Nationstar Mortage LLC v. Kanahele ( 2024 )

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
28-OCT-2024
07:59 AM
Dkt. 110 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
NATIONSTAR MORTGAGE LLC, Plaintiff-Appellant,
v.
DANIEL KALEOALOHA KANAHELE; THE ESTATE OF MARCUS C. KANAHELE;
CHILD SUPPORT ENFORCEMENT AGENCY, STATE OF HAWAII; UNITED STATES
OF AMERICA; FIA CARD SERVICES, N.A.; and GLORIA KANAHELE,
PERSONAL REPRESENTATIVE OF THE ESTATE OF MARCUS C. KANAHELE,
Defendants-Appellees,
and
DOES 2-20, inclusive, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CASE NO. 2CC141000584)
SUMMARY DISPOSITION ORDER
(By: Leonard, Acting Chief Judge, Hiraoka and Wadsworth, JJ.)
Nationstar Mortgage LLC appeals from the May 27, 2021
Judgment entered by the Circuit Court of the Second Circuit.1
Nationstar challenges the May 27, 2021 "Order Granting in Part
and Denying in Part Plaintiff's Motion To: (1) Set Aside Order of
Dismissal Filed June 26, 2020, and Re-set Trial Deadlines; or
(2) Alternatively, to Amend the Order Entered June 26, 2020,
Filed March 9, 2021." We affirm.
Nationstar filed a residential mortgage foreclosure
complaint against Daniel Kaleoaloha Kanahele and others on
1
The Honorable Peter T. Cahill presided.
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
October 7, 2014. The circuit court granted Nationstar's motion
for summary judgment and decree of foreclosure and entered a
judgment against all defendants. Kanahele appealed. We vacated
the judgment, holding that Nationstar did not show it was
entitled to enforce the Note when its complaint was filed as
required by Bank of America, N.A. v. Reyes-Toledo, 139 Hawai#i
361, 390 P.3d 1248 (2017). Nationstar Mortg. LLC v. Kanehele,
No. CAAP-XX-XXXXXXX, 2018 WL 2944168, at *9 (Haw. App. June 12,
2018) (mem. op.), aff'd, 144 Hawai#i 394, 396, 443 P.3d 86, 88
(2019).
Kanahele applied for certiorari. The supreme court
affirmed our conclusion on the standing issue, but held (a) we
erred by concluding that Nationstar's business records were
admissible under the business records exception to the hearsay
rule, and (b) we should have clarified that the circuit court
must address Kanahele's affirmative defenses because Nationstar
was a holder, not a holder in due course. Nationstar Mortg. LLC
v. Kanahele, 144 Hawai#i 394, 396, 443 P.3d 86, 88 (2019). The
supreme court remanded the case to the circuit court and its
judgment on appeal was entered on June 4, 2019.
Nationstar took no action after the remand. On
June 26, 2020, the circuit court entered an "Order of Dismissal
(No Activity)" and electronically served Nationstar's counsel of
record. The order stated the case was dismissed with prejudice,
but could be reinstated for good cause by motion filed within ten
days. Hawai#i Rules of Civil Procedure (HRCP) Rule 41(b)(2).
Nationstar moved to set aside the Order of Dismissal on March 9,
2021. The motion was heard on April 21, 2021. The circuit court
declined to reinstate the case, but granted Nationstar's request
that the dismissal be without prejudice. The written Order and
the Judgment were entered on May 27, 2021. This appeal followed.
We review for abuse of discretion. Ryan v. Palmer, 130 Hawai#i
321, 323, 310 P.3d 1022, 1024 (App. 2013).
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Nationstar's briefing suggests that the circuit court
is to blame for Nationstar's omissions. Nationstar first argues
it did not receive notice of the Order of Dismissal because the
order "was inexplicably and inexcusably not served" on its
"primary counsel," David B. Rosen. Nationstar's argument is not
persuasive. Rosen was not served with the Order of Dismissal
because he did not file a notice of appearance in the Judiciary
Electronic Filing System (JEFS) until March 9, 2021, almost nine
months after the Order of Dismissal was entered.
Nationstar's foreclosure complaint was signed by
Lloyd T. Workman and electronically filed on October 7, 2014.
Workman became a party in JEFS on that date. The June 26, 2020
Order of Dismissal was electronically served on Workman on
June 26, 2020, consistent with Hawai#i Electronic Filing and
Service Rules (HEFS) Rule 6.1.
Rosen had wet-ink signed Nationstar's January 13, 2015
memorandum opposing Kanahele's motion to dismiss; the document
was conventionally filed ex officio; Rosen did not file a notice
of appearance in JEFS. Rosen also wet-ink signed many other
documents conventionally filed and served between April 21, 2015
and April 24, 2017. He did not file a JEFS notice of appearance
with those documents; the record does not show he filed an HEFS
Rule 6.1 statement of consent and active email address so he
could be electronically served by JEFS if he did not have a login
and password.
Effective October 28, 2019, Rosen had to register as a
JEFS User and file all documents electronically. HRCP Rule 1.1.
He did not file a notice of appearance. He did not add himself
as a party to be served in JEFS until March 9, 2021, when he
electronically filed the motion to set aside the Order of
Dismissal.
Nationstar argues it includes multiple attorneys on its
cases for various reasons, and while it "certainly does not
expect the Circuit Court to know which attorney is handling what
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NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
aspect of a foreclosure action" "it is reasonable to expect that
if there are attorneys identified in its case caption, that all
of those attorneys will receive notices (albeit electronically)."
We disagree. Other than Workman, none of the attorneys listed in
Nationstar's captions — Rosen, George C. Alejandro, Zachary K.
Kondo, David E. McAllister, Justin S. Moyer, Andrew R. Tellio, or
Anna T. Valiente, entered electronic notices of appearance in
JEFS. That is why none of them were listed on the JEFS Notice of
Electronic Filing (NEF) for the Order of Dismissal. An attorney
who does not enter their appearance in JEFS shouldn't expect to
receive an NEF. The circuit court's failure to serve the
June 26, 2020 Order of Dismissal on Rosen or any of the Aldridge
Pite attorneys besides Workman was neither inexplicable nor
inexcusable.
Nationstar argued in circuit court that "due to
COVID-19 stay at home orders, typical Aldridge Pite procedures by
which Mr. Workman (or his paralegal) might have forwarded the
Order of Dismissal to Mr. Rosen were not in practice."
Nationstar argues on appeal that the Order of Dismissal "was
entered in the beginning months of a global pandemic of
COVID-19"2 and Workman was "working from home and did not yet
have the same procedures in place that had existed previously."
But Nationstar's motion to set aside blamed the circuit court for
making a mistake, arguing that "Mr. Rosen . . . should have been
served with notice of the Dismissal Order, but was not." On
appeal Nationstar continues to blame the circuit court by arguing
that "the Circuit Court's Order of Dismissal was not properly
2
The Order of Dismissal was entered three months after then-
Governor David Y. Ige declared a state of emergency in Hawai#i on March 5,
2020. See Order, In re Judiciary's Response to the COVID-19 Outbreak, SCMF-
XX-XXXXXXX (Haw. Mar. 16, 2020).
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served." The circuit court is not to blame for Nationstar's
omissions.3
There was no clerical mistake warranting relief under
HRCP Rule 60(a); Rosen did not receive an NEF because he never
entered an appearance in JEFS. Nor does the record establish
excusable neglect or any other reason justifying relief from the
Order of Dismissal under HRCP Rule 60(b)(1) or (6). Workman, the
only Aldridge Pite attorney who registered to receive NEFs for
the case, was served with the Order of Dismissal. Nationstar did
not move to reinstate within the time prescribed by HRCP
Rule 41(b)(2) and stated in the Order of Dismissal. The circuit
court acted within its discretion by declining to reinstate
Nationstar's foreclosure action.
Nationstar argues the circuit court abused its
discretion because Nationstar might not be legally able to refile
its foreclosure action. That issue was not raised with the
circuit court. Nationstar specifically asked the circuit court
to alternatively amend the Order of Dismissal to be without
prejudice. It represented that it "will ensure that it will
promptly commence a new foreclosure action[.]" The circuit court
granted that relief. The reply brief's argument that it was
"unreasonable for the circuit court to assume Nationstar would be
able to refile for foreclosure without obtaining briefing or
argument on this issue or crafting specific relief" is not
persuasive. We will not consider issues not raised below. "It
is unfair to the trial court to reverse on a ground that no one
even suggested might be error. It . . . does not comport with
the concept of an orderly and efficient method of administration
of justice." Kawamata Farms, Inc. v. United Agri Prods., 86
Hawai#i 214, 248, 948 P.2d 1055, 1089 (1997).
3
Rosen, who signed Nationstar's opening brief, is cautioned about
making unsubstantiated allegations that the circuit court had "a bias against
mortgage lenders" and characterizing the circuit court's decision as
"abusive." See Hawai#i Rules of Professional Conduct Rule 3.5(b) and Comment
[2].
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NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
The "Order Granting in Part and Denying in Part
Plaintiff's Motion To: (1) Set Aside Order of Dismissal Filed
June 26, 2020, and Re-set Trial Deadlines; or (2) Alternatively,
to Amend the Order Entered June 26, 2020, Filed March 9, 2021"
and the "Judgment[,]"4 both entered by the circuit court on
May 27, 2021, are affirmed.
DATED: Honolulu, Hawai#i, October 28, 2024.
On the briefs:
/s/ Katherine G. Leonard
David B. Rosen, Acting Chief Judge
for Plaintiff-Appellant
Nationstar Mortgage LLC. /s/ Keith K. Hiraoka
Associate Judge
Kalama M. Lui-Kwan,
for Plaintiff-Appellant /s/ Clyde J. Wadsworth
Nationstar Mortgage LLC. Associate Judge
Sean C. Aronson,
Lance D. Collins,
for Defendant-Appellee
Daniel Kaleoaloha Kanahele.
4
The May 27, 2021 Judgment was not an adjudication on the merits.
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