The opinion of the court was delivered by: David Alan Ezra United States District Judge
ORDER GRANTING PLAINTIFF'S MOTIONS TO DISMISS DEFENDANTS' COUNTERCLAIMS
On April 23, 2012, the Court heard Plaintiff's Motions to Dismiss Defendants' Counterclaims. Patricia J. McHenry, Esq., appeared at the hearing on behalf of Plaintiff Bank of New York Mellon ("BNY"); Lisa M. Volquardsen, Esq., appeared by telephone on behalf of Defendants Steven J. Sakala, Teresa Ann Collins, Mary Janet Collins, Dana Maria Mitchell, and Douglas B. Hackett, as Trustee of the Honaunau School Road Trust. After reviewing the motions and the supporting and opposing memoranda, the Court GRANTS Plaintiff's Motions to Dismiss. (Docs. ## 36, 42.)
On February 7, 2007, Defendant Steven J. Sakala ("Sakala") executed a promissory note in favor of Countrywide Home Loans, Inc. ("Countrywide") in the principal amount of $910,000.00. ("FAC," Doc. # 4-1.) To secure payment on the note, on the same day, Defendants Sakala, Dana Maria Mitchell, Teresa Ann Collins, and Mary Janet Collins (collectively, "Defendants") executed a mortgage encumbering real property located at 83-1064 Honaunau School Road, Honaunau, Hawaii 96726 ("Subject Property") in favor of Countrywide. (FAC, Doc. # 4-2.) The mortgage was recorded in the State of Hawaii Bureau of Conveyances on February 16, 2007, as Document No. 2007-030068. (Id.) Countrywide Home Loans, Inc. is listed on the mortgage as the originating lender and Mortgage Electronic Registration Systems, Inc. ("MERS") is listed as the mortgagee "acting solely as nominee for Lender and Lender's successors and assigns." (Id.)
On August 8, 2009, MERS executed an assignment, which purports to transfer its interest in the mortgage to Plaintiff The Bank of New York Mellon as Trustee for the Benefit of CHL Mortgage Pass-Through Trust 2007-3 Mortgage Pass-Through Certificates, Series 2007-3 ("BNY"). (FAC, Doc. # 4-3.) The assignment was recorded in the State of Hawaii Bureau of Conveyances on September 17, 2009, as Document No. 2009-142800. (Id.) On or about September 10, 2009, BNY began non-judicial foreclosure proceedings against the Subject Property because of Sakala's failure to make payments under the Note. (Id.)
On September 16, 2010, Sakala filed a complaint against BNY, MERS, and BAC Home Loan Servicing in the Third Circuit Court for the State of Hawaii to stop BNY's non-judicial foreclosure of the Subject Property. (Cv. No. 10-00578, Doc. # 1-2.) On October 6, 2010, Defendants removed that action to this Court. (Cv. No. 10-00578, Doc. # 1.) On February 22, 2011, the Court issued an Order Granting BAC and MERS' Motion to Dismiss and dismissing the Complaint without prejudice as against all Defendants. (Cv. No. 10-00578, Doc. # 40.) Sakala filed an Amended Complaint on March 24, 2011 and a Second Amended Complaint on June 23, 2011. (Cv. No. 10-00578, Docs. ## 45, 80.) On October 4, 2011, this Court issued an order dismissing the Second Amended Complaint with leave to amend. (Cv. No. 10-00578, Doc. # 98.) Since Plaintiff failed to file an amended complaint or take any further action in the case, on December 30, 2011, the Court issued an order dismissing the action with prejudice.*fn1
On June 13, 2011, while the federal action was still pending, Sakala filed a Certified Conversion Petition in state court seeking to convert BNY's non-judicial foreclosure proceedings to judicial foreclosure proceedings. (Doc. # 20-3.) On September 23, 2011, the state court entered a Judgment converting the non-judicial foreclosure to a judicial foreclosure and ordering BNY to file a judicial foreclosure complaint within thirty days. (Id.)
On October 17, 2011, BNY initiated the instant foreclosure action against the Defendants, alleging that Sakala has defaulted on his obligations under the Note and Mortgage and now owes BNY in the principal amount of $888,960.37 ("Federal Foreclosure Action"). (FAC ¶¶ 16--18.)
On October 21, 2011, four days after the instant action was filed, BNY filed a judicial foreclosure complaint against the Defendants in state court in compliance with the state court Judgment dated September 23, 2011 (the "State Foreclosure Action"). (Doc. # 20-3.) The state court subsequently granted BNY's motion to stay the State Foreclosure Action pending a decision in the present Federal Foreclosure Action. (Doc. # 20-8.)
On November 16, 2011, Sakala filed a Motion to Dismiss the Federal Foreclosure Action for Lack of Subject Matter Jurisdiction and Forum Non Coveniens. ("Mot.," Doc. # 11.) BNY filed an Opposition to his Motion on January 23, 2012. ("Opp'n," Doc. # 20.) Sakala did not file a Reply. On February 3, 2012, the Court issued an Order Denying Sakala's Motion to Dismiss. (Doc. # 23.)
On February 17, 2012, Sakala filed an Answer to the FAC and a Counterclaim against BNY alleging the following causes of action: (1) Fair Debt Collection Practices Act violations, (2) Unfair and Deceptive Business Practices, (3) Slander of Title, and (4) Fraud ("Sakala's Counterclaim"). (Doc. # 31.) BNY filed a Motion to Dismiss Sakala's Counterclaim on March 8, 2012. ("First MTD," Doc. # 36.)
On March 9, 2012, Defendants Mary Janet Collins, Teresa Ann Collins, Douglas B. Hackett, and Dana Marie Mitchell filed a separate Answer to the FAC and a Counterclaim against BNY alleging the same four causes of action as Sakala ("Remaining Defendants' Counterclaim"). (Doc. # 38.) BNY filed a Motion to Dismiss the Remaining Defendants' Counterclaim on March 19, 2012. ("Second MTD," Doc. # 42.) That same day, Defendant Douglas Hackett filed a Joinder to Sakala's February 17, 2012 Answer. (Doc. # 44.)
On April 5, 2012, Sakala and the Remaining Defendants filed an
untimely "Objection" to both of BNY's Motions to Dismiss.*fn2
(Doc. # 46.) BNY filed a Reply in Support of both Motions to
Dismiss on April 9, 2012. (Doc. # 47.)
I. Federal Rule of Civil Procedure 12(b)(6)
Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a motion to dismiss will be granted where the plaintiff fails to state a claim upon which relief can be granted. Review is limited to the contents of the complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994).
A complaint may be dismissed as a matter of law for one of two reasons: "(1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable legal claim." Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984) (citation omitted). Allegations of fact in the complaint must be taken as true and construed in the light most favorable to the plaintiff. See Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005).
A complaint need not include detailed facts to survive a Rule 12(b)(6) motion to dismiss. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555--56 (2007). In providing grounds for relief, however, a plaintiff must do more than recite the formulaic elements of a cause of action. See id. at 556--57; see also McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir. 1988) ("[C]onclusory allegations without more are insufficient to defeat a motion to dismiss for failure to state a claim.") (citation omitted). "The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions," and courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (internal quotations and citations omitted). Thus, "bare assertions amounting to nothing more than a formulaic recitation of the elements" of a claim "are not entitled to an assumption of truth." Moss v. ...