Heart v. Bank of New York Mellon, The et al

UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII
HANNAH K. HEART,
Plaintiff,
vs.
BANK OF NEW YORK MELLON, THE, AS
TRUSTEE FOR THE CERTIFICATE
HOLDERS OF THE CWALT, INC.,
ALTERNATIVE LOAN TRUST 2006-
OA21, MORTGAGE PASSTHROUGH
CERTIFICATES, SERIES 2006-OA21;
SHELLPOINT MORTGAGE, 	BANK OF
AMERICA, 	ENVISION LENDING
GROUP, 	FIRST MAGNUS FINANCIAL
CORP., 	MORTGAGE CONNECTIONS
INC., 	SELECT PORTFOLIO SERVICE,
MR. COOPER, 	MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
DOES 1-100, INCLUSIVE,
Defendants.
CIV. NO. 23-00158 LEK-WRP
ORDER: GRANTING PLAINTIFF’S OBJECTIONS,
AS SUPPLEMENTED, TO THE MAGISTRATE JUDGE’S FINDINGS AND
RECOMMENDATION TO DISMISS THIS ACTION WITHOUT PREJUDICE;
REJECTING THE F&R; AND DIRECTING THE MAGISTRATE JUDGE
TO RECONSIDER PLAINTIFF’S RULE 55 MOTION FOR DEFAULT
Pro se Plaintiff Hannah K. Heart (“Heart”) filed her
Complaint on April 5, 2023. [Dkt. no. 1.] On December 5, 2023,
the magistrate judge issued the Findings and Recommendation to
Dismiss this Action Without Prejudice (“F&R”). [Dkt. no. 23. 1 ]
The F&R recommends that the Complaint be dismissed without
1 The F&R is also available at 2023 WL 9196695.
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prejudice because Heart failed to complete service on the
defendants within the period specified in Federal Rule of Civil
Procedure 4(m). [Id. at 3.] On December 18, 2023, Heart filed a
“status report” responding to the F&R. [Dkt. no. 24.] Because
Heart is proceeding pro se, her filings must be liberally
construed. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per
curiam). Heart’s status report is therefore liberally construed
as her objections to the F&R (“Objections”). See Local
Rule LR74.1(a). On February 2, 2024, Heart also filed a response
to the F&R, [dkt. no. 28,] which is liberally construed as a
supplement to Heart’s Objections (“Objections Supplement”). The
Court has considered the Objections, as supplemented, as a non-
hearing matter pursuant to Local Rule 7.1(d). For the reasons
set forth below, Heart’s Objections, as supplemented, are hereby
granted and the F&R is rejected. In addition, this Court directs
the magistrate judge to reconsider the denial of Plaintiff’s
Rule 55 Motion for Default, [filed 1/22/24 (dkt. no. 26),] in
light of the instant Order.
BACKGROUND
According to the Complaint, on December 20, 2005,
Heart “entered into a consumer credit transaction . . . with
[Defendant] First Magnus Financial Corporation” (“First
Magnus”), which sold the transaction to another one of the
defendants. [Complaint at ¶ 22.] Heart denies receiving this
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loan. [Id. at ¶ 21.] The transaction included an instrument
securing a $1,000,00 promissory note. [Id. at ¶¶ 24, 26; id.,
Exh. B (Mortgage between Heart as the borrower and First Magnus
as the lender).] Heart asserts “[t]he security interest was not
created to finance the acquisition of [her] home.” [Complaint at
¶ 25.]
Heart makes similar allegations regarding an
October 26, 2005 home equity line of credit consumer credit
transaction with Defendant Mortgage Connections Inc. (“Mortgage
Connections”) that was to close simultaneously with the First
Magnus transaction. [Id. at ¶¶ 28-34.] She also makes similar
allegations regarding a December 1, 2006 consumer credit
transaction with Countrywide Bank, N.A. (“Countrywide”) that was
to be a refinancing of the First Mangus and Mortgage Connections
transactions. 2 Heart alleges that loan was originated by
Defendant Envision Lending Group (“Envision”), and it was
usurious loan. [Id. at pgs. 12-13.] Heart asserts a claim for
declaratory relief, a claim for injunctive relief, and various
state law and federal law claims. [Id. at pgs. 16-33.]
Federal Rule of Civil Procedure 4(m) required Heart to
effect service upon the defendants within ninety days after the
2 Heart alleges Countrywide is now known as Bank of America,
which she has named as a defendant in this action. See Complaint
at pg. 2.
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filing of the Complaint. On July 6, 2023, the magistrate judge
issued an entering order noting that the time to make service
had passed and directing Heart to file a status report. [Dkt.
no. 8.] On July 14, 2023, Heart filed a Request for Extension of
Time to Serve Defendants. [Dkt. no. 9.] On July 17, 2023, the
magistrate judge issued an entering order granting Heart’s
request and extending the service deadline to October 3, 2023.
[Dkt. no. 10.]
On October 19, 2023, the magistrate judge issued an
entering order noting that the extended service deadline had
passed and ordering Heart to show good cause why the case should
not be dismissed (“OSC”). [Dkt. no. 11.] Heart filed a response
to the OSC on November 9, 2023 (“OSC Response”). [Dkt. no. 12.]
On November 13, 2023, the magistrate judge filed an entering
order directing Heart “to file a Status Report by 12/1/2023,
explaining when each Defendant was served and attaching proofs
of service for each Defendant, reflecting that service was
effected by the 10/3/2023 deadline.” [Dkt. no. 13.] The
magistrate judge issued the F&R after Heart failed to file a
status report by December 1, 2023.
The Objections argue Heart did not make timely service
on the defendants because the Clerk’s Office did not return the
summons to her until November 29, 2023, and she argues that
delay was beyond her control. [Objections at 1, § II.] She also
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attaches: a Proof of Service for each defendant, indicating the
mailing of each summons on December 14, 2024; [id. at
PageID.110-18;] and mailing documentation, [id. at PageID.119-
21]. Heart’s Objections Supplement points out that her OSC
Response noted that she submitted the summons to the Clerk’s
Office on September 12, 2023. See Objections Supplement at 2.
Heart argues she has been diligently pursuing this action, and
the delay in completing service was caused by the delay in
issuing the summons, which she was depending upon district court
staff to do. [Id. at 2-3.]
DISCUSSION
When a party objects to a magistrate judge’s
findings or recommendations, the district court
must review de novo those portions to which the
objections are made and “may accept, reject, or
modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28
U.S.C. § 636(b)(1); United States v. Reyna-Tapia,
328 F.3d 1114, 1121 (9th Cir. 2003) (en banc)
(“[T]he district judge must review the magistrate
judge’s findings and recommendations de novo if
objection is made, but not otherwise.”). Under a
de novo standard, there is no deference to the
lower court’s ruling; rather, the Court “freely
consider[s] the matter anew, as if no decision
had been rendered below.” Dawson v. Marshall, 561
F.3d 930, 933 (9th Cir. 2009) (alteration in
original) (quotations omitted); Freeman v.
DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir.
2006).
Bank of Haw. v. Plimpton, CIVIL NO. 22-00220 JAO-WRP, 2022 WL
17039239, at *1 (D. Hawai`i Nov. 17, 2022) (alterations and
emphasis in Bank of Haw.).
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Heart’s OSC Response noted that she submitted the
summons to the Clerk’s Office on September 12, 2023. [OSC
Response at 1, § II.] It also stated that she “has proactively
provided additional copies of the summons for the Clerk’s
signature and seal.” [Id. at 2, § V.] The summonses were issued
on November 29, 2023. See dkt. nos. 14 to 22. Heart attempted
service approximately two weeks after the summonses were issued.
See Objections at PageID.110-18.
In light of Heart’s attempt to submit the summons in
September 2023, her attempt to call the September 2023
submission to the magistrate judge’s attention in the OSC
Response, and the eventual issuance of the summonses in
November 29, 2023, this Court finds that there is good cause for
Heart’s failure to serve the summonses by the October 3, 2023
deadline. See Fed. R. Civ. P. 4(m) (stating that, “if the
plaintiff shows good cause for the failure [to make service by
the deadline], the court must extend the time for service for an
appropriate period”).
This Court does not condone Heart’s failure to respond
to the magistrate judge’s November 13, 2023 entering order,
which directed her to file a status report by December 1, 2023.
Although Heart would not have been able to attach the Proof of
Service documents that she attached to the Objections, she could
have filed a status report by the December 1, 2023 deadline,
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noting the issuance of the summons on November 29, 2023 and
stating that she intended to make prompt service.
However, in light of Plaintiff’s pro se status and the
requirement that “the court must extend the time for service” if
a plaintiff establishes good cause for the failure to make
service, Fed. R. Civ. P. 4(m) (emphasis added), this Court
rejects the F&R and extends the service deadline to December 14,
2023. In other words, if the service reflected in any Proof of
Service attached to Heart’s Objections is effective, it
constitutes timely service.
On January 22, 2024, Heart filed Plaintiff’s Rule 55
Motion for Default (“Rule 55 Motion”). [Dkt. no. 26.] The
magistrate judge denied the Rule 55 Motion without prejudice,
based on the F&R. [EO, filed 1/25/24 (dkt. no. 27).] Because
this Court has rejected the F&R, this Court directs the
magistrate judge to reconsider the denial of Heart’s Rule 55
Motion.
CONCLUSION
For the foregoing reasons, Heart’s December 18, 2023
objections to the magistrate judge’s Findings and Recommendation
to Dismiss this Action Without Prejudice, filed December 5,
2023, are HEREBY GRANTED, and the magistrate judge’s F&R is
REJECTED. In addition, the magistrate judge is DIRECTED to
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reconsider the ruling on Plaintiff’s Rule 55 Motion for Default,
filed December 22, 2024.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, February 27, 2024.
HANNAH K. HEART V. BANK OF NEW YORK MELLON, ET AL; CV 23-00158
LEK-WRP; ORDER: 	GRANTING PLAINTIFF’S OBJECTIONS, AS
SUPPLEMENTED, TO THE MAGISTRATE JUDGE’S FINDINGS AND
RECOMMENDATION TO DISMISS THIS ACTION WITHOUT PREJUDICE;
REJECTING THE F&R; AND DIRECTING THE MAGISTRATE JUDGE TO
RECONSIDER PLAINTIFF’S RULE 55 MOTION FOR DEFAULT
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