Chavez v. Deutsche Bank Nat'l Tr. Co.
| Decision Date | 30 November 2020 |
| Docket Number | CIV. NO. 17-00446 LEK-RT |
| Parties | LUIS C. CHAVEZ, INDIVIDUALLY, AND AS SPECIAL ADMINISTRATOR OF THE ESTATE OF MARCARIO ARAUJO CHAVEZ; Plaintiff, v. DEUTSCHE BANK NATIONAL TRUST COMPANY, OCWEN LOAN SERVICING, LLC, AMERICAN HOME MORTGAGE SERVICING, INC., JOHN DOES 1-10, DOE CORPORATIONS 1-10, DOE PARTNERSHIPS 1-10, DOE ENTITIES 1-10, DOE GOVERNMENTAL UNITS 1-10, Defendants. |
| Court | U.S. District Court — District of Hawaii |
On August 28, 2020, Defendants Deutsche Bank National Trust Company, as Trustee for American Home Mortgage Assets Trust 2007-3, Mortgage-Backed Pass-Through Certificates Series 2007-3 ("Deutsche Bank"); Ocwen Loan Servicing, LLC ("Ocwen"); and Homeward Residential, Inc., formerly known as American Home Mortgage Servicing, Inc. ("AHMSI," collectively "Defendants") filed their Motion for Summary Judgment ("Motion"). [Dkt. no. 125.] Plaintiff Luis C. Chavez, Individually and as Special Administrator of the Estate of Macario Araujo Chavez ("Plaintiff"), filed his memorandum in opposition to the Motion on September 25, 2020, and Defendants filed their reply on October 2, 2020. [Dkt. nos. 134, 135.] This matter came on for hearing on October 16, 2020. On October 30, 2020, an entering order was issued informing the parties of the Court's rulings on the Motion. [Dkt. no. 143.] This Order supersedes that entering order. Defendants' Motion is hereby granted, and summary judgment is entered in favor of Defendants as to all of Plaintiff's claims, for the reasons set forth below.
The procedural history of this case is set forth in this Court's May 31, 2019 Order Granting in Part and Denying in Part Defendants' Motion to Dismiss Plaintiff's Second Amended Complaint ("5/31/19 Order"). [Dkt. no. 61.1] The operative pleading is the Third Amended Complaint, filed November 13, 2019. [Dkt. no. 81.] It alleges the following claims: 1) a claim alleging unfair and deceptive acts and practices ("UDAP"), in violation of Haw. Rev. Stat. § 480-2 ("Count I"); 2) a claim under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq., ("Count II"); 3) breach of contract ("Count III"); 4) promissory estoppel ("Count IV"); 5) conversion ("Count V"); 6) intentional interference with prospective economic advantage ("Count VI"); 7) a quiet titleclaim, pursuant to Haw. Rev. Stat. § 669-1 ("Count VII"); 8) fraud ("Count VIII"); 9) intentional infliction of emotional distress ("IIED" and "Count IX"); 10) negligent infliction of emotional distress ("NIED" and "Count X"); and 11) a claim alleging violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq. ("Count XII").
The following evidence has been presented in connection with the instant Motion. In 1986, Plaintiff's family began developing two separate houses on the property located at 952 Paipala Place, in Makawao, Hawai`i ("the Property"). [Defs.' Concise Statement of Facts in Supp. of Motion for Summary Judgment ( ), filed 8/28/20 (dkt. no. 126), at ¶ 1.2] On March 7, 2007, Plaintiff's father, Macario Araujo Chavez ("M.A. Chavez"), obtained a $650,000 loan from American Home Mortgage, secured by a mortgage on the Property ("the Loan"and "the Mortgage"). Defs.' CSOF at ¶ 2; see also Defs. CSOF, Decl. of Sally R. Torres ("Torres Decl."), Exh. I (Mortgage).3 M.A. Chavez used the proceeds from the Loan to pay of a prior loan, and he also received $100,000. [Defs.' CSOF at ¶ 6.]
When he obtained the Loan, M.A. Chavez certified that he would occupy the Property as his "principal residence," as required under federal law, and his "primary residence," as required under the terms of the Loan. Defs.' CSOF at ¶¶ 3-4; see also Torres Decl., Exh. C (Occupancy Certification), Exh. D (Occupancy Agreement). M.A. Chavez also acknowledged that the failure to use the Property as his primary residence would constitute a default. [Defs.' CSOF at ¶ 4.] Plaintiff asserts M.A. Chavez complied with the Occupancy Agreement and "did live [at the Property] until his death in 2010 and he considered Hawaii his home." [Pltf.'s CSOF at ¶ 9 (citing Pltf.'s CSOF, Aff. of Luis C. Chavez ( ) at ¶ 6).] Defendants dispute this, pointing to Plaintiff's deposition testimony that California was his parents' primary residence and to M.A. Chavez's death certificate, which listed an Orange Countyaddress as M.A. Chavez's residence. [Reply CSOF at ¶ 9 ( )) .4]
Plaintiff asserts he is the borrower in the Loan, having assumed the liability for the Mortgage and the underlying promissory note ("the Note") since 2007. He states his payments were accepted without objection. Plaintiff asserts Defendants were aware that he had assumed the Mortgage, as evidenced by the fact that the assumption was discussed and agreed to during the loan modification process. [Pltf.'s CSOF at ¶¶ 1-3 ).] Defendants dispute this, stating no loan assumption agreement was ever entered into, and they point out that the Mortgage payments came from a joint bank account shared by Plaintiff and M.A. Chavez, not necessarily from Plaintiff himself. [Defs.' concise statement of facts in supp. of reply ("Reply CSOF"), filed 10/2/20 (dkt. no. 136), at ¶¶ 1-3 ( ) ; ( )
Plaintiff states that, on November 17, 2008, he notified AHMSI, in writing, that he held title to the Property. [Pltf.'s CSOF at ¶ 10 .] Defendants state this is "[p]artially disputed" because Plaintiff's letter did not disclose the transfer of title, and Defendants emphasize that M.A. Chavez did not obtain lender consent prior to the transfer. [Reply CSOF at ¶ 10.]
Plaintiff argues the notes in Defendants' serving file for the Mortgage show that Defendants were aware that M.A. Chavez and Plaintiff intended to have Plaintiff take over the Loan and Mortgage. [Pltf.'s CSOF at ¶ 4 .5] The letter is to AHMSI from Plaintiff, and states, inter alia:
-"I Macario A. Chavez c/o Luis Chavez am proposing a loss mitigation option"; [Pltf. Aff., Exh. 1 at PageID #: 1248;] and
-"I the repayor Luis Chavez would like to disclose my father Macario Chavez has given me a Durable Power of Attorney on February 1, 2007[,]" [id.]Plaintiff points out that he entered into the loan modification agreement, dated March 1, 2009, using M.A. Chavez's power of attorney, and that Defendants did not object to this. Plaintiff also states one of Defendants' agents, Matt Palmer, had personal knowledge that Plaintiff was going to be responsible for the Loan. Pltf.'s CSOF at ¶ 5; Reply CSOF at ¶ 5 (); see also Pltf. Aff., Exh. 2 (Loan Modification Agreement).
It is undisputed that M.A. Chavez transferred his interest in the Property to Plaintiff through a Quitclaim Deed that was recorded on April 3, 2007. Defs.' CSOF at ¶ 7; see also Nakashima Decl., Exh. M (Quitclaim Deed).6 Defendants state M.A. Chavez "did not obtain consent of the lender pursuant to Paragraph 18 of the [M]ortgage to transfer his interest" in the Property to Plaintiff. [Defs.' CSOF at ¶ 8 (some citations omitted) (citing Torres Decl. at ¶ 18).] Plaintiff disputes this and has argued the lender was aware of the transfer ofinterest, but he has not identified any evidence supporting his position.
Defendants state that, "[o]n May 1, 2007, the beneficial interest in the Loan was transferred to Deutsche Bank as Trustee," and M.A. Chavez was not in default at that time. [Id. at ¶ 9 (citing Torres Decl. at ¶ 7).] Plaintiff disputes this but does not cite supporting evidence. He merely states: "No transfer took place." [Pltf.'s CSOF at ¶ 9.]
It is undisputed that the following events took place:
-on August 13, 2008, AHMSI sent M.A. Chavez a written notice of default;
-on November 14, 2008, an assignment of the Mortgage by MERS, as American Home Mortgage Acceptance, Inc.'s ("AHMAI") nominee, to Deutsche Bank was recorded ("2008 Assignment");7 and
-on March 1, 2009, M.A. Chavez and AHMSI entered into Loan Modification Agreement.
Defs.' CSOF at ¶¶ 10-12; see also Torres Decl., Exh. E (2008 Assignment), Exh. P (8/13/08 default notice letter). M.A. Chavez died in California on November 30, 2010, and Plaintiff was appointed as the special administrator of M.A.Chavez's estate ("the Estate") on May 25, 2011. [Defs.' CSOF at ¶¶ 15, 18.]
According to Defendants, "[t]he last regular monthly Loan payment was applied on November 8, 2010." [Id. at ¶ 13 (citing Torres Decl. at ¶ 9).] Plaintiff disputes this, stating that, after April 1, 2009, he made more than $96,000 in payments to Defendants, and Defendants accepted the payments without objection. [Pltf.'s CSOF at ¶ 6 ).8] Plaintiff does not specify how much of the $96,000 he paid after he allegedly stopped making monthly payments.
The parties apparently agree that there were insurance claims made for losses to the Property from May 2010 to March 2011, and they agree that the insurance claims were paid. Plaintiff states he made the repairs himself before the claims were paid by the insurance company. When the checks were received, he submitted them as payments on the Loan. The parties agree the two checks were for $2,445.00 and $1,656.84. [Pltf.'s CSOF at ¶¶ 11, 16-17;...
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