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Loren Christine Mattos v. Laurus Funding Group

January 22, 2013

LOREN CHRISTINE MATTOS,
PLAINTIFF,
v.
LAURUS FUNDING GROUP, INC.; FLAGSTAR BANK FSH; NATIONSTAR MORTGAGE, LLC; JOHN DOES 1- 10; JANE DOES 1-10; DOE CORPORATIONS, PARTNERSHIPS OR OTHER ENTITIES 1-10, DEFENDANTS.



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

ORDER GRANTING DEFENDANT NATIONSTAR MORTGAGE, LLC'S MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF'S FIRST AMENDED COMPLAINT

Before the Court is Defendant Nationstar Mortgage, LLC's ("Nationstar" or "Defendant") Motion for Summary Judgment on Plaintiff's First Amended Complaint ("Motion"), filed on October 12, 2012. Plaintiff Loren Christine Mattos ("Plaintiff") filed her memorandum in opposition on November 5, 2012, and Defendant filed its reply on November 9, 2012. The Court finds this matter suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i ("Local Rules"). After careful consideration of the Motion, supporting and opposing memoranda, and the relevant legal authority, Defendant's Motion is HEREBY GRANTED for the reasons set forth below.

BACKGROUND

I. Factual Background

Plaintiff filed her original Complaint on April 26, 2011, which was dismissed with leave to amend by United States Senior District Judge David Alan Ezra on June 29, 2012 ("6/29/12 Order").*fn1 [Dkt. no. 32.] She filed her First Amended Complaint on July 30, 2012, against Laurus Funding Group, Inc. ("Laurus"), Flagstar Bank FSB ("Flagstar"), and Nationstar. [Dkt. no. 35.]
Plaintiff was the owner of the subject property located at 17-943 Kukui Camp Road, Mountain View, Hawai'i, 96771 (the "Property"), and claims she originally sought a construction loan to finance the building of the Property. On March 6, 2008, she executed and delivered a promissory note ("Note") to Laurus in the amount of $318,500.00, plus interest at the rate of 6.875%; the Note includes a blank endorsement and Nationstar is in possession of the Note.*fn2 The Note is secured by a mortgage dated March 6, 2008 ("Mortgage"), executed by Plaintiff as mortgagor, in favor of Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee for Laurus. The Note secured by the Mortgage was recorded on March 12, 2008 in the Bureau of Conveyances, State of Hawai'i ("Bureau"), as Document No. 2008-037785.*fn3

The Mortgage was assigned by MERS, as nominee for Laurus, to Nationstar pursuant to an assignment of Mortgage ("Assignment"), recorded on June 16, 2010 in the Bureau as Document No. 2010-083262.*fn4

As part of the loan, Plaintiff executed a Uniform Residential Loan Application, which provides in part as follows:

(7) the Lender and its agents, brokers, insurers, servicers, successors, and assigns may continuously rely on the information contained in this application, and I am obligated to amend and/or supplement the information provided in this application if any of the material facts that I have represented herein should change prior to closing the Loan[.] [Smith Decl., Exh. D (Loan Application).] Plaintiff did not amend or supplement her loan application at any time. [Smith Decl. at ¶ 9.]

On August 1, 2009, Plaintiff defaulted under the terms of the Note and Mortgage for failure to make payments when due. In October of 2009, the servicing of Plaintiff's loan was transferred from Flagstar to Nationstar. On January 20, 2010, Plaintiff entered into a trial forbearance plan with Nationstar. [Id. at ¶¶ 10-12.]

On January 28, 2010, Nationstar sent a letter to Plaintiff advising of the default under the Note and Mortgage, providing thirty-five days to cure the default, noting that failure to cure the default may result in the acceleration of the entire balance, and advising of the right to reinstate after acceleration. [Id. at ¶ 13, Exh. E (1/28/10 Letter).]

By April 6, 2010, Plaintiff failed to provide Nationstar with all of the requested documents, in default of the terms of the forbearance plan. Nationstar sent Plaintiff a letter dated April 7, 2010, which advised Plaintiff that she defaulted under the terms of the forbearance plan and provided additional mitigation alternatives. [Id. at ¶ 15, Exh. F (4/7/10 Letter).] Plaintiff claims that she provided Flagstar with the requested information and made all payments on time, but that her last payment was returned to her by Nationstar. [Mattos Aff. at ¶¶ 14-17.] On June 24, 2010, Nationstar recorded a Notice of Mortgagee's Intention to Foreclose Under Power of Sale ("NOI") in the Bureau as Document No. 2010-088400. [Smith Decl. at ¶ 16, Exh. G (6/24/10 NOI).] A foreclosure sale of the Property was conducted on October 29, 2010. [Id. at ¶ 20.] On July 26, 2011, Nationstar recorded a Notice of Rescission of Mortgagee's Intention to Foreclose Under Power of Sale in the Bureau as Document No. 2011-116326. [Id. at ¶ 21.]

Plaintiff's First Amended Complaint alleges that Nationstar, Laurus, and Flagstar failed to give her notice that she was in default, that she had a right to cure and reinstate, or the identity of the lender so that she could discuss loss mitigation and loan workout options. [First Amended Complaint at ¶ 35.] She alleges that Nationstar foreclosed on the Property without disclosing that the subject loan had been sold to an investor, and failed to disclose to Plaintiff her consumer rights, and allow her obtain relief from the "HARP or HAMP" programs. [Id. at ¶¶ 36-37.] Plaintiff claims that Nationstar, Laurus, and Flagstar conspired to conceal material information as to the owner of the subject loan so that they could obtain title to the Property by deception. [Id. at ¶ 39.]

Plaintiff asserts the following claims in her First Amended Complaint: Count I - fraudulent misrepresentation and concealment; Count II - unjust enrichment; Count III - unfair and deceptive acts or practices ("UDAPs"), in violation of Haw. Rev. Stat. § 480-2 and § 481A-3; Count IV - intentional infliction of emotional distress ("IIED"); Count V - declaratory and injunctive relief.

II. Defendant's Motion

Defendant moves for summary judgment on all of the claims in Plaintiffs' First Amended Complaint, and seeks dismissal with prejudice. Defendant states that it was not involved in the origination of the loan, did not make any misrepresentations, was not responsible for any alleged non-disclosures at the time of origination, and that it is in possession of the original Note. [Mem. in Supp. of Motion at 2-3.]

A. Fraudulent Misrepresentation and Concealment

Defendant first argues that it did not make any false representations to Plaintiff, nor did Plaintiff rely upon any representation from Nationstar, therefore, her claims fail as a matter of law. It also asserts that she fails to allege her fraud with particularity as required by Fed. R. Civ. P. 9(b) because she fails to allege any statement attributable to Nationwide or any lender. [Id. at 9-12.]

B. Unjust Enrichment

Next, Defendant argues that Count II fails as a matter of law because Plaintiff did not confer a benefit upon Nationstar that was unjustly retained. Nationstar submits evidence that it is the servicer of Plaintiff's loan and is entitled to enforce the terms of the Note and Mortgage. [Id. at 12-13.]

C. UDAP

Nationstar argues that it did not commit any UDAP because it was not involved in the origination of the loan, that it did not make any misrepresentations, and that Plaintiff fails to support her allegations with any evidence. [Id. at 14-15.]

D. IIED

According to Defendant, it did not act in an extreme and outrageous manner, and Plaintiff cannot satisfy the elements of the tort of IIED. It argues that it did attempt to qualify Plaintiff for loan modification programs, and acted within its rights under the Note and Mortgage. [Id. at 15-16.]

E. Declaratory and Injunctive Relief

Defendant argues that Plaintiff is not entitled to the relief she seeks because she is in default and filed the instant frivolous action to delay the foreclosure sale of the Property. Further, it notes that these are ...


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