Wilmington Savings Fund Society v. Kirkland Kaiponohea Shodahl

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
26-SEP-2024
08:00 AM
Dkt. 55 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

WILMINGTON SAVINGS FUND SOCIETY, FSB, D/B/A/
CHRISTIANA TRUST, NOT INDIVIDUALLY BUT AS TRUSTEE
FOR PRETIUM MORTGAGE ACQUISITION TRUST,
Plaintiff/Counterclaim Defendant-Appellee,
v.
KIRKLAND KAIPONOHEA SHODAHL; KIRKLAND KAIPONOHEA
SHODAHL, AS CO-TRUSTEE OF THE "SHODAHL FAMILY
REVOCABLE LIVING TRUST," UNDER AN UNRECORDED TRUST INSTRUMENT
DATED APRIL 8, 2005; KELLE MOANA SHODAHL; KELLE MOANA SHODAHL,
AS CO-TRUSTEE OF THE "SHODAHL FAMILY REVOCABLE LIVING TRUST,"
UNDER AN UNRECORDED TRUST INSTRUMENT DATED APRIL 8, 2005;
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
SOLELY AS NOMINEE FOR FIRST CAPITAL GROUP, INC.;
NATIVE HAWAIIAN REVOLVING LOAN FUND, OFFICE OF
HAWAIIAN AFFAIRS; FIA CARD SERVICES, N.A.,
Defendants/Cross-claim Defendants-Appellees,
and
EWA BY GENTRY COMMUNITY ASSOCIATION; UNITED STATES
OF AMERICA; STATE OF HAWAII-DEPARTMENT OF TAXATION,
Defendants-Appellees,
and
LAUNANI ASSETS, LLC, A HAWAII LIMITED LIABILITY COMPANY,
Defendant/Counterclaimant/Cross-claimant-Appellant,
and
JOHN DOES 1-50; JANE DOES 1-50; DOE PARTNERSHIPS 1-50; DOE
CORPORATIONS 1-50; DOE ENTITIES 2-50, and DOE GOVERNMENTAL UNITS
1-50, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CASE NO. 1CC131001329)
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

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

Launani Assets LLC appeals from the July 26, 2021
Judgment for Wilmington Savings Fund Society, FSB, doing business
as Christiana Trust, not individually but as Trustee for Pretium
Mortgage Acquisition Trust, entered by the Circuit Court of the
First Circuit.1 We affirm.
Bank of America, N.A. (BANA) filed a foreclosure
complaint and notice of pendency of action on May 6, 2013. Named
as defendants were the mortgagors, Kirkland Kaiponohea Shodahl
and Kelle Moana Shodahl (the Shodahls), and others.
The Ewa by Gentry Community Association nonjudicially
foreclosed its lien against the Shodahls' Property in 2016, while
BANA's foreclosure action was pending. The Property was sold to
Launani by quitclaim deed recorded on September 19, 2016.
Launani was then added as a defendant to the foreclosure action.
Launani answered and counterclaimed to quiet title.
BANA moved to substitute Wilmington as the plaintiff
and real party in interest. The circuit court granted the
motion. Wilmington moved for summary judgment and a decree of
foreclosure, and for summary judgment on Launani's counterclaim.
On July 26, 2021, the circuit court entered findings of fact,
conclusions of law, and an order granting BANA's motion, and the
Judgment. This appeal followed. Launani contends the circuit
court erred by (1) granting the motion to substitute Wilmington
for BANA; and (2) granting Wilmington's motion for summary
judgment.
(1) We review substitution of a party for abuse of
discretion. See Roxas v. Marcos, 89 Hawai#i 91, 117, 969 P.2d
1209, 1235 (1998). Hawai#i Rules of Civil Procedure (HRCP)
Rule 25(c) allows substitution of parties "[i]n case of any
transfer of interest[.]" BANA showed that the Shodahls' original
mortgagee, Mortgage Electronic Registration Systems, Inc. (MERS),

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The Honorable Jeannette H. Castagnetti presided.

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

as nominee for Countrywide Home Loans, Inc., assigned the
mortgage to BAC Home Loans Servicing, LP; BAC merged into BANA;
BANA assigned the mortgage to Federal National Mortgage
Association (FNMA); and FNMA assigned the mortgage to Wilmington.
Launani argues FNMA should have been the party moving
to substitute Wilmington as the plaintiff. Launani cites no
authority supporting its argument, and we find none. Launani
also argues that BANA had to serve summons on FNMA and Wilmington
under HRCP Rule 25(a)(1). The rule contains no such requirement.
The circuit court acted within its discretion by granting BANA's
motion to substitute.
(2) The statement of the points of error in Launani's
opening brief does not challenge the circuit court's findings of
fact as required under Hawai#i Rules of Appellate Procedure
(HRAP) Rule 28(b)(4)(C). Unchallenged findings of fact are
binding on appeal. Okada Trucking Co. v. Bd. of Water Supply, 97
Hawai#i 450, 459, 40 P.3d 73, 82 (2002).
(a) Launani argues Wilmington did not prove BANA had
standing to enforce the Shodahls' note when it filed the lawsuit,
as required by Bank of Am., N.A. v. Reyes-Toledo, 139 Hawai#i
361, 368, 390 P.3d 1248, 1255 (2017). The circuit court found
that "BANA[] had physical possession of the original blank-
indorsed Note . . . at the time the Complaint was filed on May 6,
2013 . . . and was entitled to enforce the Note under HRS
§ 490:3-301." Even if Launani had properly challenged this mixed
finding and conclusion, its argument has no merit.
Launani argues that Tramelle Martise Thomas, whose
declaration was offered by Wilmington to support its motion for
summary judgment, was "not qualified to authenticate the business
records of Countrywide or BAC rendering Exhibits 3 through 12 [to
her declaration] inadmissible hearsay[.]" Thomas is a BANA
assistant vice president. She is familiar with BANA's computer
system that services loans. She knows how information is made
and kept on the system. She reviewed BANA's records for the
Shodahls' loan. Exhibits 3 and 8 through 12 were the documents

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

she used to confirm that BANA possessed the note when its
complaint was filed. Those documents were BANA's own; they were
not incorporated records such as those at issue in U.S. Bank N.A.
v. Mattos, 140 Hawai#i 26, 398 P.3d 615 (2017). Thomas was
qualified to authenticate them. Being BANA's business records,
they were admissible under Hawaii Rules of Evidence Rule
803(b)(6) to prove the truth of the matter asserted. The circuit
court's mixed finding and conclusion was supported by substantial
evidence, was not clearly erroneous, and applied the correct rule
of law. It will not be overturned. Est. of Klink ex rel. Klink
v. State, 113 Hawai#i 332, 351, 152 P.3d 504, 523 (2007).
(b) Launani argues Wilmington hasn't shown what the
Pretium Mortgage Acquisition Trust (the assignee of the Shodahls'
mortgage) is, or that Wilmington is its trustee. It cites no
authority for this requirement. It lacks standing to challenge
the assignment. Mattos, 140 Hawai#i at 35, 398 P.3d at 624.
(c) Wilmington's motion for a decree of foreclosure
was supported by the declaration of Michael N. Zerulik and the
exhibits to that declaration. Launani's brief makes no arguments
about Zerulik's qualifications as a witness or the admissibility
of the documents he authenticated. Those issues are waived.
HRAP Rule 28(b)(7). Zerulik's declaration and exhibits show the
existence of an agreement, the terms of the agreement, default by
the mortgagors, giving of the cancellation notice, and standing
to foreclose. See Reyes-Toledo, 139 Hawai#i at 367, 390 P.3d at
1254 (reciting elements of foreclosure). The circuit court did
not err by granting Wilmington's motion for summary judgment and
interlocutory decree of foreclosure.
(d) Launani argues the circuit court should have
denied Wilmington summary judgment on Launani's counterclaim for
the same reasons it should have denied summary judgment on the
foreclosure claim. It makes no other argument. The circuit
court did not err by granting Wilmington's motion for summary
judgment on Launani's counterclaim to quiet title.

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

For these reasons, the Judgment entered by the circuit
court on July 26, 2021, is affirmed.
DATED: Honolulu, Hawai#i, September 26, 2024.

On the briefs:
/s/ Keith K. Hiraoka
Richard T. Forrester, Presiding Judge
for Launani Assets, LLC,
a Hawaii limited liability /s/ Karen T. Nakasone
company. Associate Judge

Jade Lynne Ching, /s/ Sonja M.P. McCullen
David A. Nakashima, Associate Judge
Ryan B. Kasten,
for Wilmington Savings
Fund Society, FSB,
d/b/a Christiana Trust,
not individually but as
Trustee for Pretium
Mortgage Acquisition
Trust.

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