Marzan v. Bank of Am.

• Decision Date: 10 March 2011
• Docket Number: Civil No. 10–00581 JMS/BMK.
• Citation: 779 F.Supp.2d 1140
• Parties: Alfred MARZAN, an individual; Adelaida Liwanag Marzan, an individual, Plaintiffs,v.BANK OF AMERICA, Business Entity, et al., Defendants.
• Court: U.S. District Court — District of Hawaii

779 F.Supp.2d 1140

Alfred MARZAN, an individual; Adelaida Liwanag Marzan, an individual, Plaintiffs,

v.BANK OF AMERICA, Business Entity, et al., Defendants.

Civil No. 10–00581 JMS/BMK.

United States District Court, D. Hawai‘i.

March 10, 2011.

Alfred Marzan, Waipahu, HI, pro se.Adelaida Liwanag Marzan, Waipahu, HI, pro se.Brandon M. Segal, Jade L. Ching, Alston Hunt Floyd & Ing, Patricia J. McHenry, Cades Schutte, Honolulu, HI, for Defendants.

ORDER: (1) GRANTING DEFENDANT OLD REPUBLIC TITLE & ESCROW OF HAWAII, LTD.'S MOTION TO DISMISS; (2) GRANTING DEFENDANT MORTGAGE ELECTRONIC REGISTRATION SYSTEM'S MOTION TO DISMISS; (3) DISMISSING OTHER CLAIMS; AND (4) GRANTING LEAVE TO AMEND

J. MICHAEL SEABRIGHT, District Judge.

I. INTRODUCTION

On October 6, 2010, Plaintiffs Alfred Marzan and Adelaida Liwanag Marzan (“Plaintiffs”), proceeding pro se, filed this action against Defendants Bank of America (“BOA”); Countrywide Home Loans, Inc. (“Countrywide”), First Magnus Financial (“First Magnus”), Old Republic Title & Escrow, Ltd. (“Old Republic”), and Mortgage Electronic Registration Systems (“MERS”) (collectively, “Defendants”) alleging federal and state law claims stemming primarily from a March 14, 2006 mortgage transaction concerning real property located at 94–102 Heahea Street, Waipahu, Hawaii 96797 (the “subject property”).

Plaintiffs seek declaratory and injunctive relief, as well as damages and rescission of the mortgage transaction. In separate motions, Old Republic and MERS each seek dismissal of all counts against them. For the reasons set forth below, the court GRANTS the Motions and dismisses the Complaint with leave to amend as to certain counts. Given obvious defects as to all Defendants, the dismissal is as to all claims against all Defendants.

II. BACKGROUND

A. Factual Background

The court assumes the Complaint's factual allegations are true for purposes of this Motion. See, e.g., Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n. 1 (9th Cir.2003).

According to the Complaint and documents of which the court takes judicial notice, on March 10, 2006, Plaintiffs entered into a loan repayment and security agreement with First Magnus, which was subsequently transferred to Countrywide and/or BOA. See Compl. ¶ 2. Plaintiffs' claims stem from the consummation of this transaction.

Plaintiffs assert, among other things, that (1) First Magnus qualified Plaintiffs for a loan which it knew Plaintiffs were not qualified for and could not repay, and that Plaintiffs “should have been declined for this loan,” Compl. ¶¶ 21, 27–28, 34; (2) the terms of the transaction were not clear and Defendants ¹ never explained the transaction to them, id. ¶¶ 24, 29; (3) the loan was more expensive than alternative financing arrangements for which Plaintiffs were qualified, id.; and (4) Defendants charged excessive or illegal fees. Id. ¶¶ 22, 31.

Plaintiffs assert that Defendants failed to provide forms and disclosures required under the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq. ; the Equal Opportunity Credit Act; “Fair Lending/Fair Debt Collection Act”; and the Real Estate Settlement Practices Act (“RESPA”), 12 U.S.C. § 2601 et seq. Compl. ¶¶ 11, 13. Defendants allegedly “intentionally concealed the negative implications of the loan they were offering,” id. ¶ 18, and “failed to perform due diligence,” id. ¶¶ 20, 27, such that Plaintiffs were sold “a deceptive loan product” and the acts of deception created an illegal loan and constituted predatory lending. Id. ¶¶ 26–27, 39. Defendants' acts allegedly were in violation of federal and state law, including bad faith, breach of fiduciary duty, and unfair and deceptive trade practices.

B. Procedural Background

Plaintiffs' October 6, 2010 Complaint alleges twelve separate counts, entitled: “(1) Declaratory Relief; (2) Injunctive Relief; (3) Contractual Breach of Implied Covenant of Good Faith and Fair Dealing; (4) Violations of TILA; (5) Violations of RESPA; (6) Rescission; (7) Unfair and Deceptive Acts and Practices (UDAP); (8) Breach of Fiduciary Duty; (9) Unconscionability; (10) Predatory Lending; (11) Quiet Title; and (12) Lack of Standing (MERS).”

On November 19, 2010, Old Republic filed its Motion to Dismiss seeking dismissal of all counts.² On December 6, 2010, MERS filed its Motion to Dismiss. On February 4, 2011, Plaintiffs filed an Opposition. Replies were filed on February 7, 2011. A hearing was held on February 28, 2011.

III. STANDARD OF REVIEW

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, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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, 127 S.Ct. 1955). 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, 127 S.Ct. 1955). 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.

The court liberally construes pro se pleadings. See Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir.1987). “Unless it is absolutely clear that no amendment can cure the defect ... a pro se litigant is entitled to notice of the complaint's deficiencies and an opportunity to amend prior to dismissal of the action.” Lucas v. Dep't of Corr., 66 F.3d 245, 248 (9th Cir.1995).

Despite the liberal pro se pleading standard, the court may dismiss a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on its own motion. See Omar v. Sea–Land Serv., Inc., 813 F.2d 986, 991 (9th Cir.1987) (“A trial court may dismiss a claim sua sponte under [Rule] 12(b)(6). Such a dismissal may be made without notice where the claimant cannot possibly win relief.”); Ricotta v. California, 4 F.Supp.2d 961, 968 n. 7 (S.D.Cal.1998) (“The Court can dismiss a claim sua sponte for a Defendant who has not filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6).”); see also Baker v. Director, U.S. Parole Comm'n, 916 F.2d 725, 727 (D.C.Cir.1990) (holding that a district court may dismiss cases sua sponte pursuant to Rule 12(b)(6) without notice where plaintiff could not prevail on complaint as alleged).

IV. DISCUSSION

Many of the arguments raised by Old Republic and MERS were addressed in this court's recent Order in Phillips et al. v. Bank of America et al., 2011 WL 240813 (D.Haw. Jan. 21, 2011), regarding a similar complaint.³ The court draws extensively from that Order.

Both Motions address each of the Counts as they relate to MERS and Old Republic, and the court therefore addresses the arguments as to each specific Count.⁴

A. Counts I and II—Declaratory and Injunctive Relief

Both MERS and Old Republic contend, among other things, that Count I (Declaratory Relief) and Count II (Injunctive Relief), fail to state claims upon which relief can be granted because the claims are remedies, not independent causes of action. MERS Mot. 5–6; Old Republic Mot. 6. The court agrees that these Counts fail to state a claim.

Initially, the court follows the well-settled rule that a claim for “injunctive relief” standing alone is not a cause of action. See, e.g., Jensen v. Quality Loan Serv. Corp., 702 F.Supp.2d 1183, 1201 (E.D.Cal.2010) (“A request for injunctive relief by itself does not state a cause of action”); Henke v. ARCO Midcon, L.L.C., 750 F.Supp.2d 1052, 1059–60 (E.D.Mo.2010) (“Injunctive relief, however, is a remedy, not an independent cause of action.”); Plan Pros, Inc. v. Zych, 2009 WL 928867, at *2 (D.Neb. Mar. 31, 2009) (“no independent cause of action for injunction exists”); Motley v. Homecomings Fin., LLC, 557 F.Supp.2d 1005, 1014 (D.Minn.2008) (same). Injunctive relief may be available if Plaintiffs are entitled to such a remedy on an independent cause of action.

As for declaratory relief, Count I is apparently seeking relief under the Declaratory Judgment Act, 28 U.S.C. § 2201.⁵ Count I alleges that “[a]n actual controversy has arisen and now exists between Plaintiffs and Defendants regarding their respective rights and duties, in that Plaintiffs contend[ ] that Defendants did not have the right to foreclose on the Subject Property[.]” Compl. ¶ 43. Plaintiffs ask the court to declare that “the purported power of sale contained in the Loan [is] of no force and effect at this time” because of “numerous violations of State and Federal laws designed to protect borrowers[.]” Id. ¶ 44. “As a result of Defendants' actions, Plaintiffs have suffered damages ... and seek[ ] declaratory relief that Defendants' purported power of sale is void[.]” Id. ¶ 45.

Given these allegations, Plaintiffs' declaratory relief claim is not cognizable as an independent cause of action under the Declaratory Relief Act. See Seattle Audubon Soc. v. Moseley, 80 F.3d 1401, 1405 (9th Cir.1996) (“A declaratory judgment offers a means by which rights and obligations may be adjudicated in cases brought by any interested party involving an actual controversy that has not reached a stage at which either party may seek a coercive remedy and in cases where a party who could sue for coercive relief has not yet done so.” (citation and quotation signals omitted))....