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Hunter v. Bank of America, N.A.

United States District Court, W.D. Washington, Seattle

May 25, 2017

KEITH HUNTER, an individual, and ELAINE HUNTER, an individual, Plaintiffs,
BANK OF AMERICA, N.A.; SPECIALIZED LOAN SERVICING, LLC, a Delaware limited liability company; NATIONSTAR MORTGAGE, LLC, Delaware limited liability company; QUALITY LOAN SERVICE CORPORATION OF WASHINGTON, a Washington corporation; HSBC BANK USA, N.A., as Trustee for Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, MANA Series 2007-OAR2; JOHN DOES NO. 1-10, Defendants.


          Honorable Richard A. Jones United States District Judge.

         This matter comes before the Court on Defendants' Motions to Dismiss. Dkt. ## 5, 20. Plaintiffs oppose the motions. Dkt. ## 16, 21.

         I. BACKGROUND[1]

         Elaine and Donald Hunter signed a promissory note to Countrywide that is secured by a deed of trust concerning the property located at 7022 NE 170th Street in Kenmore, Washington. Dkt. # 1-4 (Amended Complaint) at ¶¶ 1-2. Defendant Bank of America, N.A. (“BANA”) acquired Countrywide and began servicing the Hunters' loan. Id. at ¶ 21. The Hunters made consistent monthly loan payments to BANA.

         Sometime in 2011, BANA began returning the Hunters' mortgage payments without crediting their account. Id. at ¶ 25. The Hunters contacted BANA on several occasions to resolve the issue. Id. at ¶¶ 28-34. BANA did not give Hunters any clear answers or instructions, and so the Hunters continued to send their payments to BANA. Nevertheless, BANA continued to return the checks without crediting the account. Id.

         Eventually, the Hunters arranged a meeting with Paul Mills, a vice president and mortgage specialist at BANA. Id. at ¶ 35. Mr. Mills advised the Hunters to apply for a loan modification. Id. at ¶ 41. Mr. Mills was so confident that BANA would modify the loan that he told the Hunters not to “bother [sending their mortgage payments], you have a new mortgage coming, it's on the underwriter's desk.” Id. at ¶ 55. When the Hunters attempted to find out why BANA had been returning the payments, Mr. Mills brushed off the issue as “one department not talking to the other department.” ¶ 43. Ultimately, BANA sold the note and did not modify the Hunters' loan. Id. at ¶¶ 60-61. BANA then characterized the loan as in default. Id. at ¶ 63. The Hunters continued to submit monthly mortgage payments in an attempt to pay off the loan. Id. at ¶ 64.

         Nationstar Mortgage, LLC (“Nationstar”) began servicing the loan in 2014. Id. at ¶ 83. Nationstar stated that it would consider modifying the Hunters' loan. Id. at ¶ 85. However, after the parties participated in a foreclosure mediation, Nationstar declined to modify the loan. Id. at ¶¶ 92-98. In early 2015, Quality Loan Servicing Corporation of Washington (“QLS”) began to initiate foreclosure, identifying HSBC Bank USA N.A. (“HSBC”) as the beneficiary. Id. at ¶¶ 88, 110. Foreclosure proceedings are currently stayed.

         The Hunters filed suit in state court against BANA, Nationstar, and HSBC, among others, for violations of the Deed of Trust Act and Consumer Protection Act, intentional and/or negligent infliction of emotional distress, misrepresentation, and promissory estoppel. Defendants removed the action to this Court and now move the Court to dismiss Plaintiffs' claims.


         Fed. R. Civ. P. 12(b)(6) permits a court to dismiss a complaint for failure to state a claim. The rule requires the court to assume the truth of the complaint's factual allegations and credit all reasonable inferences arising from those allegations. Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). A court “need not accept as true conclusory allegations that are contradicted by documents referred to in the complaint.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The plaintiff must point to factual allegations that “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 568 (2007). If the plaintiff succeeds, the complaint avoids dismissal if there is “any set of facts consistent with the allegations in the complaint” that would entitle the plaintiff to relief. Id. at 563; Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).

         The court typically cannot consider evidence beyond the four corners of the complaint, although it may rely on a document to which the complaint refers if the document is central to the party's claims and its authenticity is not in question. Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). The court may also consider evidence subject to judicial notice. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).


         A. Statute of Limitations on Consumer Protection Act Claims

         BANA claims that Plaintiffs are too late in raising their Consumer Protection Act (CPA) claim. Dkt. # 5 at 9-10; RCW 19.86.120. A party must bring a CPA claim within four years after the cause of action accrues. RCW 19.86.120 (establishing a four-year statute of limitations on CPA claims). Claims accrue “when the plaintiff has a complete and present cause of action, . . . that is, when the plaintiff can file suit and obtain relief.” Wallace v. Kato, 549 U.S. 384, 388 (2007) (internal quotation marks and citations omitted). There are, however, times when a plaintiff will not know that her claim has accrued. In such cases, the “discovery rule” governs, which tolls the statute of limitations until a plaintiff knows or should know the essential elements of her cause of action. Matter of Estates of Hibbard, 826 P.2d 690, 694 (Wash. 1992); see also Pruss v. Bank of Am. NA, No. C13-1447 MJP, 2013 WL 5913431, at *2 (W.D. Wash. Nov. 1, 2013) ...

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