Gill v. CIT Bank, N.A., formerly known as ONEWEST BANK, FSB et al
ORDER REMANDING CASE FOR LACK OF JURISDICTION AND DENYING DEFENDANTS' MOTION TO DISMISS AS MOOT re 5 , 25 - Signed by JUDGE ALAN C. KAY on 12/8/2017. "For the foregoing reasons, the Court finds that it lacks subject-matter jurisdiction over this action pursuant to the Rooker-Feldman doctrine. This case shall be REMANDED to Circuit Court of the First Circuit, State of Hawaii. Defendants' Motion is therefore DENIED AS MOOT." (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). 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
DAVID GARY GILL,
) Civ. No. 17-00400 ACK-KSC
CIT BANK, N.A. fka ONEWEST
BANK, FSB; OWB REO; and DOE
ORDER REMANDING CASE FOR LACK OF JURISDICTION AND DENYING
DEFENDANTS’ MOTION TO DISMISS AS MOOT
For the reasons set forth below, the Court finds that
it lacks subject-matter jurisdiction under the Rooker-Feldman
doctrine and accordingly REMANDS this matter to state court.
Defendants’ Motion to Dismiss, ECF No. 5, is therefore DENIED AS
On April 18, 2017 Plaintiff David Gary Gill
(“Plaintiff”) filed a complaint in state court.
Removal ¶ 1, ECF No. 1.
On August 14, 2017, Defendants CIT
Bank, N.A., fka OneWest Bank, N.A., fka OneWest Bank, FSB
(“OneWest Bank” or “OneWest”), and OWB REO LLC (collectively,
“Defendants”) timely removed this case from state court on the
basis of diversity jurisdiction.
Id. ¶¶ 4-6.
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Plaintiff alleges that in April 2006 he executed a
mortgage in favor of IndyMac Federal Bank, FSB, to be recorded
against his property as security for his performance under a
promissory note in the amount of $903,000.
Compl. ¶ 16, ECF No.
The mortgage agreement was a standard-form
single family residential mortgage provided by IndyMac, which
was recorded in the State of Hawaii Office of Assistant Register
(“Land Court”) around April 21, 2006.
In February 2010,
OneWest claimed to be the mortgagee following assignment from
the Federal Deposit Insurance Corporation after IndyMac was
placed in receivership. 1
Id. ¶¶ 5, 17.
On May 3, 2011, OneWest acted under a power of sale
clause in the mortgage and conveyed the property to OWB REO
through a quitclaim deed, which was recorded on August 1, 2011.
Id. ¶ 19.
Plaintiff alleges that either (1) OWB REO owned the
mortgage, and OneWest was acting as its agent or alter ego, or
(2) OWB REO was a nominee, agent, or alter ego of OneWest.
On August 17, 2011, OneWest filed a complaint in state
According to Plaintiff, OneWest Bank, FSB was converted to a
national bank in February 2014. Compl. ¶ 5. OneWest Bank, N.A.
then merged with CIT Bank, N.A., with OneWest as the surviving
bank, wholly owned by CIT Group. Id. OneWest then changed its
corporate title to CIT Bank, N.A. Id. Plaintiff refers to this
entity as “OneWest Bank,” while Defendants refer to it as “CIT
Bank” or “CITB.” For clarity, the Court will refer to it as
“OneWest Bank” or “OneWest” as this was the name during the
relevant time period.
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district court for summary possession and ejectment (“Ejectment
Motion, ECF No. 5 (“Mot.”), Ex. F.
The state court
minutes for a September 13, 2011 hearing note that “confession
[was] entered as to possession.”
Mot., Ex. G.
The state court
then issued a Judgment for and Writ of Possession on September
Mot., Exs. H-I.
On October 11, 2011, the state court
dismissed the case, which had been continued for a hearing on
the status of the damages claim, as neither party was present.
Mot., Ex. G.
On May 31, 2012, OWB REO executed a special warranty
deed for the property to Hawaii Retail Services, LLC, which deed
was recorded on June 20, 2012.
Compl. ¶ 21.
Hawaii Retail then
executed a warranty deed for the property to Ryno Irwin, as
trustee of the Ryno Irwin Revocable Living Trust Agreement, on
March 21, 2013, which deed was recorded on April 17, 2013.
Based on the foregoing, Plaintiff has alleged two
claims here: (1) quiet title, ejectment, and declaratory relief,
and (2) wrongful foreclosure.
Id. ¶¶ 13-59.
that the initial sale from OneWest to OWB REO was improper
because OneWest did not strictly comply with the power of sale
Id. ¶ 23.
He alleges that the notice of
acceleration he received was defective; the notice of intent to
foreclose contained an inadequate description of the property;
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only a quitclaim deed was offered; no written notice of the
postponed date on which the property was to be sold was ever
published; and the foreclosure affidavit did not show diligent
efforts were used to secure the best price.
In particular, Plaintiff complains that although the
foreclosure sale was advertised in writing for September 8,
2010, the sale did not take place until May 3, 2011 at a
different location than advertised 2 and no written notice of the
change in date or location was published.
Id. ¶¶ 19, 36-38.
Plaintiff asserts that the Hawaii Supreme Court held in Hungate
v. Law Office of David B. Rosen, 139 Haw. 394, 391 P.3d 1 (Haw.
2017) that mortgagees were required to publish notices for
postponed auctions under the power of sale, and therefore claims
that the sale here was wrongful and unlawful.
Id. ¶¶ 39-40.
such, Plaintiff claims entitlement to possession and title, or
alternatively rescissory damages.
Id. ¶ 24.
claims damages under his wrongful foreclosure claim for lost use
and rental value, as well as punitive damages.
Id. ¶¶ 57-58.
Defendants filed their Motion to Dismiss on August 21,
Mot., ECF No. 5.
Plaintiff filed his Opposition on
Plaintiff alleges that the sale location had been advertised as
the public sidewalk by the flagpole at the First Circuit Court
in Honolulu. Compl. ¶ 38. However, prior to July 21, 2010, the
Circuit Court advised that auctions would no longer be permitted
on its property. Id. Around October 2010, OneWest’s agents
began noticing sales at a different location. Id.
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October 30, 2017.
ECF No. 18 (“Opp.”).
Reply on November 6, 2017.
Defendants filed their
ECF No. 19 (“Reply”).
8, 2017, the Court ordered supplemental briefing regarding
whether it had subject-matter jurisdiction under the RookerFeldman doctrine.
ECF No. 20.
Both Defendants and Plaintiff
filed supplemental memoranda on November 15, 2017.
(“Defs. Supp. Mem.”); ECF No. 22 (“Pl. Supp. Mem.”).
ECF No. 21
parties filed supplemental responses on November 21, 2017.
No. 23 (“Defs. Supp. Resp.”); ECF No. 24 (“Pl. Supp. Resp.”).
The Court held a hearing on Defendants’ Motion on
December 7, 2017.
Rule 12(b)(6) authorizes the Court to dismiss a
complaint that fails “to state a claim upon which relief can be
Fed. R. Civ. P. 12(b)(6).
Rule 12(b)(6) is read in
conjunction with Rule 8(a), which requires only “a short and
plain statement of the claim showing that the pleader is
entitled to relief.”
Fed. R. Civ. P. 8(a)(2).
The Court may
dismiss a complaint either because it lacks a cognizable legal
theory or because it lacks sufficient factual allegations to
support a cognizable legal theory.
Balistreri v. Pacifica
Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988).
In resolving a Rule 12(b)(6) motion, the Court must
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construe the complaint in the light most favorable to the
plaintiff and accept all well-pleaded factual allegations as
Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777, 783
(9th Cir. 2012).
The complaint “must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
“The plausibility standard . . . asks for more than a
sheer possibility that a defendant has acted unlawfully.”
“Where a complaint pleads facts that are ‘merely consistent
with’ a defendant’s liability, it ‘stops short of the line
between possibility and plausibility of entitlement to relief.’”
Id. (quoting Twombly, 550 U.S. at 557).
“In considering a
motion to dismiss, the court is not deciding whether a claimant
will ultimately prevail but rather whether the claimant is
entitled to offer evidence to support the claims asserted.”
Tedder v. Deutsche Bank Nat’l Trust Co., 863 F. Supp. 2d 1020,
1030 (D. Haw. 2012) (citing Twombly, 550 U.S. at 563 n.8).
Under Rule 12(b)(6), review is generally limited to
the contents of the complaint.
Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Campanelli v.
Bockrath, 100 F.3d 1476, 1479 (9th Cir. 1996).
may “consider certain materials — documents attached to the
complaint, documents incorporated by reference in the complaint,
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or matters of judicial notice — without converting the motion to
dismiss into a motion for summary judgment.”
United States v.
Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).
If the Court dismisses the complaint, it should grant
leave to amend regardless of whether a request has been made,
unless it determines that the pleading cannot be cured by new
OSU Student All. v. Ray, 699 F.3d 1053,
1079 (9th Cir. 2012).
Defendants seek to have this Court take judicial
notice of thirteen exhibits attached to its motion to dismiss,
which Plaintiff does not appear to oppose.
Mot. at 8-9 & n.4.
“A court may take judicial notice of ‘matters of public record’
without converting a motion to dismiss into a motion for summary
Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th
Cir. 2001); see also MGIC Indem. Corp. v. Weisman, 803 F.2d 500,
504 (9th Cir. 1986) (taking judicial notice of filings in
separate court action).
A court may also consider a document
referenced in the complaint if it is central to the plaintiff’s
claim and no party questions the authenticity of the copy
attached to the motion.
Marder v. Lopez, 450 F.3d 445, 448 (9th
In addition, “judicial notice may be taken of
documents available on government websites.”
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Long v. JP Morgan
Chase Bank, Nat’l Ass’n, 848 F. Supp. 2d 1166, 1170 n.1 (D. Haw.
2012) (internal citation and quotation omitted).
All of the
documents for which Defendant seeks judicial notice are public
records, referenced in the complaint and central to Plaintiff’s
claims, and/or available on government websites.
finds judicial notice of all of these documents appropriate.
“Removal and subject matter jurisdiction statutes are
strictly construed and a defendant seeking removal has the
burden to establish that removal is proper and any doubt is
resolved against removability.”
Hawaii v. HSBC Bank Nevada,
N.A., 761 F.3d 1027, 1034 (9th Cir. 2014) (internal citation and
quotation omitted) (reversing district court judgment for lack
of subject-matter jurisdiction and remanding to state court).
“[T]he Court has an independent duty to address jurisdiction and
standing ‘even when not otherwise suggested.’”
Weaver, 872 F. Supp. 2d 1023, 1037 (D. Haw. 2012) (quoting Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998)).
such, the Court first turns to whether the Rooker-Feldman
doctrine deprives it of jurisdiction, with the aid of the
supplemental briefing requested from the parties.
“The Rooker-Feldman doctrine instructs that federal
district courts are without jurisdiction to hear direct appeals
from the judgments of state courts.”
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Cooper v. Ramos, 704 F.3d
772, 777 (9th Cir. 2012).
“The doctrine bars a district court
from exercising jurisdiction not only over an action explicitly
styled as a direct appeal, but also over the ‘de facto
equivalent’ of such an appeal.”
“To determine whether an
action functions as a de facto appeal, we ‘pay close attention
to the relief sought by the federal-court plaintiff.’”
777-78 (emphasis in original) (quoting Bianchi v. Rylaarsdam,
334 F.3d 895, 900 (9th Cir. 2003)).
“It is a forbidden de facto
appeal under Rooker-Feldman when the plaintiff in federal
district court complains of a legal wrong allegedly committed by
the state court, and seeks relief from the judgment of that
Id. at 778 (internal citation and quotation omitted).
In the Ninth Circuit, “only when there is already a forbidden de
facto appeal in federal court does the ‘inextricably
intertwined’ test come into play.”
citation, and quotation omitted).
Id. (internal alteration,
Claims are inextricably
intertwined “where the relief requested in the federal action
would effectively reverse the state court decision or void its
Id. at 779 (internal citation and quotation omitted).
The Ninth Circuit has noted that “[d]etermining what
constitutes a forbidden de facto appeal...has sometimes proven
difficult for the lower courts.”
Kougasian v. TMSL, Inc., 359
F.3d 1136, 1139 (9th Cir. 2004).
It has cautioned that “where
the federal plaintiff does not complain of a legal injury caused
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by a state court judgment, but rather of a legal injury caused
by an adverse party, Rooker-Feldman does not bar jurisdiction.”
Noel v. Hall, 341 F.3d 1148, 1163 (9th Cir. 2003).
If there is
an “independent claim, albeit one that denies a legal conclusion
that a state court has reached in a case to which he was a
party, then there is jurisdiction and state law determines
whether the defendant prevails under principles of preclusion.”
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293
(2005) (internal alteration, citation, and quotation omitted).
In Sakuma v. Association of Apartment Owners of the
Tropics at Waikele, the plaintiff brought a wrongful foreclosure
claim relating to a series of prior actions through which she
had lost her property.
Civ. No. 16-00274 DKW-KJM, 2016 WL
6433842, at *4-6 (D. Haw. Oct. 28, 2016).
After a global
settlement regarding two actions brought in 2001 and 2002, the
defendant had recorded a lien against the plaintiff’s property
Id. at *2.
In 2007, the defendant brought a judicial
foreclosure action and obtained a decree of foreclosure in 2008.
The plaintiff also sought in 2008 to reopen the 2002 action
for fraud by the defendant’s attorney, which case was dismissed
for lack of jurisdiction as the foreclosure sale had already
Id. at *3.
In the wrongful foreclosure action, the
court noted that allegations relating to whether there was a
right to foreclose, including whether the allegedly illegitimate
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lien had been fraudulently recorded, could not support her
claims for relief without running afoul of Rooker-Feldman.
The court determined that finding that the 2005 lien on
her property was illegitimate would nullify the decree of
Id. at *6.
As such, the court concluded that
ruling in the plaintiff’s favor “would effectively reverse and
void the decisions of the Hawaii state courts” and thus the
court lacked jurisdiction.
Id. at *6.
Similarly in Hicks v. Wells Fargo Bank, N.A., the
plaintiff alleged quiet title and fraud, claiming that the
defendant had no authority to conduct non-judicial foreclosure
and no right to eject her from the property, despite having lost
a prior ejectment action brought by the defendant.
Civ. No. 12-
00063 DAE-KSC, 2012 WL 346660, at *1 (D. Haw. Feb. 2, 2012).
The court concluded it lacked jurisdiction under Rooker-Feldman
as “the injury Plaintiff alleges arises from the state court’s
purportedly erroneous Judgment and Writ of Ejectment,” and
“[w]ithout the State Court Judgment, [the defendant] would not
be ejecting Plaintiff from the Subject Property.”
Id. at *2.
Defendants argue that Rooker-Feldman does not bar
jurisdiction here because Plaintiff’s injuries were caused by
the allegedly illegal or wrongful non-judicial foreclosure
proceedings conducted by Defendants, rather than an injury
caused by the state court Judgment for Possession.
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Mem. at 2, 7.
However, Plaintiff is not merely seeking to
recover title; he also seeks to recover possession and damages
resulting from the lost possession.
Supp. Mem. at 8.
See Compl. ¶¶ 56-57; Pl.
While the non-judicial foreclosure involved
title, the issue of possession was not determined until the
See Mot., Exs. F, H; see also Mot. at 2
(noting Plaintiff seeks to recover possession, which was already
Plaintiff also alleges that violations of the
power of sale were apparent from the Foreclosure Affidavit,
Compl. ¶ 46, and as such argues that the Judgment dispossessing
him of the property was erroneous since OneWest did not have
valid title. 3
Pl. Supp. Resp. at 4-5.
Though not expressly styled as an appeal, the injuries
Plaintiff alleges stem, at least in part, from the state court’s
Judgment for Possession.
The Judgment is undoubtedly a final
judgment, as proceedings end for purposes Rooker-Feldman “when
the state courts finally resolve the issue that the federal
court plaintiff seeks to relitigate in a federal forum, even if
Plaintiff also argues that he is challenging a legal wrong
because the record showed contradictory ownership on its face,
and he was not required to make any submission placing title in
dispute in order to divest the court of jurisdiction. Pl. Supp.
Resp. at 5 n.3. However, Plaintiff has cited no authority in
support of this exception to the general rule in Hawaii that to
divest the state district court of jurisdiction, the defendant
in an ejectment action must set forth in an affidavit sufficient
facts to put title in question. See Deutsche Bank Nat’l Trust
Co. v. Peelua, 126 Haw. 32, 33, 265 P.3d 1128, 1129 (Haw. 2011).
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other issues remain pending at the state level.”
Justices of Supreme Court, 410 F.3d 602, 604 n.1 (9th Cir.
2005), as amended on denial of reh'g (July 21, 2005), opinion
amended on denial of reh'g, No. 03-16878, 2005 WL 1692466 (9th
Cir. July 21, 2005).
Indeed, Defendants are asserting that
Plaintiff’s claims are precluded under the doctrine of res
judicata and/or collateral estoppel based on the state court
The Court is mindful of the Ninth Circuit’s
instruction that the relief sought deserves close attention in
determining whether the action is a de facto appeal.
704 F.3d at 777-78.
Having carefully reviewed this issue, the
Court concludes that the restoration of possession which
Plaintiff seeks here indicates that his injury arises at least
in part from the state court Judgment dispossessing him of the
property and his claims thus constitute a de facto appeal.
addition, ruling in his favor would effectively reverse or void
the state court ruling, and thus Plaintiff’s claims for quiet
title and wrongful foreclosure are inextricably intertwined with
the Judgment for Possession and are barred by Rooker-Feldman.
The Court also notes that Plaintiff’s claims do not
appear to fall within the extrinsic fraud exception to RookerFeldman, even though he contends that the state court Judgment
was procured by fraud.
Pl. Supp. Mem at 7.
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not bar claims of extrinsic fraud, which is “conduct which
prevents a party from presenting his claim in court.”
Kougasian, 359 F.3d at 1140 (internal citation and quotation
Plaintiff’s claim that Defendants procured possession
through a false claim of title constitutes intrinsic fraud,
which is subject to the Rooker-Feldman bar.
See Green v.
Ancora-Citronelle Corp., 577 F.2d 1380, 1384 (9th Cir. 1978)
(intrinsic fraud “go[es] to the very heart of the issues
contested in the state court action”).
Since nothing prevented
Plaintiff from challenging Defendants’ claim of title during the
Ejectment Action, the extrinsic fraud exception to RookerFeldman does not apply.
See Pl. Supp. Resp. at 5 n.2
(indicating that the extrinsic fraud exception does not appear
In light of the foregoing reasons, the Court concludes
that it lacks subject-matter jurisdiction over this matter under
Rooker-Feldman, and the Motion should be dismissed as moot.
For the foregoing reasons, the Court finds that it
lacks subject-matter jurisdiction over this action pursuant to
the Rooker-Feldman doctrine.
This case shall be REMANDED to
Circuit Court of the First Circuit, State of Hawaii.
Defendants’ Motion is therefore DENIED AS MOOT.
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IT IS SO ORDERED.
Honolulu, Hawaii, December 8, 2017.
Alan C. Kay
Sr. United States District Judge
Gill v. CIT Bank, N.A., et al., Civ. No. 17-00400 ACK-KSC, Order Remanding
Case for Lack of Jurisdiction and Denying Defendants’ Motion to Dismiss as
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