NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 23-OCT-2024 07:53 AM Dkt. 54 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
HSBC BANK USA, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE HOLDERS OF THE CERTIFICATES ISSUED BY DEUTSCHE ALT-A SECURITIES MORTGAGE LOAN TRUST, SERIES 2006-AR3, Plaintiff-Appellee, v. NICHOLAS J. SCARDINO, Defendant-Appellant, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., SOLELY AS NOMINEE FOR MERIDIAS CAPITAL, INC.; ASSOCIATION OF APARTMENT OWNERS OF MAKIKI TOWERS, Defendants-Appellees, and 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 FIRST CIRCUIT (CASE NO. 1CC191001630)
SUMMARY DISPOSITION ORDER (By: Hiraoka, Presiding Judge, McCullen and Guidry, JJ.)
This is a judicial foreclosure case. Self-represented
Defendant-Appellant Nicholas J. Scardino (Scardino), appeals
from (1) the Findings of Fact, Conclusions of Law, and Order
Granting Plaintiff's Motion for Summary Judgment Against All
Defendants and for Interlocutory Decree of Foreclosure, NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
(Foreclosure Order), and (2) Judgment, both entered on
October 12, 2021 by the Circuit Court of the First Circuit
(circuit court).1 The Foreclosure Order and Judgment were
entered in favor of Plaintiff-Appellee HSBC Bank USA, National
Association, as Trustee for the Holders of the Certificates
Issued by Deutsche ALT-A Securities Mortgage Loan Trust, Series
2006-AR3 (HSBC Bank).
The summary judgment record reflects that Scardino
owned real estate in Honolulu (the Property). In May 2006,
Scardino executed a $318,400 promissory note (Note) in favor of
Meridias Capital, Inc. (Meridias). Scardino secured the Note
with a mortgage on the Property (the Mortgage). The Mortgage
identified Mortgage Electronic Registration Systems, Inc.
(MERS), solely as nominee for Meridias, as mortgagee. The
Mortgage was assigned to HSBC Bank by assignment of mortgage
recorded on September 3, 2008; the Note was specially indorsed
to HSBC Bank. Specialized Loan Servicing LLC (SLS) serviced the
loan.
Scardino defaulted on the Note in April 2008. HSBC
Bank sent Scardino notice of the default and acceleration of the
loan (Notice) in June 2010. The Notice provided Scardino 30
days to cure the default. Scardino did not timely cure the
1 The Honorable Jeannette H. Castagnetti presided.
2 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
default, and HSBC Bank filed a Complaint for Mortgage
Foreclosure (the Complaint) on October 16, 2019.
HSBC Bank moved for summary judgment and interlocutory
decree of foreclosure in June 2021. The circuit court granted
HSBC Bank's Motion for Summary Judgment (MSJ), and entered
Judgment. On appeal, Scardino appears to contend that the
circuit court erred by granting HSBC Bank's MSJ because HSBC
Bank lacked standing to bring the foreclosure action.
Upon careful review of the record and relevant legal
authorities, and having given due consideration to the arguments
advanced and the issues raised by the parties, we resolve
Scardino's contention as follows.
We review the circuit court's grant of summary
judgment de novo, applying the following standard,
[S]ummary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties. The evidence must be viewed in the light most favorable to the non-moving party. In other words, we must view all of the evidence and inferences drawn therefrom in the light most favorable to the party opposing the motion.
Ralston v. Yim, 129 Hawaiʻi 46, 55-56, 292 P.3d 1276, 1285-86
(2013) (citation omitted).
HSBC Bank, as the foreclosing party, "must [inter
alia] prove its entitlement to enforce the note and mortgage."
3 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Bank of Am., N.A. v. Reyes-Toledo, 139 Hawaiʻi 361, 367, 390 P.3d
1248, 1254 (2017). In Reyes-Toledo, the Hawaiʻi Supreme Court
held that,
A foreclosing plaintiff's burden to prove entitlement to enforce the note overlaps with the requirements of standing in foreclosure actions as standing is concerned with whether the parties have the right to bring suit. Typically, a plaintiff does not have standing to invoke the jurisdiction of the court unless the plaintiff has suffered an injury in fact. A mortgage is a conveyance of an interest in real property that is given as security for the payment of the note. A foreclosure action is a legal proceeding to gain title or force a sale of the property for satisfaction of a note that is in default and secured by a lien on the subject property. Thus, the underlying "injury in fact" to a foreclosing plaintiff is the mortgagee's failure to satisfy its obligation to pay the debt obligation to the note holder. Accordingly, in establishing standing, a foreclosing plaintiff must necessarily prove its entitlement to enforce the note as it is the default on the note that gives rise to the action.
Id. at 367-68, 390 P.3d at 1254-55 (cleaned up).
Here, the summary judgment record reflects that HSBC
Bank provided the circuit court with: (1) the October 25, 2019
Declaration of Sylvia Meregillano (Meregillano), the Custodian
of Records for HSBC Bank's legal counsel, TMLF Hawaii LLLC
(TMLF), who declared under penalty of perjury that "[a]ccording
to the records and files of [TMLF], on 11/29/2016, [TMLF] was in
possession of the original Note, specially indorsed to [HSBC
Bank],. . .[o]n 10/16/2019, the date [the Complaint] was filed,
[HSBC Bank], through counsel, was in possession of the original
Note, specially indorsed to [HSBC Bank]," and that the original
Note was stored at TMLF's "designated storage facility in a
fire-proof safe"; (2) the November 25, 2016 Bailee Letter to
4 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
TMLF, authenticated by Meregillano; (3) the May 26, 2021
Declaration of Indebtedness and on Prior Business Records of
Steven Ross, Second Assistant Vice President of SLS, who
declared under penalty of perjury that he has "personal
knowledge of SLS's procedures for creating" its business records
and is authorized to provide verification of these records, and
that "SLS's records indicate that [HSBC Bank], by and through
its counsel, had possession of the original Note, specially
indorsed to [HSBC Bank], as of 10/16/2019, the date of the
filing of the Complaint in this foreclosure," and (4) the Note,
Mortgage, and Assignment of Mortgage to HSBC Bank.
On this record, we conclude that HSBC Bank satisfied
its initial burden on summary judgment. See U.S. Bank Tr.,
N.A. v.
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NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 23-OCT-2024 07:53 AM Dkt. 54 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
HSBC BANK USA, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE HOLDERS OF THE CERTIFICATES ISSUED BY DEUTSCHE ALT-A SECURITIES MORTGAGE LOAN TRUST, SERIES 2006-AR3, Plaintiff-Appellee, v. NICHOLAS J. SCARDINO, Defendant-Appellant, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., SOLELY AS NOMINEE FOR MERIDIAS CAPITAL, INC.; ASSOCIATION OF APARTMENT OWNERS OF MAKIKI TOWERS, Defendants-Appellees, and 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 FIRST CIRCUIT (CASE NO. 1CC191001630)
SUMMARY DISPOSITION ORDER (By: Hiraoka, Presiding Judge, McCullen and Guidry, JJ.)
This is a judicial foreclosure case. Self-represented
Defendant-Appellant Nicholas J. Scardino (Scardino), appeals
from (1) the Findings of Fact, Conclusions of Law, and Order
Granting Plaintiff's Motion for Summary Judgment Against All
Defendants and for Interlocutory Decree of Foreclosure, NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
(Foreclosure Order), and (2) Judgment, both entered on
October 12, 2021 by the Circuit Court of the First Circuit
(circuit court).1 The Foreclosure Order and Judgment were
entered in favor of Plaintiff-Appellee HSBC Bank USA, National
Association, as Trustee for the Holders of the Certificates
Issued by Deutsche ALT-A Securities Mortgage Loan Trust, Series
2006-AR3 (HSBC Bank).
The summary judgment record reflects that Scardino
owned real estate in Honolulu (the Property). In May 2006,
Scardino executed a $318,400 promissory note (Note) in favor of
Meridias Capital, Inc. (Meridias). Scardino secured the Note
with a mortgage on the Property (the Mortgage). The Mortgage
identified Mortgage Electronic Registration Systems, Inc.
(MERS), solely as nominee for Meridias, as mortgagee. The
Mortgage was assigned to HSBC Bank by assignment of mortgage
recorded on September 3, 2008; the Note was specially indorsed
to HSBC Bank. Specialized Loan Servicing LLC (SLS) serviced the
loan.
Scardino defaulted on the Note in April 2008. HSBC
Bank sent Scardino notice of the default and acceleration of the
loan (Notice) in June 2010. The Notice provided Scardino 30
days to cure the default. Scardino did not timely cure the
1 The Honorable Jeannette H. Castagnetti presided.
2 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
default, and HSBC Bank filed a Complaint for Mortgage
Foreclosure (the Complaint) on October 16, 2019.
HSBC Bank moved for summary judgment and interlocutory
decree of foreclosure in June 2021. The circuit court granted
HSBC Bank's Motion for Summary Judgment (MSJ), and entered
Judgment. On appeal, Scardino appears to contend that the
circuit court erred by granting HSBC Bank's MSJ because HSBC
Bank lacked standing to bring the foreclosure action.
Upon careful review of the record and relevant legal
authorities, and having given due consideration to the arguments
advanced and the issues raised by the parties, we resolve
Scardino's contention as follows.
We review the circuit court's grant of summary
judgment de novo, applying the following standard,
[S]ummary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties. The evidence must be viewed in the light most favorable to the non-moving party. In other words, we must view all of the evidence and inferences drawn therefrom in the light most favorable to the party opposing the motion.
Ralston v. Yim, 129 Hawaiʻi 46, 55-56, 292 P.3d 1276, 1285-86
(2013) (citation omitted).
HSBC Bank, as the foreclosing party, "must [inter
alia] prove its entitlement to enforce the note and mortgage."
3 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
Bank of Am., N.A. v. Reyes-Toledo, 139 Hawaiʻi 361, 367, 390 P.3d
1248, 1254 (2017). In Reyes-Toledo, the Hawaiʻi Supreme Court
held that,
A foreclosing plaintiff's burden to prove entitlement to enforce the note overlaps with the requirements of standing in foreclosure actions as standing is concerned with whether the parties have the right to bring suit. Typically, a plaintiff does not have standing to invoke the jurisdiction of the court unless the plaintiff has suffered an injury in fact. A mortgage is a conveyance of an interest in real property that is given as security for the payment of the note. A foreclosure action is a legal proceeding to gain title or force a sale of the property for satisfaction of a note that is in default and secured by a lien on the subject property. Thus, the underlying "injury in fact" to a foreclosing plaintiff is the mortgagee's failure to satisfy its obligation to pay the debt obligation to the note holder. Accordingly, in establishing standing, a foreclosing plaintiff must necessarily prove its entitlement to enforce the note as it is the default on the note that gives rise to the action.
Id. at 367-68, 390 P.3d at 1254-55 (cleaned up).
Here, the summary judgment record reflects that HSBC
Bank provided the circuit court with: (1) the October 25, 2019
Declaration of Sylvia Meregillano (Meregillano), the Custodian
of Records for HSBC Bank's legal counsel, TMLF Hawaii LLLC
(TMLF), who declared under penalty of perjury that "[a]ccording
to the records and files of [TMLF], on 11/29/2016, [TMLF] was in
possession of the original Note, specially indorsed to [HSBC
Bank],. . .[o]n 10/16/2019, the date [the Complaint] was filed,
[HSBC Bank], through counsel, was in possession of the original
Note, specially indorsed to [HSBC Bank]," and that the original
Note was stored at TMLF's "designated storage facility in a
fire-proof safe"; (2) the November 25, 2016 Bailee Letter to
4 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
TMLF, authenticated by Meregillano; (3) the May 26, 2021
Declaration of Indebtedness and on Prior Business Records of
Steven Ross, Second Assistant Vice President of SLS, who
declared under penalty of perjury that he has "personal
knowledge of SLS's procedures for creating" its business records
and is authorized to provide verification of these records, and
that "SLS's records indicate that [HSBC Bank], by and through
its counsel, had possession of the original Note, specially
indorsed to [HSBC Bank], as of 10/16/2019, the date of the
filing of the Complaint in this foreclosure," and (4) the Note,
Mortgage, and Assignment of Mortgage to HSBC Bank.
On this record, we conclude that HSBC Bank satisfied
its initial burden on summary judgment. See U.S. Bank Tr.,
N.A. v. Verhagen, 149 Hawaiʻi 315, 328, 489 P.3d 419, 432 (2021)
("Collectively, the evidence presented by U.S. Bank []
establishes the bank's possession of the Note on the day the
complaint was filed.").
The burden then shifted to Scardino, and Scardino did
not meet his burden of establishing that there is a genuine
question of material fact for trial. See Id. at 328, 489 P.3d
at 432 ("[A] defendant may counter this inference of possession
at the time of filing with evidence setting forth 'specific
facts showing that there is a genuine issue' as to whether the
plaintiff actually possessed the subject note at the time it
5 NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER
filed suit.") (citing Hawaiʻi Rules of Civil Procedure Rule
56(e)). Scardino offered no evidence that HSBC Bank, through
its counsel, did not possess the Note at the time the Complaint
was filed. Nor did Scardino provide evidence to support his
contention that HSBC Bank "falsified" the Note.
For the foregoing reasons, we affirm the circuit
court's Foreclosure Order and Judgment, filed October 12, 2021.2
DATED: Honolulu, Hawaiʻi, October 23, 2024.
On the briefs: /s/ Keith K. Hiraoka Presiding Judge Nicholas J. Scardino, Self-represented /s/ Sonja M.P. McCullen Defendant-Appellant. Associate Judge
Charles R. Prather, /s/ Kimberly T. Guidry for Plaintiff-Appellee. Associate Judge
2 Scardino's "Motion for Preemptory Challenge – Disqualification or Recusal of Judge Jeannette H. Castagnetti," attached to his opening brief as pages 23-28, is denied.