Molina v. OneWest Bank

903 F.Supp.2d 1008

Linda MOLINA fka Linda Pacheco, John Aniu and Davelyn Aniu, Plaintiffs,

v.ONEWEST BANK, FSH; Home Loan Center, Inc., Dba Lending Tree Loans; and Does 1 through 10 inclusive, Defendants.

Civil No. 10–00403 LEK–RLP.

United States District Court, D. Hawai‘i.

Sept. 30, 2012.

Dexter K. Kaiama, Keoni Kealoha Agard, Honolulu, HI, for Plaintiffs.

David B. Rosen, Lauren M. Akitake, The Law Office of David B. Rosen, ALC, Honolulu, HI, for Defendants.

ORDER DENYING PLAINTIFFS' MOTION TO DISMISS COUNTERCLAIM COMPLAINT [DKT. NO. 48]; GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT RE: COMPLAINT [DKT. NO. 50]; AND GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ON ITS COUNTERCLAIM FOR FORECLOSURE AND FOR INTERLOCUTORY DECREE OF FORECLOSURE [DKT. NO. 56]

LESLIE E. KOBAYASHI, District Judge.

Before the Court are the following three motions: (1) Plaintiffs Davelyn Aniu, John Aniu, and Linda Molina formerly known as Linda Pacheco's (collectively “Plaintiffs”) Motion to Dismiss Counterclaim Complaint, filed April 13, 2012 (“Motion to Dismiss”) [dkt. no. 48]; (2) Defendant OneWest Bank, FSB's (“Defendant” or “OneWest”) Motion for Summary Judgment Re: Complaint, filed April 20, 2012 (“Motion for Summary Judgment on Complaint”) [dkt. no. 50]; and (3) Defendant's Motion for Summary Judgment on Its Counterclaim for Foreclosure and for Interlocutory Decree of Foreclosure, filed April 20, 2012 (“Motion for Summary Judgment on Foreclosure”) [dkt. no. 56]. On May 15, 2012, OneWest filed its memorandum in opposition to Plaintiffs' Motion to Dismiss, and on July 31, 2012, Plaintiffs filed their consolidated memorandum in opposition to both of OneWest's motions. OneWest filed its reply in support of both of its motions on August 8, 2012.

The Court finds these matters suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai'i (“Local Rules”). After careful consideration of the motions, supporting and opposing memoranda, and the relevant legal authority, the Court rules as follows: Plaintiffs' Motion to Dismiss is DENIED; Defendant's Motion for Summary Judgment on Complaint is GRANTED; and Defendant's Motion for Summary Judgment on Foreclosure is GRANTED for the reasons set forth below.

BACKGROUND

I. Factual Background

Plaintiffs filed the instant action on July 16, 2010 against OneWest and Home Loan Center, Inc., doing business as Lending Tree Loans (“Home Loan,” both collectively, “Defendants”).¹ Plaintiffs allege that Defendants violated, inter alia, the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq.,Haw.Rev.Stat. § 480–2, and the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 1679 et seq.Plaintiffs seek to enjoin Defendants “from foreclosing and conducting a foreclosure auction sale[,]” of Plaintiffs' residence. [Complaint at ¶¶ 2, 4–6.] On March 23, 2012, OneWest filed a Counterclaim for Foreclosure (“Counterclaim Complaint”) against Plaintiffs.

Plaintiffs are the record owners of the subject property located at 15–337 North Puni Makai Loop, Pahoa, Hawai'i, 96778, designated as TMK (3) 1–5–066–028–0000 (the “Property”).² Plaintiffs John and Davelyn Aniu (“Borrowers”) executed and delivered a promissory note (“Note”) ³ in the amount of $266,500.00 on July 18, 2007 to Home Loan. [Counterclaim Complaint at ¶¶ 2–3.] The Counterclaim Complaint alleges that OneWest is the current holder of the Note. The Note is secured by a mortgage dated July 18, 2007 (“Mortgage”) executed by Borrowers and Ms. Molina, as mortgagors, in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for Home Loan. The Note secured by the Mortgage was recorded on August 23, 2007 in the Bureau of Conveyances, State of Hawai'i (“Bureau”) Document No. 2007–151179. ⁴ The Mortgage was assigned by MERS, as nominee for Home Loan, to OneWest pursuant to an assignment of Mortgage (“Assignment”) recorded on December 21, 2009, in the Bureau as Document No. 2009–193349.⁵ [ Id. at ¶¶ 4–6.]

OneWest alleges that it is entitled to enforce the Mortgage, and that Plaintiffs are in default as of September 1, 2008. It states that, as a result of the default, the entire amount of the principle obligation of the Note and Mortgage is due and payable. OneWest alleges that, although demand has been made, the Plaintiffs have failed to pay. On July 1, 2009, OneWest sent letters to Plaintiffs advising them of their default under the Note and Mortgage, and providing thirty days to cure. OneWest advised Plaintiffs that failure to cure the default within thirty days may result in the noteholder's option to accelerate the total balance outstanding, and advised them of the right to reinstate after acceleration (“Notices of Acceleration”).⁶ OneWest alleges that it is currently entitled to foreclose and sell the Property in accordance with the terms of the Mortgage. [ Id. at ¶¶ 7–10.]

II. Plaintiff's Motion to DismissA. Motion

Plaintiffs assert that under Haw.Rev.Stat. Chapter 667, OneWest must initiate a civil action for foreclosure by filing in the Third Circuit Court, State of Hawai'i, where the Property is situated. [Mem. in Supp. of Motion to Dismiss at 2–3.] Plaintiffs further allege that OneWest is attempting to bring its “ ‘State’ foreclosure action” before this Court by refusing to agree to stipulate to Plaintiffs' voluntary dismissal of their federal action.⁷ On January 3, 2012, Plaintiffs' counsel forwarded an email correspondence to OneWest and attached a Stipulation for Dismissal Without Prejudice of all Claims and Parties (“Stipulation to Dismiss”), dismissing the federal court civil action in Civ. No. 10–00403. [ Id. at 3–4.] Plaintiffs assert that, on January 6, 2012, Plaintiffs attended a status conference with the Court and informed the Court that the Stipulation to Dismiss was provided to OneWest, and would be filed with the Court upon execution by counsel for OneWest. [ Id. at 4 (citing Exh. 1).] Plaintiffs allege that OneWest's counsel would not agree to execute the Stipulation to Dismiss unless all the claims were dismissed with prejudice. [ Id.] To date, the Stipulation to Dismiss has not been executed by OneWest. [ Id. at 4.] Plaintiffs request this Court grant the Motion to Dismiss and order OneWest's execution of the Stipulation to Dismiss. [ Id.]

B. OneWest's Memorandum in Opposition

OneWest argues that the Court does have subject matter jurisdiction over the claims at issue, and faults Plaintiffs for refusing to dismiss the claims with prejudice as a further stalling tactic. It argues that the Court has diversity jurisdiction over Plaintiffs' Complaint and has supplemental jurisdiction over the state law claims in its Counterclaim Complaint pursuant to 28 U.S.C. § 1367. [Mem. in Opp. to Motion to Dismiss at 6.]

III. OneWest's Motion for Summary Judgment of Complaint

OneWest moves for summary judgment on all of the claims in Plaintiffs' Complaint. It states that it has possession of the indorsed Note and is the current mortgagee under the Mortgage. The Mortgage was assigned by MERS, as nominee for Home Loan, to OneWest in the recorded Assignment. [Mem. in Supp. of Motion for Summary Judgment on Complaint at 4.]

A. TILA Claims

OneWest first argues that Plaintiffs' First, Second, and Eleventh counts for, recoupment, and rescission under TILA, and for equitable tolling, fail as a matter of law. It argues that the claims for damages are time-barred because the loan transaction and alleged violation occurred on July 18, 2007, when the Note was executed by Borrowers and the Mortgage was executed by all Plaintiffs. Plaintiffs' Complaint was filed on July 16, 2010, beyond the one-year limitations period in TILA § 1640(e). It argues that equitable tolling does not apply because Plaintiffs have not actively pursued judicial remedies and were not induced or tricked into allowing the filing deadline to pass. It next argues that, even if the TILA claims are not time-barred, they fail against OneWest as assignee of the loan. [ Id. at 7–8.]

As for recoupment, OneWest argues that Plaintiffs are barred from bringing an affirmative recoupment claim, which is only available as a defense in an action to collect a debt. With respect to rescission, OneWest asserts that Plaintiffs' claims are time-barred. It maintains that, because Plaintiffs signed, dated, and acknowledged receipt of all required notices on July 18, 2007, there is a rebuttable presumption that they received these disclosures, and that Plaintiffs present no evidence to overcome the presumption. OneWest further argues that Plaintiffs have not alleged an intent or ability to effectuate rescission; that is, Plaintiffs have provided no evidence of their ability to tender the borrowed funds back to the lender. [ Id. at 12–13.]

B. RESPA Claims

Next, OneWest argues that Plaintiffs' Third cause of action fails as a matter of law because it is time-barred and without merit. According to OneWest, the only basis the claimed RESPA violation is that “MOLINA did not receive a signed and dated Good Faith Estimate ‘GFE’, as required by law.” [ Id. at 13 (quoting Complaint ¶ 45).] OneWest notes that RESPA does not provide for a private right of action when a defendant fails to provide a good faith estimate. It also asserts that 24 C.F.R. § 3500.7(b) requires only that a good faith estimate be provided, but does not require that it be signed and dated by the applicant. [ Id. at 13–14.]

C. Haw. Rev. Stat. Chapter 480 Claims

OneWest moves for summary judgment on Plaintiffs' Chapter 480 claims on the grounds that they are vague, conclusory, and unsupported by facts. First, it argues that Plaintiffs' only remedy against OneWest would be rescission, and as discussed above, Plaintiffs have not alleged an intent or ability to effectuate a rescission. Second, it argues that Plaintiffs cannot show that OneWest targeted them for inappropriate credit products because OneWest, as...