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Mather v. First Hawaiian Bank

United States District Court, District of Hawaii

January 12, 2015

DIANE E. MATHER, Plaintiff,
v.
FIRST HAWAIIAN BANK; JONATHAN W.Y. LAI; and DAVID Y. NAKASHIMA, Defendants.

ORDER DISMISSING ACTION

SUSAN OKI MOLLWAY, CHIEF UNITED STATES DISTRICT JUDGE

I. INTRODUCTION.

This case arises out of loans made by Defendant First Hawaiian Bank to Plaintiff Diane E. Mather. Mather is no stranger to this court. She has been declared a vexatious litigant by another judge in this district, having filed what amount to frivolous appeals of various state court foreclosure proceedings. See ECF No. 48 in Civ. No. 14-00384 HG/KSC

The present case, a continuation of an earlier case dismissed by this court, involves loans secured by real property located on Dole Street in Honolulu.

Mather’s First Amended Original Petition, filed in the present action on September 29, 2014, alleges that First Hawaiian Bank, in conjunction with the attorneys representing it in state-court foreclosure proceedings, Defendants Jonathan W.Y. Lai and David Y. Nakashima, “manufactured evidence of indebtedness and used allegedly false evidence of indebtedness” to take her property, thus violating the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”). See ECF No. 5, PageID #s 31-32. In a filing on November 5, 2014, Mather clarified that her RICO claim is based on First Hawaiian Bank’s foreclosure on the Dole Street property. See ECF No. 18. In other words, Mather is asserting in her current RICO claim that, in the state-court foreclosure proceedings, First Hawaiian Bank and its attorneys presented a false note and mortgage to the state court. Because that a claim essentially seeks to have this court reverse the state court’s determination that the loan documents were valid and enforceable, the claim is barred by the Rooker-Feldman doctrine. Accordingly, Defendants’ motion to dismiss is granted.

II. STANDARD.

In relevant part, Defendants’ motion challenges this court’s jurisdiction, arguing that the Rooker-Feldman doctrine precludes the exercise of subject matter jurisdiction over this case.

A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) may either attack the allegations of the complaint as insufficient to confer upon the court subject matter jurisdiction, or attack the existence of subject matter jurisdiction in fact. Thornhill Publ’g Co. v. Gen, Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). When the motion to dismiss attacks the allegations of the complaint as insufficient to confer subject matter jurisdiction, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Fed’n of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir. 1996). When the motion to dismiss is a factual attack on subject matter jurisdiction, however, no presumptive truthfulness attaches to the plaintiff’s allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the existence of subject matter jurisdiction in fact. Thornhill, 594 F.2d at 733 Defendants’ motion to dismiss is a factual attack on this court’s subject matter jurisdiction, as it asks the court to examine Mather’s extensive history of litigation concerning First Hawaiian Bank’s loans to her that were secured by the Dole Street property and to determine that Mather is essentially appealing the state-court foreclosure proceedings to this court. On this motion, the court may accept and evaluate evidence to determine whether jurisdiction exists. See McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988) (“when considering a motion to dismiss pursuant to Rule 12(b)(1) the district court is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction”); Biotics Research Corp. v. Heckler, 710 F.2d 1375, 1379 (9th Cir. 1983) (consideration of material outside the pleadings does not convert a Rule 12(b)(1) motion into a motion for summary judgment).

III. BACKGROUND FACTS.

This case is a continuation of Civil No. 14-00091 SOM/RLP, a case in which this court entered judgment against Mather with respect to her attempt to appeal from state-court foreclosure rulings related to the Dole Street property. Given the paucity of factual assertions in the First Amended Complaint in this matter, the court takes judicial notice of the pleadings and facts in that earlier case and in the state-court proceedings.

On or about September 25, 2008, First Hawaiian Bank lent Mather $686, 000, which was secured by a mortgage on property located on Dole Street in Honolulu. First Hawaiian Bank ultimately foreclosed on this property in state-court proceedings. See Complaint ¶¶ 27, 29, 38, Civil No. 14-00091 SOM/RLP; Findings of Fact, Conclusions of Law and Order Granting Plaintiff’s Motion for Summary Judgment as to All Claims and All Parties, Interlocutory Decree of Foreclosure and Order of Sale ¶ 4, Civ. No. 12-1-3080 (Haw. Cir. Ct. Aug. 23, 2013), ECF No. 9-11 in Civil No. 14-00091 SOM/RLP, PageID # 400; and ECF No. 13-4, PageID # 119 (“Interlocutory Decree of Foreclosure”).

On or about November 5, 2008, First Hawaiian Bank also extended to Mather a line of credit of up to $20, 000, which was secured by a second mortgage on the Dole Street property. First Hawaiian Bank also foreclosed on this line of credit in state court. See Complaint ¶¶ 28, 29, 38, Civil No. 14-00091 SOM/RLP.

First Hawaiian Bank had previously initiated a state-court special proceeding concerning the September 2008 $686, 000 loan. On August 9, 2012, the Circuit Court of the First Circuit, State of Hawaii, entered Findings of Fact, Conclusions of Law and Order Granting Petitioner’s Motion for Summary Judgment and Order to Expunge Various Instruments Against Karen Mary Schaefer, S.P. No. 12-1-0240 KKS (Haw. Cir. Ct. Aug. 9, 2012), ECF No. 9-7 in Civil No. 14-00091 SOM/RLP, PageID # 378. In that document, the state court made a factual finding that Mather had recorded in Hawaii’s Bureau of Conveyances a Notice of Dishonor and Non-Response in January 2012 that claimed that, if First Hawaiian Bank failed to respond to the notice within three days, the $686, 000 note (along with another note for a separate $224, 000 loan) would be null and void. Id., PageID # 382. According to the state-court order, several days later, Karen Schaefer, who is apparently a notary, recorded a Certificate of Dishonor that claimed the notes were “null and void” and that First Hawaiian Bank owed Mather $1, 459, 703.35. Id., PageID # 383. According to the description in the state-court order, Mather then filed a Satisfaction of Mortgage and a Release and Discharge of Mortgage Lien, as well as a UCC Financing Statement that purportedly granted her a security interest in First Hawaiian Bank property. See id., PageID #s 383-84. The state-court order expunged the various instruments filed by Schaefer. Id., PageID # 387.

Several weeks later, Mather stipulated to the expungement of the instruments she had filed. See Stipulated Order to Expunge Various Instruments, S.P. No. 12-1-0240 KKS (Haw. Cir. Ct. Aug. 30, 2012), ...


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