HSBC Bank USA v. Gillespie, Jr.

492 P.3d 1077, 149 Haw. 414
CourtHawaii Intermediate Court of Appeals
DecidedAugust 9, 2021
DocketCAAP-18-0000098
StatusPublished

This text of 492 P.3d 1077 (HSBC Bank USA v. Gillespie, Jr.) is published on Counsel Stack Legal Research, covering Hawaii Intermediate Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HSBC Bank USA v. Gillespie, Jr., 492 P.3d 1077, 149 Haw. 414 (hawapp 2021).

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 09-AUG-2021 07:46 AM Dkt. 85 MO NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

HSBC BANK USA, NATIONAL ASSOCIATION, AS TRUSTEE FOR DEUTSCHE ALT-A SECURITIES, INC., MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2005-5, Plaintiff-Appellant, v. ROBERT M. GILLESPIE, JR., Defendant-Appellee, and MERIDIAN FINANCIAL NETWORK, INC.; STATE OF HAWAI#I - DEPARTMENT OF TAXATION; UNITED STATES OF AMERICA, DEPARTMENT OF THE TREASURY - INTERNAL REVENUE SERVICE; 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 SECOND CIRCUIT (CIVIL NO. 2CC141000420)

MEMORANDUM OPINION (By: Ginoza, Chief Judge, Leonard and Hiraoka, JJ.)

Plaintiff-Appellant HSBC Bank USA, National Association, as Trustee for Deutsche Alt-A Securities, Inc., Mortgage Pass-through Certificates Series 2005-5, appeals from the "Order Granting Defendant Robert M. Gillespie's [sic] Application for Fees and Costs Filed November 1, 2017," and the "Amended Final Judgment as to All Claims and All Parties," both entered by the Circuit Court of the Second Circuit on January 25, 2018.1 For the reasons explained below, we reverse the Order and vacate the Amended Final Judgment to the extent it awards

1 The Honorable Peter T. Cahill presided. NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

attorneys' fees, costs, and Hawai#i general excise tax to Gillespie.

I.

On July 15, 2014, Bank filed a "Complaint for Declaratory Judgment" against Defendant-Appellee Robert M. Gillespie, Jr. and others.2 The Complaint contained the following allegations: Gillespie executed a promissory Note for $1.3 million in favor of Meridian Mortgage, Inc. The Note was secured by a Mortgage on real property (the Property) owned by Gillespie. Meridian Mortgage merged with Meridian Financial Network, Inc. Bank is the "beneficial owner" and holder of the Note and Mortgage, but no assignment of the Mortgage to Bank was recorded in the Hawai#i Bureau of Conveyances. Bank sought a declaration, under Hawaii Revised Statutes (HRS) § 632-1,3 that

2 The other named defendants were Meridian Financial Network, Inc., State of Hawai#i Department of Taxation, and United States of America Department of the Treasury — Internal Revenue Service. 3 HRS § 632-1 (1993) provides, in relevant part: § 632-1 Jurisdiction; controversies subject to.

(a) In cases of actual controversy, courts of record, within the scope of their respective jurisdictions, shall have power to make binding adjudications of right, whether or not consequential relief is, or at the time could be, claimed, and no action or proceeding shall be open to objection on the ground that a judgment or order merely declaratory of right is prayed for[.] (b) Relief by declaratory judgment may be granted in civil cases where an actual controversy exists between contending parties, or where the court is satisfied that antagonistic claims are present between the parties involved which indicate imminent and inevitable litigation, or where in any such case the court is satisfied that a party asserts a legal relation, status, right, or privilege in which the party has a concrete interest and that there is a challenge or denial of the asserted relation, status, right, or privilege by an adversary party who also has or asserts a concrete interest therein, and the court is satisfied also that a declaratory judgment will serve to terminate the uncertainty or controversy giving rise to the proceeding. Where, however, a statute provides a special form of remedy for a specific type of case, that statutory remedy shall be followed; but the mere fact that an actual or threatened controversy is susceptible of relief through a general common law remedy, a remedy equitable in nature, or an extraordinary legal remedy, whether such remedy is (continued...)

2 NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

it was the "legal and beneficial owner of the Note and First Mortgage." The Complaint did not allege that Gillespie was in default of the Note. There was no attorney affirmation attached to the Complaint.4 The Complaint sought no monetary award. Gillespie answered the Complaint on November 24, 2015. Bank filed its pretrial statement on March 17, 2016. It stated:

C. PLAINTIFF'S CLAIMS

[Bank's] claim is for declaratory judgment that [Bank] is the legal and beneficial owner and holder of the Note and Mortgage, which was recorded as Document No. 2005-111439 in the Bureau of Conveyances, State of Hawaii. [Bank's] claim for declaratory judgment can be established by the fact that [Bank] has possession of the original Note.

[Bank] will be filing a motion for leave to amend its complaint to assert a foreclosure claim, which also relates to Note and First Mortgage. [Bank] can establish its foreclosure claim through its sworn-to copies of the Note and First Mortgage, made and given by Defendant Gillespie, and either by a Declaration of Indebtedness establishing Defendant Gillespie's default under the Note and First Mortgage and/or by trial testimony.

The circuit court set trial for August 28, 2017. The parties were ordered to submit "a memorandum setting forth each affirmative claim they shall assert at trial, and the legal basis and a summary of the evidence supporting each claim." Bank's "Statement of Affirmative Claims" stated, in relevant part:

[Bank's] claim for relief as stated in its July 15, 2014 Complaint for Declaratory Judgment ("Complaint"), is for an order declaring [Bank] the legal and beneficial owner

3 (...continued) recognized or regulated by statute or not, shall not debar a party from the privilege of obtaining a declaratory judgment in any case where the other essentials to such relief are present. 4 HRS § 667-17 (1993) provides, in relevant part: § 667-17 Attorney affirmation in judicial foreclosure. Any attorney who files on behalf of a mortgagee seeking to foreclose on a residential property under this part shall sign and submit an affirmation that the attorney has verified the accuracy of the documents submitted, under penalty of perjury and subject to applicable rules of professional conduct. The affirmation shall be filed with the court at the time that the action is commenced[.]

3 NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER and holder of the Note and Mortgage dated May 31, 2005, from Defendant ROBERT M. GILLESPIE JR. to Meridian Mortgage, Inc. . . . . [Bank] seeks the following relief:

1. An order determining [Bank] is the legal and beneficial owner and holder of the Note and Mortgaged [sic] dated May 31, 2015, recorded in the Bureau of Conveyances of the State of Hawaii as Document No. 2005-111439, as amended. 2. To enter a final judgment herein pursuant to Rule 54(b) of the Hawaii [sic] Rules of Civil Procedure, as there is not [sic] just reason for delay.

Bank never amended its Complaint to assert a foreclosure claim. A jury-waived trial was conducted on August 28, 2017. Bank's attorney gave an opening statement:

Your Honor, this is a action for declaratory judgment. It is not a foreclosure action.

And the issue before this Court is very narrow. If [Bank] is the legal and beneficial owner of the note and mortgage.

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Cite This Page — Counsel Stack

Bluebook (online)
492 P.3d 1077, 149 Haw. 414, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hsbc-bank-usa-v-gillespie-jr-hawapp-2021.