Wells Fargo Bank v. Saito

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
29-JUN-2022
07:52 AM
Dkt. 52 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

WELLS FARGO BANK, N.A., A NATIONAL BANKING ASSOCIATION,
as Trustee for Option One Mortgage Loan Trust 2007-3
Asset-Backed Certificates, Series 2007-3,
Plaintiff-Appellee,
v.
STUART KUNIO SAITO; RAYNETTE KUILANI SAITO,
Defendants-Appellants,
and
JOHN and MARY DOES 1-10,
Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 10-1-0978-05)

SUMMARY DISPOSITION ORDER
(By: Ginoza, C.J., and Wadsworth and Nakasone, JJ.)

Defendants-Appellants Stuart Kunio Saito and Raynette
Kuilani Saito (the Saitos) appeal from the September 3, 2019
"Judgment on Findings of Fact, Conclusions of Law, and Order
Granting Plaintiff's Motion for Summary Judgment on Second
Amended Complaint Filed July 12, 2018" (Judgment), entered in
favor of Plaintiff-Appellee Wells Fargo Bank, N.A., as Trustee
for Option One Mortgage Loan Trust 2007-3 Asset-Backed
Certificates, Series 2007-3 (Bank), by the Circuit Court of the
First Circuit (Circuit Court).1/ The Saitos also challenge the
September 3, 2019 "Findings of Fact, Conclusions of Law, and
Order Granting Plaintiff's Motion for Summary Judgment on Second

1/
The Honorable James S. Kawashima presided.
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Amended Complaint Filed July 12, 2018" (FOFs/COLs/Order), entered
by the Circuit Court. For the reasons explained below, we affirm
the Judgment.
Bank filed a Second Amended Complaint against the
Saitos on July 12, 2018. Bank alleged, among other things, that:
(1) on or about December 19, 2006, the Saitos executed an
adjustable rate note (Note), which was eventually endorsed to
Bank; (2) the Note was secured by a Mortgage dated December 19,
2006 (Mortgage), executed by the Saitos as mortgagors and
recorded in the Bureau of Conveyances of the State of Hawai#i
(Bureau) on January 11, 2007, with respect to certain real
property in Kâne#ohe, Hawai#i (Property); (3) the Mortgage was
eventually assigned to Bank via a June 10, 2008 assignment, which
was recorded in the Bureau on June 24, 2008; (4) the loan went
into default and the Saitos entered into a loan modification
agreement with the servicer of the loan; (5) Bank completed a
nonjudicial foreclosure on the Property, as set forth in a
January 27, 2010 Mortgagee's Affidavit of Foreclosure Sale Under
Power of Sale (Affidavit of Sale); (6) the Property was sold to
Bank or its nominee, which was the high bidder at the foreclosure
auction; and (7) Bank recorded the Affidavit of Sale and the
Mortgagee's Quitclaim Deed (Quitclaim Deed) transferring title to
the Property to Bank. The Second Amended Complaint sought
declaratory relief to set aside the nonjudicial foreclosure –
specifically, a declaration that, among other things, "[t]he non-
judicial public auction held on January 19, 2010, be set aside;"
"[t]he Affidavit of Sale is rescinded and null and void;" "[t]he
Quitclaim Deed is rescinded;" and "[t]he Mortgage, as modified,
is reinstated as a valid and effective lien[.]"
The Saitos answered the Second Amended Complaint and
asserted numerous affirmative defenses, including "the doctrine
of wrongful foreclosure[,] as the alleged non-judicial
foreclosure was lacking in mandatory material contractual and
statutory conditions precedent . . . ."2/ The Saitos did not
assert a counterclaim against Bank.

2/
The Saitos had made similar allegations prior to the filing of the
Second Amended Complaint.

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NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

On March 28, 2019, Bank filed a motion for summary
judgment on the Second Amended Complaint. The Saitos' opposition
was filed on May 6, 2019. The Saitos' sole argument was that
"[Bank] has not . . . met its prima facie burden of demonstrating
that it was the holder of th[e] [N]ote and [M]ortgage at the time
the original complaint was filed herein, as necessary to
establish its standing to sue." In support of this argument, the
Saitos relied on Bank of America, N.A. v. Reyes-Toledo, 139
Hawai#i 361, 390 P.3d 1248 (2017). In its reply memorandum, Bank
argued that unlike the foreclosing mortgagee in Reyes-Toledo,
Bank "does not seek to enforce the Note and Mortgage." Rather,
Bank "simply seeks to rescind the non-judicial foreclosure sale."
Bank's motion was heard on June 26, 2019. During the
hearing, Bank's counsel stated that he had the original Note with
him, but reiterated:

[W]e're just trying to set aside the nonjudicial foreclosure
that happened and put the parties back into the position
that they were prior to the nonjudicial.

And, . . . if at some point . . . my client does
decide that the loan is in default and that it wants to seek
redress, at that point[,] it would, you know, file the
appropriate pleadings to indicate that it is better to
enforce the note. But, you know, that's not something we're
trying to do at this point.

Following arguments, the Circuit Court indicated its intent to
grant Bank's summary judgment motion.
On September 3, 2019, the Circuit Court entered the
FOFs/COLs/Order granting Bank's motion for summary judgment.
The Circuit Court concluded, among other things, that "[t]he
standards set forth in . . . Reyes-Toledo . . . apply to
noteholders' entitlements to enforce notes, but are otherwise
inapposite absent foreclosure in the instant action . . . ." The
Circuit Court granted the following declaratory relief:

a. The non-judicial foreclosure sale of the
Property held on January 19, 2010 is set aside;

b. That certain . . . Affidavit of . . . Sale
recorded in the Bureau . . . on January 27, 2010 as Document
No. 2010-012015 is rescinded;

c. That certain . . . Quitclaim Deed & Conveyance
Tax Certificate recorded in the Bureau on February 5, 2010
as Document No. 2010-017093 is cancelled; and

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NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

d. That certain Mortgage recorded in the Bureau on
January 11, 2007 as Document No. 2007-005528 is reinstated
with its original recording date.

Also, on September 3, 2019, the Circuit Court entered the
Judgment in favor of Bank. This appeal followed.
The Saitos' sole contention on appeal is that "[t]he
Circuit Court committed reversible error in granting summary
judgment, because [Bank] failed to meet its prima facie burden of
establishing its standing through admissible evidence." The
Saitos again cite Reyes-Toledo for the proposition that a
plaintiff seeking summary judgment in a foreclosure action has
the burden to establish standing to enforce the promissory note
at the time the complaint was filed.
We recently addressed a similar argument in U.S. Bank,
Nat'l Ass'n, as Trustee for Mastr Asset Backed Securities Trust,
2006-FRE2 v. Omizo, No. CAAP-XX-XXXXXXX, 2021 WL 5504993 (Haw.
App. Nov. 24, 2021) (SDO), and concluded the argument lacked
merit. Id. at *2. There, as here, the claim at issue did not
seek foreclosure, but instead sought declaratory relief to unwind
a nonjudicial foreclosure. Id. There, as here, the Circuit
Court granted declaratory relief, not a decree of foreclosure.
Id. As we stated in Omizo, a party has standing to seek
declaratory relief:

(1) where antagonistic claims exist between the parties (a)
that indicate imminent and inevitable litigation, or (b)
where the party seeking declaratory relief has a concrete
interest in a legal relation, status, right, or privilege
that is challenged or denied by the other party, who has or
asserts a concrete interest in the same legal relation,
status, right, or privilege; and (2) a declaratory judgment
will serve to terminate the uncertainty or controversy
giving rise to the proceeding.

Id. (quoting Tax Found. of Hawai#i v. State, 144 Hawai#i 175, 202,
439 P.3d 127, 154 (2019)).
As in Omizo, the record here reflects that Bank had
standing to request declaratory relief against the Saitos
regarding the legal consequences of Bank's nonjudicial
foreclosure. The Saitos do not challenge the entry of summary
judgment on any other ground. Accordingly, the Circuit Court did
not err in granting summary judgment in favor of Bank.

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For these reasons, the September 3, 2019 "Judgment on
Findings of Fact, Conclusions of Law, and Order Granting
Plaintiff's Motion for Summary Judgment on Second Amended
Complaint Filed July 12, 2018," entered by the Circuit Court of
the First Circuit, is affirmed.

DATED: Honolulu, Hawai#i, June 29, 2022.

On the briefs:
/s/ Lisa M. Ginoza
Gary Victor Dubin and Chief Judge
Frederick J. Arensmeyer
for Defendants-Appellants.
/s/ Clyde J. Wadsworth
Steven T. Iwamura, Associate Judge
Steven K. Idemoto, and
Mary Martin
(Clay Chapman Iwamura Pulice /s/ Karen T. Nakasone
& Nervell) Associate Judge
for Plaintiff-Appellee.

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