The Bank of New York Mellon v. Colton

• Court: Hawaii Intermediate Court of Appeals
• Decided: May 19, 2025
• Docket: CAAP-22-0000291
• Status: Published

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 19-MAY-2025 08:12 AM Dkt. 56 SO

NOS. CAAP-XX-XXXXXXX and CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI‘I

CAAP-XX-XXXXXXX THE BANK OF NEW YORK MELLON, AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF CWABS INC., ASSET-BACKED CERTIFICATES, SERIES 2007-11, Plaintiff/Counterclaim Defendant-Appellant, v. MARY LEE COLTON, Defendant/Counterclaimant-Appellee, JOHN DOES 1-50; JANE DOES 1-50; DOE PARTNERSHIPS 1-50; DOE CORPORATIONS 1-50; DOE ENTITIES 1-50; and DOE GOVERNMENTAL UNITS 1-50, Defendants, and CAAP-XX-XXXXXXX THE BANK OF NEW YORK MELLON, AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF CWABS INC., ASSET-BACKED CERTIFICATES, SERIES 2007-11, Plaintiff/Counterclaim Defendant-Appellee, v. MARY LEE COLTON, Defendant/Counterclaimant-Appellant, JOHN DOES 1-50; JANE DOES 1-50; DOE PARTNERSHIPS 1-50; DOE CORPORATIONS 1-50; DOE ENTITIES 1-50; and DOE GOVERNMENTAL UNITS 1-50, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT (CASE NO. 3CC13100082K)

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

Plaintiff/Counterclaim Defendant-Appellant-Appellee

The Bank of New York Mellon, as Trustee for the NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

Certificateholders of CWABS Inc., Asset-Backed Certificates,

Series 2007-11 (BONYM) appeals, in case no. CAAP-XX-XXXXXXX,

from the Circuit Court of the Third Circuit's (circuit court)1:

(1) "Order Granting Without Prejudice Defendant Mary Colton's

Motion to Dismiss Complaint for Lack of Standing" (Dismissal

Order), filed on March 17, 2022; (2) "Order Denying [BONYM]'s

Motion for Reconsideration of the [Dismissal Order], Filed on

March 17, 2022, or in the Alternative, for Relief from Judgment

[Dkt.266], Filed March 28, 2022" (Reconsideration Order), filed

on June 15, 2022; (3) Judgment filed on June 22, 2022; and (4)

Notice of Entry of Judgment, filed on June 22, 2022.

Self-represented Defendant/Counterclaimant-Appellant-

Appellee Mary Lee Colton (Colton) appears to appeal, in case no.

CAAP-XX-XXXXXXX,2 from the circuit court's: (1) orders granting

BONYM's four extensions of time to file a pretrial statement;

(2) March 17, 2022 Dismissal Order, and June 15, 2022 "Order

Clarifying [Dismissal Order], Filed March 17, 2022, and Denying

as Moot Under HRAP 10(f) Request for Entry of Findings of Fact

and Conclusions of Law [Dkt. 305], Filed April 22, 2022"; and

(3) June 13, 2022 "Order Denying [Colton's] Objection to Order

Granted on April 1, 2022 Dkt 281 and Demand Judge Wendy DeWeese

1 The Honorable Wendy M. DeWeese presided. 2 Case nos. CAAP-XX-XXXXXXX and CAAP-XX-XXXXXXX were consolidated under case no. CAAP-XX-XXXXXXX, and the appellate briefs were filed according to the schedule in case no. CAAP-XX-XXXXXXX.

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Recusal in Want of Subject Matter Jurisdiction and 42 USC 1983

Civil Rights Violations Includes Due Process, Filed April 6,

2022."

Upon careful review of the record and the briefs

submitted by the parties, and having given due consideration to

the issues raised and arguments advanced, we resolve this appeal

as follows:

(1) We first address BONYM's contention that the

circuit court erred in dismissing BONYM's complaint without

prejudice for lack of standing.3

The record reflects that Colton filed "motions to

dismiss," on January 11, 2022 and January 12, 2022.4 The circuit

court, in ruling on these motions to dismiss, considered matters

outside of the pleadings. The Dismissal Order observed that

BONYM's counsel "represented to the [circuit c]ourt on the

record that [BONYM] was still in the process of obtaining a

3 We note that the circuit court erred in initially determining that standing is an issue of subject matter jurisdiction. "In Hawaiʻi state courts, standing is a prudential consideration regarding the proper - and properly limited – role of courts in a democratic society and is not an issue of subject matter jurisdiction, as it is in federal courts." Tax Found. of Haw. v. State, 144 Hawaiʻi 175, 188, 439 P.3d 127, 140 (2019) (quotation marks omitted). The circuit court later acknowledged and corrected its error in its Reconsideration Order. 4 Colton's motions to dismiss did not expressly state whether Colton was relying on Hawaiʻi Rules of Civil Procedure (HRCP) Rules 12(b)(1), 12(b)(6), 56, or some other procedural rule. In the January 11, 2022 motion, Colton stated "[i]f a complaint meets the requirements of HRCP Rule 8(a), dismissal pursuant to HRCP Rule 12(b)(6) is appropriate where the allegations of the complaint itself clearly demonstrate that plaintiff does not have a claim," indicating Colton was relying on HRCP Rule 12(b)(6), which involves dismissal based only on the pleadings. (Cleaned up.)

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declaration regarding the location of the original note." The

Dismissal Order also stated that the circuit court had

considered BONYM's submission of a bailee letter and a copy of

the original Note, along with late-filed errata consisting of

the declaration of Jeane Hirao. Under HRCP Rule 12(b), when a

court considers matters outside the pleadings in a motion

brought under Rule 12(b)(6), "the motion shall be treated as one

for summary judgment and disposed of as provided in Rule 56."

Colton was therefore required to meet the burden of proof

applying to a motion for summary judgment. See Andrade v. Cnty.

of Hawaiʻi, 145 Hawaiʻi 265, 268-70, 451 P.3d 1, 4-6 (App. 2019).

The Note submitted by BONYM in opposition to Colton's

motions to dismiss was indorsed in blank by Michele Sjolander on

behalf of Countrywide Home Loans, Inc. To enforce a promissory

note indorsed in blank, the foreclosing lender must prove

standing by demonstrating it had possession of the note when

filing the lawsuit. Bank of Am., N.A. v. Reyes-Toledo,

139 Hawaiʻi 361, 368-69, 390 P.3d, 1248, 1255-56 (2017). "A

foreclosing plaintiff's burden to prove entitlement to enforce

the note overlaps with the requirements of standing in

foreclosure actions as '[s]tanding is concerned with whether the

parties have the right to bring suit.'" Id. at 367, 390 P.3d at

1254 (citation omitted); see also U.S. Bank Trust, N.A. v.

Verhagen, 149 Hawaiʻi 315, 327, 489 P.3d 419, 431 (2021).

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To obtain summary judgment based on BONYM's alleged

lack of standing, Colton needed to either: (1) present evidence

negating BONYM's possession of the Note when initiating the

suit; or (2) demonstrate that BONYM would be unable to prove

such possession at trial. See Ralston v. Yim, 129 Hawaiʻi 46,

60, 292 P.3d 1276, 1290 (2013). In this case, Colton's motions

did not present evidence negating BONYM's possession of the Note

at the time BONYM filed the complaint.

Accordingly, Colton could only succeed under the

second Ralston prong, by showing that at trial BONYM would be

unable to prove it possessed the Note when it filed the

complaint. See id. However, because the circuit court had not

yet set a discovery deadline when it issued the March 17, 2022

Dismissal Order, Colton could not obtain summary judgment by

merely pointing to BONYM's failure to present evidence of

standing.

[I]n general, a summary judgment movant cannot merely point to the non-moving party's lack of evidence to support its initial burden of production if discovery has not concluded. . . . "[M]erely asserting that the non-moving party has not come forward with evidence to support its claims is not enough."

Id. at 61, 292 P.3d at 1291 (emphasis added) (citation omitted).

The circuit court therefore erred in dismissing BONYM's

complaint "[b]ased on [BONYM's] failure to meet its burden" of

proving standing. It was Colton who failed to meet her burden

of proving that BONYM would be unable to establish standing at

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trial. See Mobley v. Kimura, 146 Hawaiʻi 311, 326, 463 P.3d 968,

983 (2020) (holding that the defendant did not meet their burden

of proving the plaintiff did not satisfy the tort threshold

exception under Hawaiʻi's no-fault statute, where the defendant

did not present evidence negating the exception, and discovery

had not yet concluded).

For the above reasons, we conclude that the circuit

court erred in dismissing BONYM's complaint for lack of

standing. We therefore vacate the circuit court's Dismissal

Order, and remand for further proceedings. In light of this

determination, we decline to address BONYM's remaining points of

error.

(2) We next turn to Colton's points of error on

appeal, which we address in turn as follows5:

Colton's first point of error appears to allege the

circuit court erred in granting BONYM four extensions of time to

file its pretrial statement. BONYM's last three requests for an

extension were based on its allegation that it was complying

with the federal COVID-19 moratorium on foreclosure proceedings.

The circuit court did not abuse its discretion in granting BONYM

multiple extensions of time on the basis of that moratorium.

5 We address Colton's points of error to the extent they are discernible, and have numbered them for ease of reference.

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Colton's second point of error appears to contend that

the circuit court erred in granting dismissal of BONYM's

complaint without prejudice, rather than with prejudice.

Because we find the circuit court erred in dismissing BONYM's

complaint, this argument necessarily fails.

Colton's third point of error alleges "Judge DeWeese

did not follow the higher courts instructions on remand" and

"directly defied two higher courts orders." Colton's contention

lacks merit because the ICA's decisions in Bank of New York

Mellon v. Colton, No. CAAP-XX-XXXXXXX, 2017 WL 3587949 (Haw.

App. Aug. 21, 2017) (SDO), and Bank of New York Mellon v. Colton

(Colton II), 146 Hawaiʻi 577, 463 P.3d 1234 (App. 2020), did not

set forth specific remand instructions.

Colton's fourth point of error appears to challenge

the circuit court's June 13, 2022 order denying her motion to

recuse Judge DeWeese. Colton contends that Judge DeWeese should

have been recused because she erred in entertaining BONYM's

motions and submissions after the March 17, 2022 Dismissal

Order. The record reflects that, after March 17, 2022, the

circuit court considered BONYM's motions and submissions

relating to BONYM's motion for reconsideration of the Dismissal

Order, and BONYM's responses to Colton's motions. Colton

appears to claim without citing to any supporting legal

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authority that, after dismissal, BONYM could not file a motion

for reconsideration or challenge Colton's motions.

Colton's motion for recusal further argued that Judge

DeWeese had "a financial interest in conflict with [Colton's]

rights to justice and an unbiased tribunal," and submitted as an

attachment the Employees' Retirement System of the State of

Hawaii's (ERS) "Comprehensive Annual Financial Report for the

Fiscal Year Ended June 30, 2019" that listed BONYM as a service

provider to the ERS.

Hawaiʻi courts apply a two-part analysis in judicial

disqualification or recusal cases. State v. Ross, 89 Hawaiʻi

371, 377, 974 P.2d 11, 17 (1998). First, the court must apply

Hawaii Revised Statutes (HRS) § 601-7 (2016) to determine

whether the alleged bias is covered by a statutory prohibition.

Id. If the alleged bias falls outside of HRS § 601-7, the court

may then determine, if appropriate, whether the circumstances

"fairly give rise to an appearance of impropriety and . . .

reasonably cast suspicion on [the judge's] impartiality." Id.

(ellipsis and brackets in original) (citation omitted).

The applicability of the disqualification factors in

HRS § 601-7(a)(1) (2016) to Judge DeWeese turns on whether she

had "a more than de minimus pecuniary interest" in the case.

(Emphasis added.) "The Hawaiʻi Revised Code of Judicial Conduct

(HRCJC) . . . has defined '[d]e minimus' in the context of

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interests pertaining to disqualification of a judge, [as

meaning] an insignificant interest that could not raise a

reasonable question regarding the judge's impartiality." Title

Guar. Escrow Servs. Inc. v. Wailea Resort Co., No. CAAP-12-

0000711, 2016 WL 4555771, at *5 (Haw. App. Aug. 31, 2016) (mem.

op.). Colton presented no evidence that BONYM's success in the

foreclosure proceeding would have any impact on the ERS, or on

Judge DeWeese's retirement benefits. Thus, the circuit court

did not abuse its discretion in denying Colton's recusal motion.

Colton's fifth point of error contends the circuit

court erred by failing to dismiss BONYM's complaint pursuant to

HRS § 604-5(d) (2016). HRS § 604-5(d), which prohibits the

district courts from hearing real actions, or actions involving

title to real estate, does not apply to the circuit courts.

Colton's sixth point of error appears to be two-fold.

First, Colton contends the circuit court erred in issuing orders

and entertaining motions, after she filed her first notice of

appeal on July 18, 2014, because the "July 18, 2014 [Notice of

Appeal] filed by Colton removed the [circuit court's]

jurisdiction." Second, Colton contends that the circuit court

was "without jurisdiction from 2014 to 2022" based on the

circuit court's finding that BONYM lacked standing.

We note first that the ICA's decision in Colton II,

which vacated the circuit court's August 1, 2016 sanctions order

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and the February 10, 2017 HRCP Rule 54(b) judgment, had already

remedied the circuit court's erroneous rulings after her July

2014 appeal. Moreover, pursuant to section (1), supra, Colton's

second contention lacks merit.

For the foregoing reasons, we vacate the circuit

court's March 17, 2022 Dismissal Order, June 15, 2022

Reconsideration Order, and June 22, 2022 Judgment dismissing

BONYM's complaint, and remand for further proceedings consistent

with this summary disposition order. We affirm all other orders

appealed from.

DATED: Honolulu, Hawaiʻi, May 19, 2025.

On the briefs: /s/ Clyde J. Wadsworth Presiding Judge David B. Rosen, Christina C. MacLeod, /s/ Sonja M.P. McCullen for Plaintiff/Counterclaim Associate Judge Defendant-Appellant, in No. CAAP-XX-XXXXXXX and /s/ Kimberly T. Guidry Plaintiff/Counterclaim Associate Judge Defendant-Appellee, in No. CAAP-XX-XXXXXXX.

Mary Lee Colton, Self-represented Defendant/Counterclaimant- Appellee in No. CAAP-XX-XXXXXXX and Defendant/Counterclaimant- Appellant in No. CAAP-XX-XXXXXXX.