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Carolyn Rosemary Espina Stanton v. Bank of America

November 30, 2011

CAROLYN ROSEMARY ESPINA STANTON, PLAINTIFF,
v.
BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO COUNTRYWIDE BANK, N.A., ET ) AL., DEFENDANT.



The opinion of the court was delivered by: Leslie E. Kobayashi United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART BANK OF AMERICA, N.A.'S MOTION FOR SUMMARY JUDGMENT AND DENYING FIDELITY ESCROW NATIONAL TITLE & ESCROW OF HAWAII, INC.'S RENEWED MOTION FOR SUMMARY JUDGMENT ON COUNTS 8, 12, & 14 OF PLAINTIFF'S FIRST AMENDED COMPLAINT

On June 15, 2011, Defendant Bank of America, N.A., successor by merger to Countrywide Bank, N.A. ("BOA"), filed its Motion for Summary Judgment ("BOA Motion") and its concise statement of facts in support of the BOA Motion ("BOA CSOF"). Also on June 15, 2011, Defendant Fidelity National Title & Escrow of Hawaii, Inc. ("Fidelity Escrow") filed its Renewed Motion for Summary Judgment on Counts 8, 12, & 14 of Plaintiff's First Amended Complaint ("Fidelity Escrow Motion") and its concise statement of facts in support thereof ("Fidelity Escrow CSOF"). On September 14, 2011, Plaintiff Carolyn Rosemary Espina Stanton ("Plaintiff") filed her: memorandum in opposition to the BOA Motion; concise statement of facts in opposition to the BOA Motion ("Plaintiff's BOA CSOF"); memorandum in opposition to the Fidelity Escrow Motion; and concise statement of facts in opposition to the Fidelity Escrow Motion ("Plaintiff's Fidelity Escrow CSOF"). On September 14, 2011, Fidelity Escrow filed a statement of no position as to the BOA Motion. BOA filed its reply memorandum ("BOA Reply") on September 21, 2011, and Fidelity Escrow filed its reply memorandum ("Fidelity Escrow Reply") on September 20, 2011.

These matters came on for hearing on October 5, 2011. Patricia McHenry, Esq., appeared on behalf of BOA. Jade Ching, Esq., and J. Blaine Rogers, Esq., appeared on behalf of Fidelity Escrow. Colin Yost, Esq., and George Zweibel, Esq., appeared on behalf of Plaintiff. After careful consideration of the motions, supporting and opposing memoranda, and the arguments of counsel, the BOA Motion is HEREBY GRANTED IN PART AND DENIED IN PART, and the Fidelity Escrow Motion is HEREBY DENIED for the reasons set forth below.

BACKGROUND

Plaintiff filed this action on August 27, 2009. Defendant Loan Network LLC ("Loan Network") failed to respond to the Complaint, and Plaintiff obtained an entry of default on October 1, 2009. On April 12, 2010, pursuant to a stipulation by the parties, [dkt. no. 25,] Plaintiff filed her First Amended Complaint [dkt. no. 26].

Some of the basic facts of this case are set forth in a dispositive order filed before the case was reassigned to this Court.

I. The Transaction

Plaintiff alleges that she purchased the

property located at 5404 Poola Street, Honolulu, Hawai`i 96821 (the "Property") in 2003. ("[First Amended] Compl." ¶ 18, Doc. # 26.) In late 2006, Plaintiff states that she discussed refinancing the Property with the mortgage broker for the transaction, Defendant Loan Network LLC ("Loan Network") in order to "obtain cash for house upgrades and improvements." (Id. ¶¶ 18-19.) The lender for the transaction was Defendant Bank of America, N.A., successor by merger to Countrywide Bank, N.A. ("Countrywide"). (Id. ¶¶ 8, 24-25.) Pursuant to written instructions from the parties, and specifically the instructions between Plaintiff and Defendant Fidelity National Title & Escrow of Hawaii, Inc. ("Fidelity Escrow" or "Defendant"), Fidelity Escrow served as the escrow depository for the refinancing loan transaction. (Id. ¶ 29; Doc. # 32, Declaration of Dot Yoza, "Yoza Decl." ¶ 3 & Ex. D.) The escrow instructions signed and accepted by Plaintiff (the "Escrow Instructions") provide, inter alia, that:

[Fidelity Escrow] serves ONLY as an Escrow Holder in connection with these instructions and cannot give legal advice to any party hereto.

Escrow Holder is not to be accountable or liable for the sufficiency or correctness as to form, manner of execution, or validity of any instrument deposited in this escrow, nor as to the identity, authority or rights of any person executing the same. Escrow Holder's duties hereunder shall be limited to the proper handling of such money and the proper safekeeping of such instruments, or other documents received by Escrow Holder, and for the disposition of same in accordance with the written instructions accepted by Escrow Holder. (Yoza Decl., Ex. D ¶ 19.)

As alleged by Plaintiff, the principal amount of the first loan was $1,500,000.00. ([First Amended] Compl. ¶ 37.) The first loan is evidenced by a mortgage dated February 1, 2007 and recorded February 12, 2007, in the Office of the Assistant Registrar of the Land Court of the State of Hawai`i ("Land Court") as Document No. 3558893 (the "First Mortgage"). (Id.; Doc. # 32, Declaration of Moritz "Moritz Decl.," Ex. B.) The principal amount of the second loan was $215,000.00, and the second loan is evidenced by a mortgage dated February 1, 2007 and recorded February 12, 2007, in the Land Court as Document No. 3558894 (the "Second Mortgage") (collectively, the First Mortgage and Second are hereinafter the "Loan"). ([First Amended] Compl. ¶ 49; Moritz Decl., Ex. C.) Plaintiff states that she signed the relevant Loan documents at Fidelity Escrow's offices and did not read them. ([First Amended] Compl. ¶¶ 31, 32, 34, 46.) Plaintiff refinanced her Property with the two loans and obtained over $330,000 in cash. (Id., Exs. E, F.)

Stanton v. Bank of Am., N.A., Cv. No. 09-00404 DAE-LEK, 2010 WL 4176375, at *1 (D. Hawai`i Oct. 19, 2010).*fn1

Plaintiff alleges that, before she signed the Loan Documents, Loan Network made various representations to her about what the terms of the loans would be.

*Although Plaintiff did not qualify for the single, fixed-rate loan that she wanted, she would still qualify for "excellent rates" and would have a combined mortgage payment of "well under $8,500" per month. [First Amended Complaint at ¶¶ 20-22; Pltf.'s BOA CSOF, Decl. of Carolyn Rosemary Espina Stanton ("Stanton BOA Decl.") at ¶ 9.]

*The loans would have no more than a one-year prepayment penalty. [Stanton BOA Decl. at ¶ 10.]

*According to two Good Faith Estimates dated January 2, 2007 that Loan Network provided from Countrywide ("1/2/07 Good Faith Estimates"): the first loan, for $1,505,000, would be a thirty-year loan at 6.500% per annum, with a monthly principal and interest payment of $4,840.67; and the second loan, for $215,000, would be a fifteen-year loan at 6.000% per annum, with a monthly principal and interest payment of $1,289.03.*fn2 [Id. at ¶¶ 11, 13.]

Plaintiff states that she relied upon these representations in deciding to obtain the two loans, and she did not receive any communications about changes to the terms of the loans between her receipt of the 1/2/07 Good Faith Estimates and the closing. [Id. at ¶¶ 15, 17.] She states that, on the closing date, she was not given copies to keep of any of the documents that she signed. [Id. at ¶¶ 22-23.] Plaintiff did not discover the true terms of the loans until sometime after she received her copies of the documents on or about February 12 or 13, 2007. [Id. at ¶¶ 26-27.] The true loan terms include:

*The interest on the first loan was initially 8.500% per annum and "was to be adjusted each month equal to the applicable 12-month U.S. Treasury Securities rate (the 'index') plus

3.575% (the 'margin'), up to a maximum of 9.950%." [First Amended Complaint at ¶ 37; Stanton BOA Decl. at ¶ 28.]

*The monthly payments for the first year would be $5,358.65 based on a rate of 1.750%, and would be adjusted each year thereafter. A payment cap, however, limited the amount that the resulting monthly payments could exceed the prior year's payments. This would result in negative amortization up to 115% of the original principal amount, at which time the monthly payments could change more frequently and would not be subject to the cap. [First Amended Complaint at ¶¶ 38-39; Stanton BOA Decl. at ¶ 29.]

*Countrywide estimated that the monthly payments would increase to $13,612.59 in less than three-and-a-half years. [Pltf.'s BOA CSOF, Decl. of Colin A. Yost ("Yost BOA Decl."), Exh. 7 (Truth in Lending Disclosure Statement, dated February 1, 2007, stating that the first loan had 319 payments of $13,612.59 and a final payment of $13,608.96).]

*The first loan had a three-year prepayment penalty. [Yost BOA Decl., Exh. 8 (Prepayment Penalty Addendum for first loan).]

*The second loan was a home equity line of credit of up to $215,000 that Plaintiff could draw from for five years, with a possible five-year extension. The rate was initially

10.625% per annum, but was "to be adjusted each month to equal the applicable highest prime rate published in The Wall Street Journal (the 'index') plus 2.375% (the 'margin'), up to a maximum of 18.000% per annum." [First Amended Complaint at ¶ 49; Stanton BOA Decl. at ¶ 28.]

*At the 10.625% rate, the monthly, interest-only payments during the draw period would be $1,903.65. [First Amended Complaint at ¶ 52.]

*After the draw period, there was "a 15-year repayment period, during which minimum payments equal to 1/180th of the outstanding principal balance plus accrued finance charges would be required." [Id. at ¶ 51.]

Plaintiff states that, if she "had been provided with the loan documents and/or an estimated settlement statement on February 1, 2007, [she] would have cancelled the transaction on or before February 5, 2007." [Stanton BOA Decl. at ¶ 35.] Plaintiff also states that "[o]ver a period of many months," she and others acting on her behalf, including a California attorney, attempted to communicate with Countrywide about the "changed terms" of the loans, but Countrywide would not talk to them. [Id. at ¶ 39.]

The First Amended Complaint acknowledges that, on February 1, 2007, Plaintiff was instructed to sign a "Notice of Right to Cancel" in connection with both loans. [First Amended Complaint at ¶¶ 44, 54.] She also alleges that, as to the first loan, she was instructed to sign two different "Truth in Lending Disclosure Statements" and each had "a different 'annual percentage rate,' 'finance charge,' 'amount financed,' 'total of payments,' payment schedule, and other credit terms." [Id. at ¶

45.] Plaintiff states that, on or after February 12, 2007, she received a Notice of Right to Cancel for each loan "stating that the date of the transaction was February 1, 2007 and that [she] had until midnight on February 5, 2007 to cancel each loan."*fn3

[Stanton BOA Decl. at ¶ 36, Exh. 4 (Notice of Right to Cancel for the first loan), Exh. 5 (Notice of Right to Cancel for the second loan).]

Plaintiff alleges that she exercised her right to rescind both loans, but BOA did not allow rescission. [First Amended Complaint at ¶¶ 88, 94, 103, 109.] The instant action followed.

The First Amended Complaint alleges the following claims: a Truth in Lending Act ("TILA") claim seeking rescission of the first loan and recoupment (Count I); a TILA damages claim against BOA based on the first loan (Count II); a TILA claim seeking rescission of the second loan and recoupment (Count III); a TILA damages claim against BOA based on the second loan (Count IV); a claim for violations of the Credit Repair Organizations Act against Loan Network (Count V); an unfair or deceptive acts or practices ("UDAP") claim against BOA, alleging violations of Haw. Rev. Stat. §§ 480-2(a) and/or 481A-3 (Count VI); a UDAP claim against Loan Network (Count VII); a UDAP claim against Fidelity Escrow (Count VIII); a fraud claim against BOA (Count IX); a fraud claim against Loan Network (Count X); a civil conspiracy claim alleging that Countrywide, Loan Network, and Fidelity Escrow conspired to defraud Plaintiff (Count XI); an aiding and abetting claim against Countrywide, Loan Network, and Fidelity Escrow (Count XII); a negligence claim against Fidelity Escrow (Count XIII); and a breach of fiduciary duty claim against Fidelity Escrow pursuant to Haw. Rev. Stat. § 449-16 (Count XIV).

The First Amended Complaint seeks: injunctive and ancillary relief during the pendency of this action; rescission and recoupment of both loans; a declaratory judgment that any contract or agreement for the two loans is void and unenforceable; actual, compensatory, and statutory damages; punitive damages; reasonable attorneys' fees and costs; and any other appropriate relief.

Fidelity Escrow filed a motion for summary judgment ("Fidelity Escrow 2010 Motion") on May 5, 2010. [Dkt. no. 31.]

On July 30, 2010, United States District Judge David Alan Ezra issued his Order Granting in Part With and Without Prejudice and Denying in Part Defendant Fidelity National Title & Escrow of Hawaii's Motion for Summary Judgment. [Dkt. no. 42.] Fidelity Escrow filed a motion for reconsideration on August 13, 2010, and BOA filed a joinder on August 20, 2010. [Dkt. nos. 46, 48.] On October 18, 2010, Judge Ezra issued an amended order denying the motion for reconsideration,*fn4 2010 WL 4115403, but the order also stated that he would issue an amended summary judgment order addressing the issues raised on reconsideration. The 10/19/10 Summary Judgment Order followed.

In the 10/19/10 Summary Judgment Order, Judge Ezra: granted summary judgment to Fidelity Escrow as to Count XIII, negligence; granted summary judgment without prejudice to Fidelity Escrow as to Count XI, civil conspiracy;*fn5 denied Fidelity Escrow summary judgment as to Count XII, aiding and abetting; denied Fidelity Escrow summary judgment on Count VIII, UDAP, as to the portion of the claim based on failure to timely provide the Loan Documents;*fn6 granted summary judgment to Fidelity Escrow as to all other allegations in Count VIII; denied Fidelity Escrow summary judgment on Count XIV, breach of fiduciary duty, as to the portion of the claim based on failure to timely provide the Loan Documents; and granted summary judgment to Fidelity Escrow as to all other allegations in Count XIV. Stanton, 2010 WL 4176375, at *19.

I. BOA's Motion

In the BOA Motion, BOA first asserts that, contrary to Plaintiff's claims, Loan Network prepared Good Faith Estimates for two loans for Plaintiff in December 2006. The first was for a $1,505,000 loan with a thirty-year term and an adjustable interest rate, starting at 7.5%. [BOA CSOF, Declaration of Ana Alvarado ("Alvarado Decl."), Exh. C.] The second was a $215,000 interest-only loan, with a thirty-year term at a fixed rate of 9.5%. [Id., Exh. D.] After reviewing Plaintiff's loan application, however, Countrywide issued a counter offer of 8.5% and 10.625% for the two loans, [Mem. in Supp. of BOA Motion at 2,] which Plaintiff accepted [Alvarado Decl., Exh. E (email dated 1/8/07 from Robin Lefcourt regarding "stanton acceptance")].

Loan Network issued new Good Faith Estimates with the new interest rates on January 31, 2007, and Plaintiff signed them on February 1, 2007. [Id., Exhs. F, G.] BOA emphasizes that the 1/2/007 Good Faith Estimates with the rates Plaintiff allegedly relied upon are not signed. [Mem. in Supp. of BOA Motion at 3 n.1.]

BOA does not contest Plaintiff's description of the terms of loans she ultimately entered into. [Id. at 3; Alvarado Decl., Exh. H (Monthly Adjustable Rate PayOption Note), Exh. I (Home Equity Credit Line Agr. & Disclosure Stat.), Exh. J (Amortization Schedule for first loan), Exh. K (document BOA describes as the TILA disclosure for the first loan), Exh. L (Important Terms of Our Home Equity Line of Credit).]

BOA emphasizes that the 2/5/07 Cancellation Notices, which Plaintiff signed, stated, inter alia:

You have a legal right under federal law to cancel this transaction, without cost, within THREE BUSINESS DAYS from whichever of the following events occurs last:

(1) The date of the transaction, which is

2/1/2007 ; or

(2) The date you received your Truth in Lending disclosures; or

(3) the date you received this notice of your right to cancel.

If you cancel by mail or telegram, you must send the notice no later than MIDNIGHT of 2/5/2007 (or MIDNIGHT of the THIRD BUSINESS DAY following the latest of the three events listed above.) [Alvarado Decl., Exhs. M, N (emphases in original).] BOA also emphasizes that Plaintiff acknowledges that the closing instructions Countrywide provided to Fidelity Escrow provided that Fidelity Escrow was to give Plaintiff a copy of the Loan Documents at closing. [Mem. in Supp. of BOA Motion at 4; Pltf.'s CSOF in Opp. to Fidelity Escrow 2010 Motion, at ¶ 12, Decl. of Colin A. Yost, Exh. 7 (closing instructions).]

BOA argues that Counts I through IV, the TILA claims, fail because TILA and Regulation Z expressly contemplate that lenders may deliver notices of the right to cancel and other material disclosures after the consummation of the loan. BOA urges the Court to apply Palmer v. Champion Mortgage, which held that "a properly completed notice of right to cancel, even if received after the date of the transaction, 'complie[s] with the applicable TILA requirements.'" [Mem. in Supp. of BOA Motion at 6-7 (citing 465 F.3d 24, 31 (1st Cir. 2006)).] BOA acknowledges that the 10/19/10 Summary Judgment Order recognized that the Ninth Circuit has not squarely considered the issue whether a notice like the ones Plaintiff received would be considered a technical TILA violation. BOA distinguishes Semar v. Platte Calley Federal Savings & Loan Ass'n, 791 F.2d 699 (9th Cir. 1986), which held that the failure to fill in the blank for the expiration date on a rescission form was a violation of TILA. In the present case, the date was filed in, making the case more like Palmer than Semar. [Id. at 9-10.]

BOA also emphasizes that 15 U.S.C. § 1635(h), enacted in 1995, prohibits rescission claims based on the form of the notice of right to cancel where the lender used the appropriate form, such as the form published by the Board of Governors of the Federal Reserve System ("the Board"). BOA argues that, in light of such amendments to TILA, "'Congress has now leaned against a penalty approach and, perhaps, weakened the present force of the older case law,' including Semar." [Mem. in Supp. of BOA Motion at 10 (quoting Melfi v. WMC Mortg. Corp., 568 F.3d 309, 313 (1st Cir. 2009)).] BOA argues that several other courts have rejected borrowers' claims of TILA violations based on the date they received a properly completed notice of right to cancel. [Id. at 11-12 (citing Ware v. Indymac Bank, FSB, 534 F. Supp. 2d 835 (N.D. Ill. 2008); Colanzi v. Savings First Mortgage, LLC, No. 07-3632, 2008 WL 161170 (E.D. Pa. Jan 16, 2008); Mourer v. Equicredit Corp., 309 B.R. 502 (Bankr. W.D. Mich. 2004); Chabot v. Wash. Mut. Bank, 369 B.R. 1, 15 (Bankr. D. Mont. 2007)).] BOA next argues that Count VI (UDAP) and Count IX

(fraud) fail because Plaintiff cannot support her factual allegations, and she cannot show causation or damages. BOA categorizes Plaintiff's UDAP allegations as relating to either Countrywide's alleged attempts to deprive Plaintiff of her right to cancel, or alleged misrepresentations in early Good Faith Estimates regarding terms and costs of the loans. [Id. at 15.] BOA argues that there is no evidence to support the first category of allegations because Countrywide's closing instructions expressly required the closing agent to provide Plaintiff with the Loan Documents, including the notices of right to cancel. [Id. at 15-16.] As to the second category, BOA argues that Plaintiff cannot establish that Countrywide's acts caused her to enter into loans with unanticipated terms, because the terms were disclosed to her before she executed the loans. Plaintiff could have reviewed the documents before she signed them, but she chose not to do so. [Id. at 16-17.] Further, the alleged UDAPs cannot form the basis of a fraud claim because the alleged representations about the more favorable terms were "'mere prognostication or prophecy as to happening of future events and did not concern an existing material fact and it was utterly unreasonable for [Plaintiff] to rely upon such representations.'" [Id. at 19 (quoting Stahl v. Balsara, 587 P.2d 1210, 1214 (Haw. 1978)).]

Finally, BOA argues that Count XII (aiding and abetting) and Count XI (conspiracy) fail because Plaintiff cannot produce evidence that Countrywide knew of, substantially assisted with, or agreed to participate in, any of the other defendants' tortious acts. BOA also argues that Plaintiff cannot prove an independent breach of duty by Countrywide. [Id. at 20-23.] Plaintiff cannot show that Countrywide and Loan Network united to accomplish a fraudulent scheme. The correspondence between those two entities occurred in the normal course of business and does not show any illegal objective. [Id. at 23 (citing 10/19/10 Summary Judgment Order at 50-51).]

A. Plaintiff's Opposition

In addition to the factual allegations discussed supra, Plaintiff emphasizes the following:

In late 2006, she first approached Loan Network mortgage broker Sean Ramos about refinancing her home mortgage. After inquiring with various lenders, including Countrywide, he informed her that he would not be able to broker a deal for her because she did not meet lender requirements. A short time later, Plaintiff met Robin Lefcourt, who stated that she had recently left a position at Countrywide's Honolulu office to join Loan Network. Ms. Lefcourt represented that she could use her connections at Countrywide to obtain a deal for Plaintiff. Plaintiff provided Ms. Lefcourt the same financial information she gave Mr. Ramos. [Mem. in Opp. to BOA Motion at 3-4 (citing Stanton Decl. at ¶¶ 3-7).]

During the loan closing held at Fidelity Escrow's office, a Fidelity Escrow employee, Dot Yoza, only gave Plaintiff the signature pages of the Loan Documents to sign. Plaintiff did not have time to review the documents, nor did she receive any explanation about the documents. Plaintiff was not suspicious of this process because she had no reason to believe that the terms of the loans would be significantly different than what she had been promised by Countrywide and Loan Network. [Id. at 5 (citing Stanton Decl. at ¶¶ 18-21).]

As to the TILA claims, Plaintiff acknowledges that the notice of right to cancel can be delivered after loan consummation, but Plaintiff emphasizes that the rescission period does not begin to run until the notice is given, and she asserts that a notice which does not comply with § 226.15(b) or § 226.23(b) cannot trigger the rescission period. [Id. at 14-15.] Plaintiff argues that TILA required Countrywide to deliver a corrected notice with the proper expiration date. [Id. at 15 (citing Semar v. Platte Valley Fed. S & L Assoc., 791 F.2d 699, 704 (9th Cir. 1986); Jackson v. Grant, 890 F.2d 118 (9th Cir. 1989); Williams v. Rickard, 2010 U.S. Dist. LEXIS 65391 (D. Haw. June 30, 2010); Nichols v. Deutsche Bank Nat'l Trust Co., 2007 U.S. Dist. LEXIS 86223 (S.D. Cal. Nov. 21, 2007); Smith v. Wells Fargo Credit Corp., 713 F. Supp. 354 (D. Ariz. 1989)).] Plaintiff urges the Court to reject Palmer and Melfi because they contradict Ninth Circuit law and present an anomalous standard. [Id. at 16.] Further, other circuits have adopted strict standards similar to Semar, a case that the Ninth Circuit has never disturbed. [Id. at 18 (citing Hamm v. Ameriquest Mortgage Co., 506 F.3d 525 (7th Cir. 2007); Handy v. Anchor Mortgage Corp., 464 F.3d 760, 764 (7th Cir. 2006) (applying strict reading of TILA requirements in a rescission case); Mars v. Spartanburg Chrysler Plymouth, Inc., 713 F.2d 65 (4th Cir. 1983); Williamson v. Lafferty, 698 F.2d 767, 768-69 (5th Cir. 1983)).] Plaintiff argues that this district court and others have ruled that undated or improperly dated rescission notices violate TILA. [Id. at 19-20 (some citations omitted) (citing Riopta v. Amresco Residential Mort. Corp., 101 F. Supp. 2d 1326, 1330 (D. Haw. 1999) (an improperly dated rescission notice violated TILA and imposed liability on the creditor); Williams v. Rickard, supra ("Even a purely technical violation of TILA's disclosure provisions, including the failure to provide a borrower with a copy of the notice that includes the correct date the rescission period expires, extends the duration of the right to rescind for three years."); Smith v. Wells Fargo Cred. Corp., supra, 713 F. Supp. at 356 (the correct date of rescission must be stated)).]

Plaintiff also points out that Judge Ezra considered this issue in the 10/19/10 Summary Judgment Order and "criticize[d] Palmer and Melfi and all but decide[d] this issue in favor of Plaintiff[.]" [Id. at 20-22 (quoting 10/19/10 Summary Judgment Order at 14-16).] Judge Ezra found that there was a genuine issue of material fact as to whether Plaintiff would have rescinded the loan if she had been provided the Loan Documents at closing, based in part on the inaccurate date on the notices of right to rescind.

As to the UDAP claim, Plaintiff argues that the pervasive, material representations in the subject transaction are sufficient to establish that Countrywide engaged in unfair and deceptive acts. [Id. at 26-27.] Plaintiff emphasizes that the Hawai`i Supreme Court has applied § 480-2 to "bait and switch" mortgage transactions. [Id. at 27-28 (citing Hawaii Community Fed. Credit Union v. Keka, 94 Haw. 213, 228-29, 11 P.3d 1, 16-17 (2000)).] Plaintiff argues that Judge Ezra's UDAP ruling as to Fidelity Escrow do not apply to Countrywide because Countrywide's conduct is "qualitatively and quantitatively different". [Id. at 29.] BOA also cannot hide behind the general contract rule that a party is bound by a contract she signed because fraud is an exception to that rule and because contract rules do not apply in Chapter 480 actions. [Id. at 30 (citing Williams v. Rickard, 2011 U.S. Dist. LEXIS 56702, 23-24

(D. Haw. May 25, 2011)).] As to BOA's argument that Plaintiff cannot establish damages, Plaintiff emphasizes that de minimis damages are sufficient for a § 480-13 claim. [Id. at 31 (citing Wiginton v. Pacific Credit Corp., 2 Haw. App. 435, 634 P.2d 111 (1981); Zanakis-Pico v. Cutter Dodge, Inc., 98 Haw. 309, 47 P.3d 1222 (2002)).] Further, Plaintiff asserts that she has suffered various damages, including the amount her loan payments exceeded what she was promised, and the undisclosed fees that she was assessed at closing. She also emphasizes that the absence of injury would not preclude her Haw. Rev. Stat. § 480-12 claim. [Id. at 31-32.]

Plaintiff argues that, for similar reasons, the record supports her fraud claim against BOA. She contends that the issues that BOA raises merely illustrate that there are genuine disputes of material fact regarding this claim. [Id. at 33-34.]

Finally, Plaintiff argues that her conspiracy claim against Countrywide is based on the fraud claims against Countrywide and Loan Network and that the existence of a conspiracy can be inferred from the allegations supporting those claims. Plaintiff argues that the evidence of a conspiracy against those two entities is much stronger than the evidence that Judge Ezra rejected against Fidelity Escrow. [Id. at 35.] Plaintiff argues that the normal business correspondence does not negate ...


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