Au v. Republic State Mortg. Co.

948 F.Supp.2d 1086

Ronald AU, Plaintiff,

v.REPUBLIC STATE MORTGAGE COMPANY; Chad Cotton; Sand Canyon Corporation, f.k.a. Option One Mortgage Corporation; Homeward Residential, Inc., f.k.a. American Home Mortgage Servicing, Inc.; and Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2007–5 Asset–Backed Certificates, Series 2007–5, Defendants.

Civil No. 11–00251 JMS–KSC.

United States District Court, D. Hawai‘i.

May 31, 2013.

Ronald G.S. Au, Honolulu, HI, pro se.

Marcus L. Landsberg, Landsberg Law Office, Chanelle Mari Chung Fujimoto, Debra M. Peake, Steven K.S. Chung, Imanaka Asato, LLLC, James B. Rogers, Alston Hunt Floyd & Ing, Honolulu, HI, Ari Karen, Offit Kurman, P.A., Fulton, MD, Russell B. Berger, Offit Kurman, Baltimore, MD, for Defendants.

ORDER (1) DENYING PLAINTIFF'S RENEWED MOTIONS FOR PARTIAL SUMMARY JUDGMENT; (2) GRANTING DEFENDANTS HOMEWARD RESIDENTIAL, INC. AND WELLS FARGO BANK N.A.'S MOTION FOR SUMMARY JUDGMENT; (3) DENYING PLAINTIFF'S CROSS–MOTION FOR SUMMARY JUDGMENT AGAINST DEFENDANT WELLS FARGO BANK N.A.; AND (4) DENYING REQUEST FOR RULE 54(B) CERTIFICATION

J. MICHAEL SEABRIGHT, District Judge.

I. INTRODUCTION

This is the latest installment in this protracted litigation brought by pro se Plaintiff Ronald Au (“Plaintiff” or “Au”) ¹ arising out of a refinancing transaction on real property located at 45–030 Springer Place, Kaneohe, Hawaii (the “subject property”). Plaintiff has renewed two Motions for Partial Summary Judgment on remaining claims in the Fourth Amended Complaint (“Fourth AC”) against Defendants Wells Fargo Bank N.A. (“Wells Fargo”) and Homeward Residential, Inc. (“Homeward”), f.k.a. American Home Mortgage Servicing, Inc. (“AHMSI”).²See Doc. No. 240 (Second Renewal of Motions for Partial Summary Judgment, incorporating Doc. No. 175 as to Wells Fargo, and Doc. No. 181 as to Homeward). Homeward and Wells Fargo (“Moving Defendants”) have filed a corresponding Motion for Summary Judgment on all remaining claims against them, Doc. No. 245, and Plaintiff has filed a Counter–Motion for Partial Summary Judgment against Wells Fargo. Doc. No. 282.

The court decides the Motions without an oral hearing under Local Rule 7.2(d). Based on the following, (1) Plaintiff's Renewed Motions for Partial Summary Judgment (Doc. Nos. 175, 181, and 240) are DENIED; (2) Moving Defendants' Motion for Summary Judgment (Doc. No. 245) is GRANTED; and (3) Plaintiff's Cross–Motion for Summary Judgment (Doc. No. 282) against Wells Fargo is DENIED. The court, however, declines to certify judgment against Wells Fargo and Homeward as final under Federal Rule of Civil Procedure 54(b).

II. BACKGROUND

The court has issued multiple Orders over the past two years as to various Defendants, and as to different aspects and versions of Plaintiff's Complaints. Among them are the following dispositive Orders, which the court refers to in this Order:

• Au v. Republic State Mortg. Co., 2011 WL 3422780 (D.Haw. Aug. 4, 2011) (granting in part Defendant Republic State Mortgage Co.'s (“Republic”) Motion to Dismiss First Amended Complaint) (“ Au I ”);

• Au v. Republic State Mortg. Co., 2012 WL 760316 (D.Haw. Mar. 8, 2012) (granting Homeward's Motion to Dismiss Counts Three and Five of the Third Amended Complaint) (“ Au II ”);

• Au v. Republic State Mortg. Co., 2012 WL 3113147 (D.Haw. July 31, 2012) (granting in part Motions to Dismiss the Fourth Amended Complaint) (“ Au III ”);

• Au v. Republic State Mortg. Co., 2012 WL 6726384 (D.Haw. Dec. 27, 2012) (denying Plaintiff's Motion to File Fifth Amended Complaint) (“ Au IV ”); and

• Au v. Republic State Mortg. Co., 2013 WL 1339738 (D.Haw. Mar. 29, 2013) (granting in part and denying in part Republic's Motion for Summary Judgment) (“ Au V ”).

The parties are thus more than familiar with the factual background and confusing procedural history of this case. And because the present Motions concern only Plaintiff's remaining claims against Wells Fargo and Homeward, the court reiterates only the facts necessary to resolve specific claims against those Defendants.³ Where appropriate, the court refers to the evidentiary record, construed in the light most favorable to the non-moving party as required at this summary judgment phase. See, e.g., Nelson v. City of Davis, 571 F.3d 924, 927 (9th Cir.2009) (“All justifiable inferences must be drawn in [Plaintiff's] favor, and [the court] must deny summary judgment if any rational trier of fact could resolve an issue in his favor.”) (citation omitted). To understand the current posture, however, it's important to understand what happened previously. In particular, Au III directly addressed some of Plaintiff's claims in the Fourth AC against Wells Fargo and Homeward, and Au V's subsequent rulings on claims against Republic are, in turn, dispositive of some of the remaining claims against Wells Fargo. Thus, in setting forth the relevant facts, the court also refers to the relevant conclusions from prior decisions to put this Order into proper context.

A. Relevant Factual Background

The action arises from Plaintiff's February 2, 2007 refinancing transaction on the subject property. During the transaction, Plaintiff dealt with Defendant Chad Cotton (“Cotton”), who was, or represented himself to be, associated with Republic. Doc. No. 128, Fourth AC ¶ 3. Cotton allegedly told Plaintiff that Republic could refinance the subject property for $680,000 at a rate of 7.5% per annum as long as the loan closed by the first week of February 2007. Id. ¶ 9. At closing on February 2, 2007, however, Plaintiff was presented with loan documents indicating an adjustable rate loan, with an initial rate of 8.925% for $700,000 (which included closing costs of over $19,000). Au V, 2013 WL 1339738, at *2.

Plaintiff questioned the figures at closing, and called or attempted to call Cotton. Cotton or another Republic representative told Plaintiff by telephone that (1) Republic had “misunderstood” that there was a loan commitment for 7.5%; and (2) after closing, Republic would “adjust” or modify the mortgage and promissory note to reflect the correct interest rate, and rebate certain closing costs. Id. Allegedly relying on these representations, Plaintiff proceeded to close escrow. Plaintiff knowingly and admittedly signed various closing documents clearly listing the terms of an adjustable rate loan amount of $700,000 at 8.925%. See, e.g., Doc. No. 246–6, Moving Defs.' Ex. 4; Au V, 2013 WL 1339738, at *2.

According to one of Plaintiff's theories, Republic or Cotton ⁴ (or both) were not licensed mortgage brokers or solicitors in Hawaii, and therefore the note and mortgage entered into on February 2, 2007 are void and unenforceable under a then-applicable statutory provision, Hawaii Revised Statutes (“HRS”) § 454–8.⁵Id.; see Au I, 2011 WL 3422780, at *6 (“Plaintiff had a matured right to bring a cause of action for violation of HRS Ch. 454 [in 2007]”).⁶ Plaintiff's suit thus seeks rescission of the transaction on that and other bases.

On February 8, 2007, Republic assigned the note and mortgage to Sand Canyon (known at that time as Option One Mortgage Corporation (“Option One”)). ⁷Au V, 2013 WL 1339738, at *2. Subsequently, Sand Canyon assigned the loan (the note) to Wells Fargo on April 1, 2007 as part of a loan securitization Pooling and Service Agreement (“PSA”). Id. The mortgage was assigned to Wells Fargo on January 4, 2012 (after this action was filed), and that assignment was recorded in the Hawaii Bureau of Conveyances on January 12, 2012. Id.⁸

Plaintiff's loan was initially serviced by Sand Canyon. Au III, 2012 WL 3113147, at *2. As noted above, the undisputed record establishes that Sand Canyon later sold its mortgage servicing business to Homeward, effective on April 30, 2008. Doc. No. 155–1, Sugimoto Decl. ¶ 8. Homeward began servicing Plaintiff's loan effective on July 1, 2008. Doc. No. 246–13, Moving Defs.' Ex. 11. The record confirms that Plaintiff was notified in writing, by letter of June 16, 2008, of this change in loan servicers. Id.

At times in 2009, Plaintiff apparently experienced some difficulty making timely loan payments and was often assessed for late charges. See Doc. No. 246–14, Moving Defs.' Ex. 12 at 6; Doc. No. 246–15, Moving Defs.' Ex. 13; Doc. No. 283–15, Pl.'s Ex. 14 at 7. On February 6, 2009, Plaintiff wrote a letter to Republic and Homeward stating that “I believe that I am entitled to a loan modification in the interest rate and principal that you are assessing monthly.” Au V, 2013 WL 1339738, at *2. Plaintiff wrote, in part:

On closing [on February 2, 2007], I first learned that the settlement charges were over $19,000, and the loan was at 8.9%. This was not what was represented by the representative of Republic State Mortgage. I immediately called him before signing any documentation. I was not able to reach him at his number, which I believe to be Texas. I spoke to a representative of the company where Mr. Cotton is employed, and they advised me that they owned or worked very closely with Republic State Mortgage and that the difference in settlement charges would be rebated to me after closing. I was further advised that because of their close connection to Republic State Mortgage, that the interest rate would be adjusted and I would receive documents for modification.

....

I believe that there has been misrepresentation and fraud by the representative of Republic State Mortgage in soliciting the refinancing through Republic State Mortgage.

....

I have been making good faith payments pursuant to the loan statement by the loan servicing company, in good faith so as not to jeopardize my mortgage. Pursuant to the Federal law, I am demanding a loan modification as to the interest rate and to the excessive settlement charges that were assessed without prior notice.

Id. at *2–3.

Plaintiff subsequently had numerous other similar telephone and email communications with Republic regarding the loan. Id. at *3. He...