Kondaur Capital Corporation v. Matsuyoshi

551 P.3d 1222, 551 P.3d 1200, 154 Haw. 410
CourtHawaii Intermediate Court of Appeals
DecidedJune 28, 2024
DocketCAAP-19-0000696
StatusPublished

This text of 551 P.3d 1222 (Kondaur Capital Corporation v. Matsuyoshi) 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
Kondaur Capital Corporation v. Matsuyoshi, 551 P.3d 1222, 551 P.3d 1200, 154 Haw. 410 (hawapp 2024).

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 28-JUN-2024 08:16 AM Dkt. 142 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS OF THE STATE OF HAWAI‘I

KONDAUR CAPITAL CORPORATION, a Delaware corporation, Plaintiff-Appellee, v. LEIGH MATSUYOSHI et al, Defendant-Appellant

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT (CIVIL NO. 12-1-0185)

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

This is the latest appeal1 stemming from the mortgagee's non-judicial foreclosure sale of its mortgagor's residential property to itself in the underlying case. Resmae Liquidation Properties LLC (Resmae) conducted the 2008 foreclosure auction on Oʻahu, at which it bought the Kauaʻi

1 Previous appeals include: Kondaur Cap. Corp. v. Matsuyoshi, CAAP-XX-XXXXXXX, 2014 WL 895025 (Haw. App. Mar. 7, 2014) (mem. op.); Kondaur Cap. Corp. v. Matsuyoshi, 134 Hawaiʻi 342, 341 P.3d 548 (2014); Kondaur Cap. Corp. v. Matsuyoshi, CAAP-XX-XXXXXXX, 2014 WL 6488946 (Haw. App. Nov. 19, 2014) (SDO); and Kondaur Cap. Corp. v. Matsuyoshi (Kondaur II), 136 Hawaiʻi 227, 361 P.3d 454 (2015). NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

residential property (Property) belonging to its mortgagor Defendant-Appellant Leigh Matsuyoshi (Matsuyoshi). Resmae subsequently conveyed the Property by quitclaim deed to Plaintiff-Appellee Kondaur Capital Corporation (Kondaur), which filed a 2012 Complaint seeking possession of the Property and Matsuyoshi's ejectment. This latest appeal arises out of a bench trial conducted on remand, following the Hawaiʻi Supreme Court's 2015 decision in Kondaur II, vacating summary judgment on Kondaur's ejectment complaint. Kondaur prevailed at trial. Matsuyoshi appeals from the Circuit Court of the Fifth Circuit's (Circuit Court)2 (1) March 15, 2019 "Findings of Fact and Conclusions of Law After Trial" (FOFs/COLs); (2) March 15, 2019 Final Judgment (Judgment); June 13, 2018 "Order Denying Defendant Leigh Matsuyoshi's Request for Judicial Notice Filed February 21, 2018"; and (4) September 11, 2019 "Order Granting Plaintiff's Motion to Tax Costs and Expenses and for Award of Attorneys' Fees Filed March 29, 2019" (Order Granting Fees). On appeal, Matsuyoshi contends3 that the Circuit Court erred (1) in Findings of Fact (FOFs) 63, 64, 69, and Conclusion of Law (COL) 7, "that the sale on Oahu was not a factor to be considered in evaluating Resmae's conduct and that conducting the sale on Oahu was fair, reasonably diligent and in good faith"; (2) by finding that the sale price was "reasonable"; (3) by concluding in COLs 4 to 15 that the sale complied with the

2 The Honorable Randal G.B. Valenciano presided.

3 We have edited, reordered, renumbered, and consolidated Matsuyoshi's numerous points of error (POEs) for clarity. In addition to the POEs above, Matsuyoshi also challenges certain oral findings made by the Circuit Court prior to the issuance of the FOFs/COLs. Because a court's "written order generally controls over its oral statements[,]" we do not address these additional contentions. State v. Milne, 149 Hawaiʻi 329, 335, 489 P.3d 433, 439 (2021) (citations omitted).

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"statutory, [sic] power of sale and common law duties"; (4) by admitting certain evidence, refusing to rule on preliminary admissibility of evidence, and denying a motion in limine to exclude certain testimony; (5) in ruling that the notice of default and acceleration was delivered to or received by Matsuyoshi at least 30 days before the deadline to cure default; (6) by refusing to take judicial notice that the Honolulu Star- Bulletin stopped circulation on Kaua‘i in 2004 and finding that the newspaper had general circulation in Kaua‘i County; (7) in awarding Kondaur its attorneys' fees and costs; and (8) by dismissing Matsuyoshi's quiet title counterclaim in COL 16 and entering judgment against Matsuyoshi on that claim.4 Upon careful review of the record and the briefs submitted by the parties and having given due consideration to the arguments advanced and the issues raised, we resolve Matsuyoshi's contentions as follows, and vacate and remand. In Kondaur II, the supreme court held that "in situations where a mortgagee acts as both the seller and the purchaser of the subject property at a non-judicial foreclosure sale," as in this case, the mortgagee or its quitclaim transferee "bears the burden of proving compliance" with Ulrich v. Sec. Inv. Co. Ltd., 35 Haw. 158 (Haw. Terr. 1939). 136 Hawaiʻi at 229, 361 P.3d at 456. "Ulrich requires mortgagees to exercise their right to non-judicial foreclosure under a power of sale in a manner that is fair, reasonably diligent, and in good faith, and to demonstrate that an adequate price was procured for the property." Id. at 240, 361 P.3d at 467 (citation omitted).

4 Matsuyoshi does not challenge the Judgment as to her slander of title claim.

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The supreme court concluded that Kondaur failed to satisfy its initial burden on summary judgment, because Kondaur's only evidence as to the manner in which the foreclosure sale was conducted, was the Affidavit of Sale by Resmae's attorney. Id. at 242-43, 361 P.3d at 469-70. This Affidavit of Sale merely certified compliance with statutory requirements and mortgage terms, and failed to establish compliance with Ulrich, including why the sale was conducted on a different island from the Property's location: [T]he Affidavit of Sale fails to provide any averments as to the fairness and regularity of the foreclosure sale or as to whether [Resmae] conducted the foreclosure sale in a diligent and reasonable manner. This document does not even speak of any reason as to why the foreclosure sale was conducted on O‘ahu when the Property is on Kaua‘i. Although the Affidavit of Sale states that the Property was sold for $416,900.20 at the foreclosure sale, it does not make any declaration concerning the adequacy of this price.

. . . Hence, a mortgagee's minimal adherence to the statutory requirements and the terms of the mortgage under which the foreclosure sale is conducted—the only facts that [Resmae]'s Affidavit of Sale supports—does not establish that the foreclosure sale similarly satisfied the Ulrich requirements.

Id. (emphases added) (cleaned up). The supreme court rejected Kondaur's justification for holding a sale on Oʻahu for the Kauaʻi Property as "conclusory" and without evidentiary support, as follows: Kondaur asserted in the circuit court and the ICA that "conducting the public sale on the island of Oahu made it possible for the foreclosing mortgagee to conduct the sale in a larger market with more prospective purchasers." This assertion fails to establish that the foreclosure sale satisfied the requirements of Ulrich, not only because it is conclusory but also because evidence substantiating this assertion was not submitted in support of the MSJ.

In any event, because the Property is located on Kaua‘i and the terms of the sale included a clause requiring the buyer to take the Property "AS IS" and "WHERE IS," it is at least a question of fact whether

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Cite This Page — Counsel Stack

Bluebook (online)
551 P.3d 1222, 551 P.3d 1200, 154 Haw. 410, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kondaur-capital-corporation-v-matsuyoshi-hawapp-2024.