The opinion of the court was delivered by: J. Michael Seabright United States District Judge
ORDER GRANTING DEFENDANTS MORTGAGE ELECTRONIC REGISTRATIONS
SYSTEMS, INC.; BANK OF AMERICA, N.A.; AND U.S. BANK, N.A.'SMOTION TO DISMISS PLAINTIFFS' COMPLAINT
ORDER GRANTING DEFENDANTS MORTGAGE ELECTRONIC REGISTRATIONS SYSTEMS, INC.; BANK OF AMERICA, N.A.; AND U.S. BANK, N.A.'S MOTION TO DISMISS PLAINTIFFS' COMPLAINT
On May 31, 2011, Plaintiffs Steven and Tiffany Lindsey ("Plaintiffs") filed a Complaint in the Third Circuit Court of the State of Hawaii against Defendants Meridias Capital, Inc. ("Meridias"), Mortgage Electronic Registration Sytems, Inc. ("MERS"), Bank of America fka Countrywide Home Loans, Inc. ("BANA"); BAC Home Loans Servicing LP ("BAC"); and U.S. Bank National Association as Trustee for the Certificate Holders LXS 2007-15N ("U.S. Bank") (collectively "Defendants") asserting claims titled (1) Violation of the Real Estate Settlement Procedures Act [("RESPA")] 12 U.S.C. § 2605 et seq., and Accounting; (2) Stay of Non-judicial Proceedings; and (3) Quiet Title. On October 26, 2011, MERS, BANA, and U.S. Bank removed the action to this court.
Currently before the court is MERS, BANA, and U.S. Bank's ("Moving
Defendants") Motion to Dismiss, in which they argue that the Complaint
fails to state a claim upon which relief can be granted.*fn1
Based on the following, the court GRANTS the Motion to
As alleged in the Complaint, in April 2007, Plaintiffs entered into a mortgage loan transaction for $425,600 with Meridias secured by real property located at 64-5244 Puu Nani Drive, Kamuela, HI 9643 (the "subject property").
Doc. No. 1-2, Compl. at 5.*fn2 The mortgage lists Meridias as the lender, and states that MERS "is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the mortgagee under this Security Instrument." Doc. No. 11-1, Defs.' Ex. A.*fn3 According to the Complaint, "[t]he mortgage security was granted to MERS, so the note and the mortgage were split from the inception." Doc. No. 1-2, Compl. at 5.
According to the Complaint, the mortgage loan had a "rapidly adjusting rate mortgage," and Plaintiffs began to have difficulty making payments after their tenant moved out and Plaintiffs were unable to find a replacement. Doc. No. 1-2, Compl. at 5-6. Plaintiffs therefore attempted to modify or rework the loan with Countrywide, who at that time purported to be their lender. Id. at 6.
In addition to Countrywide, various other Defendants have allegedly
ownership of the loan, including BANA, BAC, and U.S. Bank.*fn4
Id. at 6. The only assignment of mortgage recorded with
Hawaii's Bureau of Conveyances, however, was a December 8, 2009
assignment from MERS, on behalf of Meridias, to U.S. Bank, whose
address is listed as "C\O Bank of America fka Countrywide Home Loans,
Inc." Id. at Compl. Ex. 2. The Complaint asserts that the recording of
transfers regarding the subject property is incomplete, causing a
cloud upon the title. Id. at Compl. at 6-7.
On December 8, 2009, U.S. Bank recorded a notice of intent to foreclose under power of sale. Id. at 6; see also id. at Compl. Ex. 2. On December 15, 2009, U.S. Bank provided Plaintiffs a "Notice Required by the Fair Debt Collection Practices Act ["FDCPA"], 15 U.S.C. Section 1692, et seq." Id. at Compl. Ex. 1. The December 15, 2009 letter explained, among other things, that
(1) Routh Crabtree Olson ("RCO") "has been retained to initiate foreclosure proceedings" on the subject property, (2) the amount of the debt is $459,455.76,
(3) the FDCPA entitles Plaintiffs to dispute the debt and/or request the name of the original creditor within thirty days of the letter, and (4) if Plaintiffs request such information, then RCO will suspend foreclosure efforts until the information is provided. Id.
A January 7, 2010 letter from Plaintiffs to RCO provides: As required by the [FDCPA], please provide me with the following:
1. You have not provided me with the "ledger of payments". When I made payments I sent them registered mail.
2. I do dispute this debt.
3. I want to know the name of the original creditor and who has legitimate "possession of the original note".
4. You have not provided me with the "original note" with my signature.
On January 18, 2010, RCO responded by, among other things,
(1) providing a copy of the note, mortgage, and payment history of the loan; and
(2) explaining that MERS assigned the loan to U.S. Bank, that U.S. Bank employed BANA to service the obligation, and that BANA retained RCO to initiate foreclosure proceedings. Id. On January 30, 2010, Plaintiffs reiterated the requests in their January 7, 2010 letter, and on February 22, 2010, RCO responded by directing Plaintiffs to RCO's January 18, 2010 letter. Id.
On June 10, 2010, Plaintiffs sent RCO a twelve-page letter titled "Affidavit of Truth and Statement of Facts[;] 'Qualified written request.'" Id. The June 10, 2010 letter asserts that it is a request pursuant to the FDCPA and a qualified written request ("QWR") pursuant to RESPA. The letter then proceeds to demand that RCO (1) investigate and audit Plaintiffs' account, (2) produce copies of "all pertinent information regarding this loan," and (3) answer an exhaustive list of questions. The documents requested and questions seeking information span an array of topics including ensuring compliance with federal laws, accounting and servicing systems used, debits and credits, mortgages and assignments, attorneys' fees, suspense/unapplied accounts, late fees, property inspections, broker price opinion fees, force-placed insurance, and servicing of the mortgage loan. Id.
As alleged in the Complaint, Plaintiffs' January 7, 2010 letter qualifies as a QWR under RESPA and RCO "sent an inadequate response to Plaintiff's requests and refused to produce even a certified copy of the original promissory note to show that his clients had any right to enforce the note or the security that was placed thereon." Id. at Compl. at 8.
On May 31, 2011, Plaintiffs filed this action in the Third Circuit Court of the State of Hawaii, asserting claims against Defendants titled
(1) Violation of the Real Estate Settlement Procedures Act 12 U.S.C. § 2605 et seq., and Accounting; (2) Stay of Non-judicial Proceedings; and (3) Quiet Title. On October 26, 2011, MERS, BANA, and U.S. Bank removed the action to this court.
On November 10, 2011, Moving Defendants filed their Motion to Dismiss. Plaintiffs filed an Opposition on January 23, 2012, and Moving Defendants filed a Reply on January 30, 2012. Pursuant to Local Rule 7.2(d), the ...