Court Opinion

ID: 2709781
Source: CourtListenerOpinion
Date Created: 2014-08-05 19:00:43.003802+00
Date Added: 2024-06-11T10:01:31.843328
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

WATOSHINA LYNN COMPTON,                   No. 11-17158
             Plaintiff-Appellant,
                                            D.C. No.
                 v.                      1:11-cv-00198-
                                           SOM-BMK
COUNTRYWIDE FINANCIAL
CORPORATION; COUNTRYWIDE
HOME LOANS, INC.; BANK OF                   OPINION
AMERICA CORPORATION; BAC
HOME LOANS SERVICING, LP; U.S.
BANK NATIONAL ASSOCIATION AS
TRUSTEE, for CSMC Mortgage-
Backed Pass Through Certificates,
Series 2006-7; U.S. BANK N.A.;
DOES, JOHN AND MARY DOES, 1–10,
               Defendants-Appellees.

     Appeal from the United States District Court
              for the District of Hawaii
  Susan Oki Mollway, Chief District Judge, Presiding

                 Argued and Submitted
           June 11, 2014—Honolulu, Hawaii

                  Filed August 4, 2014

      Before: William A. Fletcher, Sandra S. Ikuta,
        and Andrew D. Hurwitz, Circuit Judges.

                Opinion by Judge Ikuta
2       COMPTON V. COUNTRYWIDE FINANCIAL CORP.

                           SUMMARY*

                     Hawaii Consumer Law

   The panel reversed the district court’s Fed. R. Civ. P.
12(b)(6) dismissal of a borrower’s claim brought under Haw.
Rev. Stat. § 480-2(d) alleging unfair and deceptive acts by
Bank of America Corporation, and remanded.

    The panel held that when a district court evaluates
whether a borrower’s complaint states a claim under Haw.
Rev. Stat. §§ 480-2 and 480-13 against a lender, 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, without looking to negligence
law to determine whether the lender breached a common law
duty of care. The panel held that the district court erred in
dismissing the borrower’s claim solely on the ground that the
borrower failed to allege that the lender exceeded its role as
a lender and owed an independent duty of care to the
borrower. The panel held that the complaint adequately
alleged under Hawaii law unfair and deceptive acts by Bank
of America, and injury resulting in damage to the borrower,
to withstand a motion to dismiss.

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
        COMPTON V. COUNTRYWIDE FINANCIAL CORP.                        3

                            COUNSEL

James Harry Fosbinder, Ivey Fosbinder Fosbinder, LLC,
Wailuku, Hawaii, for Plaintiff-Appellant.

Dennis Peter Maio (argued) and Rosalie Euna Kim, Reed
Smith LLP, San Francisco, California, for Defendants-
Appellees.

                             OPINION

IKUTA, Circuit Judge:

    Watoshina Lynn Compton appeals the district court’s
dismissal of her claim under section 480-2 of the Hawaii
Revised Statutes, which authorizes consumers to “bring an
action based upon unfair or deceptive acts or practices.”
Haw. Rev. Stat. § 480-2(d) (referred to herein as a UDAP
claim). Because Compton’s complaint adequately alleges
that unfair and deceptive acts by Bank of America
Corporation (BAC)1 caused an injury resulting in damages,
we reverse the district court.

                                   I

    We assume the following facts taken from the complaint
are true for the purpose of our review. See Metzler Inv.

  1
     Although the allegations in the complaint refer to various entities
associated with BAC, such as BAC Home Loan Servicing, L.P.,
Countrywide Financial Corporation, and Countrywide Home Loans, Inc.,
for convenience we refer to these entities as BAC.
4     COMPTON V. COUNTRYWIDE FINANCIAL CORP.

GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1055 n.1
(9th Cir. 2008).

    In 2003, Compton purchased a piece of real property
through a privately funded construction loan. Compton later
sought to refinance this loan and, in May 2006, executed a
promissory note and mortgage giving Countrywide Home
Loans, Inc., a security interest in the property. After
Compton refinanced her mortgage and before the events at
issue in this case, BAC acquired Countrywide.

    After making timely loan payments for more than two
years, Compton began suffering financial difficulties due to
a decline in her fiberglass pool business. In August 2008,
while still making timely payments, Compton contacted BAC
to inquire about modifying her loan to lower the monthly
payments. The BAC representative informed her that she
would not qualify for a loan modification unless she was at
least 30 days behind on her loan payments. Compton
continued making timely payments for another eight months.

    In May 2009, Compton stopped making loan payments
and subsequently applied for a loan modification. According
to her complaint, Compton’s simple request to modify her
loan resulted in a twenty-month entanglement in a
Kafkaesque nightmare. Compton alleges that during the
period from May 2009 to August 2010, she indefatigably
sought a loan modification, while BAC intentionally
frustrated her efforts, gave her misleading and erroneous
advice, and imposed a never-ending list of new requirements
and demands, despite knowing that a loan modification
agreement would never be forthcoming. After Compton
submitted her first loan modification application, the
complaint alleges, a series of ever-changing BAC
      COMPTON V. COUNTRYWIDE FINANCIAL CORP.                5

representatives told Compton that the application was under
review, continued to demand further documentation, failed to
respond to her requests for updates, and finally told her that
her loan modification application file had been closed. Her
second loan modification application met with the same fate.
In August 2009, BAC approved her third loan modification
application and sent Compton a modification agreement.
After Compton signed the modification agreement, had it
notarized, and returned it to the bank, a BAC representative
informed her that the agreement was incomplete due to a
problem with the notary’s signature block. Compton
submitted re-notarized documents, but a BAC representative
told Compton that the notary stamp was still deficient and she
would have to submit a fourth modification application.
After Compton submitted this fourth application, BAC
representatives assured Compton that the bank would not
commence foreclosure proceedings while the modification
process was underway. Despite these repeated assurances, on
August 26, 2010, Compton learned that a notice of
foreclosure had been recorded against her property. When
she contacted BAC regarding the foreclosure notice, she
learned that her fourth application had been denied due to
“lack of documentation” and her file closed on August 19,
2010. Several months later, when Compton tried to apply for
a fifth time, a different representative informed Compton that
the foreclosure notice rendered her ineligible for a loan
modification.

    On March 28, 2011, Compton filed a complaint in the
district court alleging a UDAP claim under section 480-2(d),
among other claims, and seeking injunctive relief and
monetary damages. Compton alleged that BAC engaged in
unfair and deceptive acts and practices, including:
(1) misinforming her that only borrowers who were at least
6      COMPTON V. COUNTRYWIDE FINANCIAL CORP.

30 days behind on their mortgage payments were eligible for
loan modifications, although BAC does not, in fact, have such
a requirement; (2) purposefully delaying her efforts to
negotiate a loan modification and repeatedly terminating her
loan modification requests; (3) misrepresenting the length of
time it would take to process her loan modification, and
knowingly and purposefully drawing out the modification
process so that she would end up in foreclosure; and
(4) misrepresenting that foreclosure proceedings would not be
brought against her so long as her loan modification
application remained pending, and then backdating
paperwork so it would falsely appear that BAC commenced
foreclosure proceedings only after denying her loan
modification application. Compton alleges that as a result of
BAC’s misrepresentations and delays, she spent almost two
years in a futile effort to modify her mortgage loan and, as a
result of failing to obtain a modification, ended up in
foreclosure.

   The defendants filed a motion to dismiss Compton’s
complaint for failure to state a claim.

    The district court granted the defendants’ motion as to all
claims. The district court dismissed Compton’s UDAP claim
without prejudice for failure to state a claim. Compton v.
Countrywide Fin. Corp., Civ. No. 11-00198 SOM-BMK,
2011 WL 2746807, at *6 (D. Haw. July 13, 2011). Compton
elected not to amend her complaint, and the district court
entered final judgment on August 16, 2011. Compton has
appealed the judgment only as to the dismissal of her UDAP
claim.
         COMPTON V. COUNTRYWIDE FINANCIAL CORP.                   7

                                     II

    Hawaii enacted section 480-2 “in broad language in order
to constitute a flexible tool to stop and prevent fraudulent,
unfair or deceptive business practices for the protection of
both consumers and honest businessmen.” Ai v. Frank Huff
Agency, Ltd., 61 Haw. 607, 616 (1980), overruled on other
grounds by Robert’s Haw. Sch. Bus, Inc. v. Laupahoehoe
Transp. Co., 81 Haw. 224 (1999). State courts construe this
section liberally, Haw. Cmty. Fed. Credit Union v. Keka,
94 Haw. 213, 229 (2000), in light of the state legislature’s
intention to “‘encourage those who have been victimized by
persons engaging in unfair or deceptive acts or practices to
prosecute their claim,’ thereby affording ‘an additional
deterrent to those who would practice unfair and deceptive
business acts,’” Zanakis-Pico v. Cutter Dodge, Inc., 98 Haw.
309, 317 (2002) (quoting S.R. No. 600, at 1111 (1969)
(Comm. Rep.); H.R. No. 661, at 882–83 (1969) (Comm
Rep.)).

    Under section 480-2(a), “unfair or deceptive acts or
practices in the conduct of any trade or commerce are
unlawful.” Haw. Rev. Stat. § 480-2(a).2 Hawaii courts have
held that “[a] practice is unfair when it offends established
public policy and when the practice is immoral, unethical,
oppressive, unscrupulous or substantially injurious to
consumers.” Balthazar v. Verizon Haw., Inc., 109 Haw. 69,

 2
     Section 480-2(a) provides in full:

          Unfair methods of competition and unfair or deceptive
          acts or practices in the conduct of any trade or
          commerce are unlawful.

Haw. Rev. Stat. § 480-2(a).
8      COMPTON V. COUNTRYWIDE FINANCIAL CORP.

77 (2005) (alteration in original) (quoting Keka, 94 Haw. at
228).

    Although the statute does not define the term “deceptive,”
Hawaii courts construe it “in accordance with judicial
interpretations of similar federal antitrust statutes.” Courbat
v. Dahana Ranch, Inc., 111 Haw. 254, 261 (2006) (quoting
Haw. Rev. Stat. § 480-3); see also Haw. Rev. Stat. § 480-2(b)
(requiring courts to construe the statute with “due
consideration” to FTC rules, regulations, and decisions).
Under this interpretation, “a deceptive act or practice is ‘(1) a
representation, omission, or practice[] that (2) is likely to
mislead consumers acting reasonably under the circumstances
[where] (3) [] the representation, omission, or practice is
material.’” Courbat, 111 Haw. at 262 (alterations in original)
(quoting FTC v. Verity Int’l, Ltd., 443 F.3d 48, 63 (2d Cir.
2006)). “A representation, omission, or practice is considered
‘material’ if it involves ‘information that is important to
consumers and, hence, likely to affect their choice of, or
conduct regarding, 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 or omission ‘is likely
to mislead consumers.’” Id. (quoting Verity Int’l, 443 F.3d at
63). Material misrepresentations made during the course of
loan negotiations can constitute an unfair or deceptive act
within the meaning of section 480-2(a). See Keka, 94 Haw.
at 229.

    Finally, the Hawaii Supreme Court has determined that “a
loan extended by a financial institution is activity involving
‘conduct of any trade and commerce.’” Id. at 227; see Haw.
Rev. Stat. § 480-2(a) (making unfair or deceptive acts or
practices unlawful only when they arise “in the conduct of
any trade or commerce”).
       COMPTON V. COUNTRYWIDE FINANCIAL CORP.                    9

    Section 480-13(b)(1) provides that “[a]ny consumer who
is injured by any unfair or deceptive act or practice” that
violates section 480-2 “[m]ay sue for damages sustained by
the consumer.” Haw. Rev. Stat. § 480-13(b)(1). “[L]oan
borrowers are ‘consumers’ within the meaning of [the
statute].” Keka, 94 Haw. at 227. To obtain relief under
section 480-13(b)(1), a consumer must establish three
elements: “(1) a violation of [section] 480-2; (2) injury to the
consumer caused by such a violation; and (3) proof of the
amount of damages.” Davis v. Wholesale Motors, Inc.,
86 Haw. 405, 417 (Ct. App. 1997) (citing Ai, 61 Haw. at 617,
and Cieri v. Leticia Query Realty, Inc., 80 Haw. 54, 61–62
(1995)).

     Although the statute does not define either “injury” or
“damages,” see Zanakis-Pico, 98 Haw. at 316, Hawaii courts
have not set a high bar for proving these elements. The
plaintiff must show only that the alleged violations of section
480-2(a) caused “private damage,” Kekauoha-Alisa v.
Ameriquest Mortg. Co. (In re Kekauoha-Alisa), 674 F.3d
1083, 1092 (9th Cir. 2012) (quoting Ai, 61 Haw. at 618), and
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). Because deceptive
acts “do their damage when they induce action that a
consumer would not otherwise have undertaken,” a consumer
who can show “a resulting injury” is entitled to damages even
if the consumer has not actually consummated a particular
transaction. Zanakis-Pico, 98 Haw. at 317. For instance, a
consumer could recover damages for “out-of-pocket expenses
for a money order, gasoline, parking, and wear and tear on
[an] automobile that resulted from [an] unfair business
10      COMPTON V. COUNTRYWIDE FINANCIAL CORP.

practice.”3 Id. at 319 (citing Wiginton v. Pac. Credit Corp.,
2 Haw. App. 435, 444 (1981)). A plaintiff’s “allegation that
he has, as a ‘direct and proximate result’ of [defendant’s]
violation [of section 480-2], ‘sustained special and general
damages’ suffices to withstand a motion to dismiss under
Rule 12(b)(6).” Jenkins v. Commonwealth Land Title Ins.
Co., 95 F.3d 791, 799 (9th Cir. 1996); see also Zanakis-Pico,
98 Haw. at 330 (holding that a plaintiff adequately alleges
special damages by claiming “special damages in such
amounts as will be proved at trial”).

                                    III

     We review de novo the district court’s dismissal of a
complaint for failure to state a claim pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure. Cervantes
v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1040 (9th
Cir. 2011). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “[L]abels and
conclusions” or “a formulaic recitation of the elements of a
cause of action” do not suffice. Twombly, 550 U.S. at 555.

 3
   The Hawaii Supreme Court has held that emotional distress and other
personal injury damages are not available under section 480-13(b)(1).
Zanakis-Pico, 98 Haw. at 319. “‘[B]enefit-of-the-bargain’ damages” and
specific performance are not available unless a contract exists between the
parties. Id.
       COMPTON V. COUNTRYWIDE FINANCIAL CORP.                 11

                               A

    The district court gave two reasons for its conclusion that
Compton failed to state a claim under sections 480-2 and 480-
13. First, it stated that “lenders generally 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 WL 2746807, at *6 (quoting Marzan v. Bank
of Am., 779 F. Supp. 2d 1140, 1152 (D. Haw. 2011)), and a
lender has no duty to determine whether a borrower is
qualified for a loan, id. This reasoning is not directly
applicable to Compton’s UDAP claim, which was based on
allegations that BAC “made material [mis]representations
and purposefully delayed Plaintiff’s modification efforts,” id.
(internal quotation marks omitted), not on the theory that
BAC had placed her in a loan for which she was not
qualified.

    Second, the district court stated that, “as a general rule, a
financial institution owes no duty of care to a borrower when
the institution’s involvement in the loan transaction does not
exceed the scope of its conventional role as a mere lender of
money.” Id. (quoting Nymark v. Heart Fed. Sav. & Loan
Ass’n, 231 Cal. App. 3d 1089, 1096 (1991)). Under this
reasoning, the district court implicitly held that Compton
could not state a claim for unfair or deceptive acts and
practices unless her complaint alleged that BAC owed her a
duty of care, and that she could not make such an allegation
absent a showing that BAC’s conduct exceeded the scope of
behaving as “a mere lender of money.”

   We disagree with the district court’s rationale, which
seems to be based on a long line of federal district court
decisions holding that a lender’s decision to approve a loan to
12     COMPTON V. COUNTRYWIDE FINANCIAL CORP.

a borrower who could not afford the payments does not
constitute a cognizable claim under sections 480-2 and 480-
13, absent allegations that the lender exceeded the scope of its
role as a lender of money and owed the borrower a duty of
care. See, e.g., Teaupa v. U.S. Nat’l Bank N.A., 836 F. Supp.
2d 1083, 1099 (D. Haw. 2011) (relying on this theory to
dismiss a UDAP claim for failure to state a claim); Marzan,
779 F. Supp. 2d at 1152 (same); see also Swartz v. City
Mortg., Inc., 911 F. Supp. 2d 916, 942 (D. Haw. 2012)
(relying on this theory to grant summary judgment in favor of
the lender); Wood v. Greenberry Fin. Servs., Inc., 907 F.
Supp. 2d 1165, 1184 (D. Haw. 2012) (same); Stanton v. Bank
of Am., N.A., 834 F. Supp. 2d 1061, 1082 (D. Haw. 2011)
(same).

    None of these cases is directly applicable to Compton’s
complaint, which did not allege that BAC allowed her to
obtain a loan for which she was unqualified. It is
understandable, however, how the district courts’ reasoning
in these prior cases misled the district court here. Had these
courts applied the plain language of section 480-2, they might
well have concluded that a lender’s failure in the ordinary
course of business to make an adequate assessment of a
borrower’s qualifications does not constitute an unfair or
deceptive practice, although this precise question is not
before us. But rather than take this straightforward approach,
the opinions listed above (among others) rested their analysis
on common law tort principles, reasoning that: (1) a lender
generally “owes no duty of care to a borrower when the
institution’s involvement in the loan transaction does not
exceed the scope of its conventional role as a mere lender of
money,” Marzan, 779 F. Supp. 2d at 1152 (quoting Nymark,
231 Cal. App. 3d at 1096); (2) therefore “lenders generally
owe no duty to a borrower ‘not to place borrowers in a loan
       COMPTON V. COUNTRYWIDE FINANCIAL CORP.               13

even where there was a foreseeable risk borrowers would be
unable to repay,’” id. (quoting McCarty v. GCP Mgmt., LLC,
Civ. No. 10-00133 JMS/KSC, 2010 WL 4812763, at *6 (D.
Haw. Nov. 17, 2010)); and thus (3) absent an allegation that
the lender owed the borrower a common law duty of care
(which could not occur unless the lender exceeded its role as
a lender), an allegation that the lender allowed an unqualified
borrower to obtain a loan does not state a claim under
sections 480-2 and 480-13, see id. Logically, this reasoning
is based on the unstated premise that a lender cannot be held
liable under sections 480-2 and 480-13 unless the lender owes
the borrower a common law duty of care.

    Contrary to this line of federal district court opinions,
borrowers are not obliged 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 language of
sections 480-2 or 480-13 requires a plaintiff to make such an
allegation. And we have not identified any decision of a
Hawaii court interpreting sections 480-2 and 480-13 as
imposing such a requirement. The Hawaii Supreme court’s
decision in Keka, 94 Haw. 213, is to the contrary. In
considering a UDAP claim against a lender, Keka held that
the borrowers raised a genuine issue of material fact
regarding whether a violation of section 480-2 occurred
simply by swearing in an affidavit that during loan
negotiations the lender had misrepresented the interest rate
that would apply to the loan. Id. at 228–29. Keka, therefore,
strongly supports the conclusion that section 480-2 does not
require a borrower to allege that a lender “exceed[ed] the
scope of its conventional role as a mere lender of money,”
Nymark, 231 Cal. App. 3d at 1096, and thus may have owed
the borrower an independent duty of care.
14     COMPTON V. COUNTRYWIDE FINANCIAL CORP.

    Accordingly, we conclude that district courts evaluating
whether a borrower’s complaint states a claim under sections
480-2 and 480-13 against a lender need only address whether
the complaint adequately alleges that the lender used unfair
or deceptive acts in its relationship with the borrower, without
looking to negligence law to determine whether the lender
breached a common law duty of care. Rather than requiring
proof of a common law duty of care, section 480-2 is better
interpreted as imposing a statutory duty on lenders not to
engage 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 allege that a lender has breached
that statutory duty (in a way that caused private damages) in
order to state a claim under sections 480-2 and 480-13. See
Davis, 86 Haw. at 417. While courts may well conclude that
a borrower’s allegation that a lender failed “to determine the
creditworthiness and ability to repay by a borrower” does not
breach the statutory duty imposed by section 480-2, Marzan,
779 F. Supp. 2d at 1152 (quoting Sheets v. DHI Mortg. Co.,
Civ. No. 09-1030 LJO DLB, 2009 WL 2171085, at *4 (E.D.
Cal. July 20, 2009)), a borrower’s failure to allege that the
lender’s conduct occurred outside the course of ordinary
lender activity or that the lender owed a duty of care to the
borrower is not fatal to a UDAP claim.

                               B

    Here, the district court dismissed Compton’s UDAP claim
solely on the ground that Compton failed to allege that BAC
exceeded its role as a lender and owed an independent duty of
care to Compton. This reasoning was erroneous. But
because we may affirm the district court on “any ground
supported by the record,” Thompson v. Paul, 547 F.3d 1055,
      COMPTON V. COUNTRYWIDE FINANCIAL CORP.               15

1059 (9th Cir. 2008), we next consider whether BAC can
nevertheless prevail on its motion to dismiss.

    As explained above, in order to state a claim under
sections 480-2 and 480-13, Compton must plausibly allege
that (1) she is a “consumer,” see Haw. Rev. Stat. §§ 480-2(d),
480-13(b); (2) BAC violated section 480-2(a), prohibiting
“unfair or deceptive acts or practices in the conduct of any
trade or commerce,” id. § 480-2(a); and (3) she has suffered
an injury resulting in damages, see id. § 480-13(b)(1);
Zanakis-Pico, 98 Haw. at 316.

   As a threshold matter, it is undisputed that Compton
qualifies as a “consumer,” and that BAC’s lending and loan
modification activities involve the “conduct of any trade and
commerce.” See Keka, 94 Haw. at 227 (internal quotation
marks omitted).

    We also conclude that Compton has sufficiently alleged
that BAC engaged in an “unfair or deceptive act or practice”
for the purpose of withstanding a motion to dismiss. As
previously noted, Compton does not base her UDAP claim on
allegations that BAC failed to determine whether she would
be financially capable of repaying the loan. Rather, the gist
of Compton’s complaint is that BAC misled her into
believing that BAC would modify her loan and would not
commence foreclosure proceedings while her loan
modification request remained under review. As a result of
these misrepresentations, Compton engaged in prolonged
negotiations, incurred transaction costs in providing and
notarizing documents, and endured lengthy delays. The
complaint’s description of BAC’s misleading behavior
sufficiently alleges a “representation, omission, or practice”
that is likely to deceive a reasonable consumer. Courbat,
16    COMPTON V. COUNTRYWIDE FINANCIAL CORP.

111 Haw. at 262. Moreover, BAC’s misrepresentations and
misleading conduct were material, in that they involved
information important to a consumer attempting to negotiate
with a mortgagor to prevent foreclosure. Id.

    We next turn to the question whether the complaint
adequately alleged an injury resulting in damages. In the
section relating to the UDAP claim, the complaint merely
states that Compton suffered “considerable hardship” due to
spending “almost two years attempting to modify her
mortgage loan” and ending up in foreclosure. This section
also incorporates by reference the preceding paragraphs in the
complaint. The complaint’s factual allegations detail the
various transaction costs Compton incurred in attempting to
meet BAC’s never-ending and ever-changing requirements.
These allegations of the damages proximately caused by the
lender’s deceptive acts, namely the costs suffered by
Compton in connection with the failed loan negotiations, are
sufficiently pleaded to survive a motion to dismiss.

    In addition, the complaint states that had Compton been
able to enter into a loan modification agreement, she would
not have defaulted or faced foreclosure, and the foreclosure
caused her to incur attorney fees, late payment payments, and
lost business income. These allegations were made in
connection with a breach of contract claim, however, and the
complaint does not state that BAC’s misleading loan
modification practices resulted in the foreclosure or
consequential damages at issue. Accordingly, the complaint
does not allege a basis for Compton to recover equitable
remedies such as relief from foreclosure through her UDAP
claim.
       COMPTON V. COUNTRYWIDE FINANCIAL CORP.               17

    Given Hawaii’s low bar for showing damages, we
conclude that for the purpose of a motion to dismiss
Compton’s allegations that BAC’s deceptive conduct caused
her to waste two years of effort and incur multiple transaction
costs are sufficient to state an injury that caused damages.
See Jenkins, 95 F.3d at 799 (holding that a complaint’s mere
conclusory statement that the plaintiff has “sustained special
and general damages” due to defendant’s violation of section
480-2 suffices to withstand a motion to dismiss).

    Accordingly, Compton has “nudged” her UDAP claim
“across the line from conceivable to plausible.” Twombly,
550 U.S. at 570. We therefore REVERSE the district court’s
dismissal of Compton’s UDAP claim and REMAND for
proceedings consistent with this opinion.