Case Title: Batangan v. First Hawaiian Bank

Citation: 

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2006-07-13T00:00:00Z

Document:
*** NOT FOR PUBLICATION ***
No. 24990

 

IN THE SUPREME COURT OF THE STATE OF HAWAT

2:6 WY 1 Tn son

PETER A. BATANGAN and HELEN B. BATANGAN,
Plaintiffs-Counter-Claim Defendants-Appellants,

FIRST HAWAIIAN BANK, Defendant-Counter-Claim Plaintiff-Appellee.

  

FIRST HAWAIIAN BANK, Third-Party Plaintiff,
vs.

DEL NORTE REFI LLC, successor in interest to LIFE SAVINGS BANK,
F.8-B.; HOUSEHOLD FINANCE CORPORATION OF HAWAII; JOHN DOES 1-50;
JANE DOES 1-50; DOE PARTNERSHIPS 1-50; DOE CORPORATIONS 1-507 DOE
ENTITIES 1-50 and DOE GOVERNMENTAL UNITS 1-5
Third-Party Defendants.

APPEAL FROM THE FIFTH CIRCUIT COURT
(CIV. NO. 00-01-0178)

 

‘SUMMARY DISPOSITION ORDER
Moon, C.J., Levinson, Nakayama, Acoba, and Duffy, JJ.)

 

Plaintif£s-Counterclaim Defendants-Appellants Peter A.
Batengan and Helen 8. Batangan [hereinafter “the Batangans”],
appeal from the fifth circuit court's! (1) December 3, 2001
“Revised Judgment Re: Findings Of Fact, Conclusions Of Law And
order Granting Defendant And Third-Party Plaintiff First Hawaiian
Bank’s Motion For Sunmary Judgnent And Interlocutory Decree of
Foreclosure Against Plaintiffs And Third-Party Defendants Del

Norte Refi LLC, Successor In Interest To Life Savings Bank,

‘me lionorable George M. Maeuoks presided.

aad
 

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F.S.B.; Household Finance Corporation of Hawaii; Etc.”s? (2)

December 3, 2001 “Order Granting First Hawaiian Bank’s Motion For

 

order Approving Report Of Conmissioner, Confirming Sale At Public
Auction, Directing Distribution Of Proceeds, For Deficiency
Judgment And For Writ Of Possession Filed July 18; 2001"; and (3)
February 25, 2002 “Order Denying Plaintiffs’ Motion For
Reconsideration Of The Order Granting Defendant First Hawaiian
Bank's Motion For Sunmary Judgment And Interlocutory Decree of
Foreclosure Against Plaintiffs Filed December 3, 2001 Btc.”?

On appeal, the Batangans argue that the circuit court
erroneously granted sunmary judgment insofar as: (1) their sworn
affidavits and declarations stating that they were provided with
Inadequate disclosure docunents, as required by the federal Truth
In Lending Act [hereinafter “TILA"), were sufficient to rebut
FHB’s written acknowledgment of receipt that delivery was made
thereof; (2) FHB failed to support its motion for summary

 

+ bel Norte Refi LLC and Household Finance Corporation of Hawall
were named as thire-party litigants by virtue of their status as junior
Ufsnore with respect to the subject foreclosure property.

® _nathough the Batangans’ notice of appeal purports to appeal from
(2) the December 3, 2001 order granting First Hawaiian Bank's (hereinafter
-tbip’) swetion for’ Order Approving Report Of Commissioner, Confirming Sale At
Public Auction, Directing bietrinution OF Proceeds, For Deficiency Judgrent
And For Mrit Of Posseseion,” and (2) the February 25, 2002 order denying the
Batangans’ motion for reconsideration of the December 3, 2001 revised
Jwcgnent, the Betangane neither challenge the orders in their points on appeal
or present any argunent identifying prejudicial error. Accordingly, we ne
ot Consider those orders on appeal. See Hawai'i Rules of Appellate Procedure
hereinafter “HRAP") Rule 28 (b) (4) (2002) ("Points not presented... will be
Gleregarded! 1")? HRAP Able 28(b)(7) (2002) ("Points not argued may be dened
waived."); Wiitey's Boat Cruises, Inc. v. Napali-Kauai Goat Charters, Inca,
110 Wowas's 302, 3169.26, 132 F.3d 1273, 1229 0.26 (2006) Appellants aid
hot assign ae error the circuit court's dismissal of Appellants’ claim for
TRjunceive relief nor did Appellants present an argunent with respect to their
Claim for injunctive relief. As such, Appellants’ contention with respect to
injunctive relief is dened walved.”)

 

 

 

  
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judgment with any admissible evidence that the Batangans
defaulted on their loan payments; (3) they had a continuing right
to rescind their October 18, 1995 and March 13, 1996 loan
transactions based on FHB’s alleged violations of TILA; and (4)
the security interests on their property became void upon their
notifying FHB of their rescission by way of recoupment.‘ The
Batangans also assert that final judgment was inappropriate
inasmuch as numerous disputed factual issues remain unresolved.

upon carefully reviewing the record and the briefs
submitted by the parties and having given due consideration to
the arguments advanced and the issues raised, we hold that:

(1) The Batangans’ right to rescind the March 13, 1996
loan transaction is not properly before this court insofar as the
record on appeal indicates that the Batangans did not request
rescission of that transaction before the circuit court.*

(2) Any rights the Batangans may have had to rescind
the October 18, 1995 loan transaction expired after three years.
See 15 U.S.C. § 1635(£) (2000) (“An obligor’s right of rescission
shall expire three years after the date of consummation of the

transaction or upon the sale of property, whichever comes first,

 

«points of error nunb
and disposed of By this court's

2 (1); (3), and (4) have been consolidated
cond holding, discussed infra.

 

 

+ the record indicates that the Batangane’ “Demand For Truth In
Lending Act Rescission,” filed in the circuit court, only requested rescission
Of the October 18, 1998 loan transaction. The Batangans did not argue before
the elzesit court that their rights to rescind extended to the March 13, 1996
Joan transaction. Accordingly, that argument 1s not properly before this
‘court on appeal. See Honda v. Bd, of 11 a

‘Staie, 108 Hawai 212, 261 n.14, 118 P-3 1155, 1184 n.34 (2008)
(this court will not consider o question which was not raised and ‘properly

served in the lower court.’ ") “(citations omitted.)

 

 

 

 

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notwithstanding the fact that the information and forms required
under this section or any other disclosures required under this
part have not been delivered to the obligor(.]")7 12 C.F.R. §
226.15(a) (3) (“IE the required notice and material disclosures
are not delivered, the right to rescind shall expire 3 years
after the occurrence giving rise to the right of rescission, or
upon transfer of all of the consumer's interest in the property,
or upon sale of the property, whichever occurs first.”); Beach v.
Ocuen Fed, Bank, 523 U.S. 410, 419 (1998) ("We respect Congress's
manifest intent by concluding that [TILA] permits no federal
right to rescind, defensively or otherwise, after the 3-year
period of § 1635(f) has run."); Hawai'i Cmtv. Fed, Credit Union
wa Keka, 94 Hawai'l 213, 224, 11 P.3d 1, 12 (2000) (concluding
that “[the Kekas’] right to rescission expired, at the latest,
three years after they entered into the transaction, . . . and
their attempt to assert that right as a defense in the Credit
Union's action to foreclose on the mortgage on their residence
was as ineffective as their original attempt to rescind the
transaction by sending the cancellation notice”). Although 15
U.S.C. § 1635 (i) (3) provides that “[nJothing . . . affects a
consumer’s right of rescission in recoupment under State law(,]”"
the Batangans have failed to identify any statute vesting a state
right of rescission. See HRAP Rule 28(b) (7) ("Points not argued
may be deemed waived.”). Furthermore, although the Batangans

assert that the common law provides for rescission by recoupment,
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‘they do not assert a common law basis for rescission.‘ See HRAP
Rule 28(b) (7) ("Points not argued may be deemed waived.”).

(3) The account ledger attached to the January 16,
2001 affidavit of FHB’s assistant vice-president, Gary Y.
Kawamoto [hereinafter “Kawamoto”], was hearsay inasmuch as it (a)
was not prepared by Kawamoto, (b) was offered to prove the truth
of the matter asserted -~ i.e., that the Batangans were in
default on the loan, and (c) Kawamoto’s affidavit failed to
allege facts based upon personal knowledge establishing that the
documents would have been admissible at trial. Nevertheless,
sunmary judgment was supported by admissible evidence, insofar as
Kawamoto’ s amended affidavit, filed on November 6, 2001, alleged
facts aufficiently demonstrating that the appended documents fell
within the scope of the business records exception to the hearsay

rule.” See Hawai'i Rules of Civil Procedure Rule 56(e) (2001)

 

‘Easy fraudulent inducement, undue influence, misrepresentation,
ak cetera. See 13 Saran H. Jenkins, Corbin on Contracts § 67.8, at_¢7 (Joseph
Mr Periiic, eas, rev. ed. 2008) (stating that “unilateral rescission .
arises bectuse of incapacity, such as infancy, or the inducement of assent
through isrepresentation, or undue influence”) (quotation marks omitted)
(footnote omitted); Restatement (Second) ef Contracts § 7 cmt. b (1961)
(typical instances of voidable contracts are those where one party waa an
Infant, or unere the contract was induced by fraud, mistake, of duress, oF
‘here breach of 2 warranty or other promise justifies the aggrieved party in
putting an end to the conteact.”)

 

 

     

 

 

   

+ We prudentially note that the Lesue is somewhat complicated by the
procedural posture of the case. The record indicates that, on February 14,
200i, the circuit court rendered its findings of fact, conclusions of law, and
Seder, a8 well as a judgnent thereon, based only upon’ the defective January
16, 2001 affidavit. “Accordingly, the findings of fact, conclusions of lax,
fd order and the jushmene were” erroneoug “Rawevery that Juagnent 18 not
Felevane in the present case insofar as it was not the on (ed from: The
Fecord indicates thet the Batangans’ attempt to appeal from the Febrosry 1,
2002 Judgnont was dismissed by this court for lack ef jurisdiction. During
‘the interim, on Novenber 6, 2001, FHB filed Kavanote’ s amended affidavit. The
circuit court thereafter filed | revised Judgment from which the present

(Gontinved. ..)

 

     

   
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(“supporting and opposing affidavits shall be made on personal
knowledge, shall set forth such facts as would be admissible in
evidence, and shall show affirmatively that the affiant is
competent to testify to the matter stated therein,”); Nakato v.
Macharg, 89 Hawai'i 79, 87, 969 P.2d 824, 833 (App. 1998) (*{Rule
56(e)] requires that facts set forth in the affidavits be

 

admissible in evidence.") (brackets in original) (citation
omitted) -

(4) There was no genuine issue of material fact with
respect to whether the Eatangans’ attempted to rescind their loan
transaction beyond the deadline imposed by statute, and therefore

FHB was entitled to summary judgment as a matter of law. Here,

 

1. continues)
‘appeal wae taken

‘hea porely technical matter, the revised judgnent shares the same
defect as the February 14, 2001 judgnent to the extent that it references the
Seriier findings of fact, ‘concluelons of law, and order, which relied upon the
Esuley’ veruazy 36, 2001 agfigavit "However, that Binor” defect, does not
Recesditace reversal inssmvch aa it 1s axiomatic that ve nay offirm summary
Joepeene ‘oh any ground in the record. See i

ongiulae 38 faw. 40, 13, $14 P20 861, 864
AGSTH a appellate court may affirm summary Judgment on any ground which
in the record, regardiess of whether the circuit coure relied on
aabinstesn 433 F.2d 1021, 1023 (Sth Cir. 1970)
(SPiret it ie proper for this court £6 affirms » summary judgment on any ground
{hat appears from the record, whether of not the trial court relied on it.").

Here, the record indicates, via Kewanoto's anended affidavit, that
tthe attached docinents were adnicsible through the business records exception
fo the hearsay rule. The anended affidavit and appended docunents denonstrate
that (1) the Batsngane executed two loan transactions, secured by mortgage
Agreements, with FHB on Osteber 18,1995 and March 13, 1996; (2) the Batangens
Gefaulved on their loan obligations; end (3) FHB was thus entitled to
foreclose upon the real property that was the subject of the mortgage
agreenente and served as collateral for the loan transactions. The record
further indicates that the Batangane attempted to rescind their October I
1998 loan transection by letter dated September 5, 2000 =~ beyond the thre
yeer deadline inposed by 15 U.S.C. § 1635(£)

‘Thus, the record contains a sufficient basis upon which to affirm
the circuit court’s revised Juaguent, in relevant part, granting FHB"s motion
for suimary Jodgnent and interlocutory decree of foreclosure and dismissing
the Batangans” “Cenand For ‘Trath In Lending Act Rescission.”

 

 

 

 

 

 

 

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even if we assume that the alleged TILA violations occurred, thus
obviating the need to adjudicate the issue, the Batangans’ right
to rescind has nevertheless expired pursuant to 15 U.S.C. §
1635(£).

‘Therefore,

IT 1S HEREBY ORDERED that the, judgment from which the
appeal is taken is affirmed.

DATED: Honolulu, Hawai'i, July 13, 2006.

on the briefs:
Peter A. Batangan and Li

Helen B. Batangan,

plaintiffs-counterclaim Bir Doeenae~
Gefendants-appellants,
pro se .

Nae Oo era

Louis L.c. Chang of

Kaniyuki & Chang for
Sefendant-counterclain A
plaintiff-sppel lee

First Hawaiian Bank Wenn Beka