MacCarley v. Countrywide Fin. Corp.
| Decision Date | 14 November 2022 |
| Docket Number | CAAP-17-0000438 |
| Parties | KURT P. MACCARLEY, Plaintiff-Appellant, v. COUNTRYWIDE FINANCIAL CORPORATION, INC.; COUNTRYWIDE HOME LOANS, INC.; BANK OF AMERICA CORPORATION, INC.; LANDSAFE, INC.; LANDSAFE APPRAISAL SERVICES, INC.; JOSEPH MICHAEL MAGALDI, III, Defendants-Appellees, and DOES 1 through 20, inclusive, Defendants |
| Court | Hawaii Court of Appeals |
NOT FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER
APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT (CIVIL NO 10-1-339)
Keith M. Kiuchi, for Plaintiff-Appellant
Patricia J. McHenry, Nicholas M. McLean, Defendants-Appellees
MEMORANDUM OPINION
Plaintiff-Appellant Kurt P. MacCarley (MacCarley) appeals from the "Amended Judgment" filed on April 24, 2017, by the Circuit Court of the Third Circuit (Circuit Court),[1] and challenges the "Order Granting Defendants Countrywide Financial Corporation, Inc.; Countrywide Home Loans, Inc.; Bank of America Corporation, Inc.; Landsafe, Inc.; and Landsafe Appraisal Services, Inc.'s Motion to Dismiss Second Amended Complaint" (Order Granting Motion to Dismiss SAC) entered on July 13, 2015.
This appeal arises from a civil action in which MacCarley filed claims against Defendants-Appellees Countrywide Financial Corporation, Inc. (Countrywide Financial) and Countrywide Home Loans, Inc. (Countrywide Home Loans) (collectively Countrywide); Bank of America Corporation, Inc. (Bank of America); Landsafe, Inc. (Landsafe); and Landsafe Appraisal Services, Inc. (Landsafe Appraisal) (collectively the Entity Defendants). MacCarley also asserted claims against Defendant Joseph Michael Magaldi, III (Magaldi).
MacCarley's Second Amended Complaint (SAC) asserts, inter alia, that after receiving an advertisement from Countrywide about a "Dream Loan," he contacted Countrywide's call center and was told he would be pre-approved for a "One-Time Close Loan," which was a single loan for the purchase and construction of property with one set of loan costs and charges. The SAC then alleges that Countrywide's call center persuaded MacCarley to speak with Magaldi, who was described as a real estate agent with "Hawaiian Dream Properties" who had "lots of good deals," but MacCarley was not informed that Magaldi was an employee or agent of Countrywide as a mortgage solicitor/loan officer and home loan consultant. The SAC alleges Magaldi falsely represented to MacCarley that he was being offered the best loans available to him when Countrywide was instead steering MacCarley into a subprime loan calculated to increase revenues to Countrywide; Magaldi persuaded MacCarley to purchase a lot (Property) located in Volcano on Hawai'i Island to build his "dream home," by promising the property was a bargain and that MacCarley would have $500,000 in equity because the 5 acre lot could be sub-divided to sell as five separate homes. The SAC further alleged that when Countrywide recommended Magaldi to MacCarley as a real estate agent, Magaldi provided a real estate license number that belonged to another person which he used on loan documents and agreements, and although Magaldi was employed by Countrywide as a mortgage solicitor he was not licensed as such. The SAC further alleges Magaldi assured MacCarley he could easily get county approval to subdivide the property, which induced MacCarley to make the purchase. The SAC also alleges that appraisals were done by Landsafe that were higher than warranted so that MacCarley could afford the deposit amount. The SAC alleges that on July 10, 2006, Magaldi traveled to Los Angeles for the loan closing, documents were not provided to MacCarley and he later learned that rather than the one simple loan he had been promised, there were three extremely complicated loans with their own costs, fees, penalties and interest. The SAC further contends that Countrywide provided MacCarley with another Truth in Lending Disclosure Statement, which he signed with other loan documents on April 22, 2008, which showed his mortgage payments and increases over time. Finally, the SAC alleges that in November 2009, MacCarley obtained a judgment against Magaldi in a lawsuit filed in Civil No. 07-1-0413 in the Circuit Court, for numerous claims.
The SAC alleges three counts: Breach of Contract (count I), Unfair and Deceptive Trade Practices (UDAP) (count II), and Injunction (count III).
On appeal, MacCarley raises three points of error. He asserts that the Circuit Court erred in granting the Entity Defendants' Motion to Dismiss Second Amended Complaint (Motion to Dismiss SAC) by (1) dismissing his UDAP claim for failure to file it within the four-year limitations period under Hawaii Revised Statutes (HRS) § 480-24 (2008);[2] and (2) dismissing the breach of contract claim for insufficient factual pleading. MacCarley also contends the Circuit Court erred in dismissing fraud claims that had been asserted in the First Amended Complaint.
We conclude MacCarley timely filed his UDAP claim within the four-year limitations period under HRS § 480-24 (2008); MacCarley sufficiently asserted a claim for "breach of good faith and fair dealing" against Countrywide Home Loans and Bank of America, but not the other Entity Defendants; and that MacCarley abandoned his fraud claims by not seeking to reassert them in his Second Amended Complaint. We thus affirm in part and vacate in part.
In his first point of error, MacCarley contends the Circuit Court erred in dismissing his UDAP claim on the basis that this claim was not filed within the four-year statute of limitations period under HRS § 480-24. In addition MacCarley argues that because the UDAP claim was first filed in federal court in June 2009[3] and later voluntarily dismissed, the limitations period for refiling in state court was tolled pursuant to 28 U.S.C.A. § 1367(d) (1990).[4] We do not address tolling under 28 U.S.C.A. § 1367(d) because the record shows that MacCarley did not argue it below and has thus waived the argument on appeal. Stanley v. State, 148 Hawai'i 489, 495 n.13, 479 P.3d 107, 113 n.13 (2021) (quoting Kernan v. Tanaka, 75 Haw. 1, 35, 856 P.2d 1207, 1224 (1993) ()).
We review the Circuit Court's ruling on the Motion to Dismiss SAC de novo. Bank of Am., N.A. v. Reyes-Toledo, 143 Hawai'i 249, 256-7, 428 P.3d 761, 768-9 (2018), as corrected (Oct. 15, 2018) (citing Hunqate v. Law Office of David B. Rosen, 139 Hawai'i 394, 401, 391 P.3d 1, 8 (2017)). We adhere to the notice pleading standard of review by which a Hawai'i Rules of Civil Procedure (HRCP) Rule 12(b)(6) motion is evaluated, and which requires that:
a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [their] claim that would entitle [them] to relief. The appellate court must therefore view a plaintiff's complaint in a light most favorable to [them] in order to determine whether the allegations contained therein could warrant relief under any alternative theory. For this reason, in reviewing a circuit court's order dismissing a complaint ... the appellate court's consideration is strictly limited to the allegations of the complaint, and the appellate court must deem those allegations to be true.
Malabe v. Ass'n of Apartment Owners of Exec. Ctr. by & through Bd. of Dirs., 147 Hawai'i 330, 356-57, 465 P.3d 777, 803-04 (2020) () (quoting Reyes-Toledo, 143 Hawai'i at 257, 428 P.3d at 769) .
In the Order Granting the Motion to Dismiss SAC, the Circuit Court ruled that:
As to Plaintiff's unfair and deceptive trade practices claim, in that the appellate courts of the State of Hawai'i have not determined whether the discovery rule applies to the statute of limitations set forth in [HRS] § 480-24, this Court will, in the absence of such a determination, follow the position taken by the United States District Court for the District of Hawai'i, which has determined that the discovery rule does not apply. [5] Plaintiff has also pled insufficient facts as to fraudulent concealment to toll the statute of limitations.
(Emphasis added.) In his SAC, MacCarley alleged:
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