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Tiburcio v. Reo Properties Corp.

United States District Court, D. Hawaii

May 29, 2015




Before the Court are: (1) Defendants Ocwen Loan Servicing, LLC (“Ocwen”) and Mortgage Electronic Registration Systems, Inc.’s (“MERS, ” collectively “Ocwen Defendants”) Motion to Dismiss [Dkt. # 1] Verified Complaint for Damages and Declaratory and Injunctive Relief, Filed February 12, 2015 (“Ocwen Motion”), filed March 16, 2015;[1] (2) Defendant Clay Chapman Iwamura Pulice & Nervell’s (“Clay Chapman”) Motion to Dismiss and/or for Summary Judgment (“Clay Chapman Motion”), filed March 16, 2015; (3) Defendant the Honorable Bert I. Ayabe’s (“Judge Ayabe”) Motion to Dismiss with Prejudice Verified Complaint for Damages and Declaratory and Injunctive Relief (“Judge Ayabe Motion”), filed March 17, 2015; (4) Defendant Prudential Advantage Realty’s (“Prudential”) Motion to Dismiss with Prejudice Plaintiffs’ Verified Complaint for Damages and Declaratory and Injunctive Relief (“Prudential Motion”), filed March 18, 2015; (5) Defendants Sandra Whang (“Whang”) and Thomas Cayetano’s (“Cayetano”) substantive joinder in the Clay Chapman Motion (“Whang-Cayetano Joinder”), on March 23, 2015; (6) Defendant Island Realtors, LLC’s (“Island Realtors”) Motion to Dismiss Plaintiffs’ Verified Complaint, Filed February 12, 2015 (“Island Realtors Motion”), filed April 2, 2015; and Defendant Hawaii Self Storage’s (“Self Storage”) joinder in the Clay Chapman Motion (“Self Storage Joinder, ” all collectively “Motions”), on April 2, 2015. [Dkt. nos. 15, 19, 20, 21, 26, 31, 32.] Pro se Plaintiffs Nes Sarmiento Tiburcio, Yolie C. Tiburcio, Neslie Joy Tiburcio-Ancheta, Mark Ancheta, and Hazel Tiburcio, all on behalf of themselves and all others similarly situated (collectively “Plaintiffs”), filed their memorandum in opposition to the Judge Ayabe Motion on May 12, 2015.[2] [Dkt. no. 54.] Prudential filed its reply on May 1, 2015 (“Prudential Reply”), and the Ocwen Defendants filed their reply on May 4, 2015 (“Ocwen Reply”).[3] [Dkt. nos. 46, 48.]

The Court finds these matters 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 Motions, supporting and opposing memoranda, and the relevant legal authority, the Court rules on the Motions as follows: the Judge Ayabe Motion and the Island Realtors Motion are HEREBY GRANTED; the Whang-Cayetano Joinder is HEREBY GRANTED IN PART; the Ocwen Motion, Clay Chapman Motion, and Prudential Motion are HEREBY GRANTED IN PART AND DENIED IN PART; and the Self Storage Joinder is DENIED.


On February 12, 2015, Plaintiffs filed their seventy-two page Verified Complaint for Damages and Declaratory and Injunctive Relief (“Complaint”), asserting twenty-two counts against more than twenty defendants.[4] [Dkt. no. 1.] Plaintiffs allege that, on or about March 1, 2006, they acquired a home in Honolulu (“Property”), “via mortgagor, Faustino Luis Castillo and Joselyn Giron Vaquila.” [Complaint at ¶ 61.] On August 19, 2008, MERS, as nominee of Fremont Investment and Loan (“Fremont”) initiated an action to foreclose on the mortgage securing the Property (“Mortgage”) in Hawai`i state court (“State Case”). [Id. at ¶ 64.] On September 23, 2009, Judge Ayabe entered summary judgment in favor of MERS (“Foreclosure”) and, on September 19, 2012, he issued a writ of ejectment (“Writ”).[5][Id. at ¶¶ 65, 70.] On September 7, 2014, Defendants Cayetano and Whang executed the Writ (“Lock-Out”).[6] [Id. at ¶ 69.]

Boiled down to its essentials, Plaintiffs’ Complaint challenges: (1) the State Case, including Judge Ayabe’s rulings, the Foreclosure, the Writ, and the ejectment process; (2) the mortgagees’, servicers’, and banks’ acts related to the Mortgage, and mortgage industry practices in general; and (3) Cayetano and Whang and their team’s conduct during the Lock-Out.[7] The Complaint includes numerous state claims, such as negligence, fraud, breach of contract, and quiet title. It also includes federal claims, specifically for: unfair methods of competition against the “Foreclosing Defendants, ” pursuant to 15 U.S.C. § 45 (“Count XIII”);[8] conspiracy to violate rights against Ayabe, Cayetano, and Whang, pursuant to 18 U.S.C. § 241 (“Count XXI”); and deprivation of civil rights against Ayabe, Cayetano, and Whang, pursuant to 42 U.S.C. § 1983 (“Count XXII”). Plaintiffs seek the following relief: a declaratory judgment that the Foreclosure was wrongful; cancellation of the deed of sale; quiet title in favor of Plaintiffs; compensatory, general, special, treble, and punitive damages; attorneys’ fees and costs; and all other just relief. [Id. at pgs. 69-70.]


I. State Case Claims

All of the Motions argue that the Rooker-Feldman doctrine bars this lawsuit. The Court agrees that some, but far from all, of Plaintiffs’ claims are barred by the doctrine, because those claims attempt to have this Court review the State Case and Judge Ayabe’s decisions therein. It is impermissible for this Court to sit in judgment over a state court case.

“The Rooker–Feldman doctrine provides that federal district courts lack jurisdiction to exercise appellate review over final state court judgments.” Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir. 2007) (some citations omitted) (citing Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16, 44 S.Ct. 149, 68 L.Ed. 362 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482-86, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983)). “Essentially, the doctrine bars ‘state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced’ from asking district courts to review and reject those judgments.” Id. (quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005)).

There are a couple of exceptions to this doctrine. First, the doctrine does not apply to “general constitutional challenges” where the plaintiffs argue that their constitutional rights were violated in ways that would not require the federal court to review the state court’s decision. Doe & Assocs. Law Offices v. Napolitano, 252 F.3d 1026, 1029 (9th Cir. 2001). However, if the constitutional claims are “inextricably intertwined” with the state court decision, Rooker-Feldman bars jurisdiction. Manufactured Home Communities Inc. v. City of San Jose, 420 F.3d 1022, 1030 (9th Cir. 2005). Second, claims for fraud, wherein the plaintiffs argue that the fraudulent conduct was “extrinsic” to the state case and kept them from presenting their claims to the state court, are not barred by Rooker-Feldman. Kougasian v. TMSL, Inc., 359 F.3d 1136, 1141 (9th Cir. 2004).

In this case, Plaintiffs claim that: Judge Ayabe reached erroneous decisions regarding the Foreclosure and issuance of the Writ; the sheriff and process server waited too long to evict Plaintiffs; and the realtors should not have attempted to sell the Property after the Foreclosure. All of these allegations go to the merits of the State Case and, therefore, are barred by Rooker-Feldman. See, e.g., Henrichs, 474 F.3d at 613.

To the extent that Plaintiffs argue that the Rooker-Feldman doctrine does not bar their claims because they sound in fraud against Judge Ayabe, this Court rejects that argument. [Mem. in Opp. at 4-5.] Plaintiffs simply argue that Judge Ayabe’s decisions were based on “winner’s chicanery, ” [id. at 4, ] and then proceed to explain that the execution of the Writ was untimely. These arguments are inextricably intertwined with the merits of the State Case, and the purported fraud is not extrinsic to what was before the state court. See Manufactured Home, 420 F.3d at 1030; Kougasian, 359 F.3d at 1141. Thus, neither of the exceptions apply.[9]

The Court CONCLUDES that Plaintiffs’ claims related to the State Case, including those against Judge Ayabe, Whang, Cayetano, Prudential, and Island Realtors, are barred by the Rooker-Feldman doctrine.[10] The Court thus GRANTS the Judge Ayabe Motion, Prudential Motion, Island Realtors Motion, and Whang-Cayetano Motion insofar as the allegations against those Defendants are barred by Rooker-Feldman.[11] Accordingly, it DISMISSES the claims that go to the merits of the State Case. While the allegations in the claims are quite vague, the Court finds that the following counts seek review of the State Case: negligence ...

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