Amina v. Wmc Mortgage Corp.

MELVIN KEAKAKU AMINA and DONNA MAE AMINA, Husband and Wife, Plaintiffs,

v. WMC MORTGAGE CORP.; GENERAL ELECTRIC COMPANY;MERSCORP, INC.; MORTGAGE ELECTRONIC REGISTRATIONSYSTEMS, INC.; CHASE HOME FINANCE LLC; CHASE HOMEFINANCE, INC.; LCS FINANCIAL SERVICES CORPORATION;UNKNOWN OWNERS OF THE EVIDENCE OF THE DEBT and/orOWNERS OF THE NOTE, Defendants.

CIVIL NO. 10-00165 JMS/KSC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

Dated: May 13, 2011

ORDER (1) GRANTING DEFENDANTS WMC

MORTGAGE LLC AND GENERAL ELECTRIC COMPANY'S

MOTION FOR JUDGMENT ON THE PLEADINGS, DOC. NO. 64;

AND (2) GRANTING IN PART AND DENYING IN PART

DEFENDANT LCS FINANCIAL SERVICES CORPORATION'S

MOTION FOR SUMMARY JUDGMENT, DOC. NO. 57

ORDER (1) GRANTING DEFENDANTS WMC MORTGAGE LLC AND

GENERAL ELECTRIC COMPANY'S MOTION FOR JUDGMENT ON

THE PLEADINGS, DOC. NO. 64; AND (2) GRANTING IN PART AND

DENYING IN PART DEFENDANT LCS FINANCIAL SERVICES

CORPORATION'S MOTION FOR SUMMARY JUDGMENT, DOC. NO. 57

I. INTRODUCTION

On March 22, 2010, Plaintiffs Melvin Keakaku Amina and Donna Mae Amina ("Plaintiffs") filed this action alleging claims against DefendantsWMC Mortgage LLC ("WMC"), ¹ General Electric Company ("GE"), MERSCORP, Inc. and Mortgage Electronic Registration Systems, Inc. ("MERS entities"), Chase Home Finance LLC and Chase Home Finance, Inc. ("Chase entities"), and LCS Financial Services Corporation ("LCS") (collectively "Defendants"), for violations of the Truth in Lending Act ("TILA"), the Real Estate Settlement Procedures Act of 1974 ("RESPA"), the Fair Debt Collection Practices Act ("FDCPA"), the Fair Credit Reporting Act ("FCRA"), and various state law claims stemming from a mortgage transaction and subsequent threatened foreclosure of real property located at 2304 Metcalf Street #2, Honolulu, Hawaii 96822 (the "subject property").

Currently pending before the court are (1) WMC and GE's Motion for Judgment on the Pleadings, and (2) LCS's Motion for Summary Judgment. Based on the following, the court GRANTS WMC and GE's Motion for Judgment on the Pleadings with leave for Plaintiffs to amend certain claims, and GRANTS in part and DENIES in part LCS's Motion for Summary Judgment.

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II. BACKGROUND

A. Factual Background

On or about February 25, 2006, Plaintiffs obtained two loans from WMC, one for $880,000, and another for $220,000, to purchase the subject property. See Doc. No. 35, Am. Compl. ¶¶ 36, 39-40; Doc. No. 64-7, WMC & GE Ex. E (Warranty Deed for the subject property to Plaintiffs, dated February 28, 2006).² Plaintiffs assert that the loan broker (not named in this action) "deceived Plaintiffs about the interest rate and payment amounts," and that WMC paid the loan broker a kickback and knew the loans would go into default. Doc. No. 35, Am. Compl. ¶¶ 36-38.

Plaintiffs secured the promissory notes by executing mortgages on the subject property, which list as the mortgagee Mortgage Electronic Registration Systems, Inc., solely as nominee for WMC. See id. ¶¶ 39-40, 46; Doc. Nos. 64-5-6, WMC & GE's Exs. C-D. It is undisputed that WMC no longer owns the notes and mortgages on the subject property. See Doc. No. 64-4, WMC & GE's Ex. B, Answer ¶¶ 4, 50 (admitting that WMC no longer holds the notes and mortgages).

The Amended Complaint further alleges that on February 3, 2010, Chase Home Finance, LLC mailed a letter to Plaintiffs entitled "Acceleration Warning (Notice of Intent to Foreclose)," claiming that their account, number 22917306, was past due. Doc. No. 35, Am. Compl. ¶¶ 98. Plaintiffs assert that they have no loan with this account number. Id. ¶ 99. Subsequently, someone identifying themselves from "Chase" told Plaintiffs via telephone that if Plaintiffs did not pay the second mortgage loan, Chase would write off the loan and sell it or assign it to a collection agency. Id. ¶ 100.

On March 25, 2010, LCS sent Plaintiffs a letter providing:

Please be advised that LCS Financial Services Corp. represents CHASE with regard to the balance due and owing on the above referenced promissory note.... PLEASE SEE REVERSE SIDE FOR IMPORTANT INFORMATION

[reverse side of the letter]

The following information is provided in accordance with the Fair Debt Collection Practices Act:

1. The total amount of the debt as of the date of this letter is $235669.54.

2. The name of the current creditor to whom the

debt is owed is CHASE.

3. Unless you notify this office within thirty days after receiving this notice that you dispute thisdebt, or any portion thereof, the debt will be assumed to be valid by us.

4. If you notify this office in writing within thirty days after receiving this notice that you dispute this debt, or any portion thereof, our office will obtain verification of the debt, or a copy of any judgment against you, and a copy of such verification of judgment will be mailed to you.

5. Upon written request within thirty days after your receipt of this notice, our office will provide you with the name and address of the original creditor, if different from the current creditor.

Doc. No. 58-2, LCS Ex. A; see also Doc. No. 35, Am. Compl. ¶ 102.

In an April 14, 2010 letter, Plaintiffs notified LCS that "all or part of [LCS's] claim is disputed," and demanded (1) "verification and validation [] pursuant to the federal Fair Debt Collection Practices Act (Amended), 15 U.S.C. § 1692 et seq.," (2) the name and address of the original creditor, and (3) that LCS cease debt collection until Plaintiffs are provided verification of the debt, evidence of ownership of the note, and the name and address of the original creditor. Doc. No. 58-3, LCS Ex. B.

LCS responded in an April 21, 2010 letter, explaining that Plaintiffs' account was now on hold pending verification of the debt:

As you have been advised LCS Financial Services Corporation represents CHASE with regard to the balance due and owing on the loan.

We have requested additional documents and/orinformation from our client to process your request. Upon receipt, we will forward copies of the documents and/or information to you along with an itemized description of all amounts due and owing.

Your account has been placed on "hold" pending our receipt of the requested information from CHASE. If you have any questions or require assistance, please contact use toll free at (800) 868-5985.

Doc. No. 58-4, LCS Ex. C.³

On July 21, 2010, LCS provided Plaintiffs copies of the mortgage notes with WMC, identified the current creditor as "CHASE," identified the original creditor as "WMC Mortgage Corp.," and advised Plaintiffs that the current amount due on the debt was $235,669.54. Doc. No. 58-5, LCS Ex. D.

B. Procedural Background

On March 22, 2010, pro se Plaintiffs filed this action, and their Amended Complaint asserts claims for: (1) TILA violations against WMC and GE (Count I); (2) Quiet title against all Defendants (Count II); (3) RESPA violations against WMC, GE, MERS entities, and Chase entities (Count III); (4) FDCPA violations against Chase entities and LCS (Count IV); (5) FCRA violations against Chase entities and LCS (Count V); (6) Conspiracy to commit fraud and conversionagainst all Defendants (Count VI); (7) Conspiracy to commit fraud related to MERS against all Defendants (Count VII); (8) Unjust enrichment against all Defendants (Count VIII); and (9) Fraud in the inducement against WMC, GE, and MERS entities (Count IX).

On December 21, 2010, LCS filed its Motion for Summary Judgment, and on February 7, 2011, WMC and GE filed their Motion for Judgment on the Pleadings. On February 24, 2011, Plaintiffs filed an Opposition to LCS's Motion, and a Request for Extension of Time to respond to WMC and GE's Motion. On March 1, 2011, the court granted Plaintiffs until March 21, 2011 to file an Opposition to WMC and GE's Motion. Doc. No. 73. Although not requested, the court further granted Plaintiffs until March 21, 2011 to properly respond to LCS's Motion. The March 1, 2011 Order explained that to properly oppose a Motion for Summary Judgment, Plaintiffs must cite to evidence raising a genuine dispute as to those facts, and if they are seeking additional time for discovery, they must meet the requirements of Federal Rule of Civil Procedure 56(d). Id. at 3.

On March 21, 2011, Plaintiffs filed another Motion for Extension of Time to respond to both Motions, and after receiving objections, the court granted in part and denied in part Plaintiffs' Motion for Extension of Time. Doc. No. 81. On April 19, 2011, Plaintiffs filed a "Rule 56(d) Declaration" in Opposition to bothMotions. On April 25, 2011, WMC and GE, and LCS filed Replies in support of their Motions. Pursuant to Local Rule 7.2(d), the court determines these Motions without a hearing.

III. STANDARDS OF REVIEW

A. Motion for Judgment on the Pleadings

A party may make a motion for judgment on the pleadings at any time after the pleadings are closed, but within such time as not to delay the trial. Fed. R. Civ. P. 12(c). In considering a Rule 12(c) motion, the court accepts as true all factual allegations in the pleading being challenged, and construes them in the light most favorable to the non-moving party. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). A motion for judgment on the pleadings should be granted when there are no disputed issues of material fact, and the moving party is entitled to judgment as a matter of law. Id.

The standards for dismissal pursuant to Rule 12(b)(6) articulated in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), apply to a Rule 12(c) motion. See United States ex rel. Cafasso v. General Dynamics C4 Systems, NVW Inc., — F.3d 2011 WL 1053366, at *4 n.4 (9th Cir. Mar. 24, 2011). Accordingly, pursuant to Iqbal, "[t]o 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 itsface.'" Iqbal, 129 S. Ct. at 1949 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Weber v. Dep't of Veterans Affairs, 521 F.3d 1061, 1065 (9th Cir. 2008)....