In re: Application of Natalie Au Nishida ( 2021 )

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Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
22-NOV-2021
07:51 AM
Dkt. 227 MO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
In the Matter of the Application of
NATALIE AU NISHIDA, as Personal Representative of
the Estate of Ronald Git Sum Au, Petitioner-Appellant, v.
3908 KAMOKU LLC, MARCELLA ROSEN, DAVID B. ROSEN,
Respondents-Appellees,
to register and confirm title to land situate at
Waikiki, City and County of Honolulu, State of Hawaii, and;
to modify or amend Royal Iolani Condominium Unit 3908
Document No. T-9187098 on Certificate of Title No. 1093274
and Royal Iolani Condominium Unit 3906 Document No. T-8876060
on Certificate of Title No. 1077015
APPEAL FROM THE LAND COURT OF THE STATE OF HAWAI#I
(L.C. NO. 15-1-3758 (CASE NO. 1LD15-1-3758))
MEMORANDUM OPINION
(By: Ginoza, C.J., Wadsworth and Nakasone, JJ.)
Petitioner-Appellant Natalie Au Nishida (Nishida), as
Personal Representative of the Estate of Ronald Git Sum Au,
appeals from the July 18, 2017 Final Judgment (Judgment), entered
in the Land Court of the State of Hawai#i (Land Court).1/
Pursuant to Hawai#i Rules of Appellate Procedure (HRAP) Rule
43(a), and this court's August 9, 2021 order, Nishida has been
substituted as the Petitioner–Appellant in place of Ronald Git
Sum Au (Au), who filed this appeal, as well as the opening and
1/
The Honorable Gary W. B. Chang presided.
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reply briefs, and who has since died.
The Land Court entered judgment in favor of
Respondents-Appellees 3908 Kamoku LLC (Kamoku) and David B. Rosen
(Rosen) (collectively Respondents), dismissing with prejudice
"[Au's] First Amended Petition to Expunge or Cancel Document No.
T-9187098 on Certificate of Title No. 1093274, and Expunge
Commissioner's Deed" (Amended Petition), filed on December 5,
2016.2/ The Judgment was entered pursuant to a series of orders
that, among other things, denied Au's motion for summary judgment
and granted Kamoku's counter-motion for summary judgment, and
Rosen's joinder therein, on the Amended Petition. It appears the
Land Court based its judgment dismissing the Amended Petition
primarily on two grounds: (1) that the claims asserted in the
Amended Petition were previously adjudicated by the Circuit Court
of the First Circuit (Circuit Court) in a prior foreclosure
action, Wells Fargo Bank, N.A. v. Au et al., Civil No. 12-1-1567-
06 (Foreclosure Case) and, therefore, the Amended Petition
constituted an impermissible "collateral attack" on the prior
orders and judgments (Foreclosure Judgments) entered in the
Foreclosure Case; and (2) that the Land Court lacked subject
matter jurisdiction over the tort and consumer protection claims
set forth in the Amended Petition.
On appeal, Au contends3/ that the Land Court erred in
entering judgment in favor of Respondents and in dismissing the
Amended Petition with prejudice, on the ground, among others,
that the Amended Petition constituted an impermissible collateral
attack on the Foreclosure Judgments. Au argues that: (1) the
claims set forth in the Amended Petition fall within recognized
exceptions to the collateral-attack doctrine, because the Circuit
2/
With respect to Respondent-Appellee Marcella Rosen, Rosen's wife,
the Judgment states:
Respondent MARCELLA ROSEN, who was named in the Petition,
apparently was not served and did not appear herein.
However, because the basis for the Amended Petition being
dismissed would apply equally to her, this Final Judgment
shall operate as a final adjudication of any claims asserted
against her therein as well.
3/
Although Nishida is now the Petitioner-Appellant, we refer to the
contentions and arguments contained in Au's opening and reply briefs as Au's.
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Court lacked personal jurisdiction over Kamoku, and fraud was
committed in the Foreclosure Case; (2) the Land Court had "cogent
reasons" to expunge or vacate the quitclaim deed that conveyed
the foreclosed property to Kamoku; (3) the Land Court was
required to determine that the foreclosed property was acquired
at a "fair and equitable price"; and (4) the Circuit Court erred
in entering a post-judgment order confirming the foreclosure
sale.4/
For the reasons discussed below, we affirm the
Judgment.
I. Background
A. The Foreclosure Case
On June 4, 2012, Wells Fargo Bank, N.A. (Wells Fargo)
filed a Complaint for Declaratory Relief and to Foreclose
Mortgage (Complaint), initiating the Foreclosure Case. The
Complaint sought foreclosure of a 2007 Mortgage that was executed
by Au to secure a $475,700 loan, and was recorded with respect to
real property located at 581 Kamoku Street #3908, Honolulu,
Hawai#i 96826, i.e., Unit 3908 of the Royal Iolani Condominium
Project (Unit 3908 or the Property).
On March 3, 2014, the Circuit Court entered its
"Findings of Fact and Conclusions of Law; Order Granting
Plaintiff's Motion for Summary Judgment as to its Second Cause of
Action for Judicial Foreclosure and for Interlocutory Decree of
Foreclosure Filed December 6, 2013" (Foreclosure Decree).5/ The
Foreclosure Decree found Au in default under the 2007 Mortgage
and related promissory note, and concluded that Wells Fargo was
entitled to the foreclosure of the 2007 Mortgage and the sale of
the Property.
4/
Au's points of error have been reordered, restated, and condensed
for clarity. Au's opening brief does not strictly comply with HRAP Rule 28(b)
in numerous respects. Nevertheless, Hawai #i appellate courts have
"consistently adhered to the policy of affording litigants the opportunity 'to
have their cases heard on the merits, where possible.'" Marvin v. Pflueger,
127 Hawai#i 490, 496, 280 P.3d 88, 94 (2012) (quoting Morgan v. Plan. Dep't,
Cty. of Kauai, 104 Hawai#i 173, 180–81, 86 P.3d 982, 989–90 (2004)).
5/
The Honorable Karl K. Sakamoto presided.
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Au initially appealed from the Foreclosure Decree, but
the appeal was dismissed with prejudice pursuant to stipulation.
On January 22, 2015, the Circuit Court entered its
"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/Ejectment, Filed
October 22, 2014" (Confirmation Order). The Confirmation Order
approved the sale to Kamoku, ordered the Commissioner upon
closing to convey the Property to Kamoku, and "forever barred and
foreclosed" Au "of and from all right, title and interest and
claims at law or in equity in and to the . . . Property and every
part thereof and to the proceeds therefrom arising up to the date
of closing or in equity in and to the Mortgaged Property and
every part thereof and to the proceeds therefrom arising up to
the date of closing." The Confirmation Order was entered as a
final judgment pursuant to Hawai#i Rules of Civil Procedure
(HRCP) Rule 54(b). Au did not appeal from the Confirmation
Order.
The deed conveying the Property to Kamoku
(Commissioner's Deed) was recorded in the Land Court on
February 26, 2015 as Document No. T-9187098 on Transfer
Certificate of Title No. 1093274. The Commissioner's Deed
conveyed Unit 3908, together with the "exclusive easement to use
the Parking Stall(s), if any, as shown in said Declaration, as
amended."
B. Land Court Petition
On October 9, 2015, Au filed a petition (Petition) in
the Land Court, initiating the case underlying this appeal. The
Petition sought to modify or amend the respective certificates of
title for Units 3908 and 3906 of the Royal Iolani Condominium
Project. Prior to the foreclosure of Unit 3908, Au owned both
units. By the Petition, Au sought to divest Kamoku of the two
parking stalls of record for Unit 3908, numbers 17 and 541, and
attach one stall, number 21, which was appurtenant to the other
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unit owned by Au.6/ Additionally, Au requested that the court
"conclude that Respondents 3908 Kamoku LLC, Marcella Rosen and
David B. Rosen are not bonafide purchasers for value . . . ."7/
Au asserted six claims for relief: (1) Intentional or Negligent
Misrepresentation; (2) Wrongful Conversion; (3) Fraud and
Concealment; (4) Bad Faith; (5) Tortious Interference of
Prospective Financial Business Advantage; and (6) Unfair and
Deceptive Practices under HRS § 480.
On March 17, 2016, Kamoku filed a motion for summary
judgment on the Petition. On April 8, 2016, Au filed
"Petitioner's Motion for Temporary Restraining Order and/or
Permanent Injunction, and Motion for Partial Summary Judgment."
On June 22, 2016, the Land Court entered orders denying both
Kamoku and Au's motions.
On July 5, 2016, Kamoku filed a motion for partial
summary judgment as to Au's tort and consumer protection claims
for lack of subject matter jurisdiction under HRS chapter 501.
On August 11, 2016, Kamoku filed another motion for partial
summary judgment, which sought judgment in Kamoku's favor and
against Au on the other claims asserted in the Petition. On
August 15, 2016, Rosen joined in both of Kamoku's motions.
Meanwhile, on August 3, 2016, Au filed his own motion for summary
judgment. The three motions were heard by the Land Court on
August 29, 2016.
At the August 29, 2016 hearing, the Land Court orally
denied Au's motion "on the grounds that the petition in the case
at bar constitutes a collateral attack upon the foreclosure
judgment that has already been filed." The Land Court further
ruled:
6/
The Petition alleged that Au was in adverse possession of parking
stall numbers 17 and 541, and that Au had exchanged stalls appurtenant to
Units 3908 and 3906 in 1991. It appears that later in the litigation Au
acknowledged that the stalls had not been exchanged.
7/
Rosen represented Wells Fargo in the Foreclosure Case. Au alleged
in the Petition that Rosen "never represented to Petitioner Au or to
foreclosure Judge Sakamoto that the prevailing bidder Respondent 3908 Kamoku
LLC was an entity prepared by . . . Rosen naming his wife Respondent Marcella
Rosen and that the address of 3908 Kamoku LLC . . . was the law office address
of . . . Rosen."
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[T]he Court will grant minimal relief on [Kamoku's August
11, 2016] motion for partial summary judgment only to the
extent that the Court will recognize that the instant
petition does constitute a collateral attack upon the
foreclosure judgment.
Beyond that, the Court will deny all other relief
without prejudice, because this court does not believe it is
appropriate for this court to adjudicate any of the issues,
and thereby restrict Judge Sakamoto's ability to address,
with complete freedom, all of the allegations of fraud or
other impropriety that is alleged to be a basis to set aside
or alter or amend the Court's prior judgment.
Additionally, the Land Court granted Kamoku's July 5, 2016 motion
for partial summary judgment, concluding that the court lacked
jurisdiction over the tort and consumer protection claims
asserted in the Petition.8/
On October 28, 2016, Au moved to amend the Petition.
The Land Court granted the request, but limited the amendment to
"that single claim of fraud affecting the title to the subject
property and whether or not title is properly sitting in the
hands of a genuine and legitimate owner because of the alleged
fraud." The court "determined that there is no basis to allow
amendment of the petition with respect to the parking stall
claim."
On December 5, 2016, Au filed the Amended Petition.
The Amended Petition asked the Land Court to determine that the
8/
On April 19, 2017, the court entered its written order granting in
part and denying in part Kamoku's August 11, 2016 motion for partial summary
judgment, which stated in relevant part:
[T]he Court concludes the instant Petition is an
impermissible collateral attack on the orders, decrees,
and/or final judgment rendered in civ. no. 12-1-1567-06
(KKS), a judicial foreclosure action.
Accordingly, this Court refrains from addressing the
merits and dismisses the instant Petition with prejudice to
the extent it constitutes a collateral attack, and dismisses
the instant Petition without prejudice as to all remaining
claims.
On the same date, the court entered its written order granting Kamoku's
July 5, 2016 motion for partial summary judgment, which stated in relevant
part:
[T]he Court concludes that it lacks subject matter
jurisdiction over the claims raised by the instant Petition
which seek relief not arising under Hawaii Revised Statutes
chapter 501-1, et seq.
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Circuit Court "had no jurisdiction in rem or in personam over
[Kamoku]," because Kamoku was not "incorporated" when it bid on
the Property and the Circuit Court orally confirmed the sale,9/
and thus "[t]he Circuit Court Order authorizing the sale of Unit
3908 to [Kamoku] was void and unenforceable for lack of
jurisdiction." The Amended Petition also requested that the Land
Court modify or amend the certificate of title for Unit 3908, and
expunge and cancel the Commissioner's Deed. Au asserted that the
"recordation in the Land Court of the Commissioner's Deed was
fraudulent, void[,] and unenforceable" due to alleged fraud and
concealment by Rosen. Au asserted the following "claims for
relief": (1) "Jurisdiction of the Court and parties"; (2) "The
First Circuit Court's lack of subject matter jurisdiction on
November 18, 2014, and the self-dealing of Respondent David B.
Rosen"; (3) "Intentional or Negligent Misrepresentation"; (4)
"Fraud and Concealment"; (5) "Bad Faith"; (6) "Tortious
Interference of Prospective Financial Business Advantage"; and
(7) "Unfair and Deceptive Practices [Under] HRS [chapter] 480."
Also on December 5, 2016, Kamoku filed a "Post Judgment
Motion to Enforce Judgment, Subsidiary Orders and Decrees, and
Settlement Agreement and for Injunctive Relief" (Post-Judgment
Motion) in the Foreclosure Case.10/ On March 1, 2017, the Circuit
Court entered an order granting the Post-Judgment Motion, except
as to the requested injunction and fee award (Post-Judgment
Order). In particular, the Post-Judgment Order granted Kamoku's
request that the court:
(1) confirm that the sale of the Property to 3908
Kamoku LLC was properly conducted in all respects;
(2) confirm that 3908 Kamoku LLC's being organized
after the confirmation hearing did not, in any way, affect
this Court's subject matter jurisdiction, mislead or defraud
9/
The January 22, 2015 Confirmation Order indicates that Wells
Fargo's motion for confirmation of foreclosure sale was heard on November 18,
2014. At the hearing, "bidding on the . . . Property was re-opened for the
public . . . [and Kamoku] submitted the winning bid in the amount of . . .
$569,433.00[.]" Au asserts that Kamoku did not file its articles of
organization as a limited liability company (LLC) until December 17, 2014.
Kamoku does not dispute the date of its organization.
10/
The Honorable Bert I. Ayabe presided.
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the court, or damage any party hereto;
(3) declare 3908 Kamoku LLC to be the true and lawful
owner of the Property, including all appurtenances thereto,
pursuant to the orders and judgment entered in this case;
(4) declare Mr. Au forever barred from asserting any
rights in the Property, and all appurtenances thereto,
pursuant to the orders and judgment entered in this case[.]
Au did not appeal from the Post-Judgment Order.
In the Land Court case underlying this appeal, on
March 6, 2017, Au filed a motion "for summary judgment regarding
collateral attack," which in substance sought summary judgment on
the Amended Petition. Au argued, among other things, that his
claims were not barred by the collateral-attack doctrine because
the Circuit Court had lacked personal jurisdiction over Kamoku,
and fraud was committed in the Foreclosure Case. On March 30,
2017, Kamoku filed a counter-motion for summary judgment on the
Amended Petition. Kamoku argued that: (1) the Amended Petition
constituted an impermissible collateral attack on the Foreclosure
Case and contained claims that did not arise under HRS chapter
501; (2) Au was not a "party in interest" for the purpose of
seeking to amend a Land Court certificate of title; and (3) Au
lacked standing to amend title to the Property. The respective
motions for summary judgment were heard on May 15, 2017, at which
time the Land Court orally denied Au's motion and granted
Kamoku's motion.
On July 18, 2017, the Land Court entered written
orders: (1) denying Au's March 6, 2017 motion for summary
judgment; (2) granting Kamoku's March 30, 2017 counter-motion for
summary judgment; and (3) granting Rosen's April 3, 2017 joinder
in Kamoku's counter-motion. On the same date, the Land Court
entered the Judgment in favor of Kamoku and Rosen and against Au,
dismissing with prejudice the Amended Petition as to all claims
and all parties. This appeal followed.
II. Standards of Review
A. Summary Judgment
An appellate court reviews a trial court's grant or
denial of summary judgment de novo using the same standard
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applied by the trial court. Nozawa v. Operating Engineers Local
Union No. 3, 142 Hawai#i 331, 338, 418 P.3d 1187, 1194 (2018)
(citing Adams v. CDM Media USA, Inc., 135 Hawai#i 1, 12, 346 P.3d
70, 81 (2015)). "Summary 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 a judgment as a matter of law."
Id. at 342, 418 P.3d at 1198 (quoting Adams, 135 Hawai#i at 12,
346 P.3d at 81) (brackets omitted). "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." Id. (quoting Adams, 135 Hawai#i at 12,
346 P.3d at 81).
The moving party has the burden to establish that
summary judgment is proper. Id. at 342, 418 P.3d at 1198 (citing
French v. Haw. Pizza Hut, Inc., 105 Hawai#i 462, 470, 99 P.3d
1046, 1054 (2004)). "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.'" Id. (quoting Lales v. Wholesale Motors Co.,
133 Hawai#i 332, 359, 328 P.3d 341, 368 (2014)) (brackets
omitted). "The evidence must be viewed in the light most
favorable to the non-moving party." Id. (quoting Adams, 135
Hawai#i at 12, 346 P.3d at 81) (brackets omitted).
B. Collateral Attack
"The applicability of the collateral attack doctrine,
which shares similarities with other preclusive doctrines such as
collateral estoppel and res judicata, is a question of law which
is reviewable de novo." In re Thomas H. Gentry Revocable Tr.,
138 Hawai#i 158, 168, 378 P.3d 874, 884 (2016) (citing Smallwood
v. City and Cty. of Honolulu, 118 Hawai#i 139, 146, 185 P.3d 887,
894 (App. 2008)).
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III. Discussion
A. Collateral-Attack Doctrine
Au contends that the Land Court erred in entering
judgment in favor of Respondents and in dismissing the Amended
Petition with prejudice on the ground that the collateral-attack
doctrine barred his claims. Au argues that his claims were not
barred by the collateral-attack doctrine because the Amended
Petition alleged that the Circuit Court lacked personal
jurisdiction over 3908 Kamoku and that fraud was committed in the
Foreclosure Case.
"A collateral attack 'is an attempt to impeach a
judgment or decree in a proceeding not instituted for the express
purpose of annulling, correcting or modifying such judgment or
decree.'" In re Gentry Revocable Tr., 138 Hawai#i at 168–69, 378
P.3d at 884–85 (quoting Lingle v. Hawai#i Gov't Emps. Ass'n,
AFSCME, Local 152, AFL–CIO, 107 Hawai#i 178, 186, 111 P.3d 587,
595 (2005)). This court has explained: "[T]he collateral attack
doctrine is implicated when an independent suit seeks to impeach
a judgment entered in a prior suit." Smallwood, 118 Hawai#i at
150, 185 P.3d at 898.
The party asserting that an action constitutes an
impermissible collateral attack on a judgment must establish
that: (1) a party in the present action seeks to avoid,
defeat, evade, or deny the force and effect of the prior
final judgment, order, or decree in some manner other than a
direct post-judgment motion, writ, or appeal; (2) the
present action has an independent purpose and contemplates
some other relief or result than the prior adjudication; (3)
there was a final judgment on the merits in the prior
adjudication; and (4) the party against whom the collateral
attack doctrine is raised was a party or is in privity with
a party in the prior action.
Id. Collateral attacks may be allowed under limited
circumstances, such as when the prior court lacked subject matter
jurisdiction or when fraud was committed in the prior proceeding.
Id.Here, Au alleged in the Amended Petition that "[t]he
Circuit Court Order authorizing the sale of Unit 3908 to 3908
Kamoku LLC was void and unenforceable for lack of jurisdiction."
Additionally, Au asserted that the Commissioner's Deed should be
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expunged due to alleged fraud. Kamoku contends that "[t]his is a
barred collateral attack because the Commissioner's Deed was
executed pursuant to the Confirmation Order and to invalidate the
Commissioner's Deed would necessarily require overturning the
Confirmation Order (and, by implication, the Foreclosure
[Judgments])." (Footnote omitted.)
As Kamoku maintains, and Au does not appear to dispute,
the four prongs of the collateral attack doctrine were satisfied.
"The first part of this test confirms that the collateral attack
doctrine is implicated when an independent suit seeks to impeach
a judgment entered in a prior suit." Smallwood, 118 Hawai#i at
150, 185 P.3d at 898. Here, both the Petition and the Amended
Petition sought to impeach the Foreclosure Judgments, which
extinguished Au's interest in the Property. Au's requested
amendments to the Property's title would "avoid, defeat, evade,
or deny the force and effect of" the Foreclosure Judgments. Id."The second part [of the test] distinguishes the collateral
attack doctrine, where a party is suing on a different claim for
relief, from the doctrine of res judicata where a party is
seeking a different result on the same claim or cause or action."
Id. Here, both the Petition and the Amended Petition asserted
different claims for relief than those resolved by the
Foreclosure Judgments. The Foreclosure Case sought to foreclose
a mortgage on the Property and then to confirm the foreclosure
sale, while Au's Land Court petitions sought to invalidate the
sale of the Property and/or expunge the Commissioner's Deed.
Third, there must have been a final judgment on the merits in the
prior adjudication. Id. Here, the Foreclosure Judgments (i.e.,
the Foreclosure Decree and the Confirmation Order) constituted
final judgments on the merits of the Foreclosure Case. See Bank
of America, N.A. v. Reyes-Toledo, 139 Hawai#i 361, 372, 390 P.3d
1248, 1259 (2017) (a judgment entered on a decree of foreclosure
is a final judgment under HRS § 641-1); HRS § 667-51(a) (Supp.
2013) (identifying orders in a foreclosure case that are final
and appealable, including "[a] judgment entered on an order
confirming the sale of the foreclosed property, if the circuit
court expressly finds that no just reason for delay exists, and
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certifies the judgment as final pursuant to [HRCP] [R]ule
54(b)"). Lastly, "under appropriate circumstances, persons who
were not parties to the prior adjudication may raise the
collateral attack doctrine against a party who is properly bound
by the prior judgment." Smallwood, 118 Hawai#i at 150, 185 P.3d
at 898. Here, "the party against whom the collateral attack
doctrine is raised," Au, was a defendant in the Foreclosure Case
and was bound by the Foreclosure Judgments. Thus, barring an
applicable exception, the collateral-attack doctrine was properly
applied to Au's claims in this case.
1. Circuit Court's Subject Matter Jurisdiction
This court has recognized an exception to the
collateral-attack doctrine when the prior court lacked subject
matter jurisdiction. Id. Here, the Amended Petition stated, in
relevant part:
Petitioner's First Amended Petition requests the Land Court
of the State of Hawaii to determine that the Circuit Court
of the First Circuit on November 18, 2014 had no
jurisdiction in rem or in personam over 3908 Kamoku LLC,
which was not incorporated under HRS 428-202 until it was
filed with the State of Hawaii DCCA on December 17, 2014.
The Circuit Court Order authorizing the sale of Unit 3908 to
3908 Kamoku LLC was void and unenforceable for lack of
jurisdiction.
Au's allegation ignores the distinction between personal
jurisdiction and subject matter jurisdiction. Au appears to
argue that the Circuit Court lacked subject matter jurisdiction
to confirm the foreclosure sale of the Property because Kamoku
was not yet organized as an LLC when it bid on the Property and
the Circuit Court orally confirmed the sale.
"[B]y statute, the state legislature has vested the
circuit courts with general jurisdiction over 'civil actions and
proceedings,' and specific jurisdiction over mortgage foreclosure
actions." First Hawaiian Bank v. Timothy, 96 Hawai#i 348, 356,
31 P.3d 205, 213 (App. 2001) (original brackets and citation
omitted); see HRS § 603-21.5(a)(3) (Supp. 2013) (civil actions
and proceedings); HRS chapter 667, part IA (1993 & Supp. 2013)
(judicial foreclosure actions). In addition, we have recognized
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that:
[a] successful bidder at a judicial sale becomes a so-called
quasi party to the proceedings, by virtue of the bid, even
though originally not a party to the action or proceeding in
which the sale was ordered, for some purposes, including the
right to urge or to oppose confirmation. Purchasers subject
themselves to the jurisdiction of the court in the original
suit as to all matters connected with the sale and therefore
have the right to interfere in the proceedings for their own
benefit and protection and to claim equitable relief. They
become subject to the future orders of the court, and are
bound as parties by the decree of the court confirming or
setting aside the sale. They can be compelled by summary
processes of the court, so long as the court's control over
the cause and the parties continues, to perform their
agreement specifically and comply with the terms of the
purchase, by payment or otherwise.
Timothy, 96 Hawai#i at 357, 31 P.3d at 214 (citation omitted).
Here, the Circuit Court had subject matter jurisdiction
over the Foreclosure Case and personal jurisdiction over the
successful bidder at the foreclosure sale. Au has provided no
authority supporting the premise that a circuit court, after
entering a foreclosure decree, loses subject matter jurisdiction
to confirm sale and enter judgment, because the successful bidder
had not yet filed its organizational paperwork at the time of its
bid. We have found none. Au has similarly provided no authority
for his position that a purported lack of personal jurisdiction
over the successful bidder at a foreclosure sale strips the
circuit court of its subject matter jurisdiction over the
underlying foreclosure action. We have found none. Rather, as
"a general rule, a collateral attack may not be made upon a
judgment or order rendered by a court of competent jurisdiction.
If it is only a question of error or irregularity and not of
jurisdiction, it cannot be raised on collateral attack."
Matsuura v. E.I. du Pont de Nemours & Co., 102 Hawai#i 149, 158-
59, 73 P.3d 687, 696-97 (2003) (quoting First Hawaiian Bank v.
Weeks, 70 Haw. 392, 398, 772 P.2d 1187, 1191 (1989)); see Aames
Funding Corp. v. Mores, 107 Hawai#i 95, 104 n.10, 110 P.3d 1042,
1051 n.10 (2005) (declining to address the contention that the
court lacked subject matter jurisdiction in a foreclosure case
where the defendants failed to provide any discernable legal
argument supporting their contention); First Hawaiian Bank, 70
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Haw. at 398, 772 P.2d at 1191 ("The appellants maintain the
question here is one of jurisdiction since they question the
authority of the supreme court justice who presided over the
probate proceedings in 1863 to approve and order a distribution
not in accord with the testator's intent. But we are convinced
the issue they raise is one 'of error or irregularity and not of
jurisdiction,' for there is no doubt that the justice was vested
with power to determine matters involved in the settlement and
distribution of William Johnson's estate.").
Accordingly, Au has failed to present a discernible
legal argument that his collateral attack on the Foreclosure
Judgments was based on the Circuit Court's lack of subject matter
jurisdiction. He thus failed to establish an exception to the
collateral attack doctrine on this ground.
2. Fraud
This court has recognized that a collateral attack on a
prior judgment may be allowed when the party attacking the prior
judgment shows that it was procured by fraud. Smallwood, 118
Hawai#i at 154, 185 P.3d at 902; see Matsuura, 102 Hawai#i at 159,
73 P.3d at 697; HRCP Rule 60(b) ("This rule does not limit the
power of a court to entertain an independent action to relieve a
party from a judgment, order, or proceeding, or to set aside a
judgment for fraud upon the court.") Here, Au contends that
Rosen concealed his "self-interest to purchase unit 3908" and
made misrepresentations to Au by "rejecting Au's offer to
repurchase unit 3908 by bringing all interest current and
continuing the Wells Fargo Bank N.A. mortgage." Au further
argues that at the November 18, 2014 hearing, Rosen
misrepresented to the Circuit Court that Kamoku was the
successful bidder in the foreclosure sale of Unit 3908, when
Kamoku was not "incorporated" until December 17, 2014.
In Hawai#i, there are three types of fraud recognized
in the mortgage or conveyance context: "(1) fraud in the factum,
(2) fraud in the inducement, and (3) constructive fraud."
Hancock v. Kulana Partners, LLC, 145 Hawai#i 374, 382, 452 P.3d
371, 379 (2019) (conveyance context); Aames Funding Corp., 107
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Hawai#i at 103, 110 P.3d at 1050 (mortgage context).
First, fraud in the factum "is fraud which goe to the nature
of the document itself." [107 Hawai#i at 103, 110 P.3d at
1050.] . . . Second, fraud in the inducement is "fraud
which induces the transaction by misrepresentation of
motivating factors." [Id.] at 103-04, 110 P.3d at 1050-51.
Third, constructive fraud is "characterized by the breach of
fiduciary or confidential relationship." [Id.] at 104, 110
P.3d at 1051.
Hancock, 145 Hawai#i at 382, 452 P.3d at 379.
Au does not provide a discernible factual or legal
argument in support of his position that fraud was committed in
the Foreclosure Case. As to Au's contention that Rosen made
misrepresentations in rejecting Au's offer to repurchase unit
3908, Au asserts that "Caldwell Banker received an offer for
$600,000.00 and Respondent Rosen advised the Court and Au that
the current deficiency exceeded $700,000.00 and was
unacceptable." Au fails to provide any citation to the record
supporting his assertions. He cites to appendices attached to
his opening brief, but "[t]his court disregards appendices that
are not part of the record, unless otherwise specified by the
rule." Durda v. Ion Genius, Inc., No. CAAP-XX-XXXXXXX, 2017 WL
621277, at *3 n.4 (Haw. App. Feb. 15, 2017) (mem.) (citing HRAP
Rule 28(b)(10)).
Even if there were evidence to support Au's factual
allegations, Au has failed to present a discernable argument as
to how Rosen's alleged statement constituted fraud. For example,
Au does not identify a false representation of material fact made
with knowledge of falsity and "in contemplation of [Au's]
reliance upon th[is] false representation[]." Shoppe v. Gucci
Am., Inc., 94 Hawai#i 368, 386, 14 P.3d 1049, 1067 (2000)
("[E]ven taking all of Plaintiff's factual allegations as true,
Plaintiff has failed to establish that Defendants made a false
representation with respect to a material fact."). Nor does Au
explain how he relied on or was harmed by any false
representation allegedly made by Rosen. See id.; see also Aames
Funding Corp., 107 Hawai#i at 104, 110 P.3d at 1051 (concluding
that the defendants did not "provide a discernible factual or
legal argument in support of their position that the case at bar
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involves any one of the three types of fraud mentioned" (citing
HRAP Rule 28(b)(7))).
Au also contends that "the ultimate fraud and
concealment of Respondent Rosen was the concealment from the
Foreclosure Court, Commissioner and Petitioner Au" that Kamoku
was not "incorporated" when it was declared the successful bidder
at the November 18, 2014 hearing. Relatedly, Au argues that
Rosen "never disclosed to the Foreclosure Court or Petitioner Au
that he represented [Kamoku], which was not in existence until
almost 30 days later on December 17, 2014 . . . ."
Again, Au fails to provide a discernible factual or
legal argument in support of his position that Rosen committed
fraud in the Foreclosure Case. See Aames Funding Corp., 107
Hawai#i at 104, 110 P.3d at 1051; Shoppe, 94 Hawai#i at 386, 14
P.3d at 1067. There is no dispute that: (1) Kamoku was organized
on December 17, 2014; (2) the Confirmation Order was entered on
January 22, 2015; and (3) the Commissioner's Deed conveying the
Property to Kamoku was executed on February 24, 2015, and
recorded on February 26, 2015. Under these circumstances, where
Kamoku was formed prior to accepting delivery of the
Commissioner's Deed, Au failed to raise a genuine issue of
material fact that the conveyance of the Property to Kamoku was
fraudulent. See R.W. Meyer, Ltd. v. McGuire, 36 Haw. 672, 673-74
(Haw. Terr. 1944) ("The time of acceptance of delivery being the
criterion of every deed's final and complete execution, a grant
in futuro, where no immediate delivery, acceptance and conveyance
are intended to a proposed and potentially existent corporation
named as grantee, becomes a valid conveyance eo instanti upon the
acceptance of delivery by the grantee, which has in the meantime
qualified as a duly organized and corporate entity fully
authorized by its articles of incorporation to hold land and
accept deeds to it." (citation omitted)); cf. HRS § 414-34 (2004)
("All persons purporting to act as or on behalf of a corporation,
knowing there was no incorporation under this chapter, are
jointly and severally liable for all liabilities created while so
acting.").
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Additionally, to the extent Au contends that the
alleged non-disclosure constitutes fraud on the court, his
argument is without merit. The Hawai#i Supreme Court has
explained, "since the remedy for fraud on the court is far
reaching, it only applies to very unusual cases involving 'far
more than an injury to a single litigant,' but rather, a
'corruption of the judicial process itself.'" Cvitanovich-Dubie
v. Dubie, 125 Hawai#i 128, 144-45, 254 P.3d 439, 455-56 (2011)
(brackets omitted) (quoting Schefke v. Reliable Collection
Agency, Ltd., 96 Hawai#i 408, 431 n. 42, 32 P.3d 52, 75 n. 42
(2001)). "It is generally accepted that fraudulent conduct such
as perjury or non-disclosure by a party, standing alone, is
insufficient to make out a claim for fraud on the court." Id.(citing Gleason v. Jandrucko, 860 F.2d 556, 559–60 (2d Cir.1988);
Lockwood v. Bowles, 46 F.R.D. 625, 632–34 (D.D.C. 1969); 12 James
Wm. Moore et al., Moore's Federal Practice ¶ 60.21 [4][c] (3d ed.
2010)).
Here, Au did not raise a genuine issue of material fact
that the alleged non-disclosure resulted in the corruption of the
judicial process. Thus, he has not set forth a factual or legal
basis for any fraud on the court.
Accordingly, Au has failed to present a discernible
factual or legal argument that his collateral attack on the
Foreclosure Judgments was based on fraud committed in the
Foreclosure Case. He thus failed to establish an exception to
the collateral attack doctrine on this ground.
B. Law of the Case Doctrine
Au contends that "the Land Court for 'cogent reason[s]'
has the authority to expunge the documents recorded in the Land
Court resulting from the fraud and misrepresentation of Rosen."
(Capitalization altered.) Au cites Wong v. City & Cty. of
Honolulu, 66 Haw. 389, 396, 665 P.2d 157, 162 (1983), for the
proposition that the law of the case doctrine does not prevent a
second court from modifying the prior ruling of another court of
equal and concurrent jurisdiction, where "cogent reasons" support
the second court's action.
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"A fundamental precept of common-law adjudication is
that an issue once determined by a competent court is
conclusive." PennyMac Corp. v. Godinez, 148 Hawai#i 323, 331,
474 P.3d 264, 272 (2020) (brackets omitted) (quoting Arizona v.
California, 460 U.S. 605, 619 (1983)). "This 'general principle
of finality and repose' is embodied in the law of the case
doctrine, which provides that 'when a court decides upon a rule
of law, that decision should continue to govern the same issues
in subsequent stages in the same case.'" Id. (brackets omitted)
(emphasis added) (quoting Arizona, 460 U.S. at 618).
Here, Au brought a new case in the Land Court and
sought to impeach the Circuit Court's judgments in a different
case, i.e., the Foreclosure Case. The law of the case doctrine
and any exception based on "cogent reasons" simply does not
apply. For the reasons previously stated, the Land Court did not
err in concluding that the collateral-attack doctrine barred Au's
claims.
C. Fair Price
Au contends that "[t]he Land Court has been provided no
evidence by [Kamoku] or Rosen that the sale of the property below
the claimed deficiency by Wells Fargo N.A., was a sale that was
conducted fairly and diligently to obtain the best price for unit
3908." In support of his argument, Au cites the supreme court's
decision in Kondaur Capital Corp. v. Matsuyoshi, 136 Hawai#i 227,
361 P.3d 454 (2015).
Au's argument is part of his collateral attack on the
Foreclosure Judgments – in particular, the Confirmation Order,
from which he did not appeal. For the reasons previously
discussed, the Land Court did not err in concluding that the
collateral-attack doctrine barred Au's claims.11/
11/
We also note that, to the extent Au's argument could be viewed as
a defense that could have been raised in the Foreclosure Case, it would be
barred under the res judicata/claim preclusion doctrine. See Mortg. Elec.
Registration Sys., Inc. v. Wise, 130 Hawai #i 11, 18, 304 P.3d 1192, 1199
(2013).
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D. The Circuit Court's Post-Judgment Order
Au contends that the Circuit Court lacked jurisdiction
to entertain the Post-Judgment Motion filed by Kamoku and Rosen.
Because Au did not appeal from the Post-Judgment Order, it is not
within the scope of this appeal. Accordingly, we lack
jurisdiction to consider the merits of Au's argument regarding
the Post-Judgment Order.
IV. Conclusion
For the reasons discussed above, we affirm the Final
Judgment, entered on July 18, 2017, in the Land Court of the
State of Hawai#i.
DATED: Honolulu, Hawai#i, November 22, 2021.
On the briefs:
Ronald G.S. Au, /s/ Lisa M. Ginoza
Petitioner-Appellant, Pro Se Chief Judge
Wayne Nasser and
Benjamin M. Creps /s/ Clyde J. Wadsworth
(Ashford & Wriston, LLLP) Associate Judge
for Respondent-Appellee
3908 Kamoku LLC
/s/ Karen T. Nakasone
David B. Rosen Associate Judge
(Law Office of David B. Rosen)
Pro Se Respondent-Appellee
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