U.S. Bank, National Association v. Webb

NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
31-MAR-2025
08:06 AM
Dkt. 71 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI‘I

U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE
FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE
FOR WMALT SERIES 2006-AR1 TRUST, Plaintiff-Appellee,
v.
DONOVAN PAUL WEBB, Defendant-Appellant;
BANK OF AMERICA, N.A.; HAWAII PLANING MILL, LTD.;
MAUI LANI COMMUNITY ASSOCIATION; WINSTON PANG;
STACIA PANG, Defendants-Appellees;
JOHN DOES 1-50; JANE DOES 1-50; DOE PARTNERSHIPS 1-50;
DOE CORPORATIONS 1-50; DOE ENTITIES 1-50; and
DOE GOVERNMENTAL UNITS 1-50, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CASE NO. 2CC171000024)

SUMMARY DISPOSITION ORDER
(By: Nakasone, Presiding Judge, McCullen and Guidry, JJ.)

Defendant-Appellant Donovan Paul Webb (Webb) appeals

from the "Findings of Fact [(FOFs)]; Conclusions of Law

[(COLs)]; and Order Granting Plaintiff[-Appellee] U.S. Bank

National Association, as Trustee for WaMu Mortgage Pass Through

Certificate for WMALT Series 2006-AR1 Trust's [(U.S. Bank)]

Second Motion for Summary Judgment as Against All Defendants and
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for Interlocutory Decree of Foreclosure" (Order), and its

"Judgment on [Order]" (Judgment), both filed on January 21,

2022, by the Circuit Court of the Second Circuit (circuit

court).1

This appeal arises out of a January 2017 foreclosure

action by U.S. Bank against Webb.2 U.S. Bank sought to foreclose

on an Adjustable Rate Note (Note), which was secured by a

mortgage (Mortgage) on real property located in Kahului, Maui

(Property). The Note was assigned to U.S. Bank, by Washington

Mutual Bank, in April 2009. It appears that JPMorgan Chase

Bank, N.A. (JPMorgan Chase) was the loan servicer at the time of

the assignment to U.S. Bank. Select Portfolio Servicing, Inc.

(SPS) became the loan servicer of the Note in November 2013.

On appeal, Webb contends that the circuit court erred

by granting summary judgment in favor of U.S. Bank.3 Upon

1 The Honorable Peter T. Cahill presided.

2 Bank of America, N.A. (Bank of America) was named as a defendant
in the underlying case, and is a nominal appellee to this appeal. In May
2023, the parties filed a stipulation to dismiss Bank of America as a party
to the appeal without prejudice. The parties stipulated in 2018, prior to
the filing of the notice of appeal, to the dismissal of Bank of America,
without prejudice, from the underlying case. The stipulated dismissal of
Bank of America from this appeal is therefore unnecessary.

3 Webb raises several points of error, contending that:

The Circuit Court Erred in Granting US Bank's Motion for
Summary Judgment Because: (A) US Bank had no standing
because they did not establish that they had "rightful
possession" of the Note at the time the Note was lost, nor
did they establish that they had the right to enforce the
lost note under HRS § 490:3-309, and the declarations
submitted by US Bank were contradictory; (B) US Bank had no
(continued . . .)

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careful review of the record, briefs, and relevant legal

authorities, and having given due consideration to the arguments

advanced and the issues raised by the parties, we conclude that

there are genuine questions of material fact as to whether U.S.

Bank had standing to enforce the Note. We therefore vacate the

Order and Judgment on this basis.

We review the circuit court's grant of summary

judgment de novo, applying the following standard,

[S]ummary judgment is appropriate if the pleadings,
depositions, answers to interrogatories and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law. A
fact is material if proof of that fact would have the
effect of establishing or refuting one of the essential
elements of a cause of action or defense asserted by the
parties. The evidence must be viewed in the light most
favorable to the non-moving party. In other words, we must
view all of the evidence and inferences drawn therefrom in
the light most favorable to the party opposing the motion.

Ralston v. Yim, 129 Hawaiʻi 46, 55–56, 292 P.3d 1276, 1285–86

(2013) (citation omitted).

3(. . .continued)
standing to bring this foreclosure action because the
Affidavit of Lost Note was not generated until AFTER the
Complaint was filed[;] (C) US Bank has failed to establish
the admissibility of business records of the prior
servicer[;] and (D) US Bank has failed to establish that it
provided Mr. Webb with an adequate notice of default.

(Emphasis omitted.)

Webb also challenges various FOFs and COLs in relation to the
above listed points of error. Because we conclude that U.S. Bank has not
demonstrated standing to enforce the Note, we decline to address Webb's
additional points of error.

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In Bank of America, N.A. v. Reyes-Toledo, the Hawaiʻi

Supreme Court held that,

A foreclosing plaintiff's burden to prove entitlement to
enforce the note overlaps with the requirements of standing
in foreclosure actions as standing is concerned with
whether the parties have the right to bring suit.
Typically, a plaintiff does not have standing to invoke the
jurisdiction of the court unless the plaintiff has suffered
an injury in fact. A mortgage is a conveyance of an
interest in real property that is given as security for the
payment of the note. A foreclosure action is a legal
proceeding to gain title or force a sale of the property
for satisfaction of a note that is in default and secured
by a lien on the subject property. Thus, the underlying
"injury in fact" to a foreclosing plaintiff is the
mortgagee's failure to satisfy its obligation to pay the
debt obligation to the note holder. Accordingly, in
establishing standing, a foreclosing plaintiff must
necessarily prove its entitlement to enforce the note as it
is the default on the note that gives rise to the action.

139 Hawaiʻi 361, 367–68, 390 P.3d 1248, 1254–55 (2017) (emphasis

added) (cleaned up).

Here, we conclude that U.S. Bank has not sufficiently

proved its entitlement to enforce the Note. U.S. Bank

represented, in its second motion for summary judgment, that it

was entitled to enforce the Note pursuant to Hawaii Revised

Statutes (HRS) §§ 490:3-301 (2008) and 490:3-309 (2008). HRS

§ 490:3-301 states, in relevant part,

"Person entitled to enforce" an instrument means . . .
(iii) a person not in possession of the instrument who is
entitled to enforce the instrument pursuant to section
490:3-309[.]

HRS § 490:3-309, which governs the "[e]nforcement of

lost, destroyed, or stolen instrument[s]," states, in relevant

part,

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(a) A person not in possession of an instrument is
entitled to enforce the instrument if (i) the person was in
rightful possession of the instrument and entitled to
enforce it when loss of possession occurred, (ii) the loss
of possession was not the result of a transfer by the
person or a lawful seizure, and (iii) the person cannot
reasonably obtain possession of the instrument because the
instrument was destroyed, its whereabouts cannot be
determined, or it is in the wrongful possession of an
unknown person or a person that cannot be found or is not
amenable to service of process.

(b) A person seeking enforcement of an instrument
under subsection (a) must prove the terms of the instrument
and the person's right to enforce the instrument. If that
proof is made, section 490:3-308 applies to the case as if
the person seeking enforcement had produced the instrument.

(Emphasis added.)

In his Affidavit of Lost Note, attorney Lester K.M.

Leu (Leu), attested that,

2. In January 2008, Leu & Okuda was retained by
Washington Mutual Bank to complete a non-judicial
foreclosure of the Mortgage on the [Property], which
Mortgage secure[d] [the Loan]. Leu & Okuda caused a Notice
of Mortgagee's Non-Judicial Foreclosure Under Power of Sale
to be recorded in the Bureau of Conveyances of the State of
Hawaiʻi (the "Bureau") as Document No. 2008-058945 on April
15, 2008. Leu & Okuda closed the matter in June 2008 and
it did not complete the non-judicial foreclosure.

3. In March 2009, Leu & Okuda was retained by
[JPMorgan Chase], as servicer for [U.S. Bank], to proceed
with a new non-judicial foreclosure of the same Mortgage.
In connection with that retention, Leu & Okuda recorded an
Assignment of Mortgage and Note to U.S. Bank in the Bureau
as Document No. 2009-060793 on April 20, 2009.

4. On May 11, 2009, Leu & Okuda received the
collateral file with the original promissory note for the
Loan from JPMorgan Chase by Federal Express. Federal
Express's tracking number for the package with the
collateral file was 4096 2448 4587. A true and correct
copy of the FedEx Shipping Label is attached hereto as
Exhibit "6." At that time, Leu & Okuda's procedure was to
send collateral files with original promissory notes to the
case managers at Leu & Okuda assigned to handle particular
loans.

5. Leu & Okuda closed the matter shortly after May
19, 2009 when Leu & Okuda was instructed to close its files

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for this matter because the Borrower had reinstated the
loan by curing the defaults that then existed.

6. Leu & Okuda's usual procedure with respect to
matters being closed at that time was for the case managers
to send their files for the loans assigned to them to the
department that closed files and that department would
shred the correspondence and pleadings files, but
definitely not the collateral files. Leu & Okuda has
searched its records for the collateral file multiple times
and has been unable to locate it. Leu & Okuda therefore
believes that the collateral file with the original note
was inadvertently shredded when the correspondence and
pleadings files for the matter were shredded.

(Emphasis added.)

In his Supplemental Affidavit of Lost Note, Leu

attested to the following:

2. In 2009, when Leu & Okuda received foreclosure
referrals from [JPMorgan Chase], [JPMorgan] Chase's
standard practice was to send to Leu & Okuda by Federal
Express ("Fed Ex") packages with the collateral files for
the loan being referred for foreclosure and to include
release transmittals, which documented [JPMorgan] Chase's
release of the collateral files. The collateral files
contained the original notes, copies of the mortgages and
copies of any assignments of the mortgages. Leu & Okuda's
standard practice was to scan the release transmittals and
Federal Express labels.

3. A true and correct copy of the release
transmittal for the collateral file for loan XXXXXX9848
sent to Leu & Okuda by [JPMorgan] Chase on 5/08/09 via Fed
Ex with tracking number 4096 2448 4587 is attached hereto
as Exhibit 6. The release transmittal identified the
borrower as Donovan Webb is attached hereto as Exhibit 6A.

4. As stated in my prior affidavit, Leu & Okuda
believes that the collateral file with the original note
was inadvertently shredded when the correspondence and
pleadings files for the matter were shredded after May 19,
2009, when Leu & Okuda was instructed to close its files
for this matter because the Borrower had reinstated the
Loan by curing the defaults that then existed.

5. Leu & Okuda did not know that it no longer had
possession of the collateral file with the original note
for the Loan until July 30, 2019 when I reviewed Leu &
Okuda's records relating to the Loan. My review was
therefore after this lawsuit had commenced on January 24,
2017, after the Attorney Affirmation was filed in this
lawsuit on January 24, 2017, and after [U.S. Bank's] first

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Motion for Summary Judgment was filed in this lawsuit on
October 5, 2017.

6. Therefore, prior to the filing of the Complaint
with its accompanying Attorney Affirmation and prior to the
filing of the first Motion for Summary Judgment, Leu &
Okuda had not informed U.S. Bank, the prior loan servicer,
[JPMorgan Chase], or its current loan servicer for the
loan, [SPS], that the original note was lost because Leu &
Okuda did not then realize that the original note had been
lost.

(Emphasis added.)

Notwithstanding Leu's Affidavits, it is unclear

whether the Note was in fact lost, because it is unclear whether

the Note was contained within the "collateral file" that was

transmitted by JPMorgan Chase to Leu & Okuda in May 2009. Leu

does not represent that he inspected the collateral file, or

that he otherwise had personal knowledge of what the collateral

file received in May 2009 contained.4 He stated that "[JPMorgan]

Chase's standard practice was to send to Leu & Okuda by [Fed Ex]

packages with the collateral files for the loan being referred

for foreclosure," and that the "collateral files contained the

original notes, copies of the mortgages[,] and copies of any

assignments of the mortgages."

Leu thus inferred, based on JPMorgan Chase's practice,

that the Note would have been included in the collateral file

transmitted by JPMorgan Chase in May 2009. Leu did not,

however, explain how he was qualified to make this inference

4 Leu represented that he "reviewed Leu & Okuda's records relating
to the Loan" on July 30, 2019 – ten years after the "collateral file" was
transmitted – at which time he was "unable to locate" the Note.

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with regard to JPMorgan Chase's "collateral file" transmittal

practices. See Nationstar Mortg. LLC v. Kanahele, 144 Hawaiʻi

394, 401, 443 P.3d 86, 93 (2019) ("[A]ffidavits in support of a

summary judgment motion must be scrutinized to determine whether

the facts they aver are admissible at trial and are made on the

personal knowledge of the affiant.") (cleaned up).

U.S. Bank did not produce an affidavit or declaration

by a person with knowledge of JPMorgan Chase's record keeping

and transmittal practices to establish that the collateral file

transmitted to Leu & Okuda in May 2009 included the Note.5 There

is also no documentary evidence that would establish the

5 JPMorgan Chase Authorized Signer Karla Baxter's November 8, 2021
declaration, and SPS Document Control Officer Sherry Benight's December 19,
2019 declaration, did not reference the transmittal of the collateral file
from JPMorgan Chase to Leu & Okuda in May 2009. SPS Document Control Officer
Mark Syphus's July 7, 2020 declaration summarily represented only that:

7. SPS's business records reflected . . . at the
time of the filing of the Complaint, the collateral file
for the Loan, which included the original Adjustable Rate
Note (the "Note") executed by the Borrower, had previously
been delivered to the law firm of Leu & Okuda. At that
time, SPS's business records did not reflect that Leu &
Okuda no longer possessed the original Note or that the
original Note had been lost. It is the regular practice of
SPS to record any changes in the location of the collateral
file. Therefore, because there were no records reflecting
any change in the location of the collateral file or that
the original note had been lost, SPS concluded that Leu &
Okuda continued to maintain possession of the original
Note.

(Emphasis added.) See Deutsche Bank Nat'l Tr. Co. v. Bass, No. CAAP-20-
0000501, 2024 WL 4287149, at *3 (Haw. App. Sept. 25, 2024) (SDO) (noting that
the declarant "did not attach the [s]ervicer's business records or otherwise
establish the [s]ervicer's regularly-conducted business activities and
record-keeping practices which might evidence" the servicer's business
practice).

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contents of the Fed Ex package, which bears the return address

for "Chase Custody Services." Although U.S. Bank produced a

May 8, 2009 "Release Transmittal" referencing "WEBB DONOVAN" as

the "borrower," that document does not mention the Note. There

thus remains a genuine question of material fact as to whether

the Note was transmitted to Leu & Okuda, such that Leu & Okuda,

which was "unable to locate" the Note in July 2019, in fact had

the Note to lose or destroy.

Moreover, there is no declaration, affidavit, or other

evidence establishing that, upon JPMorgan Chase's transmittal of

the collateral file to Leu & Okuda in May 2009, Leu & Okuda held

the contents of the collateral file on behalf of U.S. Bank.6

This raises a genuine question of material fact as to whether

U.S. Bank was the person "in rightful possession of the

instrument and entitled to enforce it when loss of possession

occurred," pursuant to HRS § 490:3-309.

As explained supra, there remain genuine questions of

material fact – questions of whether the Note was in fact

transmitted to Leu & Okuda in May 2009 and lost or destroyed

sometime between May 2009 and January 2017, and of whether Leu &

6 Leu represents that JPMorgan Chase retained Leu & Okuda's legal
services in March 2009, a month before the Note was assigned to U.S. Bank.
Although Leu refers to JPMorgan Chase as the "servicer" for U.S. Bank, there
is no declaration, affidavit, or other evidence establishing that JPMorgan
Chase had the authority to retain Leu & Okuda on U.S. Bank's behalf in March
2009, which was prior to U.S. Bank's assignment of the Note.

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Okuda was "in rightful possession" of the Note on behalf of U.S.

Bank at the time it was purportedly lost or destroyed. These

questions implicate U.S. Bank's standing to enforce the Note at

the time the complaint was filed. Reyes-Toledo, 139 Hawaiʻi at

368, 390 P.3d at 1255 ("[A] foreclosing plaintiff does not have

standing to foreclose on mortgaged property unless the plaintiff

was entitled to enforce the note that has been defaulted on.")

(citation omitted).

We therefore conclude that the circuit court erred in

granting summary judgment in favor of U.S. Bank. We vacate the

Order and Judgment, and remand for further proceedings

consistent with this summary disposition order.

DATED: Honolulu, Hawaiʻi, March 31, 2025.

Keith M. Kiuchi, /s/ Karen T. Nakasone
for Defendant-Appellant. Presiding Judge

Lisa K. Swartzfager, /s/ Sonja M.P. McCullen
for Plaintiff-Appellee. Associate Judge

/s/ Kimberly T. Guidry
Associate Judge

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