Troxel v. Deutsche Bank National Trust Company et al
Filing
26
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS COMPLAINT FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED re 12 Motion to Dismiss for Failure to State a Claim. Signed by JUDGE LESLIE E. KOBAYASH I on 07/30/2015. Deutsche Bank's Motion to Dismiss Complaint for Failure to State a Claim upon which Relief Can Be Granted, filed March 18, 2015, is HEREBY GRANTED IN PART AND DENIED IN PART. The Motion is GRANTED insofar as: all of Plaintiff's claims are HEREBY DISMISSED; and the dismissal of Plaintiff's claim under the Fair Debt Collections Practices Act is WITH PREJUDICE. The Motion is DENIED insofar as the dismissal Plaintiff's other claims is WITH OUT PREJUDICE. If Plaintiff chooses to file an amended complaint, she must do by August 31, 2015, and the amended complaint must comply with the terms of this Order This Court CAUTIONS Plaintiff that: if she fails to file her amended complaint by August 31, 2015, this Court will dismiss her case with prejudice; or, if any claim in the amended complaint fails to cure the defects identified in this Order, this Court will dismiss that claim with prejudice. (eps)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
LOREEN DIRECTO TROXEL,
individually,
)
)
)
Plaintiff,
)
)
vs.
)
)
DEUTSCHE BANK NATIONAL TRUST )
COMPANY, AS TRUSTEE IN TRUST )
FOR THE BENEFIT OF THE
)
CERTIFICATEHOLDER FOR ARGENT )
SECURITIES TRUST 2006-MI,
)
ASSET BACKED PASS-THROUGH
)
CERTIFICATES, 2006-MI; JOHN
)
AND JANE DOE; CORPORATIONS OR )
OTHER ENTITIES and DOES 1-100 )
inclusive,
)
)
Defendants.
)
_____________________________ )
CIVIL 14-00342 LEK-RLP
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION TO DISMISS COMPLAINT FOR FAILURE
TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED
On March 18, 2015, Defendant Deutsche Bank National
Trust Company, as Trustee in Trust for the Benefit of the
Certificateholders for Agent Securities Trust 2006-M1, Asset
Backed Pass-Through Certificates, Series 2006-M1, erroneously
sued as Deutsche Bank National Trust Company, as Trustee in Trust
for the Benefit of the Certificateholder for Agent Securities
Trust 2006-MI, Asset Backed Pass-Through Certificates, 2006-MI
(“Deutsche Bank”), filed its Motion to Dismiss Complaint for
Failure to State a Claim upon which Relief Can Be Granted
(“Motion”).
[Dkt. no. 12.]
On May 28, 2015, this Court issued
an Entering Order (“EO”) finding the Motion suitable for
disposition without a hearing pursuant to Rule LR7.2(d) of the
Local Rules of Practice of the United States District Court for
the District of Hawai`i (“Local Rules”).
[Dkt. no. 15.]
On June 26, 2015, pro se Plaintiff Loreen Directo
Troxel (“Plaintiff”) filed a document that this Court
subsequently construed as her memorandum in opposition to the
Motion.
[Dkt. nos. 20, 21.]
Plaintiff also filed another
memorandum in opposition on June 30, 2015, and Deutsche Bank
filed its reply on July 6, 2015.
[Dkt. nos. 23, 24.]
After
careful consideration of the Motion, supporting and opposing
memoranda, and the relevant legal authority, Deutsche Bank’s
Motion is HEREBY GRANTED IN PART AND DENIED IN PART for the
reasons set forth below.
BACKGROUND
Plaintiff filed her Complaint on July 29, 2014.
According to the Complaint, Plaintiff obtained a loan secured by
a promissory note and a mortgage on the property at issue in this
action (“the Property”) on April 25, 2006.
The original lender
was Argent Mortgage Company, LLC (“Argent”).
Plaintiff states
that, on February 4, 2014, she sent Deutsche Bank a notice
stating that, inter alia, she was disputing the debt pursuant to
the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C.
§ 1692.
She requested a copy of the recorded assignment of her
2
note and mortgage, which she alleges was necessary for Deutsche
Bank to collect payments on the loan and to pursue the foreclose
proceedings that were initiated against the Property.
On
March 27, 2014, Ocwen Loan Servicing, LLC (“Ocwen”) provided
Plaintiff with copies of an assignment by Citi Residential
Lending Inc. (“Citi”), on behalf of Argent, in favor of Deutsche
Bank.
[Complaint at ¶¶ 7-10.]
Plaintiff argues that the assignment to Deutsche Bank
is invalid because: it was not recorded; [id. at ¶ 10;] the
persons who signed or notarized the document did not have
authority to do so, and were in fact “robo-signers[;]” [id. at
¶¶ 10, 12 (emphasis omitted);] the note and mortgage were not
assigned to Deutsche Bank’s trust prior to the closing date
required by the Pooling Service Agreement (“PSA”); [id. at pg. 7,
¶ 14;1] and “the purported assignments and transfers of
Plaintiffs [sic] debt or obligation did not comply with New York
law, and/or other laws and statutes, and, thus, do not constitute
valid and enforceable ‘True Sales’” [id. at pg. 8, ¶ 16].
Plaintiff therefore alleges that the assignment is null and void.
[Id. at pg. 9, ¶¶ 17, 19.]
It is not clear what specific claims Plaintiff is
alleging because the Complaint does not identify individual
1
The paragraphs of the Complaint are misnumbered; there are
two sets of paragraphs numbered 13 through 18. See Complaint at
pgs. 5-9.
3
counts.
Instead, the Complaint alleges that Defendant
was misleading for providing the Plaintiff an
Unrecorded and false assignment of mortgage,
defendant violates fraud, misleading, intentional
misrepresentation, conspiracy, Unfair Deceptive
Business Practices Act and Fair Debt Collection
Practices Act for providing “UNRECORDED ASSIGNMENT
OF MORTGAGE” and therefore the defendant has lack
of Standing to foreclose on the Plaintiff. . . .
[Id. at ¶ 11 (emphasis in original).]
Complaint includes a similar list.
The caption of the
[Id. at pg. 1.]
Plaintiff
seeks the following relief: a finding that she is the rightful
title holder for the Property and that Deutsche Bank has no
interest in it; an order preventing the assignment from being
recorded with the State of Hawai`i Bureau of Conveyances (“BOC”);
an award of compensatory, special, and general damages; and any
other appropriate relief.
[Id. at pgs. 9-10.]
In the instant Motion, Deutsche Bank asks this Court to
dismiss all of Plaintiff’s claims with prejudice.
DISCUSSION
I.
Procedural Issues
At the outset, this Court must address the procedural
issues regarding what materials are properly before it in
connection with the Motion.
A.
Judicial Notice
First, Deutsche Bank asks this Court to take judicial
notice of the three exhibits attached to the Motion.
4
[Mem. in
Supp. of Motion at 2-3 nn.3-5.]
They are:
-Exhibit 1, the Mortgage between Plaintiff as the borrower and
Argent as the lender, recorded with the BOC on April 28,
2006 as document number 2006-079139 (“Mortgage”);
-Exhibit 2, the assignment of Plaintiff’s Mortgage by Citi in
favor of Deutsche Bank National Trust Company, as Trustee
for, Argent Securities Inc. Asset Back Pass-Through
Certificates, Series 2006-M1, under the Pooling and
Servicing Agreement Dated June 1, 2006, effective
February 11, 2009, recorded with the BOC on February 23,
2009 as document number 2009-025642 (“February 2009
Assignment”); and
-Exhibit 3, the assignment of Plaintiff’s Mortgage by Deutsche
Bank National Trust Company, as Trustee for, Argent
Securities Inc. Asset Back Pass-Through Certificates, Series
2006-M1, under the Pooling and Servicing Agreement Dated
June 1, 2006, in favor of Deutsche Bank National Trust
Company, as Trustee in trust for the benefit of the
Certificateholders for Argent Securities Trust 2006-M1,
Asset-Backed Pass-Through Certificates, Series 2006-MI,
dated October 8, 2009, recorded with the BOC on October 20,
2009 as document number 1009-161014 (“October 2009
Assignment”).2
Deutsche Bank argues that this Court can take judicial notice of
these exhibits because they are publicly available documents.
This Court agrees and GRANTS Deutsche Bank’s request.
See Fed. R. Evid. 201(b)(2) (“The court may judicially notice a
fact that is not subject to reasonable dispute because it . . .
can be accurately and readily determined from sources whose
accuracy cannot reasonably be questioned.”).
This Court will
consider the Mortgage and the Assignments in ruling on the
portion of the Motion seeking dismissal for failure to state a
2
This Court will refer to the February 2009 Assignment and
the October 2009 Assignment collectively as the “Assignments.”
5
claim.
See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551
U.S. 308, 322 (2007) (stating that “courts must consider the
complaint in its entirety, as well as other sources courts
ordinarily examine when ruling on Rule 12(b)(6) motions to
dismiss, in particular, documents incorporated into the complaint
by reference, and matters of which a court may take judicial
notice”).
B.
Plaintiffs’ Second Memorandum in Opposition
In its reply, Deutsche Bank asks this Court to strike
Plaintiffs’ second memorandum in opposition because it was
untimely and because Plaintiff did not seek leave of court to
file a second memorandum in opposition.
Plaintiff’s memorandum in opposition was due by
June 26, 2015.
See EO, filed 6/10/15 (dkt. no. 17), at 2.
As
previously noted, Plaintiff filed a document on June 26, 2015,
and this Court construed it as her memorandum in opposition.
Plaintiff filed another memorandum in opposition on June 30, 2015
(“6/30/15 Memorandum”), without seeking leave of court to do so.
Local Rule 7.4 states, in pertinent part, that “[a]ny
opposition or reply that is untimely filed may be disregarded by
the court or stricken from the record,” and, other that the
memorandum in opposition and the reply, “[n]o further or
supplemental briefing shall be submitted without leave of court.”
Thus, this Court has the discretion to strike or disregard
6
Plaintiff’s 6/30/15 Memorandum because Plaintiff filed it after
the June 26 deadline and because she did not obtain leave of
court to file a supplemental memorandum.
Although this Court
does not condone Plaintiff’s failure to follow the applicable
rules, it declines to strike Plaintiff’s 6/30/15 Memorandum
because: 1) Plaintiff is proceeding pro se; and 2) the filing of
the 6/30/15 Memorandum did not prejudice Deutsche Bank.
Deutsche
Bank which was able to address both of Plaintiff’s memoranda in
its reply, and, although Plaintiff filed the 6/30/15 Memorandum
after her deadline, Deutsche Bank was able to file its reply by
the July 6, 2015 deadline.
This Court therefore DENIES Deutsche
Bank’s request to strike or disregard the 6/30/15 Memorandum.
This Court, however, reminds Plaintiff that her pro se
status does not excuse her from complying with the applicable
court rules.
See King v. Atiyeh, 814 F.2d 565, 567 (9th Cir.
1987) (“Pro se litigants must follow the same rules of procedure
that govern other litigants.” (citations omitted)).
This Court
CAUTIONS Plaintiff that it may strike future filings that are
untimely or future supplemental memoranda that Plaintiff submits
without obtaining leave of court.
The Court now turns to the merits of the Motion.
II.
Lack of Jurisdiction
Deutsche Bank first argues that this Court should
dismiss Plaintiff’s claims because her Complaint does not include
7
“a short, plain statement of the grounds for this Court’s
jurisdiction,” as required by Fed. R. Civ. P. 8(a)(1).
Supp. of Motion at 4.]
[Mem. in
It is true that the section of
Plaintiff’s Complaint titled “JURISDICTION” only addresses where
the events at issue in this case occurred.
¶¶ 5-6.
See Complaint at
This Court, however, must liberally construe the
Complaint because Plaintiff is proceeding pro se.
See, e.g.,
Litmon v. Harris, 768 F.3d 1237, 1241 (9th Cir. 2014) (reviewing
the dismissal of the plaintiff’s claims de novo and noting that
the Ninth Circuit “constue[s] pro se complaints liberally”).
Liberally construing the caption of the Complaint and
paragraph 11, quoted supra, this Court FINDS that Plaintiff is
attempting to plead a claim under the FDCPA.
Thus, this Court
CONCLUDES that there is at least one claim in the Complaint over
which it has federal question jurisdiction.3
3
See 28 U.S.C.
Plaintiff may be attempting allege diversity jurisdiction
pursuant to 28 U.S.C. § 1332(a)(1) (“The district courts shall
have original jurisdiction of all civil actions where the matter
in controversy exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between - (1) citizens of different
States[.]”). She alleges that she is a Hawai`i resident.
[Complaint at ¶ 1.] She also alleges that Deutsche Bank is
“authorized to do business in the [sic] Hawaii,” and it “is
located at 300 South Grand Avenue 41st Floor, Los Angeles, CA
90071, United States and located at 1761 Rast St., Andrew Place,
Santa Ana, CA 92705.” [Id. at ¶¶ 2-3.] However, she has not
pled allegations sufficient to establish the amount in
controversy, and she has not pled allegations regarding Deutsche
Bank’s state of incorporation and its principal place of
business. See § 1332(c)(1) (“a corporation shall be deemed to be
a citizen of every State and foreign state by which it has been
(continued...)
8
§ 1331 (“The district courts shall have original jurisdiction of
all civil actions arising under the Constitution, laws, or
treaties of the United States.”).
This Court also notes that, if
any of Plaintiff’s federal law claims survives the motion to
dismiss stage, it would have the discretion to exercise
supplemental jurisdiction over her state law claims, if it finds
that the state law claims are so factually related to the federal
law claims as to be part of the same case or controversy.
See 28
U.S.C. § 1367.
Deutsche Bank’s Motion is therefore DENIED as to its
request to dismiss the Complaint for lack of jurisdiction.
III. Failure to State a Claim
Deutsche Bank next argues that this Court should
dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b)(6)
because Plaintiff has failed to plead any plausible claims.
See
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“To survive a motion
to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible
on its face.’” (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
3
(...continued)
incorporated and of the State or foreign state where it has its
principal place of business”).
This Court therefore concludes that the Complaint does not
allege a basis for diversity jurisdiction. However, it may be
possible for Plaintiff to amend her complaint to allege a basis
for diversity jurisdiction.
9
570, 127 S. Ct. 1955 (2007))).
A.
Federal Law Claims
1.
FDCPA Claim
As previously noted, Plaintiff alleges a FDCPA claim
against Deutsche Bank.
The FDCPA provides, inter alia, that: “A
debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any
debt.”4
15 U.S.C. § 1692e.
Plaintiff’s argument appears to be
that Deutsche Bank violated the FDCPA because it provided her
with one of the Assignments - which she alleges was misleading in connection with the collection of payments on her mortgage
loan and the attempted foreclosure on her property.
However, it
is well-recognized that:
original lenders, creditors, mortgage servicing
companies, and mortgage brokers generally do not
qualify as “debt collectors.” See, e.g., Lyons v.
Bank of Am., NA, 2011 WL 3607608, at *12 (N.D.
Cal. Aug. 15, 2011) (“The FDCPA applies to those
who collect debts on behalf of another; it does
not encompass creditors who are collecting their
own past due accounts.”); Radford v. Wells Fargo
Bank, 2011 WL 1833020, at *15 (D. Haw. May 13,
4
For purposes of the FDCPA:
The term “debt collector” means any person who
uses any instrumentality of interstate commerce or
the mails in any business the principal purpose of
which is the collection of any debts, or who
regularly collects or attempts to collect,
directly or indirectly, debts owed or due or
asserted to be owed or due another. . . .
15 U.S.C. § 1692a(6).
10
2011) (collecting cases stating that original
lenders and mortgage servicing companies are not
“debt collectors”); Sakugawa v. IndyMac Bank,
F.S.B., 2010 WL 4909574, at *5 (D. Haw. Nov. 24,
2010) (dismissing FDCPA claim because the mortgage
broker was not a “debt collector”).
Pregana v. CitiMortgage, Inc., Civil No. 14–00226 DKW–KSC, 2015
WL 1966671, at *6 (D. Hawai`i Apr. 30, 2015) (some citations
omitted).
Deutsche Bank is not attempting to collect the debt of
another; it is attempting to collect on an account that it owns
by virtue of the Assignments.
Plaintiff may be alleging that Deutsche Bank is
attempting to collect the debt of another because the assignment
of her loan to Deutsche Bank’s securitization trust is invalid.
This argument, however, fails as a matter of law.
This district
court has stated:
it is well established that a plaintiff borrower
does not have standing to challenge the validity
of assignments to securitization trusts. See,
e.g., Brodie v. Nw. Trustee Servs., Inc., 579 F.
App’x 592, 593 (9th Cir. 2014) (“The district
court also correctly concluded that [plaintiff/
mortgagor] lacks standing to challenge the
transfer and assignment of the note and deed of
trust. She is neither a party to nor a
beneficiary of the assignment and transfer.”);
Rajamin v. Deutsche Bank Nat’l Trust Co., 757 F.3d
79 (2d Cir. 2014) (district court “properly ruled
that plaintiffs lacked standing to enforce the
agreements to which they were not parties and of
which they were not intended beneficiaries.”)
This is because “borrowers do not have standing to
challenge the validity of an assignment of its
loans because they are not parties to the
agreement[.]” U.S. Bank, N.A. v. Salvacion, 338
P.3d 1185, 1190 (Haw. App. 2014) (recognizing that
“[r]ecent decisions by State and Federal courts in
11
Hawai`i have ‘rejected identical arguments . . .
contesting the validity of assignments to
securitization trusts.”).
Recently, in Hunt v. U.S. Bank, N.A., 2015 WL
738067 (9th Cir. Feb. 23, 2015) (unpublished), the
Ninth Circuit Court of Appeals rejected an
argument similar to that made by Plaintiff here.
In Hunt, the borrowers challenged the bank’s
authority to foreclose based on alleged defects in
the securitization process and the validity of the
assignments. In upholding the district court’s
dismissal of Plaintiff’s claims, the Court noted
that the plaintiffs, similar to the Plaintiff
here, had executed a note and deed of trust
allowing for the lender to transfer the note
without notice and did not dispute that they
defaulted on their loan. Hunt, [593] Fed. Appx.
at 732. The Court reasoned: “Even if the improper
securitization occurred or the assignments were
fraudulent, the Hunts are not a party to those
transactions and are not the victims.” Id.
Uy v. HSBC Bank USA, Nat’l Ass’n, Civ. No. 14–00261 HG–KSC, 2015
WL 1966689, at *6 (D. Hawai`i Apr. 30, 2015) (alterations in Uy).
Similarly, in the present case, Plaintiff agreed that
her promissory note and the Mortgage could “be sold one or more
times without prior notice to” her, [Motion, Exh. 1 (Mortgage) at
¶ 20,] and there is no indication in the Assignments that
Plaintiff was a party to, or an intended third-party beneficiary
of, those instruments.
See id., Exh. 2 (February 2009
Assignment); id., Exh. 3 (October 2009 Assignment).
Thus, even
if there was impropriety or fraud in the execution of the
Assignments, Plaintiff was not the victim, and she does not have
standing to challenge Deutsche Bank’s ownership of her loan.
Hunt, 593 F. App’x at 732.
12
See
Even assuming that the factual allegations in the
Complaint about the Assignments are true,5 Deutsche Bank is the
owner of Plaintiff’s mortgage loan, and therefore it is not a
debt collector for purposes of the FDCPA.
This Court CONCLUDES
that Plaintiff’s FDCPA claim fails to state a claim upon which
relief can be granted.
See Fed. R. Civ. P. 12(b)(6).
Further,
this Court FINDS that it is clear that Plaintiff cannot cure the
deficiencies in this claim by amendment.
Plaintiff’s FDCPA claim
is therefore DISMISSED WITH PREJUDICE, i.e. without leave to
amend.
See Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012)
(“A district court should not dismiss a pro se complaint without
leave to amend unless it is absolutely clear that the
deficiencies of the complaint could not be cured by amendment.”
(citation and internal quotation marks omitted)).
2.
RESPA Claim
Deutsche Bank argues that the Complaint fails to plead
a plausible claim under the Real Estate Settlement and Procedures
Act (“RESPA”), 12 U.S.C. § 2605, et seq.
It is not clear whether
Plaintiff alleges a RESPA claim in the first instance.
She does
not refer to RESPA in either the caption of the Complaint or
5
To survive a Fed. R. Civ. P. 12(b)(6) motion to dismiss, a
complaint’s “[f]actual allegations must be enough to raise a
right to relief above the speculative level, on the assumption
that all the allegations in the complaint are true (even if
doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (emphasis added) (footnote and citations omitted).
13
paragraph 11, the two places where she lists her claims against
Deutsche Bank.
According to Plaintiff, on February 4, 2014, she
sent Deutsche Bank a document titled “Notice of Dispute Debt as
Required by the Fair Debt Collection Practices Act.
Section 1692 and Qualified Written Request.”
Exh. A.]
15 U.S.S.
[Complaint at ¶ 8,
She states that, on March 27, 2014, Ocwen sent her
response, along with two copies of an assignment regarding her
[Id. at ¶ 9, Exh. B.6]
loan.
Plaintiff may be attempting to allege a RESPA claim
based upon the failure to respond to her Qualified Written
Request (“QWR”) within the period required under the statute, or
she may be alleging that the response was misleading because it
was based upon the allegedly invalid assignment.
See, e.g., 12
U.S.C. § 2605(e)(1) (requiring “any servicer of a federally
related mortgage” who receives “a qualified written request from
the borrower” to provide the borrower with written acknowledgment
of receipt within five days); § 2605(e)(2) (requiring the
servicer to take certain action “[n]ot later than 30 days
(excluding legal public holidays, Saturdays, and Sundays)” after
receipt of the QWR).
However, the fact the Complaint does not
allege what specific provision Deutsche Bank allegedly violated
6
The Court notes that the assignment attached to the
Complaint as Exhibit B has six pages, two of which appear to be
identical to two of the three pages in the February 2009
Assignment. The other four pages of Plaintiff’s Exhibit B are
not contained in either of the Assignments.
14
is sufficient ground to dismiss any RESPA claim that Plaintiff is
attempting to bring.
See, e.g., Uy, 2015 WL 1966689, at *8
(“Plaintiff fails to cite any specific provision of RESPA that
Defendants HSBC Bank and Ocwen allegedly violated.
so is grounds for dismissal.”).
Failure to do
Further, the Complaint fails to
state a plausible RESPA claim because it does not allege how the
untimely and/or misleading response to Plaintiff’s QWR caused her
to suffer damages.
See Tedder v. Deutsche Bank Nat’l Trust Co.,
863 F. Supp. 2d 1020, 1035 (D. Hawai`i 2012) (dismissing the
plaintiff’s RESPA claim because she “fail[ed] to explain how any
RESPA violation involving Defendants’ alleged failure to respond
to her QWR has caused her pecuniary loss”).
To the extent that the Complaint attempts to allege a
RESPA claim, this Court CONCLUDES that Plaintiff fails to state a
claim upon which relief can be granted.
This Court, however,
FINDS that it is arguably possible for Plaintiff to cure the
defects in this claim by amendment.
Plaintiff’s RESPA claim is
therefore DISMISSED WITHOUT PREJUDICE.
B.
State Law Claims
Plaintiff’s remaining claims - fraud, intentional
misrepresentation, misleading,7 conspiracy, and unfair and
7
Deutsche Bank argues that this Court should construe
Plaintiff’s claim based on “misleading” as a claim for negligent
misrepresentation. [Mem. in Supp. of Motion at 10.]
15
deceptive business practices8 - are state law claims.
Because
this case is in its early stages and this Court has dismissed
Plaintiff’s only federal law claims, this Court declines to
exercise supplemental jurisdiction over her state law claims at
this time.
See § 1367(c)(3) (“The district courts may decline to
exercise supplemental jurisdiction over a claim under subsection
(a) if - . . . (3) the district court has dismissed all claims
over which it has original jurisdiction[.]”).
This Court makes
no findings or conclusions about the merits of Plaintiff’s state
law claims at this time.
This Court therefore DISMISSES Plaintiff’s state law
claims.
The dismissal is WITHOUT PREJUDICE because this Court
has dismissed Plaintiff’s RESPA claim without prejudice, see
supra Section III.A.2, and because Plaintiff may be able to amend
her Complaint to allege a basis for diversity jurisdiction.
See
supra note 2.
In order to provide guidance to Plaintiff if she
chooses to amend her Complaint, this Court points out that her
fraud claim is subject to the heightened pleading standard
8
Plaintiff’s claim for violation of the Unfair Deceptive
Business Practices Act appears to be an attempt to invoke the
Hawai`i Unfair and Deceptive Trade Practices Act. See Haw. Rev.
Stat. § 480-2(a) (“unfair or deceptive acts or practices in the
conduct of any trade or commerce are unlawful”). Such claims
alleging violations of § 480-2 are referred to as “UDAP claims.”
See, e.g., Barber v. Ohana Military Communities, LLC, Civil No.
14–00217 HG–KSC, 2014 WL 3529766, at *8 (D. Hawai`i July 15,
2014).
16
required by Fed. R. Civ. P. 9(b).
Rule 9(b) states: “In alleging
fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.
Malice, intent,
knowledge, and other conditions of a person’s mind may be alleged
generally.”
This district court has noted that Rule 9(b)’s
heightened pleading standard “requir[es] a party to state with
particularity the circumstances constituting fraud.
In other
words, ‘[a]verments of fraud must be accompanied by the who,
what, when where and how of the misconduct charged.’”
Pregana,
2015 WL 1966671, at *5 (some citations and internal quotation
marks omitted) (quoting Vess v. Ciba–Geigy Corp. USA, 317 F.3d
1097, 1106 (9th Cir. 2003)).
Plaintiff’s intentional
misrepresentation claim is also subject to the heightened
pleading standard.
See Adwalls Media, LLC v. Ad Walls, LLC,
Civil No. 12–00614 SOM/BMK, 2015 WL 419664, at *8 (D. Hawai`i
Jan. 30, 2015) (noting that “[f]raudulent misrepresentation
claims are subject to the heightened pleading requirements of
Rule 9(b)” (citation omitted)).
However, if Deutsche Bank is
correct that Plaintiff’s claim based on “misleading” is an
attempt to allege a claim for negligent misrepresentation, the
claim is not subject to the heightened pleading standard for
fraud-based claims.
See Soriano v. Wells Fargo Bank, N.A.,
Civil. No. 11–00044 SOM/KSC, 2012 WL 1536065, at *13 (D. Hawai`i
Apr. 30, 2012) (“Although a negligent misrepresentation claim in
17
some jurisdictions is subject to Rule 9(b), a negligent
misrepresentation claim under Hawaii law is not.” (citations
omitted)).
To the extent that Plaintiff’s UDAP claim is based on
allegedly fraudulent business practices, that claim must also
satisfy the Rule 9(b) pleading standard.
See Barber, 2014 WL
3529766, at *8 (“A UDAP claim alleging fraudulent business
practices must be pled with particularity, pursuant to Federal
Rule of Civil Procedure 9(b).”).
Similarly, if the object of the
conspiracy at issue in Plaintiff’s conspiracy claim is
fraudulent, that claim must satisfy the Rule 9(b) pleading
standard.
See Swartz v. KPMG LLP, 476 F.3d 756, 765 (9th Cir.
2007) (“Rule 9(b) imposes heightened pleading requirements where
the object of the conspiracy is fraudulent.” (citation and
internal quotation marks omitted)).
IV.
Leave to Amend
This Court has dismissed Plaintiff’s RESPA claim and
her state law claims - fraud, intentional misrepresentation,
misleading, conspiracy, and unfair and deceptive business
practices - without prejudice.
If Plaintiff wishes to amend
these claims, she must file an amended complaint by August 31,
2015.
Plaintiff’s amended complaint must include all of the
claims that she wishes to pursue, as well as all of the
allegations that her claims are based upon, even if she
18
previously presented those allegations in the original Complaint.
She cannot incorporate any part of the original Complaint into
the amended complaint by merely referring to the Complaint.
This Court CAUTIONS Plaintiff that: if she fails to
file her amended complaint by August 31, 2015, this Court will
dismiss her case with prejudice; or, if any claim in the amended
complaint fails to cure the defects identified in this Order,
this Court will dismiss that claim with prejudice.
This Court emphasizes that it has not granted Plaintiff
leave to make other changes, such as adding new parties, claims,
or theories of liability.
If Plaintiff wishes to do so, she must
file a motion for leave to amend pursuant to Fed. R. Civ. P.
15(a)(2).
CONCLUSION
On the basis of the foregoing, Deutsche Bank’s Motion
to Dismiss Complaint for Failure to State a Claim upon which
Relief Can Be Granted, filed March 18, 2015, is HEREBY GRANTED IN
PART AND DENIED IN PART.
The Motion is GRANTED insofar as: all
of Plaintiff’s claims are HEREBY DISMISSED; and the dismissal of
Plaintiff’s claim under the Fair Debt Collections Practices Act
is WITH PREJUDICE.
The Motion is DENIED insofar as the dismissal
Plaintiff’s other claims is WITHOUT PREJUDICE.
If Plaintiff chooses to file an amended complaint, she
must do by August 31, 2015, and the amended complaint must comply
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with the terms of this Order.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, July 30, 2015.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
LOREEN DIRECTO TROXEL VS. DEUTSCHE BANK NATIONAL TRUST COMPANY,
ETC., ET AL; CIVIL 14-00342 LEK-RLP; ORDER GRANTING IN PAT AND
DENYING IN PART DEFENDANT’S MOTION TO DISMISS COMPLAINT FOR
FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED
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