U.S. Bank National Association v. Colburn

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
27-JUN-2025
08:20 AM
Dkt. 64 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
HARBORVIEW MORTGAGE LOAN TRUST 2005-8, MORTGAGE LOAN
PASS-THROUGH CERTIFICATES, SERIES 2005-8, Plaintiff-Appellee,
v.
BRENDA COLBURN, Defendant-Appellant,
and
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE
FOR COUNTRYWIDE HOME LOANS, INC.; UNITED STATES OF AMERICA,
DEPARTMENT OF THE TREASURY, INTERNAL REVENUE SERVICE;
STATE OF HAWAII-DEPARTMENT OF TAXATION, Defendants-Appellees,
and DOES 1 THROUGH 20, INCLUSIVE, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT
(CASE NO. 3CC18100174K)

SUMMARY DISPOSITION ORDER
(By: Hiraoka, Presiding Judge, Wadsworth and McCullen, JJ.)

Brenda Colburn appeals from the February 23, 2023
Judgment for U.S. Bank N.A. entered by the Circuit Court of the
Third Circuit.1 She challenges the February 23, 2023 Order
Approving Commissioner's Report and Granting [U.S. Bank's] Motion
for Confirmation of Foreclosure Sale, Allowance of Costs,
Commissions and Fees, Distribution of Proceeds, Directing
Conveyance and for Writ of Possession/Ejectments. We affirm.

1
The Honorable Wendy M. Deweese presided.
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

U.S. Bank sued Colburn on September 7, 2018, to
foreclose a mortgage on Colburn's Property in Kamuela, Hawai#i.
On December 30, 2021, the Circuit Court entered an order granting
U.S. Bank's motion for summary judgment, appointing a foreclosure
Commissioner, and directing the Commissioner to sell the Property
by public auction. A foreclosure judgment was also entered on
December 30, 2021. The judgment divested Colburn of ownership of
the Property, even though legal title would not pass until entry
of an order confirming the foreclosure sale. Bank of New York
Mellon v. Larrua, 150 Hawai#i 429, 440, 504 P.3d 1017, 1028 (App.
2022). Colburn didn't appeal from the foreclosure judgment.
Colburn filed for Chapter 13 bankruptcy on May 19,
2022. That automatically stayed the foreclosure proceeding under
11 U.S.C. § 362. The Circuit Court entered a stay order on
June 9, 2022. The bankruptcy case was dismissed on July 11,
2022, after Colburn failed to file required documents. On
September 27, 2022, the Circuit Court entered an order lifting
the stay nunc pro tunc July 11, 2022. The Commissioner then
scheduled a public auction for September 30, 2022.
On September 29, 2022, Colburn moved for an order
instructing the Commissioner "to provide reasonable access to the
subject property so that a property valuation may be completed as
necessary to facilitate a pending private sale and possible
settlement among the parties to this foreclosure action."
Colburn's declaration supporting the motion stated she had
contracted to sell the Property to Peak Mountain LLC on May 22,
2022. But her bankruptcy was pending at that time. Any interest
she had in the Property was the property of the bankruptcy
estate. 11 U.S.C. § 1306(a)(1). The record does not show
Colburn submitted, or the bankruptcy court approved, a Chapter 13
plan, or that the court otherwise authorized the sale of the
Property. Nevertheless, Colburn's declaration stated that U.S.
Bank required an appraisal to evaluate the short sale.

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

Colburn's motion was heard on December 5, 2022.
Colburn's attorney stated the sale to Peak Mountain was "in
escrow."
The Circuit Court asked for the sale amount.
Counsel responded: "I forget the exact amount off-
hand. I think it was stated in the motion.[2] That amount is
negotiable."
The court asked for U.S. Bank's position.
U.S. Bank's counsel responded:

[W]e see some of these happen at the last hour right before
confirmation.
You know, I know that our clients as well as federal
regulations require certain reviews if complete loss
mitigation applications are received.

. . . .
Whether they will agree to it here or not, I don't
have that information because I know that numerous factors
go into those applications and those approvals.

So it would all really depend on whether Miss Colburn
can get a completed application, all of the information
required to complete a review and whether there is something
to be negotiated there.

And like I said, those pieces behind the scenes are
outside of my control.

The Circuit Court orally granted Colburn's request for
appraisal access, but denied her request that the Commissioner
not be compensated for time spent on the appraisal.3
Meanwhile, the Commissioner filed a report on
October 19, 2022. U.S. Bank was the only bidder at the public
auction, submitting a credit bid of $473,005.24. U.S. Bank moved
to confirm the foreclosure sale on October 21, 2022. On
February 23, 2023, the Circuit Court entered an order approving
the Commissioner's report and confirming the foreclosure sale,
and the Judgment. This appeal followed.

2
It was not.
3
A written order was entered on February 3, 2023.

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

An order confirming a foreclosure sale is reviewed for
abuse of discretion. U.S. Bank Tr., N.A. v. Ass'n of Apartment
Owners of Waikoloa Hills Condo., 150 Hawai#i 573, 581, 506 P.3d
869, 877 (App. 2022). Colburn contends the Circuit Court abused
its discretion by confirming the foreclosure sale because the
Commissioner denied access to the Property for an appraisal. She
argues she "should be afforded an opportunity to exercise her
equitable right of redemption, which right was previously
breached by the Circuit Court and its appointed Commissioner."
She relies on Santiago v. Tanaka, 137 Hawai#i 137, 366 P.3d 612
(2016).
In Santiago, the supreme court stated:

Because equity abhors forfeitures and regards and treats as
done what ought to be done, it is typical in foreclosure
cases that a right to cure a default and stop the
foreclosure continues up to the day of the confirmation of
the sale. Thus, Hawai#i's courts would not prevent a
mortgagor from curing the default and halting the
foreclosure prior to the entry of a written order confirming
the foreclosure sale.

Id. at 157, 366 P.3d at 632 (cleaned up) (bold italics added).
To cure a default, the mortgagor must pay the mortgagee all
delinquent payments, plus attorney fees and all other fees and
costs incurred by the foreclosing mortgagee related to the
default. Mount v. Apao, 139 Hawai#i 167, 178, 384 P.3d 1268,
1279 (2016).
Colburn was not trying to cure her default. She was
seeking U.S. Bank's agreement to a short sale of the Property to
Peak Mountain. Colburn blames the Commissioner and the Circuit
Court for "depriv[ing her] of her ability to resolve this matter
with U.S. Bank via private sale." We see no error or abuse of
discretion by the Commissioner or the Circuit Court.
A foreclosure commissioner takes possession of the
foreclosed property and preserves it for the benefit of the
person or entity subsequently entitled to it. Larrua, 150
Hawai#i at 440, 504 P.3d at 1028. The commissioner is an agent
of the court, which determines the commissioner's duties and

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

powers. AOAO Waikoloa Hills, 150 Hawai#i at 583, 506 P.3d at
879. The commissioner

is vested only with the particular legal and/or equitable
powers over the subject property that the court deems
necessary to exercise the court's legal and/or equitable
powers. Any powers vested in the commissioner by the court
— such as the power to take possession and control, collect
rents, preserve value, and offer the property for sale —
remain subject to the further orders of the court.

Id. (citation omitted).
Here, the order appointing the Commissioner was entered
on December 30, 2021. The Commissioner was ordered to take
possession of the Property, rent it if appropriate, and sell it
as-is at public auction after holding two open houses. Nothing
in the order authorized or required private showings of the
Property by the Commissioner, or a private sale of the Property.
The Commissioner scheduled the public auction for
May 23, 2022. He held open houses on May 8 and 15, 2022. On
May 16, 2022, the Commissioner learned that Colburn and a realtor
were trying to sell the Property (even though entry of the
foreclosure judgment divested Colburn of ownership of the
Property and Colburn was in bankruptcy). On May 19, 2022, U.S.
Bank's attorney told the Commissioner to postpone the auction
because Colburn had filed for bankruptcy in New Mexico. On
May 24, 2022, another realtor told the Commissioner that the
Property had been listed on the Multiple Listing Service. The
Commissioner contacted the listing realtor on June 21, 2022.
On June 23, 2022, Arlena Sefiani, who claimed to be the
"short sale negotiator," emailed the Commissioner, stating "The
foreclosure sale date has been cancelled on this property and a
short sale review has been opened[.]" The May 23, 2022 public
auction had been canceled, but because of Colburn's bankruptcy,
not because U.S. Bank had agreed to a short sale. On July 11,
2022, Sefiani emailed the Commissioner, asking "What do we need
to do to get a court approval to move forward with this
transaction . . . ?" On July 13, 2022, the Commissioner advised

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

Sefiani to retain Hawai#i counsel and advise them of the
foreclosure and bankruptcy cases.
Colburn's bankruptcy case had been dismissed on
July 11, 2022. She could then have sought U.S. Bank's agreement
to postpone the auction while she pursued a short sale. That
happened in Provident Funding Assocs., L.P. v. Gardner, 149
Hawai#i 288, 488 P.3d 1267 (2021). Or she could have moved for
instructions to the Commissioner then.
It wasn't until September 27, 2022, that Colburn's
attorney asked the Commissioner "to assist with providing access
for an appraiser[.]" The Commissioner responded — appropriately
— that Colburn would have to "get a court order allowing for a
private sale. I will operate within the confines of a court
order." See AOAO Waikoloa Hills, 150 Hawai#i at 583, 506 P.3d at
879.
Colburn moved for instructions on September 29, 2022.
She didn't ask to postpone the public auction. The auction took
place on September 30, 2022. The Circuit Court entered an order
confirming the sale on February 23, 2023. We conclude, under
these circumstances, that the Circuit Court did not abuse its
discretion by confirming the foreclosure sale.
The Circuit Court's Judgment and Order Approving
Commissioner's Report and Granting Plaintiff's Motion for
Confirmation of Foreclosure Sale, Allowance of Costs, Commissions
and Fees, Distribution of Proceeds, Directing Conveyance and for
Writ of Possession/Ejectments, both entered on February 23, 2023,
are affirmed.
DATED: Honolulu, Hawai#i, June 27, 2025.

On the briefs:
/s/ Keith K. Hiraoka
Frederick J. Arensmeyer, Presiding Judge
for Defendant-Appellant
Brenda Colburn. /s/ Clyde J. Wadsworth
Associate Judge
Matthew P. Holm,
for Plaintiff-Appellee /s/ Sonja M.P. McCullen
U.S. Bank National Associate Judge

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

Association, as Trustee
for Harborview Mortgage
Loan Trust 2005-8, Mortgage
Loan Pass-Through Certificates,
Series 2005-8.

7