan Au submitted to the AOAO on
February 25, 2014, did not include attorneys’ fees.
12-9.
See ECF No.
Section 667-92(c) specifies that a “reasonable payment
plan” must provide for “payments of an amount sufficient to cure
the default.” (Emphasis added).
The word “default” includes
attorneys’ fees and costs, as evidenced by language in the same
section stating: “A unit owner may also cure the default within
sixty days after service of a notice of default and intention to
foreclose on the unit owner by paying the association the full
amount of the default, including the foreclosing association’s
attorneys’ fees and costs[.]”
Id. (emphasis added); see also In
re Collins, No. 13-01783, 2014 WL 2575898, *3 (Bankr. D. Haw.
June 9, 2014) (“[A] plan that requires an association to take
less than the full amount owed is not a ‘reasonable payment plan’
14
within the meaning of the statute.”).
Thus, Au’s February 25
payment plan was not a “reasonable payment plan,” and the AOAO
did not have to accept it.
This conclusion also applies to the payment plan Au
submitted on March 21, 2014.
The letter Au sent to the AOAO on
that date appears to have simply attached Au’s February 25
proposal.
See ECF No. 12-10.
Au’s March 21 proposal, therefore,
fails just as his February 25 proposal did.
Nor was the AOAO required to accept Au’s third payment
plan proposal.
Au submitted his third proposal to the AOAO on
June 9, 2014, far past the thirty-day period within which a unit
owner may submit a payment plan under section 667-92(c).
Au had
until April 6, 2014, to submit a payment plan to the AOAO
pursuant to that section.
Any proposal after that date, even if
“reasonable,” did not have to be accepted.
Au fails to raise any genuine issue of material fact as
to his proposed payment plans, and no violation can arise from
McGuire’s rejection of those plans on behalf of the AOAO.
F.
McGuire is Entitled to Summary Judgment on
Au’s FDCPA Claim, Which is Based On An
Alleged Failure to Verify the Debt.
In his Complaint, Au alleges that McGuire violated 15
U.S.C. § 1692g by failing to verify Au’s debt upon his request.
ECF No. 1-1, PageID # 16.
Under 15 U.S.C. § 1692g(b), “[i]f the consumer notifies
15
the debt collector in writing . . . that the debt, or any portion
thereof, is disputed, or that the consumer requests the name and
address of the original creditor, the debt collector shall cease
collection of the debt, or any disputed portion thereof, until
the debt collector obtains verification of the debt or a copy of
a judgment, or the name and address of the original creditor, and
a copy of such verification or judgment, or name and address of
the original creditor, is mailed to the consumer by the debt
collector.”
Verification of the debt “involves nothing more than
the debt collector confirming in writing that the amount being
demanded is what the creditor is claiming is owed.”
Clark v.
Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1173-74
(9th Cir. 2006).
Au fails to produce any evidence supporting his
assertion that McGuire failed to verify the debt Au owes to the
AOAO.
Throughout the course of collection efforts, the parties
have engaged in substantial written correspondence, and Au does
not cite to any specific instance during this correspondence in
which he requested verification of the debt and was not provided
with written confirmation that the amount demanded was what he
owed to the AOAO.
Au may not simply rely on the bare allegations
in his Complaint to overcome summary judgment.
See T.W. Elec.
Serv., Inc., 809 F.2d at 630 (“[T]he nonmoving party may not rely
on the mere allegations in the pleadings in order to preclude
16
summary judgment. . . . [I]t must produce at least some
‘significant probative evidence tending to support the
complaint.’” (citation omitted)).
Therefore, McGuire is entitled
to summary judgment on Au’s claim that McGuire violated the FDCPA
by allegedly failing to verify the debt.
V.
CONCLUSION.
McGuire’s motion for summary judgment is granted.
This
disposes of all claims against McGuire in this action.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 9, 2014.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Au v. The Association of Apartment Owners of the Royal Iolani, et al., Civ.
No. 14-00271 SOM/BMK; ORDER GRANTING DEFENDANT R. LAREE MCGUIRE’S MOTION FOR
SUMMARY JUDGMENT
17
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