990 F. Supp. 2d 1042
D. Haw.2013Background
- Plaintiff Bridget Dias obtained a mortgage in 2005 (Quicken) and a second loan in 2006 (Countrywide); servicing later transferred to Bank of America entities (BANA/BAC). She defaulted and entered a six‑month forbearance beginning Sept. 1, 2009.
- Plaintiff alleges loan modification efforts (including HAMP) were mishandled, her application was lost, and a foreclosure sale was held on August 2, 2010 (she alleges poor notice and wrongful sale).
- The recorded Assignment shows MERS (as nominee for Quicken) assigned the mortgage to BANA on Aug. 31, 2009; an Affidavit of Foreclosure asserts proper public postponements and sale to BAC Home Loans Servicing, LP.
- Causes of action asserted include violations of HRS Chapter 667 (procedural foreclosure/standing), FDCPA claims for post‑foreclosure collection, breach of HAMP/contract, UDAP (HRS § 480‑2), wrongful foreclosure, promissory estoppel, fraud, due process against Fannie Mae/FHFA, and quiet title.
- Defendants moved to dismiss; FHFA moved to dismiss the due‑process claim; the court granted FHFA’s motion and granted/denied Fannie Mae/BANA/BAC motions in part, allowing limited amendment on several claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of assignment / compliance with HRS § 667 (Counts 1–2) | Assignment and sale were defective; plaintiff lacked proper notice and BANA lacked standing; HAMP pending prevented sale | Recorded Assignment and Affidavit of Foreclosure show MERS had authority to assign and that postponements/notices occurred; HAMP does not create private right to stop sale | Dismissed with prejudice — plaintiff failed to plead plausible defects; HAMP violations cannot be enforced as independent § 667 claims |
| FDCPA claims for post‑foreclosure collection and false assignment statements (Counts 3–4) | Post‑foreclosure letter in 2011 unlawfully attempted to collect; public record misrepresented ownership | Defendants contend they are not "debt collectors" and public documents contradict plaintiff | Count 3 (post‑foreclosure collection) survives (motion denied). Count 4 (false public assignment) dismissed with leave to amend because public record contradicts allegation |
| Breach of HAMP / contract and related UDAP (Counts 5–6) | BAC/Fannie Mae breached HAMP obligations and owed plaintiff third‑party beneficiary rights; UDAP for deceptive loss‑mitigation practices | HAMP has no private right of action; no TPP alleged; UDAP claim lacks specific damages and fraud particularity; HAMP cannot be basis for statutory UDAP claim | Breach of HAMP (Count 5) dismissed with prejudice. UDAP (Count 6) dismissed with leave to amend and must plead damages and fraud particulars if based on deception |
| Promissory estoppel, fraud, wrongful foreclosure, quiet title, due process (Counts 8, 10, 11, 12, 13) | Plaintiff relied on promises that sale would be postponed during loss mitigation; misrepresentations about authority to modify; title clouded; constitutional claim against Fannie Mae/FHFA | Defendants deny actionable promises/authority; foreclosure procedure complied with statute; Fannie Mae is not a government actor even in FHFA conservatorship; quiet title requires tender | Promissory estoppel (Count 10) survives. Fraud (Count 11) dismissed with leave to amend for particularity and to allege present intent to deceive. Wrongful foreclosure (Count 8) dismissed but plaintiff given leave to replead as breach of the Forbearance Agreement with specifics. Quiet title (Count 13) dismissed with leave to amend (must allege tender/ability to pay). Due process against Fannie Mae/FHFA (Count 12) dismissed with prejudice — Fannie Mae is not a state actor under Lebron despite conservatorship |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: plausible factual allegations required)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (Twombly pleading plausibility framework)
- Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (1995) (test for when a corporation is a federal actor)
- Heintz v. Jenkins, 514 U.S. 291 (1995) (FDCPA threshold requirement that defendant be a "debt collector")
- Corvello v. Wells Fargo Bank, N.A., 728 F.3d 878 (9th Cir. 2013) (TPP/TPP‑based breach claims explained)
- Shoppe v. Gucci Am., Inc., [citation="94 Hawai'i 368"] (2000) (elements and particularity for Hawaii fraud claims)
- Gonsalves v. Nissan Motor Corp. in Hawaii, Ltd., [citation="100 Hawai'i 149"] (2002) (elements of promissory estoppel under Hawaii law)
- United States v. Ritchie, 342 F.3d 903 (9th Cir. 2003) (courts may consider certain documents attached to motions to dismiss)
- Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) (court need not accept allegations contradicted by public records)
- Cafasso ex rel. United States v. General Dynamics C4 Sys., Inc., 637 F.3d 1047 (9th Cir. 2011) (Rule 9(b) and fraud pleading standards)