Hoang v. Bank of Am., N.A.
| Decision Date | 17 February 2021 |
| Docket Number | CASE NO. C17-0874JLR |
| Parties | JERRY HOANG, et al., Plaintiffs, v. BANK OF AMERICA, N.A., et al., Defendants. |
| Court | U.S. District Court — Western District of Washington |
Before the court are three motions, two filed by Plaintiffs Jerry Hoang and Le Uyen Nguyen (collectively, "Plaintiffs") and one filed by Defendants Bank of America, N.A. ("BANA"), Federal National Mortgage Association ("Fannie Mae"), Mortgage Electronic Registration Systems, Inc. ("MERS"), and BAC Home Loans Servicing, LP (collectively, "Defendants"). Plaintiffs move to amend their complaint and further move for summary judgment regarding "subject matter jurisdiction and/or judicial authority." (MTA (Dkt. # 51); Pls. MSJ (Dkt. # 55) at 1.) Defendants move for summary judgment on Plaintiffs' Truth in Lending Act ("TILA") rescission claims. (Defs. MSJ (Dkt. # 46).) The parties oppose each other's motions. The court has considered the motions, the parties' submissions, the relevant portions of the record, and the applicable law. Being fully advised,1 the court GRANTS Plaintiffs' motion to amend; DENIES Plaintiffs' motion for summary judgment and GRANTS summary judgment to Defendants on the issue of the constitutionality of various statutes governing retirement and senior status of judges; and GRANTS in part and DENIES in part Defendants' motion for summary judgment.
This suit centers on Plaintiffs' desire to rescind a home loan they received from BANA. (Compl. (Dkt. # 1-1) ¶ 1.1.) The court details the factual background before summarizing the procedural background of this matter.
In December 2004, Plaintiffs purchased a property in Tukwila, Washington, and they subsequently refinanced their home loan with BANA. (Stastny Decl. (Dkt. # 47) ¶ 3, Ex. 1 ("Hoang Dep.") at 13:18-21; Hoang Decl. (Dkt. # 59) ¶ 2; Nguyen Decl. (Dkt. # 60) ¶ 2.) The loan with BANA had an original principal amount of $288,000.00 with a fixed interest rate of 5.625%, secured by a deed of trust on their Tukwila property. (Magaddino Decl. (Dkt. # 49) ¶ 3; Hoang Dep. at 28:23-29:7.) On April 30, 2010,Plaintiffs executed the loan documents with a notary present and recall signing "a lot" of documents. (Hoang Dep. at 37:3-17, Ex. 9 ("Deed of Trust") at 11; Stastny Decl. ¶ 3, Ex. 2 ("Nguyen Dep.") at 10:17-23, 12:1-12.)
Two disclosures required by TILA are of particular relevance: a notice of the right to rescind and a TILA disclosure statement ("Disclosure Forms"). 12 C.F.R. § 1026.23(a) (b)(1) (); 15 U.S.C. § 1602(v). Ms. Susan Magaddino, an Assistant Vice President with BANA, attests that Plaintiffs' loan file contains "signed disclosures and acknowledgements of receipt of all TILA disclosures, and all additional signed disclosures/notices are in the loan file as well, including the [TILA] Statement and multiple executed copies of the Notice of Right to Cancel." (Magaddino Decl. ¶ 7.) Defendants submit several copies of the Disclosure Forms, all signed by Plaintiffs on April 30, 2010. (Id. ¶ 7, Ex. 28 ("Disclosure Forms").) Moreover, Plaintiffs signed a separate Borrower's Affidavit certifying that they "received two completed copies of the Notice of Right to Cancel along with a copy package containing all loan documents." (Id. ¶ 8, Ex. 29 ("Borrower's Aff.").) Ms. Noemi Garcia, the Escrow Officer and Notary Public present for Plaintiffs' loan closing, states that it was her "common practice to provide borrowers copies of all of the loan documents presented to them for review and signature after they had completed signing all of the required loan documents." (Garcia Decl. (Dkt. # 48) ¶¶ 2-3, 5.)
Plaintiffs "do not specifically recall" receiving the Disclosure Forms at the loan closing. (Hoang Decl. ¶ 2; Nguyen Decl. ¶ 2; see also Nguyen Dep. at 12:4-6.) Theyfurther "do not recall" signing the Borrower's Affidavit. (Hoang Decl. ¶ 3; Nguyen Decl. ¶ 3.) Plaintiffs do remember that after signing various documents, the paperwork was taken by staff to be copied and then returned in "folders of materials" that were given to Mr. Hoang. (Hoang Decl. ¶¶ 4-5; Nguyen Decl. ¶¶ 4-5; see also Nguyen Dep. at 12:7-12.) They attest that "none of the TILA 'Notice of Right to Cancel Forms' . . . or the [Borrower's Affidavit] . . . were included in those folders." (Hoang Decl. ¶ 5; Nguyen Decl. ¶ 5 (identical quote).)
It is undisputed that Plaintiffs did not rescind the loan within three business days of the loan execution. (Magaddino Decl. ¶ 4; Hoang Dep. at 43:15-16.) Plaintiffs made payments on the loan through 2010. (Magaddino Decl. ¶ 5, Ex. 10.) But starting in November, they began sending letters, styled as "Notices," to BANA seeking to invalidate the loan. (Id. ¶ 6, Exs. 11-26.) For instance, Plaintiffs sent BANA a series of questions after "[i]nformation has recently come to light that raises serious questions about who has the note on the property," including a warning that "silence can only be equated with fraud." After receiving no response, Plaintiffs declared that BANA was "in Default." (Id., Ex. 12 at 1.) They made one additional payment in June 2011, which was reversed for lack of funds. (Id.) Since then, Plaintiffs have made no further payments and sent a letter demanding rescission pursuant to TILA on April 15, 2013.
On May 9, 2013, Mr. Hoang filed suit in King County Superior Court against BANA and others claiming interest in the lien or property. (Stastny Decl. ¶ 4, Ex. 3("2013 Compl.") at 1.) Mr. Hoang alleged that BANA could not "show proper . . . ownership of [his] original Promissory Note and Deed of Trust" and therefore could not "establish that the Deed of Trust . . . and/or Note, were legally or properly acquired." (Id. ¶¶ 24-25.) Thus, he brought a quiet title claim as well as two claims of conversion for wrongfully collecting payments on the loan. (Id. ¶¶ 128-29; 165) Defendants removed the case in June 2013. (Stastny Decl. ¶ 6, Ex. 5 at 2.) Judge John C. Coughenour dismissed Mr. Hoang's suit without prejudice, holding that no foreclosure had been initiated and thus, there was no live case or controversy to adjudicate. Hoang v. Bank of America, N.A., et al., No. C13-1013JCC, 2013 WL 12075009, at *1, 3 (W.D. Wash. Aug. 15, 2013). Moreover, the court held that nothing "support[ed] the theory that the original deed of trust is invalid"; "[I]f Mr. Hoang fails to pay his mortgage loan, the holder of the note has the right to foreclose on Mr. Hoang's property to recover the amount Mr. Hoang owes it." Id. Mr. Hoang appealed, and the Ninth Circuit affirmed. (Stastny Decl. ¶ 6); see Hoang v. Boank of America, N.A., 644 F. App'x 732 (9th Cir. 2016).
Defendants initiated a foreclosure proceeding on Plaintiffs' property in February 2017. (Compl. ¶ 4.9.) This suit followed.
Mr. Hoang filed suit in King County Superior Court on May 9, 2017. (Compl. ¶ 6.1.) Defendants removed the action to federal court (Not. of Removal (Dkt. # 1)) and moved to dismiss, arguing that Plaintiffs' TILA claims were time-barred. (MTD (Dkt. # 4).) The court granted Defendants' motion and held that although TILA does not establish a statute of limitations for rescission enforcement claims, some limitationsperiod must apply to a borrower's claim to enforce a stalled rescission. (11/16/17 Order (Dkt. # 16) at 17-20.) Thus, the court borrowed TILA's one-year statute of limitations for damages claims and dismissed Plaintiffs' suit as untimely because it was brought four years after Defendants' failure to respond to their rescission notice. (Id. at 20-21.) Because amendment would be futile to cure Plaintiffs' time-barred claims, the court declined to grant leave to amend. (Id. at 22.)
On appeal, the Ninth Circuit reversed and remanded the case. Hoang v. Bank of America, N.A., 910 F.3d 1096, 1099 (9th Cir. 2018). Although the Ninth Circuit agreed that "there is a statute of limitations applicable to TILA rescission enforcement actions," it held that "contract law provides the best analogy" and thus adopted the six-year limitation period under Washington law for general contract law claims. Id. at 1101. In so holding, the Ninth Circuit clarified that Plaintiffs' damages claim was brought under the Washington Consumer Protection Act ("CPA"). Id. at 1099. Because Plaintiffs' claims were not time-barred, the Ninth Circuit concluded that the court improperly denied leave to amend, as amendment may not have been futile. Id. at 1102-03.
On remand, the court set a new case schedule. (See 4/10/20 Min. Order (Dkt. # 45).) The parties had to submit amended pleadings by December 23, 2020, complete discovery by February 22, 2021, and file any dispositive motions by March 23, 2021. (Id.) Defendants filed their motion for summary judgment on December 3, 2020. (See Defs. MSJ.) On December 17, 2020, Plaintiffs moved to amend their complaint and moved for summary judgment on subject-matter jurisdiction on December 31, 2020.
The court now turns to the three pending motions. The court first addresses Plaintiffs' motion to amend their complaint and then turn to the parties' summary judgment motions.
Plaintiffs seek to amend their complaint in various ways. First, they seek to clarify factual allegations regarding when Defendants received the notice of rescission and make explicit Plaintiffs' CPA claim, which had originally only been referenced in the prayer for relief section. (MTA at 2; Prop. Am. Compl. (Dkt. # 51-1) ¶¶ 4.7-4.14.) Additionally, Plaintiffs add several paragraphs summarizing the procedural...
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