Gamblin v. Nationstar Mortg. LLC
| Decision Date | 07 November 2018 |
| Docket Number | Civ. No. 17-00557 ACK-RLP |
| Parties | LYNDA GAMBLIN and LONI A. HART, Plaintiffs, v. NATIONSTAR MORTGAGE LLC; FEDERAL NATIONAL MORTGAGE ASSOCIATION; BARRY JAMES HARDING; DEBORAH LYNN HARDING; and DOE DEFENDANTS 1-50, Defendants. |
| Court | U.S. District Court — District of Hawaii |
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART Defendants Nationstar Mortgage LLC and Federal National Mortgage Association's Motion for Summary Judgment, ECF No. 15, as follows:
FACTUAL BACKGROUND
On June 26, 2008, Bruce J. Cary executed an apartment deed in favor of Plaintiffs Lynda Gamblin and Loni A. Hart (collectively, "Plaintiffs"), conveying to them the real property located at 2895 S. Kihei Road, Apartment 303, Kihei, Hawaii 96753, Tax Map Key ("TMK") No. (2) 3-9-004-139-0018 ("Property"). Plaintiff's Concise Statement of Facts ("Pl.'s CSF"), Declaration of James J. Bickerton ("Bickerton Decl."), ECF No. 36-1 ¶ 4; Pl.'s CSF Ex. 2, ECF No. 36-4 at 1-3. In July 2008, Plaintiffs executed a mortgage on the Property in favor of Mortgage Electronic Registration Systems, Inc. as nominee for Mangum Mortgage Inc., its successors and assigns, which was later assigned to Defendant Nationstar Mortgage LLC ("Nationstar"). Compl., ECF No. 1-1 ¶¶ 16, 17; see Defs.' Concise Statement of Facts ( ), Declaration of Jade Lynne Ching ("Ching Decl."), ECF No. 16-1 ¶3; Def.'s CSF Ex. 1, ECF No. 16-2; Bickerton Decl. ¶ 5; Pl.'s CSF Ex. 3, ECF No. 36-5. The mortgage was security for Plaintiffs' performance under a promissory note in the amount of $369,000.00. Defs.' CSF ¶¶ 1, 2; id. Ex. 1, at 191.1 On December 18, 2008, Gamblin executed a quitclaim apartment deed in favor of Hart; that deed was recorded with the State of Hawai`i Bureau of Conveyances ("BOC") on December 23, 2008. Compl. Ex. A, ECF No. 1-1 at 30-36.2
Plaintiffs assert that, at some point, "part or all of the interest in the mortgage loan had been sold to Fannie Mae [Federal National Mortgage Association], such that while Nationstar claimed to be the mortgagee, Fannie Mae also claimed to be the owner of the mortgage loan." Compl. ¶ 18. At the hearing on the instant Motion, counsel for Nationstar and Fannie Mae (together, "Defendants") admitted that Fannie Mae was, at the time of the foreclosure, the beneficial holder of the promissory note, and stated that Nationstar was a servicer acting on Fannie Mae's behalf.
Plaintiffs defaulted under the promissory note and mortgage. Defs.' CSF ¶ 3; Ching Decl. ¶ 4; Def.'s CSF Ex. 2, ECF No. 16-3. No notice of acceleration is in the record, but Plaintiffs assert that any notice of acceleration they received was defective in that, "among other omissions, [it] failed to inform Plaintiffs that they in fact had certain rights with respect to reinstatement and/or the sale." Compl. ¶ 25. On October 20, 2010, Nationstar initiated a non-judicial foreclosure under the power of sale in the mortgage and former Hawaii Revised Statutes ("HRS") Chapter 667, Part I (2008).3 Defs.' CSF ¶ 3; Ching Decl. ¶ 4; Def.'s CSF Ex. 2, ECF No. 16-3.To do so, Nationstar caused to be recorded with the BOC a Notice of Mortgagee's Intention to Foreclose Under Power of Sale ("Notice of Intent to Foreclose"), Document Number 2010-159093. Defs.' CSF ¶ 3; id. Ex. 2. The Notice of Intent to Foreclose stated the address and TMK number of the Property. Def's CSF Ex. 2. Plaintiffs assert that this Notice was defective because it did not contain a description of the Property. Compl. ¶ 28. They further assert that Nationstar erred by offering buyers only a quitclaim deed. Id. ¶ 29.
The Notice of Intent to Foreclose directed that a public auction of the Property would be held on December 22, 2010. Defs.' CSF at ¶ , 43; id. Ex. 2 at 1. An advertisement regarding the sale was placed in the Honolulu Star-Advertiser once in each of three successive weeks, the last date being more than fourteen days prior to the scheduled auction date. Ching Decl. ¶ 3; Def.'s CSF Ex. 3, ECF No. 16-4 at 3; Compl. ¶ 30. The public auction did not occur on that date, however, and was instead postponed an unknown number of times, by oral announcement at the time and place of the scheduled auction, until it was finally held on March 9, 2011. Defs.' CSF ¶¶ 4,5; Def.'s CSF Ex. 3 at 3. Plaintiffs contend that Nationstar erred both by not holding the auction on December 22, 2010, and by not publishing new written notice(s) in the newspaper regarding postponements. Compl. ¶¶ 31-37.
At the March 9, 2011, public auction, the Property was sold for $318,453.53 to Nationstar or its nominee. Defs.' CSF ¶ 6; id. Ex. 3 at 3. At the hearing on this Motion, counsel for Defendants stated that this was a credit bid by Nationstar acting as nominee for Fannie Mae. Following the sale, on March 21, 2011, Nationstar recorded with the BOC a Mortgagee's Affidavit of Foreclosure Under Power of Sale ("Mortgagee's Affidavit"), Document Number 2011-046885. Defs.' CSF ¶ 7; id. Ex. 3; Compl. ¶ 41.
Around one month later, on April 25, 2011, Nationstar executed a quitclaim deed on the Property to Fannie Mae. Compl. ¶ 19; Bickerton Decl. ¶ 6; Pl.'s CSF Ex. 4, ECF No. 36-6. Nationstar recorded the quitclaim deed with the BOC on June 20, 2011. Pl.'s CSF Ex. 4. Plaintiffs allege that, on October 4, 2011, Fannie Mae executed a limited warranty apartment deed in favor of Barry James and Deborah Lynn Harding ("Hardings"), which Fannie Mae recorded on October 7, 2011. Compl. ¶ 21.
PROCEDURAL BACKGROUND
On March 9, 2017, Plaintiffs filed a Complaint in state court against Defendants, the Hardings, and numerous Doe defendants. Compl., ECF No. 1-1. The Complaint alleges two counts: (1) quiet title, ejectment, and declaratory relief against all defendants, id. ¶¶ 13-61; and (2) wrongful foreclosure against all defendants, id. ¶¶ 62-70.
On November 13, 2017, the Hardings filed a notice of removal with this Court, Notice of Removal, ECF No. 1, and on November 27, 2017, filed an answer and counterclaim against Plaintiffs, ECF No. 4. The counterclaim alleges two counts: (1) quiet title, and (2) declaratory relief. ECF No. 4-1.
Defendants filed a Motion for Summary Judgment ("MSJ") on May 18, 2018, ECF No. 15, along with a concise statement of facts, ECF No. 16. Hearing on the MSJ was originally scheduled for August 20, 2018, but on July 30, 2018, the parties stipulated to a continuance, ECF No. 22, and the Court rescheduled the hearing for October 29, 2018, ECF No. 28. On August 8, 2018, the Hardings filed a joinder to the instant motion. ECF No. 25.4 5 Plaintiffs filed their Opposition ("Opp.") to the MSJ on October 5, 2018, ECF No. 35, together with a concise statement of facts, ECF No. 36. On October 12, 2018, Defendants filed a Reply to Plaintiffs' Opposition. ECFNo. 48. On October 25, 2018, Plaintiffs made a filing pursuant to Local Rule 7.8,6 consisting of eight cases and a short explanation of the proposition for which each was cited. ECF No. 49. The Court held a hearing on Defendants' MSJ on Monday, October 29, 2018.
STANDARD
Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Federal Rule of Civil Procedure ("Rule") 56(a) mandates summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to the party'scase, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Broussard v. Univ. of Cal., 192 F.3d 1252, 1258 (9th Cir. 1999).
"A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact." Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323); see also Jespersen v. Harrah's Operating Co., 392 F.3d 1076, 1079 (9th Cir. 2004). "When the moving party has carried its burden under Rule 56[(a)] its opponent must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forward with specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586-87 (1986) (citation and internal quotation marks omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) ().
"An issue is 'genuine' only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party, and a dispute is 'material' only if itcould affect the outcome of the suit under the governing law." In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing Anderson, 477 U.S. at 248). When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587; see also Posey v. Lake Pend Oreille Sch. Dist. No. 84, 546 F.3d 1121, 1126 (9th Cir. 2008) ().
DISCUSSION
Defendants assert their entitlement to summary judgment on a number of grounds. They argue that: Plaintiffs' claim for declaratory...
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