United States District Court, D. Hawaii
ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
DERRICK K. WATSON UNITED STATES DISTRICT JUDGE
At issue in this case is whether Defendants’ conduct during Plaintiff Watoshna Compton’s loan modification application process constituted unfair or deceptive acts or practices under Hawai'i law. Before the Court is Defendants’ Motion For Summary Judgment, Or In The Alternative, Partial Summary Judgment (“Motion For Summary Judgment”). Dkt. No. 71. Because Compton’s allegations in support of the only remaining claim for Unfair and Deceptive Acts and Practices (“UDAP”) either have no legal merit or lack evidentiary support sufficient to create a genuine issue of material fact for trial, the Motion For Summary Judgment is GRANTED.
I. Factual Background
For purposes of this summary judgment motion, the Court views the evidence in the light most favorable to Compton. See, e.g., Sullivan v. Oracle Corp., 662 F.3d 1265, 1270 (9th Cir. 2011). Viewed in that light, the evidence demonstrates the following:
In 2003, Compton purchased real property located in Kihei, Hawai’i through a privately funded construction loan. Compton Decl. ¶ 2. In May 2006, Compton refinanced, executing a $920, 000 promissory note (“Note”) secured by a mortgage (“Mortgage”) on the subject property. Dkt. No. 73-4, Defendants’ (Def.) Exhibit (“Exh.”) A; Dkt. No. 73-5, Def. Exh. B. The Mortgage identifies Compton as the Borrower, Countrywide Home Loans, Inc. (“CHL”) as the lender, and Mortgage Electronic Registration Systems, Inc. (“MERS”) as “mortgagee.” Dkt. No. 76-3, Plaintiff’s (Plf.) Exh. 1. The Note secures: “(i) repayment of the Loan, and all renewals, extensions, and modification of the Note; and (ii) the performance of [Plaintiff’s] covenants and agreements under [the Mortgage] and Note.” Id. at 3. Bank of America Corporation and/or Bank of America, N.A. (“BANA”)subsequently acquired CHL. FAC ¶ 7.
In approximately August 2008, Compton’s fiberglass pool business suffered a significant downturn. Compton Decl. ¶ 5. She contacted BANA to inquire about a loan modification. Id. ¶ 6. According to Compton, on October 10, 2008, she spoke with “Sean” from BANA about the loan modification process, and “Sean” advised her that she would have to be at least 30 days behind on her mortgage payments in order to qualify for loan modification. Id. ¶¶ 9-10. Compton continued to make timely payments on her mortgage between October 2008 and May 2009. Id. ¶ 11.
In May 2009, Compton defaulted on her loan and contacted BANA to seek a loan modification. Dkt. No. 73-6, Def. Exh. C; Declaration of Julia Susick (“Susick Decl.”) ¶ 8; Compton Decl. ¶ 13. On May 15, 2009, BANA received financial documents from Compton, and a letter requesting assistance with a loan modification. Susick Decl. ¶ 9. BANA advised Compton that reviews generally take 30 to 60 days. Id.
Although Compton’s first loan modification application was declined, BANA advised that she could re-apply, and she did so on July 17, 2009. Id. ¶¶ 13-14. On July 28 and 29, 2009, BANA notified Compton that she needed to submit certain financial documents to complete her loan modification packet. Id. ¶ 15. BANA claims that it received some, but not all, of the requested financial documents, which Compton disputes. Id. ¶ 16. As such, on August 10, 2009, BANA advised Compton that her application was canceled because it was incomplete. Id. ¶ 17.
On August 11, 2009, Compton sent BANA additional financial documents in order to continue with the loan modification review. Id. ¶ 18. By letter dated August 29, 2009, BANA notified Compton that her loan modification had been approved (“Loan Modification Approval Notice” or “Notice”). Dkt. No. 73-9, Def. Exh. F. The Notice stated: “We are pleased to advise you that your loan modification has been approved. In order for the modification to be valid, the enclosed documents need to be signed and returned.” Dkt. No. 73-9, Def. Exh. F. at 1. The Notice explained that the Loan Modification Agreement was enclosed and explicitly stated the Loan Modification Agreement “[m]ust be signed in the presence of a Notary. The notary acknowledgment must be in recordable form.” Id. at 2. Another enclosed document that needed to be signed and returned was a Step Rate Loan Modification addendum. Id. at 5. The Loan Modification Approval Notice warned: “In the event that you do not or cannot fulfill ALL of the terms and conditions of this letter no later than September 28, 2009, we will continue our collections actions without giving you additional notices or response periods.” Id. at 2.
On September 18, 2009, Compton signed the Loan Modification Agreement and sent it to BANA. Dkt. No. 73-10, Def. Exh. G. BANA, however, did not accept the executed Loan Modification Agreement because the notarization was smudged and illegible. Susick Decl. ¶ 23; see Dkt. No. 73-10, Def. Exh. F at 4. Specifically, by letter dated September 22, 2009, BANA explained that it was unable to process the modification of Compton’s Note because of “[i]ncorrect or [i]ncomplete [n]otary [s]ignatures.” Dkt. No. 73-11, Def. Exh. H.
In an attempt to fix the illegible notary stamp, Compton executed another Loan Modification Agreement on September 28, 2009 and forwarded it to BANA. Dkt. No. 73-12, Def. Exh. I. Compton, however, failed to attach the Step Rate Loan Modification addendum to the Loan Modification Agreement, and the notary stamp was, yet again, smudged. See id.; Dkt. No. 73-13, Def. Exh. J.
By letter dated September 29, 2009, BANA advised Compton that the September 28, 2009 signed loan modification could not be accepted. Dkt. No. 73- 13, Def. Exh. J. Shortly thereafter, on October 1, 2009, Compton contacted BANA and was told that her workout documents had expired, and thus, she needed to re-apply if she wished to pursue a loan modification. Susick Decl. ¶ 26. The following day, Compton resubmitted loan modification paperwork to initiate another loan modification review. Id. ¶ 27.
From December 1, 2009 through February 21, 2010, BANA advised Compton several times that she was still in review for loan modification options. Id. ¶ 28. On March 8, 2010, however, BANA rejected Compton’s loan modification application because “[Compton’s] financial information proved that her surplus income was greater than 77%, and that at this amount her loan did not qualify for a loan modification per the investor’s delegation.” Id. ¶ 29.
On August 5, 2010, MERS executed an Assignment of Mortgage, assigning all “right, title, and interest in [the Mortgage] to U.S. Bank.” Susick Decl. ¶ 6; Dkt. No. 73-7, Def. Exh. D.
On August 18, 2010, Compton faxed to BANA updated workout documents to initiate another loan modification. Susick Decl. ¶ 30. On August 19, 2010, BANA reviewed Compton’s faxed documents and determined that additional information was needed. Id. ¶ 31. Compton did not return the additional information requested by BANA. Id.
On August 26, 2010, Compton learned that a Notice of Mortgagee’s Intention to Foreclose Under Power of Sale had been issued and recorded with the Hawai’i Bureau of Conveyances on August 23, 2010 by U.S. Bank. Compton Decl. 42 ¶; see Dkt. No. 73-8, Def. Exh. E. After contacting BANA on August 27, 2010, Compton was informed that ...