The opinion of the court was delivered by: J. Michael Seabright United States District Judge
ORDER (1) GRANTING IN PART DEFENDANTS
COUNTRYWIDE HOME LOANS, INC. AND BANK OF AMERICA, N.A.'S MOTION
TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT; AND (2) DECLINING SUPPLEMENTAL JURISDICTION OVER
REMAINING STATE LAW CLAIMS
ORDER (1) GRANTING IN PART DEFENDANTS COUNTRYWIDE HOME LOANS, INC. AND BANK OF AMERICA, N.A.'S MOTION TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT; AND (2) DECLINING SUPPLEMENTAL JURISDICTION OVER REMAINING STATE LAW CLAIMS
On March 9, 2011, Plaintiffs Timothy A. and Delores A. Cootey ("Plaintiffs") filed this action alleging claims against Defendants Countrywide Home Loans, Inc. ("Countrywide") and BAC Home Loans Servicing, LP ("BAC") for violations of the Truth in Lending Act ("TILA"), the Real Estate Settlement Procedures Act of 1974 ("RESPA"), the Fair Credit Reporting Act ("FCRA"), the Equal Credit Opportunity Act ("ECOA"), and various state law claims stemming from a mortgage transaction concerning real property located at 64-212 Puu Pulehu Loop, Kamuela, Hawaii 96743 (the "subject property"). Upon a Motion to Dismiss by Defendants, the court dismissed the Complaint with leave to amend, resulting in Plaintiffs filing a First Amended Complaint ("FAC"). The FAC asserts claims against Countrywide, BAC, and Plaintiffs' mortgage broker, Island Mortgage Source ("Island").
Currently before the court is Countrywide and BAC's ("Moving Defendants") Motion to Dismiss the FAC, in which they argue that Plaintiffs have failed to correct the deficiencies of their pleading and the FAC fails to state a cognizable claim. For the reasons set forth below, the court GRANTS the Motion in part as to Plaintiffs' federal claims, and declines jurisdiction over the remaining state law claims.
As alleged in the FAC, in December 2007, Plaintiffs met with Island seeking assistance in refinancing the subject property. FAC ¶¶ 11-12. Plaintiffs were ultimately offered, and accepted, a mortgage loan with Countrywide in the amount of $331,500 with a thirty-year, fixed-interest rate of 6.125%. Id. ¶¶ 13-16.
Closing occurred on January 2, 2008.*fn1 Id. ¶ 17.
The FAC asserts that in offering and consummating this loan transaction, both Countrywide and Island committed various misdeeds. Specifically, Island allegedly never provided Plaintiffs a broker's agreement explaining its costs and fees, id. ¶ 37, and Countrywide allegedly (1) did not properly verify Plaintiffs' income or employment as required by generally accepted underwriting principles; (2) violated its fiduciary duty to Plaintiffs by ignoring that Plaintiffs would be paying more than eight times what they should be paying for housing expenses; and (3) failed to disclose that it intended to securitize and transfer, sell, or assign the note and/or mortgage. Id. ¶¶ 24, 28, 41. The FAC further asserts that both Island and Countrywide (1) overstated Plaintiffs' income on the loan application to qualify them for a loan they would not otherwise qualify for; (2) used a "stated income stated assets [sic]" loan, even though Timothy Cootey was employed; (3) rushed Plaintiffs through signing all the documents and deprived Plaintiffs the opportunity to review the documents and/or ask questions; (4) failed to have a notary present; (5) did not explain the loan terms or that Plaintiffs could compare the loan terms to other loans; (6) charged Plaintiffs excessive broker and lender fees; and (7) failed to provide signed and dated copies of the loan application, the initial and/or final truth in lending statement, the good faith estimate, the final HUD-1 settlement statement, the servicing transfer disclosure, and Gramm-Leach-Bliley disclosures. Id. ¶¶ 19-22, 30-36, 38-39.
The FAC asserts that Plaintiffs "have reason to believe their loan was sold, transferred, or assigned, improperly to undisclosed 3rd parties." Id. ¶ 42. Although not clearly alleged in the FAC, it appears that Plaintiffs believe BOA and/or BAC became a subsequent purchaser, assignee, or transferee of the note and/or mortgage, because the FAC asserts that BOA purchased Countrywide's stock. Id. ¶¶ 74-75.
In late 2008, Timothy Cootey suffered a heart attack, and on October 26, 2009, he advised BOA that he was working only part time. Id. ¶¶ 45-46. Plaintiffs therefore requested a loan modification, for which they were approved. Id. ¶¶ 47, 49. Plaintiffs made their loan payments on time, but in 2010, BAC and/or BOA incorrectly asserted that they had missed payments. Id. ¶¶ 50-59. When Delores Cootey contacted BOA and/or BAC in September 2010 seeking the payment coupon for that month, she was informed that foreclosure proceedings had already commenced. Id. ¶¶ 58-59. Plaintiffs nonetheless continued to make their payments, and received conflicting information from BOA and/or BAC during the various calls Plaintiffs made to straighten out the payment issue. Id. ¶¶ 60-67.
BOA and/or BAC returned Plaintiffs' cashier's checks for their November and December 2010 payments and filed a Notice of Intent to Foreclose on December 17, 2010. Id. ¶ 68. The FAC further asserts that BAC issued the Notice of Intent to Foreclose without establishing that it had the power to foreclose. Id. ¶ 70.
On March 9, 2011, Plaintiffs filed this action. The Complaint mirrored several complaints Plaintiffs' counsel, Robin Horner, has filed in several other actions, and Defendants filed a Motion seeking to dismiss the Complaint on the same grounds that the court had previously dismissed those other complaints. As a result, on June 14, 2011, the court granted the Motion to Dismiss, with leave for Plaintiffs to file their FAC (the "June 14 Order"). Cootey v. Countrywide Home Loans, Inc., 2011 WL 2441707 (D. Haw. June 14, 2011).
On July 12, 2011, Plaintiffs filed their FAC, alleging claims titled (1) Violations of TILA, RESPA, and ECOA (Count I); (2) Fraudulent Misrepresentation (Count II); (3) Breach of Fiduciary Duty (Count III); (4) Unjust Enrichment (Count IV); (5) Mistake (Count V); (6) Unfair and Deceptive Acts or Practices (Count VI); (7) Breach of Contract (Count VII); (8) Negligent and/or Intentional Infliction of Emotional Distress ("NIED" and/or "IIED") (Count VIII); (9) Violation of Gramm-Leach-Bliley Act (Count IX); and (10) Quiet Title (Count X).
On July 26, 2011, Moving Defendants filed their Motion to Dismiss. Plaintiffs filed an Opposition on September 19, 2011, and Defendants filed a Reply on September 26, 2011. A hearing was held on October 11, 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 ...