Sigwart v. The Office of David B. Rosen ( 2017 )

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Electronically Filed
Supreme Court
SCAP-13-0005253
26-MAY-2017
07:45 AM
SCAP-13-0005253
IN THE SUPREME COURT OF THE STATE OF HAWAII
________________________________________________________________
JULIE M. SIGWART, Individually and as Trustee
of the Revocable Living Trust Dolphin Star Trust
Dated December 10, 2003, and JAMES L.K. DAHLBERG,
Plaintiffs-Appellants,
vs.
THE LAW OFFICE OF DAVID B. ROSEN, A LAW CORPORATION,
DAVID B. ROSEN, and DOE DEFENDANTS 1-50,
Defendants-Appellees.
________________________________________________________________
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CAAP-13-0005253; CIV. NO. 13-1-2097-07)
SUMMARY DISPOSITION ORDER
(By: Recktenwald, C.J., Nakayama, McKenna, Pollack, and Wilson, JJ.)
This case arises from the foreclosure sale of the
properties of Plaintiffs-Appellants Julie M. Sigwart (Sigwart)
and James L. K. Dahlberg (Dahlberg). Both Sigwart’s and
Dahlberg’s mortgages contained a power of sale clause that
allowed non-judicial foreclosures. After Sigwart and Dahlberg
defaulted on their mortgages, Attorney David B. Rosen (Rosen)
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was retained by the foreclosing mortgagees to carry out non-
judicial foreclosures under Part I of HRS Ch. 667 (2008).
To foreclose on Sigwart’s property, Rosen published
the notice of sale on July 3, 10, and 17, 2009; the notice of
sale indicated a sale date of July 31, 2009. Although Sigwart’s
property was located in the County of Maui, the notice of sale
was published in a publication with circulation in the County of
Hawaiʻi and no general circulation in the County of Maui. The
sale of Sigwart’s property was postponed from July 31, 2009 to
August 28, 2009 through “mesne postponements” that were cried
out between July 31 and August 28, 2009.1 Rosen did not publish
any notices of the continued sale dates. At the August 28, 2009
sale, U.S. Bank, N.A., the claimed holder of the note secured by
the mortgage, was the sole bidder with a bid of $383,712.13.
To foreclose on Dahlberg’s property, Rosen published a
notice of sale on August 13, 20, and 27, 2010; the notice of
sale indicated a sale date of September 10, 2010. The sale of
Dahlberg’s property was also postponed through “mesne
postponements” that were cried out at the original sale. Rosen
did not publish any notices of the continued sale date. At the
January 7, 2011 sale, Wells Fargo Bank, N.A., the claimed holder
1
The record does not reveal the specific dates on which the
postponements were cried out, only that they were within this range.
The Affidavit of Foreclosure filed with the Bureau of Conveyances
stated only that a “postponement was cried on July 31, 2009, original
sale. Sale was postponed to August 28, 2009 by mesne postponements.”
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of the note secured by Dahlberg’s Mortgage, was the highest
bidder with a bid of $225,000.
Sigwart and Dahlberg filed a complaint against Rosen
on July 31, 2013, alleging that Rosen had failed to properly
advertise and conduct the non-judicial foreclosure sales of
their properties in violation of the duties under plaintiffs’
mortgages, statutory law (including HRS §§ 667-5 and 667-7),
common law, and the consumer protection statute, HRS § 480-2
(2008). Sigwart and Dahlberg amended the complaint on August
23, 2013 to add further allegations.
Rosen filed a motion to dismiss the first amended
complaint on September 4, 2013. Rosen argued, inter alia, that:
(1) publication of the postponement notice was not required by
Hawaiʻi law; (2) the initial sales were scheduled after the
expiration of four weeks from the date first advertised in the
notice of sale and complied with HRS § 667-7 (Supp. 2008); and
(3) Sigwart and Dahlberg lacked standing to maintain a HRS
chapter 480 claim because they were not Rosen’s clients and were
not owed a duty of care by their lender’s attorney. The first
Circuit Court granted Rosen’s motion to dismiss the complaint,
and final judgment was entered on October 30, 2013. Sigwart and
Dahlberg appealed to the Intermediate Court of Appeals. They
argued, inter alia, that Rosen’s actions in violation of the
nonjudicial foreclosure statute’s publication requirements were
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unfair and deceptive and therefore gave rise to a UDAP claim and
that they had standing to bring such a claim. The case was
later transferred to this court.
Because this case was dismissed pursuant to Hawaiʻi
Rules of Civil Procedure Rule 12(b)(6), we take the facts
alleged by Sigwart and Dahlberg as true. Hungate v. Law Office
of David B. Rosen, 139 Hawaiʻi 394, 401, 391 P.3d 1, 8
(2017)(citation omitted). In addition, we view the allegations
in the light most favorable to the plaintiffs “in order to
determine whether the allegations contained therein could
warrant relief under any alternative theory.” In re Estate of
Rogers, 103 Hawaiʻi 275, 280, 81 P.3d 1190, 1195 (2003)(citation
omitted).
Sigwart and Dahlberg contend the circuit court erred
in granting Rosen’s motion to dismiss. We disagree. We
recently held that the statutory requirements of former HRS §§
667-5 and 667-7 do not give rise to a private right of action
against a foreclosing mortgagee’s attorney. Hungate, 139 Hawaiʻi
at 405-07, 391 P.3d at 12-14. In addition, given the
circumstances alleged in that case, we declined to recognize an
unfair or deceptive acts or practices (UDAP) claim against Rosen
as the foreclosing mortgagee’s attorney. Id. at 412-413, 391
P.3d at 19-20; HRS § 480-2.
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We premised our holding concerning Hungate’s UDAP
claim, in part, on our “desire to avoid creating unacceptable
conflicts of interest in this context, to protect attorney-
client counsel and advice from the intrusion of competing
concerns, and to allow adequate room for zealous advocacy . . .
. ” Id. at 413, n.22, 391 P.3d at 20, n.22. While we recognize
that those concerns do “not encompass, for example, allowing
attorneys to conduct patently illegal activities on behalf of
clients,” id., the allegations in Sigwart and Dahlberg’s
complaint do not rise to the level of patently illegal
activities conducted by Rosen.
Dismissal under HRCP Rule 12(b)(6) is appropriate
where “the allegations of the complaint itself clearly
demonstrate that plaintiff does not have a claim.” Touchette v.
Ganal, 82 Hawaiʻi 293, 303, 922 P.2d 347, 357 (1996).
Accordingly, we hold that the circuit court properly granted
Rosen’s motion to dismiss.
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IT IS HEREBY ORDERED that the circuit court’s October
30, 2013 final judgment is affirmed.
DATED: Honolulu, Hawaiʻi, May 26, 2017.
James J. Bickerton /s/ Mark E. Recktenwald
John F. Perkin
Stanley H. Roehrig /s/ Paula A. Nakayama
Van-Alan Shima
for Plaintiffs- /s/ Sabrina S. McKenna
Appellants
/s/ Richard W. Pollack
David B. Rosen
Peter W. Olson /s/ Michael D. Wilson
Christopher T. Goodin
for Defendants-
Appellees
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