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Sigwart v. U.S. Bank National Association

United States District Court, D. Hawaii

December 28, 2018

JULIE M. SIGWART, Individually and as Trustee of the Revocable Living Trust Dolphin Star Trust Dated December 10, 2003, Plaintiff,
v.
U.S. BANK NATIONAL ASSOCIATION, also known as U.S. Bank N.A., a national banking association; and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation, Defendants.

          ORDER DENYING PLAINTIFF'S APPEAL AND AFFIRMING THE MAGISTRATE JUDGE'S SEPTEMBER 26, 2018 ORDER DENYING PLAINTIFF'S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT

          Leslie E. Kobayashi United States District Judge

         On September 26, 2018, the magistrate judge issued an Order Granting in Part and Denying in Part Plaintiff's Motion for Leave to File First Amended Complaint (“9/26/18 Order”). [Dkt. no. 69.] On October 10, 2018, Plaintiff Julie M. Sigwart, individually and as Trustee of the Revocable Living Trust Dolphin Star Trust Dated December 10, 2003 (“Plaintiff”), filed an appeal from the 9/26/18 Order (“Appeal”). [Dkt. no. 72.] Defendants U.S. Bank National Association and Mortgage Electronic Registration Systems, Inc. (“Defendants”) filed their memorandum in opposition on October 30, 2018, and Plaintiff filed her reply on November 13, 2018. [Dkt. nos. 75, 78.] The Court has considered the Appeal as a non-hearing matter pursuant to Rule LR7.2(e) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). Plaintiff's Appeal is hereby denied for the reasons set forth below.

         BACKGROUND

         The relevant factual and procedural background of this case is familiar to the parties, and the Court will only discuss the portions relevant to the Appeal. The instant Appeal stems from the Ninth Circuit's recent decision that, inter alia, reversed in part this Court's order dismissing all of Plaintiff's claims with prejudice. See Memorandum, filed 11/8/17 (dkt. no. 42); Order Granting Defs.' Motion to Dismiss Complaint, filed 3/31/14 (dkt. no. 25) (“3/31/14 Order”);[1] Order Dismissing Remaining Claims With Prejudice, filed 6/17/14 (dkt. no. 32) (“6/17/14 Order”).

         Plaintiff's original complaint alleged Defendants had committed unfair or deceptive acts and practices (“UDAP”), in violation of Haw. Rev. Stat. § 480-2, based on four separate theories: 1) Defendants scheduled the auction date for her property less than twenty-nine days after it was first advertised, in violation of Haw. Rev. Stat. § 667-7(a)(2) (“the 28-Day Practice”);[2] 2) Defendants did not publish notice of a new sale date and time when they postponed the foreclosure sale, in violation of the mortgage agreement and Haw. Rev. Stat. § 667-5(a)(2) (“the Postponement Practice”); 3) Defendants only advertised the sale of the property by quitclaim deed, and not a warranty deed (“the Quitclaim Practice”); and 4) Defendants advertised the sale of the property in the County of Hawai`i, instead of the County of Maui, where the property was located (“the Hawai`i County Publication”). See 3/31/14 Order, 2014 WL 1322813, at *2, *3 n.4.

         In ruling on Plaintiff's appeal, the Ninth Circuit considered the Hawai`i Supreme Court's recent decision in Hungate v. Law Office of David B. Rosen, 139 Hawai`i 394, 391 P.3d 1 (2017). Sigwart, 713 Fed.Appx. at 538. In Hungate, the Hawai`i Supreme Court held it was unfair and deceptive for a mortgagee to: fail to schedule an auction date for the property at least twenty-nine days after the sale was first advertised, in violation of § 667-7(a)(2); or fail to postpone the foreclosure sale without publishing notice of the new date and time in violation of the mortgage agreement and § 667-5(a)(2). Hungate, 139 Hawai`i at 411-12, 391 P.3d at 18-19. Based on Hungate, the Ninth Circuit reversed this Court's ruling as to Plaintiff's UDAP claims with respect to the 28-Day and Postponement Practices, but affirmed this Court's dismissal with prejudice of Plaintiff's remaining UDAP claims. The Ninth Circuit also rejected Plaintiff's argument that, in her original complaint, Plaintiff had properly alleged a claim for wrongful foreclosure, which this Court allegedly failed to rule on. Sigwart, 713 Fed.Appx. at 538-39. In doing so, the Ninth Circuit stated:

While the Complaint does not specifically mention wrongful foreclosure, [Plaintiff] argues for the first time on appeal she has stated a claim based on her allegation that she was “entitled [to relief] under any and all applicable tort or recovery theories.” Complaint ¶ 65 (emphasis added). Such “[c]onclusory allegations of law, however, are insufficient to defeat a motion to dismiss.” Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001) (citation omitted). And the district court did not abuse its discretion here in dismissing the Complaint with prejudice, where [Plaintiff] failed to file a motion for leave to amend her Complaint to add the claim and failed to assert it below. See Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1043 (9th Cir. 2011).

Id. (some alterations in mem. dispo.).

         On July 30, 2018, Plaintiff filed her Motion for Leave to File First Amended Complaint (“Leave Motion”) to reallege and clarify her wrongful foreclosure claim, and conform her proposed first amended complaint to the Ninth Circuit's decision as to Plaintiff's UDAP claims based on the 28-Day and Postponement Practices. See Pltf.'s Mem. in Supp. of Leave Motion, filed 6/30/18 (dkt. no. 59-1), at 1. In denying Plaintiff leave to add her foreclosure claim, the magistrate judge found, inter alia, that this Court had previously dismissed all of Plaintiff's claims with prejudice, and the Ninth Circuit affirmed this decision; therefore, the law of the case precluded Plaintiff from realleging her wrongful foreclosure claim. [9/26/18 Order at 4.]

         In the instant Appeal, Plaintiff asserts the magistrate judge erred in denying her request to reallege, support, or clarify her wrongful foreclosure claim because this claim falls under at least one of the exceptions to the law of the case doctrine. Plaintiff also asserts the magistrate judge failed to address Defendants' alleged violation of the Rules of the Supreme Court of the State of Hawai`i, Rule 6, by their counsel of record, Dentons U.S. LLP (“Dentons”).

         STANDARD

         I. Appeal of a Magistrate Judge's Order

          This district court has stated:

Pursuant to 28 U.S.C. § 636(b)(1)(A), Federal Rule of Civil Procedure 72(a), and LR 74.1, any party may appeal to the district court any pretrial nondispositive matter determined by a magistrate judge. Such an order may be reversed by the district court judge only when it is “clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); LR 74.1. An order is “contrary to law” when it “fails to apply or misapplies relevant statutes, case law, or rules of procedure.” Akey v. Placer Cty., 2017 WL 1831944, at *10 (E.D. Cal. May 8, 2017) (citation and quotation marks omitted). And an order is “clearly erroneous” if, after review, the court has a “definite and firm conviction that a mistake has been committed.” Easley v. Cromartie, 532 U.S. 234, 242 (2001); Fisher v. Tucson Unified Sch. Dist., 652 F.3d 1131, 1136 (9th Cir. 2011); Cochran v. Aguirre, 2017 WL 2505230, at *1 (E.D. Cal. June 9, 2017) (citing cases). “[R]eview under the ‘clearly erroneous' standard is significantly deferential.” Concrete Pipe & Prods. ...

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