F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

W A T O S H I

N A L Y N N C O M P T O N , Plaintiff-Appellant
,

v

.

C O U N T R Y W I D E F I N A N C I A L C O R P O R A T I O N ; C O U

N T R Y W I D E H O M E L O A

N S , I N C .; B A N K O F A M E R I C A C O R

P O R A T I O N ; B AC H O M E L O A

N S S E R V I C I N G , L P; U.S. B A N K N A T I O N

A L A S S O C I A T I O N A S T R U S T E E , for CSMC Mortg ag eB acked Pass Throug h Certificates, Series 2006-7; U.S. B A N K N.A.; D O E S , J O H

N A N D M A R

Y D O E S , 1–10, Defendants-Appellees

. N o. 11-17158

D.C. No. 1:11-cv-00198- SOM-B MK

OPI NI ON

A ppeal from the United States District Court for the District of Hawaii Susan Oki Mollway , Chief District J udg e, Presiding

Arg ued and Submitted J une 11, 2014—Honolulu, Hawaii

F iled Aug ust 4, 2014

B efore: W illiam A. F letcher, Sandra S. I kuta, and Andrew D. Hurwitz
, Circuit J udg es.

Opinion by J udg e I k

utaC O M P T O N V

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SUMMARY *

Haw aii Consum er Law

The panel reversed the district court’s Fe d

. R. Civ. P. 12(b)(6) dismissal of a borrower’s claim broug ht under Haw. Rev. Stat. § 4 80-2(d) a lleg ing u nfair and deceptive acts b y B ank of America Corporation, and remanded.

The panel held that when a d i s trict court evaluates whether a borrower’s c omp l a i n t states a claim under Haw. Rev. Stat. §§ 480-2 and 480-13 ag ainst a l e n der, the district
court need only address w hether the complaint adequately alleg ed that t h e l e n d er u sed u nfair or deceptive acts in its relationship w ith the borrower, without looking to neg lig e nce law to d etermine whether the lender b reached a common law duty of care. The panel h e l d t h a t the district court erred in dismissing the borrower’s claim solely on the g round that the b o r r o w e r failed to alleg e that the lender ex ceeded its role a s

a lender a

nd owed an independent d uty of care to the borrower. T h e panel held that the complaint adequately alleg ed under Hawaii law unfair and deceptive acts by B a nk of America, and injury resulting in damag e to the borrower, to withstand a motion to dismiss.

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.C O M P T O N V

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COUNSEL

J ames Harry F osb i n der, I vey F osbinder F osbinder, L L C, W a iluku, Hawaii, for Plaintiff-Appellant.

Dennis Peter Maio (arg

ued) and Rosalie Euna Ki m, Reed Smith L L P, San F rancisco, California, for DefendantsAppellees.

OP INION

I KUTA, Circuit J udg e:

W a toshina L y

n n Compton appeal s the district court’s dismissal of her claim under section 4 8 0

- 2 o f the Hawaii Revised Statutes, w hich authoriz e s consumer s t o “bring an action based upon unfair or deceptive acts o r p r actices.” Haw. Rev. Stat. § 480-2(d) (referred to herein a s a U DAP

c l a i m). B ecause Compton’s complaint adequately alleg e s t h at unfair and deceptive acts by B ank of Ame r i c a Corporation (B AC) 1 caused an injury re s u l t ing in d amag es, we reverse the district court.

I

W e assume the following facts taken from the complaint

are true for the purpose of o u r review. See Metzler I nv.

1 A lth o u g h th e alleg atio n s in th e co m p lain t ref er to v ario u s en tities

asso ciated w ith B A C, su ch as B A C Ho m e L o an Serv icin g , L. P
., Co u n try w id e F in an cial Co rp o ratio n , an d Co u n try w id e Ho m e L o an s, In c., f o r co n v en ien ce w e ref

er to th ese en tities as B A C.C O M P T O N V

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GMBH v. Corinthian Colls., Inc.
, 540 F .3d 1 0 4 9, 1055 n.1 (9th Cir. 2008).

I n 2003, Compton purchased a pie c e of real property throug h a privately funded construction loan. Compton later

s o ug ht to refinance this loan and, in May 2006, ex ec u t ed a promissory note and mortg a g e g iving C o u ntry wide Home L oans, I n c

. , a security interest in the property

. After Compton r e financed her mortg ag e and before the e vents at issue in this case, B AC acquired Country wide.

After making timely loan pay ments f o r more than two
y ears, Compton b ega n s uffering f inancial difficulties due to

a decline in her fiberg lass pool business. I n Aug ust 2008, while still making timely pay ments, Compton contacted B AC
to inquire about modify ing her l o a n to lower the monthly
pay ments. The B AC representativ e i nformed her that she would not qualify for a loan modification unl e s s s h e was at least 30 day s behind on h er loan pay ments. Compton continued making timely pay ments for another eig ht months.

I n May 2 0 0 9, Compton stopped making loan pay ments and subsequently applied for a loan modification. A ccording
t o h e r complaint, Compton’s simple request to modify h e r loan res u l t e d in a twenty -month entang lement in a Kafkaesque nig htmare. Compton alleg es tha t d u ring the period from May 2009 to A ug u st 2010, she indefati ga b ly
soug h t a loan modification, while B AC i ntentionally frustrated her efforts, g a ve her misleading and e rroneous advice, and imposed a n ever-ending list of new requirements and d emands, despite knowing that a loan modification

a gr eement would never be forthcoming

. After Compt o n submitted her first loan modification a p p lication, the complaint a lleg es, a series of ever-chang ing B ACC O M P T O N V

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representatives told Compton that the application was under review, continued to demand further documentation, failed to respond to h er reques ts f

o r updates, and finally told her that her loan modification a

pplication file had been closed. Her second loan modification application met with the same fate. I n A u gust 2009, B AC approved her third loan modification application and s e nt Compton a modification ag r eement. After Compton sig ned the modification ag re e m e n t, had it notariz ed, and returned it to the ban k, a B AC representative i n formed h er that the ag reement was incomplete due t o a problem with the n ota r y ’s sig nature block. Compton submitted re-notariz ed documents, but a B AC representative told Compton that the notary stamp was still deficient a nd she would have to submit a fourth modification application. After Compton submi t t e d this fourth application, B AC representatives assured Com p t o n that the bank would not

commence foreclosure p roceeding s w h ile the modification
process was u nderway

. Despite these repeated assurances, on Aug u s t 2 6
, 2010, Compton learned that a notice o f foreclosure had been recorded ag a inst her property

. W h en

s h e c ontacted B AC reg arding the foreclosure notice, s h e learned that her fourth application h a d b e en denied d ue to “lack of documentation” and her file closed on Aug ust 19, 2010. Several months later, when Compton tried to apply for

a fifth time, a different r epresentative informed Compton that the foreclosure notice r endered her inelig ibl e for a loan modification.

O n March 28, 2011, Compton filed a complaint in the district court alleg ing a UDAP claim under section 480-2(d),

amo n g other claims, and seeking injunctive relief a nd monetary damag es. Compton all e ge d that B AC eng ag ed in

u nfair and deceptive acts and practices, including : (1) misinforming her tha t only borrowers w ho were a t leastC O M P T O N V

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30 day s behind on their mortg a g e pay ments were elig ible for loan modifications, althoug h B AC does not, in fact, have such

a requirement; (2 ) purposefully delay ing her efforts to neg otiate a loan modification and r epeatedly terminating her loan modification r equests; (3) misrepresenting the leng th o f
t i m e i t w ould take to process her loan modification, a nd knowing ly and purposefully drawing ou t the modification
process so that she would end u p in foreclosur e ; a n d (4 ) m i s r e p r esenting that foreclosure p roceeding s would n ot be broug ht ag ainst h er so long as her loan modification application rem ained pending
, and then backdating
paperwo r k s o it would falsely appear that B AC c ommenced foreclosure p roceeding s only after deny ing her l o a n modification application. Compton alleg es that as a result o f B AC’s misrepresentations and delay s , she spent a lmost two
y ears in a futile effort to modify her mortg ag e loan and, as a result of failing to obtain a mo d i fi c ation, ended up in foreclosure.

Th e d e f endants filed a motion to dismiss Compton’s complaint for failure to state a claim.

The d istrict court g ranted the defendants’ motion as to all claims. The d istrict court dismissed Compton’s UDAP claim without prejudice for fa i l u r e t o state a claim. Compton v

. Countrywide Fin. Corp.
, Civ. No. 11-00198 S O M-B MK, 2011 WL 2746807, at * 6 (D. Haw. J uly 13, 2011). Compton elected n ot to amend her compl a i nt, and the district court entered f inal judg ment o n Aug ust 16, 2 0 1 1

. Compton has appealed the judg ment only a s to the dismissal of her UDAP claim.C O M P T O N V

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I I

Hawaii enacted section 480-2 “in broad lang uag e in order
to constitute a flex ible tool to stop a n d p revent fraudulent,

u n f air or deceptive business practices f or the protection o f both consumers and honest b usinessmen.” Ai v. Frank Huff Agency, Ltd.
, 61 Haw. 607, 6 16 (1980), overruled on other grounds b

y Robert’s Haw. S

c h

. B u s, I

nc. v. Laupahoehoe Transp. Co.
, 81 Haw. 224 (1999). State courts construe this section libe r a l l y , Haw. Cmty. Fed. Credit Union v. Keka
, 94 Haw. 2 13, 229 (2000), in l i ght o f the state leg islature’s intention to “‘encourag e those who have been victimiz ed by
persons eng ag ing i n unfair or deceptive acts or practices to prosecute their claim,’ t hereby affording ‘an additional deterrent to those who would practice unfair and deceptive business acts,’” Zanakis-Pico v. Cutter D odge, Inc.
, 98 Haw. 309, 3 17 (2002) (quoting S.R. No. 60 0
, a t 1111 (1969) (Comm. Rep.); H.R. No. 6 6 1
, at 882–83 (1969) (Comm Rep.)).

Under section 480-2(a), “unfair o r deceptive acts o r practices in the conduct of a n y trade or commerce a re unlawful.” H aw. Rev. Stat. § 480-2(a). 2 Hawaii courts have held that “[ a] prac t i c e i s unfair when it offends e stablished public policy and when the practi c e is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” Balthazar v. Verizon Haw., Inc. , 109 Haw. 69,

2 Sectio n 4 8 0

- 2 (a) p ro v id es in

f u ll:

Un f air m eth o d s o f co m

p etitio n an d u n f

air o r d ecep tiv e acts o r p r actices in th e co n d u ct o f an y trad e or

co m m erce are u n law f

u l.

Haw . Rev . Stat. § 4 8 0

- 2 (a).C O M P T O N V

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77 (2005) ( altera t i o n i n o rig inal) ( quoting Keka
, 94 H aw. at 228).

Althoug h the statute d oes not define the term “deceptive,” Hawaii courts construe it “in a ccordance with judicial interpretations of similar federal antitrust statutes.” Courbat

v. Da h a n a Ranch, Inc.
, 111 Haw. 254, 2 61 ( 2006) (quoting Haw. Rev. Stat. § 480-3); see also Haw. Rev. Stat. § 480-2(b) (requiring c ourts to construe the statute with “ d u e consideration” to F TC r ules, reg ulations, and decisions). Under this interpretation, “a deceptive act or practice is ‘(1) a representation, omission, or practice[ ] th at (2) is likely to

m i s l e a d c o n s u

m e rs acting reasonably under the circumstances [ w h ere] (3) [ ] the representation, omission, or practice i s material.’” Courbat
, 111 Haw. at 262 ( alterations in orig inal) (q u oting FTC v. Verity Int’l, Ltd.
, 443 F .3d 48, 6 3 (2d Cir. 2006)). “A representation, omiss ion, or practice is considered ‘material’ if it involves ‘information that i s important to

consumers and, hence, likely to affect t h e i r choice o f, o r conduct reg arding
, a product.’” Id. (quoting Novartis Corp.

v. FTC
, 223 F .3d 783, 786 ( D.C. Cir. 2000)). This inquiry is objective—the test is “whether the act o r omission ‘is likely
to mislead consumers.’” Id

. (quoting Verity Int’l
, 443 F .3d at 63). Material misrepresent a t i o n s made during the c ourse o f loan neg otiations c an co n s t itute a n unfair or deceptive act within the meaning of section 48 0

- 2 (a). See Keka
, 94 Haw. at 229.

F inally
, the Hawaii Supreme Court has determined that “a loan ex tended by a financi a l i n s titution is a ctivity involving ‘conduct of any trade and commerce.’” Id. at 227; see Haw. R ev. Stat. § 480-2(a) (making unfair o r deceptive ac t s o r practices unlawful only wh en they arise “in the conduct o f
any trade or commerce”).C O M P T O N V

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Section 480-13(b)(1) provides that “[ a] ny consumer w ho is injured by any unfair or decept ive act or practice” that violates section 480-2 “[ m] ay sue for damag es sustained b y the consumer.” Haw. Rev. Stat. § 480-13(b)(1). “ [ L ] o an borrowers are ‘consumers’ within the meaning of [ the statute] .” Keka
, 94 Haw. at 2 2 7

. T o obtain relief under

s e c t ion 480-13(b)(1), a consumer must establish thre e elements: “(1) a violation o f [ section] 4 80-2; (2) injury to the

consumer caused by such a vi o lation; and (3) proof of the
amount of damag es.” Davis v. W holesale Motors, Inc.
, 86 Haw. 405, 417 (Ct. App. 1997) (citing Ai
, 61 Haw. at 617, and Cieri v. Leticia Query Realty, Inc.
, 80 Ha w

. 5 4
, 6 1–62 (1995)).

Althoug h the statute does not define either “ injury ” o r “damag es,” see Zanakis-Pico
, 98 H aw. at 316, Hawaii courts have n ot set a hig h bar for provi n g t h e s e elements. The plaintiff must show only that the alleg ed violations of section 480-2(a) caused “privat e d amag e ,” Kekauoha-Alisa v

. A m e r iquest Mortg. Co. ( I n re Kekauoha-Alisa)
, 6 74 F .3d 1083, 1092 (9th Cir. 2012) (quoting Ai
, 6 1 Haw. at 618), a nd that the plaintiff’s injury is “ fairly traceable to the defendant’s actions,” Flores v. Rawlings Co.
, 117 Haw. 153, 167 n.23 (2008) (quoting Cieri
, 80 Haw. at 66). B ec au se deceptive
acts “do their d amag e whe n t h e y induce action that a

consumer would not otherwise have undertaken,” a consumer who can show “a resulting injury ” is entitled to damag es even if the c onsumer has n ot actually consummated a p a rticular
t r ansaction. Zanakis-Pico
, 9 8 Haw. at 3 17. F or instance
, a

consumer could r ecover damag e s f o r “ o u t -of-pocket ex penses for a money order, g asoline, parking
, and w ear a nd tear on [ an] automobile that resulted from [ an] unfair busin e s sC O M P T O N V

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practice.” 3 Id. at 319 (citing W iginton v. Pac. Credit Corp.
, 2 Haw. App. 435, 444 ( 1981)). A plaintiff’s “alleg ation that he has, a s a ‘direct and prox im a t e r e sult’ of [ defendant’s] vi o l ation [ of section 480-2]
, ‘sustained special and g eneral d amag es’ suffices to w ithstand a motion to d ismiss un d e r R u l e 12(b)(6).” Jenkins v. Commonwealth Land Title I ns. Co.
, 95 F .3d 791, 799 (9th Cir. 1996); see also Zanakis-Pico
, 98 Haw. at 330 (holding that a plaintiff adequately alleg e s special damag es by claiming “special damag es in such amounts as will be proved at trial”).

I I I

W e review de novo the district court’s dismissal of a complaint f

or failure to state a claim pursuant to Rule 12(b)(6) of the F ederal Rules of Civil Procedure. Cervantes

v. Countrywide H

ome Loans, Inc.
, 656 F .3d 1034, 1040 (9th Cir. 2 011). “To survive a motion to d i s miss, a complaint
must contain sufficient factual matter, accepte d a s true, to ‘state a claim to relief that is p lausible o n its face.’” Ashcroft

v. Iqbal
, 556 U.S. 662, 6 78 (2009) (quoting Bell Atl. Corp. v

. Twombly
, 550 U.S. 544, 570 (2007 ) )

. “ [ L ] abels a nd conclusions” o r “a formulaic recitation of the elements of a cause of action” do not suffice. Twombly , 550 U.S. at 555.

3 T h e Haw aii Su

p rem e Co u rt h as h eld th at em o tio n al d istress an d o th er p erso n al in

j u ry d am ag es are n o t av a i l a b l e u n d er sectio n 4 8 0- 1 3 (b )(1 ). Za n a kis-Pico
, 9 8 Haw

. at 3 1 9

. “ ‘ [B ]en ef it- o f

- th e- b arg ain ’ d am ag es” an d
sp ecif ic p erf o rm an ce are n o t av ailab le u n less a co n tract ex ists b etw een th e p arties. Id

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A

The district court g ave two reasons for its conclusion that Compton failed to state a claim under sections 480-2 and 480- 13. Fi r st, it stated that “lenders g enerally owe no duty to a borrower ‘not to place borrowers in a loan even where there

was a foreseeable risk borrowers would be unable to repay ,’” Compton
, 2011 W L 2746807, at *6 (quoting Marzan v

. Bank of Am.
, 779 F

. Supp. 2d 1140
, 1 1 5 2 (D. Haw. 2011)), and a lender has no duty to dete rmine whether a borrower is qualified f

or a loan, id. Thi s reasoning is n ot directly

a p p l icable to Compton’s UDAP claim, which was based o n alleg ations that B AC “ m a de material [mis] representations and purposefully delay ed Plaintiff’s modification efforts,” id. (internal quotation marks omitted), n ot on t h e theory that B AC had placed her in a loan for w hich she was not qualified.

Second, the district court stated that, “as a g eneral r ule, a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not

ex c e ed the scope of its conventional r ole as a mere lender of
money .” Id. (quoting N

y m a r k v. Heart Fed. Sav. & Loan Ass’n
, 231 C a l

. A p p

. 3d 1089, 1096 (1991)). Under this reasoning
, the district court implicitly held that Compton coul d not state a claim for unfair or deceptive acts a nd practices unless her c omplaint a l l eged that B AC owed her a du t y of care, a

nd that she c ould not make such an alleg ation absent a showing that B AC’s c onduct ex ceeded the scope o f behaving as “a mere lender of money .”

W e d isag ree with the district co u r t ’s rationale, which

seems to be based on a lo n g line of federal district court decisions holding that a lender’s d ecision to a pprove a loan toC O M P T O N V

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a b o r r ower who could not afford the pay ments does n o t constitute a cog niz able claim under sections 480-2 and 480- 13, a bsent a lleg ations that the lender ex ceeded the scope o f its role as a lender of mon e y a n d owed the borrower a duty o f

care. See, e.g. , Teaupa v. U.S. Nat’l Bank N.A.
, 836 F

. Supp. 2d 1083, 1 099 (D. H aw. 2011) (re l y ing on this theory to dismiss a UDAP clai m for failure to state a claim); M arzan , 779 F

. Supp. 2d at 1152 (same); see also S w a rtz v. City Mortg., Inc.
, 911 F

. Supp. 2d 9 1 6, 942 (D. Haw. 2 012) (rely ing o n this theory to g r a

n t summary judg ment in favor o f the lender); W

ood v. Greenberr

y F i n

. Servs., Inc.
, 9 0 7 F

. Supp. 2d 1165, 1184 (D. Haw. 2012) (same); Stanton v. Bank of Am., N.A.
, 834 F

. Supp. 2d 1061, 1082 ( D. Haw. 2 011) (same).

None o f these cases is dire c tly a pplicable to Compton’s complaint, which did not alleg e t hat B AC allowed her to obtain a loan for which she was u nqualified. I t is understandable, however, h ow the district c o u r ts’ r easoning in these prior c ases misled the district court here. Had these
courts applied the plain lang uag e of section 480-2, they mig ht well have concluded that a lender ’ s f ailure in the ordinary

course of business to make a n adequate assessment o f a borrower’s qualifications does not c onstitute an unfair o r deceptive practice, a lthoug h this precise qu e s t ion is not before us. B ut rather than take this straig htforward approach, the opinions listed above (among others) rested their analy sis

on common law t o r t principles, reasoning that: (1) a lender
g enerally “ o w e s no duty of care to a borrower when the institution’s involvement in t h e loan transaction does not

ex c e ed the scope of its conventional role as a mere lender of
money ,” Marzan
, 779 F

. Supp. 2d at 1152 (quoting Nymark
, 2 3 1 Cal. App. 3d at 1 096); (2) therefore “lenders g enerally

owe no d uty to a borrower ‘ not to place borrowers in a l o anC O M P T O N V

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even where there was a foreseeable risk borrowers would be unable to repay ,’” id. (quoting McCarty v. GCP Mgmt., LLC
, Civ. No. 10-0013 3 J MS/KSC, 2010 WL 4812763, at *6 (D. Haw. Nov. 17, 2010)); and thus (3) absent an alleg ation that the l en der o wed the borrower a c ommon law duty o f care (which could not occur unless the lender ex ceeded its r ole a s

a lender), an alleg ation that the lender allowed an unqualified borrower to obtain a loa n d oes not state a claim under sections 480-2 and 480-13, see id. L og ically
, this reasoning is based on the unstated p remise that a lender cannot be h eld liable under sections 4 80-2 and 480-13 unless the lender owes the borrower a common law duty of care.

Contrary to this line of federal district court o pinions, borrowers are not oblig ed to show that the lender owed the borrower a common law duty of care to state a claim under sections 480-2 or 480-13. Nothing in the plain l an gu ag e o f sections 4 8 0-2 or 480-13 requires a p laintiff to make such an alleg ation. And we have not identifie d a ny decision of a H a w a i i court interpreting sections 480-2 and 4 8 0-13 as imposing such a requirement. The Hawaii Supr e m e court’s decision in Ke k

a , 9 4 Haw. 213, is to the contrary

. I n considering a UDAP claim ag ainst a lender, Keka held that the borrowers raised a g enuine issue of materi a l f a ct reg arding whether a violation of section 480-2 occurred simply by sw e a r i n g in an a ffidavit that during loan
neg otia t i o ns the lender h ad misrepresented the interest rate that would apply to the loan. Id. at 228–29. Keka
, therefore, strong ly supports the conclusion that section 480-2 does not require a borrower to alleg e t h a t a lender “ex ceed[ ed] the
scope of its conventional r o l e a s a mere lender of money , ” Nymark
, 231 Cal. A pp. 3d at 1096, and thus may have owed the borrower an independent duty of care.C O M P T O N V

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According ly
, we c o nclude that district co u r t s evaluating whether a borrower’s complaint states a claim u nder sections 480-2 and 480-13 ag ainst a lender need only address whether th e c o m p laint adequately alleg es that the lender used unfair

or deceptive acts in its relationship with the borrower, without looking to neg lig ence law to determine whether the lender breached a common law duty of care. Rather than requiring proof of a commo n l aw d uty o f care, section 480-2 is better interpreted a s imposing a statutory d uty on lende r s not to eng ag e in “ unfair or deceptive acts or practices in the conduct of any trade or commerce.” Haw. Rev. Stat. § 480-2(a). Thus a borrower need only alleg e that a lender has breached that statutory duty

(in a way that caused private damag e s) in order to sta t e a claim under sections 480-2 and 480-13. See Davis
, 86 Haw. at 417. W hile courts may well c onclude that

a borrower’s alleg a tion that a lender failed “to determine the creditworthiness and ability to repay by a borrower” d oes not breach the statutory d

uty imposed by section 480-2, M arzan , 779 F

. Supp. 2d at 1152 (quoting S heets v. DHI Mortg. Co.
, Civ. No. 09-1030 L J O DL B
, 2009 W L 2171085, at *4 (E.D. Cal. J uly 20, 2009)), a borrower’s failu r e t o alleg e that the lender’s c onduct occurred outside the course of o r d inary lender activity or that th e l e n d er owed a duty of care to the borrower is not fatal to a UDAP claim.

B

Here, the district court dismiss e d C o m p t o n ’ s UDAP claim solely on the g round that Compton f a iled to alleg e that B AC

ex c e eded its role as a lender and o wed an independent duty o f

care to Compton. This reasoning was erroneous. B ut because we may affirm the district c ourt on “any g ro und supported by the record,” Thompson v. Paul
, 547 F .3d 1055,C O M P T O N V

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1059 (9th Cir. 2008), we nex t c o nsider whether B AC can nevertheless prevail on its motion to dismiss.

As ex plained above, in order to s t a te a claim under sections 480-2 and 480-13, Compton must plausibly a lleg e that (1) she is a “consumer,” see H aw. Rev. Stat. §§ 480-2(d), 480-13(b); (2) B AC v iolate d section 480-2(a), p rohibiting “unfair or deceptive acts or practices in the conduct of any trade or commerce,” id. § 480-2(a); and (3) she has suffered

a n i njury resulting in damag es, see id. § 480-13(b)( 1 ) ; Zanakis-Pico , 98 Haw. at 316.

A s a threshold matter, it is undisputed that Comp t o n qualifies as a “consumer,” and that B AC’s le n d i n g a n d loan modification activities involve the “conduct of any trade a nd commerce.” See Keka
, 94 Haw. at 227 (internal quotation marks omitted).

W e also conclude that Compton has sufficiently a l l e g ed that B AC eng a g ed in an “unfair or deceptive act or p ractice” for the purpose of withstanding a motion to d i s m iss. A s previously noted, Compton d o es n ot base her UDAP claim on alleg ations that B AC failed to determine whether she would be financially cap a b l e of repay ing the loan. Rather, the g ist of Compton’s c omplaint is t h a t B AC misled h e r into believing that B AC would modify her loan a n d would not

commence foreclosure pro c ee d i n gs w h i l e h e r loan modification re q u e st remained under review. As a r esult o f these mis representations, Compton e ng ag e d in prolong ed
neg otiations, incurred transaction costs in provi ding a nd notariz ing d ocuments, a nd endured leng thy delay s. The complaint’s description of B AC’s misleading behavi o r

s u fficiently alleg es a “representation, omission, or practice ” that is likely to deceiv e a reasonable consumer. Courbat
,C O M P T O N V

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111 H aw. at 262. Moreover, B AC’s misrepresentations and misleading co n d uct were material, in that they involved information important to a consumer attempting to neg otiate with a mortg ag or to prevent foreclosure. Id

.

W e n ex t turn to the question whether the c o m plaint adequately alleg ed an injury resulting in damag es. I n the sectio n relating to the UDAP claim, the complaint merely states that Compton suffered “considerable hardship” due to spending “ a l m ost two y ears a ttempting to modify her mortg ag e loan” a

nd e nding up in foreclosure. T h i s section also incorporates by reference the preceding parag raphs in the complaint. The c o mplaint’s factual alleg ations d etail the various transaction costs Compton incurred in attempting to meet B AC’s n ever-endin g and e ver-chang ing requirements. These a lleg ations of the damag es prox imately caused by the lender’s deceptive acts, namely the c o s t s suffered b y Compton in connection w ith the failed loan neg otiations, a re sufficiently

pleaded to survive a motion to dismiss.

I n addition, the complaint states that had Compton b een able to enter into a loan modification ag reement, she would
not have d efaulted or f

a c ed f o reclosure, and the f

oreclosure caused her to incur attorney fees, late pay ment p ay ments, a nd lost business income. These alleg ations were made in connection with a breach of c ontract claim, however, and the complaint does not state that B AC’s misleading loan modification practices r esult e d in the foreclosure o r consequential damag es at issue. According ly
, the complaint does not alleg e a b a s i s for Compton to recover equitable remedies such as relief f

rom foreclosure throug h h e r U DAP claim.C O M P T O N V

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Given H awaii’s low ba r f o r showing damag e s, we conclude that for the purpose of a m o tion to dismiss Compton’s alleg a tions that B AC’s deceptive conduct c aused her to waste two y ears of effort and incur multiple transaction
costs are sufficient to state an injury that caused damage s. See Jenkins
, 95 F .3d at 799 (holding that a complaint’s mere conclusory statement that the plaintiff has “sustained special and g eneral d amag es” d

ue to defendant’s violation of section 480-2 suffices to withstand a motion to dismiss).

According ly
, Compton has “nudg ed” her UDAP claim “across the line from conceivable to plausible .” Twombly
, 550 U.S. at 5 70. W e therefore REVERSE the district court’s dismissal of Compton’s UD AP claim and R EMAND for proceeding s consistent with this opin ion.