Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 1 of 14 PageID #: 722 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII STEVEN D. WARD, vs. Plaintiff, U.S. BANK NATIONAL ASSOCIATION, ET AL., Defendants. Civ. No. 11-00760 BMK ORDER GRANTING DEFENDANTS MOTION FOR SUMMARY JUDGMENT ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT Before the Court is Defendants 1 Motion for Summary Judgment (Doc. 31. The Court heard this Motion on July 23, 2013. After careful consideration of the Motion, the supporting and opposing memoranda, and the arguments of counsel, the Court GRANTS Defendants Motion. FACTUAL BACKGROUND On May 1, 2006, Plaintiff Steven D. Ward refinanced an existing mortgage on real property located at 77-6549 Sea View Circle, Kailua-Kona, Hawaii 96740 with a $584,500.00 loan ( Loan from BNC Mortgage, Inc. 1 Defendants are U.S. Bank National Association, as Trustee for the Structured Asset Investment Loan Trust, 2006-BNC3; American Home Mortgage Servicing, Inc.; and Mortgage Electronic Registration Systems, Inc.
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 2 of 14 PageID #: 723 (Exs. A & B. The Loan was evidenced by an Adjustable Rate Note (Ex. A. and secured by a Mortgage (Ex. B.. The Mortgage states that Defendant Mortgage Electronic Registration Systems ( MERS is the mortgagee and is acting solely as a nominee for Lender and Lender s successors and assigns. (Id. at 2 (C. The Mortgage further states that MERS (as nominee for Lender and lender s successors and assigns has the... right foreclose and sell the Property. (Id. at 3. Pursuant to this authority, MERS assigned the Mortgage to Defendant U.S. Bank, and the Assignment was recorded at the State of Hawaii Bureau of Conveyances on April 9, 2009. (Ex. C. Ward defaulted on the Loan, and the Notice of Mortgagee s Intention to Foreclose Under Power of Sale ( Foreclosure Notice was served on Ward and physically posted on the property by Civil Process Server Robert Estacion. (Ellis Decl n 6; Ex. F at 2, 10, Exs. G & H; Estacion Decl n 6. The foreclosure sale was scheduled for July 10, 2009. (Ex. H. At the time of the scheduled foreclosure sale, the sale was postponed until September 23, 2010. (Ex. F at 3 3(d. The postponement was publicly announced by crying out the postponement date at the time and place of the scheduled auction. (Id. 2
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 3 of 14 PageID #: 724 At the time of the foreclosure sale on September 23, 2010, the Loan was in default, with $554,044.04 outstanding in principal and interest and $7,627.70 in fees and costs. (Ellis Decl n 6. At the sale, the property was sold to U.S. Bank for $252,000.00, which was the highest bid. (Id. On November 7, 2011, Ward filed this lawsuit, alleging the following claims: (1 quiet title, wrongful foreclosure, and unfair and deceptive acts and practices (Count One; and (2 injunctive relief (Count Two. (Complaint at 13-14. Defendants removed this action to federal court on December 13, 2011 and now seek summary judgment on all claims in the Complaint. STANDARD OF REVIEW A motion for summary judgment may not be granted unless the court determines that there is no genuine issue of material fact, and that the undisputed facts warrant judgment for the moving party as a matter of law. See Fed. R. Civ. P. 56(c. In assessing whether a genuine issue of material fact exists, courts must resolve all ambiguities and draw all factual inferences in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986; see also Cline v. Indus. Maint. Eng g & Contracting Co., 200 F.3d 1223, 1228 (9th Cir. 2000. 3
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 4 of 14 PageID #: 725 In deciding a motion for summary judgment, the court s function is not to try issues of fact, but rather, it is only to determine whether there are issues to be tried. Anderson, 477 U.S. at 249. If there is any evidence in the record from which a reasonable inference could be drawn in favor of the non-moving party on a material issue of fact, summary judgment is improper. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass n, 809 F.2d 626, 631 (9th Cir. 1987. DISCUSSION I. Ward s Challenges to the Assignment Ward argues that the Assignment is void for numerous reasons. For example, he contends that the Assignment violated federal bankruptcy law, the Trustee had no authority to accept the Assignment, and the Assignment was fraudulently created by the now closed robosigning factory DocX. (Opp. at 13-24. He further argues that, because the Assignment is a legal nullity, [it] render[s] the subsequent alleged nonjudicial foreclosure similarly void. (Id. at 15, 23. Defendants assert that Ward has no standing to challenge the Assignment at all. (Motion at 7. Numerous cases in this Court have presented this precise issue i.e., whether a borrower who is a non-party to an assignment of mortgage may challenge the assignment as void. In dealing with this issue, the judges of this 4
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 5 of 14 PageID #: 726 Court have consistently held that a borrower lacks standing to challenge an assignment that he was not a party to and, therefore, may not dispute the validity of the assignment. See, e.g., Velasco v. Sec. Nat l Mortgage Co., 823 F. Supp. 2d 1061, 1067 (D. Haw. 2011. The facts of Velasco are similar to this case. The plaintiffs had executed a note secured by a mortgage, which stated that MERS is the mortgagee acting solely as nominee for Lender and Lender s successors and assigns. 823 F. Supp. 2d at 1063-64. MERS later executed an assignment, which transferred all of the right, title and interest in the mortgage to another lender. Id. at 1064. After being served with a foreclosure notice, the plaintiffs filed a lawsuit, asserting that the assignment was invalid. Id. Judge David Alan Ezra concluded that the plaintiffs were non-parties to the assignment and could not challenge its validity: As a preliminary matter, the Court notes that the allegations in Count I relate to the alleged invalidity of an Assignment to which Plaintiffs are not parties. In Hawaii, [g]enerally third parties do not have enforceable contract rights. The exception to the general rule involves intended third party beneficiaries. A third party beneficiary is one for whose benefit a promise is made in contract but who is not a party to the contract. Absent an enforceable contract right, a party lacks standing to challenge the validity of the contract. Here, Plaintiffs do not allege that they are parties to the Assignment, nor can they demonstrate otherwise. Similarly, Plaintiffs have not alleged, nor can they prove, that they are intended beneficiaries of the Assignment. 5
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 6 of 14 PageID #: 727 Thus, as strangers to the Assignment and without any evidence or reason to believe that they are intended beneficiaries of that contract, Plaintiffs may not dispute the validity of the Assignment. Id. at 1067 (footnote and citations omitted. The judges of this Court have consistently followed Velasco and its reasoning in holding that borrowers who are non-parties to an assignment of mortgage have no standing to challenge the assignment s validity. See Fed. Nat l Mortgage Ass n v. Kamakau, Civ. No. 11-00475 JMS-BMK, at *9-10 (D. Haw. Feb. 23, 2012; Caraang v. Aurora Loan Servs. LLC, Civ. No. 11-00319 LEK- RLP, at *15-16 (D. Haw. Jan. 27, 2012 Martin v. GMAC Mortgage Corp., Civ. No. 11-00118 LEK-BMK, 2011 WL 6002617, at *12 (D. Haw. Nov. 30, 2011; Sakala v. BAC Home Loans Servicing, LP, Civ. No. 10-00578 DAE-LEK, at *13-14 (D. Haw. Oct. 3, 2011. In this case, Ward is not a party to the Assignment. The Assignment was a contract between Mortgage Electronic Registration Systems, Inc... [and] U.S. Bank National Association, as Trustee for the Structured Asset Investment Loan Trust, 2006-BNC3. (Ex. C at 1. Further, Ward has not alleged, nor can he prove, that he was an intended beneficiary of the Assignment. See, e.g., Kamakau, Civ. No. 11-00475 JMS-BMK, at *10; Velasco, 823 F. Supp. 2d at 1067. Rather, Ward was a stranger to [the] assignment and therefore may not dispute the 6
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 7 of 14 PageID #: 728 validity of the assignment. Kamakau, Civ. No. 11-00475 JMS-BMK, at *10; see Velasco, 823 F. Supp. 2d at 1067. Accordingly, the Court rejects Ward s challenges to the validity of the Assignment. II. Count One for Quiet Title, Wrongful Foreclosure, and Unfair and Deceptive Acts and Practices A. Quiet Title In Count One, Ward asserts a claim for quiet title. To the extent that this claim is based on Ward s challenges to the Assignment, summary judgment is granted in Defendants favor as discussed above. With respect to the remainder of the quiet title claim, Defendants argue that summary judgment is warranted because Ward has not satisfied his obligations under the Loan. (Motion at 10-11. This Court has previously noted that [a] basic requirement of an action to quiet title is an allegation that plaintiffs are the rightful owners of the property, i.e., that they have satisfied their obligations under the Deed of Trust. Scilla v. Deutsche Bank Trust Co. Ams., 2012 WL 1082566, Civ. No. 11-00061 BMK, at *3 (D. Haw. March 28, 2012. Further, a mortgagor cannot quiet his title against the mortgage without paying the debt secured. Id. Where plaintiffs concede they have not paid the debt secured by a mortgage, they cannot sustain an action to quiet title. Id. 7
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 8 of 14 PageID #: 729 Ward presents no argument as to his quiet title claim. According to the Vice President of Homeward Residential, Inc., formerly known as Defendant American Home Mortgage Servicing, Inc., Ward s Loan was in default at the time of the foreclosure sale in September 2010. (Ellis Decl n 1, 6. At that time, $554,044.04 [was] outstanding in principal and interest and $7,627.70 in fees in costs. (Id. 6. Ward does not dispute that the Loan was in default. Because a mortgagor cannot quiet his title against the mortgage without paying the debt secured, the Court grants summary judgment in Defendants favor on Ward s quiet title claim. See Scilla, 2012 WL 1082566, at *3. B. Wrongful Foreclosure Ward also asserts a claim for wrongful foreclosure in Count One. To the extent that this claim is based on Ward s challenges to the Assignment, summary judgment is granted in Defendants favor as discussed above. Ward also contends that the foreclosure was procedurally defective because Defendants failed to comply with the requirements of the governing statutes and contractual provisions. (Opp. at 24. Specifically, Ward argues that the notice requirements in Haw. Rev. Stat. 667-5 were not satisfied and that the postponement of the foreclosure was improper. 8
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 9 of 14 PageID #: 730 i. Notice Requirements in Haw. Rev. Stat. 667-5 At the time of the foreclosure, Haw. Rev. Stat. 667-5 required the attorney for the foreclosing mortgagee to (1 publish notice of intent to foreclose once in each of three successive weeks in a newspaper with general circulation in the county where the property is located, with the last publication coming not less than fourteen days before the sale, (2 give notice as prescribed in the mortgage, (3 file a copy of the foreclosure notice with the State of Hawaii Department of Taxation, and (4 post a copy of the foreclosure notice on the property not less than twenty-one days before the sale. Each of the foregoing requirements in Haw. Rev. Stat. 667-5 was satisfied. The Foreclosure Notice was published in The Honolulu Advertiser on June 3, 10, and 17, 2009, more than fourteen days before the foreclosure sale. (Ex. F at 3 3(c, 12. A copy of the Notice was mailed or personally served on Ward, which was required by the Mortgage. 2 (Id. at 2 3(a, 10. Further, a copy of the Notice was filed at the State Department of Taxation. (Ex. F at 10. Lastly, the Foreclosure Notice was physically posted on the property on May 28, 2009, 2 The Mortgage required that [a]ny notice to Borrower... shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower s notice address if sent by another means. (Ex. B at 10 15. 9
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 10 of 14 PageID #: 731 more than twenty-one days before the foreclosure sale. (Id. at 11; Estacion Decl n 6; Exs. G & H. Ward challenges the truth of Civil Process Server Robert Estacion s declaration, in which Estacion states that he physically posted the Foreclosure Notice on the premises located at 77-6549 Sea View Circle, Kailua-Kona, Hawai`i 96740 on May 28, 2009. (Estacion 6. Ward says the declaration is untrue because no posting was ever conducted on the property. (Opp. at 26. The only evidence Ward provides on this issue is his own declaration, wherein he states: I personally contacted Robert Estacion, and he denied ever having posted the notice. (Ward Decl n 34. Ward s self-serving declaration is unsupported by corroborating evidence and is undermined by the credible evidence Defendants present: (1 the Mortgagee s Affidavit of Foreclosure Under Power of Sale, wherein Robert Estacion certifi[ed] that a copy of the attached Notice of Mortgagee s Intention to Foreclose Under Power of Sale was duly posted on the front door of the premises on May 28, 2009 (Exs. F at 11; G & H; and (2 Estacion s sworn declaration that he physically posted the Foreclosure Notice on the premises located at 77-6549 Sea View Circle, Kailua-Kona, Hawai`i 96740 on May 28, 2009 (Estacion Decl n 6. Consequently, the Court rejects Ward s self-serving declaration as evidence 10
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 11 of 14 PageID #: 732 regarding the posting of the Foreclosure Notice on the property. Bolla v. Univ. of Hawaii, Civ. No. 09-00165 SOM-LEK, 2010 WL 5388008, at *11 (D. Haw. Dec. 16, 2010 ( This court may disregard sham affidavits and declarations when they contradict... sworn testimony. ; Kaulia v. County of Maui, Dep t of Pub. Works & Waste Mgt., 504 F. Supp. 2d 969, 983 n.18 (D. Haw. 2007 ( His declaration, at best, is conclusory and without detail. The court finds that Plaintiff s self-serving statements contained in his declaration are a sham and do not defeat... sworn deposition testimony.. Thus, the Court concludes that Defendants satisfied the procedural requirements in Haw. Rev. Stat. 667-5. ii. Postponement of the Foreclosure Sale Ward next argues that the foreclosure did not take place at the location, date, and time of the written notice, in violation of Section 667-5 of the Hawaii Revised Statutes. (Opp. at 25. He also argues that oral notice of the postponement was insufficient. (Id. at 26. At the time of the foreclosure, Haw. Rev. Stat. 667-5 allowed for scheduled nonjudicial foreclosure sales to be postponed from time to time by public announcement made by the mortgagee or by some person acting on the mortgagee s behalf. See Lima v. Deutsche Bank Nat l Trust Co., Civ. Nos. 11
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 12 of 14 PageID #: 733 12-0509 SOM-RLP, 12-00514 SOM-RLP, 2013 WL 1856255, at *7 (D. Haw. May 6, 2013. As explicitly authorized by this statute, the foreclosure sale was postponed by public announcement by crying out the postponement date at the time and place of the scheduled auction. (Ex. F 3(d. Contrary to Ward s position that he should have received written notice of the postponement, [n]o statute, contract provision, or case authority equates announcement with publication, and therefore crying out the postponement information was sufficient under Haw. Rev. Stat. 667-5. See Lima, 2013 WL 1856255, at *7. C. Unfair and Deceptive Acts and Practices ( UDAP In Count One of the Complaint, Ward also alleges that the acts discussed above amount to unfair and deceptive acts and practices against a consumer in violation of Chapter 480 of the Hawaii Revised Statutes. (Complaint 50. Section 480 2(a of the Haw. Rev. Stat. prohibits unfair or deceptive acts or practices in the conduct of any trade or commerce. A practice is unfair when it offends established public policy and when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers. Tokuhisa v. Cutter Mgt. Co., 223 P.3d 246, 259 (Haw. Ct. App. 2009. A 12
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 13 of 14 PageID #: 734 deceptive practice is a practice having the capacity or tendency to mislead or deceive. Id. at 260. As discussed above, Ward may not challenge the Assignment for lack of standing. Further, Ward defaulted on the Loan, thereby precluding a claim for quiet title. Lastly, Defendants complied with all statutory procedural requirements regarding the foreclosure. Ward provides no evidence showing that any of Defendants acts or practices were immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers or have the capacity or tendency to mislead or deceive. Tokuhisa, 223 P.3d at 259. The Court therefore grants summary judgment in Defendants favor on Ward s UDAP claim. III. Count Two for Injunctive Relief In Count Two of the Complaint, Plaintiff seeks a permanent injunction. (Complaint 51. However, it is well-settled... that a claim for injunctive relief standing alone is not a cause of action. Molina v. OneWest Bank, FSH, 903 F. Supp. 2d 1008, 1022 (D. Haw. 2012 (citation omitted. Further, because the Court grants summary judgment on all other claims in the Complaint, there is no claim for which injunctive relief could be granted. Beazie v. Amerifund Fin., Inc., Civ. No. 09-00562 JMS-KSC, 2011 WL 2457725, at *5 (D. Haw. June 16, 2011 ( It is well-settled... that injunctive relief is only a possible 13
Case 1:11-cv-00760-BMK Document 47 Filed 08/23/13 Page 14 of 14 PageID #: 735 remedy if Plaintiff succeeds on one of his independent causes of action; it is not its own cause of action.. The Court therefore grants summary judgment in Defendants favor on this claim as well. Molina, 903 F. Supp. 2d at 1022. CONCLUSION For the foregoing reasons, the Court GRANTS Defendants Motion for Summary Judgment. The Clerk of Court is DIRECTED to enter judgment in favor of Defendants and to close this case. DATED: Honolulu, Hawaii, August 23, 2013. IT IS SO ORDERED. /s/ Barry M. Kurren United States Magistrate Judge Dated: August 23, 2013 Ward v. U.S. Bank National Association, et al., Civ. No. 11-00760 BMK; ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT. 14