Court Opinion

ID: 9384081
Source: CourtListenerOpinion
Date Created: 2023-03-31 18:03:23.3755+00
Date Added: 2024-06-11T17:17:50.464037
License: Public Domain

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                                                         Electronically Filed
                                                         Supreme Court
                                                         SCWC-XX-XXXXXXX
                                                         31-MAR-2023
                                                         07:46 AM
                                                         Dkt. 24 OP

           IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

                               ---o0o---

                     JAMES B. NUTTER & COMPANY,
                   Respondent/Plaintiff-Appellee,

                                  vs.

                      ELTON LANE NAMAHOE, SR.,
                  Petitioner/Defendant-Appellant,

                                  and

            SECRETARY OF HOUSING AND URBAN DEVELOPMENT,
                  Respondent/Defendant-Appellant.

                           SCWC-XX-XXXXXXX

        CERTIORARI FROM THE INTERMEDIATE COURT OF APPEALS
              (CAAP-XX-XXXXXXX; CIVIL NO. 12-1-0113)

                           MARCH 31, 2023

  RECKTENWALD, C.J., NAKAYAMA, McKENNA, WILSON, AND EDDINS, JJ.

             OPINION OF THE COURT BY RECKTENWALD, C.J.

                          I.    INTRODUCTION

            Elton Lane Namahoe, Sr. lost his home to a judicial

foreclosure of a reverse mortgage after he allegedly failed to
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make $500.00 worth of repairs.           The lender, James B. Nutter

Company (JBNC), brought a foreclosure proceeding against Namahoe

for allegedly “default[ing] in the observance and performance of

the terms, covenants and conditions [of his mortgage] by failing

to repair the property as required by the Repair Rider to the

Loan Agreement in a timely manner.”

               In the Circuit Court of the Third Circuit, JBNC filed

a Motion for Summary Judgment and Decree of Foreclosure against

Namahoe, which the court granted.            More than two and a half

years after the foreclosure, Namahoe filed a Hawaiʻi Rules of

Civil Procedure (HRCP) Rule 60(b) (2006) Motion for Relief from

Judgment, specifically citing subsections 60(b)(3), (4), and

(6).       The circuit court denied these motions, in addition to

Namahoe’s subsequently filed HRCP Rule 59 (2000) Motion for

Reconsideration. 1

               On appeal to the Intermediate Court of Appeals (ICA),

Namahoe argued that JBNC sought foreclosure on impermissible

grounds and that: (1) the circuit court abused its discretion in

denying Namahoe’s HRCP Rule 60(b)(3) motion because JBNC and its

attorneys committed fraud in seeking the foreclosure; (2) under

HRCP Rule 60(b)(4), the circuit court’s judgment was void

because he was not properly served; (3) under HRCP Rule

       1       The Honorable Greg K. Nakamura presided.

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60(b)(6), JBNC committed fraud on the court by failing to

disclose the facts supporting foreclosure and by failing to

satisfy statutory attorney affirmation requirements; and (4) the

circuit court erred in denying his HRCP Rule 59 Motion for

Reconsideration.

           The ICA affirmed the circuit court’s judgment in favor

of JBNC.   James B. Nutter & Co. v. Namahoe, No. CAAP-XX-XXXXXXX,

2022 WL 899896 at *12 (App. March 28, 2022).      In his application

for certiorari, Namahoe asks this court to vacate the ICA’s

judgment affirming the circuit court’s denial of his motions

brought under HRCP Rule 60(b) and Rule 59.

           We resolve Namahoe’s appeal as follows.     We agree with

the ICA that the circuit court did not err in finding that

Namahoe was time-barred from raising a HRCP Rule 60(b)(3) motion

and that, under HRCP Rule 60(b)(4), the judgment was not void,

because he was personally served.      Further, the ICA and circuit

court did not err in rejecting Namahoe’s Rule 59 Motion for

Reconsideration.

           But we conclude that the ICA erred in affirming the

circuit court’s denial of Namahoe’s request for relief under

HRCP Rule 60(b)(6).    Specifically, we hold that there are

grounds for relief both on a fraud on the court theory and under

the equitable principles governing foreclosure.      JBNC submitted

a materially deficient attorney affirmation to the circuit court
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in support of its motion for summary judgment, and the balance

of equities weighed strongly against foreclosure.             Accordingly,

we reverse the circuit court’s denial of Namahoe’s HRCP Rule

60(b)(6) motion and vacate the Decree of Foreclosure insofar as

it would otherwise preclude Namahoe from asserting a wrongful

foreclosure counterclaim.

                               II.   BACKGROUND

A.    Foreclosure and Circuit Court Proceedings

             This case centers around a home equity conversion

mortgage (reverse mortgage) 2 on Elton Lane Namahoe, Sr.’s home,

which is located in Kurtistown, Hawaiʻi.          Namahoe’s lender, JBNC,

through its former attorneys Clay Chapman Iwamura Pulice &

Nervell (Clay Chapman), brought a foreclosure action against

Namahoe for allegedly “default[ing] in the observance and

performance of the terms, covenants and conditions by failing to

repair the property as required by the Repair Rider to the Loan

Agreement in a timely manner.”         Specifically, JBNC sought

foreclosure based on Namahoe’s alleged failure to complete

$500.00 worth of repairs to his home. 3

      2     Although the loan at issue is more precisely a home equity
conversion mortgage, this opinion refers to the broader term “reverse
mortgage” for the sake of consistency with the parties’ briefs, circuit court
orders, and ICA opinion.

      3      Lenders are required to set aside 150% of the estimated cost of
repairs.   24 C.F.R. § 206.19(f)(1) (2009). Because the Repair Rider set
                                                              (continued . . .)

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      1.    Reverse mortgage loan agreement

            On October 19, 2009, Namahoe executed a promissory

note (Note) in favor of JBNC for the maximum principal sum of

$189,000.00.    The agreement also included a home equity

conversion loan agreement (Loan Agreement) and a Repair Rider.

Namahoe also executed, as mortgagor, an adjustable rate home

equity conversion mortgage (Security Instrument) securing the

Note and Loan Agreement and incorporating his property located

at 16-1218 ʻŌpeʻapeʻa Road, Kurtistown (Property) into the

mortgage.    According to the Loan Agreement, out of a “Principal

Limit” of $67,536.00, Namahoe was to receive a “Loan Advance” of

$52,462.48.    The remaining balance was to cover the “Servicing

Fee Set Aside,” closing costs, and funds designated for repairs.

      2.    Alleged breach of the Repair Rider

            JBNC alleged that Namahoe “defaulted in the observance

and performance of the terms, covenants and conditions” of the

Repair Rider by failing to make timely repairs on the Property.

The Repair Rider, in relevant part, states:

                        THIS REPAIR RIDER is made on October 19, 2009,
                  and is incorporated into and shall be deemed to
                  supplement the Loan Agreement of the same date made
                  by the undersigned Lender and the undersigned
                  Borrower and the Secretary of Housing and Urban
                  Development (“Secretary”).

(. . . continued)
aside a total of $750.00 for repairs, this indicates an estimated $500.00
cost of repairs.

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                 I.    Lender’s Promises
                        A. The Lender shall set aside $750.00 from the
                        initial Principal Limit under the Loan
                        Agreement to be used for the purpose of
                        bringing the Property up to the property
                        standards required by the Secretary [of Housing
                        and Urban Development (HUD)] by repairing:
                        The hall and carport ceiling shows evidence of
                        water stains due to roof leak. The Front stair
                        rail showed evidence of water rot. All to be
                        repaired.

                                          . . .

                       C. The Lender shall require one or more
                       inspections by a HUD-approved inspector during
                       the course of the repair work. The Lender
                       shall not release any funds for work which is
                       not complete and which is not approved by a
                       HUD-approved inspector. The Lender certifies
                       by executing this Repair Rider that the repairs
                       which are funded under this Repair Rider will
                       be completed in a manner to meet HUD property
                       standards required by the Secretary as
                       determined by a HUD-approved inspector.

                                          . . .

                       E. Until a HUD-approved inspector finds that
                       all repairs required by Section I.A. of this
                       Repair Rider have been completed in a
                       satisfactory manner, the Lender shall not
                       release funds in excess of (i) the total value
                       of work satisfactorily completed, and (ii) the
                       value of materials or equipment delivered to,
                       and suitably stored at, the site but not yet
                       incorporated in the work, less (iii) ten
                       percent heldback, less (iv) prior advances
                       under this Repair Rider.

                 II.   Borrower’s Promises
                       A. The Borrower will complete all repairs
                       required by Section I.A. of this Repair Rider
                       so that the Property meets the property
                       standards required by the Secretary as
                       determined by a HUD-approved inspector.

                       B. Borrower shall cause work to begin on
                       October 19, 2009. Borrower shall have work
                       completed by October 18, 2010. Work is to be
                       performed with reasonable diligence. Should
                       Borrower fail to comply with these terms, until
                       all repair work is satisfactorily completed
                       Borrower shall not request and Lender shall not
                       make any further payments under the Loan
                       Agreement except for payment of repairs

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                       required by Section I.A. of this Repair Rider
                       and Loan Advances required under Section 4.5.
                       of the Loan Agreement.

                                            . . .

(Emphasis added.)

           As a result of Namahoe’s alleged failure to complete

the enumerated repairs, JBNC demanded immediate payment in full

of all outstanding principal and accrued interest arising from

the reverse mortgage. 4     Although the Repair Rider does not

include an acceleration provision, section 9(b) of the Security

Instrument states that JBNC may require “immediate payment in

full of all sums secured by this Security Instrument, upon

approval by an authorized representative of the Secretary, if: .

. . (iii) [a]n obligation of the Borrower under this Security

Instrument is not performed.”       Thus, a failure to satisfy the

duty to repair under the Repair Rider may qualify as a

sufficient breach to require immediate payment.

           JBNC was required to notify Namahoe and the Secretary

of HUD (Secretary) if the loan ever became due and payable under

9(b), and was limited in its right to pursue foreclosure by the

terms of the Security Instrument:

      4     Compliance with the Repair Rider was to be determined by a
HUD-approved inspector. As set forth below, the record does not establish
whether any HUD-approved inspectors surveyed the repairs or reported any
deficiencies with Namahoe’s repair work.

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                 Lender shall not have the right to commence
                 foreclosure until Borrower has had thirty (30) days
                 after notice to either:

                    (i)   Correct the matter which resulted in the
                          Security Instrument coming due and payable;
                          or

                   (ii)   Pay the balance in full; or

                  (iii)   Sell the Property for the lesser of the
                          balance or 95% of the appraised value and
                          apply the net proceeds of the sale toward
                          the balance; or

                   (iv)   Provide the Lender with a deed in lieu of
                          foreclosure.

           The Loan Agreement and Note outlined the process for

notice.   The Loan Agreement provided, in relevant part:

           6.3. Notices. Any notice to Borrower provided for in this
           Loan Agreement shall be given by delivering it or by
           mailing it by first class mail unless applicable law
           requires use of another method. The notice shall be
           directed to the property address shown in the Security
           Instrument or any other address all Borrowers jointly
           designate.

           The Note provided:

           9. GIVING OF NOTICES
           Unless applicable law requires a different method, any
           notice that must be given to Borrower under this Note will
           be given by delivering it or by mailing it by first class
           mail to Borrower at the Property address above or at a
           different address if Borrower has given Lender a notice of
           Borrower’s different address.

(Emphases added.)

           JBNC mailed a letter to Namahoe’s P.O. Box on

November 16, 2011 titled “Notice of Intent to Foreclose.”               The

letter stated:

                 Our records reflect that a default now exists on the
           above referenced loan. The default consists of the failure
           to repair the property as required by the Repair Rider to
           the Loan Agreement in a timely manner. As a result your
           loan has been called due and payable because of non-

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          compliance with the Deed of Trust/Mortgage securing the
          Promissory Note underlying this home loan.

                                     . . .

                This letter serves as further notice that [JBNC]
          intends to enforce the provisions of the Note and Deed of
          Trust (Mortgage). Unless you cure the default on or before
          30 days from the date of this letter, this shall serve as
          further notice to you that immediately thereafter, and
          without further demand or notice to you, [JBNC] shall
          accelerate the entire amount due of both principal and
          interest, which shall become immediately due and payable,
          invoke any remedies provided for in the Note and Deed of
          Trust (Mortgage), including but not limited to the
          foreclosure sale of the property.

          On April 6, 2012, JBNC sent another letter to Namahoe

at his P.O. Box.   It stated, “[y]ou did not comply with the

Repair Rider to the Loan Documents in that you failed to repair

the property in a timely manner.        Therefore, the Lender has

called the loan immediately due and payable.”

          Namahoe’s alleged violation of the Repair Rider

triggered the acceleration of his total remaining balance.

Thus, for a $500.00 deficiency, Namahoe was presented with a

bill for $75,946.58 plus interest, and he ultimately lost his

home.

     3.   Foreclosure proceeding in the circuit court

          On March 6, 2012, JBNC filed its foreclosure complaint

against Namahoe in the Circuit Court of the Third Circuit.

Robert A. Estacion, a civil process server, failed to serve the

complaint on Namahoe during his first three attempts.

Estacion’s stated reasons for non-service include “NO ONE HOME”

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and “NOT LIVING AT THIS ADDRESS (per neighbor and friend down

the street).”      JBNC then filed two Freedom of Information Act

(FOIA) requests seeking information related to Namahoe’s mailing

address.    In response to the FOIA request for a physical address

associated with Namahoe’s P.O. Box, the post office provided the

address as 16-1218 ʻŌpeʻapeʻa Road.       JBNC also asserted that it

conducted a “skip trace” 5 on Namahoe and confirmed the Property

address as his current address.

            On November 13, 2012, Estacion filed a Return and

Acknowledgment of Service which included what appeared to be

Namahoe’s signature, indicating personal service of the

complaint at Namahoe’s home.        Based on the record, Namahoe did

not subsequently answer or otherwise respond to the Complaint. 6

            On May 20, 2013, JBNC filed a Motion for Summary

Judgment and Decree of Foreclosure, exclusively relying on the

allegation that Namahoe had failed to repair the property in a

timely manner. 7

            In support of the motion, JBNC attached a Declaration

of Indebtedness signed by JBNC’s Vice President Bruce Huey,

      5      Here, “skip trace” refers to a LexisNexis Accurint report.

      6     Four years later, in his declaration submitted in support of his
HRCP Rule 60(b) motion, Namahoe attested that he did not recall signing the
Return and Acknowledgement of Service and that he “would not have understood
it anyway.”

      7     JBNC did not expressly inform the circuit court that Namahoe’s
alleged default concerned only $500.00 of repairs.

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attesting that he had personal knowledge that “based on [his]

review of the records and files related to the mortgage loan”

Namahoe “defaulted in the observance and performance of the

terms, covenants and conditions by failing to repair the

property, as required by the Repair Rider to the Loan Agreement,

in a timely manner.”    Huey’s declaration included a copy of

HUD’s approval of JBNC’s request to call the loan due and

payable, and specified that written notice was given to Namahoe

regarding his obligation to pay in full all outstanding

principal and accrued interest due on the loan.

          JBNC also attached an attorney affirmation signed by

Robert M. Ehrhorn, Jr. of Clay Chapman, pursuant to Hawaiʻi

Revised Statutes (HRS) § 667-17 (Supp. 2012) (repealed 2017)

(current version at HRS § 667-18), which stated:

                2. On May 3, 2013, I received a written
          communication from Bruce Huey, Vice President of James B.
          Nutter & Company, who informed me that he personally
          reviewed [JBNC’s] documents and records relating to this
          loan file . . . [and] confirmed the factual accuracy of the
          allegations set forth in the Motion for Summary Judgment[.]

                3. Based upon the communication from the person
          identified in Paragraph 2 above, as well as upon my own
          inspection and other reasonable inquiry under the
          circumstances, I affirm that, to the best of my knowledge,
          information, and belief, the Motion for Summary Judgment,
          and other papers filed or submitted to the Court in this
          matter contain no false statements of fact or law and that
          [JBNC] has legal standing to bring this foreclosure action.
          I understand my continuing obligation to amend this
          Affirmation in light of newly discovered material facts
          following its filing.

                4. To the best of Declarant’s knowledge,
          information, and belief the allegations contained in the

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          Motion for Summary Judgment are warranted by existing law
          and have evidentiary support.

(Emphases added.)

          Other than these declarations, JBNC did not provide

any evidence of Namahoe’s breach of the reverse mortgage terms

and failure to cure the default.

          Namahoe did not oppose the Motion for Summary Judgment

and Decree of Foreclosure, and he did not appear before the

circuit court.     The circuit court’s relevant Findings of Fact

and Conclusions of Law were as follows:

                                FINDINGS OF FACT

           . . .

                3.    [Namahoe] defaulted in the observance and
          performance of the terms, covenants and conditions by
          failing to repair the property, as required by the Repair
          Rider to the Loan Agreement, in a timely manner. [HUD]
          approved [JBNC’s] Request to Call The Loan Due And Payable,
          for immediate payment in full of all outstanding principal
          and accrued interest as required by paragraph 7(B)(iii) of
          the Note.

                4.    Written notice was given to [Namahoe] that
          because of his failure to repair the property as required
          by the Repair Rider to the Loan Agreement in a timely
          manner, [JBNC] required immediate payment in full of all
          outstanding principal and accrued interest due on the loan.
          However, despite said notice the default was not cured and
          the loan has not been paid off.

          . . .

                               CONCLUSIONS OF LAW

          . . .

                3)    [JBNC] is entitled to have its Mortgage
          foreclosed, a commissioner appointed to take possession of
          and sell the mortgaged property . . . and the proceeds of
          sale applied, first, to the payment of delinquent of real

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            property taxes, then to the amounts due on [JBNC’s]
            Mortgage and the balance, if any, as determined by the
            Court.

(Emphasis in original.)

            Subsequently, JBNC purchased Namahoe’s home for

$85,904.96, and Namahoe was served with a Writ of Ejectment on

June 22, 2014. 8

     4.     Namahoe’s HRCP Rule 60(b) Motion for Relief

            On January 3, 2017, more than two and half years after

being served with the Writ of Ejectment, Namahoe filed a HRCP

Rule 60(b) Motion for Relief from Judgment, citing subsections

60(b)(3), (4), and (6). 9

      8     According to Namahoe, the loss of his only home caused him to
become unsheltered.

     9      HRCP Rule 60(b) states, in relevant part:

           Mistakes; inadvertence; excusable neglect; newly discovered
           evidence; fraud, etc. On motion and upon such terms as are
           just, the court may relieve a party or a party’s legal
           representative from a final judgment, order, or proceeding
           for the following reasons: . . . (3) fraud (whether
           heretofore denominated intrinsic or extrinsic),
           misrepresentation, or other misconduct of an adverse
           party; (4) the judgment is void; . . . or (6) any other
           reason justifying relief from the operation of the
           judgment. The motion shall be made within a reasonable
           time, and for reason[] . . .(3) not more than one year
           after the judgment, order, or proceeding was entered or
           taken. A motion under this subdivision (b) does not affect
           the finality of a judgment or suspend its operation. This
           rule does not limit the power of a court to entertain an
           independent action to relieve a party from a judgment,
           order, or proceeding, or to set aside a judgment for fraud
           upon the court.

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            Namahoe also submitted a declaration in which he

attested that he timely made the required repairs pursuant to

the Repair Rider, and that JBNC had no right to foreclose:

                  5. I understood I was supposed to make repairs after
            I received the money. A neighbor (name forgotten) who was
            a tenant of Nick Rapoza helped me repair the entire front
            porch railing and I bought putty and we plugged the leak in
            the carport roof and repaired the surface. There was no
            leaking after the repairs were done. This was all done
            right after I got the money and was simple to do. I used
            my own money and some labor to make the repairs.

                  [ . . . ]

                  7. I do not remember [Estacion] handing me the
            foreclosure Complaint on November 9, 2012. [Nor] do I
            recall signing any paper that I received the Complaint.   I
            would not have understood it anyway.

                  8. My first memory about the foreclosure was a
            telephone call from an attorney who said he wanted to
            inspect my house and property because it was his job to
            sell my house at a foreclosure auction. I was shocked! I
            did not know of any foreclosure. How come no one wrote me,
            telephoned me, or came to the house. I was always there
            because I had no car, very little money and only a few
            neighbors and relatives. I had to hitch rides from my
            house in remote Hawaiian Acres to shop for food and collect
            my mail at my post office box in Hilo. I was angry and
            upset and never heard again from the attorney.

            Namahoe’s HRCP Rule 60(b)(3) motion argued that JBNC

committed fraud by (1) failing to obtain an inspection by a HUD-

approved inspector as required by the Repair Rider, (2) failing

to use the $750.00 in set aside funds for repairs, and (3)

failing to give Namahoe a “realistic opportunity to have the

mortgage reinstated.” 10      Namahoe also argued that JBNC’s

attorneys, the law firm of Clay Chapman, committed fraud by

      10    Namahoe does not provide any additional factual basis for these
claims beyond his declaration.

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failing to include pertinent facts and disclosures in its

attorney affirmations as required by HRS § 667-17.

Specifically, Namahoe alleged that Clay Chapman failed to

disclose the aforementioned instances of alleged fraud in their

HRS § 667-17 affirmation, and that the attorneys failed to amend

the affirmation after the companion Domingo case clarified that

noncompliance with a similar repair rider was an inadequate

basis for foreclosure. 11     James B. Nutter & Co. v. Domingo, No.

CAAP-XX-XXXXXXX, 2016 WL 5920412 (App. Oct. 11, 2016) (SDO).

Namahoe also argued that his motion was timely because the

“final act” in the foreclosure proceeding was March 26, 2016,

when JBNC allegedly sold the Property to a third party. 12

      11    We take judicial notice of the court records in the unpublished
Domingo case, in accordance with Hawai‘i Rules of Evidence (HRE) Rule 201
(1993). James B. Nutter & Co. v. Domingo, No. CAAP-XX-XXXXXXX, 2016 WL
5920412 (App. Oct. 11, 2016) (summary disposition order). Because the
unpublished Domingo case figured prominently in the pleadings and oral
argument in this case, a brief summary is provided here.

            The Domingo foreclosure was similar to the Namahoe foreclosure,
including a nearly identical repair rider and loan called due for alleged
failure to make repairs. Id. at *1. Both Domingo and Namahoe asserted that
they completed necessary repairs. See id. at *1—2.

            The ICA affirmed the circuit court’s ruling that JBNC’s
assumption that Domingo had failed to make the required repairs was not a
sufficient justification to accelerate the mortgage note and seek
foreclosure. Id. The ICA affirmed the order and clarified that “JBNC’s
burden, . . . was to prove that at trial Domingo would be unable to prove
that the required repairs were done.” Id. at *2.

            The Domingo foreclosure action discussed above is distinct from
the Domingo v. James B. Nutter & Co., Civil No. 16-1-0249, CAAP-XX-XXXXXXX,
wrongful foreclosure action pending before the ICA. The latter action is
discussed in further detail below.

                                                             (continued . . .)

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            Next, Namahoe asserted that the Decree of Foreclosure

was void under HRCP Rule 60(b)(4) because, as a result of JBNC

allegedly “knowingly mailing notices to an address where there

was no mail delivery,” Namahoe was deprived of notice of the

foreclosure proceeding and an adequate opportunity to defend

against the action. 13

            Finally, Namahoe raised a HRCP Rule 60(b)(6) claim,

arguing that JBNC committed fraud on the court.           Unlike his HRCP

Rule 60(b)(3) fraud claim which centered on JBNC’s acts and

omissions in relation to Namahoe, the HRCP Rule 60(b)(6) motion

focused on an alleged “pattern of mortgage abuse” by lenders

such as JBNC who make it a part of their business operations to

bring “unfounded” foreclosure actions.

            JBNC did not present any new evidence rebutting the

statements in Namahoe’s declaration.         Rather, in response to

Namahoe’s HRCP Rule 60(b)(3) motion, JBNC responded that the

motion was untimely because the relevant final act in this case

was the July 2, 2013 Decree of Foreclosure.           With regard to

(. . . continued)
      12    Evidence of the alleged sale to a third party is not in the
record. However, JBNC did not dispute Namahoe’s claim that the property had
been sold on March 26, 2016.

      13    Namahoe did not present a factual basis for this allegation
beyond that he “believes that in accordance with the standard practice of the
United States Postal Service [JBNC] was receiving the returned envelopes
marked undeliverable,” and that JBNC subsequently mailed pleadings to
Namahoe’s P.O. Box after JBNC “already knew that the post office box had been
closed.” (Emphasis added.)

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Namahoe’s HRCP Rule 60(b)(4) motion, JBNC maintained that

Namahoe was personally served with the Complaint on November 9,

2012, and that neither JBNC nor the circuit court had an

affirmative duty to “track Namahoe down” due to Namahoe’s

failure to inform the court of any changes to his mailing

address.    Finally, on Namahoe’s HRCP Rule 60(b)(6) claim, JBNC

responded that even if it had committed fraud, which JBNC

disputes, the “substance of [Namahoe’s] allegations” fails to

rise to the level of “corruption of the judicial process itself”

as required by Cvitanovich-Dubie v. Dubie.          125 Hawaiʻi 128, 144,

254 P.3d 439, 455 (2011) (quoting Schefke v. Reliable Collection

Agency, Ltd., 96 Hawaiʻi 408, 431 n.42, 32 P.3d 52, 75 n.42

(2001), as amended (Oct. 11, 2001)).         Rather, JBNC’s alleged

acts of fraud only concerned “a single litigant.”            JBNC did not

present any additional evidence of Namahoe’s alleged

noncompliance with the terms of the reverse mortgage.

            The circuit court denied Namahoe’s HRCP Rule 60(b)

motion in full.     With regard to Namahoe’s HRCP Rule 60(b)(6)

fraud on the court argument, the court determined:

                  Regarding the fraud on the court type theories I’m
            going to think that that’s more properly addressed in
            [Domingo v. James B. Nutter & Co., Civil No. 16-1-0249,
            CAAP-XX-XXXXXXX].[ 14] I see that case as being that

      14    Domingo v. James B. Nutter & Co., Civil No. 16-1-0249, CAAP-17-
0000324, is pending before the ICA. It involves Domingo and Namahoe’s
wrongful foreclosure claims against JBNC. We take judicial notice of the
court records in this related case, in accordance with HRE Rule 201.

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          independent action that’s mentioned under Rule 60(b). And
          my impression is that independent action is not really a
          60(b) type motion.

                There’s still a fraud on the court type claim for
          relief by Mr. Namahoe against Clay Chapman. And Mr.
          Namahoe would have at least the opportunity to attempt to
          amend the pleadings in that case to state, let’s say, clear
          claims for relief against [JBNC]. So that's what the
          Court’s belief is.

          . . .

                I think Mr. Namahoe still has a claim for relief
          against . . . Clay Chapman. And then you have the
          opportunity to amend. I’m thinking that you already have
          that action already . . . . You did not need to go forward
          on the . . . case regarding those theories cause they’re in
          the [Domingo v. James B. Nutter & Co., Civil No. 16-1-0249,
          CAAP-XX-XXXXXXX] action. You already have the forum for
          that. It’s not as if I -- you know, the Court has to set
          aside the judgment here for you to be able to address your
          issues in the other case. It’s my thinking.

(Emphases added.)

          The circuit court presented Namahoe with a catch-22.

The circuit court required Namahoe to pursue his fraud on the

court claim against JBNC in the wrongful foreclosure action,

Domingo v. James B. Nutter & Co., Civil No. 16-1-0249,

CAAP-XX-XXXXXXX.    However, as noted at oral argument, Namahoe

was precluded by the circuit court from asserting a wrongful

foreclosure claim in that action due to the issuance of the

Decree of Foreclosure below.      Thus, Namahoe’s path to recovery

was effectively blocked, and his only opportunity for relief is

the instant case.

          On April 13, 2017, Namahoe filed a HRCP Rule 59 motion

for reconsideration of the circuit court’s order denying his

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motion for relief, arguing that Hungate v. Law Off. of David B.

Rosen, 139 Hawaiʻi 394, 391 P.3d 1 (2017), established the

importance of notice to foreclosure proceedings. 15          He added that

JBNC was aware that the notices mailed to the Property’s

physical address and the P.O. Box were deemed undeliverable and

any alleged personal service was ineffective because Namahoe’s

serious health conditions and his use of marijuana to treat his

pain impeded his comprehension.        The circuit court denied

Namahoe’s motion on the grounds that HRCP Rule 5(a) only

required JBNC to serve Namahoe with the Complaint, and that

Hungate did not provide an adequate basis for altering or

amending the denial of Namahoe’s HRCP Rule 60(b) motion.             See

HRCP Rule 5(a) (2019).

B.    ICA Appeal

            On appeal to the ICA, Namahoe raised two points of

error, arguing first that the circuit court erred in denying

Namahoe’s HRCP Rule 60(b) motion because (a) the Decree of

Foreclosure was obtained through JBNC’s fraud,

misrepresentation, and misconduct; (b) JBNC failed to provide

adequate notice to Namahoe; and (c) JBNC and its attorneys

      15    Hungate was decided in the context of a non-judicial foreclosure,
in which there is, by definition, no judicial officer to supervise and ensure
the integrity of the foreclosure process. 139 Hawaiʻi at 398, 391 P.3d at 5.
Accordingly, Hungate is distinguishable from the immediate case and need not
be discussed further.

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committed fraud on the court, all of which prevented Namahoe

from fairly presenting his case.       Namahoe next argued that the

circuit court abused its discretion by denying Namahoe’s HRCP

Rule 59 motion for reconsideration.

          With regard to his HRCP Rule 60(b) arguments, Namahoe

largely reiterated points raised before the circuit court.

Namahoe reasserted the claims underpinning his HRCP Rule

60(b)(3) motion, arguing that JBNC had no legal authority to

seek foreclosure because (1) Namahoe did not receive notice of

the proceedings; (2) JBNC did not notify Namahoe of his right to

reinstatement; (3) JBNC did not perform a HUD inspection

required by the Repair Rider; and (4) JBNC’s attorneys failed to

include the previous facts in its affirmation and failed to

amend the affirmation to include the related Domingo foreclosure

action, which involved JBNC, their same attorneys, and “the same

justification for the reverse mortgage foreclosure” which the

circuit court found improper and in violation of HRS § 667-17.

          Namahoe again raised his HRCP Rule 60(b)(4) claim,

asserting that the Decree of Foreclosure was void because

Namahoe lacked adequate notice of the proceeding, thus depriving

Namahoe of due process.

          In his HRCP Rule 60(b)(6) claim, Namahoe argued that

he was entitled to relief from the Decree of Foreclosure because

JBNC and its attorneys did not disclose all relevant facts to
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the circuit court.   Specifically, Namahoe asserted that JBNC’s

conduct rose to the level of fraud on the court because its

attorneys submitted an insufficient and misleading attorney

affirmation, as required by HRS § 667-17, despite the plain

language of the reverse mortgage not permitting foreclosure

under the circumstances.    Namahoe also reasserted his HRCP Rule

60(b)(3) fraud arguments, stating that JBNC had not informed

Namahoe of his right to reinstatement, did not inspect the

property using a HUD-approved inspector, and pursued foreclosure

despite the ruling in the Domingo foreclosure action.       These

errors by JBNC “went to the very heart of the circuit court’s

jurisdiction and [JBNC’s] ability to even foreclose.”

          With respect to the circuit court’s denial of

Namahoe’s HRCP Rule 59 Motion for Reconsideration, Namahoe

argued that the circuit court mistakenly concluded that JBNC’s

notices were sufficient.    Namahoe maintained that new evidence

provided in support of his HRCP Rule 59 motion demonstrated that

(1) JBNC was aware that Namahoe was not receiving mail at his

physical address and (2) Namahoe’s serious health conditions at

the time of the proceedings impeded his comprehension.

          The ICA affirmed the circuit court’s orders denying

Namahoe’s HRCP Rule 60(b) motion for relief and HRCP Rule 59

motion for reconsideration.    James B. Nutter & Co. v. Namahoe,

No. CAAP-XX-XXXXXXX, 2022 WL 899896 at *12 (App. March 28,
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2022).    First, the ICA held that Namahoe’s HRCP Rule 60(b)(3)

motion asserting fraud was untimely, as the applicable

“judgment, order, or proceeding” in this case was the Decree of

Foreclosure entered on July 2, 2013 — nearly four years before

Namahoe’s HRCP Rule 60(b)(3) motion.     Id. at *7.   Second, the

ICA determined from the record that Namahoe was personally

served with the Complaint and was therefore not denied due

process.    Id. at *7—9.   Third, the ICA held that the circuit

court did not abuse its discretion when it denied Namahoe relief

under HRCP Rule 60(b)(6) on the grounds that Namahoe could seek

appropriate relief in an alternate forum, i.e., his separate

wrongful foreclosure action against JBNC raised in Domingo v.

James B. Nutter & Co., Civil No. 16-1-0249, CAAP-XX-XXXXXXX.

Id. at *10—11.    The ICA also noted that by the time the JBNC

wrongful foreclosure suit was initiated by Domingo and Namahoe,

Namahoe’s property had already been purchased by JBNC at auction

and sold to a third party.     Id. at *11.

            Finally, the ICA affirmed the circuit court’s denial

of the Rule 59 motion and rejected Namahoe’s claims of new

evidence, finding that much of the evidence was not in fact new,

and that no “cogent argument” was raised as to why the allegedly

“new” evidence could not have been presented earlier.       Id. at

*11—12.

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C.   Supreme Court Proceedings

          Namahoe filed a timely application for a writ of

certiorari.

          First, he argues that the ICA erred in affirming the

lower court’s denial of his HRCP Rule 60(b)(3) motion because

(1) the one-year deadline began running on March 26, 2016, when

JBNC allegedly sold the property to a third party; (2) it did

not take into account the fact that JBNC’s foreclosure was based

on “allegedly unrepaired repairs” worth $500.00 and that JBNC

was aware that Namahoe actually made those repairs; and (3) it

“leave[s] the door open” for other bad actors to instigate

“bogus proceedings.”    (Emphasis in original.)

          Second, he argues that the ICA erred in affirming the

lower court’s denial of his HRCP Rule 60(b)(4) motion based on

the Return and Acknowledgement of Service.      Namahoe asserts that

the fact that the signature on the Return and Acknowledgement of

Service is “markedly different” from his signature on the Note,

Loan Agreement, and Repair Rider should have been sufficient to

rebut the prima facie evidence of notice.      He also argues that

the entire proceedings were void under Hungate, 139 Hawai‘i 394,

391 P.3d 1 (2017), because statutory notice requirements are

trumped by the more “stringent” notice requirements included in

the specific “loan/note/mortgage documents.”

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          Third, Namahoe asserts that the ICA erred in affirming

the circuit court’s denial of his HRCP Rule 60(b)(6) motion

because the circuit court failed to reach the merits of the

issue and “merely punted” it by declaring that Namahoe could

bring the claim in the separate wrongful-foreclosure action.

          Lastly, Namahoe asserts that the ICA erred by

affirming the circuit court’s denial of his HRCP Rule 59 motion,

because his counsel presented new information — after the

conclusion of his HRCP Rule 60(b) motion — regarding his P.O.

Box being closed in September 2013.     He further argued that the

ICA “missed the issue” in distinguishing Hungate because it

actually “stands for the proposition” that when loan and

mortgage documents require additional notice requirements on top

of those required by the statutes, “failure to comply” with the

additional requirements is “fatal to the foreclosure itself.”

Hungate, 139 Hawai‘i at 404, 391 P.3d at 11.

                     III.   STANDARDS OF REVIEW

A.   HRCP Rule 60(b) Relief From Judgment or Order

          “[T]he trial court has a very large measure of

discretion in passing upon motions under [HRCP] Rule 60(b) and

its order will not be set aside unless we are persuaded that

under the circumstances of the particular case, the court’s

refusal to set aside its order was an abuse of discretion.”

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Haw. Hous. Auth. v. Uyehara, 77 Hawai‘i 144, 147, 883 P.2d 65, 68

(1994) (quoting Paxton v. State, 2 Haw. App. 46, 48, 625 P.2d

1052, 1054 (1981)).     Therefore, the circuit court’s decisions

related to Namahoe’s HRCP Rule 60(b) motion are reviewed for an

abuse of discretion.     “The burden of establishing abuse of

discretion [in denying a HRCP Rule 60(b) motion] is on the

appellant, and a strong showing is required to establish it.”

Ditto v. McCurdy, 103 Hawai‘i 153, 162, 80 P.3d 974, 983 (2003).

           Notwithstanding this general rule, “under HRCP Rule

60(b)(4), an order is ‘void only if the court that rendered it

lacked jurisdiction of either the subject matter or the parties

or otherwise acted in a manner inconsistent with due process of

law.’”   In re Haw. Elec. Co., Inc., 149 Hawai‘i 343, 362—63, 489

P.3d 1255, 1274—75 (2021).      As such, a denial of a HRCP Rule

60(b)(4) motion is reviewed de novo.        See id.

B.   HRCP Rule 59 Motion for Reconsideration

                 As this court has often stated, “[t]he purpose of a
           motion for reconsideration is to allow the parties to
           present new evidence and/or arguments that could not have
           been presented during the earlier adjudicated motion.”
           Reconsideration is not a device to relitigate old matters
           or to raise arguments or evidence that could and should
           have been brought during the earlier proceeding.

Sousaris v. Miller, 92 Hawai‘i 505, 513, 993 P.2d 539, 547 (2000)

(citations omitted) (quoting First Ins. Co. of Haw. Ltd. v.

Lawrence, 77 Hawai‘i 2, 17, 991 P.2d 489, 504 (1994)).

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          The appellate court reviews a “trial court’s ruling on

a motion for reconsideration . . . under the abuse of discretion

standard.”   Ass’n of Apartment Owners of Wailea Elua, 100 Hawaiʻi

97, 110, 58 P.3d 608, 621 (2002).       An abuse of discretion occurs

if the trial court has “clearly exceeded the bounds of reason or

disregarded rules or principles of law or practice to the

substantial detriment of a party litigant.”         Amfac, Inc. v.

Waikiki Beachcomber Inv. Co., 74 Haw. 85, 114, 839 P.2d 10, 26

(1992).

C.   Foreclosure Actions

                Foreclosure is an equitable action. “Courts of
          equity have the power to mold their decrees to conserve the
          equities of the parties under the circumstances of the
          case.” A court sitting in equity in a foreclosure case has
          the plenary power to fashion a decree to conform to the
          equitable requirements of the situation. Whether and to
          what extent relief should be granted rests within the sound
          discretion of the court and will not be disturbed absent an
          abuse of such discretion.

Peak Cap. Grp., LLC v. Perez, 141 Hawaiʻi 160, 172, 407 P.3d 116,

128 (2017) (citations omitted) (quoting Honolulu, Ltd. v.

Blackwell, 7 Haw. App. 210, 219, 750 P.2d 942, 948 (1988)).

          A circuit court abuses its equitable discretion “by

issuing a decision that clearly exceeds the bounds of reason or

disregard[s] rules or principles of law or practice to the

substantial detriment of the appellant.”        Hawaii Nat’l Bank v.

Cook, 100 Hawaiʻi 2, 7, 58 P.3d 60, 65 (2002) (quoting Shanghai

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Inv. Co. v. Alteka Co., 92 Hawaiʻi 482, 493, 993 P.2d 516, 526

(2000)).

                            IV.   DISCUSSION

A.   Introduction

           We hold that the ICA did not err in affirming the

circuit court’s denial of Namahoe’s motions under HRCP Rule 59,

Rule 60(b)(3), and Rule 60(b)(4).       However, the ICA erred in

affirming the circuit court’s denial of relief under HRCP Rule

60(b)(6) for two reasons.    First, the record establishes that

JBNC failed to comply with HUD regulations and Hawaiʻi state law

in pursuit of foreclosure against Namahoe.       Thus, JBNC lacked

legal authority to foreclose and its attorneys provided the

lower court with an inadequate and misleading HRS § 667-17

attorney affirmation.    This conduct constitutes fraud on the

court for purposes of HRCP Rule 60(b)(6).

           Second, the balance of equities weighs heavily against

a decree of foreclosure for the alleged failure to complete

$500.00 worth of repairs.    HRCP Rule 60(b) allows courts to

relieve a party from a final judgment or order “upon such terms

as are just[.]”   Here, justice requires Namahoe to be afforded

an effective remedy.

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B.    The Legal Framework Protecting Homeowners

            Before analyzing JBNC’s conduct toward Namahoe in

isolation, a brief review of reverse mortgages and the relevant

regulatory landscape is warranted.           Reverse mortgages are

distinct from conventional mortgages both in their function and

purpose.    Reverse mortgages, of which home equity conversion

mortgages (HECMs) make up a significant portion, 16 are loans that

allow senior homeowners to withdraw a portion of their home’s

equity in the form of cash.       Consumer Financial Protection

Bureau, Reverse Mortgages: Report to Congress 5—6 (June 2012).

This provides seniors with capital to pay for living expenses

and other costs, with the loan only reaching maturity when the

borrower dies, sells the home or moves out, or fails to maintain

the property or pay necessary fees and taxes.             Id. at 5—6, 22;

see also HRS § 506-10 (2008) (listing the events that make a

reverse mortgage loan due).       This transaction for cash at the

expense of ownership of one’s home — the largest and most

significant asset most Americans possess — has significant

ramifications for senior citizens, their families, and the

communities in which they live.          Protecting Seniors: A Review of

      16    The mortgage at issue in   this case is specifically a home equity
conversion mortgage. HECMs are only    available for seniors above 62 years of
age who own a property and occupy it   as their principal residence. For
consistency with the briefs, circuit   court documents, and ICA Memorandum
Opinion, this court uses the broader   term “reverse mortgage.”

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the FHA’s Home Equity Conversion Mortgage (HECM) Program:

Hearing Before the Subcomm. on Housing, Community Development,

and Insurance of the H. Comm. on Financial Services, 116th Cong.

2 (2019) (statement of Rep. Wm. Lacy Clay, Chairman, H. Subcomm.

on Hous., Cmty. Dev., and Ins.) (“The racial wealth gap is

exacerbated as countless families[, largely racial minorities,]

are deprived of the chance to pass on their homes and other

property to their children and other heirs, leading to . . .

gutted city blocks, and less overall wealth.”)

            Seniors face a significant risk of abuse by lenders,

and the consequences of reverse mortgages can be unclear at the

time of signing, but disastrous for mortgagors.      See Reverse

Mortgages: Polishing Not Tarnishing the Golden Years: Hearing

Before the Senate Special Comm. on Aging, 110th Cong. 1 (2007)

(statement of Senator Herb Kohl, Chairman, Special Comm. on

Aging) (“[Reverse mortgage] [a]gents are targeting seniors

aggressively in ways that this Committee has seen before:

through direct mail, celebrity endorsements, and free lunch

seminars.    Marketers often gloss over the risks of a reverse

mortgage, but they convey the pay-off quite clearly.”);       Sarah

B. Mancini & Odette Williamson, Reversing Course: Stemming the

Tide of Reverse Mortgage Foreclosures Through Effective

Servicing and Loss Mitigation, 26 Elder L.J. 85, 86—87, 119—20

(2018) (“[o]lder adults who have taken out reverse mortgages are
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particularly resource-constrained.     They tend to take out these

loans as a last resort, motivated by a lack of sufficient income

to cover rising medical costs and other essential expenses.”).

Namahoe appears to have been targeted in a similar manner;

according to his declaration: “some folks came to my door and

told me I could obtain a loan and not pay back anything while I

lived and resided at the property.     I believed them and I

obtained what I understand was a reverse mortgage. . . . I spent

the money over the years paying bills and buying food.”

          Due to the significant risks of abuse by lenders and

inadequate understanding of reverse mortgage agreements by many

senior citizens, reverse mortgages and foreclosures are subject

to stringent rules and regulations promulgated by both federal

and state authorities.    Lenders offering loans backed by HUD, of

which reverse mortgages and HECMs are one type, are required to

make reasonable efforts to conduct face-to-face interviews with

delinquent mortgagors, 24 C.F.R. § 203.604 (2009), conduct loss

mitigation efforts to cure defaults, 24 C.F.R. §§ 203.605 (2009)

and 203.501 (2009), conduct pre-foreclosure review, 24 C.F.R.

§ 203.606 (2009), and facilitate reinstatement of the mortgage,

24 C.F.R. § 203.608 (2009).    Failure to comply with these

regulations may result in civil penalties or the withdrawal of a

mortgagee’s HUD approval.    24 C.F.R. § 203.500 (2009).

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            Our state legislature has also acted to combat

predatory lending in the context of reverse mortgages.             Lenders

are required to refer borrowers to HUD-approved counselors, and

must be presented with a signed certification confirming that

the borrower has received counseling prior to accepting an

application for a reverse mortgage loan.          HRS § 506-10.

            Further, in the aftermath of economic crash and

foreclosure crisis in the early-2010s, the legislature passed

HRS § 667-17.     The language of the attorney affirmation even

refers to the conditions that gave rise to the statute:

            During and after August 2010, numerous and widespread
            insufficiencies in foreclosure filings in various courts
            around the nation were reported . . . , including failure
            to review documents and files to establish standing and
            other foreclosure requisites; filing of notarized
            affidavits that falsely attest to such review and to other
            critical facts in the foreclosure process; and
            “robosignature” of documents.

HRS § 667-17.

            Importantly for this appeal, HRS § 667-17 requires

attorneys filing on behalf of mortgagees seeking foreclosure to

sign and submit an affirmation that the attorney has verified

the accuracy of filed documents, and confirm that the lender has

an adequate factual and legal basis for pursuing foreclosure. 17

As officers of the court, attorneys for mortgagees seeking

      17    HRS § 667-17 states, “[a]ny attorney who files on behalf of a
mortgagee seeking to foreclose on a residential property under this part
shall sign and submit an affirmation that the attorney has verified the
accuracy of the documents submitted, under penalty of perjury and subject to
applicable rules of professional conduct.” HRS § 667-17.

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foreclosure must affirm not only the accuracy of the factual

allegations underlying foreclosure, but also the legal

sufficiency of foreclosure claims. 18       Id.      Attorneys are also

under a “continuing obligation to amend” the affirmation in the

event of newly discovered material facts after filing.             Id.

            It is within this expansive legislative and regulatory

framework that JBNC and its attorneys at Clay Chapman pursued

foreclosure on Namahoe’s only home — all on the basis of a

$500.00 repair obligation.

C.    The ICA Did Not Err in Affirming the Circuit Court’s Denial
      of Namahoe’s HRCP Rule 59, Rule 60(b)(3), and Rule 60(b)(4)
      Motions

      1.    HRCP Rule 59 Motion for Reconsideration

            Namahoe asserts that the ICA erred in affirming the

circuit court’s denial of his HRCP Rule 59 19 motion for

      18    One of the form affirmations in § 667-17 states:

                  Based upon my communication with [the foreclosing
            entity], as well as upon my own inspection and other
            reasonable inquiry under the circumstances, I affirm that,
            to the best of my knowledge, information, and belief, the
            Summons, Complaint, and other papers filed or submitted to
            the Court in this matter contain no false statements of
            fact or law and that plaintiff has legal standing to bring
            this foreclosure action.

(Emphasis added.)

      19    HRCP Rule 59 states, in relevant part:

                  (a) Grounds. A new trial may be granted to all or
            any of the parties and on all or part of the issues (1) in
            an action in which there has been a trial by jury, for any
            of the reasons for which new trials have heretofore been
                                                             (continued . . .)

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reconsideration despite (1) the existence of “new evidence”

showing the P.O. Box was closed in September 2013; and (2) the

supreme court decision in Hungate, decided shortly before his

HRCP Rule 60(b) motion, which stands for the proposition that

failure to comply with the terms of a mortgage is fatal to the

foreclosure itself. 20    Hungate v. Law Off. of David B. Rosen, 139

Hawaiʻi 394, 391 P.3d 1 (2017).

            This court has stated, “[t]he purpose of a motion for

reconsideration is to allow the parties to present new evidence

and/or arguments that could not have been presented during the

earlier adjudicated motion.”        Amfac, 74 Haw. at 114, 839 P.2d at

27.   “Reconsideration is not a device to relitigate old matters

or to raise arguments or evidence that could and should have

(. . . continued)
            granted in actions at law in the courts of the state; and
            (2) in an action tried without a jury, for any of the
            reasons for which rehearings have heretofore been granted
            in suits in equity in the courts of the State. On a motion
            for a new trial in an action tried without a jury, the
            court may open the judgment if one has been entered, take
            additional testimony, amend findings of fact and
            conclusions of law or make new findings and conclusions,
            and direct the entry of a new judgment.

      20    The ICA correctly distinguished Hungate. In Hungate, this court
held that in a non-judicial foreclosure, the mortgagee has a duty to follow
statutory and contractual notice requirements in order to ensure the borrower
receives adequate notice of the foreclosure proceeding. Hungate, 139 Hawaiʻi
at 403-04, 391 P.3d at 10-11. While Namahoe is seeking to void a judgment in
a reverse-mortgage judicial-foreclosure proceeding, Hungate instead dealt
with non-judicial foreclosure — a distinct procedure. See id. at 399, 391
P.3d at 6. That is, Hungate is premised on clarifying the burdens on the
mortgagee in the context of a proceeding in which “[t]here is no neutral
party, such as a court, [to] supervis[e] the sale and ensur[e] a fair and
reasonable process.” Id. at 409, 391 P.3d at 16. Such is not the case here,
where the judgment of foreclosure was rendered by the circuit court.

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been brought during the earlier proceeding.”      Sousaris, 92

Hawai‘i at 513, 993 P.2d at 547 (2000).

          In order for reconsideration to be granted on the

basis of newly discovered evidence: “(1) it must be previously

undiscovered even though due diligence was exercised; (2) it

must be admissible and credible; (3) it must be of such a

material and controlling nature as will probably change the

outcome and not merely cumulative or tending only to impeach or

contradict a witness.”    Kawamata Farms, Inc. v. United Agri

Products, 86 Hawai‘i 214, 251, 948 P.2d 1055, 1092 (1997)

(quoting Orso v. City & Cnty. of Honolulu, 56 Haw. 241, 250, 534

P.2d 489, 494 (1975), overruled on other grounds by Kahale v.

City & Cnty. of Honolulu, 104 Hawai‘i 341, 90 P.3d 233 (2004)).

          Here, the ICA correctly noted that Namahoe’s arguments

regarding notice were already made as part of his HRCP Rule

60(b) motion.   James B. Nutter & Co. v. Namahoe, No. CAAP-17-

0000496, 2022 WL 899896 at *11—12.     Most importantly, as the ICA

concluded, “there is no cogent argument as to why the ‘new’

evidence and arguments concerning proper notice could not have

been presented earlier.”    Id. at *11.

     2.   HRCP Rule 60(b)(3)

          Namahoe asserts that the ICA erred in affirming the

circuit court’s denial of his HRCP Rule 60(b)(3) motion for

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untimeliness.    According to the circuit court, the event that

triggered the countdown to the one-year deadline was the circuit

court’s July 2, 2013 Decree of Foreclosure.      Namahoe filed his

HRCP Rule 60(b)(3) motion on January 3, 2017, well past the one-

year deadline.    Namahoe contends that the “final act” was when

JBNC sold the property to a third party in 2016, thus making his

motion timely.

          We disagree with Namahoe, and hold that his HRCP Rule

60(b)(3) motion was untimely.     The ICA correctly noted that

“Namahoe argued that [JBNC’s] fraud, misrepresentation, and

misconduct occurred when [JBNC] sought and obtained foreclosure

against Namahoe on impermissible grounds.”      James B. Nutter &

Co. v. Namahoe, No. CAAP-XX-XXXXXXX, 2022 WL 899896 at *7 (App.

March 28, 2022) (emphasis added).      As a result, Namahoe was

seeking “relief from the Foreclosure Judgment itself . . . [and]

not from the sale of the Property to a third party after the

Property’s sale to [JBNC] was confirmed.”      Id. at *7.   Thus, the

final judgment, for purposes of HRCP Rule 60(b)(3), was the 2013

Decree of Foreclosure and Namahoe’s motion was untimely.

     3.   HRCP Rule 60(b)(4)

          Namahoe next argues that the Decree of Foreclosure was

void due to lack of service, because JBNC allegedly mailed

notices to Namahoe’s home address despite that address not

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receiving mail delivery. 21     However, the November 9, 2012 Return

and Acknowledgment of Service was signed by Namahoe, comprising

prima facie evidence of valid service.          Namahoe was served with

all required documents, including the Complaint, Foreclosure

Mediation Notice and Foreclosure Mediation Request, and Summons.

[ICA Dkt. 35:81]     Furthermore, had Namahoe wanted to contest the

signature, HRS § 634-22 (2013) provides the means for him to

examine the process server.       Namahoe requested no such

examination.

            Having established that the above documents were

properly served, Namahoe was not deprived of notice.            As the ICA

correctly states — and Namahoe does not challenge — under HRCP

Rule 5(a), “no service need be made on parties in default for

failure to appear, except that pleadings asserting new or

additional claims for relief against them shall be served upon

them in the manner provided for service of summons in Rule 4 of

these Rules.”     HRCP Rule 5(a) (2000) (emphasis added).

Therefore, once the complaint was personally served on Namahoe,

JBNC was not required to serve subsequent filings, as long as it

did not assert additional claims.

      21    Namahoe also alleges that JBNC continued sending mail to
Namahoe’s P.O. Box despite knowing that it had been deactivated.

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D.   The ICA Erred in Affirming the Circuit Court’s Denial of
     Namahoe’s HRCP Rule 60(b)(6) Motion

            Namahoe is entitled to relief pursuant to his HRCP

Rule 60(b)(6) motion on two grounds: (1) JBNC and its attorneys

committed fraud on the court, and (2) principles of equity

necessitate relief from the operation of the foreclosure

judgment.    Accordingly, we reverse the ICA’s decision affirming

the circuit court’s denial of Namahoe’s HRCP Rule 60(b)(6)

motion, and vacate the Decree of Foreclosure insofar as it would

preclude Namahoe from asserting a wrongful foreclosure claim

against JBNC. 22

     1.     JBNC committed fraud on the court

            This case presents an opportunity to clarify the

applicability of a HRCP Rule 60(b)(6) fraud on the court theory

to this set of facts.      Namahoe asserts that the circuit court

abused its discretion in “merely punt[ing]” his fraud on the

court claim in the separate Domingo wrongful foreclosure action

against JBNC, which is currently on appeal.           We agree that the

circuit court’s denial of a remedy was an abuse of discretion,

and that Namahoe was entitled to relief in the immediate action.

            This court has defined fraud on the court as “a wrong

against the institutions set up to protect and safeguard the

     22     This decision has no bearing on the judgment confirming sale.

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public, institutions in which fraud cannot complacently be

tolerated consistently with the good order of society.”             Schefke

v. Reliable Collection Agency, Ltd., 96 Hawaiʻi 408, 430, 32 P.3d

52, 74 (2001) (quoting Kawamata Farms, 86 Hawai‘i at 256, 948

P.2d at 1097).     Our case law has provided examples of what rises

to the level fraud on the court.          As this court further

explained:

            Not any fraud connected with the presentation of a case
            amounts to fraud on the court. It must be a “direct
            assault on the integrity of the judicial process.” Courts
            have required more than nondisclosure by a party or the
            party’s attorney to find fraud on the court. Examples of
            such fraud include “bribery of a judge,” and “the
            employment of counsel in order to bring an improper
            influence on the court.”

Schefke, 96 Hawai‘i at 431, 32 P.3d at 75 (citations omitted).

            Pursuant to HRCP Rule 60(b)(6), courts have broad

authority to provide relief from final judgments obtained by

fraud on the court, upon a motion made “within a reasonable

time.” 23   Unlike other motions for relief or reconsideration of a

judgment, courts retain flexibility to exercise this power in

the face of fraud on the court, precisely because a decision

obtained through such means cannot be final.           See Kenner v.

Comm’r of Internal Revenue, 387 F.2d 689, 691 (7th Cir. 1968)

(“[I]t can be reasoned that a decision produced by fraud on the

court is not in essence a decision at all, and never becomes

      23    The “reasonable time” limit notably contrasts with the one-year
limit on HRCP Rule 60(b)(3) fraud claims.

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final.”); see also PennyMac Corp. v. Godinez, 148 Hawaiʻi 323,

328—329, 474 P.3d 264, 269—270 (2020) (noting that the purpose

of HRCP Rule 60(b) motions “is to authorize the reopening of a

closed case or a final order,” and that “[Appellant’s] HRCP Rule

60(b) motion was not a new action but rather a continuation of

the original foreclosure case.”).      Further, we have expressed a

“preference for judgments on the merits over the finality of

judgments procured through fraud.”     Matsuura v. E.I. du Pont de

Nemours and Co., 102 Hawai‘i 149, 157—58, 73 P.3d 687, 695—96

(2003).

          Fraud on the court cannot be neatly defined, but it is

understood by courts, including this court, to affect more than

the litigants in the underlying dispute.      Cvitanovich-Dubie, 125

Hawaiʻi at 144—46, 254 P.3d at 455—57.     Like other jurisdictions,

we narrowly interpret fraud on the court.      Compare id., with Ray

v. Ray, 647 S.E.2d 237, 239 (S.C. 2007) (“Generally speaking,

only the most egregious misconduct . . . in which an attorney is

implicated will constitute fraud on the court.”) (citation

omitted), and SEC v. N. Am. Clearing, Inc., 656 F. App’x 947,

949 (11th Cir. 2016) (stating that the fraud on the court

standard “is more exacting than the standard for fraud under

[Federal Rules of Civil Procedure (FRCP)] Rule 60(b)(3),

encompassing only the most egregious misconduct . . . .”).

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Otherwise, judgments would remain subject to challenge in

perpetuity, and the one-year time limitation on motions for

relief predicated on regular fraud pursuant to HRCP Rule

60(b)(3) would be hollowed.

          Despite the high threshold for a finding of fraud on

the court, we find that JBNC committed fraud on the court in

pursuit of this foreclosure against Namahoe.

          Namahoe’s fraud on the court claim is premised on

JBNC’s initiation of foreclosure proceedings “without fully

disclosing to the lower court the facts supporting the

foreclosure.”   Specifically, Namahoe argues that JBNC did not

diligently verify whether he actually failed to make the

required repairs through use of a HUD-approved inspector, and

JBNC did not provide the court with evidence of Namahoe’s

alleged failure to make the repairs.

          In response to Namahoe’s HRCP Rule 60(b)(6) motion,

JBNC did not present evidence of Namahoe’s alleged failure to

make the repairs.   JBNC instead reiterates its assertion that

Namahoe failed to make the repairs, and argues that it was

simply following HUD protocol in calling the loan due and

payable — and pursuing foreclosure — as a result of Namahoe’s

failure to comply with the Repair Rider.      JBNC also responds

that its actions in this case do not pass the threshold to

support a finding of fraud on the court because they involve the
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parties to the case only.     In other words, their conduct does

not implicate the judicial process writ large.         However, JBNC’s

conduct does not just involve Namahoe.

          Attorneys representing foreclosing lenders must verify

and affirm to the court the accuracy of documents proffered by

the lender/client in order to prevent unwarranted foreclosures.

HRS § 667-17.   Attorney affirmations in foreclosure proceedings

are a statutory means of protecting homeowners from wrongful

foreclosure, as they prevent the courts from advancing fraud by

lenders in foreclosure actions.      Id.   According to the statutory

mandate, attorneys shall file an affirmation with the court

“that the attorney has verified the accuracy of the documents

submitted, under penalty of perjury and subject to applicable

rules of professional conduct.”      Id.   The purpose of the statute

“is to prevent unwarranted foreclosure actions on residential

property by requiring an attorney who files a judicial

foreclosure . . . to also submit a signed affidavit to the court

. . . stating that the attorney has verified the accuracy of the

document submitted.”    H. Stand Comm. Rep. No. 697-14, in 2014

House Journal, at 1127.     The statute specifically notes that:

          During and after August 2010, numerous and widespread
          insufficiencies in foreclosure filings in various courts
          around the nation were reported by major mortgage lenders
          and other authorities, including failure to review
          documents and files to establish standing and other
          foreclosure requisites; filing of notarized affidavits that
          falsely attest to such review and to other critical facts

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            in the foreclosure process; and “robosignature” of
            documents.

HRS § 667-17.

            Failure to submit adequate documentation, including

the attorney affirmation, has been determined to be an adequate

basis for denial of a motion for summary judgment.               Wells Fargo

Bank, N.A. v. Fong, 149 Hawaiʻi 249, 252, 255—56, 488 P.3d 1228,

1231, 1234—35 (2021).      It is reasonably inferred that to require

attorney affirmations is to also require them to be accurate and

complete.    Anything less would render the statutory requirement

meaningless.    See In re City & Cnty. of Honolulu Corp. Counsel,

54 Haw. 356, 373, 507 P.2d 169, 178 (1973) (“It is a cardinal

rule of statutory construction that a statute ought upon the

whole be so construed that, if it can be prevented, no clause,

sentence or word shall be superfluous, void, or

insignificant.”); Korean Buddhist Dae Won Sa Temple of Haw. v.

Sullivan, 87 Hawaiʻi 217, 230, 953 P.2d 1315, 1328 (1998) (courts

can consider “[t]he reason and spirit of the law, and the cause

which induced the legislature to enact it . . . to discover its

true meaning.”) (bracket and ellipsis points in original).

Because attorney affirmations are representations to the court,

an inaccurate, incomplete, or otherwise misleading HRS § 667-17

affirmation may constitute a misrepresentation to the court.

Accordingly, an inadequate attorney affirmation may rise to the

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level of fraud on the court.        In these instances, relief from

the Decree of Foreclosure is justified. 24

            Here, the attorney affirmation submitted in support of

the foreclosure of Namahoe’s home was inaccurate and incomplete

in several respects.      JBNC appears to have initiated foreclosure

despite having knowledge that it failed to comply with the

Repair Rider — the violation of which triggered the foreclosure.

According to the Repair Rider attached to JBNC’s complaint, the

burden was on JBNC to certify “that the repairs which are funded

under this Repair Rider will be completed in a manner to meet

HUD property standards required by the Secretary as determined

by a HUD-approved inspector.”        However, the record is devoid of

any admissible evidence of Namahoe’s alleged failure to carry

out the repairs.     As the ICA stated in its Memorandum Opinion,

“there is no declaration or other evidence in the record of the

            24     The circuit court in the Domingo and Namahoe foreclosure
action in Domingo v. James B. Nutter & Co., Civil No. 16-1-0249,
CAAP-XX-XXXXXXX, highlighted the importance of the attorney affirmation:
                   If the representations contained in the affirmation
            required under HRS § 667-17 are not directed to the
            mortgagor, then to whom are they directed? Quite clearly
            they are directed to the Court presiding over the
            foreclosure case. The Court implicitly relies upon the
            attorney affirmation. The attorney affirmation “helps
            ensure that Hawaiʻi’s courts are not used as instruments of
            fraud in foreclosure actions.” Conf. Comm. Rep. No. 62-12,
            in 2013 House Journal, 27th Leg., Reg. Sess. at 1632 (Haw.
            2013).
                   Since the attorney affirmation contains
            representations to the Court, if the attorney affirmation
            contains misrepresentations they are misrepresentations to
            the Court. Sanctions and remedies may be available as a
            result of these misrepresentations to the Court.

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particular repairs Namahoe allegedly failed to complete.”             No.

CAAP-XX-XXXXXXX, 2022 WL 899896 at *11 n.10 (App. March 28,

2022) (emphasis added).       Furthermore, nowhere in the record does

JBNC confirm that Namahoe’s property had been inspected by a

HUD-certified inspector. 25     Pursuant to the Repair Rider, JBNC

had the independent duty to ensure that a HUD-approved inspector

had inspected Namahoe’s property prior to initiating foreclosure

proceedings.

            By submitting an attorney affirmation in support of

foreclosure against Namahoe, without first verifying that there

was an adequate factual and legal basis for foreclosure pursuant

HRS § 667-17, the attorney affirmation falsely affirmed the

sufficiency of the basis for the foreclosure.            This failure by

JBNC and its attorneys supports a finding of fraud on the court.

            In its Memorandum Opinion, the ICA concluded that the

circuit court did not abuse its discretion when it denied

Namahoe’s HRCP Rule 60(b) motion because “the foreclosure

proceedings were final and unappealable, Namahoe had been

ejected from his home, and the Property had been purchased by

[JBNC] and sold to a third party.”         Id. at *11.    Implicit in its

decision, and more directly addressed in JBNC’s Answering Brief,

      25    Based on the current record, it is unknown whether any inspectors
were sent to survey the state of repairs on Namahoe’s property. Namahoe
attests that two individuals inspected his property, but that none indicated
any problems with Namahoe’s repairs.

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is that “any need for Namahoe to reopen these proceedings was

substantially outweighed by the value of finality in this

litigation.”     However, JBNC’s conduct toward Namahoe and the

subsequent filing of a legally and factually deficient attorney

affirmation led the circuit court to conclude that applicable

statutes, regulations, and contractual provisions were followed.

These failures pass the threshold to constitute fraud on the

court, and, accordingly, the circuit court erred in denying

Namahoe’s HRCP Rule 60(b)(6) motion for relief insofar as it

would otherwise preclude Namahoe from asserting a wrongful

foreclosure counterclaim.

  2.      Principles of equity necessitate relief

          Namahoe’s claim for relief under HRCP Rule 60(b)(6)

should also have been granted because JBNC had no equitable

basis to pursue foreclosure in these specific circumstances.        We

hold that the circuit court abused its discretion in denying

Namahoe relief.

          The function of the court in a foreclosure proceeding

is to ascertain the precise amount due under the mortgage.

Honolulu, Ltd. v. Blackwell, 7 Haw. App. 210, 219, 750 P.2d 942,

948 (1988).    A key factor in the court’s determination of

whether and to what extent to provide equitable relief is

whether forfeiture would be harsh and unreasonable under the

circumstances.    Jenkins v. Wise, 58 Haw. 592, 597—98, 574 P.2d
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1337, 1341 (1978).   We can think of no better example of a harsh

and unreasonable forfeiture than foreclosure of one’s home based

on an alleged default of a $500.00 agreement.

           A court’s discretionary decision shall not be set

aside “unless manifestly against the clear weight of the

evidence.”   Id. at 598, 574 P.2d at 1342.     Here, because JBNC

failed to disclose all pertinent evidence, the circuit court

issued its judgment and denied equitable relief without availing

itself of all relevant facts.     A careful review of the record

leads us to conclude that the Decree of Foreclosure was in

error.

           As we explained in Jenkins, “[e]quity, . . . abhors

forfeitures and where no injustice would thereby result to the

injured party, equity will generally favor compensation rather

than forfeiture against the offending party.”      Id. at 597, 574

P.2d at 1341.   We have also held in the wrongful foreclosure

context that “where the property has passed into the hands of an

innocent purchaser for value, . . . an action at law for damages

is generally the appropriate remedy.”     Delapinia v. Nationstar

Mortgage LLC, 150 Hawai‘i 91, 101-02, 497 P.3d 106, 116-17 (2021)

(quoting Mount v. Apao, 139 Hawai‘i 167, 180, 384 P.3d 1268, 1281

(2016)).

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             Accordingly, we hold that Namahoe’s HRCP Rule 60(b)(6)

motion should have been granted on this alternate ground, and

that, accordingly, he should not be precluded from seeking

relief in the form of a wrongful foreclosure counterclaim

against JBNC.

     3.    Namahoe’s HRCP Rule 60(b)(6) motion is not time barred

             Unlike HRCP Rule 60(b)(3) fraud, which imposes a one-

year time limit, a party seeking relief under HRCP Rule 60(b)(6)

must bring their motion “within a reasonable time.”       HRCP Rule

60(b).    We have interpreted HRCP Rule 60(b)(6) as requiring

litigants to establish “the existence of ‘extraordinary

circumstances’ that prevented or rendered [them] unable to

prosecute an appeal” within the “reasonable time” period.       Haw.

Hous. Auth. v. Uyehara, 77 Hawaiʻi 144, 148—49, 883 P.2d 65, 69—

70 (1994).    Under the similar federal rule, relief is available

under FRCP Rule 60(b)(6) (2007) “within a reasonable time.”

FRCP Rule 60(c)(1) (2007).    This phrasing has been interpreted

to mean that relief is available “only where extraordinary

circumstances prevented a litigant from seeking earlier, more

timely relief.”     U.S. v. Alpine Land & Reservoir Co., 984 F.2d

1047, 1049 (9th Cir. 1993).

           Our case law sets a high bar.    In Uyehara, Uyehara

filed his Rule 60(b) motion over three-and-a-half years after

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the entry of the order.    77 Hawaiʻi at 149, 883 P.2d at 70

(1994).   Uyehara claimed that his delay in filing was “not

unreasonable because, throughout this period, [Uyehara] was

attempting to obtain counsel.”     Id.    This court concluded,

however, that “even under the more relaxed time limitations of

HRCP Rule 60(b)(6), it is unreasonable for Uyehara to claim that

three and one-half years is a reasonable time expenditure for

obtaining an attorney.”    Id.; see Aiona v. Wing Sing Wo Co., 45

Haw. 427, 432, 368 P.2d 879, 882 (1962) (“‘There must be an end

to litigation someday, and free, calculated, deliberate choices

are not to be relieved from.’     Three years is far in excess of a

reasonable time within which to make a decision as to choice of

remedy.”) (quoting Ackermann v. U.S., 340 U.S. 193, 198 (1950)).

          Here, Namahoe has demonstrated extraordinary

circumstances that would justify waiting more than three years

from the filing of the Decree of Foreclosure — and more than two

years from the filing of the Order Confirming Sale — to file his

Rule 60(b) motion.   Namahoe recounted that he had “no memory of

being served or signing a paper that I was served,” and that he

was receiving care for an illness.       Namahoe further claims that

after the Writ of Ejectment was served, he was forced to live in

a van “until it broke down.”    This inquiry is fact-specific and

determined on a case-by-case basis.      See Alpine Land, 984 F.2d

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at 1049.   Here, Namahoe has shown that the delay was warranted

due to his personal circumstances which were, in significant

part, generated by JBNC’s conduct.

                           V.   CONCLUSION

           Namahoe presented two valid bases for relief from the

Decree of Foreclosure issued by the circuit court.       We find that

JBNC committed fraud on the court, and that the balance of

equities weighed against foreclosure in this case.       Thus, the

circuit court’s denial of Namahoe’s HRCP Rule 60(b)(6) motion is

hereby reversed, and the Decree of Foreclosure is vacated

insofar as it would preclude Namahoe from asserting a wrongful

foreclosure claim.   We remand for further proceedings consistent

with this opinion.

Kai K.A. Lawrence,              /s/ Mark E. Recktenwald
William J. Rosdil,
for petitioner                  /s/ Paula A. Nakayama

David J. Minkin,                /s/ Sabrina S. McKenna
for respondent
                                /s/ Michael D. Wilson

                                /s/ Todd W. Eddins

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