Court Opinion

ID: 5116156
Source: CourtListenerOpinion
Date Created: 2021-10-05 19:03:48.564743+00
Date Added: 2024-06-11T08:21:54.772493
License: Public Domain

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                                               Electronically Filed
                                               Intermediate Court of Appeals
                                               CAAP-XX-XXXXXXX
                                               05-OCT-2021
                                               07:54 AM
                                               Dkt. 62 SO
                            NO. CAAP-XX-XXXXXXX

                  IN THE INTERMEDIATE COURT OF APPEALS

                          OF THE STATE OF HAWAI#I

     ASSOCIATION OF APARTMENT OWNERS OF WAIAU GARDEN VILLA,
                       Plaintiff-Appellee,
                                v.
           NOREEN C. LATORRE-HOLT, Defendant-Appellant

         APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
                      (CIVIL NO. 1CC131000537)

                       SUMMARY DISPOSITION ORDER
      (By:    Ginoza, Chief Judge, Hiraoka and Wadsworth, JJ.)

             Defendant-Appellant Noreen C. Latorre-Holt appeals from
(1) the "Order Granting in Part and Denying in Part Defendant
Noreen C. Latorre-Holt's Motion to Set Aside Deficiency Judgment
and to Quash Garnishee Summons Filed September 22, 2017[,]"
entered by the Circuit Court of the First Circuit on
September 10, 2021; and (2) the "Order Granting Plaintiff
Association of Apartment Owners of Waiau Garden Villa's Motion
for Reconsideration of Defendant Noreen C. Latorre-Holt's Motion
to Set Aside Deficiency Judgment and to Quash Garnishee Summons
Filed September 22, 2017[,]" entered by the circuit court on
January 31, 2018.1 For the reasons explained below, we affirm
order (2) (which unquashed the garnishee summons), but vacate
order (1) to the extent it denied Latorre-Holt's motion to set
aside the judgment against her, and remand for proceedings
consistent with this summary disposition order.

     1
             The Honorable Dean E. Ochiai presided.
   NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

            Plaintiff-Appellee Association of Apartment Owners of
Waiau Garden Villa filed a complaint against Latorre-Holt on
February 25, 2013. The complaint alleged that: Latorre-Holt
owned a unit in the Waiau Garden Villa condominium; Latorre-Holt
failed to pay common assessments; the Association conducted a
non-judicial foreclosure on the unit; the Association was the
sole bidder at the foreclosure auction, bidding $1.00; and
because there were no proceeds from the foreclosure sale to pay
the Association, the Association was entitled to a money judgment
against Latorre-Holt for the amount she owed.
          A "Return and Acknowledgment of Service" (Return Form)
was signed by Sandra K.S. Whang and filed on March 14, 2013.              The
Return Form stated that Whang personally served the Association's
complaint upon Latorre-Holt on March 11, 2013, at 94-1121 Hilihua
Place in Waipahu.     Accordingly, Latorre-Holt's response to the
complaint was due on April 1, 2013.2  The second page of the
Return Form contained a space for the signature of a notary
public, but that space was blank. The second page also contained
a space for the signature of the person served, to acknowledge
service, but that space was also blank.
          Latorre-Holt did not serve an answer to the complaint.
Her default was entered on April 4, 2013. The Association then
filed a motion for summary judgment. A copy of the motion was
mailed to the Hilihua Place address.
          An order granting the Association's motion for summary
judgment was entered on October 18, 2013. A copy of the order
was mailed to the Hilihua Place address.
          A Deficiency Judgment in favor of the Association and
against Latorre-Holt for $19,980.66 was also entered on
October 18, 2013.3 A notice of entry of judgment and a copy of
the Deficiency Judgment were mailed to the Hilihua Place address.
The Association's counsel submitted a declaration stating that

      2
            The 20th day following service was Sunday, March 31, 2013.
      3
            The Honorable Edwin C. Nacino signed the order and the Deficiency
Judgment.

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none of the documents mailed to the Hilihua Place address had
been returned as undeliverable.
          Latorre-Holt did not appeal from the Deficiency
Judgment.
          Nothing further happened until August 28, 2017, when
the Association submitted an ex parte motion for issuance of a
garnishee summons to Admor HVAC Products. The circuit court
issued the garnishee summons, which was filed on August 29,
2017.4
          On September 22, 2017, Latorre-Holt filed a motion to
set aside the Deficiency Judgment and to quash the garnishee
summons (Post-Judgment Motion). The Post-Judgment motion
contended that the Deficiency Judgment was void. It sought
relief under Rule 60(b)(4) of the Hawai#i Rules of Civil
Procedure (HRCP). Latorre-Holt submitted a declaration stating
that she "was never served with the Complaint, Summons, or any
other documents in this case," and that Whang's Return Form "is
not true." She also declared that she first learned about the
case when her employer began withholding her earnings after being
served with a garnishee summons.
          The Post-Judgment Motion was heard on November 16,
2017. At the conclusion of the hearing the circuit court stated:

                  THE COURT: Well, with regard to [the] motion to set
            aside a deficiency judgment and quash garnishee summons, I'm
            going to grant in part and deny in part at this time.

                  [Addressing counsel for Latorre-Holt], granted in part
            to quash the garnishee summons. Denied as to setting aside
            the deficiency judgment without prejudice.

                  Your motion at this point is not an attack on the
            validity of the [Deficiency Judgment]. It's just basically
            stop the garnishee. The Court is concerned about this
            entire case now since the document that started the entire
            lawsuit [the Return Form] is now in question, at least with
            this Court. I don't know what your client is going to do at
            this point, but I'm a bit perturbed that you didn't see this
            either [that the Return Form was not notarized].
                  . . . .

      4
            The Honorable Dean E. Ochiai signed the garnishee summons and
presided over the remainder of the case.

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                Okay. You can prepare the appropriate order.   Case
          goes wherever it's going to go from this point.

(Emphasis added.)
          On November 20, 2017, before a written order on the
Post-Judgment Motion was entered, the Association filed a motion
for reconsideration. The Association argued that Whang was not
required to execute an affidavit of service, and that the Return
Form contained a space for notarization only because HRCP
Rule 4(g) required:

          When service is made by any person specially appointed by
          the court, that person shall make affidavit of such service.

A declaration signed by Whang stated that she "is a process
server in the State of Hawaii [sic]." Since Whang was not
specially appointed by the court (for example, by commission to
serve process outside the state of Hawai#i), the Association
maintained that she was not required to make an affidavit of
service.
           In opposition, Latorre-Holt argued that the Association
could and should have made its argument in opposition to the
Post-Judgment Motion. She made no other arguments. The
Association replied that the issue about the Return Form did not
arise until the hearing, when it was raised sua sponte by the
court.
           The circuit court entered the order granting the
Association's motion for reconsideration and reinstating the
garnishee summons on January 31, 2018. Latorre-Holt filed a
notice of appeal.
           After briefing was completed, we temporarily remanded
this case under State ex rel. Office of Consumer Prot. v. Joshua,
141 Hawai#i 91, 93, 405 P.3d 527, 529 (2017) and Waikiki v.
Ho#omaka Vill. Ass'n of Apartment Owners, 140 Hawai#i 197, 204,
398 P.3d 786, 793 (2017), for entry of a written order disposing
of the Post-Judgment Motion. The circuit court entered the
written order quashing the garnishee summons but denying without
prejudice Latorre-Holt's request to set aside the Deficiency
Judgment on September 10, 2021. Latorre-Holt's notice of appeal

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was deemed filed at that time. See Rule 4(a)(2) of the Hawai#i
Rules of Appellate Procedure.
          Latorre-Holt states a single point of error:

                The circuit court committed reversible error in
          failing to quash the aforesaid garnishee summons and set
          aside its deficiency judgment, which were obtained as a
          result of insufficient service of process in violation of
          [Latorre-Holt]'s constitutional rights to due process of
          law, rendering those judgments [sic] void.

           We first address the issue of whether the circuit court
erred by failing to set aside the Deficiency Judgment. "A
judgment is void only if the court that rendered it lacked
jurisdiction of the subject matter, or of the parties, or if it
acted in a manner inconsistent with due process of law." Wagner
v. World Botanical Gardens, Inc., 126 Hawai#i 190, 195, 268 P.3d
443, 448 (App. 2011) (quoting In re Genesys Data Techs., Inc., 95
Hawai#i 33, 38, 18 P.3d 895, 900 (2001) (other citation
omitted)). A circuit court's HRCP Rule 60(b)(4) determination is
reviewed de novo, under the right/wrong standard. Id. at 194,
268 P.3d at 447.
           The Association argues that this appeal is "an untimely
attempt at appealing the Deficiency Judgment." That is not
correct. "[A] judgment may be declared void upon a HRCP Rule
60(b)(4) motion regardless of how much time has passed between
entry of judgment and filing the motion." Wagner, 126 Hawai#i at
195, 268 P.3d at 448 (quoting Bank of Haw. v. Shinn, 120 Hawai#i
1, 11, 200 P.3d 370, 380 (2008)) (other citations omitted).
           The Association also argues that Latorre-Holt has not
met the three-part test for setting aside a default under BDM,
Inc. v. Sageco, Inc., 57 Haw. 73, 76, 549 P.2d 1147, 1150 (1976),
abrogated by Chen v. Mah, 146 Hawai#i 157, 177, 457 P.3d 796, 816
(2020). Even if BDM — which concerned an HRCP Rule 55(c) motion
to set aside an entry of default, not an HRCP Rule 60(b) motion
to set aside a default judgment — applied, "we do not consider
the BDM test in this case where the default judgment was void due
to lack of service of process." Wagner, 126 Hawai#i at 196, 268
P.3d at 449 (citations omitted).

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  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

          Latorre-Holt contends the Deficiency Judgment is void
because she was never served with the Association's complaint.
The order granting in part and denying in part the Post-Judgment
Motion states:

          The court   finds that service of the Complaint herein on
          Defendant   LATORRE-HOLT was not properly documented due to
          lack of a   notary of the process server's signature on the
          Return of   Service filed March 14, 2013.

The circuit court's finding was actually a conclusion of law.
Respectfully, it is incorrect. HRCP Rule 4 provides, in relevant
part:

          PROCESS.

                (a) Summons: Issuance. Upon the filing of the
          complaint the clerk shall forthwith issue a summons.
          Plaintiff shall deliver the complaint and summons for
          service to a person authorized to serve process. . . .

                . . . .

                (c) Same: By Whom Served. Service of all process
          shall be made: (1) anywhere in the State by the sheriff or
          the sheriff's deputy, by some other person specially
          appointed by the court for that purpose, or by any person
          who is not a party and is not less than 18 years of age. . .
          .

                . . . .
                (g) Return. The person serving the process shall make
          proof of service thereof to the court promptly and in any
          event within the time during which the person served must
          respond to process. When service is made by any person
          specially appointed by the court, that person shall make
          affidavit of such service.

(Bold italics added.) Whang's declaration states she is a
process server in Hawai#i. She was not a party to the action.
She was not "specially appointed by the court" to serve the
Association's complaint. We conclude that the Return Form need
not have been notarized.
          Whang's declaration states — consistent with the Return
Form — that she personally served the Association's complaint
upon Latorre-Holt at the Hilihua Place address. Latorre-Holt's
declaration states that she was never served with the complaint,
that Whang's Return Form is not true, and that she first learned
about the case when her employer began withholding her earnings

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after being served with a garnishee summons. If in fact the
Association's complaint was never served on Latorre-Holt, the
Deficiency Judgment would be void for lack of jurisdiction over
Latorre-Holt. Wagner, 126 Hawai#i at 196, 268 P.3d at 449.
Accordingly, there was a factual issue concerning service of the
complaint, which should have been resolved by an evidentiary
hearing on the Post-Judgment Motion.
          Regarding the order granting the Association's motion
for reconsideration, Latorre-Holt argues that the garnishee
summons should have remained quashed because the Deficiency
Judgment was void. The circuit court, however, denied Latorre-
Holt's motion to set aside the Deficiency Judgment. Although the
denial was "without prejudice," HRCP Rule 60(b) provides that a
"motion under this subdivision (b) does not affect the finality
of a judgment or suspend its operation." Latorre-Holt could have
filed an HRCP Rule 62(b) motion to stay enforcement of the
Deficiency Judgment pending final disposition of her HRCP
Rule 60(b)(4) motion. Because she did not, it was not error for
the garnishee summons to issue even though Latorre-Holt's motion
to set aside the Deficiency Judgment was denied without
prejudice. See Peacock v. Thomas, 516 U.S. 349, 359 n.8 (1996)
("The district court may only stay execution of the judgment
pending the disposition of certain post-trial motions . . . if
the court provides for the security of the judgment creditor.");
Owens v. Republic of Sudan, 141 F.Supp.3d 1, 11 (D. D.C. 2015)
(applying former federal Rule 62(b)(4), which was substantively
identical to HRCP Rule 62(b)).5
          Based upon the foregoing:
          1.   the "Order Granting Plaintiff Association of
Apartment Owners of Waiau Garden Villa's Motion for
Reconsideration of Defendant Noreen C. Latorre-Holt's Motion to
Set Aside Deficiency Judgment and to Quash Garnishee Summons
Filed September 22, 2017[,]" entered on January 31, 2018, is
affirmed; but

      5
            We express no opinion about Latorre-Holt's potential remedies for
the garnishment should the circuit court set aside the Deficiency Judgment on
remand.

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          2.   the "Order Granting in Part and Denying in Part
Defendant Noreen C. Latorre-Holt's Motion to Set Aside Deficiency
Judgment and to Quash Garnishee Summons Filed September 22,
2017[,]" entered on September 10, 2021, is vacated, and this case
is remanded for the circuit court to conduct an evidentiary
hearing on Latorre-Holt's HRCP 60(b)(4) motion, and for further
proceedings consistent with this summary disposition order.
          DATED: Honolulu, Hawai#i, October 5, 2021.

On the briefs:
                                      /s/ Lisa M. Ginoza
Arlette S. Harada,                    Chief Judge
Tiffany N. Dare,
for Plaintiff-Appellee.               /s/ Keith K. Hiraoka
                                      Associate Judge
Keith M. Kiuchi,
for Defendant-Appellant.              /s/ Clyde J. Wadsworth
                                      Associate Judge

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