Court Opinion

ID: 4172333
Source: CourtListenerOpinion
Date Created: 2017-05-26 21:10:53.441518+00
Date Added: 2024-06-11T14:39:26.193245
License: Public Domain

*** NOT FOR PUBLICATION IN WEST’S HAWAI’I REPORTS AND PACIFIC REPORTER ***

                                                               Electronically Filed
                                                               Supreme Court
                                                               SCAP-13-0005253
                                                               26-MAY-2017
                                                               07:45 AM

                              SCAP-13-0005253

          IN THE SUPREME COURT OF THE STATE OF HAWAII
________________________________________________________________

            JULIE M. SIGWART, Individually and as Trustee
          of the Revocable Living Trust Dolphin Star Trust
         Dated December 10, 2003, and JAMES L.K. DAHLBERG,
                        Plaintiffs-Appellants,

                                     vs.

      THE LAW OFFICE OF DAVID B. ROSEN, A LAW CORPORATION,
            DAVID B. ROSEN, and DOE DEFENDANTS 1-50,
                      Defendants-Appellees.
________________________________________________________________

        APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
             (CAAP-13-0005253; CIV. NO. 13-1-2097-07)

                        SUMMARY DISPOSITION ORDER
(By: Recktenwald, C.J., Nakayama, McKenna, Pollack, and Wilson, JJ.)

           This case arises from the foreclosure sale of the

properties of Plaintiffs-Appellants Julie M. Sigwart (Sigwart)

and James L. K. Dahlberg (Dahlberg).         Both Sigwart’s and

Dahlberg’s mortgages contained a power of sale clause that

allowed non-judicial foreclosures.         After Sigwart and Dahlberg

defaulted on their mortgages, Attorney David B. Rosen (Rosen)
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was retained by the foreclosing mortgagees to carry out non-

judicial foreclosures under Part I of HRS Ch. 667 (2008).

           To foreclose on Sigwart’s property, Rosen published

the notice of sale on July 3, 10, and 17, 2009; the notice of

sale indicated a sale date of July 31, 2009.           Although Sigwart’s

property was located in the County of Maui, the notice of sale

was published in a publication with circulation in the County of

Hawaiʻi and no general circulation in the County of Maui.             The

sale of Sigwart’s property was postponed from July 31, 2009 to

August 28, 2009 through “mesne postponements” that were cried

out between July 31 and August 28, 2009.1          Rosen did not publish

any notices of the continued sale dates.          At the August 28, 2009

sale, U.S. Bank, N.A., the claimed holder of the note secured by

the mortgage, was the sole bidder with a bid of $383,712.13.

           To foreclose on Dahlberg’s property, Rosen published a

notice of sale on August 13, 20, and 27, 2010; the notice of

sale indicated a sale date of September 10, 2010.            The sale of

Dahlberg’s property was also postponed through “mesne

postponements” that were cried out at the original sale.             Rosen

did not publish any notices of the continued sale date.             At the

January 7, 2011 sale, Wells Fargo Bank, N.A., the claimed holder

     1
           The record does not reveal the specific dates on which the
     postponements were cried out, only that they were within this range.
     The Affidavit of Foreclosure filed with the Bureau of Conveyances
     stated only that a “postponement was cried on July 31, 2009, original
     sale. Sale was postponed to August 28, 2009 by mesne postponements.”

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of the note secured by Dahlberg’s Mortgage, was the highest

bidder with a bid of $225,000.

           Sigwart and Dahlberg filed a complaint against Rosen

on July 31, 2013, alleging that Rosen had failed to properly

advertise and conduct the non-judicial foreclosure sales of

their properties in violation of the duties under plaintiffs’

mortgages, statutory law (including HRS §§ 667-5 and 667-7),

common law, and the consumer protection statute, HRS § 480-2

(2008).   Sigwart and Dahlberg amended the complaint on August

23, 2013 to add further allegations.

           Rosen filed a motion to dismiss the first amended

complaint on September 4, 2013.        Rosen argued, inter alia, that:

(1) publication of the postponement notice was not required by

Hawaiʻi law; (2) the initial sales were scheduled after the

expiration of four weeks from the date first advertised in the

notice of sale and complied with HRS § 667-7 (Supp. 2008); and

(3) Sigwart and Dahlberg lacked standing to maintain a HRS

chapter 480 claim because they were not Rosen’s clients and were

not owed a duty of care by their lender’s attorney.            The first

Circuit Court granted Rosen’s motion to dismiss the complaint,

and final judgment was entered on October 30, 2013.            Sigwart and

Dahlberg appealed to the Intermediate Court of Appeals.             They

argued, inter alia, that Rosen’s actions in violation of the

nonjudicial foreclosure statute’s publication requirements were

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unfair and deceptive and therefore gave rise to a UDAP claim and

that they had standing to bring such a claim.           The case was

later transferred to this court.

            Because this case was dismissed pursuant to Hawaiʻi

Rules of Civil Procedure Rule 12(b)(6), we take the facts

alleged by Sigwart and Dahlberg as true.          Hungate v. Law Office

of David B. Rosen, 139 Hawaiʻi 394, 401, 391 P.3d 1, 8

(2017)(citation omitted).       In addition, we view the allegations

in the light most favorable to the plaintiffs “in order to

determine whether the allegations contained therein could

warrant relief under any alternative theory.”           In re Estate of

Rogers, 103 Hawaiʻi 275, 280, 81 P.3d 1190, 1195 (2003)(citation

omitted).

            Sigwart and Dahlberg contend the circuit court erred

in granting Rosen’s motion to dismiss.          We disagree.    We

recently held that the statutory requirements of former HRS §§

667-5 and 667-7 do not give rise to a private right of action

against a foreclosing mortgagee’s attorney.           Hungate, 139 Hawaiʻi

at 405-07, 391 P.3d at 12-14.        In addition, given the

circumstances alleged in that case, we declined to recognize an

unfair or deceptive acts or practices (UDAP) claim against Rosen

as the foreclosing mortgagee’s attorney.          Id. at 412-413, 391

P.3d at 19-20; HRS § 480-2.

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           We premised our holding concerning Hungate’s UDAP

claim, in part, on our “desire to avoid creating unacceptable

conflicts of interest in this context, to protect attorney-

client counsel and advice from the intrusion of competing

concerns, and to allow adequate room for zealous advocacy . . .

. ”   Id. at 413, n.22, 391 P.3d at 20, n.22.          While we recognize

that those concerns do “not encompass, for example, allowing

attorneys to conduct patently illegal activities on behalf of

clients,” id., the allegations in Sigwart and Dahlberg’s

complaint do not rise to the level of patently illegal

activities conducted by Rosen.

           Dismissal under HRCP Rule 12(b)(6) is appropriate

where “the allegations of the complaint itself clearly

demonstrate that plaintiff does not have a claim.”            Touchette v.

Ganal, 82 Hawaiʻi 293, 303, 922 P.2d 347, 357 (1996).

Accordingly, we hold that the circuit court properly granted

Rosen’s motion to dismiss.

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           IT IS HEREBY ORDERED that the circuit court’s October

30, 2013 final judgment is affirmed.

           DATED: Honolulu, Hawaiʻi, May 26, 2017.

James J. Bickerton                  /s/ Mark E. Recktenwald
John F. Perkin
Stanley H. Roehrig                  /s/ Paula A. Nakayama
Van-Alan Shima
for Plaintiffs-                     /s/ Sabrina S. McKenna
Appellants
                                    /s/ Richard W. Pollack
David B. Rosen
Peter W. Olson                      /s/ Michael D. Wilson
Christopher T. Goodin
for Defendants-
Appellees

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