SCWC 16 0000319
SCWC 16 0000319
SCWC 16 0000319
Electronically Filed
Supreme Court
SCWC-16-0000319
01-MAY-2019
09:29 AM
---o0o---
vs.
SCWC-16-0000319
MAY 1, 2019
foreclosure action.
the ICA:2
1
The Honorable Peter T. Cahill presided.
2
Daniel also asks this court to review whether the circuit court
abused its discretion in denying his motion to compel discovery to determine
whether Nationstar was the Note’s “holder” or “holder in due course.” Because
Nationstar conceded its status as “holder” in its answering brief to the ICA,
we need not resolve whether the circuit court abused its discretion in this
respect.
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several versions of the Note was the “wet-ink” original, the ICA
well.
The ICA did not clarify this, despite the circuit court’s
correct its reasoning as set forth below, and remand the case for
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I. BACKGROUND
A. Factual Background3
pursuits. Austin allegedly knew that Daniel, who had worked most
represented to Daniel and his brother that because Daniel was the
3
For the purposes of this section, we accept the facts asserted in
Daniel’s declarations as true, including Daniel’s statements explaining the
circumstances under which he obtained the loan. See Crichfield v. Grand
Wailea Co., 93 Hawaii 477, 483, 6 P.3d 349, 355 (2000) (explaining that, for
the purposes of summary judgment, the court “must view all of the evidence and
the inferences drawn therefrom in the light most favorable to the party
opposing the motion” and that any doubt should be resolved in favor of the
non-moving party). All other facts in this section were taken from the record
on appeal and are otherwise undisputed by the parties.
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default.
Fargo Bank owned the Note. She also sent Daniel a copy of the
Note, which had two indorsements. The Note was first indorsed
4
The indorsement stamps read as follows:
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attorney-in-fact.
mortgage as follows:
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B. Procedural Background5
a. The Complaint
verification attesting that the Note was the original; and (3) an
2012, this Note also had two indorsements. While the first
5
This case has a long and complicated procedural history. Because
many of the previous proceedings do not materially affect the analysis, we do
not address them in this opinion.
6
The indorsements read as follows:
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records and files she had reviewed were kept by Nationstar in its
had submitted to the circuit court were accurate and that they
7
In relevant part, Workman declared:
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attested that: (1) she had personally reviewed the documents and
accuracy; (2) the records and files she had reviewed were kept by
near the time of such acts; and (3) Nationstar possessed the
indorsed-in-blank.
the Note; and (2) Nationstar, which had neither pled nor proven
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fact.8
business and verified for their accuracy; and (3) the Note was in
8
The indorsements read as follows:
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outdated copy of the Note to the first motion that “did not
9
In relevant part, Vincent’s declaration stated:
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also attested via declaration that this Note, with its three
affirmative defenses.
9
(...continued)
derived from my having inspected a copy of the
MSJ Declaration, the Exhibits thereto, a current
copy of the original Note, and my having
conferred with Person regarding this matter.
(emphases in original).
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2. ICA Proceedings
U.S. Bank N.A. v. Mattos, 140 Hawaii 26, 398 P.3d 615 (2017),
10
Specifically, Nationstar stated in its Answering Brief that “Mr.
Kanahele ignores the fact that Nationstar denied it was a holder in due course
but stated that it [was] the holder of the Note. As discussed above,
Nationstar’s status as a “holder in due course” is not at issue[.]” (emphasis
in original).
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and Wells Fargo Bank, N.A. v. Behrendt, 142 Hawaii 37, 414 P.3d
records were trustworthy under Mattos, 140 Hawaii 26, 398 P.3d
615, and Behrendt, 142 Hawaii 37, 414 P.3d 89, because unlike
that Wells Fargo owned the Note, was inapposite because the
“issue [here] [was] whether Nationstar was the holder at the time
of the filing of the Complaint, not the identity of the owner two
years ago.”
A. Summary Judgment
Hawaii 1, 5, 919 P.2d 263, 267 (1996); see also Hawaii Rules of
affiant.” Adams v. CDM Media USA, Inc., 135 Hawaii 1, 28, 346
11
HRCP Rule 56(c) provides, in relevant part:
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Miller v. Manuel, 9 Haw. App. 56, 66, 828 P.2d 286, 292 (1991)).
motion for summary judgment, the appellate court “must view all
most favorable to the party opposing the motion” and any doubt
v. Grand Wailea Co., 93 Hawaii 477, 483, 6 P.3d 349, 355 (2000)
Similarly,
Makila Land Co., LLC v. Kapu, 114 Hawaii 56, 67, 156 P.3d 482,
227 P.3d 520, 528 (2010) (internal quotation marks and citation
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C. Statutory Interpretation
Transp., 120 Hawaii 181, 197, 202 P.3d 1226, 1242 (2009).
198, 208, 124 P.3d 943, 953 (2005) (internal quotation marks and
citation omitted).
III. DISCUSSION
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(emphasis added).
that:
(emphasis added).
declaration.”
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despite the fact that Vincent may have been a qualified witness
reflect that the affiant (1) perceived the event about which they
See id.; HRE Rule 602 (1992);12 HRCP Rule 56(e).13 Affidavits
12
The commentary to HRE Rule 602 (personal knowledge) provides in relevant
part:
(...continued)
requirement for admissibility of all evidence, subject
to Rule 703 relating to expert witnesses.
(emphasis added).
13
HRCP Rule 56 (Summary judgment) provides in relevant part:
(emphases added).
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Person[.]”
her declaration should not have been relied upon by the circuit
version of the Note that she attested to was “the current copy of
14
Person’s statements to Vincent would appear to be inadmissible
hearsay. However, because Daniel did not object to the admission of Vincent’s
declaration on this ground, we do not address this issue further.
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declaration was more credible than any other, and that, on this
the ICA held that “the vague testimony that [a company] ‘kept bad
broken.” 125 Hawaii 417, 424-25, 263 P.3d 127, 134-35 (App.
2011) (citing United States v. McGill, 953 F.2d 10, 15 (1st Cir.
true and correct version of the Note, then Person should have
Haw. App. 463, 776 P.2d 411 (1989), to support its contention
could have done the same. As such, Person should have been the
indeed, it was.
qualified witness under Mattos and Behrendt, the Note with three
affidavits explaining why and how they had erred before, and
should have been denied, not only on the ground of standing, but
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assert his affirmative defenses against “the people who are now
demonstrate that:
(2) The holder took the instrument (i) for value, (ii)
in good faith, (iii) without notice that the
instrument [was] overdue or ha[d] been dishonored or
that there [was] an uncured default with respect to
payment of another instrument issued as part of the
same series, (iv) without notice that the instrument
contain[ed] an unauthorized signature or ha[d] been
altered, (v) without notice of any claim to the
instrument described in section 490:3-306, and (vi)
without notice that any party ha[d] a defense or claim
in recoupment described in section 490:3-305(a).
HRS § 490:3-302(a).
15
Daniel’s affirmative defenses, raised before the circuit court,
included, inter alia, fraud in the inducement, unconscionability, and mistake.
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16
HRS § 490:3-305 (Defense and claims in recoupment) provides in relevant
part:
(continued...)
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claim, “except to the extent the plaintiff proves that [it] has
308 cmt. 2.
(...continued)
(emphases added).
17
HRS § 490:3-306 (2008) (Claims to an instrument) provides:
(emphasis added).
18
A “real defense” is “good against any possible claimant,”
including holders and holders in due course. Black’s Law Dictionary 512 (10th
ed. 2014). In contrast, a “personal defense” is “[a]n ordinary defense in a
contract action . . . that the maker or drawer of a negotiable instrument is
precluded from raising against a person who has the rights of a holder in due
course.” Id.
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defenses”).
19
White, Summers, and Hillman explain:
White, Summers, and Hillman, Uniform Commercial Code § 18:29 (6th ed. 2010).
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IV. CONCLUSION
Appeal, which vacated the circuit court’s March 14, 2016 Judgment
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