Compton v. Countrywide Financial Corp.

In determining whether to dismiss an unfair and deceptive trade practice claim a district court need only address whether the complaint adequately alleged that the lender used unfair or deceptive acts in its relationship with the borrower, not whether the lender breached a duty of ordinary care.

Watoshina Lynn Compton appeals the dismissal of her claim against the defendants based on unfair and deceptive acts or practices. Compton purchased a piece of real property through Countrywide Financial Corporation (“Countrywide”). Years later, Compton took measures to refinance her loan. However, before refinancing, Bank of America Corporation (“BAC”) acquired Countrywide. As a result, she contacted a BAC representative in order to move forward with her refinancing. Unfortunately after five rejected attempts to refinance her loan, Compton’s property went into foreclosure. Compton filed a complaint, alleging that BAC’s conduct constituted unfair and deceptive acts or practices under Haw. Rev. Stat. § 480-2(d). The district court dismissed her claim, holding that BAC never breached its duty of care. On appeal, the panel held that the district court need only address whether the complaint adequately alleged that the lender used unfair or deceptive acts in its relationship with the borrower, not whether the lender breached a duty of ordinary care. Using an analysis under Trombley, the panel found that Compton’s claim crosses the line from conceivable to plausible. Therefore, the panel held that Compton is a consumer under the circumstances, that she sufficiently alleged her claim of unfair or deceptive acts or practices, and that she may obtain relief. REVERSED and REMAND.