Krakauer v. Indymac Mortgage Serv.

• Decision Date: 14 December 2010
• Docket Number: Civ. No. 09-00518 ACK-BMK
• Parties: DEAN KRAKAUER and ROBBIN KRAKAUER, Plaintiffs, v. INDYMAC MORTGAGE SERVICES, A DIVISION OF ONEWEST BANK, FSB, A FEDERAL SAVINGS BANK; ONEWEST BANK, FSB; DOES 1-20, Defendants. INDYMAC MORTGAGE SERVICES, A DIVISION OF ONEWEST BANK, FSB, A FEDERAL SAVINGS BANK; ONEWEST BANK, FSB, Counterclaimants, v. DEAN KRAKAUER and ROBBIN KRAKAUER, Counterclaim Defendants.
• Court: United States District Courts. 9th Circuit. United States District Court (Hawaii)

DEAN KRAKAUER and ROBBIN KRAKAUER, Plaintiffs,
v.
INDYMAC MORTGAGE SERVICES, A DIVISION OF ONEWEST BANK, FSB,
A FEDERAL SAVINGS BANK; ONEWEST BANK, FSB; DOES 1-20, Defendants.
INDYMAC MORTGAGE SERVICES, A DIVISION OF ONEWEST BANK, FSB,
A FEDERAL SAVINGS BANK; ONEWEST BANK, FSB, Counterclaimants,
v.
DEAN KRAKAUER and ROBBIN KRAKAUER, Counterclaim Defendants.

Civ. No. 09-00518 ACK-BMK

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII

Dated: December 14, 2010

ORDER GRANTING DEFENDANTS/COUNTERCLAIMANTS' MOTION FOR SUMMARY JUDGMENT
PROCEDURAL BACKGROUND

On October 27, 2009, Dean Krakauer and Robbin Krakauer (collectively, "Plaintiffs") filed a complaint ("Complaint") in this Court against IndyMac Mortgage Services and OneWest Bank, FSB ("OneWest, " and collectively, "Defendants"). Doc. No. 1.

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Plaintiffs were represented by counsel at that time. On December 28, 2009, Defendants filed an answer to the Complaint as well as a counterclaim ("Counterclaim") against Plaintiffs. Doc. No. 5.

Plaintiffs discharged their counsel on March 30, 2010. Doc. No. 15. Proceeding pro se, Plaintiffs filed a first amended complaint ("FAC") on July 30, 2010. Doc. No. 43. Defendants filed an answer to the FAC on August 11, 2010. Doc. No. 45.

On August 23, 2010, Defendants filed a motion for summary judgment as to both the FAC and the Counterclaim ("Motion"). Doc. No. 46. This motion was supported by a separate concise statement of facts ("CSF") and a number of exhibits. Doc. Nos. 47, 54. Plaintiffs filed memoranda in opposition to the Motion on September 28, 2010 ("Opp'n 1") and October 28, 2010 ("Opp'n 2"). Doc. Nos. 53, 55. These memoranda were supported by numerous exhibits.¹ On November 30, 2010,

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Defendants filed an untimely reply memorandum in support of their Motion ("Reply"). Doc. No. 56.² On the morning of December 13, 2010, one hour before the hearing in this matter, Plaintiffs submitted to the Court, but not Defendants, a reply memorandum to Defendants' concise statement of facts. Doc. No. 58.³ The Court held a hearing on the Motion on December 13, 2010.⁴

FACTUAL BACKGROUND

In August 2002 Plaintiffs bought a vacant lot located at 71-1620 Puulani Place, Kailua-Kona, Hawai'i, 96740

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("Property"). CSF Ex. G at 4, Ex. M. On March 31, 2006, in order to build a home on the Property, Plaintiffs executed and delivered a promissory note ("Note") in favor of IndyMac Bank, FSB ("IndyMac"), in the amount of $546,000. CSF ¶ 1; Hoffman Decl. ¶ 2; CSF Ex. A, Ex. F, Ex. G at 7. To secure payment on the Note, Plaintiffs on the same day executed a mortgage encumbering the Property in favor of IndyMac ("Mortgage"). CSF 1 2; Hoffman Decl. ¶ 3; CSF Ex. B. The Mortgage was recorded on April 7, 2006, in the Bureau of Conveyances of the State of Hawai'i ("Bureau") as Document No. 2006-065052. CSF ¶ 2; Hoffman Decl. ¶ 3; CSF Ex. B. The Mortgage was subsequently assigned to Defendant OneWest. CSF ¶ 3; Hoffman Decl. ¶ 4; CSF Ex. C.⁵

In June 2008, Plaintiffs completed building a two-

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story, four-bedroom, three-bathroom home on the Property. CSF Ex. G at 13, 18. According to Plaintiff Dean Krakauer, Plaintiffs originally intended the Property to be their primary residence, but later decided not to move into the completed house on the Property. Id. at 10, 13. The Property remained vacant for one year following completion, at which point Plaintiffs began renting the Property. Id. at 13-14.

From August 2008 through April 2009, Plaintiffs made scheduled payments (many of which were late) under the Note and Mortgage. CSF 1 7; CSF Ex. D, Ex. G at 12-13. Plaintiffs thereafter stopped making payments. CSF ¶ 7; Hoffman Decl. ¶ 6; CSF Ex. D, Ex. G at 12-13. Consequently, on September 10, 2009, Defendant OneWest recorded in the Bureau a "Notice of Mortgagee's Intention to Foreclose Under Power of Sale." CSF ¶ 8; Hoffman Decl. ¶ 7; CSF Ex. E.⁶ Plaintiffs initiated the instant lawsuit

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on October 27, 2009, to prevent Defendants' non-judicial foreclosure sale, which had been scheduled for October 30, 2009. CSF ¶ 11; FAC ¶¶ 7-8.

Beginning in June 2010, Plaintiffs initiated the first of two "Administrative Process Remedies" in which, among other things, Plaintiffs offered to settle with Defendants for $749,000⁷ so long as Defendants first sent the original Note to a purported third-party escrow agent. See Opp'n 1 at 6-8; Opp'n 1 Exs. H-P; Opp'n 2 Exs. Q-S. After Defendants did not accept this offer and failed to comply with Plaintiffs' subsequent "Presentment Letter, " which demanded to see the original Note, Plaintiffs claimed they were "entitled to performance and stipulated damages" of $2,184, 000. See Opp'n 2 Exs. Q-V.

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LEGAL STANDARDS

A. Summary Judgment Standard

The purpose of summary judgment is to identify and dispose of factually unsupported claims and defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is therefore appropriate if the "pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). "A fact is 'material' when, under the governing substantive law, it could affect the outcome of the case. A 'genuine issue' of material fact arises if 'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Thrifty Oil Co. v. Bank of Am. Nat'l Trust & Sav. Ass'n, 322 F.3d 1039, 1046 (9th Cir. 2003) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)) (citation omitted).⁸ Conversely, where the evidence could not lead a rational trier of fact to find for the nonmoving party, no genuine issue exists for trial. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). "Only admissible evidence may be considered in deciding a motion for summary judgment." Miller v. Glenn Miller Prods., Inc., 4 54 F.3d

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975, 988 (9th Cir. 2006).

The moving party has the burden of persuading the court as to the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323; Miller, 454 F.3d at 987. The moving party may do so with affirmative evidence or by "'showing'—that is pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325.⁹Once the moving party satisfies its burden, the nonmoving party cannot simply rest on the pleadings or argue that any disagreement or "metaphysical doubt" about a material issue of fact precludes summary judgment. See id. at 323; Matsushita Elec., 475 U.S. at 586; California Arch. Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987). ¹⁰The nonmoving party must instead set forth "significant probative evidence" in support of its position. T.W. Elec. Serv. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

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Summary judgment will thus be granted against a party who fails to demonstrate facts sufficient to establish an element essential to his case when that party will ultimately bear the burden of proof at trial. See Celotex, 477 U.S. at 322.

When evaluating a motion for summary judgment, the court must construe all evidence and reasonable inferences drawn therefrom in the light most favorable to the nonmoving party. See T.W. Elec. Serv., 809 F.2d at 630-31.¹¹ Accordingly, if "reasonable minds could differ as to the import of the evidence, " summary judgment will be denied. Anderson, 477 U.S. at 250-51.

B. Special Considerations for Pro Se Litigants

A pro se litigant's pleadings must be read more liberally than pleadings drafted by counsel. Haines v. Kerner, 404 U.S. 519, 520-21 (1972); Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004); Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir. 1987). When a plaintiff proceeds pro se and technically violates a rule, the court should act with leniency toward the pro se litigant. Draper v. Coombs, 792 F.2d 915, 924 (9th Cir. 1986); Pembrook v. Wilson, 370 F.2d 37, 39-40 (9th Cir. 1966). However, "a pro se litigant is not excused from knowing the most basic pleading requirements." American Ass'n of Naturopathic

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Physicians v. Hayhurst, 227 F.3d 1104, 1107-08 (9th Cir. 2000) (citations omitted). Moreover, "ro se litigants must follow the same rules of procedure that govern other litigants." King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1987).

DISCUSSION

Plaintiffs' FAC asserts five counts against Defendants: "Unfair Trade Practices Involving Non Compliance" (Count I), "Failure t[o] Give 3 Day Cooling Period" (Count II), "Failure to Give Conspicuous Writings" (Count III), "Unfair and Deceptive Acts and Practices" in violation of Hawai'i Revised Statutes ("H.R.S.") Ch. 480 (Count IV), and "Unfair and Deceptive Acts and Practices" in violation of the Uniform Commercial Code ("UCC") (Count V). Defendants move for summary judgment as to each of these counts, and the Court will address each count...