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Jean-Francois Benoist and Joyce K. v. U.S. Bank National Association

November 15, 2012

JEAN-FRANCOIS BENOIST AND JOYCE K. MARVEL-BENOIST, PLAINTIFFS,
v.
U.S. BANK NATIONAL ASSOCIATION, A NATIONAL BANK ASSOCIATION, AS TRUSTEE FOR JPM ALT 2006-A6; PHH MORTGAGE CORPORATION, A NEW JERSEY CORPORATION FORMERLY CENDANT MORTGAGE CORP., MERSCORP. INC., A DELAWARE CORPORATION; MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC.; A NEW YORK CORPORATION, AND DOES 1-100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: J. Michael Seabright United States District Judge

FINDINGS OF FACT AND CONCLUSIONS OF LAW

I. INTRODUCTION

The court conducted a non-jury trial in this case on October 23, 2012. Pursuant to Federal Rule of Civil Procedure 52(a), the following constitute the court's Findings of Fact ("Findings") and Conclusions of Law ("Conclusions"). To the extent any Findings as stated may also be deemed to be Conclusions, they shall also be considered Conclusions. Similarly, to the extent any Conclusions as stated may be deemed to be Findings, they shall also be considered Findings. See In re Bubble Up Delaware, Inc., 684 F.2d 1259, 1262 (9th Cir. 1982).

II. OVERVIEW

This action arises from a July 2006 mortgage transaction in which Plaintiffs Jean-Francois Benoist and Joyce K. Marvel-Benoist ("Plaintiffs") borrowed $498,520 from PHH Mortgage Corporation, formerly Cendant Mortgage Corp. ("PHH"), secured by a promissory note and mortgage on real property located at 47-4505 Honokaa Waipio Road, Honokaa, Hawaii 96727 (the "subject property"). The mortgage loan was subsequently transferred to Defendant U.S. Bank National Association, as Trustee for JPM ALT 2006-A6 ("Defendant" or "U.S. Bank"), who foreclosed on the subject property after Plaintiffs became delinquent in their payments. During the time that U.S. Bank was seeking to foreclose, Plaintiffs were seeking a loan modification and the auction on the subject property was postponed several times. The trial centered on claims against U.S. Bank for (1) failure to comply with Hawaii Revised Statutes ("HRS") § 667-5's requirements that each postponement of the foreclosure be publicly announced, and (2) misrepresenting that it would not foreclose during the loan modification process.

For the reasons set forth below, the court finds that Plaintiffs have failed to prove by a preponderance of the credible evidence that U.S. Bank either failed to publicly announce each postponement in compliance with HRS § 667-5 or made any representations to Plaintiffs.

III. PROCEDURAL HISTORY

On June 22, 2010, Plaintiffs filed this action, and their Second Amended Complaint ("SAC") asserted claims titled (1) Violation of Hawaii Revised Statutes [("HRS")] Chapter 667, Lack of Legal Right to Foreclose (Defendant U.S. Bank); (2) Violation of [HRS] Chapter 667, Failure to Comply with terms of HRS [§] 667:5-10*fn1 (Defendant U.S. Bank); (3) Wrongful Foreclosure (Defendant U.S. Bank and PHH); and (4) Quiet Title (Defendants Claiming Any Interest in the Subject Property).

On January 25, 2012, PHH and U.S. Bank filed a Motion for Summary Judgment. On August 3, 2012,*fn2 the court granted in part and denied in part the Motion for Summary Judgment such that Plaintiffs' remaining claims consisted of: (1) Count II of the SAC, to the extent it asserts a claim against U.S.

Bank for failure to comply with HRS § 667-5's requirements that each postponement of the foreclosure be publicly announced, and (2) Count III of the SAC, to the extent it asserts a claim against U.S. Bank for misrepresenting that it would not foreclose during the loan modification process.

On October 23, 2012, a bench trial proceeded on these remaining claims. The parties orally stipulated to admission of all trial exhibits, including Plaintiffs' Exhibits 1-14 and Defendant's Exhibits A-H. Plaintiffs did not present oral testimony, and Defendant presented the testimony of Jerel I. Yamamoto and Henry T. Nakamoto. On November 7, 2012, the parties submitted their Stipulated Preliminary Facts. Doc. No. 132.*fn3

IV. FINDINGS OF FACT

1. On or about July 13, 2006, Plaintiffs entered into an Adjustable Rate Note with PHH for $498,520.00, and a mortgage on the subject property in favor of PHH was recorded in the Bureau of Conveyances of the State of Hawaii as Document No. 2006-142693. Doc. No. 132, Joint Fact ¶ 2.

2. In March 2009, Plaintiffs stopped making payments on their mortgage. Id. ¶ 3.

3. On September 28, 2009, Mortgage Electronic Registration Systems ("MERS"), solely as nominee for PHH, executed an Assignment of Mortgage to U.S. Bank, recorded in the Bureau of Conveyances of the State of Hawaii as Document No. 2009-198707. Id. ¶ 4.

4. On December 31, 2009, U.S. Bank recorded a Notice of Intent to Foreclose ("Notice of Foreclosure") with the Bureau of Conveyances of the State of Hawaii as Document No. 2009-198708. Id. ¶ 5.

5. The Notice of Foreclosure stated that the auction of the subject property would be held on March 2, 2010. Id. ΒΆ 6. This auction date was subsequently postponed several times to allow the parties ...


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