Agustin v. PNC Financial Services Group, Inc.(The)

Filing 111

ORDER (1) Dismissing Claims Against PNC Mortgage; (2) Granting Summary Judgment In Favor Of The PNC Financial Services Group, Inc., (3) Granting Summary Judgment In Favor Of PNC Bank N.A. With Respect To The Fair Debt Collection Practices Act Claim Asserted In Count Two And The Telephone Consumer Protection Act Claim Asserted In Count Four; And (4) Granting Summary Judgment In Favor Of Annette Augustin With Respect To Liability For The Breach Of Contract Claim Asserted In Count One And With Respect To The Section 480-2 Claim Asserted In Count 3 re 71 74 . Signed by JUDGE SUSAN OKI MOLLWAY on 1/16/2019. (cib)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
ANNETTE AUGUSTIN,

)
)
Plaintiff,
)
)
vs.
)
)
THE PNC FINANCIAL SERVICES
)
GROUP, INC.; PNC BANK N.A.;
)
PNC MORTGAGE,
)
)
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
_____________________________ )

CIVIL NO. 17-00525 SOM/RT
ORDER (1) DISMISSING CLAIMS
AGAINST PNC MORTGAGE;
(2) GRANTING SUMMARY JUDGMENT
IN FAVOR OF THE PNC FINANCIAL
SERVICES GROUP, INC.;
(3) GRANTING SUMMARY JUDGMENT
IN FAVOR OF PNC BANK N.A.
WITH RESPECT TO THE FAIR DEBT
COLLECTION PRACTICES ACT
CLAIM ASSERTED IN COUNT TWO
AND THE TELEPHONE CONSUMER
PROTECTION ACT CLAIM ASSERTED
IN COUNT FOUR; AND
(4) GRANTING SUMMARY JUDGMENT
IN FAVOR OF ANNETTE AUGUSTIN
WITH RESPECT TO LIABILITY FOR
THE BREACH OF CONTRACT CLAIM
ASSERTED IN COUNT ONE AND
WITH RESPECT TO THE SECTION
480-2 CLAIM ASSERTED IN COUNT
THREE

ORDER (1) DISMISSING CLAIMS AGAINST PNC MORTGAGE; (2) GRANTING
SUMMARY JUDGMENT IN FAVOR OF THE PNC FINANCIAL SERVICES GROUP,
INC.; (3) GRANTING SUMMARY JUDGMENT IN FAVOR OF PNC BANK N.A.
WITH RESPECT TO THE FAIR DEBT COLLECTION PRACTICES ACT CLAIM
ASSERTED IN COUNT TWO AND THE TELEPHONE CONSUMER PROTECTION ACT
CLAIM ASSERTED IN COUNT FOUR; AND (4) GRANTING SUMMARY JUDGMENT
IN FAVOR OF ANNETTE AUGUSTIN WITH RESPECT TO LIABILITY FOR THE
BREACH OF CONTRACT CLAIM ASSERTED IN COUNT ONE AND WITH RESPECT
TO THE SECTION 480-2 CLAIM ASSERTED IN COUNT THREE
I.

INTRODUCTION.
This is Plaintiff Annette Agustin’s second case before

this court involving the same residential mortgage loan.

In

March 2009, she stopped sending payments to Defendant PNC Bank
N.A., the loan servicer.
over the loan.

Agustin sued PNC Bank N.A. and others

In June 2011, the parties settled that case, with

Agustin agreeing to vacate and surrender the mortgaged property
and not to oppose the foreclosure of the mortgage.

In return,

the settlement agreement required PNC Bank to pay Agustin $5,000
and to refrain from seeking any deficiency judgment and to
release all claims and demands with respect to Agustin’s loan.
Notwithstanding the settlement agreement, PNC Bank or PNC
Mortgage (a division of PNC Bank) continued to send Agustin
monthly statements and other correspondence demanding payment,
reflecting past due amounts ranging from over $90,000 to over
$135,000.

PNC Bank also called Agustin more than 100 times with

respect to the loan.
Agustin wrote to PNC Mortgage in October 2014,
referring to the settlement.

In November 2014, PNC Mortgage

conceded that its records reflected the settlement and that she
“no longer ha[d] personal liability for either the debt or for
the property.”

PNC Mortgage said it was working diligently to

update its system to prevent further communication about the
loan, but noted that she might still receive information
regarding the loan.

The correspondence and calls demanding

payment continued.
Agustin now sues PNC Bank and PNC Mortgage for having
made numerous attempts to collect a debt she no longer owed.

She

also sues The PNC Financial Services Group, Inc., asserting that
it is vicariously liable for conduct by PNC Bank and PNC

2

Mortgage.

In the First Amended Complaint of September 21, 2017,

Agustin asserts claims of breach of the settlement agreement
(Count One), violation of the Fair Debt Collection Practices Act
(“FDCPA”) (Count Two), violation of section 480-2 of Hawaii
Revised Statutes (“UDAP”) (Count Three), and violation of the
Telephone Consumer Protection Act (Count Four).
Defendants move for summary judgment with respect to
all counts.

See ECF No. 71.

Agustin separately moves for

summary judgment with respect to the breach of contract and UDAP
claims asserted in Counts One and Three.

See ECF No. 74.

The

court dismisses the claims against PNC Mortgage, which Agustin
recognizes is not a legal entity separate from PNC Bank.

The

court grants summary judgment in favor of The PNC Financial
Services Group, Inc., with respect to all claims asserted in the
First Amended Complaint, as Augustin concedes that she cannot
establish any liability on its part.

Without objection by

Augustin, the court grants summary judgment in favor of PNC Bank
with respect to the FDCPA and Telephone Consumer Protection Act
claims asserted in Counts Two and Four of the First Amended
Complaint.

However, the court grants summary judgment in favor

of Agustin and against PNC Bank with respect to the breach of
contract and UDAP claims asserted in Counts One and Three of the
First Amended Complaint.

The court leaves for further

adjudication the issue of damages resulting from the breach of

3

contract.

The court awards statutory damages of $1,000 to

Agustin for the UDAP claim, as well as her reasonable attorney’s
fees and costs.
II.

BACKGROUND.
This case arises out of a $278,400 loan that Plaintiff

Annette Agustin and her then-husband, George Agustin, obtained in
February 2007 from National City Mortgage.

The Agustins executed

an Adjustable Rate Note and a Mortgage to secure the loan.
ECF Nos. 73-3 and 73-4.

See

On May 18, 2012, PNC Bank, successor by

merger to National City Bank, assigned the loan to HSBC Bank USA,
National Association as Trustee for Luminent Mortgage Trust 20072.

See ECF No. 73-5.

PNC Bank and PNC Mortgage, a division of

PNC Bank, continued to service the loan.

See Corporate

Disclosure Statement, ECF No. 19 (“PNC Mortgage is not a legal
entity.

It is a division of PNC Bank N.A.”).
The Agustins stopped paying on their loan in March

2009.

In September 2009, the Agustins sued The PNC Financial

Services Group, Inc., and others, seeking rescission of their
loan, recoupment, injunctive relief, and damages under the Truth
in Lending Act, Real Estate Settlement Procedures Act, and Hawaii
law.

See Complaint, Agustin v. PNC Fin. Serv. Group, Inc., Civ.

No. 09-00423 SOM/KSC, ECF No. 1.

On February 23, 2010, PNC Bank,

N.A., filed a Corporate Disclosure Statement, indicating that it,

4

not The PNC Financial Services Group, Inc., was the proper
defendant.

See Civ. No. 09-00423 SOM/KSC, ECF No. 12.
In June 2011, PNC Bank and Agustin settled the earlier

case.

See Settlement Agreement, Waiver, and Mutual Release, ECF

No. 100.

In relevant part, Agustin agreed to vacate and

surrender the mortgaged property to PNC Bank no later than May
18, 2018.

Id., PageID # 2753.

The settlement agreement allowed

PNC Bank to foreclose on the mortgage and barred Agustin from
opposing foreclosure proceedings.

Id., PageID # 2737.

In

return, PNC Bank agreed to pay Agustin $5,000 and agreed not to
seek any deficiency judgment.

Id., PageID #s 2737 and 2754.

PNC

Bank also agreed that it would
absolutely and unconditionally release the
AGUSTINS . . . from any and all claims,
demands, actions or causes of action, of
whatever nature or description, known or
unknown, now existing or hereafter acquired,
and whether or not asserted in the
Litigation, which the PNC Releasors ever had,
now have, or may hereafter acquire against
the AGUSTIN Releasees, arising out of or
related in any manner to conduct of the
AGUSTIN Releasees regarding the First Note
and First Mortgage arising after the date of
this Agreement, except for the obligations of
the AGUSTINS under the terms and conditions
of this Agreement.
Id., PageID # 2738.
For purposes of these motions, there is no dispute that
Agustin complied with her obligations under the settlement
agreement.

Despite her compliance, PNC Mortgage, as loan

5

servicer, continued to send Agustin monthly statements that
demanded payment.

For example, a statement dated August 18,

2014, indicated that Agustin owed $91,152.90, which included
interest, an escrow payment for taxes and insurance, new fees and
charges, an overdue payment amount, late fees, and other fees.
See, e.g., ECF No. 73-6.

On August 21, 2014, PNC Mortgage sent

Agustin a letter saying, “We understand that borrowers sometimes
face challenges when it comes to making their payments.”
No. 73-7, PageID # 1601.

ECF

The letter included the heading

“Delinquency Notice Information,” underneath which the letter
stated, “Our records show that mortgage payments of $87,588.89,
plus late charges and other fees and costs of $10,159.10 for a
total of $97,747.99 January 16, 2019are due . . . .

Please note

that if you do not make these payments by the late charges
assessment date, an additional late fee may be added to your
account.”

Id.
On or about October 5, 2014, Agustin sent a letter to

PNC Mortgage disputing the debt.

She told PNC Mortgage that she

did not owe anything because “this matter has already been
settle[d] in court.

Please see the attached documentation that

provides a more detailed breakdown of the court settlement.”

ECF

No. 74-3, PageID # 1704.
On or about November 10, 2014, PNC Mortgage responded
to the October 5, 2014, letter, stating:

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Our records indicate that you entered into a
Settlement Agreement with PNC. We have
updated the account to reflect that you no
longer have personal liability for either the
debt or for the property.
On November 6, 2014, we updated the credit
reporting showing a full settlement as of May
2011.
PNC is working diligently to update our
system to prevent any further communication .
. . to you. However, you may continue to
receive information about the foreclosure.
We trust that this response will resolve your
concerns.
ECF No. 74-4, PageID # 1709.

PNC Mortgage’s system was updated

on November 6, 2014, to say, “THIS IS A LITIGATED LOAN, AND PER
THE TERMS OF THE SETTLEMENT, THE LOAN IS BEING REPORTED AS
SATISFIED IN FULL EFFECTIVE 5/11/11.”
# 1711.

ECF No. 74-5, PageID

At no time, however, did PNC Mortgage update its

standard delinquency letters, monthly statements, or other
correspondence, to reflect that Agustin did not actually have to
pay any of the amounts PNC Mortgage was demanding.
While PNC Bank now says it was required by federal law
to send Agustin “information” about her loan obligations, the
“information” it sent never acknowledged that PNC Bank was not
actually seeking the money from Agustin that the letters kept
saying she owed.

For example, on November 17, 2014, a week after

acknowledging that Agustin had no further liability with respect
to the loan, PNC Mortgage sent Agustin a letter that enclosed a

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one-year hazard insurance policy at a cost of $2,359.00 that it
charged to Agustin’s loan account.

See ECF No. 73-8.

PNC Mortgage also continued to send Agustin letters
noting, “We understand borrowers sometimes face challenges when
it comes to making their payments. . . . please call us to
discuss your current loan status.

We want to help you explore

options to bring your account current and find the best possible
solution to resolve any financial hardship. . . .
attempt to collect a debt and/or enforce our lien.”

This is an
ECF No. 98-

3, PageID #s 2610-2639 (letters dated from Nov. 11, 2014, through
June 13, 2017).
fees.

Letters continued to threaten additional late

ECF No. 98-4, PageID #s 2630-2710 (letters dated from July

10, 2015, through Oct. 10, 2017).
Each statement listed a “Payment Amount Due,” “Total
Amount Due,” and “Payment Due Date.”

The statements also

reflected a past due amount ranging from over $90,000 to over
$135,000.

See ECF No. 98-2.

In other words, PNC Mortgage

continued to demand payment, even after PNC Mortgage’s November
2014 acknowledgment that the loan had been deemed “satisfied” as
of May 2011.

Beginning in December 2016, the same monthly

statements were sent to Agustin on PNC Bank letterhead.

See ECF

No. 98-2, PageID #s 2537-86.
Agustin’s verified First Amended Complaint also states
that, “Despite Defendants’ knowledge and assertions that they

8

would stop calling, Defendants continued to call Ms. Agustin over
100 more times.”

ECF No. 62, PageID # 1263.

On October 27, 2014, approximately 3½ years after the
June 2011 settlement agreement, HSBC filed a state-court
foreclosure proceeding.

See Docket,

http://hoohiki.courts.hawaii.gov/#/search (input Case ID
3cc141000401, then click on “Document List”).

In the July 20,

2017, Findings of Fact and Conclusions of Law; Order Granting
Plaintiff’s Motion for Summary Judgment and for Interlocutory
Decree of Foreclosure, Judge Henry Nakamoto determined that the
Agustins owed payments on their loan from March 1, 2009.

While

the order reflected that the Agustins owed $401,420.42 for
principal and interest, taxes, insurance, property inspections,
fees, and late charges, it noted that “Pursuant to an agreement
between PLAINTIFF, G. Agustin, AND A. Agustin, PLAINTIFF has
agreed to voluntarily waive any right it may have to a
monetary/deficiency judgment in this action.”
PageID # 1609-10.

ECF No. 73-10,

According to the docket, the property was sold

in October 2017, nearly three years after the unopposed
foreclosure proceedings began.

Agustin received the

“informational” correspondence that continued to demand payment
through the end of the foreclosure proceedings.

As noted above,

none of the “informational” correspondence ever told Agustin that

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she had no further liability.

Instead, the standard letters

continued to demand payment.
III.

SUMMARY JUDGMENT STANDARD.
Under Rule 56 of the Federal Rules of Civil Procedure,

summary judgment shall be granted when “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
P. 56(a).

Fed. R. Civ.

See Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134

(9th Cir. 2000).

The movants must support their position

concerning whether a material fact is genuinely disputed by
either “citing to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including
those made for the purposes of the motion only), admissions,
interrogatory answers, or other materials”; or “showing that the
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.”

Fed. R. Civ. P. 56(c).

One of the principal purposes of summary judgment is to identify
and dispose of factually unsupported claims and defenses.
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
Summary judgment must be granted against a party that
fails to demonstrate facts to establish what will be an essential
element at trial.

See id. at 323.

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A moving party without the

ultimate burden of persuasion at trial--usually, but not always,
the defendant--has both the initial burden of production and the
ultimate burden of persuasion on a motion for summary judgment.
Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102
(9th Cir. 2000).
The burden initially falls on the moving party to
identify for the court those “portions of the materials on file
that it believes demonstrate the absence of any genuine issue of
material fact.”

T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors

Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp.,
477 U.S. at 323).

“When the moving party has carried its burden

under Rule 56(c), its opponent must do more than simply show that
there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986) (footnote omitted).
The nonmoving party may not rely on the mere
allegations in the pleadings and instead must set forth specific
facts showing that there is a genuine issue for trial.
Elec. Serv., 809 F.2d at 630.

T.W.

At least some “‘significant

probative evidence tending to support the complaint’” must be
produced.

Id. (quoting First Nat’l Bank of Ariz. v. Cities Serv.

Co., 391 U.S. 253, 290 (1968)); see also Addisu, 198 F.3d at 1134
(“A scintilla of evidence or evidence that is merely colorable or
not significantly probative does not present a genuine issue of
11

material fact.”).

“[I]f the factual context makes the non-moving

party’s claim implausible, that party must come forward with more
persuasive evidence than would otherwise be necessary to show
that there is a genuine issue for trial.”

Cal. Arch’l Bldg.

Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468
(9th Cir. 1987) (citing Matsushita Elec. Indus. Co., 475 U.S. at
587).

Accord Addisu, 198 F.3d at 1134 (“There must be enough

doubt for a ‘reasonable trier of fact’ to find for plaintiffs in
order to defeat the summary judgment motion.”).
In adjudicating summary judgment motions, the court
must view all evidence and inferences in the light most favorable
to the nonmoving party.

T.W. Elec. Serv., 809 F.2d at 631.

Inferences may be drawn from underlying facts not in dispute, as
well as from disputed facts that the judge is required to resolve
in favor of the nonmoving party.
IV.

Id.

ANALYSIS.
Certain issues that were argued in Agustin’s briefs are

no longer in dispute.

At the hearing on the present motions,

Agustin agreed that PNC Mortgage is a division of PNC Bank and
therefore should be dismissed from this case.
PageID # 231.

See ECF No. 19,

The court therefore dismisses the claims asserted

against PNC Mortgage.
At the hearing, Agustin also failed to articulate any
basis for her claim that The PNC Financial Services Group should
12

be held vicariously liable for the acts of PNC Bank. She agreed
that summary judgment should be granted in favor of The PNC
Financial Services Group with respect to all claims.
On December 17, 2018, Agustin agreed that she lacked
facts to establish the Telephone Consumer Protection Act claim
asserted in Count Four.

See ECF No. 98, PageID # 2396.

Summary

judgment is therefore granted in favor of PNC Bank with respect
to Count Four.
Finally, at the hearing, Agustin conceded that PNC Bank
was not a debt collector such that it could be held liable for
violations of the Fair Debt Collection Practices Act.

See 15

U.S.C. § 1692a(6)(F) (“Debt collector” does not include “any
person collecting or attempting to collect any debt owed or due
or asserted to be owed or due another to the extent such activity
. . . (ii) concerns a debt which was originated by such person;
[or] (iii) concerns a debt which was not in default at the time
it was obtained by such person.”).

See also Heejoon Chung v.

U.S. Bank, N.A., 250 F. Supp. 3d 658, 682 (D. Haw. 2017) (“courts
have consistently held that the FDCPA does not apply to mortgage
servicing companies, or assignees of the mortgage debt, if the
debt was not in default at the time the debt was obtained.”);
Soriano v. Wells Fargo Bank, N.A., 2012 WL 1536065, at *8 (D.
Haw. Apr. 30, 2012) (same).

Accordingly, summary judgment is

13

granted in favor of PNC Bank with respect to the FDCPA claims
asserted in Count Two.
Given Agustin’s concessions, only the breach of
contract and section 480-2 claims asserted in Counts One and
Three against PNC Bank remain for adjudication.
A.

Summary Judgment is Granted in Favor of Agustin
With Respect to Liability for the Breach of
Contract Claim Asserted in Count One of the First
Amended Complaint.

Agustin seeks summary judgment with respect to her
breach of contract claim, arguing that PNC Bank breached the
settlement agreement by continuing to demand payment after
agreeing to “absolutely and unconditionally release” her “from
any and all claims, demands, actions or causes of action, of
whatever nature or description, known or unknown, now existing or
hereafter acquired . . . arising out of or related to” the
mortgage, except with respect to obligations in the settlement
agreement.

Id., PageID # 2738.
To demonstrate liability with respect to a breach of

contract claim, Agustin must prove: “(1) the contract at issue;
(2) the parties to the contract; (3) whether Plaintiff performed
under the contract; (4) the particular provision of the contract
allegedly violated by Defendants; and (5) when and how Defendants
allegedly breached the contract.”

Evergreen Eng'g, Inc. v. Green

Energy Team LLC, 884 F. Supp. 2d 1049, 1059 (D. Haw. 2012)

14

(quotation marks and citation omitted).

Agustin satisfies each

of these elements.
First, the contract at issue is the settlement
agreement.

Second, the parties to the settlement agreement

included PNC Bank and Agustin.

Third, there is no dispute that

Agustin performed her obligations under the terms of the
settlement agreement.

Fourth, Agustin shows that PNC Bank

unconditionally released her “from any and all claims, demands,
actions or causes of action, of whatever nature or description,
known or unknown, now existing or hereafter acquired . . .
arising out of or related to” the mortgage.

Fifth, Agustin

demonstrates that, even after the parties settled their dispute,
PNC Bank continued to demand payment with respect to the
mortgage.
PNC Bank argues that, even if its actions are
inconsistent with the release language, its actions do not
constitute a breach of contract.

PNC Bank argues that the mutual

release does not prohibit it from asserting that Agustin still
owes PNC Bank money.

PNC Bank says the release only provides a

defense to any lawsuit that PNC Bank might file seeking to
collect the settled debt from Agustin.
The Ninth Circuit deems “[f]ormalistic distinctions to
avoid the clear import of a contract” as inconsistent with the
covenant of good faith and fair dealing implied in all contracts.

15

See Gruver v. Midas Int'l Corp., 925 F.2d 280, 283 (9th Cir.
1991).

Under that approach, the release in this case must be

viewed as a contractual obligation prohibiting demands for
payment, even in the absence of a new lawsuit by a creditor
seeking to collect on the settled debt.

Admittedly, Gruver

addressed the right to sue in the face of a release, saying,
“[A]t least in the absence of an express contractual provision
that one retains the right to sue on extinguished claims, it
cannot seriously be maintained that when one releases his claims
against another, thereby extinguishing any causes of action he
might have had, he nevertheless retains the right to sue on those
extinguished claims.”

Id. (citation omitted).

Treating the

release as a kind of contract, the Ninth Circuit applied the
“American Rule” with respect to attorneys’ fees to release
agreements, concluding under Oregon law that attorneys’ fees were
not available for an alleged breach of a release agreement unless
such fees were provided for in the release.

Id.

However, while

Gruver focused on the right to sue, there is no basis for
rejecting its reasoning in the context of demands for payment
made outside of a formal lawsuit.
PNC Bank’s argument that the release language cannot
support Augustin’s breach of contract claim ignores Gruver’s
reasoning.

In Gruver, it was the breach of release that was the

wrongful action giving rise to the very concept of an attorneys’
16

fee award as damages.

It is not at all clear why, as PNC Bank

argues, such damages can only be incurred in defending against a
suit filed by PNC Bank.
breach.

That may be the context of a particular

See, e.g., Widener v. Arco Oil & Gas Co., 717 F. Supp.

1211, 1217 (N.D. Tex. 1989) (noting that a “breach of a release
may be grounds for an action for damages” because “the purpose of
entering into a release is to avoid litigation”).

But PNC Bank

cites no authority stating that a new lawsuit by the settling
creditor is the exclusive context in which a release can be
breached.

That is, PNC Bank does not show that a particular

factual context is somehow a legal prerequisite.
The release language says that PNC Bank “absolutely and
unconditionally” releases Agustin from “any and all claims,
demands, actions or causes of action” that PNC Bank had or may in
the future have.

The repeated loan statements listing ever-

increasing amounts qualify as “demands” that PNC Bank made in
contravention of its express release.

In arguing that the

release cannot serve as a breached contract provision, PNC Bank
is reading out of the release the express prohibition on further
“demands” by PNC Bank.
At this point, Agustin may seek damages, including
“costs and reasonable attorney’s fees” arising out of PNC’s
breach of its agreement to refrain from demanding payment with
respect to the underlying loan.

See Choy v. Cont'l Cas. Co.,

17

2015 WL 7588233, at *4 (D. Haw. Nov. 25, 2015) (stating that a
breach of contract claim also requires a showing of damages);
accord Gruver, 925 F.2d at 283.

The settlement agreement

includes an express agreement with respect to attorneys’ fees
that overcomes the “American Rule” under which each side bears
its own attorneys’ fees and that therefore establishes damages
for a breach of the release agreement:
In the event that any Party hereto fails to
perform any of the obligations under this
Agreement or in the event a dispute arises
concerning the meaning or interpretation of
any provision of this Agreement, the Party
not prevailing in such dispute shall pay any
and all costs and expenses incurred by the
other party in enforcing or establishing
their rights hereunder, including without
limitation court costs and reasonable
attorney’s fees.
ECF No. 100, PageID #s 2744-45.

Evidence of the amount of

damages flowing from the breach of contract is not before this
court, and this court leaves adjudication of the damage amount
for future proceedings.
This court is not persuaded by PNC Bank’s argument that
it cannot be liable to Agustin because, it says, it was required
by law to send her the very monthly statements and other letters
that form the basis of her breach of contract claim.

PNC Bank

notes that it did not seek or obtain a deficiency judgment
against Agustin.

This court disagrees that the correspondence

was simply required “information.” See ECF No. 71-1, PageID #s

18

1543-44.

For years after the settlement agreement, PNC Bank or

PNC Mortgage sent Agustin deficiency letters, monthly statements,
and other correspondence demanding payment or seeking to collect
the debt.

While language such as “this is an attempt to collect

a debt” may have been included to satisfy potential obligations
under the Fair Debt Collections Practices Act and other statutes
and regulations, that language did not indicate the true
relationship PNC Bank had with Agustin under the settlement
agreement.

Unless accompanied by an explanation, which it was

not, this “information” conveyed a request by PNC Bank for
payment from Agustin when no payment was actually due.

The

inclusion of language noting that “this is an attempt to collect
a debt” certainly made it appear that PNC Bank was indeed trying
to collect money from Agustin.
PNC argues that Regulation Z, 12 C.F.R. Part 1026, the
implementing regulations for the Truth in Lending Act, required
it to send Agustin the “information” in question.

Under 12

C.F.R. § 1026.41, creditors must send consumers periodic
statements for residential mortgage loans that disclose things
such as the amount due, the payment due date, past payment
information, the amount of outstanding the principal balance, and
delinquency information including the length of delinquency and
the total payment needed to bring the account current.
Bank cites no provision of Regulation Z that allows such

But PNC

19

disclosures to inaccurately reflect the obligations of the
consumer when, for example, the lender and the consumer have
settled all claims with respect to the mortgage loan.

One of the

purposes of the Truth in Lending Act is “‘to protect the consumer
against inaccurate and unfair credit billing,’”.

Jesinoski v.

Countrywide Home Loans, Inc., 135 S. Ct. 790, 792, (2015)
(quoting 15 U.S.C. § 1601(a)).

At the time PNC Bank sent the

“information,” Agustin no longer owed anything to PNC Bank.

PNC

Bank fails to show that Regulation Z allowed, much less required,
monthly statements that inaccurately reflected what Agustin owed.
PNC also argues that Regulation X, 12 C.F.R. Part 1024,
the implementing regulations for the Real Estate Settlement
Procedures Act, required it to send the “information” to Agustin.
While PNC Bank does not identify any specific provision of
Regulation X requiring it to send the “information,” Regulation X
did require PNC Bank to have policies in place that were
reasonably designed to ensure the provision of accurate and
timely disclosures and to investigate, respond to, and make
corrections with respect to complaints by borrowers.
C.F.R. § 1024.38(b).

See 12

It is not at all clear that PNC Bank’s

provision of “information” that inaccurately reflected Agustin’s
obligations complied with, much less was required by,
Regulation X.

20

For example, each of the monthly statements listed an
“Amount Due,” “Payment Due Date,” and “Past Due Amount.”

Each

monthly statement had an “Explanation of Amount Due,” which
listed interest, taxes, insurance, new fees and charges, overdue
payments, past late charge fees, and other past fees.

No

statement indicated that Agustin need not pay the “amount due,”
even after PNC Mortgage told Agustin in November 2014 that it had
“updated the account” to reflect that Agustin had no “personal
liability for either the debt or for the property.”
5, PageID # 1308.

ECF No. 62-

Under these circumstances, PNC Bank breached

the release provision in the settlement agreement by continuing
to demand payment with respect to loan obligations it had agreed
to release Agustin from.
While Agustin has established liability with respect to
her breach of contract claim, damages for the breach remain for
future adjudication.
B.

Partial Summary Judgment is Granted in Favor of
Agustin With Respect to Liability for the UDAP
Claim Asserted in Count Three of the First Amended
Complaint.

Count III of the First Amended Complaint alleges that
PNC Bank violated chapter 480 of Hawaii Revised Statutes, also
known as Hawaii’s Unfair and Deceptive Acts and Practices
(“UDAP”) law.

Section 480-2(a) states: “Unfair methods of

competition and unfair or deceptive acts or practices in the
conduct of any trade or commerce are unlawful.”
21

Two distinct

causes of action exist under section 480–2: claims alleging
unfair methods of competition and claims alleging unfair or
deceptive acts or practices.

See Haw. Med. Ass'n v. Haw. Med.

Serv. Ass'n, 113 Haw. 77, 110, 148 P.3d 1179, 1212 (2006).
Agustin does not proceed under the “unfair methods of
competition” prong.

Instead, she seeks summary judgment on the

ground that PNC Bank’s unrelenting demands for payment in spite
of the settlement agreement constituted an “unfair or deceptive”
act or practice.1
In Hawaii Community Federal Credit Union v. Keka, 94
Haw. 213, 227, 11 P.3d 1, 15 (2000), the Hawaii Supreme Court
noted that a mortgage loan secured by a residence is “conduct of
any trade and commerce” involving “consumers” for purposes of a
section 480-2 claim.

This court therefore turns to whether PNC

Bank’s conduct was either unfair or deceptive.
“Unfair” acts and practices are distinct from
“deceptive” acts and practices in terms of how they are defined
and the standard by which they are proved.

See State by Bronster

v. U.S. Steel Corp., 82 Haw. 32, 51, 919 P.2d 294, 313 (1996);
see also Bald v. Wells Fargo Bank, N.A., 688 F. App’x 472, 475
(9th Cir. 2017) (“To violate HRS § 480-2, a practice need only be

1

To the extent Agustin premises her UDAP claim alleged in
Count III on a violation of Hawaii’s collection agency statute,
she does not now contest that PNC Bank is not a “collection
agency.”
22

unfair or deceptive, not both.”); Courbat v. Dahana Ranch, Inc.,
111 Haw. 254, 261, 141 P.3d 427, 434 (2006) (“‘Deceptive’ acts or
practices violate HRS § 480–2”).
Hawaii’s courts have held that an act or practice is
unfair (1) when it offends established public policy, (2) when
the practice is immoral, unethical, oppressive, unscrupulous, or
(3) when it is substantially injurious to consumers.

See Hungate

v. Law Office of David B. Rosen, 139 Haw. 394, 411, 391 P.3d 1,
18 (2017); Balthazar v. Verizon Haw., Inc., 109 Hawaii 69, 77,
123 P.3d 194 (2005).

Agustin need not establish all three

circumstances to demonstrate that PNC Bank’s conduct was
“unfair.”

Id.; Bald, 688 F. App'x 472, 475 (9th Cir. 2017)

(stating that a “practice may be unfair because of the degree to
which it meets one of the criteria or because to a lesser extent
it meets all three” (quotation marks and citation omitted)).

“A

practice may be unfair if it “offends public policy as it has
been established by statutes, the common law, or otherwise.”
Hungate, 139 Haw. at 411, 391 P.3d at 18 (alterations, quotation
marks, and citation omitted).
Whether an act or practice is “unfair” usually involves
a question of fact for the factfinder to decide.
391 P.3d at 17.
what occurred.
“unfair.”

See id. at 410,

However, in this case, there is no dispute about
Any reasonable jury would find PNC Bank’s acts

The court therefore rules as a matter of law that PNC
23

Bank’s conduct in this case was “unfair” for purposes of section
480-2 of Hawaii Revised Statutes.

PNC Bank relentlessly sent

Agustin correspondence demanding payment of money she did not
owe, even after acknowledging in November 2014 that, pursuant to
the settlement agreement, Agustin had no further liability with
respect to the loan.

Additionally, PNC bank called Agustin over

a hundred times with respect to the loan.

For years, PNC Bank

demanded payments of additional charges such as late fees and
insurance, each time inaccurately demanding payment of money that
PNC Bank knew Agustin did not owe.

As a matter of law, this is

“oppressive” conduct, and oppressive conduct is unfair for
purpose of Hawaii’s UDAP statute.
The years of inaccurate demands for payment were also
unfair in that they were “unscrupulous or substantially
injurious” to a consumer like Agustin.

For example, if a company

for years sent a consumer monthly bills charging $0.15 that the
consumer did not owe, the consumer might well pay the bill to
stop the harassing monthly bills.

While Agustin may not have

been able to as easily pay the huge amount PNC Bank was
demanding, PNC Bank’s monthly demands for money not owed were
just as unscrupulous or injurious as demands by a company wrongly
billing a consumer $0.15 every month.

In both cases, a consumer

is relentlessly bombarded with payment demands for amounts the
consumer does not owe.

24

While “deceptive” is not defined in Hawaii’s UDAP
statute, it involves “the capacity or tendency to mislead or
deceive.”

Courbat, 111 Haw. at 261, 141 P.3d at 434.

Courts

apply a three-part test to determine whether an act or practice
is “deceptive,” examining whether there is “‘(1) a
representation, omission, or practice[ ] that (2) is likely to
mislead consumers acting reasonably under the circumstances
[when] (3) [ ] the representation, omission, or practice is
material.’”

Compton v. Countrywide Fin. Corp., 761 F.3d 1046,

1053 (9th Cir. 2014) (quoting Courbat v Dahana Ranch, Inc., 111
Haw. 254, 262, 141 P.3d 427, 435 (alterations in original)).

A

representation, omission, or practice is “material” when it
involves “information that is important to consumers and, hence,
likely to affect their choice of, or conduct regarding, a
product.”

Courbat, 111 Haw. at 262, 141 P.3d at 435.
The test to determine deceptiveness is objective, and

turns on “whether the act or omission is likely to mislead
consumers, as to information important to consumers in making a
decision regarding the product or service.”

Hungate v. Law

Office of David B. Rosen, 139 Haw. 394, 411, 391 P.3d 1, 18
(2017) (alterations, quotation marks, and citation omitted).
Proof of actual deception is not required.

Id.

Whether an act

is “deceptive” usually involves questions of fact for the
factfinder to decide.

Id. at 410, 391 P.3d at 17.
25

Having

determined that PNC Bank’s conduct was unfair, this court need
not determine whether it was also deceptive for purposes of
Hawaii’s UDAP statute.
In addressing the UDAP claim, PNC Bank, as it did with
the contract claim, argues that it was required by federal
statutes and/or regulations to send monthly statements and other
correspondence to Agustin with respect to her mortgage
obligations.

However, as discussed above, PNC Bank does not

actually show that federal statutes or regulations allowed, much
less required, monthly statements demanding payments that it knew
Agustin did not actually need to make.

Nor does PNC Bank cite

any law prohibiting a clarifying statement even if “information”
had to be provided.

In fact, the regulations PNC Bank relies on

require accurate disclosures.

The “information” PNC Bank sent

Agustin was undeniably inaccurate.
For example, PNC Bank says it was required to provide
various details to Agustin pursuant to 12 C.F.R. § 1026.41(d)(8),
which requires the provision of certain information related to
delinquent loans.

Even if PNC Bank was including purportedly

required information, that information was incomplete and
therefore misleading.

The Truth in Lending Act requires truthful

disclosures, not inaccurate “information.” See Jesinoski, 135 S.
Ct. at 792, (2015) (“Congress passed the Truth in Lending Act . .
.‘to protect the consumer against inaccurate and unfair credit

26

billing.’” (quoting 15 U.S.C. § 1601(a)).

PNC Bank sent Agustin

statements that inaccurately demanded payments she was not
required to make.

To add insult to injury, PNC Bank kept adding

fees and other charges, even though the settlement agreement
released Agustin from further liability under the loan.

The

monthly statements and other correspondence did not indicate
that, while amounts kept accruing until the foreclosure was
completed, Agustin had no liability with respect to those
amounts.

There was no notation on the letters sent to Agustin

such as “Amount listed for informational purposes only.
payment due pursuant to settlement agreement.”
statements did not even state, “Do not pay.”

No

The monthly
Instead, the

standard monthly statements and other correspondence made it
appear as though Agustin still owed significant amounts with
respect to her loan and told Agustin that payment was due on
certain dates.

Even after recognizing in November 2014 that

Agustin “no longer ha[d] personal liability for either the debt
or for the property, see ECF No. 62-5, PageID # 1308, PNC Bank
continued to demand payments from her for years after that.
Complicating matters, PNC Bank took 3½ years after the
settlement agreement was signed to commence an action seeking
foreclosure, and over three more years to complete the unopposed
foreclosure action.

While PNC Bank stated at the hearing that

Hawaii’s nonjudicial foreclosure process had been stayed during

27

that time, it cited no law prohibiting it from promptly bringing
a judicial foreclosure action.

During the extended period, even

though Agustin had turned the property over to PNC Bank, PNC Bank
kept adding fees and other charges for taxes and insurance and
telling Agustin she owed these growing balances.
Under section 480-13(b)(1) of Hawaii Revised Statutes,
any consumer who is injured by an unfair or deceptive act
forbidden or declared unlawful by section 480-2 may be awarded
“not less than $1,000 or threefold damages by the plaintiff
sustained, whichever sum is the greater, and reasonable
attorney’s fees together with the costs of suit.”

“To obtain

relief under section 480–13(b)(1), a consumer must establish
three elements: “‘(1) a violation of [section] 480–2; (2) injury
to the consumer caused by such a violation; and (3) proof of the
amount of damages.’”

Compton, 761 F.3d at 1053 (quoting Davis v.

Wholesale Motors, Inc., 86 Hawaii 405, 417, 949 P.2d 1026 (Ct.
App. 1997)).
The Ninth Circuit notes that, although “injury” and
“damages” are not defined in Hawaii’s UDAP statutes,
Hawaii courts have not set a high bar for
proving these elements. The plaintiff must
show only that the alleged violations of
section 480–2(a) caused private damage, and
that the plaintiff’s injury is fairly
traceable to the defendant’s actions[.]”
Because deceptive acts do their damage when
they induce action that a consumer would not
otherwise have undertaken, a consumer who can
show a resulting injury is entitled to
28

damages even if the consumer has not actually
consummated a particular transaction. For
instance, a consumer could recover damages
for out-of-pocket expenses for a money order,
gasoline, parking, and wear and tear on an
automobile that resulted from an unfair
business practice.
Compton, 761 F.3d at 1053 (alterations, quotation marks, and
citations omitted).
At a minimum, the record reflects that Agustin was
injured and suffered damages in the form of postage that she
spent trying to clarify that she did not owe any money to PNC
Bank.

In July 5, 2017, for example, Agustin sent a certified

letter to PNC Bank that disputed the bank’s claim that she owed
more than $128,000.
$6.59.

The postage for the certified letter was

See ECF No. 74-2, PageID # 1708.

Agustin clarified at

the hearing that she is seeking statutory damages of $1,000,
rather than three times her actual damages.
PageID # 1697.

See ECF No. 74,

Because Agustin has established liability for a

UDAP violation and some monetary damages, the court, pursuant to
section 480–13(b)(1) of Hawaii Revised Statutes, awards to
Agustin $1,000 in statutory damages, as well as her reasonable
attorney’s fees and costs.
V.

CONCLUSION.
The claims against PNC Mortgage are dismissed, as it is

not a legal entity and is instead a division of PNC Bank.

29

Summary judgment is granted in favor of The PNC
Financial Services Group, Inc., with respect to all claims
asserted in the First Amended Complaint.
Summary judgment is granted in favor of PNC Bank with
respect to the FDCPA and Telephone Consumer Protection Act claims
asserted in Counts Two and Four of the First Amended Complaint.
Summary judgment is granted in favor of Agustin and
against PNC Bank with respect to liability for the breach of
contract claim asserted in Count One of the First Amended
Complaint, but the court leaves the determination of damages for
that breach for future adjudication.
Summary judgment is granted in favor of Agustin and
against PNC Bank with respect to the UDAP claim asserted in Count
Three of the First Amended Complaint.

The court awards statutory

damages of $1,000 to Agustin and against PNC Bank, leaving any
award of fees and costs for future adjudication.
Finally, the parties are ordered to immediately contact
Magistrate Judge Rom Trader to conduct a further settlement
conference in light of this order.

30

IT IS SO ORDERED.
DATED: Honolulu, January 16, 2019.

/s/ Susan Oki Mollway
Susan Oki Mollway
United States District Judge

Agustin v. The PNC Fin. Servs. Group, Inc., Civ. No. 17-00525 SOM/RT; ORDER
(1) DISMISSING CLAIMS AGAINST PNC MORTGAGE; (2) GRANTING SUMMARY JUDGMENT IN FAVOR OF
THE PNC FINANCIAL SERVICES GROUP, INC.; (3) GRANTING SUMMARY JUDGMENT IN FAVOR OF PNC
BANK N.A. WITH RESPECT TO THE FAIR DEBT COLLECTION PRACTICES ACT CLAIM ASSERTED IN
COUNT TWO AND THE TELEPHONE CONSUMER PROTECTION ACT CLAIM ASSERTED IN COUNT FOUR; AND
(4) GRANTING SUMMARY JUDGMENT IN FAVOR OF ANNETTE AUGUSTIN WITH RESPECT TO LIABILITY
FOR THE BREACH OF CONTRACT CLAIM ASSERTED IN COUNT ONE AND WITH RESPECT TO THE SECTION
480-2 CLAIM ASSERTED IN COUNT THREE

31