Long v. Deutsche Bank Nat'l Trust Co. as Tr. for Soundview Home Loan Trust 2006 WF-1
| Decision Date | 24 October 2011 |
| Docket Number | CIVIL NO. 10-00359 JMS/KSC |
| Parties | KERRY K. LONG, Plaintiff, v. DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR SOUNDVIEW HOME LOAN TRUST 2006 WF-1; WELLS FARGO BANK N.A.; and DOES 1-20, inclusive, Defendants. |
| Court | U.S. District Court — District of Hawaii |
ORDER GRANTING DEFENDANTS DEUTSCHE BANK
NATIONAL TRUST COMPANY, AS TRUSTEE FOR SOUNDVIEW
HOME LOAN TRUST 2006 WF-1 AND WELLS FARGO BANK N.A.'S MOTION TO DISMISS
On June 29, 2010, Plaintiff Kerry K. Long ("Plaintiff") filed this action alleging claims against Defendants Deutsche Bank National Trust Company, as Trustee for Soundview Home Loan Trust 2006 WF-1 ("Deutsche Bank"), and Wells Fargo Bank ("Wells Fargo") (collectively, "Defendants") asserting federal and state law claims stemming from a mortgage transaction concerning real property located at 15-144, 31st Avenue, Keeau, Hawaii 96749 (the "subject property").
After this court granted in part and denied in part Defendants' Motion for Judgment on the Pleadings with leave to amend, see Long v. Deutsche Bank Nat'l Trust Co., 2011 WL 2650219 (D. Haw. July 5, 2011), Plaintiff filed a First Amended Complaint ("FAC"). Currently before the court is Defendants' Motion to Dismiss the FAC, in which they argue that the FAC fails to state a cognizable claim. Based on the following, the court GRANTS Defendants' Motion to Dismiss the FAC.
As alleged in the FAC, in June 2006, Plaintiff sought to purchase the subject property and therefore applied for a thirty-year fixed rate mortgage loan for $416,000 with Wells Fargo. Doc. No. 47, FAC ¶¶ 17-19. In the loan application process, Wells Fargo allegedly (1) completed the application without providing or showing Plaintiff a copy; (2) failed to explain the contents of the application to Plaintiff; (3) concealed from Plaintiff that it had significantly overstated Plaintiff's income to increase his chance of qualifying for a loan he would not ordinarily qualify for; and (4) concealed that the loan was unaffordable once the payments were amortized over the life of the loan. Id. ¶¶ 20-25. Plaintiff never knowingly signed the loan application that overstated his income, and had answered all ofWells Fargo's questions and provided all requested documents. Id. ¶¶ 26-27.
Wells Fargo and Plaintiff ultimately entered into a loan on or about July 5, 2006. Id. ¶ 34; see also Defs.' Ex. A.1 In entering into the loan, Wells Fargo allegedly (1) failed to verify Plaintiff's income and employment and otherwise use due diligence to verify that Plaintiff qualified for the loan;
(2) offered Plaintiff a stated income loan even though Plaintiff was employed;
(3) did not explain to Plaintiff that he could compare loan terms or purchase down the interest rate of the loan; (4) failed to provide Plaintiff a myriad of required documents including, among other things, a good faith estimate, a final HUD-1 Settlement Statement, the Servicing Disclosure Statement, and the Notice of Assignment, Sale or Transfer of Servicing Rights; (5) did not disclose and/or concealed from Plaintiff material terms of the loan including the interest rate, theadjustable interest rate, the actual anticipated interest, the fees and costs of the loan, and his right to rescind the loan; (6) failed to give Plaintiff a reasonable time to read and understand the loan documents; and (7) failed to disclose that it intended to transfer, sell, or assign the note and mortgage to other lenders. Doc. No. 47, FAC ¶¶ 29-38.
Although the FAC does not explain Deutsche Bank's role in this transaction, the FAC states that "[Deutsche Bank] alleges it was subsequently assigned the note and mortgage," and that it had a duty to verify Plaintiff's income and employment when purchasing the loan from Wells Fargo. Id. ¶¶ 13, 29.
On June 29, 2010, Plaintiff filed his Complaint. On July 26, 2011, the court granted in part and denied in part Defendants' Motion for Judgment on the Pleadings (the "July 26, 2011 Order"), see Long, 2011 WL 2650219. As a result, on July 26, 2011, Plaintiff filed his FAC. The FAC asserts claims against Defendants entitled (1) Violations of Real Estate Settlement Procedures Act (Count I); (2) Violation of Fair Credit Reporting Act (Count II); (3) Fraudulent Misrepresentation (Count III); (4) Breach of Fiduciary Duty (Count IV); (5) Unjust Enrichment (Count V); (6) Civil Conspiracy and Aiding and Abetting (Count VI); (7) Complaint to Quiet Title (Count VII); (8) Misrepresentation as tothe Status of Defendants to Conduct Business in the State of Hawaii and Otherwise Enforce Any Alleged Note and/or Mortgage (Count VIII); (9) Violation of Fair Debt Collection Practices (Count IX); (10) Unconscionability (Count X); (11) Unfair and Deceptive Acts or Practices (Count XI); (12) Failure to Act Consistent with the Implied Duty of Good Faith and Fair Dealing (Count XII); (13) Negligent and/or Intentional Infliction of Emotional Distress (Count XIII); (14) Violation of the Gramm-Leach-Bliley Act (Count XIV); and (15) Violation of the Hawaii Constitutional Right of Privacy (Count XV).
On August 9, 2011, Defendants filed their Motion to Dismiss. Plaintiff filed an Opposition on October 3, 2011,2 and Defendants filed a Reply on October 11, 2011. A hearing was held on October 17, 2011.
Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss a claim for "failure to state a claim upon which relief can be granted[.]"
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Weber v. Dep't of Veterans Affairs, 521 F.3d 1061, 1065 (9th Cir. 2008). This tenet -- that the court must accept as true all of the allegations contained in the complaint -- "is inapplicable to legal conclusions." Iqbal, 129 S. Ct. at 1949. Accordingly, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555). Rather, "[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." Id. (citing Twombly, 550 U.S. at 556). Factual allegations that only permit the court to infer "the mere possibility of misconduct" do not show that the pleader is entitled to relief. Id. at 1950.
Federal Rule of Civil Procedure 9(b) requires that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." "Rule 9(b) requires particularized allegations of the circumstances constituting fraud." In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1547-48 (9th Cir. 1994) (en banc), superseded on other grounds by 15 U.S.C. § 78u-4.
In their pleadings, Plaintiffs must include the time, place, and nature of the alleged fraud; "mere conclusory allegations of fraud are insufficient" to satisfy this requirement. Id. (). Where there are multiple defendants, Plaintiffs cannot "lump multiple defendants together" and instead must "differentiate their allegations [between defendants]." Destfino v. Kennedy, 630 F.3d 952, 958 (9th Cir. 2011) (citation omitted). However, "[m]alice, intent, knowledge, and other condition of mind of a person may be averred generally." Fed. R. Civ. P. 9(b); see also In re GlenFed, Inc. Sec. Litig, 42 F.3d at 1547 (); Walling v. Beverly Enter., 476 F.2d 393, 397 (9th Cir. 1973) .
A motion to dismiss for failure to plead with particularity is the functional equivalent of a motion to dismiss under Fed. R. Civ. P. 12(b)(6). Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). In considering a motion to dismiss, the court is not deciding the issue of "whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support claims." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Harlow v. Fitzgerald, 457 U.S. 800 (1982).
Defendants seek dismissal of all Counts of the FAC for failure to state a claim upon which relief can be granted. The court addresses each Count of the FAC in turn.
The FAC asserts that Wells Fargo violated the Real Estate Settlement Procedures Act ("RESPA"), by "accepting charges for rendering of real estate services which were in fact charges for other than services actually performed" in violation of 12 U.S.C. § 2607, Doc. No. 47, FAC ¶ 41, and by failing to timely and promptly notify Plaintiff of the "assignment or sale or transfer of the alleged note and/or mortgage for the subject property" in violation of 12 U.S.C. § 2605. Id.¶ 45. The FAC further asserts that both Wells Fargo and Deutsche Bank violated 12 U.S.C. § 2605(e) by failing to respond to Plaintiff's request for Defendants to "resolve servicing issues." Id. ¶ 43. Plaintiff's RESPA claim fails for several reasons.
All of the FAC's allegations of RESPA violations fail because Plaintiff has not alleged any actual damages. Pursuant to 12 U.S.C. § 2605(f)(1), Plaintiff has a burden to plead and demonstrate he has suffered damages. Specifically, § 2605(f)(1) provides:
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