Court Opinion

ID: 8483586
Source: CourtListenerOpinion
Date Created: 2022-11-14 19:02:15.124327+00
Date Added: 2024-06-11T16:49:46.810646
License: Public Domain

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                                                     Electronically Filed
                                                     Intermediate Court of Appeals
                                                     CAAP-XX-XXXXXXX
                                                     14-NOV-2022
                                                     08:10 AM
                                                     Dkt. 69 MO

                             NO. CAAP-XX-XXXXXXX

                    IN THE INTERMEDIATE COURT OF APPEALS

                           OF THE STATE OF HAWAI#I

                 KURT P. MACCARLEY, Plaintiff-Appellant,
                                    v.
         COUNTRYWIDE FINANCIAL CORPORATION, INC.; COUNTRYWIDE
         HOME LOANS, INC.; BANK OF AMERICA CORPORATION, INC.;
           LANDSAFE, INC.; LANDSAFE APPRAISAL SERVICES, INC.;
          JOSEPH MICHAEL MAGALDI, III, Defendants-Appellees,
                                   and
                DOES 1 through 20, inclusive, Defendants

          APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT
                         (CIVIL NO. 10-1-339)

                             MEMORANDUM OPINION
         (By:    Ginoza, Chief Judge, Leonard and Nakasone, JJ.)

                Plaintiff-Appellant Kurt P. MacCarley (MacCarley)
appeals from the "Amended Judgment" filed on April 24, 2017, by
the Circuit Court of the Third Circuit (Circuit Court),1 and
challenges the "Order Granting Defendants Countrywide Financial
Corporation, Inc.; Countrywide Home Loans, Inc.; Bank of America
Corporation, Inc.; Landsafe, Inc.; and Landsafe Appraisal
Services, Inc.'s Motion to Dismiss Second Amended Complaint"
(Order Granting Motion to Dismiss SAC) entered on July 13, 2015.

     1
          The Honorable Greg K. Nakamura presided.
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

          This appeal arises from a civil action in which
MacCarley filed claims against Defendants-Appellees Countrywide
Financial Corporation, Inc. (Countrywide Financial) and
Countrywide Home Loans, Inc. (Countrywide Home Loans)
(collectively Countrywide); Bank of America Corporation, Inc.
(Bank of America); Landsafe, Inc. (Landsafe); and Landsafe
Appraisal Services, Inc. (Landsafe Appraisal) (collectively the
Entity Defendants).   MacCarley also asserted claims against
Defendant Joseph Michael Magaldi, III (Magaldi).
          MacCarley's Second Amended Complaint (SAC) asserts,
inter alia, that after receiving an advertisement from
Countrywide about a "Dream Loan," he contacted Countrywide's call
center and was told he would be pre-approved for a "One-Time
Close Loan," which was a single loan for the purchase and
construction of property with one set of loan costs and charges.
The SAC then alleges that Countrywide's call center persuaded
MacCarley to speak with Magaldi, who was described as a real
estate agent with "Hawaiian Dream Properties" who had "lots of
good deals," but MacCarley was not informed that Magaldi was an
employee or agent of Countrywide as a mortgage solicitor/loan
officer and home loan consultant. The SAC alleges Magaldi
falsely represented to MacCarley that he was being offered the
best loans available to him when Countrywide was instead steering
MacCarley into a subprime loan calculated to increase revenues to
Countrywide; Magaldi persuaded MacCarley to purchase a lot
(Property) located in Volcano on Hawai#i Island to build his
"dream home," by promising the property was a bargain and that
MacCarley would have $500,000 in equity because the 5 acre lot
could be sub-divided to sell as five separate homes. The SAC
further alleged that when Countrywide recommended Magaldi to
MacCarley as a real estate agent, Magaldi provided a real estate
license number that belonged to another person which he used on
loan documents and agreements, and although Magaldi was employed
by Countrywide as a mortgage solicitor he was not licensed as
such. The SAC further alleges Magaldi assured MacCarley he could
easily get county approval to subdivide the property, which

                                  2
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

induced MacCarley to make the purchase. The SAC also alleges
that appraisals were done by Landsafe that were higher than
warranted so that MacCarley could afford the deposit amount. The
SAC alleges that on July 10, 2006, Magaldi traveled to Los
Angeles for the loan closing, documents were not provided to
MacCarley and he later learned that rather than the one simple
loan he had been promised, there were three extremely complicated
loans with their own costs, fees, penalties and interest. The
SAC further contends that Countrywide provided MacCarley with
another Truth in Lending Disclosure Statement, which he signed
with other loan documents on April 22, 2008, which showed his
mortgage payments and increases over time. Finally, the SAC
alleges that in November 2009, MacCarley obtained a judgment
against Magaldi in a lawsuit filed in Civil No. 07-1-0413 in the
Circuit Court, for numerous claims.
          The SAC alleges three counts: Breach of Contract (count
I), Unfair and Deceptive Trade Practices (UDAP) (count II), and
Injunction (count III).
          On appeal, MacCarley raises three points of error. He
asserts that the Circuit Court erred in granting the Entity
Defendants' Motion to Dismiss Second Amended Complaint (Motion to
Dismiss SAC) by (1) dismissing his UDAP claim for failure to file
it within the four-year limitations period under Hawaii Revised
Statutes (HRS) § 480-24 (2008);2 and (2) dismissing the breach of
contract claim for insufficient factual pleading.            MacCarley also

      2
         At the time the underlying action was commenced, HRS § 480-24
provided, in relevant part:
                  §480-24 Limitation of actions. (a) Any action to
            enforce a cause of action arising under this chapter shall
            be barred unless commenced within four years after the cause
            of action accrues, except as otherwise provided in
            subsection (b) and section 480-22. For the purpose of this
            section, a cause of action for a continuing violation is
            deemed to accrue at any time during the period of the
            violation.
(Emphasis added.) HRS § 480-24 has since been amended by deleting subsection
(b) and the "subsection (b) and" language in subsection (a). 2016 Haw. Sess.
Laws Act 7, § 2 at 7.

                                      3
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

contends the Circuit Court erred in dismissing fraud claims that
had been asserted in the First Amended Complaint.
          We conclude MacCarley timely filed his UDAP claim
within the four-year limitations period under HRS § 480-24
(2008); MacCarley sufficiently asserted a claim for "breach of
good faith and fair dealing" against Countrywide Home Loans and
Bank of America, but not the other Entity Defendants; and that
MacCarley abandoned his fraud claims by not seeking to reassert
them in his Second Amended Complaint. We thus affirm in part and
vacate in part.
                         I. UDAP Claim
          In his first point of error, MacCarley contends the
Circuit Court erred in dismissing his UDAP claim on the basis
that this claim was not filed within the four-year statute of
limitations period under HRS § 480-24. In addition, MacCarley
argues that because the UDAP claim was first filed in federal
court in June 20093 and later voluntarily dismissed, the
limitations period for refiling in state court was tolled
pursuant to 28 U.S.C.A. § 1367(d) (1990).4 We do not address
tolling under 28 U.S.C.A. § 1367(d) because the record shows that

      3
         On June 29, 2009, MacCarley filed a complaint in the U.S. District
Court, Central District of California, asserting state and federal claims
against "Countrywide; Landsafe; Bank of America, Angelo Mozilo; Joseph Michael
Magaldi, III[.]" MacCarley asserts that, after that case was transferred to
the U.S. District Court for the District of Hawaii, the case was voluntarily
dismissed.
      4
          28 U.S.C.A. § 1367 (1990) provides, in relevant part:

                   §1367 Supplemental jurisdiction. (a)... in any civil
             action of which the district courts have original
             jurisdiction, the district courts shall have supplemental
             jurisdiction over all other claims that are so related to
             claims in the action within such original jurisdiction that
             they form part of the same case or controversy under Article
             III of the United States Constitution....
             ....
                   (d) The period of limitations for any claim asserted
             under subsection (a), and for any other claim in the same
             action that is voluntarily dismissed at the same time as or
             after the dismissal of the claim under subsection (a), shall
             be tolled while the claim is pending and for a period of 30
             days after it is dismissed unless State law provides for a
             longer tolling period.

                                       4
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

MacCarley did not argue it below and has thus waived the argument
on appeal. Stanley v. State, 148 Hawai#i 489, 495 n.13, 479 P.3d
107, 113 n.13 (2021) (quoting Kernan v. Tanaka, 75 Haw. 1, 35,
856 P.2d 1207, 1224 (1993) ("[T]he general rule is that an issue
which was not raised in the lower court will not be considered on
appeal[.]")).
           We review the Circuit Court's ruling on the Motion to
Dismiss SAC de novo. Bank of Am., N.A. v. Reyes-Toledo, 143
Hawai#i 249, 256–7, 428 P.3d 761, 768–9 (2018), as corrected
(Oct. 15, 2018) (citing Hungate v. Law Office of David B. Rosen,
139 Hawai#i 394, 401, 391 P.3d 1, 8 (2017)). We adhere to the
notice pleading standard of review by which a Hawai#i Rules of
Civil Procedure (HRCP) Rule 12(b)(6) motion is evaluated, and
which requires that:
          a complaint should not be dismissed for failure to
          state a claim unless it appears beyond doubt that the
          plaintiff can prove no set of facts in support of
          [their] claim that would entitle [them] to relief.
          The appellate court must therefore view a plaintiff's
          complaint in a light most favorable to [them] in order
          to determine whether the allegations contained therein
          could warrant relief under any alternative theory.
          For this reason, in reviewing a circuit court's order
          dismissing a complaint ... the appellate court's
          consideration is strictly limited to the allegations
          of the complaint, and the appellate court must deem
          those allegations to be true.

Malabe v. Ass'n of Apartment Owners of Exec. Ctr. by & through
Bd. of Dirs., 147 Hawai#i 330, 356-57, 465 P.3d 777, 803-04
(2020) (alterations and ellipsis in original) (quoting
Reyes-Toledo, 143 Hawai#i at 257, 428 P.3d at 769).
          In the Order Granting the Motion to Dismiss SAC, the
Circuit Court ruled that:
                As to Plaintiff's unfair and deceptive trade
          practices claim, in that the appellate courts of the
          State of Hawai#i have not determined whether the
          discovery rule applies to the statute of limitations
          set forth in [HRS] § 480-24, this Court will, in the
          absence of such a determination, follow the position
          taken by the United States District Court for the
          District of Hawai#i, which has determined that the

                                    5
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

            discovery rule does not apply.[5] Plaintiff has also
            pled insufficient facts as to fraudulent concealment
            to toll the statute of limitations.

(Emphasis added.)     In his SAC, MacCarley alleged:
                  3. Defendant COUNTRYWIDE HOME LOANS, INC. ...
            is and was a subsidiary of COUNTRYWIDE Financial, and
            engages in the business of originating mortgage loans.

                  4. Defendant BANK OF AMERICA (hereinafter
            "BOA") is a Delaware Corporation. At all times
            relevant herein Defendant BOA was an assignee, which
            owned and/or purchased the benefits of Plaintiff's
            residential mortgage loan from COUNTRYWIDE Home Loans.

                  5. Defendant LANDSAFE, INC. (hereinafter
            "LANDSAFE") is a Delaware corporation and at all
            relevant times herein, was a subsidiary of COUNTRYWIDE
            Financial, and provides loan closing products and
            services such as credit reports, appraisals, property
            valuation services and flood determinations.

                  6. Defendant LANDSAFE APPRAISAL SERVICES, INC.
            (hereinafter "LANDSAFE APPRAISAL") is a California
            corporation and is registered to do business in the
            State of Hawaii. LANDSAFE APPRAISAL offers appraisal
            services in connection with mortgage loan closings.

                  7. Defendant, JOSEPH MICHAEL MAGALDI III
            (hereinafter "MAGALDI"), is a resident of the Island
            of Hawaii, State of Hawaii.

                  . . . .

                  9. The real property in question (hereinafter
            "subject property") is a lot located at 19-4034 Old
            Volcano Road, Volcano, Hawaii.
                  10. The subject mortgage loans were entered
            into between Plaintiff and Defendant COUNTRYWIDE HOME
            LOANS, INC., predecessor to Defendant BANK OF AMERICA
            CORPORATION, INC., in California.
                  11.   In November 2005, Plaintiff received an
            advertisement from Defendants COUNTRYWIDE FINANCIAL
            CORPORATION, INC. and COUNTRYWIDE HOME LOANS, INC
            (hereinafter referred to collectively as
            "COUNTRYWIDE") offering a "Dream Loan" to help him to
            build his "Dream Home."
                  12.   The "dream loan" was in fact Defendant
            COUNTRYWIDE's One-Time Close Loan ("OTC") program that
            offered construction, permanent financing, and a Home

      5
         Under the discovery rule, the statute of limitations is triggered
"when the plaintiff 'discovers or should have discovered the negligent act,
the damage, and the causal connection between the former and the latter.'"
Thomas v. Kidani, 126 Hawai#i 125, 132, 267 P.3d 1230, 1237 (2011) (quoting
Yamaguchi v. Queen's Med. Ctr., 65 Haw. 84, 90, 648 P.2d 689, 693–94 (1982)).

                                      6
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

            Equity Line of Credit ("HELOC") in one "fast and easy"
            loan transaction and provide borrowers like Plaintiff
            a "low Prime plus 1% interest during construction" and
            "interest-only option during construction".
                  13.   ... Defendant COUNTRYWIDE,[6] through their
            call center operatives, told Plaintiff that he had
            such good credit scores he would be pre-approved for
            any [One-Time Close (OTC)] loan, and that the OTC loan
            was a single loan which dealt with the purchase and
            construction of the property with only one set of loan
            costs and charges for one loan.

                  14.   In fact, there was not "one loan
            transaction" but three, each with its own costs, fees
            and penalties, and further, Plaintiff was charged
            neither a "low Prime plus 1% interest during
            construction" nor an "interest-only option during
            construction" but a higher interest rate which was not
            disclosed to him until long after the closing....
                  15.   Defendant COUNTRYWIDE, through their call
            center operatives, in November 2005, persuaded
            Plaintiff to speak to Defendant MAGALDI in Hawaii, who
            was described by them as a real estate agent with
            "Hawaiian Dream Properties" and someone who had "lots
            of good deals". Plaintiff was not informed that
            Defendant MAGALDI was an employee or agent of
            Defendant COUNTRYWIDE as a COUNTRYWIDE Mortgage
            Solicitor/Loan Officer and Home Loan Consultant.

                  16.   Defendant COUNTRYWIDE told Plaintiff he
            qualified for a Prime Loan, since he had credit
            excellent scores with the three reporting agencies of
            respectively 741, 783 and 791; however, COUNTRYWIDE
            encouraged its brokers like MAGALDI, through financial
            incentives, to move Plaintiff into the subprime
            category. The commission on a subprime loan was .50%
            of the loan's value, while the commission on loans in
            the next highest category was a mere .20% of the
            loan's value.
                  17.   Defendants through their agent, MAGALDI,
            falsely represented to Plaintiff from November 2005
            through April 2006 that they were offering the best
            loans available to Plaintiff when, in fact, Defendant
            COUNTRYWIDE and its agents steered Plaintiff, a
            potential prime borrower, into a subprime OTC loan
            that was calculated to increase Defendants' income and
            Defendant COUNTRYWIDE earned additional funds of
            approximately $40,250.00 through undisclosed fees and
            penalties that produce significant amounts of revenue
            to COUNTRYWIDE but that were not disclosed to
            Plaintiff.
                  18.   When Plaintiff contacted MAGALDI he was
            persuaded to purchase the subject property and to

      6
         As set forth in Paragraph 11 of the SAC, "COUNTRYWIDE" is the
collective name for Countrywide Home Loans and Countrywide Financial in the
SAC.

                                      7
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

        construct his "dream home" thereon by express promises
        that the property was a "bargain" and that on the day
        he purchased the property he would already have around
        $500,000 in equity since the 5 acre lot could be
        sub-divided to sell as 5 separate homes. Defendant
        MAGALDI then purported to act as Plaintiff's real
        estate agent, as well as his loan broker, and later as
        his construction supervisor. However, unknown to
        Plaintiff, but known to the other named Defendants,
        Defendant MAGALDI did not have a license for any of
        these positions. Defendant COUNTRYWIDE never
        disclosed this fact to Plaintiff.

              19.   ... Defendant MAGALDI used a "false" real
        estate license number on every loan document and
        agreement involved in the transaction and Defendant
        COUNTRYWIDE never disclosed this fact to Plaintiff.
              20.   At the time Defendant MAGALDI was employed
        by Defendant COUNTRYWIDE as a "mortgage solicitor",
        and so acted in relation to the OTC loan taken out by
        Plaintiff, Defendant MAGALDI was not licensed as a
        mortgage solicitor since Defendant MAGALDI received
        his mortgage solicitor's license on April 4, 2007,
        almost a full year after the closing.

              21.   Within two months prior to the signing of
        the loan in July 2006, Plaintiff was contacted by
        Christy Maddage, an underwriter with Defendant
        COUNTRYWIDE in Plano, Texas, who stated that she
        discovered that Defendant MAGALDI had appeared on
        Plaintiff's documents as the real estate agent and had
        notified her superiors.

              22.   Plaintiff later learned that Shawn Kelly,
        branch manager of Defendant COUNTRYWIDE Honolulu
        office, had demanded that Defendant MAGALDI surrender
        his real estate license since it was against the
        COUNTRYWIDE Lotus Notes Employee Handbook to be a loan
        officer with COUNTRYWIDE and have a real estate
        license, but Defendant MAGALDI threatened to quit and
        Defendant COUNTRYWIDE failed to discipline Defendant
        MAGALDI.
              23.   Defendant COUNTRYWIDE, as Defendant
        MAGALDI's employer, failed to closely review the
        professional licenses allegedly claimed to be held by
        Defendant MAGALDI and closely supervise Defendant
        MAGALDI's representations to Plaintiff and other
        customers.

              24.   Defendant MAGALDI assured Plaintiff that
        the process of sub-dividing the 5 acre lots into five
        separate pieces was a simple administrative process
        and that Defendants COUNTRYWIDE and MAGALDI could get
        the matter approved by the county easily.
              25.   Based upon the above representations,
        Plaintiff was induced into agreeing to make the
        purchase because he was promised he could build his
        home on one plot of land and then sell the front four
        plots of land at a profit to finance his retirement.

                                  8
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

              26. Because Plaintiff could not afford to make
        a deposit of twenty percent (20%) of the purchase
        price, Defendant COUNTRYWIDE and MAGALDI persuaded him
        that if there was a high enough appraisal value a
        lower deposit could be acceptable.
              27. Defendants COUNTRYWIDE and MAGALDI then
        hired Defendant LANDSAFE, a subsidiary of Defendant
        COUNTRYWIDE, to provide an appraisal for the subject
        property.
              28. Defendant LANDSAFE is registered with the
        State of Hawaii Department of Commerce and Consumer
        Affairs ("DCCA") as a foreign corporation and employs
        real estate appraisers that must be registered with
        the Professional and Vocational Licensing Division
        ("PVL") of DCCA and shall comply with the Hawaii
        Revised Statutes, the Administrative Rules and the
        Uniform Standards of Professional Appraisal Practices
        ("USPAP").

              29. On or about July 6, 2006, the appraisal was
        done by Maylyn H.M. Stake, SLA #603, and a former high
        school girlfriend of MAGALDI. Defendant LANDSAFE
        provided an appraisal value for the subject property
        of $1,150,000.

              30. In March 2008, appraiser William Wallace
        with Defendant LANDSAFE provided a second appraisal
        which found a "true" value of $700,000.

              31. Plaintiff believes that Defendant LANDSAFE
        was agreed to and/or induced to make both appraisals
        higher than was warranted and violated its duty to
        comply with the Hawaii state law and USPAP, especially
        Advisory Opinion No. 19.

              32. Defendants MAGALDI and COUNTRYWIDE also
        failed to disclose the community of Volcano's extreme
        opposition to sub-dividing and building in the
        forested area and COUNTRYWIDE is in a position to be
        knowledgeable since its Kona office is nearby.
        Defendants COUNTRYWIDE and MAGALDI were well aware of
        or should have known that about such opposition and
        the extreme difficulty in getting approval to
        sub-divide and develop the subject property.

              33.   On July 10, 2006, MAGALDI traveled to Los
        Angeles to have the loan closing documents signed and
        prior to that date, none of the documents or specific
        terms contained therein had been disclosed to
        Plaintiff. Plaintiff signed with Defendant MAGALDI on
        that date in Los Angeles, California. Defendants have
        never provided a signed original of the Promissory
        Note and despite having promised that Plaintiff would
        pay no interest for the first three years of the loan
        have charged an excessive and undisclosed amount in
        interest charges. Plaintiff also later learned that
        he was signing up, not as he had been expressly
        promised by Defendants COUNTRYWIDE and MAGALDI, for
        one simple loan, but three extremely complicated loans
        each with their own costs, fees, penalties and
        interest charges.

                                  9
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                  34.   The construction loan portion provided for
            a floating rate of interest and Plaintiff was unable
            to lock in a permanent rate of interest before thirty
            (30) days from the date construction was completed.
                  35.   Plaintiff went to the Island of Hawaii in
            late February or March 2007 after signing said loan
            documents in Los Angeles July 2006.
                  36.   After completing construction of the home,
            Defendant COUNTRYWIDE provided Plaintiff with another
            Truth in Lending Disclosure Statement that Plaintiff
            signed on April 22, 2008 as well as other loan
            documents, showing that his mortgage payments would
            commence on June 1, 2008 at $4,025.00 with an Annual
            Percentage Rate of 5.364% and increase to $5,368.39 on
            June 1, 2018 for 239 months.
                  37.   On or about November 16, 2009, Plaintiff
            secured a judgment against Defendant MAGALDI in an
            action brought in the Circuit Court of the Third
            Circuit for the State of Hawaii, Civil Case number
            07-1-0413, for breach of contract, breach of the
            covenant of good faith and fair dealing, breach of
            fiduciary duty and loyalty, unjust
            enrichment/detrimental reliance and HRS Chapter 480
            Violations, while acting as ... Kurt MacCarley's
            mortgage broker while employed by Countrywide
            Financial on the Island of Hawaii, defamation,
            Negligent and Intentional Infliction of Emotional
            Distress, Fraud, Negligence/Gross Negligence,
            Negligent Misrepresentation and Conversion in the
            principal amount of $359,200.00 together with
            attorneys' fees and costs awarded in the amount of
            $22,512.70. A true and correct copy of said document
            is attached hereto as Exhibit 'A' and incorporated
            herein by reference.

(Emphases added.)
          Based on the foregoing, the alleged conduct that
constitutes the basis for the UDAP claim commenced in November
2005, and is alleged to have continued through April 22, 2008.
MacCarley filed his initial complaint on November 16, 2010,
approximately two-and-a-half years after April 22, 2008, and
filed his First Amended Complaint on March 5, 2011, less than
three years after April 22, 2008.7 Viewing the allegations in
the light most favorable to MacCarley, the events on April 22,
2008, and the amounts MacCarley was then required to pay after

      7
         The initial Complaint did not contain allegations about the events on
April 22, 2008, but the First Amended Complaint contained the same allegations
regarding the April 22, 2008 events as set forth in the Second Amended
Complaint.

                                     10
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

construction of his home was completed, were part of an alleged
continuing violation constituting the UDAP claim and the UDAP
claim was asserted within four years of those alleged events.
Malabe, 147 Hawai#i at 338, 465 P.3d at 785; Reyes-Toledo, 143
Hawai#i at 257, 428 P.3d at 769 ("The appellate court must . . .
view a plaintiff's complaint in a light most favorable to him or
her in order to determine whether the allegations contained
therein could warrant relief under any alternative theory."); HRS
§ 480-24 ("For the purpose of this section, a cause of action for
a continuing violation is deemed to accrue at any time during the
period of the violation."); see also Robert's Waikiki U-Drive,
Inc. v. Budget Rent-A-Car Systems, Inc., 491 F. Supp. 1199, 1227-
29 (D.Haw. 1980).
           We thus conclude the Circuit Court erred in dismissing
the UDAP claim as untimely under the applicable statute of
limitations.
                   II. Breach of Contract Claims
          In his second assertion of error, MacCarley contends
the Circuit Court erred in dismissing the breach of contract
claim as insufficiently pled because claims for "breach of good
faith and fair dealing" and "breach of a fiduciary duty" were
adequately pled in the SAC.
          Paragraph 10 of the SAC alleges that the "subject
mortgage loans were entered into between [MacCarley] and
[Countrywide Home Loans], predecessor to [Bank of America]." The
SAC further alleges that "[a]t all times relevant herein [Bank of
America] was an assignee, which owned and/or purchased the
benefits of [MacCarley's] residential mortgage loan from
Countrywide Home Loans." There are no allegations of a contract
between MacCarley and any other party. Therefore, dismissal of
the breach of contract claim against all Entity Defendants,
except Countrywide Home Loans and Bank of America, was proper.
          We thus focus on the claims in count I with respect to
Countrywide Home Loans and Bank of America. In count I, entitled
"Breach of Contract," the SAC at paragraph 39 alleges that "[t]he

                                 11
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

acts of Defendants constitute a breach of contract, breach of
good faith and fair dealing, and breach of fiduciary duty and
have caused [MacCarley] to suffer financial damages in an amount
to be proven at trial."
          MacCarley does not dispute that he failed to allege a
breach of any contract provision. See Au v. Au, 63 Haw. 210,
221, 626 P.2d 173, 181 (1981) (concluding that because count for
breach of agreement of sale fails to specify what provisions of
the agreement were breached, appellees did not have fair notice
of what appellant's claim is or the grounds upon which it rests);
Kohala Agriculture v. Deloitte & Touche, 86 Hawai#i 301, 307 n.7,
949 P.2d 141, 147 n.7 (App. 1997) (noting that in a breach of
contract claim a complaint must cite the contractual provision
allegedly violated). Instead, his arguments on appeal focus on
his claims for "breach of good faith and fair dealing" and
"breach of fiduciary duty". Thus, to the extent the Circuit
Court dismissed the "breach of contract" claim, MacCarley does
not challenge that aspect of the dismissal and we affirm as to
dismissal of that claim.
          With respect to MacCarley's claim for breach of good
faith and fair dealing, dealing in good faith is a principle of
contract law. As determined by the Hawai#i Supreme Court in Best
Place, Inc. v. Penn America Insurance Co., 82 Hawai#i 120, 920
P.2d 334 (1996):
          The obligation to deal in good faith is now a
          well-established principle of contract law.
          Restatement (Second) Contracts § 205 (1979)
          provides that "[e]very contract imposes upon
          each party a duty of good faith and fair dealing
          in its performance and its enforcement." In
          Hawai#i Leasing v. Klein, 5 Haw.App. 450, 456,
          698 P.2d 309, 313 (1985) [sic], the Intermediate
          Court of Appeals (ICA) explicitly recognized
          that parties to a contract have a duty of good
          faith and fair dealing in performing contractual
          obligations.

Best Place, 82 Hawai#i at 124, 920 P.2d at 338 (alteration in
original). The implied covenant of good faith and fair dealing
mandates that "neither party will do anything that will deprive
the other of the benefits of the agreement." Id. at 123-24, 920

                                   12
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

P.2d at 337-38 (citations omitted). "[G]ood faith performance
emphasizes faithfulness to an agreed common purpose and
consistency with the justified expectations of the other party."
Joy A. McElroy, M.D., Inc. v. Maryl Grp., Inc., 107 Hawai#i 423,
436, 114 P.3d 929, 942 (App. 2005) (citation omitted).
          Here, the Circuit Court dismissed the breach of
contract claim as insufficiently pled as follows:
          Plaintiff's breach of contract claims pled facts
          indicating that the contract was between
          Plaintiff and Countrywide Home Loans, Inc. but
          Plaintiff has alleged insufficient facts to
          state breach of contract claims for relief
          against Countrywide Home Loans, Inc. Plaintiff
          has also pled insufficient facts to state claims
          for relief against the other Defendants merely
          because of a business relationship between them
          and Countrywide Home Loans, Inc.

          MacCarley contends he was promised the best loan
available, that he could subdivide a five-acre property and sell
it as five separate homes, that he would pay low interest, and
that he would be getting a single loan with one set of loan costs
and charges. MacCarley contends that none of these promises were
kept. We further note that the SAC alleges that Countrywide
persuaded MacCarley to contact Magaldi and that although Magaldi
purported to be a real estate agent, he was an employee or agent
of Countrywide.
          Viewing the allegations in the SAC in the light most
favorable to MacCarley, we cannot say that MacCarley can prove no
set of facts to support a claim for breach of good faith and fair
dealing. Therefore, we conclude that the Circuit Court erred in
dismissing this claim as part of count I against Countrywide Home
Loans and Bank of America.
          With respect to the breach of fiduciary duty claim,
MacCarley contends that a realtor owes a client a fiduciary duty
and that Magaldi acted as both his real estate agent and loan
broker. The SAC, however, does not allege any contract between
MacCarley and Magaldi, nor does it allege that any defendant owed
MacCarley a fiduciary duty. Further, Entity Defendants point to

                                   13
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

case law establishing that commercial lenders have no fiduciary
duties to borrowers. See McCarty v. GCP Mgmt., LLC, No. 10-00133
(JMS) (KSC), 2010 WL 4812763, at *5 (D. Haw., Nov. 17, 2010)
("Lenders generally owe no fiduciary duties to their
borrowers."); Nymark v. Heart Fed. Sav. & Loan Ass'n, 283
Cal.Rptr. 53, 54 n.1 (Cal. Ct. App. 1991)("The relationship
between a lending institution and its borrower-client is not
fiduciary in nature."); Idaho First Nat. Bank v. Bliss Valley
Foods, Inc., 824 P.2d 841, 853 (Idaho 1991) ("[A] borrower-lender
situation does not create a fiduciary relationship"). Thus, even
when viewing the allegations in the SAC in a light most favorable
to MacCarley, we conclude that dismissal of the breach of
fiduciary duty claim was proper.
          Thus, with regard to count I in the SAC, the Circuit
Court erred in dismissing the claim for "breach of good faith and
fair dealing" against Countrywide Home Loans and Bank of America.
However, the dismissal of the other claims in count I was proper.
                        III. Fraud Claim
          In his third assertion of error, MacCarley contends the
Circuit Court erred in granting the Entity Defendants' motion to
dismiss a fraud claim that was asserted in the First Amended
Complaint for failure to plead with sufficient particularity.
MacCarley asserts that if the Circuit Court had not erred in
granting in part and denying in part the Entity Defendants'
motion to dismiss the First Amended Complaint, he never would
have filed the SAC, which excluded the fraud claim.
          In our view, MacCarley waived his fraud claim when he
did not seek to reassert it in the Second Amended Complaint. On
June 22, 2011, the Circuit Court entered an order dismissing
counts I (fraud), II (misrepresentation), and III (UDAP) in the
First Amended Complaint, but not counts IV (breach of contract),
V (unjust enrichment), and VI (injunction). Subsequently, on
January 5, 2012, the Circuit Court dismissed MacCarley's action
and entered an "Order of Dismissal" because no pretrial statement
had been filed.

                                 14
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

          After a few years, on July 9, 2014, MacCarley filed a
"Motion to Set Aside Order for Dismissal (Rule 12(Q))(Initial
Complaint 11-16-2010) Filed January 5, 2012" (Motion to Set
Aside).     The Motion to Set Aside requested that the Circuit Court
reinstate the case, "subject to the filing of a pretrial
statement and a motion to amend the complaint for a second time"
and attached "Plaintiff's Pretrial Statement" (Pretrial
Statement).      The Pretrial Statement asserted only three claims
for relief: 1) "Breach of Contract"; 2) "Unjust Enrichment"; and
3) "Injunction". MacCarley's Pretrial Statement did not seek to
assert a claim for fraud. The Circuit Court granted the Motion
to Set Aside by order dated October 13, 2014. On October 27,
2014, MacCarley filed a "Motion for Leave to File Second Amended
Complaint," in which he sought to plead only breach of contract
and UDAP claims, and a request for an injunction.8
          Given this record, we reject MacCarley's third point of
error. MacCarley could have reasserted a fraud claim in the
Second Amended Complaint, but he failed to do so. "[A]n amended
petition supercedes the original petition and renders the
original petition of no legal effect." Beneficial Hawaii, Inc.
v. Casey, 98 Hawai#i 159, 167, 45 P.3d 359, 367 (2002) (citing
Wight v. Lum, 41 Haw. 504, 506-07 (1956)); see also Young v.
Univ. of Hawai#i, No. 20-CV-00231-DKW-RT, 2020 WL 4612380, at *5
(D. Haw. Aug. 11, 2020) (citing Lacey v. Maricopa Cnty., 693 F.3d
896, 928 (9th. Cir. 2012) (en banc) (stating that claims
dismissed with prejudice need not be re-alleged in an amended
complaint to preserve them for appeal, but claims that are
voluntarily dismissed are considered waived if not re-pled)).
                          IV. Conclusion
          Based on the foregoing, the "Amended Judgment" entered
on April 24, 2017, by the Circuit Court of the Third Circuit, is
vacated to the extent that it dismissed: the UDAP claim on
statute of limitations grounds; and the claim against Countrywide

     8
          The Second Amended Complaint was filed on November 25, 2014.

                                       15
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Home Loans and Bank of America for "breach of good faith and fair
dealing." The Amended Judgment is otherwise affirmed.
          This case is remanded to the Circuit Court for further
proceedings consistent with this Memorandum Opinion.
          DATED: Honolulu, Hawai#i, November 14, 2022.

On the briefs:                        /s/ Lisa M. Ginoza
                                      Chief Judge
Keith M. Kiuchi,
for Plaintiff-Appellant               /s/ Katherine G. Leonard
                                      Associate Judge
Patricia J. McHenry,
Nicholas M. McLean,                   /s/ Karen T. Nakasone
Defendants-Appellees                  Associate Judge

                                 16