St. James v. JP Morgan Chase Bank Corporation et al
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS JP MORGAN CHASE BANK, N.A.; WELLS FARGO BANK, N.A.; CALIFORNIA RECONVEYANCE COMPANY; AND U.S. BANK NATIONAL ASSOCIATION'S "MOTION TO DISMISS 10 FIRST AMENDED COMPLAINT"; AND GRANT ING DEFENDANT DEBORAH BRIGNAC'S "MOTION TO DISMISS [ECF NO. 10] FIRST AMENDED COMPLAINT FILED OCTOBER 24, 2016" re 14 Motion to Dismiss; re 32 Motion to Dismiss. Signed by JUDGE LESLIE E. KOBAYASHI on 09/29/2017. The First Amended Complaint is dismissed in its entirety, for lack of subject matter jurisdiction. Plaintiff is granted permission to file a motion seeking leave to file a second amended complaint. Plaintiff must attach his proposed second amended complaint to the Motion for Leave. This Court ORDERS Plaintiff to file his Motion for Leave by November 13, 2017. The Motion for Leave will be referred to the magistrate judge. Plaintiff is CAUTIONED that, if he fail s to file his Motion for Leave by November 13, 2017, the claims that this Court dismissed without prejudice in this Order will be dismissed with prejudice. The Brignac Motion is GRANTED insofar as Plaintiff's claims against Brignac in Counts I and VII are DISMISSED WITH PREJUDICE. There being no remaining claims against her in this case, this Court DIRECTS the Clerk's Office to terminate Brignac as a defendant on October 20, 2017, unless Plaintiff files a motion for reconsideration of this Order by October 16, 2017. (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 served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
SAMUEL ST. JAMES,
JP MORGAN CHASE BANK
CORPORATION, ETC., ET AL.,
CIVIL 16-00529 LEK-KSC
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS
JP MORGAN CHASE BANK, N.A.; WELLS FARGO BANK, N.A.;
CALIFORNIA RECONVEYANCE COMPANY; AND U.S. BANK NATIONAL
ASSOCIATION’S “MOTION TO DISMISS  FIRST AMENDED COMPLAINT”;
AND GRANTING DEFENDANT DEBORAH BRIGNAC’S “MOTION TO DISMISS
[ECF NO. 10] FIRST AMENDED COMPLAINT FILED OCTOBER 24, 2016”
On November 14, 2016, Defendants JP Morgan Chase Bank,
N.A. (“JP Morgan”); Wells Fargo Bank, N.A. (“Wells Fargo”);
California Reconveyance Company (“CRC”); U.S. Bank National
Association, as Trustee, Successor in Interest to Wachovia Bank,
National Association, as Trustee, for Merrill Lynch Mortgage
Investors Inc. Mortgage Pass-through Certificates, Series MLMI
2005-A5 (“U.S. Bank,” collectively “Bank Defendants”) filed their
“Motion to Dismiss  First Amended Complaint” (“Bank Motion”).
[Dkt. no. 14.]
On February 24, 2017, Defendant Deborah Brignac
(“Brignac”) filed her “Motion to Dismiss [ECF No. 10] First
Amended Complaint Filed October 24, 2016” (“Brignac Motion”).
[Dkt. no. 32.]
Pro se Plaintiff Samuel St. James (“Plaintiff”)
filed his response to the Bank Motion on February 13, 2017, and
the Bank Defendants filed their reply on February 17, 2017.
[Dkt. nos. 25, 27.]
Plaintiff did not respond to the Brignac
On July 31, 2017, this Court ordered Plaintiff to file a
supplemental memorandum and allowed any defendant to file a
[Dkt. no. 39.]
Plaintiff filed his supplemental
memorandum on August 28, 2017, and the Bank Defendants and
Brignac filed a joint position statement on September 6, 2017.
[Dkt. nos. 43, 44.]
The Court finds these matters 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”).
The Bank Motion is hereby granted in
part and denied in part, and the Brignac Motion is hereby granted
in its entirety, for the reasons set forth below.
Plaintiff filed his original Complaint on September 26,
[Dkt. no. 1.]
On October 24, 2016, Plaintiff filed his
First Amended Complaint, pursuant to Fed. R. Civ. P. 15(a)(1).
[Dkt. no. 10.]
This case arises from Plaintiff’s unsuccessful
attempt to obtain a loan modification for the mortgage on his
home in San Diego, California (“the Property”) under the Home
Affordable Modification Program (“HAMP”).
Complaint at ¶¶ 2, 27, 36, 37, 84.]
According to Plaintiff,
during the loan modification process, his attorney worked with
JP Morgan to have Plaintiff placed in a HAMP three-month trial
period plan (“TPP”).
The TPP, however, only reduced Plaintiff’s
monthly mortgage payment by $79.00, and, sometime in June 2010,
JP Morgan denied him a permanent HAMP loan modification.
Plaintiff entered into his “mortgage loan contract
. . . on approximately 04/07/2005.”
[Id. at ¶ 84 (quotation
According to Plaintiff, on May 2, 2005,
Washington Mutual Bank (“WaMu”) assigned its interest in his loan
to the Merrill Lynch Mortgage Investors Inc. Mortgage PassThrough Certificates, Series MLMI 2005-A5, Trust (“Merrill
[Id. at ¶ 53(A).]
Plaintiff states that WaMu was his
“personal bank,” but it had “changed over to” JP Morgan by June
[Id. at ¶ 58.]
Apparently, while Plaintiff was attempting
to secure the loan modification from JP Morgan, he received a
notice from Brignac, CRC’s vice president, of a trustee’s
foreclosure sale scheduled for August 27, 2009.
Brignac robo-signed the notice.1
[Id. at ¶ 61.]
He alleges that
alleges that, because of the assignment to Merrill Lynch, neither
Plaintiff alleges the “practice of repeated false
attestation of information in affidavits is popularly known as
‘robosigning.’ Where third parties engaged in ‘robosigning’ on
behalf of the Banks, they did so with the knowledge and approval
of the Banks.” [First Amended Complaint at ¶ 43.d.] “The Banks”
refers to JP Morgan, Wells Fargo, Defendant Washington Mutual
Holding, Inc. (“WMHI”), and U.S. Bank. [Id. at ¶ 26.]
CRC2 nor JP Morgan was the legal trustee of the Property, and
neither held any ownership interest in the Property.
contends that they did not have any authority to foreclose on the
[Id. at ¶ 43.d.]
In 2010, Plaintiff filed suit in the United States
District Court for the Southern District of California against
JP Morgan and CRC, Civil Number 10-01893 IEG-NLS (“California
The purpose of the California Case was to halt the
foreclosure of the Property, which had been Plaintiff’s home
Plaintiff filed his first amended complaint in the
California Case on October 1, 2010.
[Id. at ¶¶ 82-83.]
According to Plaintiff, the district court in the California Case
granted a motion to dismiss the case because the district court
“believed [JP Morgan] had bought and did own [Plaintiff’s] home
as an asset from WaMu.”
[Id. at ¶ 88.]
Plaintiff alleges that
JP Morgan accomplished this through a fraud upon the court.
Plaintiff later relocated to Hawai`i “because of fear
[Id. at ¶ 27.]
Plaintiff entered into
bankruptcy proceedings in the United States Bankruptcy Court for
the District of Hawai`i, In re Samuel St. James, et al., Case
No. 13-00138 (“Bankruptcy Case”).
He alleges that fraud by
According to Plaintiff, CRC “was listed as Trustee for”
JP Morgan. [First Amended Complaint at ¶ 13 (emphasis omitted).]
JP Morgan and U.S. Bank in the Bankruptcy Case resulted in the
illegal foreclosure of his home by U.S. Bank in 2015.
Plaintiff alleges the following claims: a fraud claim
against the Bank Defendants, Brignac, and WMHI3 based on
misrepresentations in the loan modification process (“Count I”);
[id. at ¶¶ 48-69;] a breach of contract against JP Morgan based
upon its alleged failure to comply with the TPP agreement
(“Count II”); [id. at ¶¶ 70-80;] a fraud claim against JP Morgan,
Wells Fargo, and CRC based on misrepresentations in the
California Case (“Count III”); [id. at ¶¶ 81-90;] an unclean
hands claim against the Bank Defendants and Defendant Alaw4 based
on their alleged actions and omissions related to the Bankruptcy
Case (“Count IV”); [id. at ¶¶ 91-111;] violation of the
California Unfair Competition Law, Business and Professions Code
§ 17200, et seq., and other Hawai`i and California consumer
protection laws, against the Bank Defendants and Alaw
(“Count V”); [id. at ¶¶ 112-18;] a claim against the Bank
According to the First Amended Complaint, Defendant
Washington Mutual Bank, FSB (“WMB”) reorganized in bankruptcy to
WMHI in 2012. [First Amended Complaint at ¶ 10.] Although both
WMHI and WMB are named as defendants in this case, there is no
evidence in the record that Plaintiff completed service upon
Plaintiff identifies Alaw as the “successor to, ‘CRC’, by
purchase from” JP Morgan. [First Amended Complaint at ¶ 14.]
There is no evidence in the record that Plaintiff has completed
service upon Alaw.
Defendants seeking to set aside or vacate the sale of his home
and to have title restored to him (“Count VI”); [id. at ¶¶ 11926;] and intentional infliction of emotional distress (“IIED”)
against all of the defendants (“Count VII”), [id. at ¶¶ 127-42].
Plaintiff prays for, inter alia: general, special,
compensatory, statutory, exemplary, and punitive damages;
attorneys’ fees and costs; an order voiding the assignment of
Plaintiff’s mortgage; restitution and disgorgement; prejudgment
interest; an order requiring that the Property be reconveyed to
him; an order voiding any document signed by Plaintiff in
connection with his mortgage loan; an injunction against future
violations of the statutes cited in the First Amended Complaint;
and any other appropriate relief.
[Id. at pgs. 101-02.]
The Bank Defendants and Brignac seek dismissal of the
First Amended Complaint with prejudice for lack of subject matter
jurisdiction and because the claims against them are all time
In addition, the Brignac Motion contends that
Plaintiff’s claims against her are not sufficiently pled.
The Bank Defendants first argue that this Court does
not have jurisdiction over the claims in Plaintiff’s First
This district court has stated:
“Federal courts are courts of limited
jurisdiction,” possessing “only that power
authorized by Constitution and statute.” United
States v. Marks, 530 F.3d 799, 810 (9th Cir. 2008)
(quoting Kokkonen v. Guardian Life Ins. Co., 511
U.S. 375, 377 (1994)). At the pleading stage, a
plaintiff must allege sufficient facts to show a
proper basis for the Court to assert subject
matter jurisdiction over the action. McNutt v.
Gen. Motors Acceptance Corp., 298 U.S. 178, 189
(1936); Johnson v. Columbia Props. Anchorage,
L.P., 437 F.3d 894, 899 (9th Cir. 2006); Fed. R.
Civ. P. 8(a)(1).
In general, a plaintiff may establish subject
matter jurisdiction in one of two ways. First, he
may assert “federal question jurisdiction,” based
on allegations that a defendant violated the
Constitution, a federal law, or treaty of the
United States. See 28 U.S.C. § 1331 (“The
district courts shall have original jurisdiction
of all civil actions arising under the
Constitution, laws, or treaties of the United
States.”). The United States Supreme Court has
recognized that a “plaintiff properly invokes
§ 1331 jurisdiction” by pleading “a colorable
claim ‘arising’ under the Constitution or laws of
the United States.” Arbaugh v. Y & H Corp., 546
U.S. 500, 513 (2006). Second, a plaintiff may
invoke the court’s “diversity jurisdiction,” which
applies “where the matter in controversy exceeds
the sum or value of $75,000, exclusive of interest
and costs, and is between . . . citizens of
different States.” 28 U.S.C. § 1332(a)(1). In
order to establish diversity jurisdiction, a
plaintiff must establish complete diversity of the
parties. See Morris v. Princess Cruises, Inc.,
236 F.3d 1061, 1067 (9th Cir. 2001) (explaining
that § 1332(a) “requires complete diversity of
citizenship; each of the plaintiffs must be a
citizen of a different state than each of the
defendants”). [The plaintiff] has the burden of
establishing this Court’s subject matter
jurisdiction. See Thompson v. McCombe, 99 F.3d
352, 353 (9th Cir. 1996) (“A party invoking the
federal court’s jurisdiction has the burden of
proving the actual existence of subject matter
jurisdiction.”). . .
Sameshima v. United States, CIVIL NO. 15-00422 DKW-BMK, 2015 WL
6453104, at *2 (D. Hawai`i Oct. 23, 2015) (some alterations in
Plaintiff asserts federal question jurisdiction based
on: 12 U.S.C. §§ 2603 and 2614, which are part of the Real Estate
Settlement Procedures Act (“RESPA”); interstate banking laws and
regulations; and bankruptcy law.
[First Amended Complaint at
However, Plaintiff’s claims are not based upon any of
these – he asserts claims arising under California law and
Plaintiff has not asserted a colorable claim
arising under either RESPA, banking laws and regulations, or
The First Amended Complaint’s citation to these
federal authorities appears to be immaterial and made solely in
an attempt to obtain federal jurisdiction.
See Flores v. Rodham
Clinton, CIVIL NO. 16-00573 DKW-KJM, 2016 WL 6542708, at *5 (D.
Hawai`i Nov. 3, 2016) (“A claim is not colorable if: (1) the
alleged claim under the Constitution or federal statutes appears
to be immaterial and made solely for the purpose of obtaining
jurisdiction; or (2) such a claim is wholly insubstantial and
frivolous.” (citing Bell v. Hood, 327 U.S. 678, 682 (1946))).
The First Amended Complaint therefore fails to “allege sufficient
facts to show a proper basis for the Court to assert” federal
question jurisdiction over this case.
See McNutt, 298 U.S. at
The First Amended Complaint does not assert
jurisdiction based on diversity.
However, because Plaintiff is
proceeding pro se, this Court liberally construes the First
Amended Complaint as asserting diversity jurisdiction.
e.g., Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir. 1987)
(“The Supreme Court has instructed the federal courts to
liberally construe the ‘inartful pleading’ of pro se litigants.”
(citing Boag v. MacDougall, 454 U.S. 364, 365, 102 S. Ct. 700,
701, 70 L. Ed. 2d 551 (1982) (per curiam))).
Plaintiff does not
clearly allege the amount in controversy, but he is seeking the
return of the Property, which he lost in foreclosure, and the
First Amended Complaint alleges that the Property was worth more
See First Amended Complaint at ¶ 56 (describing a
notice he received on May 21, 2009 regarding his mortgage, which
stated that JP Morgan was his “Lender of $417,000.00”).
Court therefore concludes that the First Amended Complaint
satisfies the amount in controversy requirement for diversity
Plaintiff must also allege that there is complete
diversity of citizenship, i.e., that he is a citizen of a
different state from each of the defendants.
F.3d at, 1067.
See Morris, 236
Plaintiff asserts that, “at all relevant times
[he] was a citizen of the United States and a resident of the
state of California and Hawaii.”
[First Amended Complaint at
He also alleges that: JP Morgan is a national banking
association with its headquarters in Columbus, Ohio; [id. at
¶ 9;] and Wells Fargo is a national banking association and a
subsidiary of Wells Fargo & Company, which is a Delaware
corporation with its headquarters in California [id. at ¶ 11].
He does not allege the citizenship of U.S. Bank – which is a
national banking association, CRC, or Brignac.
[Id. at ¶¶ 12-13,
“For diversity purposes, a national association is a
citizen of the state where its main office is located.”
JPMorgan Chase Bank, N.A., Case No. SACV 15-02030 JVS (JCGx),
2016 WL 320105, at *2 (C.D. Cal. Jan. 25, 2016) (citing Wachovia
Bank, N.A. v. Schmidt, 546 U.S. 303 (2006)).
The First Amended
Complaint alleges that JP Morgan is a citizen of Ohio, but there
are insufficient factual allegations to determine the citizenship
of the other defendants who have appeared in this case.
there are insufficient factual allegations to determine the
citizenship of the defendants who have not appeared.
Amended Complaint therefore fails to allege sufficient facts to
show a basis for diversity jurisdiction in this case.
Plaintiff has failed to allege a sufficient basis for either
federal question jurisdiction or diversity jurisdiction, this
Court does not have subject matter jurisdiction over the claims
in Plaintiff’s First Amended Complaint.
The Bank Motion and the
Brignac Motion are granted insofar as the First Amended Complaint
must be dismissed in its entirety.
However, “[u]nless it is absolutely clear that no
amendment can cure the defect,” in other words, unless amendment
would be futile, “a pro se litigant is entitled to notice of the
complaint’s deficiencies and an opportunity to amend prior to
dismissal of the action.”
248 (9th Cir. 1995).
Lucas v. Dep’t of Corr., 66 F.3d 245,
Based on the representations in Plaintiff’s
supplemental memorandum, this Court concludes that it is possible
to for Plaintiff to cure the jurisdictional defect in the First
Amended Complaint by amendment.
This Court next turns to the
issue of whether allowing Plaintiff to file a second amended
compliant would be futile because his claims against the Bank
Defendants and Brignac are time barred.
Some of the events at issue in this case occurred in
California, and some occurred in Hawai`i.5
The First Amended
Complaint appears to invoke both California law and Hawai`i law.
See, e.g., First Amended Complaint at pg. 5.
If Plaintiff can
cure the jurisdictional defects in his complaint by pleading a
For purposes of the Bank Motion and the Brignac Motion
(collectively “the Motions”), the factual allegations of the
First Amended Complaint are assumed to be true. See Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 572 (2007) (“a judge
ruling on a defendant’s motion to dismiss a complaint must accept
as true all of the factual allegations contained in the
complaint” (citations and internal quotation marks omitted)).
basis for diversity jurisdiction, this Court would apply Hawai`i
substantive law, including the Hawai`i choice of law analysis.
See First Intercontinental Bank v. Ahn, 798 F.3d 1149, 1153 (9th
The Hawai`i Supreme Court
has “moved away from the traditional and rigid
conflict-of-laws rules in favor of the modern
trend towards a more flexible approach looking to
the state with the most significant relationship
to the parties and subject matter.” Lewis v.
Lewis, 69 Haw. 497, 499, 748 P.2d 1362, 1365
(1988) (citing Peters [v. Peters], [63 Haw. 653,
660, 634 P.2d 586, 591 (1981)]). This flexible
approach places “[p]rimary emphasis . . . on
deciding which state would have the strongest
interest in seeing its laws applied to the
particular case.” Id. Hence, this court has said
that the interests of the states and applicable
public policy reasons should determine whether
Hawai`i law or another state’s law should apply.
See Peters, 63 Haw. at 667–68, 634 P.2d at 595.
“The preferred analysis, [then] in our opinion,
would be an assessment of the interests and policy
factors involved with a purpose of arriving at a
desirable result in each situation.” Id. at 664,
634 P.2d at 593.
Mikelson v. United Servs. Auto. Ass’n, 107 Hawai`i 192, 198, 111
P.3d 601, 607 (2005) (some alterations in Mikelson).
Based on the allegations of the First Amended
Complaint,6 and for purposes of the instant Motions only, this
As a general rule, when a district court considers a
motion to dismiss, its review is limited to the allegations in
the complaint. Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992,
998 (9th Cir. 2010). Exhibits 34 to 39 are attached to
Plaintiff’s First Amended Complaint, although the Exhibit List
attached to it refers to Exhibits (1) to (39). On March 1, 2017,
Plaintiff filed a “Motion to Attach Exhibit(s) to the First
Amended Complaint Filed 10/24/2016” (“Exhibits Motion”). [Dkt.
Court concludes that:
-California has the strongest interest in seeing its laws applied
to Plaintiff’s claims in Counts I, II, and III because those
claims center around the loan modification process for the
Property – which is located in California, Plaintiff was
residing on the Property when the events giving rise to
these claims occurred, and it appears from the factual
allegations of the First Amended Complaint that the events
giving rise to these claims occurred in California;
-Hawai`i has the strongest interest in seeing its laws applied to
Plaintiff’s claims in Count IV because the Bankruptcy Case
was litigated in Hawai`i – where Plaintiff was residing at
that time – and, to the extent that there were allegedly
improper actions and omissions during the Bankruptcy Case,
the bankruptcy court in Hawai`i and Plaintiff were most
-California has the strongest interest in seeing its laws applied
to the apparent wrongful foreclosure claim in Count VI,
because, although Plaintiff ultimately lost the Property
during the Bankruptcy Case, the factual allegations
supporting Count VI arise from the noticed trustee’s sale
and the California Case that Plaintiff filed to try to stop
the trustee’s sale; and
-California has the strongest interest in seeing its laws applied
to Plaintiff’s claims in Count VII because the extreme
emotional distress that Plaintiff relies upon – although he
experienced the effects of the distress in Hawai`i – arose
from having to move out of his home and the “ups and downs”
of the loan modification process, [First Amended Complaint
at ¶¶ 128, 131,] and those events occurred in California.
no. 36.] Plaintiff sought leave to file Exhibits (1) to (39),
which he stated he forgot to attach when he filed the First
Amended Complaint. On March 3, 2017, the magistrate judge denied
the Exhibits Motion. [Dkt. no. 38.] Thus, only Exhibits 34 to
39 are properly before this Court. This Court can consider those
exhibits without converting the motions into motions for summary
judgment. See Magbual v. Fed. Nat’l Mortg. Ass’n, Civil No.
16-00428 HG-KSC, 2016 WL 7478958, at *3 (D. Hawai`i Dec. 29,
2016) (citing Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir.
Finally, Count V primarily cites California law, see, e.g., id.
at pg. 84 (Count V is titled “California Unfair Competition Law
(UCL), Business and Professions Code section 17200 et seq.”), but
Plaintiff also expressly alleges that JP Morgan and Wells Fargo
“violate[d] Hawaii & California Consumer laws,” [id. at ¶ 113].
This Court concludes, for purposes of the Motions only, that
Count V must be liberally construed to allege both that the
challenged conduct which occurred in California violated
California consumer protection laws and the challenged conduct
which occurred in Hawai`i violated Hawai`i consumer protection
The Bank Defendants and Brignac argue that all of
Plaintiff’s claims against them are time barred.
Counts I and III (Fraud-Based Claims)
Counts I and III allege fraudulent misrepresentations.
Fraud claims are subject to a three-year
statute of limitations period. Cal. Code Civ.
Proc. § 338(d). “The cause of action in that case
is not deemed to have accrued until the discovery,
by the aggrieved party, of the facts constituting
the fraud or mistake.” Id. This discovery rule
“postpones accrual of a cause of action until the
plaintiff discovers, or has reason to discover,
the cause of action.” Fox v. Ethicon
Endo-Surgery, Inc., 35 Cal. 4th 797, 807 (2005).
Long v. Authentic Athletix LLC, Case No.16-cv-03129-JSC, 2017 WL
1064988, at *8 (N.D. Cal. Mar. 20, 2017).
As noted by the Bank Defendants, Plaintiff knew by June
2010 that JP Morgan denied his application for a loan
modification, and he knew that his loan payments were refused in
See, e.g., First Amended Complaint at ¶¶ 53, 73.
Bank Defendants argue that Plaintiff “made demands based on the
loan modification denial (and alleged representations regarding
the denial) on July 9, 2010.”
[Mem. in Supp. of Bank Motion at
However, the First Amended Complaint merely alleges that
Plaintiff, “in his log report, . . . dated July 09, 2010, he
alleged the Trial Plan Agreement constituted a written contract,
which [JP Morgan] breached by denying [Plaintiff] a permanent
[First Amended Complaint at ¶ 75.]
Plaintiff knew his application for a loan modification was
denied, the factual allegations of the First Amended Complaint do
not support the Bank Defendants’ position that Plaintiff knew in
2010 that the denial was based on fraudulent misrepresentations.
Similarly, although Plaintiff knew in 2010 that the
California Case was dismissed and he now alleges that the
dismissal was based on fraudulent misrepresentations, [id. at
¶¶ 86-88,] the factual allegations of the First Amended Complaint
do not support the Bank Defendants’ position that Plaintiff knew
in 2010 that the dismissal was based on fraudulent
Further, Plaintiff alleges that: “Any
applicable statutes of limitations have been tolled by the
Defendants’ continuing, knowing, and active concealment of the
facts and their fraudulent behavior as alleged herein.”
In other words, Plaintiff alleges that the limitations
period for his fraud claims did not accrue at the denial of the
loan modification or the dismissal of the California Action
because, did not know or have reason to know about the fraudulent
misrepresentations which led to those events.
It is arguably possible for Plaintiff to plead
sufficient facts that would support a reasonable inference that
the limitations period for his fraud claims did not start until
three years before he filed the instant case.
See Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (“A claim has facial plausibility
when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” (citing Twombly, 550 U.S. at 556, 127 S.
Therefore, the Bank Defendants’ argument that
amendment of Counts I and III – and Brignac’s argument that
amendment of Count I – would be futile because those claims are
time barred is rejected.
Count II (Breach of Contract)
Under California law, breach of contract claims are
generally subject to a four-year limitations period.
Proc. Code § 337.1.
Cal. Civ. Proc. Code § 336a states:
Within six years. 1. An action upon any bonds,
notes or debentures issued by any corporation or
pursuant to permit of the Commissioner of
Corporations, or upon any coupons issued with such
bonds, notes or debentures, if such bonds, notes
or debentures shall have been issued to or held by
2. An action upon any mortgage, trust deed or
other agreement pursuant to which such bonds,
notes or debentures were issued. Nothing in this
section shall apply to bonds or other evidences of
indebtedness of a public district or corporation.
Section 336a is inapplicable because the contract at issue in
Count II is not Plaintiff’s mortgage itself, but the TPP
This Court therefore concludes that Count II is
subject to a four-year limitations period.
Count II alleges that JP Morgan breached the TPP
agreement by denying Plaintiff a permanent loan modification.
[First Amended Complaint at ¶ 75.]
He alleges that, because JP
Morgan approved his TPP, he complied with the TPP, and all of his
representations in application were true and accurate, JP Morgan
was required to offer him a permanent loan modification under
[Id. at ¶ 78.]
As previously noted, Plaintiff
knew in June 2010 that his application was denied.
finds that, even accepting all of the factual allegations of the
First Amended Complaint as true, Plaintiff knew or should have
known about the alleged breach of the TPP agreement when he knew
that his application was denied.7
Plaintiff failed to bring his
Plaintiff speculates about the motives behind JP Morgan’s
actions and the part that his loan modification application
breach of contract claim within three years.
Count II fails to state a claim upon which relief can
be granted because it is time barred.
See Fed. R. Civ. P.
Further, it is absolutely clear under the
circumstances of this case that Plaintiff cannot cure this defect
in Count II by amendment.
Therefore the Bank Motion is granted
insofar as Count II is dismissed with prejudice.8
Plaintiff characterizes Count IV as asserting unclean
See, e.g., First Amended Complaint at pg. 65 (title of
The Bank Defendants characterize Count IV as an
unfair and deceptive acts and practices (“UDAP”) claim, under
Haw. Rev. Stat. Chapter 480.
[Mem. in Supp. of Bank Motion at 8-
However, Count IV alleges that the Bank Defendants and Alaw
had unclean hands in the Bankruptcy Case because the fraud that
JP Morgan and others committed both prior to and during the
See, e.g., First Amended Complaint at ¶ 94
(Plaintiff “was forced by [JP Morgan], to file Bankruptcy in an
played in a larger scheme. See, e.g., First Amended Complaint at
¶ 76. Even if Plaintiff did not know, and could not have known,
about those facts at the time he learned his application was
denied, it does not affect this Court’s analysis. Plaintiff’s
lack of knowledge about why JP Morgan allegedly breached the
contract is irrelevant to the issue of when Plaintiff knew or
should have known that the breach occurred in the first instance.
Plaintiff does not bring Count II against Brignac.
Amended Complaint at pg. 49.]
effort to keep his home.
This [is] because [JP Morgan] had used
Fraud and Unclean hands in California . . . . to obtain a court
decision against [Plaintiff].” (emphases omitted)); id. at ¶ 96
(alleging that JP Morgan and U.S. Bank “using Unclean hands in
preparation, execution and notarization of fraudulent court
documents and records so as to be able to initiate and prosecute
improper foreclosure actions”); id. at ¶ 107 (alleging “Fraud on
the Court, and Unclean Hands, against the Court and” Plaintiff in
the Bankruptcy Case (emphasis omitted)).
Count IV, like Count III regarding the California Case,
alleges that the results in the Bankruptcy Case were obtained
through fraudulent representations.
This district court has
under Hawaii law, “‘[p]ersonal actions of any
nature whatsoever not specifically covered by the
laws of the State’ have a limitations period of
six years.” Hubbart v. State of Hawaii Office of
Consumer Prot. Dep’t of Commerce & Consumer
Affairs, 2008 WL 373167, at *5 (D. Haw. Feb. 11,
2008) (citing Haw. Rev. Stat. § 657-1(4)). “Claims
sounding in fraud, whether based on state or
federal law, are governed by this six-year statute
of limitations.” Id. (citations omitted).
Jou v. Adalian, No. CV 15-00155 JMS-KJM, 2016 WL 4582042, at *19
(D. Hawai`i Sept. 1, 2016) (alteration in Jou).
initiated the Bankruptcy Case in 2013.
at ¶ 18.]
[First Amended Complaint
Thus, to the extent that Count IV alleges fraudulent
representations in the Bankruptcy Case, Plaintiff brought
Count IV within the limitations period.
Therefore the Bank
Defendants’ argument that amending Count IV is futile because the
claim is time barred is rejected.
Count V (Violation of Consumer Protection Laws)
As previously stated, Count V alleges that the Bank
Defendants’ and Alaw’s actions in California regarding
Plaintiff’s loan modification application and their actions
during the California Case violated California consumer
protection laws, in particular Cal. Bus. & Prof. Code § 17200,
and their actions in the Bankruptcy Case violated Hawai`i
consumer protection laws, i.e. Chapter 480.
First, Chapter 480 claims are subject to a four-year
Haw. Rev. Stat. § 480-24.
initiated the Bankruptcy Case in 2013, and he brought this case
Thus, assuming that Plaintiff cures the jurisdictional
defect discussed above, his Chapter 480 claims in Count V are
Cal. Bus. & Prof. Code § 17200 claims are subject to a
four-year limitations period.
Cal. Bus. & Prof. Code § 17208.
Such claims are “‘governed by common law accrual rules to the
same extent as any other statute,’ such that ‘the nature of the
right sued upon and the circumstances attending its invocation
control the point of accrual.”
Wolf v. Travolta, 167 F. Supp. 3d
1077, 1107 (C.D. Cal. 2016) (some internal quotation marks
omitted) (quoting Aryeh v. Canon Bus. Sols., Inc., 55 Cal. 4th
1185, 1196, 151 Cal. Rptr. 3d 827, 292 P.3d 871 (2013)).
on the factual allegations of the First Amended Complaint, it
does not appear that Plaintiff brought his § 17200 claims within
the four-year limitations period because Count V relies on the
same factual allegations as Counts I, II, III, and IV, see, e.g.,
First Amended Complaint at ¶ 118, and the alleged violations of
California consumer protection laws occurred in the course of the
loan modification process and the litigation of the California
As with Counts I and III, it is arguably possible for
Plaintiff to amend Count V to allege a basis for tolling of the
statute of limitations.
Therefore the Bank Defendants’ argument
that amendment of Count V would be futile because it is time
barred is rejected.
Count VI (Restoration of Title)
Count VI appears to be a wrongful foreclosure claim
alleging that the “trustee’s sale” violated California law.
e.g., First Amended Complaint at ¶ 121.
alleges that fraud in the loan modification process excused his
indebtedness and the trustee’s sale violated Cal. Bus. & Prof.
Code §§ 17206 and 17206.1.
[Id. at ¶¶ 122, 124.]
In Ancheta v. Mortgage Electronic Registration Systems,
Inc., which involved a wrongful foreclosure claim “based upon
allegations that the various documents recorded to effectuate the
foreclosure sale were recorded fraudulently and contrary to the
California non-judicial foreclosure statutes,” the district court
concluded that the claim fell
within the three-year limitations period set forth
in California Code of Civil Procedure section 338.
Under California law, “the nature of the right
sued upon, not the form of action or the relief
demanded, determines the applicability of the
statute of limitations.” Jefferson v. J. E.
French Co., 54 Cal. 2d 717, 718 (1960).
Section 338 provides a three-year statute of
limitations for a variety of claims, including:
“[a]n action upon a liability created by statute,
other than a penalty or forfeiture;” “[a]n action
for trespass upon or injury to real property;”
“[a]n action for relief on the ground of fraud or
mistake;” and “slander of title to real property.”
Cal. Code. Civ. Proc. § 338 (a), (b), (d),
(g). . . .
No. 16-CV-06520-YGR, 2017 WL 1164288, at *2 (N.D. Cal. Mar. 29,
2017) (some alterations in Ancheta).
Similarly, based on the factual allegations in
Count VI, the three-year statute of limitations set forth in
§ 338 applies.
The trustee’s sale was originally noticed for
August 27, 2009.
[First Amended Complaint at ¶ 61.]
previously noted, Plaintiff filed the California Action in 2010
to stop the trustee’s foreclosure sale.
Based on the factual
allegations of the First Amended Complaint, Plaintiff did not
bring his wrongful foreclosure claim within the three-year
It is arguably possible for Plaintiff to
amend Count VI to allege a basis for tolling of the statute of
Therefore the Bank Defendants’ argument that
amendment of Count VI would be futile because it is time barred
Count VII (IIED)
Count VII alleges that Plaintiff “suffered intentional
infliction of emotional distress, but suffered injury connected
to the fraudulent and illegal foreclosure of his home when he was
forced to move out.”
[Id. at ¶ 128.]
Plaintiff states that, in
2011, he and his family made the decision to move out of the
Property before it was foreclosed upon, and they suffered the
hardship of going through all of the steps necessary to move out
and relocate to Hawai`i in February 2012.
[Id. at ¶¶ 132-33,
Count VII alleges that the defendants engaged in a “scheme
of the Dual-Tracking, and Loan Modification scam,” [id. at ¶ 130
(emphasis omitted),] which included alleged fraudulent
misrepresentations made to him during the loan modification
process, [id. at ¶ 131].
Under California law, an IIED claim is subject to a
two-year statute of limitations.
Robles v. Agreserves, Inc., 158
F. Supp. 3d 952, 990 (E.D. Cal. 2016) (citing Cal. Code Civ. P.
§ 335.1; Pugliese v. Superior Ct., 146 Cal. App. 4th 1444, 1450,
53 Cal. Rptr. 3d 681 (2007)).
In IIED claim “accrues once
plaintiff suffers severe emotional distress as a result of
outrageous conduct on [the] part of [the] defendant.”
Sadhana Temple of New York, Inc., No. CV 13-07902 MMM (EX), 2014
WL 12588643, at *11 (C.D. Cal. Oct. 17, 2014) (some citations and
internal quotation marks omitted) (citing Johnson v. Lucent
Technologies Inc., 653 F.3d 1000, 1008 (9th Cir. 2011) (“Under
California law, an IIED claim accrues ‘when the harm is
The elements of the tort of IIED are:
(1) extreme and outrageous conduct by the
defendant; (2) the defendant’s intention of
causing, or reckless disregard of the probability
of causing, emotional distress; (3) the
plaintiff’s suffering severe or extreme emotional
distress; and (4) actual and proximate causation
of the emotional distress by the defendant’s
outrageous conduct. Hughes v. Pair, 46 Cal. 4th
1035, 1050, 95 Cal. Rptr. 3d 636, 209 P.3d 963
(2009); Potter v. Firestone Tire & Rubber Co., 6
Cal. 4th 965, 1001, 25 Cal. Rptr. 2d 550, 863 P.2d
795 (1993). . . .
Robles, 158 F. Supp. 3d at 977.
Plaintiff alleges that he and his family were
effectively forced to move out of the Property because of the
threatened foreclosure and that this process caused him extreme
Plaintiff and his family completed the move
in February 2012, and he alleges he injured his back, left ankle,
and right knee in the move.
By September 2012, Plaintiff was
only sleeping two to four hours per day because of his injuries
and because of panic and anxiety from the impending foreclosure.
His physical and mental condition continued to deteriorate
[First Amended Complaint at ¶¶ 137-41.]
diagnosed with “Generalized Anxiety Disorder & Panic Disorder,
Chronic Pain Issues, and Social environment, Financial” on
July 23, 2013.
[Id. at ¶ 142.]
Even assuming the date of that
diagnosis is the date that Plaintiff suffered severe emotional
distress for purposes of his IIED claim, he failed to bring the
claim within two years of that date.
In 2010, Plaintiff already believed that the impending
trustee foreclosure sale was wrongful, as evidenced by the fact
that he filed the California Case.
However, the defendants’
allegedly outrageous conduct is based on more than their conduct
regarding Plaintiffs’ loan.
See, e.g., First Amended Complaint
at ¶ 130 (alleging that the loan modification scheme “borderlines
on sinister as it was done to millions of people besides”
It may be possible for Plaintiff to cure the statute
of limitations defect in his IIED claim because the claim
arguably did not accrue until he knew or should have known that
his emotional distress was caused by defendants’ outrageous
Therefore the Bank Defendants’ and Brignac’s argument
that amendment of Count VII would be futile because it is time
barred is rejected.
Sufficiency of the Allegations Against Brignac
In addition to the jurisdiction and statute of
limitations arguments, Brignac argues that: Plaintiff’s claims
against her do not allege a cognizable legal theory; and, even if
any claim does allege a cognizable legal theory, Plaintiff has
failed to plead sufficient factual allegations to support the
The only claims that Plaintiff brings against Brignac
are Counts I and VII.
Plaintiff alleges that Brignac robo-signed
a notice stating that JP Morgan was going to foreclose on the
Property on August 27, 2009.
¶¶ 43.d, 61.]
[First Amended Complaint at
He alleges that she attested to and signed
“documents that were flat out false, untrue, and misleading” and
which created “a huge cloud on the title of” the Property when
they were filed with the San Diego County Recorders’ Office.
[Id. at ¶ 65.]
Plaintiff also alleges that Brignac’s signatures
on two documents do not match.
Thus, Plaintiff alleges
that Brignac was “[p]art of the fraud that led to the
foreclosure” of the Property and that her “actual fraud . . .
rendered the foreclosure void.”
Plaintiff alleges that
the Assignment of Deed of Trust, the substitution of trustee, and
the Notice of Default were all robo-signed, which he alleges
renders the sale void.
Specifically, Plaintiff alleges
that “Brignac signed that she was the Trustee for CRC, and CRC
thus had the right to foreclose on [Plaintiff], but Deborah
Brignac and CRC, was not the Trustee, Wachovia Bank was listed as
the legal Trustee.
Robo-Signed Fraud is what that is and was.”
Count VII alleges that Brignac’s actions inflicted
emotional and physical suffering upon him.
[Id. at ¶¶ 134, 142.]
Plaintiff’s allegations that Brignac robo-signed
documents stem from his theory that the assignment of his loan to
JP Morgan was fraudulent, and therefore it could not foreclose
upon the Property.
See, e.g., id. at ¶¶ 53, 71, 87.
district courts have recognized that:
In Yvanova v. New Century Mortg. Corp., 62 Cal.
4th 919 (2016), the California Supreme Court held
that borrowers challenging an assignment of
interest to the foreclosing entity lack standing
to raise issues that would render the assignment
voidable, but may assert challenges that, if
successful, would render the assignment void. 62
Cal. 4th at 939, 942-43.
Golden v. JPMorgan Chase Bank, N.A., No. 16-CV-1209-BTM(JMA),
2017 WL 3582981, at *4 (S.D. Cal. Aug. 18, 2017).
of the Brignac Motion, Plaintiff’s allegation that the Assignment
of Deed of Trust, the substitution of trustee, and the Notice of
Default were all robo-signed is assumed to be true.
even under those circumstances, the documents “‘would be
voidable, not void, at the injured party’s option.’”
v. First Am. Tr. Servicing Sols., LLC, 214 Cal. Rptr. 3d 292, 310
(Ct. App. 2017) (quoting Maynard v. Wells Fargo Bank, N.A., 2013
WL 4883202, at *8-9 (S.D. Cal. 2013)).
Brignac signed the
documents on behalf of JP Morgan and CRC and, if her signatures
on them were improper, those entities would be the injured
parties, not Plaintiff.
Even if Brignac robo-signed the
documents, JP Morgan and CRC ratified them by pursuing the
foreclosure process against Plaintiff.
Further, Plaintiff does
not dispute the existence of his mortgage on the Property and
that mortgage loan was in default.9
Thus, even accepting the
accepting the factual allegations of the First Amended Complaint
as true, Plaintiff has not pled sufficient facts to show that the
robo-signed documents were void.
Because Plaintiff’s fraud claim against Brignac is
based on his robo-signing theory, it fails to state a plausible
See Iqbal, 556 U.S. at 678 (“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 Twombly, 550 U.S. at 570, 127 S. Ct.
Further, based on the circumstances of this case, it is
absolutely clear that Plaintiff cannot cure this defect in his
fraud claim against Brignac by amendment.
The allegedly extreme and outrageous conduct by Brignac
that forms the basis of Plaintiff’s IIED claim against her is the
robo-signing of documents.
Plaintiff has not cited any case law
holding that robo-signing constitutes the type of extreme and
outrageous conduct necessary to support an IIED claim, and this
Court is not aware of any.
Count VII therefore fails to state a
This Court acknowledges that Plaintiff alleges that
JP Morgan induced him to default on his loan by representing that
he had to be delinquent in his mortgage payments to qualify for
the HAMP program, [First Amended Complaint at ¶ 102,] however
that factual allegation does not affect the robo-signing
plausible IIED claim against Brignac, and, under based on the
circumstances of this case, it is absolutely clear that Plaintiff
cannot cure this defect by amendment.
Thus, allowing Plaintiff to amend his claims against
Brignac to cure the jurisdictional defect would be futile because
he cannot cure the defects in his fraud claim and his IIED claim
The Brignac Motion is therefore granted insofar as
Plaintiff’s claims against Brignac in Count I and Count VII are
dismissed with prejudice.10
Summary and Leave to Amend
The First Amended Complaint is dismissed in its
entirety, for lack of subject matter jurisdiction.11
both of Plaintiff’s claims against Brignac are dismissed with
In other words, Plaintiff no longer has any claims
against her in this case.
The Bank Motion is granted insofar as Count II is
dismissed with prejudice.
The Bank Motion is denied insofar as
the dismissal of all of Plaintiff’s other claims against the Bank
Defendants is without prejudice.
Plaintiff is granted permission
to file a motion seeking leave to file a second amended complaint
In light of this Court’s rulings, it is not necessary to
address Brignac’s other arguments why Plaintiff’s claims against
her should be dismissed.
This Court expresses no opinion about the merits of
Plaintiff’s claims that were not before this Court in the instant
(“Motion for Leave”).
Plaintiff must attach his proposed second
amended complaint to the Motion for Leave.
See Local Rule LR10.3
(“Any party filing or moving to file an amended complaint . . .
shall reproduce the entire pleading as amended and may not
incorporate any part of a prior pleading by reference, except
with leave of court.”).
This Court ORDERS Plaintiff to file his
Motion for Leave by November 13, 2017.
The Motion for Leave will
be referred to the magistrate judge.
Plaintiff is CAUTIONED that his proposed amended
complaint must state all of the claims that he alleged in the
First Amended Complaint – except for those that have been
dismissed with prejudice – as well as all of the facts and all of
the legal theories that his remaining claims rely upon.
Plaintiff cannot rely upon or incorporate by reference any
portion of his prior complaints.
This Court will not consider
Plaintiff’s second amended complaint collectively with his prior
filings in this case.
Plaintiff is CAUTIONED that, if he fails to file his
Motion for Leave by November 13, 2017, the claims that this Court
dismissed without prejudice in this Order will be dismissed with
Further, Plaintiff is CAUTIONED that, even if the
magistrate judge grants his Motion for Leave and allows him to
file his proposed second amended complaint, this Court may still
dismiss the amended claims with prejudice if Plaintiff fails to
cure the defects identified in this Order.
On the basis of the foregoing, JP Morgan, Wells Fargo,
CRC, and U.S. Bank’s “Motion to Dismiss  First Amended
Complaint,” filed November 14, 2016, is HEREBY GRANTED IN PART
AND DENIED IN PART, and Brignac’s “Motion to Dismiss [ECF No. 10]
First Amended Complaint Filed October 24, 2016,” which Brignac
filed on February 24, 2017, is HEREBY GRANTED.
Plaintiff’s First Amended Complaint is DISMISSED, in
its entirety, for lack of subject matter jurisdiction.
Motion is GRANTED insofar as: all of Plaintiff’s claims against
JP Morgan, Wells Fargo, CRC, and U.S. Bank are DISMISSED; and the
dismissal of the claims against them in Count II is WITH
The Bank Motion is DENIED insofar as the dismissal of
Plaintiff’s claims against JP Morgan, Wells Fargo, CRC, and
U.S. Bank in Count I, III, IV, V, VI, and VII is WITHOUT
Plaintiff may file a motion seeking leave to file a
second amended complaint by November 13, 2017.
The Motion for
Leave must comply with the terms of this Order.
The Brignac Motion is GRANTED insofar as Plaintiff’s
claims against Brignac in Counts I and VII are DISMISSED WITH
There being no remaining claims against her in this
case, this Court DIRECTS the Clerk’s Office to terminate Brignac
as a defendant on October 20, 2017, unless Plaintiff files a
motion for reconsideration of this Order by October 16, 2017.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, September 29, 2017.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
SAMUEL ST. JAMES VS. JP MORGAN CHASE BANK, ET AL; CIVIL 16-00529
LEK-KSC; ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS JP
MORGAN CHASE BANK, N.A.; WELLS FARGO BANK, N.A.; CALIFORNIA
RECONVEYANCE COMPANY; AND U.S. BANK NATIONAL ASSOCIATION’S
“MOTION TO DISMISS  FIRST AMENDED COMPLAINT”; AND GRANTING
DEFENDANT DEBORAH BRIGNAC’S “MOTION TO DISMISS [ECF NO. 10] FIRST
AMENDED COMPLAINT FILED OCTOBER 25, 2016"
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