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Aquino v. Deutsche Bank Trust Company Americas

United States District Court, D. Hawaii

November 6, 2019

MARCELINO MENDOZA AQUINO, et al., Plaintiffs,
v.
DEUTSCHE BANK TRUST COMPANY AMERICAS AS TRUSTEE FOR RESIDENTIAL ACCREDIT LOANS, INC., MORTGAGE ASSET-BACKED PASS THROUGH CERTIFICATES, SERIES 2007 QH1, et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS

          JILL A. OTAKE, UNITED STATES DISTRICT JUDGE

         Plaintiffs Marcelino Mendoza Aquino and Jeanette Donia Aquino (“Plaintiffs”) bring claims against Defendant Deutsche Bank Trust Company Americas (“Deutsche Bank”) and Defendant Cody Minatodani (“Commissioner Minatodani”). Deutsche Bank and Commissioner Minatodani ask the Court to abstain from exercising jurisdiction over this action or, alternatively, to dismiss the Complaint under Federal Rules of Civil Procedure (“FRCP”) Rule 12(b)(6). For the reasons stated below, the motions are GRANTED.

         I. BACKGROUND

         Plaintiffs owned property in Wailuku, Hawai‘i. ECF No. 1 (“Compl.”) ¶¶ 3-4; ECF No. 1-3, Ex. C.[1] Deutsche Bank filed suit against Plaintiffs in the Circuit Court of the Second Circuit, State of Hawai‘i (“state court”) seeking to foreclose on Plaintiff's property (the “state court action”). ECF No. 13-3.[2] In the state court action, Deutsche Bank moved for summary judgment against Plaintiffs and requested an interlocutory decree of foreclosure. Id. In April 2018, the state court granted Deutsche Bank's summary judgment motion and request for an interlocutory decree of foreclosure, and directed that its ruling be entered as a final judgment under Rule 54(b) of the Hawai‘i Rules of Civil Procedure. Id. To enforce its order, the state court appointed Defendant Minatodani as Commissioner of the Court who was authorized and directed to take possession of the property and sell it at a public or private sale. Id.

         Plaintiffs first sought relief in state court in February 2019, asking the state court to vacate its summary judgment order pursuant to Rule 60(b) of the Hawai‘i Rules of Civil Procedure based on newly discovered evidence of fraud, and seeking dismissal of the case. Compl. ¶¶ 4-6; ECF Nos. 1 to 4, Exs. A-D. Plaintiffs also wrote to Commissioner Minatodani in June 2019 asking that she not proceed with an auction of the property scheduled for July 24, 2019. Compl. ¶¶ 4-6; ECF No. 1-4, Ex. D.

         A few days before that scheduled auction, on July 22, 2019, Plaintiffs filed this federal action. ECF No. 1. Their Complaint nominally references 42 U.S.C. § 1983, the False Claims Act (“FCA”), and the Fair Debt Collection Practices Act (“FDCPA”). Id. They allege Defendants violated their civil rights by depriving them of a right to a jury trial and appeal in the state court action. Id. ¶¶ 3, 5. Plaintiffs object to Commissioner Minatodani proceeding with an auction before the state court ruled on their motion to vacate, and further object that she did not respond to their June 2019 letter asking her not to proceed with the auction. Id. ¶¶ 4, 6-7, 10. Plaintiffs allege Deutsche Bank does not have proper documentation to prove it holds the original promissory note for Plaintiffs' mortgage. Id. ¶ 7. Plaintiffs seek damages, as well as attorney's fees and costs. Compl. at 6. Plaintiffs also ask the Court to “stop the foreclosure action and [Defendants] from selling the Plaintiffs' property.” Id.

         When Plaintiffs filed their Complaint, they also filed an ex parte petition for injunctive relief and a temporary restraining order that asked the Court to enjoin the sale of the property. ECF No. 3. The Court held a hearing on Plaintiffs' request for emergency relief that same day. ECF No. 10. The Court denied Plaintiffs' motion, concluding it lacked jurisdiction because Plaintiffs' request to enjoin the sale of the property amounted to a de facto appeal of the state court judgment, which was barred under the Rooker-Feldman doctrine.[3] See Cooper v. Ramos, 704 F.3d 772, 777-79 (9th Cir. 2012); Noel v. Hall, 341 F.3d 1148, 1154, 1163-64 (9th Cir. 2003); Worldwide Church of God v. McNair, 805 F.2d 888, 892, 893 n.3 (9th Cir. 1986). The Court noted that Plaintiffs' FRCP Rule 60(b) motion did not affect the finality of the state court's judgment or suspend its operation. The Court further ruled that while Plaintiffs' Complaint could proceed at that time to the extent it sought damages, the Court lacked jurisdiction over any request for injunctive relief in the form of enjoining the sale of the property.

         Defendants now move separately to dismiss Plaintiffs' Complaint. Deutsche Bank asks the Court to abstain from exercising jurisdiction under the Younger abstention doctrine, also arguing the Complaint fails to state a claim against it. ECF No. 15. Commissioner Minatodani moves separately, raising the same arguments as Deutsche Bank but also arguing that, as a Commissioner appointed by the state court, she is entitled to quasi-judicial immunity. ECF No. 13. Plaintiffs, representing themselves, oppose both motions. ECF No. 31; ECF No. 32.

         II. LEGAL STANDARD

         Rule 12(b)(6) allows an attack on the pleadings for failure to state a claim on which relief can be granted. “[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)). However, a court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Id. (alteration in original) (quoting Twombly, 550 U.S. at 557). A complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. This means that the complaint must plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). There must be “sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively, ” and “factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

         III. DISCUSSION

         A. Younger Abstention

         Both Defendants first ask the Court to abstain from exercising jurisdiction over the case and order dismissal under Younger v. Harris, 401 U.S. 37 (1971). In civil cases, Younger abstention is appropriate where a state court proceeding: (1) is ongoing; (2) is a quasi-criminal enforcement action or involves a state's interest in enforcing the orders and judgments of its courts; (3) implicates important state interests; (4) provides an adequate opportunity to raise federal challenges; and (5) would be enjoined by the federal court action or where the federal proceeding would have the practical effect of doing so. See Rynearson v. Ferguson, 903 F.3d 920, 924 (9th Cir. 2018). “Each of these requirements must be ‘strictly met.'” Id. (quoting AmerisourceBergen Corp. v. Roden, 495 F.3d 1143, 1148 (9th Cir. 2007)).

         Because neither Defendant addresses the second element, the Court declines to dismiss the Complaint under Younger at this time.[4]See ECF No. 13-1 at 6-8; ECF No. 15-1 at 5-7. Both Defendants also focus only on why Younger abstention is appropriate given Plaintiffs' request for injunctive relief in the form of a stay of the sale of the property. But the Court already dismissed that request for relief under the Rooker-Feldman doctrine. ECF No. 10. And neither party addresses why, for example, it would be appropriate to dismiss an FDCPA damages claim on the basis of Younger abstention. See Herrera v. City of Palmdale, 918 F.3d 1037, 1042 (9th Cir. 2019) (“[O]ur court has . . . recognized that, when a district court abstains from considering a damages claim under Younger, it must stay-rather than dismiss-the ...


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