Editor: David Reiss
Brooklyn Law School

March 16, 2013

Hawaii District Court Dismisses Homeowner Plaintiff Claims Against Defendants For Lack of Factual Support and Legal Authority

By Jeffrey Lederman

In Phillips v BAC Home Loans Servicing, LP, CV 10-00272DAE-LEK, 2010 WL 5146433 [D Haw Dec. 13, 2010], Plaintiff Mark Phillips filed a complaint on May 7, 2010 against Defendants BAC Home Loans Servicing, MERS, and Does 1 – 20 relating to the mortgage loan and foreclosure proceedings surrounding his property in Kihei, Hawaii. On September 8, 2010, Defendants filed a motion to dismiss for failure to state a claim upon which relief can be granted.

The court, pursuant to Local Rule 7.2(d) ruled upon the matter without a hearing and granted Defendants’ motion to dismiss.

The first four counts of Plaintiff’s complaint alleged various Truth in Lending Act (TILA) violations: “1) unfair trade practices involving noncompliance under TILA; 2) failure to obtain signed loan documents in violation of TILA; 3) failure to give a three-day cooling period in violation of TILA; 4) failure to give conspicuous writings in violation of TILA.”

The court ruled that Plaintiff’s claim for rescission, under 15 U.S.C. §1635, was time barred, as more than three years had lapsed since the consummation of the sale of property. Equitable tolling does not apply to rescission claims. The court also found that Plaintiff’s claim for damages and attorney fees, under 15 U.S.C. §1640, was time barred by a one-year statute of limitations; Plaintiff never alleged facts to support an equitable tolling claim.

The court also dismissed Plaintiff’s claim for recoupment of damages, under 15 U.S.C. §1640. The court noted that for Plaintiff’s claim to survive the one-year TILA statute of limitations, the recoupment claim had to be a “defense in an action to collect a debt.” 15 U.S.C §1640(e). Plaintiff not only failed to provide legal authority for claiming that a “nonjudicial foreclosure is an action to collect a debt within the meaning of TILA,” the district courts within the circuit had ruled to the contrary.

Plaintiff’s fifth claim alleged that Defendants were in violation of the Unfair and Deceptive Trade Practices Act, under Haw.Rev. Stat §480-2, §480-13. The court ruled that the plaintiff’s claims were conclusory allegations unsupported by facts and granted Defendants’ motion to dismiss.

Similarly, the court granted Defendants’ motion to dismiss Plaintiff’s sixth claim, for “declaratory judgment regarding fraud,” and eighth claim, for violations of the implied covenant of good faith and fair dealing, as Plaintiff failed to provide factual support or particularity in its claim.

The court also granted Defendants’ motion to dismiss Plaintiff’s seventh claim for injunctive relief, and eleventh claim for punitive damages, as the court reasoned that neither claim could stand alone.

The court dismissed Plaintiff’s ninth claim, for equitable estoppel, because the court was “unclear” as to how the Plaintiff wanted it to “utilize the doctrine of equitable estoppel” relating to Defendants’ allegedly fraudulent paperwork.

Plaintiff’s tenth claim alleged negligent infliction of emotional distress and intentional infliction of emotional distress (NIIED) and intentional infliction of emotional distress (IIED). The court noted that for the NIIED claim, Plaintiff never proffered a physical injury. With regard to the IIED claim, the court stated that Plaintiff failed to present evidence to support any element of an IIED claim. The court granted Defendants’ motion to dismiss these claims.

Lastly, Plaintiff made a series of additional claims, such as violations of the Equal Opportunity Act and the Gramm leach Bliley Act, for failing to provide documentation. Plaintiff did not provide any information detailing what provisions of these laws were violated. Plaintiff also asserted that Defendants could not enforce the mortgage and note provisions because they did not possess the original note, but provided no legal or evidentiary support for these claims.  The court granted Defendants’ motion to dismiss these claims.

The court granted Plaintiff 30 days to amend any claims not specifically time barred.

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