Garrett v. Association of Apartment Owners of Terrazza

552 P.3d 1182, 154 Haw. 414

• Court: Hawaii Intermediate Court of Appeals
• Decided: July 31, 2024
• Docket: CAAP-20-0000287
• Status: Published

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 31-JUL-2024 08:36 AM Dkt. 78 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAIʻI

JACQUES BARTHOLOMEW GARRETT, Plaintiff-Appellant, v. ASSOCIATION OF APARTMENT OWNERS OF TERRAZZA/ CORTEBELLA/LAS BRISAS/TIBURON, Defendant-Appellee, and JOHN DOES 1-20; JANE DOES 1-20; DOE PARTNERSHIPS 1-20; DOE CORPORATIONS 1-20; DOE ENTITIES 1-20; and DOE GOVERNMENTAL UNITS 1-20, Defendants.

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CIVIL NO. 1CC191001594)

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

Plaintiff-Appellant Jacques Bartholomew Garrett

(Garrett) appeals from the Circuit Court of the First Circuit's 1

March 18, 2020 Order Granting Defendant-Appellee Association of

Apartment Owners of Terrazza/Cortebella/Las Brisas/Tiburon's

(Association) Motion to Dismiss Complaint (Order) and March 18,

2020 Final Judgment (Judgment).

1 The Honorable Dean E. Ochiai presided. NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Upon careful review of the record and the briefs

submitted by the parties and having given due consideration to

the issues raised and the arguments advanced by the parties, we

resolve Garrett's arguments as discussed below.

In his sole point of error, Garrett contends the

circuit court erred in dismissing his complaint because Act

282's (2019) amendment to Hawai‘i Revised Statutes (HRS)

chapter 667 did not obviate the requirement for a power of sale

provision in Association's bylaws or other enforceable agreement

to conduct a nonjudicial foreclosure on his unit.

"A complaint should not be dismissed for failure to

state a claim unless it appears beyond doubt that the plaintiff

can prove no set of facts in support of their claim that would

entitle them to relief." Malabe v. Ass'n of Apartment Owners of

Exec. Ctr. by & through Bd. of Dirs., 147 Hawaiʻi 330, 338, 465

P.3d 777, 785 (2020) (cleaned up). We view the complaint in the

light most favorable to the plaintiff "to determine whether the

allegations contained therein could warrant relief under any

alternative theory" and "our consideration is strictly limited

to the allegations of the complaint, and we must deem those

allegations to be true." Id. (citation omitted).

In his complaint, Garrett asserted that "[a]ccording

to the Affidavit, [Association] claims to have complied with

[HRS] Chapter 667, Chapter 514A and 514[B], and the By-Laws[.]"

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

Garrett then asserted Association's "governing bylaws lacked a

power of sale as required to conduct a nonjudicial foreclosure

in the State of [Hawai‘i]" and Association's "actions constitute

wrongful foreclosure, which foreclosure resulted in damages to"

him.

In its Order, the circuit court concluded, based on

Act 282, "Association was not required to have a power of sale

provision in [its] governing documents to conduct a nonjudicial

power of sale foreclosure, and the Association therefore had the

statutory authority to conduct the nonjudicial foreclosure of

the Property."

However, as the Hawai‘i Supreme Court explained,

Act 282 does not affect a wrongful foreclosure claim under HRS

chapter 667, Part I. See Malabe, 147 Hawaiʻi at 333, 356, 465

P.3d at 780, 803.

To the extent the circuit court relied on Act 282 in

determining Association was not required to have a power of sale

provision in its governing documents to conduct a nonjudicial

foreclosure sale, it erred in dismissing Garrett's wrongful

foreclosure claim. See Collins v. Ass'n of Apartment Owners of

Kemoo by the Lake, CAAP-XX-XXXXXXX, 2024 WL 3205278, at *3 (Haw.

App. June 27, 2024); Sakal v. Ass'n of Apartment Owners of

Hawaiian Monarch, 148 Hawai‘i 1, 9 n.13, 466 P.3d 399, 407 n.13

(2020) (stating per Malabe, AOAO was not permitted to foreclose

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

on property without power of sale provision in its bylaws or

other enforceable agreement).

Because the circuit court concluded Garrett's

remaining causes of action relied on a lack of power of sale in

Association's governing documents, i.e. the basis of Garrett's

wrongful foreclosure claim, it erred in dismissing Garrett's

remaining claims with prejudice.

For these reasons, we vacate the March 18, 2020 Order

and the March 18, 2020 Judgment, and remand this case to the

circuit court for further proceedings consistent with this

summary disposition order.

DATED: Honolulu, Hawai‘i, July 31, 2024.

On the briefs: /s/ Katherine G. Leonard Acting Chief Judge Keith M. Kiuchi, for Plaintiff-Appellant. /s/ Clyde J. Wadsworth Associate Judge David R. Major, Grant Fasi Allison, /s/ Sonja M.P. McCullen Jai W. Keep-Barnes, Associate Judge (Bays Lung Rose & Voss), for Defendant-Appellee.