Ezeoha v. Association of Apartment Owners of Nihilani at Princeville Resort

546 P.3d 648, 154 Haw. 95

• Court: Hawaii Supreme Court
• Decided: April 17, 2024
• Docket: SCAP-23-0000361
• Status: Published

Opinion

*** NOT FOR PUBLICATION IN WEST’S HAWAI‘I REPORTS AND PACIFIC REPORTER ***

Electronically Filed Supreme Court SCAP-XX-XXXXXXX 17-APR-2024 11:37 AM Dkt. 20 SO

SCAP-XX-XXXXXXX

IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

MAHLON C. EZEOHA and LEAH DANSBY, fka Leah Ezeoha, Plaintiffs-Appellants,

vs.

ASSOCIATION OF APARTMENT OWNERS OF NIHILANI AT PRINCEVILLE RESORT, by and through its Board of Directors, Defendant-Appellee.

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT (CAAP-XX-XXXXXXX; CASE NO. 5CCV-XX-XXXXXXX)

SUMMARY DISPOSITION ORDER (By: Recktenwald, C.J., McKenna, and Eddins, JJ., Circuit Judge DeWeese and Circuit Judge Park, assigned by reason of vacancies)

This case mirrors Wong v. Ass’n of Apartment Owners of

Harbor Square, ___ P.3d ___, 2024 WL 857152 (2024). Because the

two cases present the same issue, we vacate the Circuit Court of

the Fifth Circuit’s grant of summary judgment and remand for

further proceedings consistent with Wong.

In November 2006, plaintiffs Mahlon Ezeoha and Leah Dansby

bought a condominium governed by the Association of Apartment *** NOT FOR PUBLICATION IN WEST’S HAWAI‘I REPORTS AND PACIFIC REPORTER ***

Owners of Nihilani at Princeville Resort (AOAO). Ezeoha and

Dansby financed the purchase with two mortgage loans.

By 2010, Ezeoha and Dansby had fallen behind on their

mortgage payments and association fees. On February 23, 2010,

the AOAO initiated a Part I non-judicial foreclosure.

On March 29, 2010, the AOAO held a foreclosure sale. It

sold the unit to itself for one dollar, subject to the mortgages

on the property.

Years later, the mortgagee, Nationstar Mortgage,

foreclosed. On April 4, 2014 and March 5, 2015, Nationstar

obtained foreclosure judgments on its two loans. It took title

to the unit.

On December 29, 2021, Ezeoha and Dansby sued the AOAO for

wrongful foreclosure.

In January 2023, the AOAO moved for summary judgment. It

said that because Ezeoha and Dansby owed more on their mortgage

than the unit was worth, they could not establish compensatory

damages. Ezeoha and Dansby disagreed. They claimed their

damages are the unit’s market value minus fees owed to the AOAO.

Circuit Court of the Fifth Circuit Judge Randal G.B.

Valenciano sided with the AOAO. Citing Lima v. Deutsche Bank

Nat’l Tr. Co., 149 Hawaiʻi 457, 494 P.3d 1190 (2021), the court

concluded that the outstanding mortgage debt offset and

2 *** NOT FOR PUBLICATION IN WEST’S HAWAI‘I REPORTS AND PACIFIC REPORTER ***

eliminated the plaintiffs’ compensatory damages. The court

granted summary judgment and entered judgment for the AOAO.

Ezeoha and Dansby appealed. Then, on September 13, 2023,

they requested transfer to this court. Plaintiffs’ transfer

application recognized that this case presents similar facts and

legal questions to Wong.

We accepted transfer on October 13, 2023. We decided Wong

on February 29, 2024. Then entered judgment in Wong on April 2,

2024.

The circuit court granted summary judgment on the damages

issue before we decided Wong. Wong clarifies how a plaintiff

may calculate damages when they sue a condominium association

for wrongful foreclosure.

Accordingly, we vacate the circuit court’s judgment and

remand for further proceedings.

DATED: Honolulu, Hawaiʻi, April 17, 2024.

Philip W. Miyoshi, Randall K. /s/ Mark E. Recktenwald Hironaka, Steven K.S. Chung, and Anthony F.T. Suetsugu /s/ Sabrina S. McKenna for appellants /s/ Todd W. Eddins John D. Zalewski and /s/ Wendy M. DeWeese Lissa H. Andrews for appellee /s/ Shanlyn A.S. Park