HSBC Bank USA v. Barnachea

• Court: Hawaii Intermediate Court of Appeals
• Decided: October 31, 2025
• Docket: CAAP-23-0000094
• Status: Published

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 31-OCT-2025 08:13 AM Dkt. 92 SO NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAIʻI

HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR THE HOLDERS OF THE ELLINGTON LOAN ACQUISITION TRUST 2007-2, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-2, Plaintiff-Appellee, v. JAILANIE C. BARNACHEA, Defendant-Appellant, CREDIT ASSOCIATES OF MAUI, LTD.; SOARING CAPITAL, LLC, Defendants-Appellees, JOHN DOES 1-20; JANE DOES 1-20; DOE CORPORATIONS 1-20; DOE ENTITIES 1-20; AND DOE GOVERNMENTAL UNITS 1-20, Defendants.

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT (CASE NO. 2CC161000379(3))

SUMMARY DISPOSITION ORDER (By: Wadsworth, Presiding Judge, McCullen and Guidry, JJ.)

Defendant-Appellant Jailanie C. Barnachea (Barnachea)

appeals from the Circuit Court of the Second Circuit's

January 27, 2023 "Findings of Fact, Conclusions of Law and Order

Granting [Plaintiff-Appellee HSBC Bank USA, National Association

as Trustee for the Holders of the Ellington Loan Acquisition

Trust 2007-2, Mortgage Pass-Through Certificates, Series 2007-

2's (HSBC Bank)] Motion for Summary Judgment Against All NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Defendants and for Interlocutory Decree of Foreclosure" (Summary

Judgment Order) and January 27, 2023 Judgment. 1 (Formatting

altered.)

On appeal, Barnachea contends the circuit court erred

in granting HSBC Bank's motion for summary judgment. To support

her contention, Barnachea argues, among other things, that HSBC

Bank failed to establish the documents relied upon to support

the motion for summary judgment were trustworthy. 2

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, we resolve this

appeal as discussed below and vacate and remand.

We review the grant or denial of summary judgment de

novo. Nationstar Mortg. LLC v. Kanahele, 144 Hawai‘i 394, 401,

443 P.3d 86, 93 (2019). The burden is on the summary judgment

movant "to show the absence of any genuine issue as to all

material facts, which, under applicable principles of

substantive law, entitles the moving party to judgment as a

1 The Honorable Kelsey T. Kawano presided.

2 Barnachea presented three other bases to support her contention that the circuit court erred in granting the motion for summary judgment. Barnachea argues (1) HSBC Bank failed to show notice of the default was sent to her, (2) HSBC Bank failed to show the entity that assigned the Mortgage to HSBC Bank had legal authority to make the assignment, and (3) she raised a disputed issue of fact that the increases in the interest rate on the Note were unfair and deceptive trade practices.

Because we vacate the circuit court's January 27, 2023 Summary Judgment Order and January 27, 2023 Judgment, we do not reach these additional bases.

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

matter of law." Umberger v. Dep't of Land & Nat. Res., 140

Hawai‘i 500, 528, 403 P.3d 277, 305 (2017) (citations omitted).

As summary judgment movant, "the plaintiff must establish, as a

matter of law, each element of its claim for relief by the

proper evidentiary standard applicable to that claim." Ocwen

Fed. Bank, FSB v. Russell, 99 Hawai‘i 173, 182-83, 53 P.3d 312,

321-22 (App. 2002).

A party seeking to foreclose under a note and mortgage

must "prove the existence of an agreement, the terms of the

agreement, a default by the mortgagor under the terms of the

agreement, and giving of the cancellation notice." Bank of Am.,

N.A. v. Reyes-Toledo, 139 Hawai‘i 361, 367, 390 P.3d 1248, 1254

(2017). Under Hawai‘i Rules of Evidence Rule 803(b)(6),

incorporated records may be admitted into evidence "when a

custodian or qualified witness testifies that (1) the documents

were incorporated and kept in the normal course of business,

(2) . . . the incorporating business typically relies upon the

accuracy of the contents of the documents, and (3) the

circumstances otherwise indicate the trustworthiness of the

document." U.S. Bank Tr., N.A., as Tr. for LSF9 Master

Participation Tr. v. Verhagen, 149 Hawai‘i 315, 325-26, 489 P.3d

419, 429-30 (2021) (citation modified).

Here, HSBC Bank did not put forth admissible evidence

of Barnachea's initial default on the Note. 3 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Fremont Investment & Loan was the original lender on

the Note, secured by the Mortgage. In its motion for summary

judgment, HSBC Bank claimed that the "Holders of the Ellington

Loan Acquisition Trust 2007-2, Mortgage Pass-Through

Certificates, Series 2007-2," for whom it was acting as trustee,

became the owner of the Note, and an Assignment of Mortgage was

recorded in the Bureau of Conveyances on August 16, 2012.

(Formatting altered.)

HSBC Bank also claimed Barnachea's "Initial Default

Date" was August 1, 2009, and she made her last regular payment

on August 5, 2010.

To support its motion for summary judgment, HSBC Bank

submitted a declaration from Rebecca C. Wallace (Wallace), of

Nationstar Mortgage LLC d/b/a/ Mr. Cooper (Nationstar); an

affidavit from Tyneria Denee McMillion (McMillion) of Bank of

America, N.A. (BANA); and records from BANA and Nationstar.

Wallace's declaration includes statements suggesting

Nationstar's records are trustworthy, such as the information

Nationstar received from BANA was "validated in many ways,

including, but not limited to, going through a due diligence

phase, review of hard copy documents, and review of the payment

history and accounting of other fees, costs, and expenses

charged to the loan by Prior Servicer." But BANA was not the

servicer at the time of the Initial Default Date.

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

According to McMillion, BANA became the loan servicer

on or about March 1, 2010, about seven months after the Initial

Default Date. Servicing of the loan was then transferred from

BANA to Nationstar on or about July 1, 2013. Thus, neither BANA

nor Nationstar were the servicers at the time of the Initial

Default Date. And nothing in McMillion's affidavit indicates

BANA incorporated records from another entity or explains what

BANA did to confirm the trustworthiness of information it

received from prior servicers and passed on to Nationstar.

As such, HSBC Bank failed to prove all elements of its

claim to show it was entitled to judgment as a matter of law.

Thus, the circuit court erred in granting HSBC Bank's motion for

summary judgment.

Based on the foregoing, we vacate the circuit court's

January 27, 2023 Summary Judgment Order and January 27, 2023

Judgment and remand this case for further proceedings consistent

with this summary disposition order.

DATED: Honolulu, Hawaiʻi, October 31, 2025.

On the briefs: /s/ Clyde J. Wadsworth Presiding Judge Keith M. Kiuchi, for Defendant-Appellant. /s/ Sonja M.P. McCullen Associate Judge Lansen H.G. Leu, for Plaintiff-Appellee. /s/ Kimberly T. Guidry Associate Judge