Koga v. E. Sav. Bank

WENDELL TATSUMI KOGA, individually, as attorneyin fact for Ichiyo Eko Koga, and as trustee of the William Tsugio Kogaand Ichiyo Eko Koga Revocable Living Trust, dated February 4, 1991, Plaintiff, v. EASTERN SAVINGS BANK, FSB, Defendant.

EASTERN SAVINGS BANK, FSB, Third-Party Plaintiff, v. WILLIAM J. VROOM; ALII FINANCIAL CORPORATION;

PRIORITY ONE DEBT RELIEF SERVICES, LLC;

JANICE M. K. GANITANO; and SONIA M. EVANS Third-Party Defendants.

CIVIL NO. 11-00123 DKW-BMK

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAI`I

Dated: May 9, 2014

FINDINGS OF FACT AND

CONCLUSIONS OF LAW

GRANTING EASTERN SAVINGS

BANK'S MOTION FOR

SUMMARY JUDGMENT

AGAINST SONIA M. EVANS

FINDINGS OF FACT AND CONCLUSIONS OF LAW GRANTING

EASTERN SAVINGS BANK'S MOTION FOR SUMMARY JUDGMENT

AGAINST SONIA M. EVANS

Before the Court is Defendant and Third-Party Plaintiff Eastern Savings Bank, FSB's motion for summary judgment against Sonia M. Evans. Evans did not oppose the motion. After careful consideration of the supporting memoranda, the accompanying documentation, and the relevant legal authority, the motion is hereby GRANTED.

FINDINGS OF FACT

1. This Court has supplemental jurisdiction over these claims under 28 U.S.C. § 1367 based on the underlying complaint which confers jurisdiction pursuant to 15 U.S.C. §§ 1640(e) and 1692k, and 28 U.S.C. §§ 1331, 1332, and 1337. Venue is proper in this District under 28 U.S.C. § 1391(a) and (c).

2. Eastern filed its Third-Party Complaint on August 14, 2012.

3. Eastern filed its First Amended Third-Party Complaint on June 4, 2013 against, among others, Third-Party Defendant Sonia M. Evans ("Ms. Evans") which alleged, among other things, fraud and misrepresentation.

4. On July 20, 2013, Ms. Evans served on Eastern her Answer to Eastern's First Amended Third-Party Complaint ("Answer").

5. Ms. Evans did not file her Answer with the Court.

6. On January 30, 2014, Eastern filed its Motion for Summary Judgment against Ms. Evans.

7. This is an action based on an underlying $275,000 loan ("Loan") made by Eastern on March 6, 2008 to the William Tsugio Koga and Ichiyo Eko Koga Revocable Living Trust, dated February 4, 1991, a Hawaii Trust (hereinafter "Trust").

8. The Loan was evidenced by a Promissory Note signed by Mrs. Ichiyo Eko Koga ("Mrs. Koga") as Trustee of the Trust, in the principal amount of $275,000.

9. The Loan was secured by a Mortgage, Assignment of Rents and Security Agreement, signed by Mrs. Koga as Trustee of the Trust ("Mortgage").

10. At the time the Loan was made, Mrs. Koga or Janice M.K. Ganitano were the trustees of the Trust.

11. Ms. Ganitano is the daughter of Mrs. Koga and a former co-worker and friend of Ms. Evans.

12. On December 27, 2013, the United States of America filed an Information against Ms. Evans, charging her with the felony of mortgage fraud in violation of 18 U.S.C. § 1014, for defrauding Eastern with respect to the Loan. United States of America v. Evans, CR No. 13-01111 LEK (D. Haw. December 27, 2013) ("Criminal Case").

13. On January 13, 2014, Ms. Evans entered a plea of guilty to the Information in the Criminal Case. At the hearing, Ms. Evans admitted:

a. That she made material false statements for the purpose of inducing Eastern to extend the Loan in order to help her friend "Janice," and

b. That she completed a rental agreement, knowing that the information was incorrect and would be submitted to Eastern in support of the Loan.

14. Ms. Evans admitted in her Answer to making the following false representations of material facts to Eastern:

a. Regarding the Koga Memorandum, dated February 15, 2008:

i. The Loan was to provide crucial financial assistance to Ms. Ganitano;

ii. Mrs. Koga desired to downsize to a smaller home;

iii. The property which was to be security for the loan, 94-271 Hanawai Circle, Waipahu, HI 96797 ("Property"), was receiving rental income of $2,000 per month; and

iv. Ms. Ganitano's intention was to place the Property on the market for sale.

b. Regarding the Ganitano Memorandum, dated March 3, 2008:

i. Mrs. Koga and Ms. Ganitano desired to downsize their residence;

ii. That the loan would be used to renovate the Property in preparation for its sale;iii. That the Property was being rented as of March 3, 2008; and

iv. That the Property was receiving rental income of $2,000 per month.

c. Regarding the Rental Agreement, signed December 15, 2007:

i. That the signature on the Rental Agreement belonged to Dorothy Evans, and

ii. That Dorothy Evans was leasing the Property for $2,000 per month.

d. Regarding the Tenant Estoppel Certificate, dated February 15, 2008:

i. That the signature on the Rental Agreement belonged to Dorothy Evans, and

ii. That Dorothy Evans was leasing the Property for $2,000 per month.

e. That the Property was being leased by a "Dorothy Evans" for $2,000 per month at the time Sonia Evans transmitted the Tenant Estoppel Certificate on February 15, 2008.

f. That the Property was being leased for $2,000 by Dorothy Evans at the time Sonia Evans transmitted the Rental Agreement on February 11, 2008 that was purportedly signed by Mrs. Koga and Ms. Evans.

g. That Dorothy Evans' genuine signature appears on the Rental Agreement and Tenant Estoppel Certificate.

15. In her deposition testimony, Ms. Evans admitted:

a. That the Rental Agreement and Tenant Estoppel Certificate did not contain her mother Dorothy Evans' genuine signature but rather her mother's forged signature, as signed by herself, Sonia Evans;

b. That she faxed the Tenant Estoppel Certificate; and

c. That she drafted the Koga Memorandum and Ganitano Memorandum.

16. At Ms. Evans' initial appearance in the Criminal Case, she admitted that "[i]n an effort to help my friend, I completed a rental agreement, knowing that information was incorrect."

17. Ms. Evans admitted the following allegation contained in the Amended Third-Party Complaint:

Upon information and belief, based on the allegations in the Complaint and testimony from Ms. Ganitano's Deposition, the Property was not an investment property but Mrs. Koga's residence, the Property was not being rented to a "Dorothy Evans" for $2,000.00 per month, and Ms. Ganitano and Mrs. Koga had no intention of downsizing.

18. The evidence establishes that the Property was not rented to Dorothy Evans.

19. Ms. Evans' Answer, deposition testimony, and guilty plea establish that she knew the foregoing representations were false or were made without knowing their truth or falsity.

20. Ms. Evans knew her mother Dorothy Evans did not sign the Rental Agreement or Tenant Estoppel Agreement since Ms. Evans admitted to forging her mother's signature on both documents.

21. As to the Koga Memorandum and Ganitano Memorandum, Ms. Evans drafted these documents without knowledge as to their truth or falsity.

22. Ms. Evans knew that Eastern would rely on her false representations.

23. Ms. Evans knew that all of the documents she was preparing were to be submitted in order to induce Eastern to extend the Loan to the Trust.

24. Ms. Evans admitted the following allegation contained in Eastern's First Amended Third-Party Complaint:

Ms. Evans knew the submission of the foregoing referenced documents were for the purpose of Third-Party Plaintiff ESB making a loan to Mrs. Koga and Ms. Ganitano.

25. At Ms. Evans' initial appearance in the Criminal Case, she admitted knowing that the Rental Agreement was going to be submitted in support of the Loan:

The Court: And that as part of the documents that was being submitted in support of the loan to refinance the mortgage, you understood that this false rental agreement was going to be included?

The Defendant: Yes, Ma'am.

26. Ms. Evans testified that she knew the Rental Agreement and Tenant Estoppel Certificate were being submitted to Eastern in support of the Loan.

27. Ms. Evans possessed the fraudulent intent to deceive Eastern.

28. Ms. Evans intended to deceive Eastern when she made the representations above.

29. Ms. Evans' representations were willful.

30. Ms. Evans' guilty plea alone is sufficient to establish her fraudulent intent to deceive Eastern. See Santa Barbara Capital Mgmt. v. Neilson (In re Slatkin), 525 F.3d 805, 812-814 (9th Cir. 2008).

31. Notwithstanding the guilty plea, Ms. Evans' admissions and testimony discussed above also establish her intent to defraud Eastern, with the goal of helping her friend, Ms. Ganitano.

32. For drafting and preparing documents containing fraudulent representations relied upon by Eastern, Ms. Evans personally received $3,000.

33. The Court takes judicial notice of Ms. Evans' Information and "Plea of Guilty to the Felony Information" (mortgage fraud under 18 USC § 1014) before the Honorable Leslie E. Kobayashi in United States v. Evans, CR No. 13-01111 LEK (D. Haw.) as additional evidence supporting Ms. Evans' fraud against Eastern.

34. The Court takes judicial notice of Ms. Ganitano's Information and "Plea of Guilty to the Felony Information" (mortgage fraud under 18 USC § 1014) before the Honorable Leslie E. Kobayashi in United States v.Ganitano, CR No. 13-01015 LEK (D. Haw.).

35. Eastern detrimentally relied upon the Koga Memorandum, Ganitano Memorandum, Rental Agreement, and Tenant Estoppel Agreement when it decided to loan the Trust $275,000. Eastern's reliance was justifiable.

36. Eastern relied upon the information that the Property was being rented to a Dorothy Evans for $2,000 and therefore, that Mrs. Koga was not residing at the Property.

37. Had Eastern known that the Property was not being rented and that the Property was not generating income, Eastern would not have made the Loan to the Trust.

38. As a result of Ms. Evans' fraudulent misrepresentations, Eastern suffered substantial damages.

39. Based on the Loan documents, Eastern is owed $634,991.17 on the Loan, as of April 1, 2014, as follows.

CHARGE

AMOUNT

Principal Balance

$266,814.65

Interest

$181,278.89

Late Charge(s)

$122.40

Add-Negative Escrow

$4,345.42

Interest-Neg Escrow

$6,841.91

Subtotal Due as of 4/01/14:

$459,403.27

...