Agustin v. Pnc Financial Serv. Group Inc

• Decision Date: 15 April 2010
• Docket Number: No. CV 09-00423SOM/KSC.,CV 09-00423SOM/KSC.
• Citation: 707 F.Supp.2d 1080
• Parties: Annette Kuulei AGUSTIN, George Bruno Agustin, Sr., and Jeffrey Kane Agustin, Plaintiffs,v.PNC FINANCIAL SERVICES GROUP, INC., Successor by Merger to National City Bank; First American Title Company, Inc.; Ronald P. Kanakanui, dba Ohana Financial Group; John Does 1-10; Jane Does 1-10; Doe Corporations, Partnerships, and Other Entities 1-10, Defendants.
• Court: U.S. District Court — District of Hawaii

707 F.Supp.2d 1080

Annette Kuulei AGUSTIN, George Bruno Agustin, Sr., and Jeffrey Kane Agustin, Plaintiffs,v.PNC FINANCIAL SERVICES GROUP, INC., Successor by Merger to National City Bank; First American Title Company, Inc.; Ronald P. Kanakanui, dba Ohana Financial Group; John Does 1-10; Jane Does 1-10; Doe Corporations, Partnerships, and Other Entities 1-10, Defendants.

No. CV 09-00423SOM/KSC.

United States District Court D. Hawai‘i.

April 15, 2010.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

George J. Zweibel, Law Office of George J. Zweibel, Honokaa, HI, Jamae K. Kawauchi, A Limited Liability Law Company, Hilo, HI, for Plaintiff.

David B. Rosen, Law Office Of David B. Rosen ALC, Laura S. Lucas, McCorriston Miller Mukai MacKinnon LLP, Honolulu, HI, for Defendant.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS

SUSAN OKI MOLLWAY, Chief Judge.

I. INTRODUCTION.

Plaintiffs Annette Agustin, her husband George Agustin, and their son Jeffrey Agustin refinanced their residential loan to obtain money for home improvements in early 2007. They say they applied for a single loan but ended up with two loans on terms different from those they expected. Two years after the transaction, they sought to rescind the loans, but they claim the lender rebuffed their attempt. Plaintiffs assert in this lawsuit that Defendants have violated numerous state and federal laws, and that Plaintiffs are entitled to rescission. Defendants PNC Bank, National Association (“PNC”), and First American Title Company (which has joined in part of PNC's motion) ask the court to take judicial notice of certain facts and documents related to the loans and refinancing and then to dismiss many of Plaintiffs' claims. This court denies in part the request for judicial notice and denies the motion to dismiss in its entirety.

II. FACTUAL BACKGROUND.

Plaintiffs owned real property in Hawaii in late 2006 and early 2007. Compl. ¶¶ 8-10, 19. They claim that, in late 2006, Annette spoke with Defendant Ohana Financial Group (an alleged dba for Defendant Ronald P. Kanakanui) about refinancing the loan on the property to obtain cash for home improvements. Id. ¶ 21. Ohana Financial allegedly represented that it would refinance the loan with a single new loan requiring one monthly payment. Id. ¶¶ 23, 24. Ohana Financial and PNC ¹ allegedly prepared a loan application and selected First American Title Company as the escrow depository. Id. ¶¶ 26-28.

On February 12, 2007, Annette went to First American Title Company's office to sign loan documents. Id. ¶ 27. At First American Title Company, Annette was allegedly given no time to read what was presented to her and was instead shown only where to sign each document. Id. ¶¶ 31-34. Plaintiffs allege that the result was that Annette entered into two separate loans. Id. ¶¶ 29, 35, 38. One loan was for $278,400, the other for $52,200, with PNC acquiring mortgages on Plaintiffs' property. Id. ¶¶ 37-40, 52. According to Plaintiffs, the closing costs for obtaining the loans totaled about $24,000, and Plaintiffs received $35,000 in cash. Id. ¶ 75. In connection with each loan, Annette was given three copies of a Notice of Right to Cancel. Id. ¶¶ 42-43, 57. Plaintiffs complain that George and Jeffrey were never given such notices. Id. ¶¶ 47, 48, 62, 63. Although Annette signed all documents on February 12, the notices listed the transactions as having occurred on February 9 and gave Annette until February 13 to cancel the transactions. Ex. B, attached to Compl.

Plaintiffs allege that the loan documents incorrectly described the loan durations and the required monthly payments. They complain, for example, that the Fixed Rate Note for the second loan provided that the loan would be paid off in fifteen years with monthly payments of $406.01, while, in fact, monthly payments of $517.87 were required to pay off the loan in that time. Compl. ¶¶ 52-53. The monthly payments required by the loans allegedly exceeded Annette's monthly income. Id. ¶ 92. PNC is now the servicer of the first loan, and Bank of America is the servicer of the second loan. Id. ¶¶ 76-77.

In early 2009, Annette allegedly requested certain information and documents from PNC regarding the loans. Id. ¶ 78. Although PNC gave Annette some information, it allegedly did not respond to all of her requests. Id. ¶¶ 79-80. On May 7, 2009, Plaintiffs sought to rescind the loans. Id. ¶¶ 86-88. Plaintiffs mailed a letter to PNC saying they were exercising their right to rescind. Ex. C, attached to Compl. Plaintiffs also mailed a letter to Bank of America, as the servicer and possible assignee of the second loan, notifying it that Plaintiffs were rescinding the second loan. Ex. E, attached to Compl. Plaintiffs say that no Defendant has returned any money in connection with the loans or taken any action to terminate the security interests relating to the loans. Compl. ¶ 90.

Four months later, Plaintiffs filed a 50-page, 223-paragraph Complaint, seeking rescission, recoupment, injunctive relief, and damages under the Truth in Lending Act, Real Estate Settlement Procedures Act, and Hawaii law. Plaintiffs sue PNC, First American Title Company, Inc., and Ohana Financial Group. PNC now moves to dismiss claims against it, and First American Title Company joins in the motion with respect to the dismissal of two claims. PNC also asks the court to take judicial notice of many of the loan documents.

III. LEGAL STANDARD.

Under Rule 12(b)(6), review is generally limited to the contents of the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 as amended by 275 F.3d 1187 (9th Cir.2001). If matters outside the pleadings are considered, the Rule 12(b)(6) motion is treated as one for summary judgment. See Keams v. Tempe Tech. Inst., Inc., 110 F.3d 44, 46 (9th Cir.1997); Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir.1996). However, courts may “consider certain materials-documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003).

On a Rule 12(b)(6) motion to dismiss, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Fed'n of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir.1996). To survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, ---U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 554, 127 S.Ct. 1955).

Dismissal under Rule 12(b)(6) may be based on either: (1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1988) (citing Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir.1984)).

IV. ANALYSIS.A. Request for Judicial Notice.

PNC asks this court, pursuant to Rule 201 of the Federal Rules of Evidence, to take judicial notice of many facts and documents. Specifically, PNC asks this court to take judicial notice of facts that PNC says are derived from loan applications, affidavits, a warranty deed, mortgages, adjustable and fixed rate notes that Annette executed, HUD statements, and Notices of Right to Cancel. Also, PNC asks this court to take judicial notice of certificates stating that National City Mortgage merged with and is now owned by PNC. Plaintiffs object to most of the request, arguing that many of the facts are in question, the documents are not authenticated, and the court should not consider most of the evidence PNC presents when ruling on its motion to dismiss.

This court agrees with Plaintiffs. On the present motion, the court will not consider most of the facts or documents PNC asks this court to take judicial notice of. Nor will the court take judicial notice of facts that are in dispute. As most of the facts are in dispute, the court denies most of PNC's request.

When ruling on a motion to dismiss, a court may consider documents central to the allegations in a complaint even if the documents are not attached to the complaint if the authenticity of the documents is undisputed. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.1994); see also Del Puerto Water Dist. v. U.S. Bureau of Reclamation, 271 F.Supp.2d 1224, 1233, n. 4 (E.D.Cal.2003) (“However, documents not physically attached to the complaint may nonetheless be considered by the court on a 12(b)(6) motion to dismiss if: (1) the complaint refers to such documents; (2) the document is ‘central’ to the plaintiff's claims; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion.”). If the complaint mentions a document but does not reference it extensively and the document is not integral to the complaint, the court should not consider the document. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003).

The court declines to consider the documents PNC asks the court to take judicial notice of. First, not all of the documents are “central” to Plaintiffs' Complaint, as the Complaint does not reference them extensively throughout the Complaint. Second, Plaintiffs dispute the authenticity of the documents.

Judicial notice is governed by Rule 201 of the Federal Rules of Evidence, which provides in relevant part:

(a) Scope of rule.

This rule governs only judicial notice of adjudicative facts.

(b) Kinds of facts.

A judicially noticed fact must be

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