United States District Court, D. Hawaii
LYNDA GAMBLIN and LONI A. HART, Plaintiffs,
NATIONSTAR MORTGAGE LLC; FEDERAL NATIONAL MORTGAGE ASSOCIATION; BARRY JAMES HARDING; DEBORAH LYNN HARDING; and DOE DEFENDANTS 1-50, Defendants.
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
C. Kay Sr. United States District Judge.
reasons set forth below, the Court GRANTS IN PART and DENIES
IN PART Defendants Nationstar Mortgage LLC and Federal
National Mortgage Association's Motion for Summary
Judgment, ECF No. 15, as follows:
1. Defendants' Motion for Summary Judgment on
Plaintiffs' quiet title, ejectment, and declaratory
relief claims against Nationstar Mortgage LLC and Federal
National Mortgage Association is GRANTED;
2. Defendants' Motion for Summary Judgment on
Plaintiffs' wrongful foreclosure claims against
Nationstar Mortgage LLC and Federal National Mortgage
Association is DENIED.
26, 2008, Bruce J. Cary executed an apartment deed in favor
of Plaintiffs Lynda Gamblin and Loni A. Hart (collectively,
“Plaintiffs”), conveying to them the real
property located at 2895 S. Kihei Road, Apartment 303, Kihei,
Hawaii 96753, Tax Map Key (“TMK”) No. (2)
3-9-004-139-0018 (“Property”). Plaintiff's
Concise Statement of Facts (“Pl.'s CSF”),
Declaration of James J. Bickerton (“Bickerton
Decl.”), ECF No. 36-1 ¶ 4; Pl.'s CSF Ex. 2,
ECF No. 36-4 at 1-3. In July 2008, Plaintiffs executed a
mortgage on the Property in favor of Mortgage Electronic
Registration Systems, Inc. as nominee for Mangum Mortgage
Inc., its successors and assigns, which was later assigned to
Defendant Nationstar Mortgage LLC (“Nationstar”).
Compl., ECF No. 1-1 ¶¶ 16, 17; see Defs.'
Concise Statement of Facts (“Defs.' CSF”),
Declaration of Jade Lynne Ching (“Ching Decl.”),
ECF No. 16-1 ¶3; Def.'s CSF Ex. 1, ECF No. 16-2;
Bickerton Decl. ¶ 5; Pl.'s CSF Ex. 3, ECF No. 36-5.
The mortgage was security for Plaintiffs' performance
under a promissory note in the amount of $369, 000.00.
Defs.' CSF ¶¶ 1, 2; Id. Ex. 1, at
191. On December 18, 2008, Gamblin executed
a quitclaim apartment deed in favor of Hart; that deed was
recorded with the State of Hawai`i Bureau of Conveyances
(“BOC”) on December 23, 2008. Compl. Ex. A, ECF
No. 1-1 at 30-36.
assert that, at some point, “part or all of the
interest in the mortgage loan had been sold to Fannie Mae
[Federal National Mortgage Association], such that while
Nationstar claimed to be the mortgagee, Fannie Mae also
claimed to be the owner of the mortgage loan.” Compl.
¶ 18. At the hearing on the instant Motion, counsel for
Nationstar and Fannie Mae (together,
“Defendants”) admitted that Fannie Mae was, at
the time of the foreclosure, the beneficial holder of the
promissory note, and stated that Nationstar was a servicer
acting on Fannie Mae's behalf.
defaulted under the promissory note and mortgage. Defs.'
CSF ¶ 3; Ching Decl. ¶ 4; Def.'s CSF Ex. 2, ECF
No. 16-3. No. notice of acceleration is in the record, but
Plaintiffs assert that any notice of acceleration they
received was defective in that, “among other omissions,
[it] failed to inform Plaintiffs that they in fact had
certain rights with respect to reinstatement and/or the
sale.” Compl. ¶ 25. On October 20, 2010,
Nationstar initiated a non-judicial foreclosure under the
power of sale in the mortgage and former Hawaii Revised
Statutes (“HRS”) Chapter 667, Part I
(2008).Defs.' CSF ¶ 3; Ching Decl.
¶ 4; Def.'s CSF Ex. 2, ECF No. 16-3. To do so,
Nationstar caused to be recorded with the BOC a Notice of
Mortgagee's Intention to Foreclose Under Power of Sale
(“Notice of Intent to Foreclose”), Document
Number 2010-159093. Defs.' CSF ¶ 3; Id. Ex.
2. The Notice of Intent to Foreclose stated the address and
TMK number of the Property. Def's CSF Ex. 2. Plaintiffs
assert that this Notice was defective because it did not
contain a description of the Property. Compl. ¶ 28. They
further assert that Nationstar erred by offering buyers only
a quitclaim deed. Id. ¶ 29.
Notice of Intent to Foreclose directed that a public auction
of the Property would be held on December 22, 2010.
Defs.' CSF at ¶, 43; Id. Ex. 2 at 1. An
advertisement regarding the sale was placed in the Honolulu
Star-Advertiser once in each of three successive weeks, the
last date being more than fourteen days prior to the
scheduled auction date. Ching Decl. ¶ 3; Def.'s CSF
Ex. 3, ECF No. 16-4 at 3; Compl. ¶ 30. The public
auction did not occur on that date, however, and was instead
postponed an unknown number of times, by oral announcement at
the time and place of the scheduled auction, until it was
finally held on March 9, 2011. Defs.' CSF ¶¶ 4,
5; Def.'s CSF Ex. 3 at 3. Plaintiffs contend that
Nationstar erred both by not holding the auction on December
22, 2010, and by not publishing new written notice(s) in the
newspaper regarding postponements. Compl. ¶¶ 31-37.
March 9, 2011, public auction, the Property was sold for
$318, 453.53 to Nationstar or its nominee. Defs.' CSF
¶ 6; Id. Ex. 3 at 3. At the hearing on this
Motion, counsel for Defendants stated that this was a credit
bid by Nationstar acting as nominee for Fannie Mae. Following
the sale, on March 21, 2011, Nationstar recorded with the BOC
a Mortgagee's Affidavit of Foreclosure Under Power of
Sale (“Mortgagee's Affidavit”), Document
Number 2011-046885. Defs.' CSF ¶ 7; Id. Ex.
3; Compl. ¶ 41.
one month later, on April 25, 2011, Nationstar executed a
quitclaim deed on the Property to Fannie Mae. Compl. ¶
19; Bickerton Decl. ¶ 6; Pl.'s CSF Ex. 4, ECF No.
36-6. Nationstar recorded the quitclaim deed with the BOC on
June 20, 2011. Pl.'s CSF Ex. 4. Plaintiffs allege that,
on October 4, 2011, Fannie Mae executed a limited warranty
apartment deed in favor of Barry James and Deborah Lynn
Harding (“Hardings”), which Fannie Mae recorded
on October 7, 2011. Compl. ¶ 21.
March 9, 2017, Plaintiffs filed a Complaint in state court
against Defendants, the Hardings, and numerous Doe
defendants. Compl., ECF No. 1-1. The Complaint alleges two
counts: (1) quiet title, ejectment, and declaratory relief
against all defendants, Id. ¶¶ 13-61; and
(2) wrongful foreclosure against all defendants, Id.
November 13, 2017, the Hardings filed a notice of removal
with this Court, Notice of Removal, ECF No. 1, and on
November 27, 2017, filed an answer and counterclaim against
Plaintiffs, ECF No. 4. The counterclaim alleges two counts:
(1) quiet title, and (2) declaratory relief. ECF No. 4-1.
filed a Motion for Summary Judgment (“MSJ”) on
May 18, 2018, ECF No. 15, along with a concise statement of
facts, ECF No. 16. Hearing on the MSJ was originally
scheduled for August 20, 2018, but on July 30, 2018, the
parties stipulated to a continuance, ECF No. 22, and the
Court rescheduled the hearing for October 29, 2018, ECF No.
28. On August 8, 2018, the Hardings filed a joinder to the
instant motion. ECF No. 25. Plaintiffs filed their Opposition
(“Opp.”) to the MSJ on October 5, 2018, ECF No.
35, together with a concise statement of facts, ECF No. 36.
On October 12, 2018, Defendants filed a Reply to
Plaintiffs' Opposition. ECF No. 48. On October 25, 2018,
Plaintiffs made a filing pursuant to Local Rule 7.8,
consisting of eight cases and a short explanation of the
proposition for which each was cited. ECF No. 49. The Court
held a hearing on Defendants' MSJ on Monday, October 29,
judgment is proper where there is no genuine issue of
material fact and the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(a). Federal Rule of Civil
Procedure (“Rule”) 56(a) mandates summary
judgment “against a party who fails to make a showing
sufficient to establish the existence of an element essential
to the party's case, and on which that party will bear
the burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); see also
Broussard v. Univ. of Cal., 192 F.3d 1252, 1258 (9th
party seeking summary judgment bears the initial burden of
informing the court of the basis for its motion and of
identifying those portions of the pleadings and discovery
responses that demonstrate the absence of a genuine issue of
material fact.” Soremekun v. Thrifty Payless,
Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex,
477 U.S. at 323); see also Jespersen v. Harrah's
Operating Co., 392 F.3d 1076, 1079 (9th Cir. 2004).
“When the moving party has carried its burden under
Rule 56[(a)] its opponent must do more than simply show that
there is some metaphysical doubt as to the material facts
[and] come forward with specific facts showing that there is
a genuine issue for trial.” Matsushita Elec. Indus.
Co. v. Zenith Radio, 475 U.S. 574, 586-87 (1986)
(citation and internal quotation marks omitted); see also
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986) (stating that a party cannot “rest upon
the mere allegations or denials of his pleading” in
opposing summary judgment).
issue is ‘genuine' only if there is a sufficient
evidentiary basis on which a reasonable fact finder could
find for the nonmoving party, and a dispute is
‘material' only if it could affect the outcome of
the suit under the governing law.” In re
Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing
Anderson, 477 U.S. at 248). When considering the evidence on
a motion for summary judgment, the court must draw all
reasonable inferences on behalf of the nonmoving party.
Matsushita Elec. Indus. Co., 475 U.S. at 587; see also
Posey v. Lake Pend Oreille Sch. Dist. No. 84, 546 F.3d
1121, 1126 (9th Cir. 2008) (stating that “the evidence
of [the nonmovant] is to be believed, and all justifiable
inferences are to be drawn in his favor” (internal
citation and quotation omitted)).
assert their entitlement to summary judgment on a number of
grounds. They argue that: Plaintiffs' claim for
declaratory relief is duplicative of the relief sought in
their other claims, MSJ at 22; Plaintiffs' claims are
time-barred and/or subject to laches, MSJ at 6-20; Plaintiff
cannot assert a wrongful foreclosure claim, or indeed any
claim, against Fannie Mae, MSJ at 22-23; and that
Plaintiffs' quiet title and ejectment claims fail as
against both Defendants, MSJ at 20-21. The Court addresses
these arguments below.
seek, among other things, “a declaratory judgment
against all Defendants that Nationstar's and Fannie
Mae's non-judicial foreclosure sale and transfer of the
Property . . . is void or at the least voidable at
Plaintiffs' election[.]” Compl., Prayer for Relief
¶ 7; see also Compl. ¶ 57 (“Plaintiffs are
entitled to a judicial declaration that said Defendants have
no such rights and the possession of and title to the
Property should be restored to Plaintiffs.”).
Defendants assert that Plaintiffs' request for
declaratory relief fails as a matter of law because it is
“duplicative” of Plaintiffs' other claims.
MSJ at 22. The Court concurs and finds summary judgment
appropriate on this claim.
it is important to note that declaratory judgment allows
rights and obligations to be “adjudicated in cases
brought by any interested party involving an actual
controversy that has not reached a stage at which either
party may seek a coercive remedy and in cases where a party
who could sue for coercive relief has not yet done so.”
Seattle Audubon Soc. v. Moseley, 80 F.3d 1401, 1405
(9th Cir. 1996) (citing 28 U.S.C. § 2201); Wavecom
Sols. Corp. v. Verizon Hawaii Int'l Inc., No. CV.
11-00337 DAE-KSC, 2011 WL 5374428, at *7-8 (D. Haw. Nov. 7,
2011) (quoting Seattle Audubon Soc.). Because a declaratory
judgment is not a corrective action, it should not be used to
remedy past wrongs. See, e.g., Marzan v. Bank of
Am., 779 F.Supp.2d 1140, 1146 (D. Haw. 2011)
(“[B]ecause Plaintiffs' claims are based on
allegations regarding Defendants' past wrongs, a claim
under the Declaratory Relief Act is improper and in essence
duplicates Plaintiffs' other causes of action.”
(citations omitted)) (abrogated on other grounds by
Compton v. Countrywide Fin. Corp., 761 F.3d 1046
(9th Cir. 2014)). Rather, the “useful purpose served by
the declaratory judgment action is the clarification of legal
duties for the future[.]” Amsouth Bank v.
Dale, 386 F.3d 763, 786 (6th Cir. 2004) (internal
quotation marks omitted); see also Societe de
Conditionnement en Aluminium v. Hunter Eng'g Co.,
655 F.2d 938, 943 (9th Cir. 1981) (“[The Declaratory
Judgment Act] brings to the present a litigable controversy,
which otherwise might only by [sic] tried in the
courts frequently dismiss claims for declaratory relief where
the relief sought is duplicative of their other claims.
See, e.g., Cannon v. U.S. Bank, NA, No. CIV.
11-00079 HG-BMK, 2011 WL 2117015, at *3 (D. Haw. May 24,
2011) (“The Plaintiffs have requested declaratory
relief to correct an allegedly improper mortgage transaction.
The Declaratory Relief Act, however, is not an appropriate
remedy here since any declaration of the rights of the
parties would essentially duplicate Plaintiffs' other
causes of action.”); Swartz v. KPMG LLP, 476
F.3d 756, 766 (9th Cir. 2007) (affirming district court's
dismissal of plaintiff's request for declaratory judgment
and reasoning, “To the extent [plaintiff] seeks a
declaration of defendants' liability for damages sought
for his other causes of action, the claim is merely
duplicative and was properly dismissed.”).
Plaintiffs' claim for declaratory relief, as pleaded, is
based upon Defendants' past wrongs. See generally Compl.
In addition, Plaintiffs' claim for declaratory relief is
commensurate with the relief sought through their other
claims; in particular, Plaintiffs' request for a
declaration “that Nationstar's and Fannie Mae's
non-judicial foreclosure sale and transfer of the Property .
. . is void or at the least voidable at Plaintiffs'
election, ” Compl., Prayer for Relief at ¶ 7,
mirrors the relief sought through Plaintiffs' wrongful
foreclosure and quiet title claims. The same is true of
Plaintiffs' requested declaration that Defendants or the
Hardings hold no “right, title, or interest in the
Property” and “possession of and title to the
Property should be restored to Plaintiffs.” Compl.
these circumstances, declaratory relief will “neither
serve a useful purpose in clarifying and settling the legal
relations in issue nor terminate the proceedings and afford
relief from the uncertainty and controversy faced by the
parties.” United States v Washington, 759 F.2d
1353, 1357 (9th Cir. 1985) (citations omitted). Accordingly,
Defendants are entitled to summary judgment on
Plaintiffs' claim for declaratory relief.
Statute of Limitations
argue that all of Plaintiffs' claims against them are
time-barred. MSJ at 6. According to Defendants, all of
Plaintiffs' claims accrued no later than the originally
published auction date-December 22, 2010-and are thus
time-barred by either the two-year time limitation under HRS
§ 657-7 or the six-year time limitation under HRS §
657-1. E.g., Id. at 6, 9, 13. The Court addresses
this argument as it applies to Plaintiffs' wrongful
Accrual of Plaintiffs' Claims
determine whether Plaintiffs' claims are time-barred by
the applicable statutes of limitations, the Court must first
determine when Plaintiffs' claims accrued. The Hawai`i
Supreme Court does not appear to have yet decided when a
wrongful foreclosure claim stemming from a non-judicial
foreclosure accrues, and the parties advocate for different
accrual dates. Compare MSJ at 6 with Opp. at 4.
term “accrue” means “[t]o come into
existence as an enforceable claim or right.”
Black's Law Dictionary (10th ed. 2014). Relevant here, a
claim normally accrues under HRS § 657-1 “when the
contract is breached.” Au v. Au, 63 Haw. 210,
219, 626 P.2d 173, 180 (1981); see also Blair v.
Ing, 95 Haw. 247, 264, 21 P.3d 452, 469 (2001)
(explaining that, under traditional “occurrence rule,
” “the accrual of the statute of limitations
begins when the negligent act occurs or the contract is
breached.”); Schimmelfennig v. Grove Farm Co.,
41 Haw. 124, 130 (1955) (“A right of action accrues
whenever such a breach of duty or contract has occurred . . .
as will give a right to then bring and sustain a suit. . . .
If an act occurs . . . for which the law gives a remedy, that
starts the statute.”) (citations and internal quotation
marks omitted). And a claim accrues under HRS § 657-7
“the moment plaintiff discovers or should have
discovered the negligent act, the damage, and the causal
connection between the former and the latter.”
Yamaguchi v. Queen's Med. Ctr., 65 Haw. 84, 90,
648 P.2d 689, 693-94 (1982).
matter, Defendants contend that Plaintiffs' claims
accrued no later than December 22, 2010. MSJ at 6-9.
“The alleged breach, ” Defendants argue,
“occurred [at the latest] when the public auction was
not held on December 22, 2010, the date of the originally
scheduled sale specified in the [Notice of Intent to
Foreclose].” MSJ at 9 (emphasis in original). The Court
finds, however, that ...