NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 21-MAY-2024 08:09 AM Dkt. 186 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
CITIMORTGAGE, INC., Plaintiff/Counterclaim Defendant-Appellee, v. MICHAEL COSTA BRUM, SR., JULIE PIERRETTE BRUM, ASSOCIATION OF APARTMENET OWNERS OF KALELE KAI, Defendants/Cross-claim Defendants-Appellees; DAVID V. BIRDSALL AND CARLA J. BIRDSALL, AS CO-TRUSTEES OF THE BIRDSALL REVOCABLE LIVING TRUST DATED MARCH 17, 1999, Defendants/Counterclaimants/Cross-claimants-Appellants; and JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOE CORPORATIONS 1-10; DOE ENTITIES 1-10 and DOE GOVERNMENTAL UNITS 1-10, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CASE NO. 1CC151000301)
SUMMARY DISPOSITION ORDER (By: Wadsworth, Presiding Judge, Nakasone and Guidry, JJ.)
This case arises out of the foreclosure on a
condominium property. Defendants/Counterclaimants/Cross- NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Claimants-Appellants David V. Birdsall and Carla J. Birdsall, as
Co-Trustees of the Birdsall Revocable Living Trust Dated
March 17, 1999 (the Birdsalls) appeal from the following
judgments and orders, entered by the Circuit Court of the First
Circuit (circuit court): (1) a January 2, 2019 Hawaiʻi Rules of
Civil Procedure (HRCP) Rule 54(b) "Judgment on Jury Waived Trial
Held on November 13 – 15, [2017]" (Judgment on Foreclosure and
Counterclaim); (2) a July 5, 2019 "Dispositive Order Re
[Plaintiff/Counterclaim Defendant-Appellee Citimortgage, Inc.'s
(Citimortgage)] Motion for Recovery of Attorney's Fees and Costs
Incurred in Defense of the Birdsall Counterclaim" (Attorneys'
Fees Award); (3) a September 10, 2019 HRCP Rule 54(b) "Judgment"
on an order confirming the foreclosure sale (Confirmation
Judgment); and (4) an October 1, 2019 Order Denying Birdsalls'
August 23, 2019 Motion for Stay of the [Attorneys' Fees Award]
(Order Denying Stay).1
The Birdsalls raise eleven points of error which
collectively challenge the circuit court's orders, judgments,
findings, and conclusions denying the Birdsalls' counterclaims
for quiet title and declaratory relief, excluding the Birdsalls'
proposed trial exhibits, granting Citimortgage's affirmative
foreclosure claim, granting Citimortgage's request for
1 The Honorable Jeffrey P. Crabtree presided.
2 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
attorneys' fees and costs in defending the counterclaims,
confirming the sale of the foreclosed property, and denying the
Birdsalls' respective requests to stay the Judgment on
Foreclosure and Counterclaim and the Attorneys' Fees Award
pending the appeal.
We review the circuit court's grant or denial of
summary judgment de novo. Ibbetson v. Kaiawe, 143 Hawaiʻi 1, 10,
422 P.3d 1, 10 (2018) (citation omitted). Summary judgment is
appropriate if there is no genuine issue as to any material fact
and the moving party is entitled to judgment as a matter of law.
Id. at 10-11, 422 P.3d at 10-11. We review findings of fact for
clear error and conclusions of law de novo. Bremer v. Weeks,
104 Hawaiʻi 43, 51, 85 P.3d 150, 158 (2004). We review a grant
or denial of a stay motion for abuse of discretion. Shanghai
Inv. Co., Inc. v. Alteka Co., Ltd., 92 Hawaiʻi 482, 503-04,
993 P.2d 516, 537-38 (2000), overruled on other grounds by
Blair v. Ing, 96 Hawaiʻi 327, 336, 31 P.3d 184, 193 (2001).
Evidentiary rulings based on relevance are reviewed under the
right/wrong standard. Estate of Klink ex rel. Klink v. State,
113 Hawaiʻi 332, 352, 152 P.3d 504, 524 (2007).
Upon careful review of the record and the briefs
submitted, and having given due consideration to the arguments
3 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
advanced and the issues raised by the parties, we resolve the
Birdsalls' arguments as follows:2
(1) The Birdsalls first contend the mortgage on the
subject property (Mortgage), and the accompanying promissory
note (Note), were void when made because the initial holder of
the Mortgage and Note, ABN AMRO Mortgage Group, Inc. (ABN), did
not exist at that time.3 It is undisputed that ABN had merged
with and into Citimortgage before the Mortgage and Note were
executed. The Birdsalls contend that ABN is a "dead"
corporation, and that it could not, as such, enter into a
contract.
It is undisputed that Citimortgage is a New York
corporation, and was the surviving entity in the merger with
ABN. New York Banking Law § 602(3) (McKinney 1966), which
2 We have reordered the Birdsalls' points of error, and we address only the discernible arguments that the Birdsalls raise in their opening brief. Hawaii Ventures, LLC v. Otaka, Inc., 114 Hawaiʻi 438, 477, 164 P.3d 696, 735 (2007) ("[T]he court may disregard points of error when the appellant fails to present discernible arguments supporting those assignments of error[.]") (citation omitted). Section (1) of this disposition addresses the contentions set forth on pp. 26-29 and 39-40 of the Birdsalls' opening brief.
3 Citimortgage sued to foreclose the Mortgage. The mortgagors of the subject property are Defendants/Cross-Claim Defendants-Appellees Michael Costa Brum, Sr. and Julie Pierrette Brum (the Brums). The subject property was owned by the Birdsalls at the time Citimortgage sued to foreclose, the Birdsalls having previously acquired the subject property via quitclaim deed, subject to all encumbrances. The Birdsalls counterclaimed, disputing Citimortgage's entitlement to foreclose.
4 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
governs mergers of banking corporations under New York law,4
provides that,
any reference to a merged corporation in any contract, will or document, whether executed or taking effect before or after the merger, shall be considered a reference to the receiving corporation if not inconsistent with the other provisions of the contract, will or document[.]
(Emphasis added). Under New York law, a merged corporation may
thus execute a contract post-merger, and the Birdsalls identify
no provision in the Mortgage or Note suggesting the loan funds
must be provided by ABN, such that it would be inconsistent with
their terms to consider the references to ABN as references to
Citimortgage. The circuit court did not, therefore, err in
determining that the Mortgage and Note were valid as to
Citimortgage.
(2) The Birdsalls contend Citimortgage "flunked" the
test to establish standing to foreclose by failing to prove it
4 Citimortgage, into which ABN merged, is a New York corporation. It thus appears New York Banking Law § 602 controls with respect to the merger.
Free access — add to your briefcase to read the full text and ask questions with AI
NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 21-MAY-2024 08:09 AM Dkt. 186 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
CITIMORTGAGE, INC., Plaintiff/Counterclaim Defendant-Appellee, v. MICHAEL COSTA BRUM, SR., JULIE PIERRETTE BRUM, ASSOCIATION OF APARTMENET OWNERS OF KALELE KAI, Defendants/Cross-claim Defendants-Appellees; DAVID V. BIRDSALL AND CARLA J. BIRDSALL, AS CO-TRUSTEES OF THE BIRDSALL REVOCABLE LIVING TRUST DATED MARCH 17, 1999, Defendants/Counterclaimants/Cross-claimants-Appellants; and JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOE CORPORATIONS 1-10; DOE ENTITIES 1-10 and DOE GOVERNMENTAL UNITS 1-10, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CASE NO. 1CC151000301)
SUMMARY DISPOSITION ORDER (By: Wadsworth, Presiding Judge, Nakasone and Guidry, JJ.)
This case arises out of the foreclosure on a
condominium property. Defendants/Counterclaimants/Cross- NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Claimants-Appellants David V. Birdsall and Carla J. Birdsall, as
Co-Trustees of the Birdsall Revocable Living Trust Dated
March 17, 1999 (the Birdsalls) appeal from the following
judgments and orders, entered by the Circuit Court of the First
Circuit (circuit court): (1) a January 2, 2019 Hawaiʻi Rules of
Civil Procedure (HRCP) Rule 54(b) "Judgment on Jury Waived Trial
Held on November 13 – 15, [2017]" (Judgment on Foreclosure and
Counterclaim); (2) a July 5, 2019 "Dispositive Order Re
[Plaintiff/Counterclaim Defendant-Appellee Citimortgage, Inc.'s
(Citimortgage)] Motion for Recovery of Attorney's Fees and Costs
Incurred in Defense of the Birdsall Counterclaim" (Attorneys'
Fees Award); (3) a September 10, 2019 HRCP Rule 54(b) "Judgment"
on an order confirming the foreclosure sale (Confirmation
Judgment); and (4) an October 1, 2019 Order Denying Birdsalls'
August 23, 2019 Motion for Stay of the [Attorneys' Fees Award]
(Order Denying Stay).1
The Birdsalls raise eleven points of error which
collectively challenge the circuit court's orders, judgments,
findings, and conclusions denying the Birdsalls' counterclaims
for quiet title and declaratory relief, excluding the Birdsalls'
proposed trial exhibits, granting Citimortgage's affirmative
foreclosure claim, granting Citimortgage's request for
1 The Honorable Jeffrey P. Crabtree presided.
2 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
attorneys' fees and costs in defending the counterclaims,
confirming the sale of the foreclosed property, and denying the
Birdsalls' respective requests to stay the Judgment on
Foreclosure and Counterclaim and the Attorneys' Fees Award
pending the appeal.
We review the circuit court's grant or denial of
summary judgment de novo. Ibbetson v. Kaiawe, 143 Hawaiʻi 1, 10,
422 P.3d 1, 10 (2018) (citation omitted). Summary judgment is
appropriate if there is no genuine issue as to any material fact
and the moving party is entitled to judgment as a matter of law.
Id. at 10-11, 422 P.3d at 10-11. We review findings of fact for
clear error and conclusions of law de novo. Bremer v. Weeks,
104 Hawaiʻi 43, 51, 85 P.3d 150, 158 (2004). We review a grant
or denial of a stay motion for abuse of discretion. Shanghai
Inv. Co., Inc. v. Alteka Co., Ltd., 92 Hawaiʻi 482, 503-04,
993 P.2d 516, 537-38 (2000), overruled on other grounds by
Blair v. Ing, 96 Hawaiʻi 327, 336, 31 P.3d 184, 193 (2001).
Evidentiary rulings based on relevance are reviewed under the
right/wrong standard. Estate of Klink ex rel. Klink v. State,
113 Hawaiʻi 332, 352, 152 P.3d 504, 524 (2007).
Upon careful review of the record and the briefs
submitted, and having given due consideration to the arguments
3 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
advanced and the issues raised by the parties, we resolve the
Birdsalls' arguments as follows:2
(1) The Birdsalls first contend the mortgage on the
subject property (Mortgage), and the accompanying promissory
note (Note), were void when made because the initial holder of
the Mortgage and Note, ABN AMRO Mortgage Group, Inc. (ABN), did
not exist at that time.3 It is undisputed that ABN had merged
with and into Citimortgage before the Mortgage and Note were
executed. The Birdsalls contend that ABN is a "dead"
corporation, and that it could not, as such, enter into a
contract.
It is undisputed that Citimortgage is a New York
corporation, and was the surviving entity in the merger with
ABN. New York Banking Law § 602(3) (McKinney 1966), which
2 We have reordered the Birdsalls' points of error, and we address only the discernible arguments that the Birdsalls raise in their opening brief. Hawaii Ventures, LLC v. Otaka, Inc., 114 Hawaiʻi 438, 477, 164 P.3d 696, 735 (2007) ("[T]he court may disregard points of error when the appellant fails to present discernible arguments supporting those assignments of error[.]") (citation omitted). Section (1) of this disposition addresses the contentions set forth on pp. 26-29 and 39-40 of the Birdsalls' opening brief.
3 Citimortgage sued to foreclose the Mortgage. The mortgagors of the subject property are Defendants/Cross-Claim Defendants-Appellees Michael Costa Brum, Sr. and Julie Pierrette Brum (the Brums). The subject property was owned by the Birdsalls at the time Citimortgage sued to foreclose, the Birdsalls having previously acquired the subject property via quitclaim deed, subject to all encumbrances. The Birdsalls counterclaimed, disputing Citimortgage's entitlement to foreclose.
4 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
governs mergers of banking corporations under New York law,4
provides that,
any reference to a merged corporation in any contract, will or document, whether executed or taking effect before or after the merger, shall be considered a reference to the receiving corporation if not inconsistent with the other provisions of the contract, will or document[.]
(Emphasis added). Under New York law, a merged corporation may
thus execute a contract post-merger, and the Birdsalls identify
no provision in the Mortgage or Note suggesting the loan funds
must be provided by ABN, such that it would be inconsistent with
their terms to consider the references to ABN as references to
Citimortgage. The circuit court did not, therefore, err in
determining that the Mortgage and Note were valid as to
Citimortgage.
(2) The Birdsalls contend Citimortgage "flunked" the
test to establish standing to foreclose by failing to prove it
4 Citimortgage, into which ABN merged, is a New York corporation. It thus appears New York Banking Law § 602 controls with respect to the merger. Though ABN was a Delaware corporation, the corporate merger statutes of Delaware, Hawaiʻi, and New York all suggest that the laws of the jurisdiction of the surviving entity govern the effect of the merger. See generally Del. Code Ann. tit. 8, § 252 (West 2017); N.Y. Bus. Corp. Law § 907 (McKinney 2023); Hawaii Revised Statutes §§ 414-311 (2004), 414-311.6 (2004). New York Business Corporation Law contains general provisions governing corporate mergers. However, New York Banking Law § 602 applies specifically to lenders, and expressly addresses the effect of a contract by a merged entity executed after the merger. See Matter of Khan v. Annucci, 186 A.D.3d 1370, 1372 (N.Y. App. Div. 2020) ("In the case of a conflict between a general statute and a special statute governing the same subject matter, the general statute must yield.") (citations omitted).
5 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
owned the Mortgage and Note at the time the complaint was filed.5
They assert that the allonge to the Note (the Allonge), which
was purportedly indorsed in blank by Citimortgage, and
thereafter never left Citimortgage's possession, is "a phony"
because the signature was forged, the signer was not employed by
Citimortgage, and it was signed after the complaint was filed.
These contentions lack merit.
To establish standing to foreclose, the "plaintiff
must necessarily prove its entitlement to enforce the note" at
the time the complaint was filed, "as it is the default on the
note that gives rise to the action." Bank of America, N.A. v.
Reyes-Toledo, 139 Hawaiʻi 361, 368, 390 P.3d 1248, 1255 (2017).
When an instrument is indorsed in blank, it "becomes payable to
bearer and may be negotiated by transfer or possession alone
until specially indorsed." Id. at 370, 390 P.3d at 1257.
The Birdsalls' conclusory arguments identify no
credible evidence on which to conclude the circuit court clearly
erred in determining that the Note was validly indorsed in blank
before the complaint was filed, and that the original blank-
indorsed Note thereafter never left Citimortgage's possession.
(3) The Birdsalls contend the circuit court erred in
concluding that they would be unjustly enriched if Citimortgage
5 Section (2) addresses the contentions set forth on pp. 27-29, and 41 of the Birdsalls' opening brief.
6 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
did not possess a valid first priority lien.6 The circuit court
determined that Citimortgage was entitled to foreclose on the
apartment as an alternative remedy "if the [N]ote or [M]ortgage
are found to be invalid." We decline to reach this issue, given
our conclusion that the Note and Mortgage are not invalid.7
(4) The Birdsalls contend, without more, "[t]he order
and judgment confirming the foreclosure sale must be vacated"
and "[t]he judgment of foreclosure must likewise be vacated[.]"8
In support of these arguments, the Birdsalls "incorporate by
reference" their prior contentions that the circuit court erred
in its findings and conclusions. The Birdsalls' contentions
lack merit, for the reasons set forth in this disposition.
(5) The Birdsalls contend the circuit court erred in
excluding trial exhibits showing that the Mortgage and Note were
not in ABN's loan "pipeline" at the time of the merger, and
which thus "proved" that Citimortgage could not be successor in
interest to ABN.9 The Birdsalls' contention lacks merit.
6 Section (3) addresses the contentions set forth on pp. 17-21 of the Birdsalls' opening brief.
7 The Birdsalls proceed, on pp. 17, 22-23 of their opening brief, to challenge several findings of fact and conclusions of law, entered by the circuit court on May 15, 2018, and June 21, 2018. We determine that the Birdsalls have not demonstrated that these findings are clearly erroneous, nor that these conclusions are wrong.
8 Section (4) addresses the contentions set forth on pp. 29-30 of the Birdsalls' opening brief.
9 Section (5) addresses the contentions set forth on pp. 30-31 of the Birdsalls' opening brief.
7 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
The circuit court properly excluded such evidence as
irrelevant to the triable issues because it had already
previously determined, on summary judgment, that Citimortgage,
as "successor by merger to ABN" "is the holder" of the Mortgage
and Note, and therefore held a "valid first priority mortgage
lien[.]"
(6) The Birdsalls contend the circuit court reversibly
erred in denying their respective stay motions.10 As we have
rejected the Birdsalls' challenges to the Judgment on
Foreclosure and Counterclaim, and Confirmation Judgment, the
Birdsalls' argument regarding the circuit court's denial of its
Motion to Stay Foreclosure is moot. See Wells Fargo Bank, N.A.
v. Ah Chong, No. CAAP-XX-XXXXXXX, 2015 WL 1265973 (Haw. App.
Mar. 19, 2015) (SDO).
Moreover, the Birdsalls fail to provide an adequate
record on which to conclude that the circuit court abused its
discretion in denying their motion for a stay of the Attorneys'
Fees Award. See In re RGB, 123 Hawaiʻi 1, 27, 229 P.3d 1066,
1092 (2010) ("[T]he burden is upon appellant . . . to show error
by reference to matters in the record, and he or she has the
responsibility of providing an adequate transcript.") (citations
omitted).
10 Section (6) addresses the contentions set forth on p. 32 of the Birdsalls' opening brief.
8 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
(7) The Birdsalls contend the Attorneys' Fees Award is
excessive and not related to work performed in defending against
their counterclaim.11 For the reasons set forth below, we do not
reach these arguments; we vacate the Attorneys' Fees Award on
other grounds, in accordance with Cole v. City and County of
Honolulu, 154 Hawaiʻi 28, 543 P.3d 460 (2024).
Citimortgage's post-judgment motion for attorneys'
fees and costs (Motion for Fees and Costs) is deemed filed on
January 2, 2019, for the purpose of calculating the 90-day
period to resolve the motion. Buscher v. Boning, 114 Hawaiʻi
202, 221, 159 P.3d 814, 833 (2007) (deeming a prematurely filed
post-judgment motion for attorneys' fees and costs to be filed
"immediately after the judgment becomes final for the purpose of
calculating the 90-day period" to resolve the motion, under
Hawaiʻi Rules of Appellate Procedure (HRAP) Rule 4(a)(3)). The
circuit court thus had until April 2, 2019, to resolve the
motion. See Cole, 154 Hawaiʻi at 31-32, 543 P.3d at 463-64 ("The
second clause [of HRAP Rule 4(a)(3)] requires the court to enter
that post-judgment order within 90 days after the party files
the motion. . . . Courts have no power to rule on a post-
judgment motion after the 90-day period. . . . [HRAP
11 Section (7) addresses the contentions set forth on pp. 24-27 of the Birdsalls' opening brief.
9 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Rule 4(a)(3)] nullifies an order entered 90 days after a post-
judgment motion.").
The circuit court disposed of the Motion for Fees and
Costs via two orders: (1) a November 21, 2018 "Interim Order,"
which ruled that Citimortgage was entitled to an award of
reasonable attorneys' fees and costs, and (2) the July 5, 2019
Attorneys' Fees Award, which awarded the actual fees and costs,
thereby resolving the Motion for Fees and Costs. Because the
Attorneys' Fees Award was entered after expiration of the 90-day
deadline in HRAP Rule 4(a)(3), it is nullified. In the
circumstances here, and in light of prior Hawaiʻi case law, we
conclude that Citimortgage may reassert its claims for
attorneys' fees and costs upon remand. See Victoria Ward Ctr.,
L.L.C. v. Gold Guys Holdings, LLC, Nos. CAAP-XX-XXXXXXX, CAAP-
XX-XXXXXXX, CAAP-XX-XXXXXXX, 2019 WL 2635689, at *12 (Haw. App.
June 27, 2019) (mem. op.) (construing predecessor version of
HRAP Rule 4(a)(3)); In re Int’l Union of Painters & Allied
Trades, Painters Local Union 1791 v. Endo Painting Serv., Inc.,
Nos. CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX, 2015
WL 3649836, at *4 (Haw. App. June 10, 2015) (mem. op.) (same).
For the foregoing reasons, we vacate the Attorneys'
Fees Award. We affirm all other orders and judgments appealed
10 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
from, and remand for further proceedings consistent with this
summary disposition order.
DATED: Honolulu, Hawaiʻi, May 21, 2024.
On the briefs: /s/ Clyde J. Wadsworth Presiding Judge R. Steven Geshell for Defendants/ /s/ Karen T. Nakasone Counterclaimants/ Associate Judge Cross-claimants-Appellants. /s/ Kimberly T. Guidry Benjamin M. Creps Associate Judge for Plaintiff/Counterclaim Defendant-Appellee.