Deutsche Bank National Trust Company v. Kaleimamahu

• Court: Hawaii Intermediate Court of Appeals
• Decided: June 30, 2025
• Docket: CAAP-23-0000034
• Status: Published

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 30-JUN-2025 10:27 AM Dkt. 38 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAIʻI

DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2007-NC2, MORTGAGE-PASS THROUGH CERTIFICATES, SERIES 2007-NC2, Plaintiff-Appellee, v. WENDELL KEANI KALEIMAMAHU, JR., Defendant-Appellant, 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 THIRD CIRCUIT (CASE NO. 3CC141000357)

SUMMARY DISPOSITION ORDER (By: Leonard, Acting Chief Judge, Wadsworth and McCullen, JJ.)

Self-represented Defendant-Appellant Wendell Keani

Kaleimamahu, Jr. (Kaleimamahu) appeals from the Circuit Court of

the Third Circuit's December 29, 2022 "Findings of Fact,

Conclusions of Law and Order Granting Plaintiff's Motion for

Summary Judgment and Decree of Foreclosure Against All

Defendants on Complaint Filed September 22, 2014" (Foreclosure

Decree), and December 29, 2022 Judgment based on the Foreclosure NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Decree entered pursuant to Hawai‘i Rules of Civil Procedure

Rules 54(b) and 58 (Foreclosure Judgment).1

The Foreclosure Decree's unchallenged findings of fact

(FOF) establish the following information.2 Kaleimamahu executed

a promissory note dated August 26, 2006 for the sum of $140,000

(Note), which was indorsed in blank "thereby converting it to

bearer paper as defined in [Hawai‘i Revised Statutes (HRS)]

§ 490:3-109." The Note was secured by an August 26, 2006

mortgage (Mortgage) executed by Kaleimamahu, and later assigned

to Plaintiff-Appellee Deutsche Bank National Trust Company, as

Trustee for Securitized Asset Backed Receivables LLC Trust 2007-

NC2, Mortgage-Pass Through Certificates, Series 2007-NC2

(Deutsche Bank). Kaleimamahu defaulted on the Note and

Mortgage, and was given written notice of default.

In his points of error, Kaleimamahu contends Deutsche

Bank lacked standing to seek foreclosure, and Deutsche Bank's

filings created a genuine issue of material fact as to whether

it possessed the Note when the September 22, 2014 complaint was

filed.

Upon careful review of the record and the briefs

submitted by the parties, and having given due consideration to

1 The Honorable Peter K. Kubota presided.

2 An unchallenged finding of fact is binding on the parties and the appellate court. Okada Trucking Co. v. Bd. of Water Supply, 97 Hawai‘i 450, 458, 40 P.3d 73, 81 (2002).

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the issues raised and the arguments advanced, we resolve the

points of error as discussed below, and affirm.

We review the grant of summary judgment de novo. U.S.

Bank N.A. v. Mattos, 140 Hawai‘i 26, 30, 398 P.3d 615, 619

(2017). "A party seeking to foreclose on a mortgage and note

must prove (1) the existence of the agreements, (2) the terms of

the agreements, (3) a default under the terms of the agreements,

and (4) delivery of the notice of default." Wells Fargo Bank,

N.A. v. Fong, 149 Hawai‘i 249, 253, 488 P.3d 1228, 1232 (2021).

To establish standing to foreclose, the plaintiff must

necessarily "prove its entitlement to enforce the note" when the

action was commenced. Bank of Am., N.A. v. Reyes-Toledo, 139

Hawai‘i 361, 368-69, 390 P.3d 1248, 1255-56 (2017); Wells Fargo

Bank, N.A. v. Behrendt, 142 Hawai‘i 37, 41, 42, 414 P.3d 89, 93,

94 (2018) (noting party seeking to judicially foreclose "must

establish that it was the 'person entitled to enforce the note'

as defined by HRS § 490:3-301 at the time the foreclosure

complaint was filed to satisfy standing and to be entitled to

prevail on the merits").

HRS § 490:3-301 (2008) provides a person may enforce

an instrument if the person is the "holder of the instrument,"

or is not in possession of the instrument but entitled to

enforce a lost instrument:

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"Person entitled to enforce" an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to section 490:3-309 or 490:3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

(Emphases added.)

HRS § 490:3-309 (2008) governs the enforcement of a

lost instrument and provides:

Enforcement of lost, destroyed, or stolen instrument. (a) A person not in possession of an instrument is entitled to enforce the instrument if (i) the person was in rightful possession of the instrument and entitled to enforce it when loss of possession occurred, (ii) the loss of possession was not the result of a transfer by the person or a lawful seizure, and (iii) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

(b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person's right to enforce the instrument. If that proof is made, section 490:3-308 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

(Emphases added and formatting altered.)

A blank indorsement "is not payable to an identified

person[,]" and "[w]hen indorsed in blank, an instrument becomes

payable to bearer and may be negotiated by transfer or

possession alone until specially indorsed." Reyes-Toledo, 139

Hawai‘i at 370, 390 P.3d at 1257 (citing HRS § 490:3-205(b)).

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When a lender forecloses on a promissory note secured

by a mortgage, the lender may establish standing via proof it

physically possessed the blank-indorsed note when it filed the

complaint. See id.

The foreclosing party may establish it is the holder

of a note by showing that its agent physically possessed the

note. See generally U.S. Bank Tr., N.A. as Tr. for LSF9 Master

Participation Tr. v. Verhagen, 149 Hawai‘i 315, 317, 327-28, 489

P.3d 419, 421, 431-32 (2021).

On appeal, though Kaleimamahu contests Deutsche Bank's

possession of the Note and its standing to foreclose,

Kaleimamahu failed to dispute the existence and terms of the

Mortgage and Note, his default, or the delivery of the notice of

default before the circuit court or on appeal.

To establish that it possessed the Note when the

complaint was filed, Deutsche Bank attached the following to its

September 29, 2022 "Motion for Summary Judgment and Decree of

Foreclosure Against All Defendants on Complaint Filed

September 22, 2014":

(1) A declaration of counsel, maintaining counsel

"received the original indorsed Note . . . for the prosecution

of this case on September 3, 2014[,]" and counsel mailed the

Note back to Deutsche Bank's loan servicer on February 22, 2016;

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(2) The Affidavit of Lost Note (Affidavit of Lost

Note) signed by M. Johnson an "Authorized Signer" for Ocwen Loan

Servicing, LLC (Ocwen), Deutsche Bank's loan servicer, noting

based on a review of Ocwen's records, (a) Deutsche Bank kept the

Note "in the ordinary course of business under the custody and

control of Ocwen" and Ocwen mailed the Note to Deutsche Bank's

counsel on August 28, 2014, (b) counsel mailed the original Note

back to Ocwen on February 22, 2016, (c) the Note appears to be

lost and cannot be found, (d) the Note was not "sold or assigned

to any other party, and all rights and benefits of said note are

currently held" by Deutsche Bank, and (e) Deutsche Bank agreed

to indemnify Kaleimamahu against any claims asserted by parties

other than Deutsche Bank or its assignees for amounts

purportedly due on the Note; and

(3) The declaration of Juliana Thurab, custodian of

records for PHH Mortgage Corporation (PHH), successor to

Deutsche Bank's loan servicer Ocwen, maintaining based on

Ocwen's records incorporated into PHH's business records,

Deutsche Bank "was in possession of the Note" when "the

Complaint was filed on September 22, 2014" and based on the

Affidavit of Lost Note, the original Note was "lost in transit"

between counsel and Ocwen and "cannot be located."

Based on this record, we determine the circuit court

did not clearly err and there was substantial evidence in the

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record to support the finding that Deutsche Bank, through its

counsel, "was in possession of the endorsed in blank Note at the

time of the filing of the Complaint filed September 22, 2014,

thereby establishing its standing to foreclose." See generally

Santiago v. Tanaka, 137 Hawai‘i 137, 148-49, 366 P.3d 612, 623-24

(2016) (providing "trial court's findings of fact are reviewed

under the 'clearly erroneous' standard" and "conclusions of law

are reviewed de novo").

We further determine that the circuit court did not

err in finding that "even though the original of the Note cannot

now be located, Plaintiff is the holder of all rights to the

Note and is therefore entitled to enforce it pursuant to HRS

§490:3-301 and 490:3-309." See generally Santiago, 137 Hawai‘i

at 148-49, 366 P.3d at 623-24. Deutsche Bank was entitled to

enforce the blank-indorsed Note under HRS § 490:3-309 even

though the original Note was lost in February 2016 after the

complaint was filed, because the record demonstrated Deutsche

Bank was "in rightful possession" of the Note and entitled to

enforce the Note when loss of possession occurred, the loss "was

not the result of a transfer by the person or a lawful seizure,"

and Deutsche Bank "cannot reasonably obtain possession" of the

Note because "its whereabouts cannot be determined[.]" See HRS

§§ 490:3-301(iii), 490:3-309(a).

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Furthermore, the indemnity clause in the Foreclosure

Decree protects Kaleimamahu against any concerns of any party or

entity seeking to enforce the Note, other than Deutsche Bank or

its assignees.

For these reasons, we affirm the circuit court's

December 29, 2022 Foreclosure Decree and Foreclosure Judgment.

DATED: Honolulu, Hawaiʻi, June 30, 2025.

On the briefs: /s/ Katherine G. Leonard Wendell Keani Kaleimamahu, Acting Chief Judge Jr., Defendant-Appellant, pro se. /s/ Clyde J. Wadsworth Associate Judge Steven T. Iwamura, Zachary K. Kondo, /s/ Sonja M.P. McCullen Mary Martin, Associate Judge (Clay Iwamura Pulice & Nervell), for Plaintiff-Appellee.