Court Opinion

ID: 2745338
Source: CourtListenerOpinion
Date Created: 2014-10-23 22:03:21.827391+00
Date Added: 2024-06-11T10:12:43.835106
License: Public Domain

***FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER***

                                                              Electronically Filed
                                                              Supreme Court
                                                              SCWC-12-0000867
                                                              23-OCT-2014
                                                              09:15 AM

           IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

                                ---o0o---

                    KONDAUR CAPITAL CORPORATION,
                   Petitioner/Plaintiff-Appellee,

                                    vs.

                          LEIGH MATSUYOSHI,
                   Respondent/Defendant-Appellant.

                            SCWC-12-0000867

         CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
              (CAAP-12-0000867; CIV. NO. 12-1-0185)

                            October 23, 2014

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

                OPINION OF THE COURT BY POLLACK, J.

          Kondaur Capital Corporation (Kondaur) seeks review of

the Intermediate Court of Appeals’ (ICA) Judgment on Appeal,

filed April 4, 2014, which vacated the Circuit Court of the

Fifth Circuit’s (circuit court) order granting Kondaur’s motion

for summary judgment, and remanded the case to the circuit court
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for further proceedings.      We conclude that the ICA erred in

relying upon a post-judgment motion as a basis to find disputed

facts with regard to a motion for summary judgment.           We

therefore vacate the ICA’s Judgment on Appeal, and remand the

case to the ICA for a review of the other issues raised by the

parties that were not considered by the ICA in its resolution of

the appeal in this case.

                             I.   Background

                                    A.

          This action arose out of a property title dispute

between Leigh Matsuyoshi, who purchased the property in Līhuʻe,

Kauaʻi (Property) in June of 2007 and Kondaur, which later

acquired a quitclaim deed to the Property following a judicial

foreclosure.

          Matsuyoshi bought the Property using a home loan she

obtained from Resmae Mortgage Corporation.         The Mortgage

included an acceleration clause, which provided Matsuyoshi would

be given at least 30 days to cure a default of payment.            The

notary section of the Mortgage states that Matsuyoshi personally

appeared before a notary public of the State of Hawaiʻi, on March

26, 2007, in the City and County of Honolulu.

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            Six weeks prior to Matsuyoshi buying the property, RMC

Mortgage Holdings LLC1 filed a voluntary petition for Chapter 11

bankruptcy in the United States Bankruptcy Court of the District

of Delaware (Bankruptcy Court).        On June 5, 2007, the Bankruptcy

Court issued an Order confirming the second amended plan of

reorganization (Bankruptcy Order).         The Bankruptcy Order

affirmed that the “Reorganized ResMAE” could continue to exist

“as a corporation [and] may operate its business and may use,

acquire, and dispose of property . . . without supervision or

approval of the Bankruptcy Court.”         The Bankruptcy Order further

affirmed that all transfers of the property to the reorganized

Resmae Mortgage Corporation were “legal, valid, and effective,”

and “shall vest Reorganized ResMAE” with “good title to such

property, free and clear of all Claims, liens, charges other

encumbrances, and interest[.]”

            In May 2008, an attorney representing Resmae

Liquidation Properties (Resmae) sent Matsuyoshi a Notice of

Intent to Foreclose stating Matsuyoshi’s loan was in default and

that failure to pay the amount due by June 20, 2008 would result

in the loan being accelerated and the Property being referred

for foreclosure action.      Subsequently, in October 2008,

      1
            Although it is unclear from the record, it appears RMC Mortgage
Holdings LLC was the same company as Resmae Mortgage Corporation prior to its
reorganization in Bankruptcy Court.

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Matuyoshi received personal service of a Notice of Mortgagee’s

Non-Judicial Foreclosure Under Power of Sale stating that Resmae

Liquidation Services would sell the Property at an auction held

in Honolulu on November 13, 2008.

           The sale proceeded as scheduled in Honolulu, and the

Mortgagee’s Affidavit of Foreclosure Under Power of Sale

(Affidavit of Sale) was certified by Resmae’s attorney and

recorded on November 17, 2008. The Affidavit of Sale stated that

Resmae was the highest bidder at the sale for the purchase price

of $416,900.20.     The Affidavit of Sale further stated that the

default remained uncured at the time of sale.

           On January 14, 2009, Resmae executed a quitclaim deed

conveying the Property to itself (Resmae’s quitclaim deed), and

Resmae subsequently recorded the deed on January 22, 2009.

Resmae then sought possession of the property from Matsuyoshi

through an action for ejectment in the circuit court filed on

February 3, 2009.     On October 15, 2009, the action for ejectment

was dismissed pursuant to “Rule 12(Q)” and no final judgment was

entered in the record.

           On July 14, 2010, Resmae conveyed the Property to

Kondaur by a quitclaim deed (Quitclaim Deed).2           Kondaur did not

      2
            The Quitclaim Deed was signed by a vice president and executive
vice president for Resmae. However, the limited power of attorney attached
to the Quitclaim Deed only granted the power to a third executive, and the
                                                             (continued . . .)

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record its Quitclaim Deed until February 24, 2011, and in the

period of time between executing and recording the Quitclaim

Deed, on January 14, 2011, Resmae filed an action for ejectment

against Matsuyoshi in the United States District Court for the

District of Hawaiʻi, which was later dismissed by stipulation of

the parties on February 12, 2011.         Following the February 24,

2011 recording, Kondaur gave Matsuyoshi notice to vacate.             After

Matsuyoshi refused to leave, Kondaur filed the underlying action

in this case in the circuit court.

                                     B.

            Kondaur’s complaint (Complaint), filed on June 5,

2012, against Matsuyoshi, requested a judgment for immediate and

exclusive possession of the Property and a writ of possession.

The Complaint stated that Kondaur had “acquired title and

current ownership of the Property through a Quitclaim Deed

recorded on February 24, 2011.”        The Complaint was served on

Matsuyoshi on June 9, 2012.

            On June 27, 2012, Kondaur filed a Motion for Summary

Judgment Against All Defendants on Complaint filed June 5, 2012

(MSJ).   Kondaur requested that the circuit court grant the MSJ

and enter a judgment for possession of the Property for Kondaur

(continued . . .)
notary section stated that this third executive (whose signature does not
appear on the Quitclaim Deed) executed the Quitclaim Deed.

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and against Matsuyoshi, issue a writ of possession, enter the

judgment as final, and set a time and date for a trial on

damages.   The MSJ was supported by a declaration of Ann Pham,

who stated that she was an asset manager for Kondaur and a

custodian of Kondaur’s records.        Pham declared that according to

regular business records maintained by Kondaur, Kondaur owned

the Property pursuant to its Quitclaim Deed, a true and accurate

copy of which was attached to the MSJ.          Pham also declared that

Kondaur had given Matsuyoshi notice to vacate, and Matsuyoshi

“has so far continued to reside at the Property and has

otherwise failed or refused to leave.”          Attached to the MSJ were

Exhibits A to G.3

      3
            Exhibit A was a certified copy of the Quitclaim Deed.

            Exhibit B was a certified copy of Resmae’s quitclaim deed.

            Exhibit C was a certified copy of the Affidavit of Sale. Exhibit
C also included a copy of the deed from Jun Matsuyoshi et al., to Matsuyoshi;
the Note; the Mortgage; the Assignment of Mortgage and Note from Resmae
Mortgage Corporation to Resmae Liquidation Properties; the notice of default;
the Notice of Sale; a list of parties who received the Notice of Sale by
certified mail, return receipt requested and by personal service; the returns
and acknowledgments of service from those parties listed; an Affidavit of
Posting of the Notice of Sale on the Property; an Affidavit of Publication of
the Notice of Sale in the Honolulu Star-Bulletin; and a report from the
Department of Defense Manpower Data Center stating that Matsuyoshi was not an
active duty member of the military.

            Exhibit D was the Bankruptcy Order. The Bankruptcy Order
contained a number of exhibits, including the reorganization plan; a Notice
of Assumption and Rejection of Executory Contracts and Unexpired Leases; a
Notice of Entry of Confirmation Order; the Notice of (1) Occurrence of
Effective Date of Plan and (2) Administrative Claims Bar Date; and a budget
for “ResMAE Mortgage Corporation” for the period through June 15, 2007.

                                                             (continued . . .)

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            In its memorandum in support of the MSJ, Kondaur

asserted it had undisputed title to the Property and Matsuyoshi

was residing on the property as a trespasser.           Kondaur argued

that the Quitclaim Deed was prima facie evidence of Resmae’s

conveyance of the property to Kondaur, and thus Kondaur

contended it was the owner of the Property and was entitled to

immediate and exclusive possession.

            Kondaur maintained any challenge to its title was

meritless because the Bankruptcy Order “sets forth that the

property of Resmae, as a debtor-in-possession, was conveyed to

the Liquidating Trust[.]”       Kondaur argued the Bankruptcy Order

“sets forth a Permanent Injunction that bars any claims against

the Property that is based on factual allegations arising prior

to June 15, 2007.”     Kondaur also contended the Affidavit of Sale

was evidence that the power of sale was duly executed.             Kondaur

maintained the foreclosure sale extinguished Matsuyoshi’s

(continued . . .)
            Exhibit E included the Order and “Order and Findings and
Recommendation” from the United States District Court for the Eastern
District of California case of Pantalion v. Resmae Mortgage Corporation,
dismissing that case, in part due to an injunction issued by the Bankruptcy
Court.

            Exhibit F was a second copy of the Notice of (1) Occurrence of
Effective Date of Plan and (2) Administrative Claims Bar Date.

            Exhibit G was the Final Decree and Order Approving Motion of the
Liquidating Trust of Resmae Mortgage Corporation, by and through Alan M.
Jacobs, its Bankruptcy Court Appointed Liquidating Trustee, for Entry of
Final Decree and Related Relief.

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interest in the property, and “Resmae subsequently conveyed the

Property to Kondaur by virtue of the Quitclaim Deed dated July

14, 2010.”

             Kondaur argued further that any challenges to the

foreclosure or subsequent transfers of the case should have been

brought in the Bankruptcy Court.         Kondaur maintained that

because Matsuyoshi failed to cure her default in payments prior

to the sale, “she is without standing to contest the validity of

the foreclosure conducted by Resmae and the superior title to

the Property subsequently acquired by Kondaur.”          Kondaur

concluded Matsuyoshi had no interest in the Property, she was

required to vacate the Property immediately, and the court

should issue a judgment for possession and writ of ejectment.

             On July 6, 2012, Kondaur requested an entry of default

against Matsuyoshi pursuant to Hawaiʻi Rules of Civil Procedure

(HRCP) Rule 55(a) “for her failure to answer or otherwise

respond to [Kondaur’s] Complaint.”        On the same day, an entry of

default against Matsuyoshi was filed in the circuit court by the

clerk of the court pursuant to HRCP Rule 55(a).

             On July 26, 2012, at the first hearing scheduled for

the MSJ, Matsuyoshi requested a continuance to seek legal

counsel.   Kondaur argued that Matsuyoshi was in fact represented

by counsel until May or June of 2012.        Matsuyoshi responded that

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she “had an attorney up until last week” but that he “informed

[her] last week that he was not able to take the case.”

             Kondaur also argued that Matsuyoshi could not oppose

the MSJ until she moved to set aside the default against her.

Kondaur requested that the court rule on the MSJ that day.              The

court considered Kondaur’s argument as an objection to the

request for continuance.       The court continued the hearing over

Kondaur’s objection in order to give Matsuyoshi time to seek

counsel.

             On August 16, 2012, Matsuyoshi filed, through counsel,

her opposition to the MSJ, which was supported by a memorandum,

declaration of counsel, and Exhibits 1-4 (Opposition).4

Matsuyoshi acknowledged that she “fell behind on her mortgage

payments.”    Concerning the transfer from Resmae to Kondaur,

Matsuyoshi stated that the executives who signed the Quitclaim

Deed on behalf of Resmae were not authorized to execute the

instrument.    Matsuyoshi noted that the limited power of attorney

attached to the Quitclaim Deed designated an executive who did

not in fact sign the Quitclaim Deed.         Matsuyoshi noted that

      4
            Exhibit 1 was a printout of a screenshot of the Hoʻohiki Document
List for an ejectment case filed by Resmae against Matsuyoshi in circuit
court. Exhibit 2 was a copy of the complaint from that case. Exhibit 3 was
the Stipulation for Dismissal from the ejectment action filed by Resmae in
federal court. Exhibit 4 was a printout of a screen shot of the document
history of that case. Counsel declared Exhibits 1-4 to be true and correct
copies.

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Resmae filed another ejectment action in federal district court,

which was dismissed.     Matsuyoshi argued that she did not answer

the Complaint out of confusion due to the prior two actions

filed against her.

           Matsuyoshi maintained that technical violations of the

foreclosure statutes also voided the foreclosure sale.

Matsuyoshi argued HRS § 667-5 required “that all notices and

acts required by the power contained in the mortgage shall be

complied with.”    She maintained that Resmae’s foreclosure

against her was void for several reasons related to the adequacy

of the notice.

           Additionally, Matsuyoshi contended that “only the

person who actually conducted the foreclosure can make [an]

affidavit” of foreclosure, and it was “unclear [from the

affidavit of Resmae’s attorney] whether it was [their attorney]

or ‘her’ designated representative [that] held the foreclosure.”

Matsuyoshi noted that Kondaur stood in privity of contract with

Resmae based on the alleged Quitclaim Deed from Resmae to

Kondaur.   Matsuyoshi further argued that Resmae’s assignment of

rights to Kondaur was invalid because the Quitclaim Deed only

attached a limited power of attorney for an executive who did

not in fact sign the deed.      Thus, Matsuyoshi concluded that the

Resmae foreclosure was void and the individuals who conveyed

title to Kondaur did not have authority to do so.

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          Matsuyoshi contended further that “[a]s to the Entry

of Default of Defendant in [the instant case], because of the

confusion that arose by the multiplicity of lawsuits regarding

the very same issues, it is within the authority of this

Honorable Court to sua sponte set aside such default,” or to

dismiss the instant case with prejudice.         Matsuyoshi

“request[ed] that Plaintiff stipulate [to] the setting aside of

the default” or in the alternative “that this Honorable Court

grant a continuance so that Defendant may file a Motion to Set

Aside the Default.”

          On August 20, 2012, Kondaur filed its reply.            Kondaur

argued that Matsuyoshi presented no admissible evidence showing

that there was a genuine issue for trial.         Kondaur contended

that Matsuyoshi’s “failure . . . to establish by admissible

evidence that the Note and Mortgage were not in default at the

time of the non-judicial foreclosure is dispositive.”            Kondaur

maintained that Matsuyoshi presented no admissible evidence

showing that she did not receive notice of her default under the

terms of the Mortgage.

          Kondaur additionally responded that Matsuyoshi’s claim

that the Quitclaim Deed was not properly executed by the

executive possessing the power of attorney was based on

inadmissible evidence because Matsuyoshi “has not established

how she has personal knowledge . . . on the policy and

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procedures, or the internal business operations of Resmae or

Kondaur.”   Kondaur argued further that because Matsuyoshi “was

not a party to the assignment of mortgage she has no standing to

contest the validity of the document.”         Kondaur contended that

Matsuyoshi remained in default and therefore was “procedurally

barred from defending this Motion and the underlying case,” and

that the default should not be set aside because “she has no

meritorious defense to the action.”

            On August 23, 2012, the circuit court heard oral

argument at the hearing on the MSJ.        Matsuyoshi argued that res

judicata and collateral estoppel barred Kondaur’s ejectment

action, and there was a discussion between Matsuyoshi and the

court concerning these issues and the documents that Matsuyoshi

had submitted as part of her Opposition.

            Matsuyoshi further asserted that the foreclosure sale

violated HRS Chapter 667 because it was carried out on Oʻahu

while the Property was on Kauaʻi.        There was then a discussion

regarding the location of the foreclosure sale that derived

entirely from documents submitted by Kondaur with its MSJ.

Kondaur replied that in 2008 “there was no prohibition in . . .

Chapter 667 [] that prohibited a lender from doing a foreclosure

sale [for a property located on Kauaʻi] on the island of Oahu.”

Kondaur also contended that the question of whether Matsuyoshi

could bid was an “immaterial fact because the borrower cannot

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challenge a nonjudicial foreclosure after the deed has

recorded,” and Matsuyoshi admitted to default under the Mortgage

and the loan documents.

          At the conclusion of the hearing, the circuit court

indicated that it had reviewed the documents submitted by

counsel and was inclined to grant Kondaur’s MSJ and requested

Kondaur’s counsel to prepare the order.

          On September 18, 2012, the circuit court entered its

“Order Granting [Kondaur’s] [MSJ]” (MSJ Order).          The circuit

court also issued its “Judgment on Order Granting [Kondaur’s]

[MSJ]” (MSJ Judgment), providing that “summary judgment is

hereby entered in favor of [Kondaur].”         On September 20, 2012,

the circuit court issued a writ of possession.

          On October 17, 2012, Matsuyoshi filed a “Motion to Set

Aside Entry of Default” pursuant to HRCP Rule 55(c), a “Motion

to Set Aside [MSJ Judgment]” pursuant to HRCP Rule 60(b)(1),

(3), and (6), and a “Motion to Stay [MSJ Judgment]”

(collectively Post-Judgment Motions).

          Matsuyoshi also filed the Declaration of Leigh

Matsuyoshi (Matsuyoshi Declaration) in which she declared, inter

alia, that she was “absolutely positive that the [Mortgage] was

not signed by [her] before a notary public.”          In her Motion to

Set Aside Entry of Default, Matsuyoshi contended the Matsuyoshi

Declaration presented a meritorious defense regarding the

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invalidity of the Mortgage.      Matsuyoshi also noted her failure

to file an answer in the instant case was not willful and she

did file an Opposition.

            On October 18, 2012, Matsuyoshi filed a Notice of

Appeal from the MSJ Judgment.

            Kondaur filed an opposition to the Post-Judgment

Motions on November 1, 2012.      The circuit court’s minutes of

November 8, 2012, reflect that the court determined that “since

the matter [was] currently pending appeal, [it did] not have

jurisdiction over the motion to set aside default,” and it was

“not inclined to give an inclination to the appellate courts” on

the Motion to Set Aside [MSJ Judgment].

            On November 14, 2012 the circuit court entered an

order denying Matsuyoshi’s motions to set aside the entry of

default and the MSJ Judgment (Post-Judgment Order).           The Post-

Judgment Order also granted Matsuyoshi’s motion to stay the MSJ

Judgment.    Matsuyoshi did not appeal from the Post-Judgment

Order.

                      II.   Appellate Proceedings

            On April 3, 2013, Matsuyoshi filed her opening brief

and raised two points of error:

            1. Whether the circuit court erred in granting
            Kondaur’s MSJ;

            2. Whether the circuit court erred in denying
            Matsuyoshi’s Motion to Set Aside Judgment on Order
            Granting Motion for Summary Judgment.

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Matsuyoshi argued that Resmae did not meet its strict duty of

good faith and diligence in the judicial sale of the Property.

Consistent with these requirements, she asserted, the mortgagee

has a duty “to obtain for the property as large a price as

possible.”    Matsuyoshi contended “[t]he sale of property located

on Kauai at the front entrance to the First Circuit Courthouse

did not show reasonable diligence and good faith in an endeavor

to obtain the best possible prices consistent with such

diligence and good faith.”

             Matsuyoshi maintained “[t]here was a discrepancy in

the Affidavit of Sale in that the affiant is a man but it refers

in two places to acts done by ‘her.’”        Thus, Matsuyoshi

concluded a strict interpretation of “technical violations of

foreclosure proceedings would void the sale on this basis.”

             As for her HRCP Rule 60(b) motion, Matsuyoshi argued

that if the circuit court had “expressed [an] inclination to

grant” the motion, she could have requested that the ICA remand

the case to the circuit court.       Matsuyoshi concluded HRCP Rule

60(b)(6) “is applicable as the summary judgment should never

have been granted due to the sale of the property on Oahu and

also because the notarization on the mortgage was false.”

Matsuyoshi thus requested that the ICA reverse the MSJ Order and

vacate the MSJ Judgment.

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          On June 11, 2013, Kondaur filed its answering brief.

Kondaur maintained that because “Matsuyoshi never set aside the

default that was entered against her,” she was “barred” from

challenging Kondaur’s MSJ or defending the Complaint.

          Kondaur contended further that the circuit court

properly granted Kondaur’s MSJ because Kondaur presented

undisputed evidence that it had title to the Property, and

Matsuyoshi was residing there unlawfully and without permission.

Kondaur argued that Pham’s declaration, along with the certified

copy of the Quitclaim Deed and the statements contained therein,

which were admissible as recitals in a document affecting an

interest in property, were sufficient to establish the essential

elements of Kondaur’s action for ejectment.          Kondaur asserted

that Matsuyoshi presented no admissible evidence in her

Opposition to rebut the evidence provided by Kondaur.

          Additionally, Kondaur maintained that the circuit

court properly rejected Matsuyoshi’s argument that the

foreclosure sale of the Property was void.         Matsuyoshi’s

contention that the foreclosure sale was void because it

occurred on Oʻahu must fail, Kondaur argued, because at the time

of the sale, Hawaii’s non-judicial foreclosure statute did not

prohibit the sale of the Property on Oʻahu.         Kondaur maintained

that conducting the auction on Oʻahu was reasonable because Oʻahu

was a larger market, and Matsuyoshi failed to establish that she

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was prejudiced by the occurrence of the foreclosure sale on

Oʻahu.

             Next, Kondaur maintained that Matsuyoshi’s Post-

Judgment Motions were untimely because they were filed after the

ten-day tolling period set forth in Rule 59.          Thus, Kondaur

maintained the Post-Judgment Order was a final appealable order,

and because Matsuyoshi failed to appeal it within thirty days,

the ICA did not have jurisdiction to consider Matsuyoshi’s

challenge.    Further, Kondaur contended that even if the ICA

reached the merits of Matsuyoshi’s Post-Judgment Motions,

Matsuyoshi failed to “provide any justification for her failure

to present the evidence” at the hearing on Kondaur’s MSJ.

Lastly, Kondaur argued that Matsuyoshi did not “cite any

authority to establish how her allegations that a notary failed

to properly certify her signature on the subject mortgage would

probably change the outcome of the hearing granting [Kondaur’s

MSJ].”

             On June 25, 2013, Matsuyoshi filed her reply brief.

Matsuyoshi maintained that regardless of the effect of the entry

of default, “the MSJ should not have been granted because the

material facts did not show that Kondaur was entitled to

judgment as a matter of law.”       Matsuyoshi argued she was not

bound by the recitations in the Quitclaim Deed because she was

not a party to the conveyance, and the Quitclaim Deed

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“establishes only that Kondaur obtained whatever interest, if

any,” that Resmae had in the property[.]”

           Matsuyoshi contended the Bankruptcy Order does not

apply to her because the defective foreclosure sale occurred

after the Bankruptcy Order was filed.        Matsuyoshi argued the

Bankruptcy Court did not retain jurisdiction over the

foreclosure sale after the Bankruptcy case closed.

           Concerning the sale on Oʻahu, Matsuyoshi maintained

that merely following the statute was not sufficient and the

sale on Oʻahu was unreasonable.       Matsuyoshi argued that she did

not need to prove she was prejudiced by the sale on Oʻahu and

asserted that this would be impossible to prove without a

comparable sale occurring on Kauaʻi.

           On March 7, 2014, the ICA issued its Memorandum

Opinion.   Initially, the ICA held that it lacked jurisdiction to

review the Post-Judgment Order as a timely appeal had not been

taken from it.

           The ICA next concluded that in order for Kondaur to

prove entitlement to the remedy of ejectment, it would have to

prove “ownership and title” to the Property.          The ICA held that,

although no default judgment had been filed, “[e]ntry of default

against Matsuyoshi meant she admitted factual allegations in

Kondaur[’s] complaint.”     The ICA held that “after entry of

default by the lower court, on appeal, the defendant is entitled

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to contest the sufficiency of the complaint and its allegations

to support the judgment.”      (Quoting Danning v. Lavine, 572 F.2d
1386, 1388 (9th. Cir. 1978) (internal quotation marks omitted).

          The ICA found that “[t]he circuit court did not enter

default judgment against Matsuyoshi,” but rather, the ICA noted,

the circuit court entered “an entry of default as to the

allegations in Kondaur[’s] complaint.”         This distinction,

explained the ICA, “allow[ed] the conclusion that entry of

default against Matsuyoshi did not establish that the circuit

court found that Kondaur [] had proven, as opposed to pled,

their prima facie case for ejectment.”         Thus, the ICA held that

it could consider whether the factual allegations in the

Complaint were “well-pled.”

          The ICA held that facts that are not “well-pled”

included those “which are contrary to uncontroverted material in

the file of the case.”     (Quoting In re McGee, 359 B.R. 764, 773

(B.A.P. 9th Cir. 2006).     The ICA found that among other

uncontroverted evidence in the “file of the case” was the

Matsuyoshi Declaration, which was not submitted in support of

the MSJ, but rather, was submitted with Matsuyoshi’s Post-

Judgment Motions.    The ICA found that the allegations in

Matsuyoshi’s Declaration were material to the issue of whether

Kondaur acquired good title to the property through its

Quitclaim Deed.    The ICA concluded that summary judgment for

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Kondaur was inappropriate because a mortgage not signed before a

notary public is invalid, and Matsuyoshi’s Declaration alleged

material facts that raised genuine issues as to the validity of

the Mortgage.      The ICA, thereafter, declined “to reach further

issues raised by the parties.”5

            Accordingly, the ICA vacated the MSJ Judgment and

remanded the case for proceedings consistent with its Memorandum

Opinion.

                 III.   Application for Writ of Certiorari

            Kondaur presents the following two questions in its

application:

            I.     Whether the ICA erred by reversing the Circuit
                   Court’s decision to grant summary judgment in
                   favor of Petitioner based on evidence that was
                   not a matter of record at the time the Circuit
                   Court considered the motion.

            II.    Whether on de novo review this Court should
                   affirm the Circuit Court’s judgment granting a
                   summary judgment in favor of Petitioner.

Kondaur argues that the ICA erred in reversing the circuit

court’s granting of the MSJ based on Matsuyoshi’s post-judgment

declaration, which “was not a matter of record at the time the

Circuit Court considered the [MSJ] motion.”           Kondaur contends

      5
            The ICA also held that the Bankruptcy Order did not prevent
Matsuyoshi from challenging the legitimacy of the Mortgage because
Matsuyoshi’s argument that the Mortgage was not signed before a notary public
was a defense to Kondaur’s MSJ and not an affirmative claim against Resmae
Mortgage Corporation or Resmae Liquidating Properties.

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that the ICA was “limited to those materials that were

considered by the trial court in ruling on the motion.”             Kondaur

maintains that “the ICA relied solely on the Respondent’s Post-

Judgment Declaration,” which was filed twenty-nine days after

summary judgment was entered in its favor.          Kondaur contends

that “the admissible evidence on file at the time of the motion

confirms there was no genuine issue of material fact” concerning

its title to the property and the right to its possession.

Kondaur argues that “[n]either opposition filed by [Matsuyoshi]

included any admissible evidence to create a genuine issue of

material fact as to [Kondaur’s] title to and right to possession

of the property.”     Thus, Kondaur concludes it was entitled to

judgment as a matter of law6 and requests that this court reverse

the ICA’s opinion and judgment and affirm the circuit court’s

judgment granting summary judgment in its favor.

            On May 30, 2014, Matsuyoshi filed her response.

Matsuyoshi argues that the ICA’s “analysis appears to be that

      6
            Kondaur maintains that this court should “reject the argument
presented by [Matsuyoshi] that the foreclosure sale was defective because it
was conducted on the island of Oahu, in a separate county from where the
Subject Property was located.” Kondaur argues that “[p]ursuant to HRS §§
667-5 through 667-10 [(2008)] and the power of sale clause set forth in the
Mortgage, the foreclosing mortgagee was allowed to conduct the public auction
held on November 17, 2008 in the City and County of Honolulu, despite the
mortgaged property being located in Kauai county.” Additionally, because
Matsuyoshi failed to present any admissible evidence of her ability to bid at
auction, it was not shown that she was prejudiced by the sale occurring on
Oʻahu instead of Kauaʻi.

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the MSJ was essentially a motion for default judgment.”             As

such, Matsuyoshi contends that it was permissible for the ICA to

consider the Matsuyoshi Declaration filed in support of her

motion to set aside because “when there is an entry of default

on appeal the defendant is entitled to contest the sufficiency

of the complaint and its allegations to support the judgment.”

Matsuyoshi maintains that any uncontroverted material in the

“file of the case” could be considered by the ICA in determining

the sufficiency of the Complaint.         Matsuyoshi concludes that the

ICA correctly applied the appropriate standard of review for

default judgments.7

             On June 6, 2014, Kondaur filed its reply.          Kondaur

argues that “[t]he entry of default against [Matsuyoshi] has no

legal bearing on whether the materials before the Circuit Court

      7
            Matsuyoshi also contends that Kondaur is bound by an earlier
dismissal of an ejectment action filed against Matsuyoshi by Kondaur’s
predecessor in interest, Resmae. Matsuyoshi “acknowledges that this argument
was not made to the Circuit Court or the ICA,” however, Matsuyoshi claims it
is relevant to show that the ICA did not commit a grievous error and that the
correct result was reached. Kondaur maintains that Matsuyoshi’s argument
concerning the prior ejectment actions involving the Property was waived
because Matsuyoshi did not raise it in the ICA. Kondaur maintains further
that this argument is contradicted by the record as the dismissals were
without prejudice.

            Matsuyoshi also “urges the court to adopt a [] standard of
strictest good faith and utmost diligence in situations such as the case at
bar where the mortgagee is also the purchaser.” Matsuyoshi contends that
“[t]he sale of property located on Kauai at the front entrance to the First
Circuit Courthouse did not show reasonable diligence and good faith . . . .”
Matsuyoshi argues further that she was not required to show that she was
prejudiced by the sale on Oʻahu and that showing such prejudice would be
impossible without conducting an actual auction of the property on Kauaʻi.

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in ruling on [Kondaur’s] MSJ were sufficient to support summary

judgment against [Matsuyoshi].”       Kondaur contends Matsuyoshi

implicitly recognized that the ICA erred when saying that it

“appear[ed]” the ICA interpreted the MSJ as a motion for default

judgment.   Kondaur notes that it never moved for default

judgment.

                            IV.   Discussion

                                    A.

            The record in this case reflects that the parties and

the circuit court treated the MSJ as a motion for summary

judgment irrespective of an entry of default.          Thus, on appeal

to the ICA, Matsuyoshi did not address the entry of default.

Rather, Matsuyoshi’s opening brief focused solely on the circuit

court’s MSJ Order.

            Matsuyoshi’s first point of error was whether the

circuit court erred in granting Kondaur’s MSJ.          In her second

point of error, Matsuyoshi asserted that the circuit court erred

in denying her Motion to Set Aside MSJ Judgment.           In support of

both her first and second points of error, Matsuyoshi argued

that (1) Kondaur did not have title to the property because the

foreclosure sale was void for not having been conducted where

the property was located, and (2) the foreclosure sale was also

void for “technical violations.”

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           In fact, neither party addressed default judgment in

their appellate briefs to the ICA because no motion for default

judgment was filed in the circuit court or ruled on by the

judge.   Additionally, neither party contended that the claims in

the Complaint were deemed admitted by the circuit court as a

result of a default having been entered by the clerk of the

court.   This is because the circuit court did not consider, much

less find, the allegations in the Complaint to be admitted;

instead, the court and the parties proceeded to address the

merits of the MSJ, with Matsuyoshi fully participating in the

MSJ proceeding, including filing an Opposition, appearing at the

hearing, and presenting arguments to the court.

           Further, the MSJ was filed before a default had been

requested or entered.     Kondaur attached numerous documents to

the MSJ, including a certified copy of the Quitclaim Deed, a

certified copy of Resmae’s quitclaim deed, and a certified copy

of the Affidavit of Sale.      At the initial hearing on the MSJ,

the circuit court refused to proceed upon the basis of the

clerk-entered default and granted Matsuyoshi a continuance to

seek counsel.   Subsequent to the hearing, Matsuyoshi retained

counsel and filed her Opposition.        Matsuyoshi’s Opposition

included documents related to Resmae’s prior ejectment actions

against Kondaur and a declaration supporting those documents.

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          At the continued MSJ hearing, the circuit court relied

on evidence submitted by Kondaur in its MSJ and considered

documents submitted by Matsuyoshi in her Opposition.           The

circuit court stated that it had reviewed the written

submissions.   The court had a lengthy discussion with Matsuyoshi

concerning res judicata and collateral estoppel that centered on

the documents that Matsuyoshi had submitted as part of her

Opposition.

          The court also considered Matsuyoshi’s argument that

the foreclosure sale was void because it had occurred on Oʻahu

while the Property was on Kauaʻi.        The extensive discussion of

the foreclosure was based solely on the documents submitted by

Kondaur with its MSJ.     Additionally, the MSJ Judgment issued by

the court stated explicitly that “summary judgment is hereby

entered in favor of [Kondaur].”       At no point did the circuit

court indicate that it was deeming all the allegations in the

Complaint to be true as a consequence of Matsuyoshi’s default.

          It cannot be disputed that the circuit court proceeded

upon the MSJ as a motion for summary judgment, held a hearing in

which it reviewed the evidence and arguments from both parties

with respect to the motion, issued an order granting the MSJ,

and filed a judgment affirming that “summary judgment is hereby

granted in favor of” Kondaur.       On appeal to the ICA, neither

party contested this unequivocal state of the record.

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                                    B.

          “When reviewing a summary judgment, an appellate

court’s consideration of the record is limited to those

materials that were considered by the trial court in ruling on

the motion.”   Ass’n of Apartment Owners of Wailea Elua v. Wailea

Resort Co., 100 Hawaiʻi 97, 108, 58 P.3d 608, 619 (2002); see

also Munoz v. Yuen, 66 Haw. 603, 606, 670 P.2d 825, 827 (1983)

(“Thus, in reviewing a summary judgment, this court will not

examine evidentiary documents . . . not specifically called to

the attention of the trial court, even though they may be on

file in the case.” (emphasis added)).

          Although it was uncontroverted that the circuit court

considered and ruled upon the MSJ and did not rule upon a motion

for a default judgment that had not been made, the ICA

determined that it was empowered to review the sufficiency of

the Complaint and to consider additional evidence not considered

by the circuit court in ruling on the MSJ.         The entry of

default, which was not challenged at the appellate level, was

pivotal to the ICA’s analysis in reaching this determination.

According to the ICA, the entry of default against “Matsuyoshi

meant she admitted factual allegations in Kondaur[’s]

complaint.”    However, as stated, the circuit court never

indicated that it was proceeding upon the premise that the

factual allegations in the Complaint had been admitted.

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            Next, the ICA concluded that “after entry of default

by the lower court, on appeal, the defendant is entitled to

contest the sufficiency of the complaint and its allegations to

support the judgment.”      (Quoting Danning, 572 F.2d at 1388)

(internal quotation marks omitted).         The ICA cited Danning v.

Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978), and Geddes v.

United Financial Group, 559 F.2d 557, 560 (9th Cir. 1977), for

this proposition.     Danning, however, involved an appeal from a

default judgment, 572 F.2d at 1388, and, neither Danning nor

Geddes involved a motion for summary judgment against the

defaulting defendants, id.; Geddes, 559 F.2d at 559-60.8

            The ICA also relied on In Re Beltran, 182 B.R. 820,

823 (B.A.P. 9th Cir. 1995), In Re McGee, 359 B.R. at 773, and

upon 10A Charles A. Wright & Arthur R. Miller, et al., Federal

Practice and Procedure § 2688 (3d ed. 1998), for the proposition

that entry of default by the court clerk does not automatically

entitle a plaintiff to entry of default judgment, but rather, a
      8
            While Geddes involved a motion for summary judgment, it was not
against the defaulting defendants. In Geddes, the trial court granted
plaintiffs’ summary judgment against a group of corporations, but the
plaintiffs were also seeking a judgment against the individuals who allegedly
controlled the corporations. 559 F.2d at 559. The individuals had
defaulted, but the circuit court entered monetary judgments in accordance
with the defaults against the individuals that were not equivalent to the
award of damages against the corporations. One of the plaintiffs appealed,
arguing that the individuals’ defaults meant they admitted they were jointly
and separately liable for the damages, as alleged in the complaint. The
Ninth Circuit rejected this argument, holding that the individual defendants’
defaults “established their respective liabilities, but not the extent of the
damages to the plaintiff class.” Id. at 560.

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court may require some proof of the facts that must be

established in order to determine liability.          However, all of

these sources refer to a trial court’s consideration of a

default judgment, not a motion for summary judgment.           See McGee,
359 B.R. at 773 (bankruptcy court has broad discretion to grant

a default judgment and court did not abuse its discretion in

refusing to enter default judgment when material facts were not

established); Beltran, 182 B.R. at 823 (“Entry of a default by

the bankruptcy court clerk does not automatically entitle a

plaintiff to entry of a default judgment, regardless of the fact

that generally the effect of entry of a default is to deem

allegations admitted.”); 10A Wright & Miller, Federal Practice

and Procedure § 2688 n.8 (“The trial court considering whether

to enter a default judgment may hold a hearing to establish the

truth of any averment in the complaint only if it has informed

plaintiff of the intention to do so in advance so that plaintiff

can understand the direction of the proceeding and marshall

evidence.”).

          In this case, the ICA acknowledged that the circuit

court did not enter default judgment.        Nonetheless, the ICA,

relying again on McGee, held that “[c]onsequent to entry of

default against Matsuyoshi, all well-pled factual allegations

were deemed admitted,” and “[f]acts that are not well pled

include allegations that are . . . contrary to uncontroverted

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material in the file of the case.”           (Quoting In re McGee, 359 at

773.    Thus, despite the fact that no motion for default judgment

had been made, no default judgment had been entered, no claims

in the Complaint had been construed by the circuit court as

being admitted, and the case had proceeded upon the basis of a

motion for summary judgment that was fully litigated and

decided, the ICA concluded that once default was entered the

appellate court was empowered to review the allegations in the

Complaint to determine if they were “well pled.”              Moreover, in

considering whether they were “well pled,” the ICA determined

that it could review the Matsuyoshi Declaration from the Post-

Judgment Motions because it was “in the file of the case,” and

based upon the Matsuyoshi Declaration, a disputed fact could be

found.

             The ICA did not address the fact that the Matsuyoshi

Declaration was indisputably not part of the record reviewed by

the circuit court before it issued its MSJ Judgment, as the MSJ

Judgment was filed on September 18, 2012, and the Matsuyoshi

Declaration was not filed until October 17, 2012.              Further, the

ICA’s analysis has the effect of circumventing the restriction

that “[w]hen reviewing a summary judgment, an appellate court’s

consideration of the record is limited to those materials that

were considered by the trial court in ruling on the motion.”

Ass’n of Apartment Owners of Wailea Elua, 100 Hawaiʻi at 108, 58

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P.3d at 619.    Here, not only was the Matsuyoshi Declaration not

called to the attention of the circuit court at the time the MSJ

was decided, it could not have been, as it was not filed until

nearly a month after the MSJ Judgment was entered.

             In essence, the ICA treated the MSJ as a motion for

default judgment.     Matsuyoshi acknowledges this in her response,

in which she states the following: “The ICA’s analysis appears

to be that the MSJ was essentially a motion for default

judgment.”    While the ICA never characterized the MSJ as a

motion for default judgment, this would appear to be the import

of the ICA’s ruling.9

             Allowing the rule established by the ICA to become

precedent would place a defaulting, non-prevailing party with

regard to a motion for a summary judgment in a better position

as compared to a party who had not defaulted.           In the default

situation, the appellate court would be required to examine the

entire record to determine the sufficiency of the allegations in

the complaint.     Additionally, the defaulting party could

      9
            The circuit court appeared to have implicitly set aside the entry
of default by continuing the MSJ hearing to allow Matsuyoshi to seek counsel,
allowing Matsuyoshi to file her Opposition, and allowing her to appear and
present argument at the hearing. See HRCP Rule 55(c) (“For good cause shown
the court may set aside an entry of default.”); Diaz v. United States, 789 F.
Supp. 2d 722, 732 n.11 (S.D. Miss. 2011) (“[T]he court may set aside the
entry of default sua sponte, provided of course that the court finds good
cause to do so.”). However, it is not necessary to resolve this issue in
light of the fact that the circuit court clearly considered and decided the
MSJ on its merits.

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retroactively prevail upon a correctly granted MSJ order or

judgment by a subsequent submission of a declaration.            Further,

allowing appellate courts to review evidence submitted after

summary judgment has been granted would overturn well-settled

Hawaiʻi law.

          Therefore, the ICA erred in relying on the post-

judgment Matsuyoshi Declaration as a basis to find disputed

material facts as to the MSJ and consequently to further

conclude that “summary judgment for Kondaur [] [was]

inappropriate.”    Accordingly, we vacate the ICA’s Judgment on

Appeal and remand the case to the ICA to consider the further

issues that it “decline[d] to reach” that were “raised by the

parties” on appeal.

                             V.   Conclusion

          The ICA’s April 4, 2014 Judgment on Appeal is vacated,

and the case is remanded to the ICA for consideration of the

other issues raised by the parties that were not addressed by

the ICA in its resolution of the appeal in this case.

Michael C. Bird and                      /s/ Mark E. Recktenwald
Thomas J. Berger
for petitioner                           /s/ Paula A. Nakayama

Joe P. Moss                              /s/ Sabrina S. McKenna
for respondent
                                         /s/ Richard W. Pollack

                                         /s/ Michael D. Wilson

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