Rodenhurst v. Bank of America
773 F. Supp. 2d 886
D. Haw.2011Background
- Plaintiffs refinanced their Kaneohe home with Countrywide to secure a mortgage on their primary residence.
- Promissory note executed March 23, 2007; mortgage recorded April 27, 2007.
- Foreclosure sale occurred June 15, 2010; HSBC owned the property by July 1, 2010.
- Plaintiffs allege lack of disclosures and lack of opportunity to review documents; claim misrepresentations and improper securitization.
- BofA seeks dismissal of most claims; Court grants in part and denies in part, requiring a Second Amended Complaint by April 20, 2011.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| TILA rescission viability | Rodenhurst asserts rescission rights for TILA violations | BofA contends rescission time-barred and rescission no longer possible after sale | Counts I and I-related recoupment dismissed with prejudice |
| TILA damages for failure to permit rescission | Damages requested for failure to rescind | No damages available when rescission rights expired | Count II dismissed with prejudice |
| RESPA private right of action | Counts seek private RESPA remedy | No private action under 12 U.S.C. §§ 2603-2604 | Count III dismissed with prejudice |
| UDAP and fraud-related claims (Counts IV–VII) | BofA as successor/alter ego liable for UDAP and fraud | BofA not liable; improper to plead through mere ownership | Counts IV–VII dismissed without prejudice |
| Securitization-based claims (Counts IX–X) | Securitization affected enforceability of note/mortgage; audit requested | Courts reject securitization as basis for a cognizable claim; pleadings deficient | Counts IX–X dismissed without prejudice |
Key Cases Cited
- Miguel v. Country Funding Corp., 309 F.3d 1161 (9th Cir. 2002) (TILA statute of repose governs rescission actions; time bars relief)
- In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541 (9th Cir. 1994) (Rule 9(b) requires particularity in fraud pleadings)
- O'Donnell v. Vencor Inc., 466 F.3d 1104 (9th Cir. 2006) (Equitable tolling considerations in TILA context)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) requires time, place, and nature of fraud; particularity against multiple defendants)
- Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007) (Heightened pleading for fraud against multiple defendants)