Opinion
Case No. 2:14-cv-01335-JAM-AC
01-25-2016
STEPHEN S. BOYLE, an individual, Plaintiff, v. NATIONSTAR MORTGAGE, LLC; and DOES 1-20 inclusive, Defendants.
For the Plainiff: MERCER LEGAL 770 L Street, Suite 950 Sacramento, California 95814 BY: ERIC ANDREW MERCER, ATTORNEY AT LAW For the Defendants: MCCARTHY & HOLTHUS LLP 1770 Fourth Avenue San Diego, California 92101 BY: LETICIA CARMEN BUTLER, ATTORNEY AT LAW
ORDER ON MOTION FOR SUMMARY JUDGEMENT
On January 12, 2016 at 1:30 p.m., this matter came before the Court on Defendant Nationstar Mortgage LLC's ("Nationstar") Motion for Summary Judgment. For the reasons set forth in the transcript of that hearing which is attached hereto and made a part of this Order, the Court grants Summary Judgment in Nationstar's favor.
IT IS SO ORDERED. Dated: January 25, 2016
By:/s/_________
Honorable John A. Mendez
United States District Court Judge
REPORTER'S TRANSCRIPT OF PROCEEDINGS
HEARING RE: MOTION FOR SUMMARY JUDGMENT
TUESDAY, JANUARY 12TH, 2016, 1:30 P.M.
For the Plainiff: MERCER LEGAL
770 L Street, Suite 950
Sacramento, California 95814
BY: ERIC ANDREW MERCER,
ATTORNEY AT LAW For the Defendants: MCCARTHY & HOLTHUS LLP
1770 Fourth Avenue
San Diego, California 92101
BY: LETICIA CARMEN BUTLER,
ATTORNEY AT LAW Reported by: CATHERINE E.F. BODENE, CSR #6926, RPR Official Court Reporter USDC, 916-446-6360 501 I Street, Room 4-200 Sacramento, California 95814 TRANSCRIPT PRODUCED BY COMPUTER-AIDED TRANSCRIPTION SACRAMENTO, CALIFORNIA, TUESDAY, JANUARY 12, 2016, 1:30 P.M.
THE CLERK: Calling Civil 14-1335, Boyle versus Nationstar Mortgage, LLC.
THE COURT: Go ahead. State your appearances.
MR. MERCER: Good afternoon, Your Honor. Eric Mercer on behalf of plaintiff, Mr. Boyle.
MS. BUTLER: Good afternoon, Your Honor. Leticia Butler on behalf of defendant, Nationstar Mortgage.
THE COURT: This is on for a motion for summary judgment filed by Nationstar. There were -- there was a cross motion filed. It was filed in an untimely manner, and the court issued an order indicating that it would not consider the late filed motion.
There was a request to reconsider that, and the court denied that as well, indicating that if I thought that summary-judgment was not appropriate in favor of Nationstar, and I thought summary judgment was appropriate in favor of the plaintiff, I could still grant summary judgment in favor of the plaintiff sua sponte.
The opposition to the motion for summary judgment filed on behalf of Mr. Boyle, in effect, was almost duplicative of the cross motion for summary judgment, so I'm familiar with the arguments.
This involves a home located at 1802 Camino Verdera in Lincoln, California, and attempts by Mr. Boyle, after defaulting, to modify his loan and go through a loan modification process.
There have been three claims brought by Mr. Boyle against Nationstar in this case, one brought under the Equal Credit Opportunity Act -- we'll refer to that as ECOA -- one brought under the California Homeowner's Bill of Rights, and then one brought under 17200, California's Unfair Competition Law.
So let's start first, Mr. Mercer, just so we're clear on the record, you are no longer pursuing your client's California Homeowner's Bill of Rights claim, correct?
MR. MERCER: That's right, Your Honor. There was an application pending at the time we filed. They did answer that. We believe it is either moot or we're waiving it.
THE COURT: Okay. I'm actually going to grant judgment in favor of Nationstar to get rid of it entirely, since there was no opposition and it is appropriate. So summary adjudication on that claim is granted by the court.
Next, on the ECOA claim, in the complaint, as the defendants point out in their reply brief, and I went back through the complaint, and they are correct, you only allege two purported ECOA violations. That's found in your paragraphs 15, 16, 19, 32 and 34 of the complaint. Yet in your opposition to this motion, you now claim that there were at least four separate applications for modification.
And as the defendants point out in their reply, a party cannot advance new claims at the summary judgment stage, citing numerous cases, including Martini E Ricci Iamino versus Trinity Fruit Sales, an Eastern District of California case from 2014; citing Pickern versus Pier 1 Imports, a Ninth Circuit case from 2006.
If you had wished to pursue these other two claims, you should have sought to file an amended complaint.
Do you disagree with that argument, and if so, why?
MR. MERCER: Yes, Your Honor. We believe that the facts as uncovered in discovery at the very end of the discovery period show facts to support more of the same claim.
THE COURT: The only question is, you didn't amend your complaint, right?
MR. MERCER: To add those facts? We have not amended the complaint to add those facts as of today, Your Honor.
THE COURT: So as a matter of law you can't raise them in a summary judgment opposition, unless you have some case that says you can. I assume you don't.
Is that a fair assumption?
MR. MERCER: Yes, Your Honor.
THE COURT: Okay. So that ECOA claim then really comes down to two different time periods, one being in the 2012 time period, and the second one being in the 2014 time period.
Nationstar argues in its motion that as to the 2014 application there is no triable issue of material fact. And that in the opposition plaintiff didn't present any argument or any evidence trying to rebut the fact that there was no ECOA violation with respect to the 2014 claim.
It was completed, and Nationstar responded within 30 days, and actually approved the application on that one. By that time you had filed the lawsuit, but, again, do you disagree with those facts?
Do you still think that's a viable claim with respect to the 2014?
MR. MERCER: No. We do not claim that the May 2014 application constitutes a code violation.
THE COURT: So that leaves the 2 012 ECOA violation. And Nationstar has raised a number of arguments, mainly legal arguments, as to why they think that summary judgment should be granted on that claim as well. I want to go through those with you.
First is the issue of whether you have to allege or put on evidence, as a matter of law, in order to maintain this claim that Mr. Boyle is a member of a protected class. I'll come back to that.
Let's see.
Second, Nationstar alleges that the loan modification application is not an application for credit as defined by ECOA. I'm not going to hear argument on that. Just so the parties know my position, I agree with the plaintiff's argument on that. I think the law is clear, the balance of authorities are at least clear.
In particular, this court, not my opinion, but Judge Mueller's opinion in the Cooksey case, sets precedence that, in fact, applications for loan modifications are, in fact, applications under ECOA. And so I would, at least on that legal issue, agree with the plaintiff.
There's also an argument that because Mr. Boyle was in default, he shouldn't be allowed to go forward on this claim.
Again, I would tend to agree with the plaintiff's argument on that issue. This is a claim brought under 15 U.S.C. 1691(d)(1). I would agree that you can't, and Mr, Boyle couldn't bring a claim under 15 U.S.C. Section 1691(d)(2) because he was in default. That's undisputed. But as a matter of law I think that the (d)(1) claim would survive. It's not limited in any way to only those individuals who aren't in default.
So the two arguments I want to focus on is whether this claim can still go forward or whether summary judgment should be granted, is the claim as to whether Mr. Boyle has to be a member of a protected class. And then the second argument is whether he's established damages so that he can go forward with the claim.
It's an interesting issue, and the briefs have covered and laid out the issues as well as possible. Unfortunately, it's an issue the Ninth Circuit has never specifically decided. This may be the case where that happens.
The issue is this issue of whether you do need to allege or at least at a summary judgment stage prove that Mr. Boyle fits under that statute.
The defendants rely on -- hang on. We have the cases here, and I had an opportunity to look at all of these cases.
Nationstar urges this court to follow the Banks versus JPMorgan, a Central District of California case; Schlegel, S-c-h-l-e-g-e-1; and Harvey Courts in finding that Mr. Boyle must be a member of a protected class to bring this claim, the ECOA claim.
And that since he's not -- I don't think it is disputed at all. He clearly does not fit within that protected class. That's not at dispute. The question is whether the law would require him to be a member of a protected class.
And Mr. Boyle, in his opposition, relies on a case called Dufay, D-u-f-a-y, out of the Northern District; Thompson versus Galles, G-a-l-l-e-s; Chevrolet Company; and Cooksey, which I think, Mr. Mercer, you were involved in.
MR. MERCER: Yes, Your Honor.
THE COURT: That's Judge Mueller's opinion. And then there's a case, Vasquez, out of the Northern District as well, in which the District Court Judge Tigar, T-i~g-a-r, found that you didn't have to allege discrimination.
I don't know if there is anything further that either of you want to add with respect to that issue, if you've discovered anything else. I'm not sure there's anything else out there right now.
At some point the Ninth Circuit is going to have to give us some guidance, but I would like to hear from both of you. I will allow you to make a record on that before I rule on that issue.
Or if not, you can submit it on the briefs because, again, I think you've laid out your arguments pretty well in the briefs, and the cases say what they say. But I'll give you an opportunity to do that, so...
MR. MERCER: Yes, Your Honor. Eric Mercer on behalf of plaintiff. Let me go ahead and address that issue.
The idea of a protected class or the notion of a protected class is necessarily tied to discrimination under ECOA. So if there is discrimination under ECOA, it can only happen to a protected class member.
Your Honor mentioned earlier that plaintiff is clearly not a member of a protected class, but he does have marital status, which is a protected class if there is discrimination based upon the marital status. So the entire notion of protected class is tied to a discrimination claim under ECOA.
Under a notice claim, there is no discrimination necessary. And the definitions for protected class just don't make sense.
THE COURT: That's the issue. I mean, the cases that say you don't have to allege that you're a member of a protected class focus on this is simply a notice claim, they didn't give me 30 days' notice.
But as I read the statute, and as I look somewhat at the legislative history of the statute, it doesn't seem to me that it initially was drafted to in effect become two separate statutes.
I would have thought that Congress would have written it differently if, in fact, the legislature intended to allow this cause of action now that's sprung up among a lot of creditors, and that the courts are struggling with. Because that would seem to me to simply eliminate the initial purpose of the statute, which was, as was pointed out by the defendants, that it was initially enacted to eradicate credit discrimination waged against women, especially married women who creditors traditionally refused to consider for individual credit.
And generally the statute prevents creditors from discriminating against applicants of a protected class. Your client isn't and doesn't fall within any protected class, and, again, he is not in any way alleging, and there is no evidence whatsoever, that he thinks that he was discriminated against, that his application was denied because of some alleged discrimination. His is pure and simple: You didn't give me notice within 30 days with respect to my 2 012 application.
I looked at these cases. I looked at Cooksey and Vasquez and Errico, which Judge Mueller relied on, and the other case, Dufay. So much has been read into that case. That is such an overreading of that case. It doesn't even deal with the issue of whether you have to allege protected status.
I don't know how any of the judges read so much into that case, and it keeps being built upon. I read that case completely differently. I don't think it really has anything to do with the issues that are before us and that we're struggling with in this case.
Be that as it may, I'm not that persuaded by these cases that there really is a basis for carving out this cause of action which you're relying on. And I'm looking, I guess, for something more, but I don't think there is something more out there.
MR. MERCER: Well, Your Honor, instead of looking at the cases, then I suggest that we look at the definitions under the statute itself.
If Congress wanted to, they could have defined a person to be defined as a person of a protected class. They didn't do that. They defined it as any person under the statute.
And also in the way that they define applicant, applicant is in no way restricted to protected classes. So if you rely solely on the statute itself, then that provides the elements for the cause of action.
Nowhere in the statute under the notice provisions does it require that you allege or prove that the plaintiff is a member of a protected class. There is simply no requirement in the statute for that under the notice provisions.
THE COURT: The statute says that it is unlawful for, quote, "Any creditor to discriminate against any applicant for credit."
Then it continues:
"1. On the basis of race, color, religion, national origin, sex or marital status or age;
2. Because all or part of the applicant's income derives from any public assistance program; or
3. Because the applicant has in good faith exercised any right under this chapter."
That's 15 U.S.C. Section 1691(a).
(Reading:)
An "applicant" is defined without reference to a protected class status. The term "applicant" means any person who applies to a creditor directly for an extension or renewal or continuation of credit.
(Reading concluded.)
That's at 15 U.S.C. Section 1691(a)(b).
And I get that. So it means any person who applies to a creditor, but it seems to me that you're stopping the reading of the entire statute. You're stopping at "it is unlawful for any creditor to discriminate against any applicant," and asking me to ignore "any applicant for credit," ignore the rest of that.
And that's the part I'm struggling with. How do I ignore the continuation of that sentence that says, "on the basis of race, color, religion, national origin, sex or marital status"?
MR. MERCER: I guess that's --we would say you don't ignore that for a discrimination claim under ECOA, but for a notice claim it is not necessarily an element of the claim.
THE COURT: Where in the statute does it say that, though?
That's what I'm looking for. I would think -- again, if Congress thought they were creating a cause of action for a notice claim for any creditor under a statute that is entitled the Equal Credit Opportunity Act, they would have been more specific.
The problem I have with these cases, and it cuts against the core of what I think judges shouldn't do, I see judges legislating. I see them adding language that isn't in the statute or reading the statute in a way that wasn't intended.
There is not a lot of legislative history that's been discussed in these cases; there's not a lot that's been discussed in these cases, but it seems to me that there was a clear purpose behind this statute, to prevent discrimination. And somehow that's been turned into, well, I can bring a claim for anyone who applies for credit.
I would think, if that was the case, Congress would have made that clearer. So what am I missing here?
MR. MERCER: I'm not going to claim to speak on behalf of Congress, Your Honor. I guess plaintiff's position -- and we understand the court might not agree -- plaintiff's position would be that it is adding to the statute by adding in the protected class requirement; that that is, in fact, adding to the statute rather than the other way around, Your Honor.
And I think I don't have anything else, so with that I think I submit.
THE COURT: Okay. So let me play devil's advocate, Ms. Butler, and ask you. So I look at Vasquez, and it's probably the best case for the plaintiff, along with all the other cases that I have cited, indicating that there are procedural requirements. There is this requirement in this statute that says that, in this case, Nationwide (sic) is required to give a 30-day -- a response within 30 days to a completed application, a procedural notice requirement.
And Vasquez clearly says that, regardless of whether the plaintiff has alleged or is a member of a protected class. That's a Northern District of California case. So what's wrong with Vasquez?
MS. BUTLER: If I may, Your Honor, what is the date of the Vasquez case?
THE COURT: 2013. November 2013.
MS. BUTLER: Thank you, Your Honor.
If my memory serves me correctly, the Vasquez case relies upon Thompson in its holding.
THE COURT: It does.
MS. BUTLER: And the Thompson case, Your Honor, does indicate quite clearly that there need not be -- they need not be a member of a protected class to bring a claim.
However, the Thompson court itself in refusing to -- or in declining to hold the defendant liable for the strict violation, indicated that the law must not be read in a vacuum.
And though the plaintiff in that case urged the court to take a strict adherence to the language of that code section, the court declined to do so and found that it simply didn't -- that the equities did not warrant the application, and it didn't make sense to do so because there was no liability for that technical violation.
THE COURT: I would note that this Banks case from the Central District comes after the Vasquez case.
MS. BUTLER: To that end, Your Honor, I would like to point out that the vast majority of the more recent holdings that we cited in connection with our moving papers and in reply, they are all within this circuit. Albeit, the only one that is the Ninth Circuit is the Schlegel decision, but the District Court opinions all date between 2012 and 2014.
And in addition to the case that Your Honor noted, citing in support of our position that they need to be a member of a protected class, I would like to add Franczak v. Suntrust Mortgage Inc.
THE COURT: When was that decided?
MS. BUTLER: That was decided in 2013. I will give you the exact date.
THE COURT: Did you cite it in your briefs?
MS. BUTLER: Yes, Your Honor. Both parties cited the Franczak case.
THE COURT: That's from where?
MS. BUTLER: That is the
THE COURT: Which court?
MS. BUTLER: The Northern District of California, and that was 2013.
THE COURT: Okay. And that case you believe holds what?
MS. BUTLER: The Franczak case was -- at issue in that case was a motion to dismiss. The court dismissed the ECOA claim for failure to plead that the plaintiff was a member of the protected class.
THE COURT: Did they give them leave to amend?
MS. BUTLER: There was leave to amend given, yes, Your Honor.
THE COURT: Okay.
MS. BUTLER: Trailing on that, the cases that we cited again. Your Honor, are within the District Courts of California by suggestion of Schlegel, requiring that plaintiffs be a member of a protected class; whereas the cases that Your Honor has already addressed with the plaintiff in this action are largely quite old, several of them out of this circuit, and as you pointed out with Dufay, far reaching.
In addition to those that have already been discussed, plaintiff cites Fischl in his papers
THE COURT: Right.
MS. BUTLER: -- for the proposition that they're stand-alone claims and need not be a member of a protected class. Your Honor, that's a Fifth Circuit from 1983, and the sole issue in that case was the sufficiency of notice.
There was nothing addressing whether or not a member -- a plaintiff need be a member of a protected class or otherwise. It was a very limited brief on the issue of sufficiency of notice, so I would argue that is not on point.
Your Honor has already addressed Dufay, which, again, is a very far-reaching case. So we are looking at the weight of authority within this district, within the State of California, with all of the recent holdings coming down that plaintiffs need to plead four elements to adequately plead ECOA. And one of those is that the plaintiff needs to be a member of a protected class, and failure to do so defeats the claim.
THE COURT: So let me switch to the other issue raised, which is damages. And under ECOA, one of the elements would be damages. And plaintiff in his complaint seeks damages, including punitive damages and attorney fees.
So let's just assume for purposes of this argument that notice wasn't given for the 2012 application, and so the claim would be that between that time period of November 16th, 2012, when notice allegedly should have been provided, and June 3rd, 2013, when the denial notice was actually issued, that the argument is, as a matter of law, the plaintiff has failed to demonstrate any damages.
And as Nationstar points out, the plaintiff has alleged damages, but now I'm at a summary judgment stage. And I now have at least one side arguing that it is undisputed that there has been no proof of causation and there has been no damage.
Then in response to that, in the opposition, plaintiff argues that I can't grant summary judgment and should not grant summary judgment because there is a triable issue of material fact.
And in opposition the plaintiff argues that plaintiff intends to provide that testimony at trial. That concerns me because you're now at a summary judgment stage and a summary judgment motion in which I have evidence brought by the moving party that there is no triable issue of fact.
And under the summary judgment standards, as we all know, and to make sure the record is clear:
(Reading:)
When the moving party bears the initial burden of establishing that there is no issue of material fact, and then the responding party in order to defeat summary judgment must present admissible evidence sufficient to establish that any of the elements that are essential to the moving party's case, and for which that party will bear the burden of proof at trial, again, admissible evidence has to be presented.
The court may grant summary judgment if the motion and supporting materials show that the movant is entitled to summary judgment, and if the responding party, in this case the plaintiff, fails to properly address the moving party's assertion of fact as required by Rule 56.
The responding party must set forth by affidavit or other admissible evidence specific facts demonstrating the existence of an actual issue for trial.
(Reading concluded.)
So all I have is a statement that says: Plaintiff intends to provide testimony at trial.
I don't have an affidavit, a deposition from Mr. Boyle. And that's what I was looking for in response to this argument.
While he might be entitled to recover damages, given that I now have an issue at the summary judgment stage, in which the defendant has demonstrated that there is -- that there was no damage, that that element has not and cannot be proved, I don't have anything from you in response, even a simple declaration from your client that says "I was damaged. This is how I was damaged."
All I have is that I intend to prove damages, but I don't even have that in terms of by way of a declaration. I just have that by way of your argument in the opposition.
So the simple question is, where is the evidence?
MR. MERCER: Well, with the motion itself. Your Honor, there was admissible evidence submitted on this issue in the form of an interrogatory response.
The interrogatory response details the ways in which he was harmed because of their actions. And the fact that he further intends to prove this at trial with testimony in open court is just an adjunct to that.
THE COURT: You don't cite anything in your opposition.
MR. MERCER: This is on -- I cited the reference to the interrogatory response in my opposition, which appears on page 11 of the motion itself. Your Honor -- motion for summary judgment.
THE COURT: Whose motion? Yours?
MR. MERCER: No. Defendant's motion for summary judgment on page 11 cites our -- or cites plaintiff's interrogatory response, also with Mr. Learned's declaration that
THE COURT: You are talking about the one that starts out, "Plaintiff will further testify that regarding the harm, Nationstar's failure to perform," et cetera?
MR. MERCER: Yes.
THE COURT: That's the interrogatory answer you are telling me?
MR. MERCER: Yes. Subsequent to that sentence are statements regarding the harm that he suffered.
THE COURT: Where specifically is there any evidence of that?
It just says, "Plaintiff was in a delicate financial position," but that doesn't tell me anything.
Plaintiff responds, "He will testify at length at trial regarding the following." That doesn't tell me anything.
All it says is, "He will testify." That's not evidence. Not telling me what you will do without any specifics isn't evidence that creates a triable issue of fact because I don't know what that testimony is. I don't have any evidence.
I know there is no expert. Normally, if it is an emotional damage case, confusion, depression, loss of enjoyment of life, usually there's a psychologist or psychiatrist that testifies. And they've submitted evidence that you have no intention of putting on -- or you didn't have any intention of putting on a psychologist or psychiatrist.
The other thing they point out is that during the same period of time he's admitted he lost seven to eight million dollars of his money in -- I guess, he was a developer and had real estate holdings.
I don't think he -- at least there is no evidence that he's attributing that loss to Nationstar's failure to provide a 30-day notice.
So the specific question is, you're alleging that they violated the statute by not giving your client notice back in 2012 that his application had been denied. Okay. So let's say that is true.
So during that time period, between -- I guess it was August or whenever you were supposed to give notice and the middle of 2013 -- it is about a six-month period -- what specific damages did he suffer, and where is the evidence to support that? As opposed to: I will show that.
You now have a summary judgment motion in front of you. It's as if we were standing at trial right now, what would your answer be?
I'm going to put my client on the stand, and he's going to tell me -- he's going to tell you this is what he suffered?
MR. MERCER: Yes, Your Honor.
THE COURT: Okay. But I don't have a declaration from your client saying, in fact, that he actually did suffer that.
Right?
MR. MERCER: There is an interrogatory response signed by him. And I understand Your Honor is saying "will further testify," that that was mentioned in the interrogatory response, but he's testifying here that he did suffer these damages.
THE COURT: Okay. Then let's take the next argument. Let's say he did suffer depression, loss of enjoyment, emotional distress. The next argument is that the plaintiff has not provided any evidence directly linking these alleged damages to the loan modification application submitted in July of 2012.
Causation is also part of the element of proving damages. So where's the evidence of causation?
MR. MERCER: Well, two responses. Let me just go back really quickly. A violation of the statute. Your Honor, is a violation of the statute. Damages are not necessary, especially actual damages.
Under Ninth Circuit law, and this is Anderson, under Ninth Circuit law, even without actual damages, there can be a violation ECOA and an award of punitive damages.
So actual damages is not necessarily an element of the claim. They're saying we can't show damages, but that is not an element of the claim.
Because we -- under Ninth Circuit controlling law, even if there is no damages, we can -- there can be an award of punitive damages for a violation of the statute.
THE COURT: Punitive damages are damages. Punitive damages are damages.
MR. MERCER: Statutory punitive damages.
THE COURT: All you're arguing is even if actual damages are zero, you could still ask for punitive damages.
We're not there yet because they've also moved for summary judgment on punitive damages, but
MR. MERCER: Right.
THE COURT: -- setting that aside for now, damages are still part of this cause of action. If you can't -- either actual or punitive, if you haven't provided sufficient evidence to prove either, you can't maintain this claim. There is nothing for the jury to decide is the question.
So let's just focus on actual damages, and then we'll get to your punitive damages argument.
MR. MERCER: Okay.
THE COURT: I haven't looked at a jury instruction, but my guess is a jury instruction would have the elements of this cause of action, and the fourth element would be damages.
Again, I haven't pulled up the jury instruction, but if not, I'm sure it would include, as the fourth element, damages.
So I think there is a real issue. And you didn't necessarily specifically respond to that argument. It's on page 12 of their opening brief, with respect to damages.
Then on the punitive damage issue, other than a technical violation, I don't see any evidence in this case that would give rise to punitive damages, at least I don't see any evidence in the opposition that would give rise to punitive damages.
Again, you didn't specifically argue evidence. You simply say there is a material issue of whether their failure to respond was in reckless disregard of the requirements of the law.
Normally you get that from taking depositions, and it's a continuing pattern that Nationstar is doing this to everybody, et cetera. And obviously the best evidence would be a smoking gun, where there is a memo that says "Deny all applications initially, and let's see where we go from there." There is none of that type of allegation in this case.
It's an allegation that they delayed and they didn't provide sufficient notice in compliance with the statute, but where's the recklessness or outrageous -- evidence of the outrageous conduct in this case, especially on a claim that simply they failed to meet the 30-day requirement?
MR. MERCER: Which is a requirement under the statute. Your Honor.
THE COURT: I don't disagree, but how does that lead to punitive damages in this case?
Why would I allow that to go to a jury?
MR. MERCER: Due to repeat behavior, Your Honor, as laid out in the opposition. This happened a lot. It happened repeatedly to this individual.
In his deposition Mr. Richardson states that they didn't comply with their own requirements to -- even outside of the ECOA Act.
He was unaware that Nationstar had policies and procedures to comply with ECOA at all. And then he said that they have their own internal policies on responding to these type of applications. And they didn't do it within their own policies and procedures. I think a jury may consider that to be in reckless disregard of the law.
THE COURT: Okay. Ms. Butler, anything further?
MS. BUTLER: Very briefly, Your Honor.
As a preliminary matter, I believe counsel may have slightly misrepresented the testimony of the deponent, but that's not at issue, I believe, because they did not present deposition transcripts from the specific portions that counsel just referenced.
Aside from that, I believe Anderson and Coulibaly, C-o-u-l-i-b-a-l-y, stand for the proposition that damages in a ECOA claim are not presumed and must actually be proven. Both of those cases are cited in our moving papers.
THE COURT: All right.
MS. BUTLER: And finally, Your Honor, I believe the court has hit the nail on the head, that there is no admissible competent evidence before the court with respect to damages. And under Celotex, the plaintiff may not rely upon allegations in the complaint or other references, and there must be competent evidence before the court, of which there is none. Therefore, summary judgment should be granted.
THE COURT: All right. Mr. Mercer, anything final you want to raise?
MR. MERCER: No, Your Honor. Just that I think, going back, I just want to stay focused on some of the case law that is cited conflates making a discrimination claim with a notice claim.
The cases cited by opposing counsel earlier, Franczak included, were citing case law based upon this idea of these four elements to show a discrimination claim.
And I would just finally, Your Honor, the notice claims are separate. They must be treated separately. And the requirements for discrimination and the case law that defines what a cause of action is under ECOA under the discrimination claims versus the notice claims, I believe the statute is clear with the notice claims. Under the clear terms of the statute, there has been a violation here.
With that I submit, Your Honor.
THE COURT: Okay. On the summary judgment motion with respect to the first cause of action brought under the Equal Credit Opportunity Act, as I have indicated, there really are two issues that have been raised in the complaint, two alleged failures to comply with this statute, and plaintiff has conceded that there is no cause of action under the 2014 application. And any allegations with respect to that, that was -- notice was properly given, and that claim is no longer viable. So summary judgment is granted with respect to that portion of this first cause of action.
As to the 2012 claim, the issue is whether, in fact, in order to maintain that claim, Mr. Boyle, the plaintiff in this case, needs to show that he is a member of a protected class to bring a cause of action.
Under this statute under ECOA, Mr. Boyle has argued that a notice claim is a separate claim, and that is a procedural requirement that does not require an allegation or evidence that the plaintiff is a member of a protected class.
There are a number of cases that he has cited that we have discussed here today that has adopted that interpretation of the statute.
On the other side is Nationstar's argument that, in fact, the statute, even a notice claim brought under the statute, does require evidence or proof, or an allegation even, that the plaintiff is a member of a protected class as defined by ECOA.
It's undisputed that Mr. Boyle is not alleging that, that he is not a member of a protected class, and this is purely a notice claim, a failure to provide notice within 30 days of Mr. Boyle making an application in 2012.
In looking at both the cases where courts have decided that the party need not allege that the plaintiff is a member of a protected class, and on this issue, in particular, Judge Mueller has so found, relying on a number of other cases, including Thompson and Errico.
In looking at those cases, as opposed to the cases cited by the defendant in support of the argument that only members of a protected class can bring a claim under ECOA, and all these are District Court cases, I do agree -- I so find and agree with Nationstar's argument that, including the most recent cases -- most recently the Banks versus JPMorgan Chase Bank, a 2014 case out of the Central District of California -- clearly indicate, and the District Court has so found, that there is a requirement in order to maintain even this notice cause of action, as we have in this case, that there be evidence or proof that the plaintiff is a member of a protected class.
The Ninth Circuit has yet to articulate specifically whether the elements of an ECOA claim so require this, but I think the better reasoning, the better rationale, and as Nationstar has pointed out, the most recent cases do seem to indicate that it was the initial purpose and the original purpose of this statute to be a statute that protects against discrimination, that this so-called notice claim has been carved out of that by the courts.
And in looking at the language of the statute, as well as the reasoning under the cases cited by Nationstar in their motion for summary judgment, I would find that, absent evidence, that a plaintiff is a member of a class protected by ECOA, that the cause of action cannot be maintained.
This authority needs to be resolved. Maybe this will be the case where the Ninth Circuit resolves it. But for now I think the better reasoning is found in the most recent cases cited by Nationstar, including Banks.
While that would resolve the summary judgment motion, I do want to make it clear that I would also grant summary judgment on this claim in favor of Nationstar on the damages issue.
I do not find that in response to the evidence and the arguments concerning the failure to prove damages under ECOA that plaintiff has submitted sufficient evidence to raise a triable issue of fact, either as to actual or punitive damages, both of which would be recoverable.
There is no declaration. There is no deposition testimony from Mr. Boyle himself. The only evidence cited by the plaintiff is an interrogatory answer which is vague and inconclusive at best.
And if that is, in fact, the only evidence which is submitted in opposition to the arguments raised by Nationstar as to damages, then it is insufficient to create a triable issue of fact.
So I would also find that Nationstar would be entitled to summary judgment on this ECOA claim for those reasons as well.
The second cause of action has already been dismissed and -- or not dismissed, but the court has granted summary judgment. Plaintiff has indicated he will not pursue a claim under the California Homeowner's Bill of Rights.
And then the third claim, the Unfair Competition Law claim, is derivative. It is based on either the first or second claims being maintained, and since the court has granted summary adjudication on the first and second claims, the UCL Claim also fails, and the court grants summary judgment on this claim as well.
Obviously, since summary judgment is granted, the dates are now vacated. There will be no pretrial or trial.
Ms. Butler, you can prepare a proposed order. Run it by Mr. Mercer for approval as to form and submit it within ten days so we have something on our docket.
You can also, if you want, order a transcript. A lot of lawyers do that. Simply attach an order that says: For the reasons stated at the hearing, as evidenced by the transcript, the court has granted summary judgment in favor of Nationstar. Okay. All right. Thank you all.
MR. MERCER: Thank you. Your Honor. (Off the record at 2:40 p.m.)
REPORTER'S CERTIFICATE
STATE OF CALIFORNIA
COUNTY OF SACRAMENTO
I certify that the foregoing is a correct transcript from the record of proceedings in the above-entitled matter.
IN WITNESS WHEREOF, I subscribe this certificate at Sacramento, California.
/S/ Catherine E.F. Bodene
CATHERINE E.F. BODENE, CSR NO. 6926
Official United States District Court Reporter