United States District Court, D. Hawaii
ORDER DENYING DEFENDANTS' MOTION TO DISMISS OR IN
THE ALTERNATIVE TO STAY THE COMPLAINT
A. OTAKE, UNITED STATES DISTRICT JUDGE
case concerns the administration of Plaintiff John
Hochroth's home loan and mortgage by Defendants Ally Bank
and Cenlar FSB (“Cenlar”). Plaintiff asserts
causes of action under the Fair Debt Collection Practices Act
(“FDCPA”) and state common law, seeking damages
for Defendants' alleged mishandling of Plaintiff's
default. Defendants move to dismiss the Complaint primarily
under the Rooker-Feldman doctrine and on
preclusion grounds, based on a prior foreclosure judgment in
state court. Defendants ask the Court, in the alternative, to
stay the federal claims pending resolution of Plaintiff's
appeal of the state foreclosure judgment. For the reasons
discussed below, the Court DENIES Defendants' motion.
owns a house in Kaneohe, Hawai‘i, with a home loan and
mortgage from Ally Bank. Doc. No. 1 at 3. Cenlar is the
authorized servicer of the mortgage and loan. Id. at
4. Plaintiff became delinquent on his mortgage payments and
Ally Bank filed to foreclose on the mortgage in state court
in February 2016. Doc. No. 8-2 at 1; Doc. No. 8-3 at 5. The
state court granted a decree of foreclosure (the
“Foreclosure Decree”) and entered judgment on
October 16, 2017. Doc. No. 8-3 at 8, 12. Plaintiff's
appeal of the Foreclosure Decree is currently pending. Doc.
No. 11 at 18; Doc. No. 11-6.
course of the foreclosure proceeding, Plaintiff attempted to
ascertain from Ally Bank the amount he would need to pay to
reinstate his loan. Doc. No. 1 at 5-6. Ally Bank responded
that Plaintiff's right to reinstatement had passed.
Id. at 6; Doc. No. 8-6 at 55. However, despite Ally
Bank's representations that Plaintiff's right to
reinstatement had expired, Cenlar continued to offer
Plaintiff the opportunity to reinstate his mortgage loan.
Doc. No. 1 at 6-7. In December of 2017, after the foreclosure
decree had already issued, Cenlar sent Plaintiff a statement
that he owed $111, 179.75 on his loan, and that this was
“the amount [due] to reinstate” the loan. Doc.
No. 8-6 at 48.
February 9, 2018, Ally Bank filed a motion for attorneys'
fees and costs for the legal work performed on the
Foreclosure Decree (the “Attorneys' Fees
Motion”). Doc. No. 11-7. Plaintiff opposed the
Attorneys' Fees Motion, primarily arguing that the
requested attorneys' fees were excessive and improperly
billed. Doc. No. 8-6. Plaintiff also contended that because
Ally Bank had refused to inform him of his reinstatement
amounts, Ally Bank should not be awarded attorneys' fees
for time spent litigating the foreclosure case after that
the Attorneys' Fees Motion was pending, Cenlar and
Plaintiff reached an agreement on reinstatement. Doc. No. 1
at 7. On February 26, 2018, Cenlar sent an acknowledgment
letter to Plaintiff, stating that his reinstatement payment
was received, and that “any foreclosure action will be
closed.” Doc. No. 1 at 7; Doc. No. 11 at 8. The
reinstatement agreement required Plaintiff to pay certain
costs and attorneys' fees related to the foreclosure
action. Doc. No. 1 at 7. Plaintiff's subsequent loan
statements from Cenlar increased to reflect his agreement to
pay these attorneys' fees and costs. Id.
state court granted Ally Bank's Attorneys' Fees
Motion on May 4, 2018 (the “Attorneys' Fees
Order”). Doc. No. 8-7. The Attorneys' Fees Order
did not address Plaintiff's argument that attorneys'
fees accumulated after Ally Bank refused to provide Plaintiff
the reinstatement amount should not be awarded. Id.
After the issuance of the Attorneys' Fees Order,
Plaintiff sent a letter to the state court informing the
court that Plaintiff had fully reinstated his loan and
arguing that it was improper for Ally Bank to continue to
seek foreclosure or attorneys' fees. Doc. No. 8-9. The
state court held a hearing to address Plaintiff's letter,
during which Plaintiff's counsel stated that if Ally Bank
did not agree to set aside the Attorneys' Fees Order,
Plaintiff would file a motion to set it aside based on the
reinstatement agreement with Cenlar. Doc. No. 8-10 at
11:7-13. The court did not enter any rulings during
the hearing, and instead scheduled another status conference
to give the parties time to discuss the issues with their
clients and with each other. Id. The record does not
reflect any further information about the status conference.
Thereafter, Plaintiff filed a motion to set aside and vacate
the Foreclosure Decree and Attorneys' Fees Order, but
Plaintiff voluntarily withdrew that motion before the state
court addressed it. See Doc. No. 8 at 16.
August 16, 2018, Plaintiff filed the present Complaint,
asserting causes of action under the FDCPA and state common
law against Defendants. The FDCPA claims relate to
Defendants' communications with Plaintiff regarding his
debt: Count 1 alleges calls before 8:00 a.m. and after 9:00
p.m.; Count 2 alleges calls made directly to Plaintiff even
though Cenlar was aware Plaintiff had counsel; Count 3
alleges communications with Plaintiff after he requested they
stop; Count 4 alleges harassing communications; Count 5
alleges communications with intent to annoy or harass; Count
6 alleges calls without identifying the caller; Count 7
alleges false and deceptive communications regarding loan
reinstatement; Count 8 alleges threats of imminent eviction;
Count 9 alleges a failure to advise Plaintiff that the
communications were from debt collectors; Count 10 alleges
that Cenlar Bank communicated in a way that gave the false
appearance of legal process; and Count 11 alleges various
violations related to door tags left on Plaintiff's door.
Doc. No. 1 at 9-22. Counts 12 through 14, the state law
claims, seek damages for Ally Bank's and Cenlar's
contradictory statements and actions regarding
Plaintiff's ability to reinstate his loan. Doc. No. 1 at
23-27. Specifically, Count 12 asserts a breach of contract
claim; Count 13 asserts a promissory estoppel claim; and
Count 14 asserts a Hawai‘i statutory violation of
unfair and deceptive practices for the alleged contradictory
positions of Cenlar and Ally Bank. Id.
motion to dismiss asserts several grounds for dismissal and
abstention. Defendants move for dismissal for lack of subject
matter jurisdiction under Federal Rule of Civil Procedure
(“FRCP”) 12(b)(1), pursuant to the
Rooker-Feldman doctrine, and under FRCP
12(b)(6) on claim preclusion grounds. See Doc. No. 8
at 19 n.15, 26 n.16. Defendants also seek a stay of the
federal claims pursuant to the Younger abstention
doctrine and the Court's inherent authority to issue a
stay. Doc. No. 8 at 2.
12(b)(6) authorizes dismissal of a complaint that fails
“to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). “On a motion to
dismiss, the court accepts the facts alleged in the complaint
as true.” UMG Recordings, Inc. v. Shelter Capital
Partners LLC, 718 F.3d 1006, 1014 (9th Cir. 2013)
(quoting Balistreri v. Pacifica Police Dep't,
901 F.2d 696, 699 (9th Cir. 1988)). Conclusory allegations of
law, unwarranted deductions of fact, and unreasonable
inferences are insufficient to defeat a motion to dismiss.
Sprewell v. Golden State Warriors, 266 F.3d 979, 988
(9th Cir. 2001); Nat'l Ass'n for the Advancement
of Psychoanalysis v. Cal. Bd. of Psychology, 228 F.3d
1043, 1049 (9th Cir. 2000). Although affirmative defenses
generally do not suffice for a motion to dismiss, preclusion
may be the basis for dismissal under FRCP 12(b)(6) where
there are no disputed issues of fact. See Scott v.
Kuhlmann, 746 F.2d 1377, 1378 (9th Cir. 1984).
Rooker-Feldman doctrine addresses
jurisdiction and is thus analyzed under the FRCP 12(b)(1)
standard. Noel v. Hall, 341 F.3d 1148, 1154 (9th
Cir. 2003). Because federal courts have limited
subject-matter jurisdiction, the plaintiff bears the burden
of establishing jurisdiction. Scott v. Breeland, 792
F.2d 925, 927 (9th Cir. 1986). Dismissal is warranted when
the plaintiff fails to meet its burden. Chandler v. State
Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir.
2010). The Court may rely on evidence submitted outside of
the complaint to resolve factual disputes concerning the
existence of jurisdiction. McCarthy v. United
States, 850 F.2d 558, 560 (9th Cir. 1988).
The Rooker-Feldman Doctrine Does Not Bar