The opinion of the court was delivered by: J. Michael Seabright United States District Judge
ORDER GRANTING DEFENDANT AMERICAN HOME MORTGAGE SERVICING, INC.'S MOTION TO DISMISS COUNTS THREE AND FIVE OF PLAINTIFF'S THIRD AMENDED COMPLAINT, AND GRANTING LEAVE TO AMEND
Before the court is Defendant American Home Mortgage Servicing, Inc.'s
("AHMSI") Motion to Dismiss Third Amended Complaint ("TAC") filed by
Plaintiff Ronald Au ("Plaintiff"), proceeding pro se.*fn1
Doc. No. 89. The Motion is directed only at Counts Three and
Five of the TAC against AHMSI. The court
heard the Motion on March 5, 2012. As the court indicated in open
court, the Motion is GRANTED with leave to amend to file a Fourth
The parties are familiar with the procedural history and factual allegations set forth in the TAC and prior versions of the Complaint, as set forth in the court's previous orders. See, e.g., Au v. Republic State Mortg. Co., 2011 WL 3422780 (D. Haw. Aug. 4, 2011). The court need not repeat those details here, other than to reiterate that the court previously dismissed Counts Three and Five against AHMSI, but granted Plaintiff leave to amend (1) to add a claim under the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq., and (2) to attempt to clarify Counts Three and Five, alleging misrepresentation and violations of Hawaii Revised Statutes ("HRS") Chapter 480. See Doc. No. 81.
At the March 5, 2012 hearing, besides addressing the present Motion by AHMSI, the court also denied Plaintiff's Motion for Partial Summary Judgment as to Count Four, Doc. No. 78 ("Plaintiff's Motion"), which sought to establish as a matter of law that the subject note and mortgage are void for violations of the prior HRS § 454-8. The court denied Plaintiff's Motion because obvious genuine issues of material fact exist as to whether Defendant Republic State Mortgage Company ("Republic"), apparently acting through Defendant Chad Cotton, was registered as a mortgage broker or was exempt under HRS Ch. 454.
Moreover, the record now establishes (based upon recent disclosures) that the current holder of the subject note and mortgage is Wells Fargo Bank, N.A. ("Wells Fargo"), which is not a defendant. The TAC alleges that Defendant Sand Canyon Corporation ("Sand Canyon") is the current holder.*fn2 Thus, even if the record was undisputed that there were violations of the prior HRS § 454-8, it would not be possible to void the note and/or mortgage without the presence of Wells Fargo -- a reason by itself to deny Plaintiff's Motion. That is, Wells Fargo should be added as a required party under Federal Rule of Civil Procedure 19. See generally Dawavendewa v. Salt River Project, 276 F.3d 1150, 1157 (9th Cir. 2002) ("[A] party to a contract is necessary [and] indispensable to litigation seeking to decimate that contract."). Accordingly, the court at the March 5, 2012 hearing granted Plaintiff six weeks leave to file a Fourth Amended Complaint to add Wells Fargo as a Defendant, and to consider what claims can or must be added against Wells Fargo.
The court's previous dismissal without prejudice of Count Three (misrepresentation) and Count Five (HRS Ch. 480) of the Second Amended Complaint ("SAC") against AHMSI was based upon a failure to meet the pleading standards set forth in Ashcroft v. Iqbal, 556 U.S. 662, ___, 129 S. Ct. 1937, 1949 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).*fn3 The TAC added detailed RESPA allegations, but did so in a confusing manner such that Count Three still fails to conform with Iqbal/Twombly. And the TAC added details to Count Five -- where previously there were none -- but it still violates pleading standards because Plaintiff appears to be attempting to allege that every other statutory and common-law violation alleged in the TAC also constitutes a violation of Chapter 480, with no effort made to explain which facts apply to which Defendant.
Upon his request, Plaintiff was given leave to add a claim or claims for violations of RESPA -- the prior version of the Complaint alleged facts against AHMSI (such as failure to provide certain information upon Plaintiff's requests) that might have indicated a good faith basis for alleging RESPA claims. And the TAC indeed alleges specific requests (by date and type) from AHMSI, as well as responses (or lack of responses) to his requests, and contends that AHMSI thereby violated RESPA. TAC ¶¶ 19-20. The RESPA allegations, however, are confusingly placed in the middle of the TAC's claims for negligent and intentional misrepresentation against AHMSI and every other Defendant.
That is, the revised Count Three mixes RESPA claims with misrepresentation claims. It is unclear whether Count Three is intended to assert that violations of RESPA themselves constitute negligent and/or intentional misrepresentation against AHMSI, or that the violations of RESPA are actionable on their own. Moreover, Count Three fails to separate out claims against different Defendants, such that it is unclear which factual allegations apply to which Defendant.
If Plaintiff is attempting to state a statutory claim against AHMSI for violating RESPA (distinct from common law claims for misrepresentation), then he should do so in a separate count that does not also make allegations against other Defendants. Similarly, if he is attempting to state that facts that constitute a RESPA violation also constitute a violation of state law, then the allegations need to be clarified. Such claims should not also be included against other Defendants, unless Plaintiff's theory is that other Defendants also committed the same violations.
And it is still not clear whether Plaintiff is attempting to state a claim for fraud -- one theory as pled appears to be that AHMSI intentionally told Plaintiff that Republic was the owner of the Note/Mortgage when AHMSI knew it was Sand Canyon, and that Plaintiff relied on that falsehood. TAC ¶ 19D. In this regard, however, the court will not guess as to Plaintiff's intentions (and, in any event, ...