The opinion of the court was delivered by: Alan C. Kay Sr. United States District Judge
ORDER DENYING PLAINTIFFS' MOTION TO DISMISS DEFENDANTS/COUNTERCLAIMANTS' SUMMARY JUDGMENT PURSUANT TO FRCP RULE 12(b)(1)
On October 27, 2009, Dean Krakauer and Robbin Krakauer (collectively, "Plaintiffs") filed a complaint ("Complaint") in this Court against Indymac Mortgage Services and OneWest Bank, FSB ("OneWest"). ECF No. 1. On December 28, 2009, Defendants filed an answer to the Complaint as well as a counterclaim ("Counterclaim") against the Plaintiffs. ECF No. 5.
Plaintiffs filed a First Amended Complaint on July 30, 2010. ECF No. 43. On August 23, 2010, Defendants filed a motion for summary judgment as to both the First Amended Complaint and the Counterclaim ("2010 MSJ"). ECF No. 46. Defendants also filed a Concise Statement of Facts for the 2010 MSJ ("2010 MSJ CSF"). ECF No. 47. Plaintiffs filed an Opposition to the 2010 MSJ on September 28, 2010, but Plaintiffs did not file a concise statement of facts. ECF No. 53. Defendants filed a Response in Support of the 2010 MSJ on November 30, 2010. ECF No. 56. This Court held a hearing on the 2010 MSJ on December 13, 2010 and subsequently issued its "Order Granting Defendants/ Counterclaimants' Motion for Summary Judgment" on December 14, 2010 ("2010 MSJ Order"). ECF No. 57 and 59. On January 6, 2011, the Court issued its "Order Granting Decree of Foreclosure and Appointing Commissioner." ECF No. 64. On June 22, 2012, the Court issued its "Order Requiring Another Foreclosure Sale" because Defendants failed to follow the requirements in the January 6, 2011 order. ECF No. 120.
On November 9, 2012, Plaintiffs filed a "Motion for Dismiss Counterclaimants['] [2010 MSJ Order] Pursuant to FRCP Rule 12(b)(1) for Lack of Standing to Foreclose" ("Motion to Dismiss"). ECF No. 127. Defendants Filed a Memorandum in Opposition to Plaintiffs' Motion to Dismiss on December 19, 2012. ECF No. 130. Plaintiffs did not file a reply.*fn1 See ECF No. 130-132. The Court determined that this matter could be decided without a hearing under Local Rule 7.2(d). ECF No. 135.
In August 2002, Plaintiffs bought a vacant lot located at 71-1620 Puulani Place, Kailua-Kona, Hawai'i, 96740 ("Property"). 2010 MSJ CSF Ex. G at 4, Ex. M.*fn2 On March 31, 2006, in order to build a home on the Property, Plaintiffs executed and delivered a promissory note ("Note") in favor of IndyMac Bank, FSB ("IndyMac"). 2010 MSJ CSF Ex. A, Ex. F, Ex. G at 7. To secure payment on the Note, Plaintiffs executed a mortgage encumbering the Property in favor of IndyMac ("Mortgage"). 2010 MSJ CSF Ex. B. The Mortgage was recorded on April 7, 2006, in the State of Hawai'i Bureau of Conveyances ("Bureau") as Document No. 2006-065052. 2010 MSJ CSF Ex. B.
IndyMac was closed by the United States Office of Thrift Supervision on July 11, 2008, and the Federal Deposit Insurance Corporation ("FDIC") was named Conservator of IndyMac. 2010 MSJ Order at 4 n.5, ECF No. 59; Nicholson v. OneWest Bank, Civ. No. 1:10-CV-0795-JEC/AJB, 2010 WL 2732325, at *4 n.2 (N.D. Ga. Apr. 20, 2010); FDIC Failed Bank Information, http://www.fdic.gov/bank/individual/failed/IndyMac.html (last visited on Feb. 20, 2013). On March 19, 2009, the FDIC completed the sale of IndyMac to OneWest, and almost all of IndyMac's deposits were transferred to OneWest. Id.
At some point in time subsequent to IndyMac's closure, the FDIC as Receiver for IndyMac assigned Plaintiffs' Mortgage to OneWest ("OneWest Assignment").*fn3 2010 MSJ CSF Ex. C, Plntfs.' Mtn. to Dismiss Ex. A. The OneWest Assignment was recorded at the Bureau on July 6, 2010. Id. Erica Johnson-Seck signed the OneWest Assignment as attorney-in-fact for the FDIC as Receiver for IndyMac. Id.
After April 2009, Plaintiffs failed to make their scheduled payments under the Note and Mortgage. 2010 MSJ CSF Ex. D, Ex. G at 12-13. Consequently, on September 10, 2009, OneWest recorded a "Notice of Mortgagee's Intention to Foreclose Under Power of Sale" at the Bureau. 2010 MSJ CSF Ex. E. Plaintiffs filed a First Amended Complaint to prevent OneWest's non-judicial foreclosure sale, and OneWest filed a counterclaim to establish OneWest's right to foreclose the Mortgage and sell the Property. ECF No. 1, ECF No. 5 at 6-8. OneWest filed a Motion for Summary Judgment for both Plaintiffs' First Amended Complaint and OneWest's Counterclaim, which this Court granted in December of 2010. ECF No. 59. The Court subsequently issued an order granting decree of foreclosure and appointing a commissioner to sell the Property on June 22, 2012.*fn4 ECF No. 120. After three years of litigation and on the eve of confirmation of the sale of the Property, Plaintiffs now bring this motion alleging that this Court lacks subject matter jurisdiction over the case.
Federal Rule of Civil Procedure 12(b)(1) authorizes the Court to dismiss an action for "lack of subject-matter jurisdiction." For this FRCP 12(b)(1) motion, Defendants have the burden of establishing standing to foreclose on the Property.
See Robinson v. U.S., 586 F.3d 683, 685 (9th Cir. 2009) ("[T]he party asserting subject matter jurisdiction has the burden of proving its existence."). A FRCP 12(b)(1) motion may (1) attack the allegations of a pleading as insufficient to confer subject matter jurisdiction on the court ("facial attack") or (2) "attack the existence of subject matter jurisdiction in fact" ("factual attack"). Malama Makua v. Rumsfeld, 136 F. Supp. 2d 1155, 1159 (D. Haw. 2001); White, 227 F.3d at 1242.
In this case, Plaintiffs present a factual attack on subject matter jurisdiction. Deutsche Bank Trust Co. v. Beesley, Civ. No. 12-00067 SOM/KSC, 2012 WL 5383555 at *3 (D. Haw. 2012) (party's argument that bank lacked standing to foreclose constituted a factual attack on the court's subject matter jurisdiction). For a factual attack, a court may accept and evaluate evidence to ...