Menashe v. Bank of New York
850 F. Supp. 2d 1120
D. Haw.2012Background
- Plaintiff Perle Menashe filed suit in Hawaii federal court against BONY, BANA, and BAC over a June 14, 2007 loan secured by the property at 5105 Kapiolani Loop, Princeville, HI.
- The SAC alleges RESPA violations and numerous state-law claims arising from the loan origination, servicing, and securitization activities linked to Countrywide and its successors.
- Countrywide allegedly originated a high-cost, potentially unaffordable loan with undisclosed costs and yield-spread premium, while misrepresenting borrower income and omitting material servicing information.
- BOA acquired Countrywide in 2008 and CHLS (servicer) evolved into BAC; plaintiffs allege these entities are responsible for the acts of the originator.
- Plaintiff served QWRs in 2009–2010; the SAC contends BANA failed to respond properly and improperly reported negative credit information.
- The court granted in part and denied in part the motion to dismiss, allowing RESPA § 2605(e)(3) claim to proceed while dismissing others, and dismissing most other counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RESPA viability under 2605(e)(2) and (e)(3) | Menashe asserts BANA failed to respond properly and disclosed information in violation. | BANA contends the requests were not proper QWRs or were timely/completed responses. | RESPA § 2605(e)(2) claim dismissed; § 2605(e)(3) claim survives. |
| Respondeat superior liability | Countrywide’s alleged misconduct should render BOA/BAC liable. | No valid agency or control relationship shown between defendants and Countrywide. | Count II dismissed. |
| Negligent or wanton hiring/retention | Defendants liable for Countrywide’s actions as negligent hiring/retention. | No agency or special relationship established to impute liability. | Count III dismissed. |
| Fraudulent concealment/inducement (Counts VIII–IX) | Defendants misrepresented income/appraisal to induce loan | Pleadings insufficiently particular under Rule 9(b) or fail to tie to specific defendants. | Counts VIII–IX dismissed. |
| Improper securitization claims (Counts XI–XIV) | Securitization invalidates note/mortgage and affects foreclose rights | Securitization claims lack statutory/common-law basis; no basis to deem loan unenforceable | Counts XI–XIV dismissed. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleading; not accepted as mere conclusions)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (facts must plausibly suggest entitlement to relief)
- In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541 (9th Cir. 1994) (requires particularized allegations of fraud; when applicable)
- Destfino v. Kennedy, 630 F.3d 952 (9th Cir. 2011) (separates pleading requirements among multiple defendants)
- Jones v. PNC Bank, N.A., 2010 WL 3325615 (N.D. Cal. 2010) (QWR scope and servicer obligations under RESPA)
- Gonzalez v. First Franklin Loan Servs., 2010 WL 144862 (E.D. Cal. 2010) (mortgage broker generally not agent of lender absent agency)