NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

NO. CAAP-18-0000354

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR HARBORVIEW

MORTGAGE LOAN TRUST 2005-16, MORTGAGE LOAN PASS-THROUGH

CERTIFICATES, SERIES 2005-16, Plaintiff-Appellee, 

v.

DYLAN THEDE, Defendant-Appellant,

and

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,

SOLELY AS NOMINEE FOR COUNTRYWIDE HOME LOANS, INC., 

Defendant-Appellee,

and

JOHN DOES 1-50; JANE DOES 1-50; DOE PARTNERSHIPS 1-50; 

DOE CORPORATIONS 1-50; DOE ENTITIES 1-50; and DOE 

GOVERNMENTAL UNITS 1-50, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT

(CIVIL NO. 12-1-0125)

SUMMARY DISPOSITION ORDER

(By: Ginoza, C.J., and Leonard and Wadsworth, JJ.)

This appeal arises out of a foreclosure decree entered

by the Circuit Court of the Fifth Circuit (Circuit Court) against

Defendant-Appellant Dylan Thede (Thede). On April 3, 2018, the

Circuit Court entered its Findings of Fact, Conclusions of Law

and Order Granting Plaintiff's Motion for Summary Judgment

Against All Defendants and for Interlocutory Decree of

Foreclosure (Foreclosure Decree), and the related Judgment

(Foreclosure Judgment), both in favor of Plaintiff-Appellee U.S.

Bank National Association, as Trustee for Harbor View Mortgage

Loan Trust 2005-16, Mortgage Loan Pass-Through Certificates,

Series 2005-16 (U.S. Bank), and against Thede and DefendantElectronically Filed

Intermediate Court of Appeals

CAAP-18-0000354

07-APR-2020

07:50 AM
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Appellee Mortgage Electronic Registration Systems, Inc., Solely

as Nominee for Countrywide Home Loans, Inc.1/

Thede appeals from the Foreclosure Decree and the

Foreclosure Judgment.2/ He contends that the Circuit Court erred

in granting U.S. Bank's motion for summary judgment and

interlocutory decree of foreclosure (MSJ) by relying on "the

hearsay testimony of U.S. Bank's declaring witnesses" to

establish U.S. Bank's standing to foreclose on Thede's mortgaged 

property.

After reviewing the record on appeal and the relevant

legal authorities, and giving due consideration to the issues

raised and the arguments advanced by the parties, we resolve

Thede's contention as follows and vacate and remand.

I. RELEVANT BACKGROUND

On April 19, 2012, U.S. Bank filed a Complaint for

Foreclosure (Complaint) in the Circuit Court.3/ U.S. Bank

alleged, among other things, that: (1) on August 10, 2005, Thede

obtained a $1,500,000 loan (Loan) from Countrywide Home Loans,

Inc. (Countrywide), by executing a promissory note (Note),

secured by a mortgage (Mortgage) recorded with respect to real

property located at 3657 Anini Rd., Princeville, Hawai#i 96722

(Property); (2) the Mortgage was assigned to U.S. Bank by an

Assignment of Mortgage recorded on December 8, 2009; (3) Thede

defaulted under the payment terms of the Note and Mortgage; (4)

following written notice to Thede and his failure to cure the

default, U.S. Bank exercised its option to accelerate the loan

and to declare the entire principal due under the Note and

secured by the Mortgage, plus interest, advances, and other

1/ The Honorable Randal G.B. Valenciano presided.

2/ Mortgage Electronic Registration Systems, Inc. did not appeal from

the Foreclosure Judgment and, as presumably a nominal appellee, did not file

an answering brief. See Hawai#i Rules of Appellate Procedure (HRAP) Rule

28(c). 

3/ U.S. Bank initially referred to itself as U.S. Bank National

Association, as Trustee for the Benefit of Harborview 2005-16 Trust Fund, but

on December 15, 2016, obtained the Circuit Court's permission to change its

name in the caption as currently stated.

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charges, immediately due and payable; and (5) U.S. Bank was

entitled to foreclose the Mortgage and to sell the Property.

On October 12, 2017, U.S. Bank filed its MSJ, which

included an attached "Declaration of Indebtedness and on Prior

Business Records." Rebecca C. Wallace (Wallace) signed the

declaration (Wallace Declaration), "as an authorized signer of

Nationstar Mortgage LLC ('Nationstar'), which is Plaintiff's

servicing agent for the subject loan ('the loan')[.]" Wallace

declared, among other things, that "Nationstar's records indicate

that Plaintiff, by and through Nationstar had possession of the

original Note prior to 04/19/2012, the date of the filing of the

complaint in this foreclosure." However, Wallace also stated

that "Nationstar became Plaintiff's loan servicer for the Loan

being foreclosed in this action on 04/01/2014[,]" i.e., nearly

two years after the Complaint was filed, and that "[t]he prior

loan servicer for this mortgage loan was Select Portfolio

Servicing, Inc., N.A. ('Prior Servicer')." 

On November 30, 2017, U.S. Bank filed the "Affidavit of

Bank of America, N.A. Re: Possession of Note as Prior Servicer." 

Nichole Renee Williams (Williams) signed the affidavit (Williams

Affidavit), which stated, in relevant part:

1. I am authorized to sign this Declaration on

behalf of Bank of America, N.A. ("BANA"), which was the

prior servicer for the subject loan (the "Loan").

2. As prior servicer, BANA maintained records for

the Loan. As part of my job responsibilities for BANA, I am

familiar with the type of records that were maintained by

BANA in connection with the Loan. As such, I am authorized

to make this Declaration.

3. The information in this Declaration is taken

from BANA's business records. I have personal knowledge of

BANA's procedures for creating these records. They are: (a)

made at or near the time of the occurrence of the matters

recorded by persons with personal knowledge of the

information in the business record, or from information

transmitted by persons with personal knowledge; (b) kept in

the course of BANA's regularly conducted business

activities; and (c) created by BANA as a regular practice.

4. On 04/19/2012, the Complaint for Foreclosure;

Summons ("Complaint") was filed herein identifying the

Plaintiff as U.S. Bank National Association, as Trustee, for

the Benefit of Harborview 2005-16 Trust Fund. A true and

correct copy of the Complaint is attached hereto as Exhibit

"A".

5. At the time the Complaint was filed, BANA was

the servicer for the Loan.

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6. On 04/09/2012, BANA was in possession of the

original Adjustable Rate Note dated 08/10/2005 in the

principal amount of $1,500,000.00 executed by DYLAN THEDE in

favor of Countrywide Home Loans, Inc., endorsed in blank

("Note"). A true and correct copy of the Note is attached

as Exhibit "B".

On December 6, 2017, Thede filed a memorandum in

opposition to U.S. Bank's motion for summary judgment. He argued

that U.S. Bank offered no admissible evidence that it possessed

the Note when the Complaint was filed, and thus failed to

establish its standing to foreclose under Bank of America, N.A.

v. Reyes-Toledo, 139 Hawai#i 361, 390 P.3d 1248 (2017). In

particular, Thede argued that the Wallace Declaration: (1) did

not establish Wallace's personal knowledge of her assertion that

U.S. Bank, through Nationstar, had possession of the Note prior

to the filing of the Complaint; and (2) made contradictory

statements in asserting that Nationstar had possession of the

Note before it became U.S. Bank's servicer.

On February 6, 2018, U.S. Bank filed a supplemental

declaration in support of its MSJ. Christy Vieau (Vieau) signed

the declaration (Vieau Declaration), which stated, in relevant

part:

1. I am authorized to sign this Declaration on

behalf of Plaintiff U.S. BANK NATIONAL ASSOCIATION, AS

TRUSTEE FOR HARBORVIEW MORTGAGE LOAN TRUST 2005-16, MORTGAGE

LOAN PASS-THROUGH CERTIFICATES, SERIES 2005-16 ("Plaintiff")

as an authorized signer of Nationstar Mortgage, LLC

("Nationstar"), which is Plaintiff's servicing agent for the

subject loan ("the Loan").

2. Nationstar maintains records for the loan in its

capacity as Plaintiff's servicer. As part of my job

responsibilities for Nationstar, I am familiar with the type

of records maintained by Nationstar in connection with the

Loan. As such, I am authorized to make this Declaration in

support of Plaintiff's Motion for Summary Judgment Against

All Defendants and for Interlocutory Decree of Foreclosure

filed on 10/12/2017.

3. Nationstar is the Plaintiff and current loan

servicer, and acts as the exclusive representative and agent

of Plaintiff in the servicing and administering of mortgage

loans referred to Nationstar, including the Loan being

foreclosed in this action.

4. The information in this Declaration is taken

from Nationstar's business records, I have personal

knowledge of Nationstar's procedures for creating these

records. They are: (a) made at or near the time of the

occurrence of the matters recorded by persons with personal

knowledge of the information in the business record, or from

information transmitted by persons with personal knowledge;

(b) kept in the course of Nationstar's regularly conducted

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business activities; and (c) created by Nationstar as

regular practice.

5. On 04/19/2012, the Complaint for Foreclosure

("Complaint") was filed herein identifying the Plaintiffs as

U.S. Bank National Association, as Trustee, for the benfit

[sic] of Harborview 2005-16 Trust Fund.

6. At the time the Complaint for Foreclosure was

filed, Bank of America, N.A. ("BANA") was the servicer for

the Loan.

7. Based on the affidavit executed by Nichole Renee

Williams on 11/09/2017 as an authorized representative of

BANA ("Affidavit"), BANA was in possession of the original

Adjustable Rate Note dated 08/10/2015 in the principal

amount of $1,500,000.00 executed by Defendant DYLAN THEDE in

favor of Countrywide Home Loans, Inc., endorsed in blank

("Original Note"), when the Complaint was filed. Attached

hereto as Exhibit "9" is a true and correct filed copy of

BANA's Affidvit.

8. On 12/01/2012, servicing of the Loan was

transferred from BANA to Select Portfolio Servicing Inc.

("SPS"). On 04/01/2014, the subject Loan was further

transferred to Nationstar. As a result of the service

transfer, Plaintiff was substituted as the real party in

interest on 12/15/2016.

Vieau further stated:

12. In reviewing the records from BANA and SPS which

were incorporated into Nationstar's own business records,

Nationstar clarifies that Plaintiff at the time of the

Complaint for Foreclosure was filed on 04/19/2012 had

possession of the Original Note, by and through BANA.

On February 14, 2018, Thede filed a supplemental

memorandum opposing U.S. Bank's MSJ and addressing the Williams

Affidavit. Thede argued, among other things, that Williams's

testimony: (1) contradicted the Wallace Declaration, creating a

genuine issue of material fact as to who U.S. Bank's servicer was

and who was in possession of the Note when the Complaint was

filed; and (2) was not based on Williams's personal knowledge

that BANA possessed the Note when the Complaint was filed, and

constituted inadmissible hearsay.

On February 16, 2018, U.S. Bank filed a reply

memorandum in support of its motion for summary judgment.

Following a February 22, 2018 hearing on U.S. Bank's

motion for summary judgment, on April 3, 2018, the Circuit Court

entered the Foreclosure Decree and the Foreclosure Judgment. 

Thede filed a timely notice of appeal.

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II. DISCUSSION

In Reyes-Toledo, the Hawai#i Supreme Court held that to

establish the right to foreclose, the foreclosing plaintiff must

establish standing, or entitlement to enforce the subject

promissory note, at the time the action was commenced. 139

Hawai#i at 367-70, 390 P.3d at 1254-57. The "foreclosing

plaintiff's burden to prove entitlement to enforce the note

overlaps with the requirements of standing in foreclosure actions

as '[s]tanding is concerned with whether the parties have the

right to bring suit.'" Id. at 367, 390 P.3d at 1254 (quoting

Mottl v. Miyahira, 95 Hawai#i 381, 388, 23 P.3d 716, 723 (2001)). 

The supreme court further noted that "a foreclosing plaintiff

does not have standing to foreclose on mortgaged property unless

the plaintiff was entitled to enforce the note that has been

defaulted on." Id. at 368, 390 P.3d at 1255 (citing Hanalei, BRC

Inc. v. Porter, 7 Haw. App. 304, 310, 760 P.2d 676, 680 (1988)).

Here, it appears that the Circuit Court granted U.S.

Bank's MSJ based in part on the copy of the "Adjustable Rate

Note" that was attached to the Williams Affidavit and the Vieau

and Wallace Declarations (Attached Note). At the February 22,

2018 hearing, the court stated:

So in this particular case regarding the Reyes-Toledo

issue, the Court believes that given the Court's review of

the documents, there's sufficient evidence to show that at

the time of the complaint, the parties –- the plaintiffs or

the plaintiff's predecessor in interest had possession of

the documents, and so that would satisfy Reyes-Toledo.

As far as other qualified witness, the Court believes

that the declarants or affiants had sufficient information

and were in a sufficient position to make the allegations

that they made and I'm not -– I'm not ruling that in making

their declarations, that you need to attach –- like, you

know, when they say I reviewed the business records, they

don't have to attach all of the business records they

reviewed. That would be an onerous obligation, from this

Court's perspective.

So what the court will do is the Court will grant the

motion for summary judgment.

Thede contends that the Circuit Court erred in granting

U.S. Bank's MSJ by relying on "the hearsay testimony of U.S.

Bank's declaring witnesses" to establish U.S. Bank's standing to

foreclose. Thede also argues that U.S. Bank offered "no

admissible evidence" that it possessed the Note when the

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Complaint was filed.

"Under Hawai#i Rules of Civil Procedure Rule 56(e)

(2000) and Rules of the Circuit Courts of the State of Hawai#i

Rule 7(g) (1997), 'a declaration [or affidavit] in support of a

summary judgment motion must be based on personal knowledge,

contain facts that would be admissible in evidence, and show that

the declarant [or affiant] is competent to testify as to the

matters contained within the declaration.'" Wells Fargo Bank,

N.A. v. Behrendt, 142 Hawai#i 37, 44, 414 P.3d 89, 96 (2018)

(quoting U.S. Bank N.A. v. Mattos, 140 Hawai#i 26, 30, 398 P.3d

615, 619 (2017)). "Inadmissible evidence 'cannot serve as a

basis for awarding or denying summary judgment.'" Id. (quoting

Haw. Cmty. Fed. Credit Union v. Keka, 94 Hawai#i 213, 221, 11

P.3d 1, 9 (2000)).

U.S. Bank contends that the Attached Note was

admissible under the hearsay exception for records of regularly

conducted activity pursuant to Hawai#i Rules of Evidence (HRE)

Rule 803(b)(6).4/ U.S. Bank further argues that Williams, Vieau,

and Wallace were each a "qualified witness" with respect to the

Attached Note, and each satisfied the standards set out in Mattos

for admitting that document into evidence and establishing U.S.

Bank's standing to foreclose.

In Mattos and Behrendt, the supreme court reviewed the

sufficiency of declarations similar in certain key respects to

those at issue here, each of which attested to a promissory note

and other documents relating to a foreclosure under the HRE Rule

803(b)(6) business records exception. See Mattos, 140 Hawai#i at

31, 398 P.3d at 620; Behrendt, 142 Hawai#i at 44-45, 414 P.3d at

4/ HRE Rule 803(b)(6) (Supp. 2011) provides that the following are

not excluded by the rule against hearsay:

A memorandum, report, record, or data compilation, in

any form, of acts, events, conditions, opinions, or

diagnoses, made in the course of a regularly conducted

activity, at or near the time of the acts, events,

conditions, opinions, or diagnoses, as shown by the

testimony of the custodian or other qualified witness,

or by certification that complies with rule 902(11) or

a statute permitting certification, unless the sources

of information or other circumstances indicate lack of

trustworthiness.

(Emphasis added.)

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96-97. The court's decisions in Mattos and Behrendt are

therefore dispositive as to whether HRE Rule 803(b)(6) may serve

as a basis to admit the Attached Note into evidence. 

With respect to the Williams Affidavit, Williams did

not aver that she was the custodian of records for BANA,

Countrywide,5/ or any other holder of the Note (e.g., U.S.

Bank6/). Thus, the Attached Note is admissible under HRE Rule

803(b)(6) only if the Williams Affidavit demonstrates that

Williams is a "qualified witness" with respect to that document. 

See Mattos, 140 Hawai#i at 32, 398 P.3d at 621; Behrendt, 142

Hawai#i at 45, 414 P.3d at 97. 

The supreme court has held that a witness may be

qualified to provide the testimony required by HRE Rule 803(b)(6) 

even if the witness is not employed by the business that created

the document or lacks direct, personal knowledge of how the

document was created. See Mattos, 140 Hawai#i at 32, 398 P.3d at

621; Behrendt, 142 Hawai#i at 45, 414 P.3d at 97. While there is

"no requirement that the records have been prepared by the entity

that has custody of them," the testifying witness "must have

enough familiarity with the record-keeping system of the business

that created the record to explain how the record was generated

in the ordinary course of business." Behrendt, 142 Hawai#i at

45, 414 P.3d at 97 (quoting and citing Mattos, 140 Hawai#i at 32,

398 P.3d at 621).

The court in Behrendt further explained:

Records received from another business and incorporated into

the receiving business' records may in some circumstances be

regarded as 'created' by the receiving business. 

Incorporated records are admissible under HRE Rule 803(b)(6)

5/ In its Complaint, U.S. Bank alleged that "[o]n or about August 10,

2005, [Thede], for value received, duly made, executed and delivered to

Countrywide" the Note. (Emphasis added.) In addition, the Note identifies

Countrywide as the "Lender" and, in turn, defines the "Note Holder" as the

"Lender or anyone who takes this Note by transfer and who is entitled to

receive payments under this Note." It therefore appears that Countrywide was

the original holder of the Note.

6/ The Complaint states: "By Assignment of Mortgage recorded December

8, 2009 . . . the mortgagee's interest in the Mortgage was assigned to [U.S.

Bank]." Because the debt does not automatically follow the security (ReyesToledo, 139 Hawai#i at 371 n.17, 390 P.3d at 1258 n.17), it is not clear when

U.S. Bank became the holder of the Note. The Williams Affidavit states that

BANA was in possession of the Note on April 9, 2012, but does not indicate

when BANA's possession commenced.

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when a custodian or qualified witness testifies that the

documents were incorporated and kept in the normal course of

business, that the incorporating business typically relies

upon the accuracy of the contents of the documents, and the

circumstances otherwise indicate the trustworthiness of the

document.

Id. at 45, 414 P.3d at 97 (citation omitted) (citing Mattos, 140

Hawai#i at 32, 398 P.3d at 621).

Here, as in Mattos and Behrendt, the Williams Affidavit

does not establish that the Attached Note was received by BANA

and then incorporated into BANA's records. In addition, like the

declaration in Behrendt, the Williams Affidavit does not

establish that Williams was familiar with the record-keeping

system of Countrywide or any other prior holder of the Note. See

142 Hawai#i at 46, 414 P.3d at 98 (declaration of loan servicer

employee "ma[de] no assertions as to [the declarant's]

familiarity with the record-keeping systems of Funding Group or

Option One, which first created the Note and allonges"). Thus,

the Williams Declaration does not satisfy the foundational

requirements to make Williams a qualified witness with respect to

the Attached Note, and she could not authenticate it as a record

of a regularly conducted activity under HRE Rule 803(b)(6). 

The Vieau and Wallace Declarations were similarly

deficient in providing the foundation necessary to admit the

Attached Note under HRE Rule 803(b)(6). Neither declarant stated

that she was the custodian of records for Nationstar or any prior

holder of the Note, so each had to demonstrate that she was a

"qualified witness" with respect to the Attached Note. Yet

neither declarant claimed to be familiar with the record-keeping

system of Countrywide or any other holder of the Note before

BANA. Indeed, the Wallace Declaration asserts, apparently

erroneously, that Nationstar possessed the Attached Note prior to

April 19, 2012, and does not assert that Wallace was even

familiar with BANA's record-keeping system. The Vieau

Declaration relies on the Williams Affidavit, which, for the

reasons previously stated, is insufficient to admit the Attached

Note under the business records exception. 

Absent the declaration of a "qualified witness" with

respect to the Attached Note, U.S. Bank failed to establish its

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standing to foreclose. Because the Attached Note was not

admissible as asserted, U.S. Bank did not meet its burden of

establishing facts necessary for a grant of summary judgment. 

See Behrendt, 142 Hawai#i at 46, 414 P.3d at 98. Absent

admission of the Note into evidence, U.S. Bank did not meet its

burden on summary judgment. 

We therefore vacate the (1) Findings of Fact,

Conclusions of Law and Order Granting Plaintiff's Motion for

Summary Judgment Against All Defendants and for Interlocutory

Decree of Foreclosure, and (2) Judgment, both entered on April 3,

2018, by the Circuit Court of the Fifth Circuit. The case is

remanded to the circuit court for further proceedings consistent

with this Summary Disposition Order.

DATED: Honolulu, Hawai#i, April 7, 2020.

On the briefs:

Gary Victor Dubin and

Frederick J. Arensmeyer

for Defendant-Appellant.

Andrew J. Lautenbach and

Sianha M. Gualano

(Starn O'Toole Marcus &

Fisher)

for Plaintiff-Appellee.

/s/ Lisa M. Ginoza

Chief Judge

/s/ Katherine G. Leonard

Associate Judge

/s/ Clyde J. Wadsworth

Associate Judge

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