ETrade Bank v. Gibson

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
22-DEC-2022
07:52 AM
Dkt. 79 MO

NOS. CAAP-18-000694 & CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

NO. CAAP-XX-XXXXXXX
E*TRADE BANK, Plaintiff-Appellee, v.
KAHALA-ANN TRASK GIBSON; WILLIAM GIBSON,
Defendants-Appellants, and
JOHN and MARY DOES 1-10, Defendants
(CIVIL NO. 16-1-0422K)

AND

NO. CAAP-XX-XXXXXXX
E*TRADE BANK, Plaintiff-Appellee, v.
KAHALA ANN TRASK-GIBSON; WILLIAM E. GIBSON,
Defendants-Appellants, and
KULA KAI ESTATES COMMUNITY ASSOCIATION;
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
SOLELY AS NOMINEE FOR COUNTRYWIDE HOME LOANS, INC,;
STATE OF HAWAII - DEPARTMENT OF TAXATION,
Defendants-Appellees, and
JOHN and MARY DOES 1-20, DOE PARTNERSHIPS,
CORPORATIONS OR OTHER ENTITIES 1-20, Defendants
(CIVIL NO. 19-1-00079K)

APPEALS FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT

MEMORANDUM OPINION
(By: Wadsworth, Presiding Judge, and Nakasone and McCullen, JJ.)

These consolidated appeals arise from a foreclosure
dispute between Defendants-Appellants Kahala-Ann Trask Gibson and
William Gibson (the Gibsons) and Plaintiff-Appellee E*Trade Bank
(Bank).
In case no. CAAP-XX-XXXXXXX, the Gibsons appeal from
the "Judgment" (Declaratory Judgment) and the "Findings of Fact;
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Conclusions of Law; Order Granting [Bank's] Motion for Summary
Judgment Filed June 4, 2018" (Declaratory FOFs/COLs/Order), both
entered on August 7, 2018, in Civil No. 16-1-0422K by the Circuit
Court of the Third Circuit (Circuit Court).1/ On appeal, the
Gibsons contend that the Circuit Court erred in granting Bank's
motion for summary judgment where Bank lacked standing to seek
reinstatement of the subject mortgage.
In case no. CAAP-XX-XXXXXXX, the Gibsons appeal from
the "Judgment" (Foreclosure Judgment) and the "Findings of Fact;
Conclusions of Law; Order Granting [Bank's] Motion for Summary
Judgment, and for Interlocutory Decree of Foreclosure Against All
Parties Filed January 16, 2020" (Foreclosure FOFs/COLs/Order),
both entered on September 1, 2020, in Civil No. 19-1-079K by the
Circuit Court.2/ On appeal, the Gibsons contend that the Circuit
Court erred in granting Bank's motion for summary judgment where
there were genuine issues of material fact as to: (1) whether
Bank complied with the notice requirements of the mortgage; (2)
whether the Gibsons' affirmative defense of unclean hands
prevented the equitable relief of foreclosure; and (3) "overall
credibility," based on the declaration of a Bank witness.
After reviewing the record on appeal and the relevant
legal authorities, and giving due consideration to the issues
raised and the arguments advanced by the parties, we resolve the
Gibsons' contentions as follows.

I. CAAP-XX-XXXXXXX

On December 30, 2016, Bank filed a Complaint for
Ejectment (Complaint), initiating Civil No. 16-1-422K
(Declaratory Relief Action). The Complaint alleged, among other
things, that: (1) on August 25, 2003, Kahala-Ann Trask Gibson
executed a fixed/adjustable rate note (Note); (2) the Note was
secured by a Mortgage (Mortgage), executed by the Gibsons on
August 25, 2003 and recorded in the Bureau of Conveyances of the
State of Hawai#i (Bureau) on September 3, 2003, with respect to

1/
The Honorable Melvin H. Fujino presided.
2/
The Honorable Wendy DeWeese presided.

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real property located at 75-5591A Hienaloli Road, Kailua-Kona,
Hawai#i 96740 (TMK: (3) 7-5-012-050-0000) (Property); (3) the
Mortgage was assigned to BAC Home Loans Servicing, LP (BAC) via a
February 26, 2010 assignment, which was recorded in the Bureau on
March 17, 2010; (4) on June 8, 2010, BAC conducted a nonjudicial
foreclosure on the Property, as set forth in a Mortgagee's
Affidavit of Foreclosure Sale Under Power of Sale (Affidavit of
Sale), recorded in the Bureau on June 24, 2010; (5) the Property
was sold to BAC or its nominee, which was the high bidder at the
foreclosure auction; (6) a Mortgagee's Quitclaim Deed Pursuant to
Power of Sale transferring title to the Property from BAC to
itself was recorded in the Bureau on August 3, 2010; (7) BAC
later changed its name to, and merged into, Bank of America,
National Association (BOA); (8) a Quitclaim Deed transferring
title to the property from BOA to Bank was recorded in the Bureau
on June 5, 2015; and (9) the Gibsons continued to remain on the
Property. Count I sought a declaratory judgment that the
nonjudicial foreclosure was valid. Count II sought a writ of
ejectment. Count III sought recovery of damages for the Gibsons'
continuing occupancy of the property. The prayer for relief
further requested: "In the alternative, should this court find
the non-judicial foreclosure invalid, that this court allow this
mortgage to be re foreclosed judicially."
On March 16, 2017, the Gibsons filed an Answer to
Complaint; Counterclaim for Quiet Title. The answer asserted
numerous affirmative defenses, including that Bank lacked
standing. The counterclaim alleged that the nonjudicial
foreclosure "was invalid and wrongful under Hawaii case law[.]"
Count One sought a declaratory judgment that the nonjudicial
foreclosure was invalid and subsequent transfers of title to the
property were void. Count Two sought a judgment quieting title
to the property in favor of the Gibsons.
On July 12, 2017, Bank answered the counterclaim.
On June 4, 2018, Bank filed a motion for summary
judgment on the Complaint. Bank submitted, among its exhibits, a
Corporation Assignment of Mortgage dated April 20, 2018
(Assignment of Mortgage), assigning the Mortgage to Bank, and an

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undated allonge endorsing the Note to Bank. Bank argued that it
had standing to enforce the nonjudicial foreclosure and the
foreclosure was valid, while also appearing to acknowledge that
the foreclosing mortgagee had failed to publish notice of
postponement of the foreclosure auction, as required by Hungate
v. Law Office of David B. Rosen, 139 Hawai#i 394, 403-04, 391
P.3d 1, 10-11 (2017). Bank argued in the alternative that should
the Circuit Court find the nonjudicial foreclosure invalid, the
court should enter an order "that the title of the Property be
restored into the name of [the Gibsons] and the Mortgage be
reinstated against the Property . . . ." (Emphasis omitted.)
On June 27, 2018, the Gibsons filed a memorandum in
opposition to Bank's motion. The Gibsons argued, among other
things, that the nonjudicial foreclosure was void because the
foreclosing mortgagee failed to comply with the Hungate ruling.
The Gibsons did not challenge Bank's standing.
On July 10, 2018, the parties filed a court-approved
stipulation to dismiss the Gibsons' counterclaim without
prejudice, pursuant to Hawai#i Rules of Civil Procedure (HRCP)
Rule 41(a)(1)(B).
Bank's motion was heard on July 5, 2018. During oral
argument, Bank conceded that the nonjudicial foreclosure was
invalid under Hungate. Bank asked the court to declare the
nonjudicial foreclosure void so that title to the Property could
be restored to the Gibsons and the Mortgage could be reinstated.
Bank clarified: "We're not asking for an order to foreclose the
property today. . . . That is another day." The Gibsons argued
in part: "[Bank] didn't have standing when [it] filed [the]
complaint . . . to be asking for interest to be restored to . . .
the original . . . foreclosing party. So . . . they don't have
standing to be asking for those [sic] declaratory relief."
Following arguments, the Circuit Court indicated its
intent to grant Bank's summary judgment motion and on August 7,
2018, entered the Declaratory FOFs/COLs/Order. The Circuit Court
concluded that BAC's nonjudicial foreclosure "is void with
respect to the postponement of the original sale date not being
published" under Kondaur Capital Corp. v. Matsuyoshi, 136 Hawai#i

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227, 361 P.3d 454 (2015), and Hungate. The Circuit Court granted
the following relief:

A. The non-judicial foreclosure as evidenced by the
[Affidavit of Sale] recorded in the Bureau . . . as
Document No. 2010-08859 is void;
B. The title of the Property shall be restored in the
names of [the Gibsons];

C. The Mortgage dated August 25, 2003 and recorded in the
Bureau . . . as Document No. 2003-185236 shall be
reinstated under the same terms, conditions, and
priority as it was prior to the non-judicial
foreclosure[.]

Also, on August 7, 2018, the Circuit Court entered the
Judgment in favor of Bank as to the Complaint, containing the
language required by HRCP Rule 54(b). On September 6, 2018, the
Gibsons filed their notice of appeal, initiating case no. CAAP-
XX-XXXXXXX.
The Gibsons' sole contention on appeal is that the
Circuit Court erred in reinstating the Mortgage where Bank lacked
standing to seek such relief. The Gibsons cite Bank of America,
N.A. v. Reyes-Toledo, 139 Hawai#i 361, 390 P.3d 1248 (2017), 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 addressed a similar argument in U.S. Bank, Nat'l
Ass'n, as Tr. for Mastr Asset Backed Sec. Tr., 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 sought alternative relief in
the event the Circuit Court found the nonjudicial foreclosure
invalid. Id. There, as here, the Circuit Court granted a form
of declaratory relief restoring title to the property to the
mortgagors and reinstating the mortgage; the court did not grant
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

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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 Gibsons
regarding the legal consequences of the nonjudicial foreclosure.
The Gibsons 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.
For these reasons, the August 7, 2018 Judgment entered
by the Circuit Court of the Third Circuit is affirmed.

II. CAAP-XX-XXXXXXX

On March 20, 2019, Bank filed a Complaint to Foreclose
Mortgage (Foreclosure Complaint), initiating Civil No. 19-1-079K.
The Foreclosure Complaint alleged, among other things, that: (1)
the Note was secured by the Mortgage, which encumbered the
Property located at "75-645 Kula Kai Place, Kailua-Kona, HI 96740
(TMK: (3) 7-5-012-050)"; (2) Bank "has in its care, custody
and/or control the original Note and its Allonges"; (3) the
Mortgage was eventually assigned to Bank via the Assignment of
Mortgage, which was recorded in the Bureau on February 20, 2019;
(4) on or about June 10, 2010, Kahala-Ann Trask Gibson conveyed
the Property to herself and William E. Gibson, as tenants by the
entirety, via quitclaim deed, which was recorded in the Bureau on
August 3, 2010; (5) the Note was in default, with the payment due
on March 1, 2009, and all subsequent payments not having been
made; (6) notice of the default (Notice of Default) as required
by the Note and the Mortgage was provided on December 28, 2018,
and the default was not cured; and (7) Bank was entitled to
foreclose the Mortgage and to sell the Property. The Foreclosure
Complaint also set forth the relief granted by the Circuit Court
in the Declaratory Relief Action. See supra.
On October 28, 2019, the Gibsons filed an answer to the
Foreclosure Complaint (Answer). The Answer alleged that Bank
lacked standing, but did not otherwise assert any affirmative

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defenses. No counterclaim was filed.
On January 16, 2020, Bank filed a motion for summary
judgment and an interlocutory decree of foreclosure. The
supporting declarations included a Declaration of Indebtedness
signed by Keli Smith (Smith Declaration), a document coordinator
at Bank's authorized servicing agent and custodian of records.
The Smith Declaration referred to the Mortgage as encumbering the
Property located at "75-645 Kula Kai Place, Kailua Kona, HI 96740
(TMK: (3) 7-5-012-050)[.]"
On March 10, 2020, the Gibsons filed a memorandum in
opposition to Bank's summary judgment motion. The Gibsons argued
that Bank failed to comply with the notice requirements of the
Mortgage, because the Notice of Default had been provided to the
Gibsons through their counsel, while the Mortgage required that
all notices be sent to the Property address. The Gibsons further
argued that they had an "unclean hands" defense, based on the
prior "wrongful" nonjudicial foreclosure, which prevented the
Circuit Court from granting Bank the equitable relief of
foreclosure.
On March 10, 2020, Bank filed a reply memorandum
asserting that the Notice of Default complied with the
requirements of the Mortgage and that any challenge to the
deficiency of such notice was waived. Bank also argued that the
doctrine of unclean hands did not bar relief where, among other
things, Bank's foreclosure claim had no direct connection with
its predecessor's nonjudicial foreclosure.
Bank's motion for summary judgment was heard on June 3,
2020. At that time, the Circuit Court raised questions about the
Property address, noting that the motion and Exhibit 2 identified
the address as "75-645 Kula Kai Place, Kailua-Kona, Hawaii 96740"
(Kula Kai Address), while the Note and the Mortgage (Exhibits 1
and 3) bore the address "75-5591A Hienaloli [] Road, Kailua-Kona,
Hawaii" (Hienaloli Address). The court continued the hearing and
instructed the parties to submit supplemental briefing on the
issue of the Property address.
On June 24, 2020, Bank filed its supplemental
memorandum. Bank conceded that both the Note and the Mortgage

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referenced the Hienaloli Address, but argued "[n]otwithstanding
these references, the record is clear that the debt signified by
the Note was always meant to be secured through the Mortgage
recorded on the real property at the [Kula Kai] address . . . as
pled in the Complaint." In particular, Bank argued that the
Mortgage, viewed in its entirety, plainly encumbered the Property
at the Kula Kai Address, as reflected in the legal description of
the Property attached as Exhibit "A," and the referenced tax map
key (TMK) number, which corresponded to the Kula Kai Address.
Bank also submitted a printout of county tax records for the
parcel number identified in the Mortgage, which reflected the
Kula Kai Address as the location of the Property and the
Hienaloli Address as the owner's mailing address.
On July 15, 2020, the Gibsons filed a supplemental
memorandum addressing the issue of the Property address. The
Gibsons argued generally that "a genuine issue of material fact
exists where the address identified [in the Smith Declaration],
and identified in [Bank's] Complaint and Motion as the Property
Address it seeks to foreclose, differs from the property address
identified in the loan documents offered as evidence by [Bank]."
The Gibsons further argued that "this discrepancy raises a
genuine issue of material fact as to . . . Smith's credibility
and the veracity of all other statements contained in [the Smith
D]eclaration."
The continued hearing on Bank's motion for summary
judgment was held on July 21, 2020. Regarding the issue of the
Property address, Bank referenced its supplemental memorandum and
argued: "[T]he Gibsons have not chosen to submit any type of
affidavits in opposition or stating that the [M]ortage was not
intended to encumber the Kula Kai address, so [Bank] do[es]n't
think there is a material issue of fact with respect to that."
The Gibsons responded: "[E]ven if [Bank] has been able to address
the discrepancy issue [regarding the Property address], that
issue really also raises the issue of credibility when it comes
to . . . Smith's testimony." After further argument regarding
the notice and unclean hands issues raised by the Gibsons (see
supra), the Circuit Court concluded there was no genuine issue of

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material fact and granted the motion for summary judgment and for
an interlocutory decree of foreclosure.
On September 1, 2020, the Circuit Court entered the
Foreclosure FOFs/COLs/Order, which stated in part:

FINDINGS OF FACT 3/
. . . .
3. [Bank's] Mortgage encumbers the fee simple
interest in real property, including all improvements and
fixtures, situated at 75-645 Kula Kai Place, Kailua Kona, HI
96740 (TMK: (3) 7-5-012-050) (hereinafter "the Property")
and more particularly described in Exhibit "A".

. . . .
9. [The Gibsons] were provided with proper notice of
default through their counsel of record which was in
accordance to the terms of the Note and Mortgage and the
applicable law which included the Hawaii Professional Rules
of Conduct and Fair Debt Collection Practices Act.

. . . .
CONCLUSIONS OF LAW

. . . .

3. [Gibsons'] defense of unclean hands does not
preclude the granting of this interlocutory decree of
foreclosure.

4. All of the material elements set forth in Bank of
Honolulu, N.A. v. Anderson, 3 Haw. App. 545, 551 (1982); 654
P.2d 1370, 1375 (Haw. App. 1982), have been met by [Bank].
5. There are no genuine issues of material fact, and
therefore, [Bank] is entitled to Judgment as a matter of law
pursuant to Rule 56 of the Hawaii Rules of Civil Procedure,
and an interlocutory decree of foreclosure.

A copy of the property description contained in the Mortgage was
attached as exhibit "A" to the Foreclosure FOFs/COLs/Order.
On October 1, 2020, the Gibsons filed their notice of
appeal, initiating case no. CAAP-XX-XXXXXXX.
In their first point of error, the Gibsons contend that
the Circuit Court erred in granting Bank's motion for summary
judgment because there was a genuine issue of material fact as to
whether Bank complied with the notice requirements of the
Mortgage. Specifically, the Gibsons argue that under the terms
of the Mortgage, the Notice of Default was required to be sent to

3/
We construe the quoted "Findings of Fact" as legal conclusions.

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the Property address unless the Gibsons designated a substitute
notice address by notice to Bank.4/ The Gibsons further argue
that because they did not designate a substitute notice address,
the Notice of Default was required to be sent to the Property
address, and Bank failed to comply with this requirement when it
sent the Notice of Default to the Gibsons care of their counsel
at their counsel's address.
In order to establish entitlement to foreclose, the
foreclosing plaintiff must typically prove "the existence of an
agreement, the terms of the agreement, a default by the mortgagor
under the terms of the agreement, and giving of the cancellation
notice." Bank of Am., N.A. v. Reyes-Toledo, 139 Hawai#i 361,
367, 390 P.3d 1248, 1254 (2017) (citing Bank of Honolulu, N.A. v.
Anderson, 3 Haw. App. 545, 551, 654 P.2d 1370, 1375 (1982)).
Here, there is no dispute that on December 28, 2018, Bank mailed
the Notice of Default to the Gibsons care of their counsel at
their counsel's address via regular and certified mail. Nor is
there any dispute that the Gibsons' counsel: (1) received the
Notice of Default; (2) on January 11, 2019, emailed Bank's
counsel requesting additional information regarding the Notice of
Default, including a "breakdown of the figures used in [the
Notice of Default]" and stating, among other things, "Mr. Gibson
will pay the amount in the [Notice of Default] for all
appropriate and full releases (full release of mortgage)"; and

4/
The Mortgage stated, in relevant part:
15. Notices. All notices given by Borrower or Lender
in connection with this Security Instrument must be in
writing. Any notice to Borrower in connection with this
Security Instrument shall be deemed to have been given to
Borrower when mailed by first class mail or when actually
delivered to Borrower's notice address if sent by other
means. Notice to any one Borrower shall constitute notice
to all Borrowers unless Applicable Law expressly requires
otherwise. The notice address shall be the Property Address
unless Borrower has designated a substitute notice address
by notice to Lender. Borrower shall promptly notify Lender
of Borrower's change of address. If Lender specifies a
procedure for reporting Borrower's change of address, then
Borrower shall only report a change of address through that
specified procedure. There may be only one designated
notice address under this Security Instrument at any one
time. . . . If any notice required by this Security
Instrument is also required under Applicable Law, the
Applicable Law requirement will satisfy the corresponding
requirement under this Security Instrument.

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(3) on January 24, 2019, emailed Bank's counsel requesting "a
payoff quote good through June 2019[.]" It was over a year
later, in their opposition to Bank's motion for summary judgment,
that the Gibsons first objected to the method of delivery of the
Notice of Default.
Under these circumstances, the Gibsons waived their
right under the terms of the Mortgage to have the Notice of
Default delivered to the Property Address. The Gibsons'
intention to waive this right can be inferred as a matter of law
from the acts and conduct of their counsel in acknowledging
receipt of the Notice of Default, communicating with Bank's
counsel regarding the content of the notice, and advocating on
behalf of the Gibsons with respect to the substance of the
notice. See Wilart Assoc. v. Kapiolani Plaza, Ltd., 7 Haw. App.
354, 359-60, 766 P.2d 1207, 1210-11 (1988) ("[A] waiver may be
expressed or implied, and it may be established by express
statement or agreement, or by acts and conduct from which an
intention to waive may reasonably be inferred." (brackets,
internal quotation marks omitted) (quoting 28 Am. Jur. 2d
Estoppel and Waiver § 160 at 845 (1966))); Coon v. City & Cnty.
of Honolulu, 98 Hawai#i 233, 261-62, 47 P.3d 348, 376-77 (2002)
("While the question whether a valid waiver exists is generally a
question of fact, 'when the facts are undisputed it may become a
question of law.'" (quoting Hawaiian Homes Comm'n v. Bush, 43
Haw. 281, 286 (1959))).
Accordingly, we hold that the Circuit Court correctly
concluded there was no genuine issue of material fact that Bank
complied with the notice requirements of the Mortgage.5/
In their second point of error, the Gibsons contend
that the Circuit Court erred in granting Bank's motion for
summary judgment because there was a genuine issue of material
fact as to whether the Gibsons' affirmative defense of unclean
hands prevented the equitable relief of foreclosure. The Gibsons

5/
Although the Circuit Court did not rely on the Gibsons' waiver in
determining that they were provided with proper notice of default through
their counsel, we may affirm a grant of summary judgment on any grounds
appearing in the record, even if the circuit court did not rely on it. See,
e.g., Prudential Locations, LLC v. Gagnon, 151 Hawai #i 136, 146, 509 P.3d
1099, 1109 (2022).

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argue that because the prior nonjudicial foreclosure was
"wrongful," the doctrine of unclean hands bars Bank from
judicially foreclosing on the Property.

[A] plaintiff-movant is not required to disprove affirmative
defenses asserted by a defendant in order to prevail on a
motion for summary judgment. The plaintiff is only
obligated to disprove an affirmative defense on a motion for
summary judgment when the defense produces material in
support of an affirmative defense. Generally, the defendant
has the burden of proof on all affirmative defenses, which
includes the burden of proving facts which are essential to
the asserted defense.

U.S. Bank Nat'l Ass'n v. Castro, 131 Hawai#i 28, 41, 313 P.3d
717, 730 (2013) (citations, quotation marks, and footnote
omitted).
The Hawai#i Supreme Court "has limited the doctrine of
'unclean hands,' or the equitable maxim 'he who comes into equity
must come with clean hands,'" as follows:

The maxim, considered as a general rule controlling the
administration of equitable relief in particular
controversies, is confined to misconduct in regard to, or at
all events connected with, the matter in litigation, so that
it has in some measure affected the equitable relations
subsisting between the two parties, and arising out of the
transaction; it does not extend to any misconduct, however
gross, which is unconnected with the matter in litigation,
and with which the opposite party has no concern. When a
court of equity is appealed to for relief it will not go
outside of the subject matter of the controversy, and make
its interference to depend upon the character and conduct of
the moving party in no way affecting the equitable right
which he asserts against the defendant, or the relief which
he demands.

7's Enters., Inc. v. Del Rosario, 111 Hawai#i 484, 494–95, 143
P.3d 23, 33–34 (2006) (quoting Woodward v. Auyong, 33 Haw. 810,
811–12 (1936)); see AIG Hawaii Ins. Co., Inc. v. State Farm Ins.
Cos., No. 27789, 2008 WL 4539335, at *8 (Haw. App. Oct. 8, 2008)
("In order to assert a claim that one has acted with 'unclean
hands,' however, 'some fraudulent or dishonest practice must be
shown; some attempted abuse of process; or some conduct evidently
contrary to equity and good conscience.'" (quoting Lucas v.
American Hawaiian Eng'g & Constr. Co., 16 Haw. 80, 85 (1904))).
It is within the trial court's discretion to invoke equitable
relief such as the "unclean hands" doctrine. 7's Enters., 111
Hawai#i at 489, 143 P.3d at 28 (citing Ueoka v. Szymanski, 107
Hawai#i 386, 393, 114 P.3d 892, 899 (2005)).

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Here, the Gibsons appear to assert that the prior
judicial foreclosure was "wrongful" — giving rise to their
unclean hands defense — for two reasons. First, the Gibsons
argue that the foreclosing mortgagee (BAC) failed to comply with
the requirements of the Mortgage and the power of sale in
postponing the foreclosure sale. Second, the Gibsons argue that
the foreclosing mortgagee failed to prove that an adequate price
was procured for the Property.
As to their first argument, the Gibsons rely on the
Circuit Court's conclusion in the Declaratory Relief Action that
BAC's nonjudicial foreclosure was void "with respect to the
postponement of the original sale date not being published." The
Gibsons fail to explain, however, how BAC's failure to publish a
postponed sale date in connection with the prior nonjudicial
foreclosure affects the judicial foreclosure sought by Bank,
particularly where the Gibsons do not dispute that in the
Declaratory Relief Action, Bank conceded that the nonjudicial
foreclosure was invalid under Hungate and sought to undo it. See
7's Enters., 111 Hawai#i at 495, 143 P.3d at 34.
Morever, as to both arguments, the Gibsons do not cite
any evidence in the record that would raise a triable issue as to
whether the alleged misconduct by BAC reaches the type of
fraudulent or dishonest practice, abuse of process, or conduct
contrary to equity and good conscience that would justify the
Circuit Court finding, in its discretion, that BAC's conduct
amounts to Bank's unclean hands. See AIG Hawaii Ins. Co., 2008
WL 4539335, at *8; 7's Enters., 111 Hawai#i at 489, 143 P.3d at
28.
On this record, we hold that the Circuit Court
correctly concluded there was no genuine issue of material fact
that the Gibsons' unclean hands defense did not preclude the
granting of the interlocutory decree of foreclosure.
In their third point of error, the Gibsons contend that
the Circuit Court erred in granting Bank's motion for summary
judgment because the Smith Declaration "raises general issues of
material fact regarding overall credibility." The Gibsons argue
that "a genuine issue of material fact exists where the address

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identified [in the Smith Declaration], and identified in [Bank's]
Complaint and Motion [for Summary Judgment] as the Property
Address it seeks to foreclose, differs from the property address
in the loan documents offered as evidence by [Bank]."
The Gibsons' contention is without merit. Bank showed
below that the Note was secured by the Mortgage, which encumbered
the Property at the Kula Kai Address, as reflected in the
attached legal description of the Property, as well as the
referenced TMK number, which corresponded to the Kula Kai
Address. Bank also submitted a printout of county tax records
for the parcel number identified in the Mortgage, which reflected
the Kula Kai Address as the location of the Property and the
Hienaloli Address as the owner's mailing address. In response,
the Gibsons submitted no evidence tending to show that the
Mortgage was not intended to encumber the Kula Kai address. See
Nozawa v. Operating Eng'rs Local Union No. 3, 142 Hawai#i 331,
342, 418 P.3d 1187, 1198 (2018) ("Once a summary judgment movant
has satisfied its initial burden of producing support for its
claim that there is no genuine issue of material fact, the party
opposing summary judgment must 'demonstrate specific facts, as
opposed to general allegations, that present a genuine issue
worthy of trial.'" (brackets omitted) (quoting Lales v. Wholesale
Motors Co., 133 Hawai#i 332, 359, 328 P.3d 341, 368 (2014))).
Nor do the Gibsons argue on appeal that the Mortgage was not
intended to encumber the Kula Kai address. The Gibsons make no
other discernible argument as to how the Smith Declaration raises
issues of material fact regarding "overall credibility." See
Costa v. Able Distributors, Inc., 3 Haw. App. 486, 489, 653 P.2d
101, 104 (1982) ("[A] party opposing [a] motion for summary
judgment must be able to point to some facts which refute the
proof of the movant in some material portion and 'not merely
recite the incantation, "Credibility," and have a trial on the
hope that a jury may disbelieve factually uncontested proof.'"
(quoting Rinieri v. Scanlon, 254 F. Supp. 469, 474 (S.D.N.Y.
1966))).
On this record, we hold that the Circuit Court
correctly concluded there was no genuine issue of material fact

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that the Mortgage encumbered the fee simple interest in the
Property located at the Kula Kai Address.

III. Conclusion

For the reasons discussed above, we affirm the
following:
(1) In case no. CAAP-XX-XXXXXXX, the "Judgment" and the
"Findings of Fact; Conclusions of Law; Order Granting [Bank's]
Motion for Summary Judgment Filed June 4, 2018," both entered on
August 7, 2018, in Civil No. 16-1-0422K by the Circuit Court of
the Third Circuit; and
(2) In case no. CAAP-XX-XXXXXXX, the "Judgment" and the
"Findings of Fact; Conclusions of Law; Order Granting [Bank's]
Motion for Summary Judgment, and for Interlocutory Decree of
Foreclosure Against All Parties Filed January 16, 2020," both
entered on September 1, 2020, in Civil No. 19-1-079K by the
Circuit Court of the Third Circuit.

DATED: Honolulu, Hawai#i, December 22, 2022.

On the briefs:
/s/ Clyde J. Wadsworth
Richard T. Forrester and Presiding Judge
Matthew P. Holm
(Forrester Legal, LLLC)
for Defendants-Appellants. /s/ Karen T. Nakasone
Associate Judge
Lansen H.G. Leu and
Daniel K. Kikawa
(Leu Okuda & Doi) /s/ Sonja M.P. McCullen
for Plaintiff-Appellee. Associate Judge

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