Opinion ID: 3157323
Heading Depth: 1
Heading Rank: 3

Heading: Whether the ICA erred by reversing the Circuit

Text: Court’s decision to grant summary judgment in favor (continued . . .) 13 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER This court granted certiorari, and in an opinion published on October 23, 2014, we held that the ICA erred in treating the entry of default as if it were a default judgment and then evaluating whether the allegations in the complaint were wellpled. Kondaur Capital Corp. v. Matsuyoshi, 134 Hawaiʻi 342, 351— 52, 341 P.3d 548 (2014). This court additionally held that “[w]hen reviewing a summary judgment, an appellate court’s consideration of the record is limited to those materials that were considered by the trial court in ruling on the motion.” Id. at 350, 341 P.3d at 556. Because the ICA relied on “the post-judgment Matsuyoshi Declaration as a basis to find disputed material facts” that would preclude summary judgment, we concluded that the ICA erred, vacated the ICA’s Judgment on Appeal, and “remand[ed] the case to the ICA to consider the further issues that it ‘decline[d] to reach’ that were ‘raised by the parties’ on appeal.” Id. at 352, 341 P.3d at 558. B. The ICA’s Post-Remand Summary Disposition Order On November 19, 2014, the ICA issued its post-remand summary disposition order (SDO), which affirmed the MSJ Judgment. (. . . continued) of Petitioner based on evidence that was not a matter of record at the time the Circuit Court considered the motion. II. Whether on de novo review this Court should affirm the Circuit Court’s judgment granting a summary judgment in favor of Petitioner. 14 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER In particular, the ICA held that summary judgment in favor of Kondaur was properly granted, explaining that Kondaur met its initial burden of demonstrating a prima facie case of ejectment by submitting “admissible evidence of ownership and title to the [Property] in the form of exhibits attached to its MSJ, which included a certified copy of its quitclaim deed and Ann Pham’s affidavit.” The ICA rejected Matsuyoshi’s arguments concerning the alleged invalidity of Kondaur’s title as a result of the foreclosure sale being conducted in a different county than where the Property is located. The ICA reasoned that the applicable version of HRS § 667-5 did not require the “foreclosure sale be held in the county where the subject property is located, and nothing in the record indicates that the mortgagee failed to fulfill its duty to exercise reasonable diligence to secure the best price for the Property” “when it sold the Property for $416,900.20.” 9 C. Matsuyoshi’s Application for Writ of Certiorari On April 6, 2015, Matsuyoshi filed an application for writ of certiorari seeking review of the ICA’s post-remand SDO. 9 Matsuyoshi also raised to the ICA a second point of error on appeal—whether the circuit court erred in denying Matsuyoshi’s Motion to Set Aside the MSJ Judgment. The ICA held that it “lack[ed] jurisdiction to address Matsuyoshi’s second error raised on appeal” “because Matsuyoshi did not appeal the November 14, 2012 Post-Judgment Order denying her HRCP Rule 60(b) Motion.” 15 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Matsuyoshi argues that the ICA misapplied the summary judgment standard by requiring her to present evidence when Kondaur—the movant in this case—had failed to present a prima facie case establishing that the sale of the Property was valid. Relying on Ulrich and analogous authorities setting forth the common law governing fiduciaries and quasi-fiduciaries, Matsuyoshi argues that, because Kondaur has “the ultimate burden of proof both as a plaintiff and as the direct quitclaim privy of [RLP] who carried out the Oʻahu-Self-Sale,” it “was required to establish in its moving papers that the sale was properly and fairly conducted and that the price was adequate,” particularly when the mortgagee is self-dealing in a manner that creates an inherent conflict of interest. Applying this principle, Matsuyoshi contends that Kondaur failed to present any evidence that it acted diligently to secure the best price for the Property. Matsuyoshi additionally argues that even if Kondaur satisfied its initial burden, genuine issues of material fact existed as to whether RLP violated the foreclosure statute and its duties under the power of sale contained in the Mortgage. Matsuyoshi maintains that the auction sale conducted on Oʻahu was itself evidence that RLP did not act diligently, “as potential bidders on Kauaʻi necessarily would have had to purchase an airplane ticket and travel to Oʻahu for the sale, while potential 16 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER bidders on Oʻahu could not view the [P]roperty unless they traveled to Kauaʻi.” According to Matsuyoshi, this dilemma was exacerbated by the fact that one of RLP’s sale terms was to convey the Property to the winning bidder “AS IS.” 10 In response, Kondaur argues that the ICA correctly affirmed the circuit court’s grant of its MSJ because Kondaur satisfied its initial burden to demonstrate a prima facie case of ejectment, while Matsuyoshi correspondingly failed to raise a genuine issue of material fact. Kondaur contends that requiring a third-party successor-in-interest such as Kondaur to establish a predecessor-in-interest’s reasonable diligence is tantamount to requiring such a successor-in-interest to disprove every possible defense to an ejectment action, which a summary judgment movant is not required to do. Further, Kondaur argues that Ulrich is consistent with the view that the mortgagor is the party who must introduce “credible evidence to support [his or] her alleged defense that the sale price at auction was 10 Matsuyoshi also identifies technical defects that allegedly voided RLP’s non-judicial foreclosure of the Property. Matsuyoshi argues that the notice of default that RLP sent did not comply with the notice requirements of the Mortgage and was therefore defective. Additionally, Matsuyoshi contends that the Honolulu Star-Bulletin—the newspaper in which the notice of sale for the Property was published—was not a newspaper of general circulation in Kauaʻi County in 2008, thus violating the publication requirement of HRS § 667-5(a)(1). In light of our disposition of other issues raised by Matsuyoshi, we do not address the asserted technical defects. 17 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER fraudulent”—a burden that Matsuyoshi failed to satisfy in this case. Finally, Kondaur argues that Matsuyoshi’s challenge to the venue of the non-judicial foreclosure auction is without merit because neither the applicable version of the foreclosure statute nor the power of sale contained in the Mortgage required the sale to be conducted in the same county as where the Property is located. Matsuyoshi asserts in her reply that assigning the burden to Kondaur of proving the validity of the non-judicial foreclosure sale is consistent with the burden-shifting approach employed in a summary judgment analysis, and that Kondaur is not being asked to disprove every possible defense that Matsuyoshi may have. Matsuyoshi maintains “that where the ejectment plaintiff is the mortgagee (or its non-bona fide purchaser transferee standing in its shoes),” this requirement “is not a ‘defense’ at all, but rather an element of the plaintiff’s claim.”