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Gill v. Cit Bank, N.A.

United States District Court, D. Hawaii

December 8, 2017

DAVID GARY GILL, Plaintiff,
v.
CIT BANK, N.A. fka ONEWEST BANK, FSB; OWB REO; and DOE DEFENDANTS 1-50, Defendants.

          ORDER REMANDING CASE FOR LACK OF JURISDICTION AND DENYING DEFENDANTS' MOTION TO DISMISS AS MOOT

          Alan C. Kay Sr. United States District Judge

         For the reasons set forth below, the Court finds that it lacks subject-matter jurisdiction under the Rooker-Feldman doctrine and accordingly REMANDS this matter to state court. Defendants' Motion to Dismiss, ECF No. 5, is therefore DENIED AS MOOT.

         BACKGROUND

         On April 18, 2017 Plaintiff David Gary Gill (“Plaintiff”) filed a complaint in state court. Notice of Removal ¶ 1, ECF No. 1. On August 14, 2017, Defendants CIT Bank, N.A., fka OneWest Bank, N.A., fka OneWest Bank, FSB (“OneWest Bank” or “OneWest”), and OWB REO LLC (collectively, “Defendants”) timely removed this case from state court on the basis of diversity jurisdiction. Id. ¶¶ 4-6.

         Plaintiff alleges that in April 2006 he executed a mortgage in favor of IndyMac Federal Bank, FSB, to be recorded against his property as security for his performance under a promissory note in the amount of $903, 000. Compl. ¶ 16, ECF No. 1-2 (“Compl.”). The mortgage agreement was a standard-form single family residential mortgage provided by IndyMac, which was recorded in the State of Hawaii Office of Assistant Register (“Land Court”) around April 21, 2006. Id. In February 2010, OneWest claimed to be the mortgagee following assignment from the Federal Deposit Insurance Corporation after IndyMac was placed in receivership.[1] Id. ¶¶ 5, 17.

         On May 3, 2011, OneWest acted under a power of sale clause in the mortgage and conveyed the property to OWB REO through a quitclaim deed, which was recorded on August 1, 2011. Id. ¶ 19. Plaintiff alleges that either (1) OWB REO owned the mortgage, and OneWest was acting as its agent or alter ego, or (2) OWB REO was a nominee, agent, or alter ego of OneWest. Id. ¶ 8. On August 17, 2011, OneWest filed a complaint in state district court for summary possession and ejectment (“Ejectment Action”). Motion, ECF No. 5 (“Mot.”), Ex. F. The state court minutes for a September 13, 2011 hearing note that “confession [was] entered as to possession.” Mot., Ex. G. The state court then issued a Judgment for and Writ of Possession on September 23, 2011. Mot., Exs. H-I. On October 11, 2011, the state court dismissed the case, which had been continued for a hearing on the status of the damages claim, as neither party was present. Mot., Ex. G.

         On May 31, 2012, OWB REO executed a special warranty deed for the property to Hawaii Retail Services, LLC, which deed was recorded on June 20, 2012. Compl. ¶ 21. Hawaii Retail then executed a warranty deed for the property to Ryno Irwin, as trustee of the Ryno Irwin Revocable Living Trust Agreement, on March 21, 2013, which deed was recorded on April 17, 2013. Id. ¶ 22.

         Based on the foregoing, Plaintiff has alleged two claims here: (1) quiet title, ejectment, and declaratory relief, and (2) wrongful foreclosure. Id. ¶¶ 13-59. Plaintiff claims that the initial sale from OneWest to OWB REO was improper because OneWest did not strictly comply with the power of sale requirements. Id. ¶ 23. He alleges that the notice of acceleration he received was defective; the notice of intent to foreclose contained an inadequate description of the property; only a quitclaim deed was offered; no written notice of the postponed date on which the property was to be sold was ever published; and the foreclosure affidavit did not show diligent efforts were used to secure the best price. Id.

         In particular, Plaintiff complains that although the foreclosure sale was advertised in writing for September 8, 2010, the sale did not take place until May 3, 2011 at a different location than advertised[2] and no written notice of the change in date or location was published. Id. ¶¶ 19, 36-38. Plaintiff asserts that the Hawaii Supreme Court held in Hungate v. Law Office of David B. Rosen, 139 Haw. 394, 391 P.3d 1 (Haw. 2017) that mortgagees were required to publish notices for postponed auctions under the power of sale, and therefore claims that the sale here was wrongful and unlawful. Id. ¶¶ 39-40. As such, Plaintiff claims entitlement to possession and title, or alternatively rescissory damages. Id. ¶ 24. Plaintiff also claims damages under his wrongful foreclosure claim for lost use and rental value, as well as punitive damages. Id. ¶¶ 57-58.

         Defendants filed their Motion to Dismiss on August 21, 2017. Mot., ECF No. 5. Plaintiff filed his Opposition on October 30, 2017. ECF No. 18 (“Opp.”). Defendants filed their Reply on November 6, 2017. ECF No. 19 (“Reply”). On November 8, 2017, the Court ordered supplemental briefing regarding whether it had subject-matter jurisdiction under the Rooker-Feldman doctrine. ECF No. 20. Both Defendants and Plaintiff filed supplemental memoranda on November 15, 2017. ECF No. 21 (“Defs. Supp. Mem.”); ECF No. 22 (“Pl. Supp. Mem.”). Both parties filed supplemental responses on November 21, 2017. ECF No. 23 (“Defs. Supp. Resp.”); ECF No. 24 (“Pl. Supp. Resp.”).

         The Court held a hearing on Defendants' Motion on December 7, 2017.

         STANDARD

         Rule 12(b)(6) authorizes the Court to dismiss a complaint that fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) is read in conjunction with Rule 8(a), which requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The Court may dismiss a complaint either because it lacks a cognizable legal theory or because it lacks sufficient factual allegations to support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988).

         In resolving a Rule 12(b)(6) motion, the Court must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded factual allegations as true. Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777, 783 (9th Cir. 2012). The complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The plausibility standard . . . asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557). “In considering a motion to dismiss, the court is not deciding whether a ...


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