NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 05-SEP-2025 08:31 AM Dkt. 48 SO NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI I
U.S. BANK NATIONAL ASSOCIATION, as Trustee, Successor in interest to Bank of America National Association, as Trustee, Successor by Merger to LaSalle Bank National Association, as Trustee for Residential Asset Mortgage Products, Inc., Mortgage Asset-Backed Pass-through Certificates, Series 2007-SP2, Plaintiff-Appellee, v. PAULINE FRANCES PILIALOHA YAP, Defendant-Appellant, and JOHN DOES 1-20; JANE DOES 1-20; DOE CORPORATIONS 1-20; DOE ENTITIES 1-20; DOE GOVERNMENTAL UNITS 1-20, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CASE NO. 1CC191000217)
SUMMARY DISPOSITION ORDER (By: Nakasone, Chief Judge, Leonard and Wadsworth, JJ.) Defendant-Appellant Pauline Frances Pilialoha Yap (Yap)
appeals from the June 1, 2023 Judgment and challenges the June 1,
2023 Findings of Fact, Conclusions of Law and Order Granting
Plaintiff's Motion for Summary Judgment Against All Defendants
and for Interlocutory Decree of Foreclosure [(Second MSJ)]
(FOFs/COLs/Order), entered by the Circuit Court of the First
Circuit (Circuit Court), in favor of Plaintiff-Appellee U.S. Bank
National Association, as Trustee, successor in interest to Bank
of America National Association, as Trustee, successor by merger
to LaSalle Bank National Association, as Trustee for Residential NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
Assert Mortgage Products, Inc., Mortgage Asset-Backed Pass-
Through Certificates, Series 2007-SP2 (U.S. Bank).1
Yap raises three points of error on appeal, contending
that the Circuit Court erred in granting the Second MSJ because:
(1) U.S. Bank failed to demonstrate possession of a January 26,
2009 loan modification document (Loan Modification); (2) there
was no verification from U.S. Bank's counsel regarding possession
of either the November 6, 2006 fixed rate balloon note Yap
executed and delivered to People's Choice Home Loan, Inc.
(People's Choice) in the principal amount of $526,500.00 (Note)
or the Loan Modification; and (3) there was no business record or
document establishing LaSalle Bank as an original Trustee or U.S.
Bank as a successor-in-interest.
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 Yap's
points of error as follows:
(1) Yap argues that U.S. Bank failed to demonstrate
possession of the Loan Modification under Bank of Am., N.A. v.
Reyes-Toledo, 139 Hawai i 361, 390 P.3d 1248 (2017). Yap does
not point to any authority to support the proposition that a
foreclosing plaintiff must demonstrate possession of a loan
modification agreement for a note to prove its entitlement to
enforce the note, nor could we find any. 2
1 The Honorable Jeannette H. Castagnetti presided. 2 We note that Yap failed to raise this argument in the Circuit Court.
2 NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
To establish standing to foreclose, the plaintiff must
prove its entitlement to enforce the note and mortgage.
Reyes-Toledo, 139 Hawai i at 367, 390 P.3d at 1254. Under Hawaii
Revised Statutes (HRS) § 490:3-301 (2008), a "'[p]erson entitled
to enforce' an instrument means (i) the holder of the instrument,
or (ii) a nonholder in possession of the instrument who has the
rights of a holder[.]" An instrument is a "note" if it is a
promise. HRS § 490:3-104(e) (2008). When a note is indorsed in
blank, it becomes payable to the bearer and may be negotiated by
transfer of possession alone unless specially indorsed. Id. at
370, 390 P.3d at 1257 (citing HRS § 490:3-205(b) (2008)). A
foreclosing plaintiff establishes their standing to foreclose by
producing evidence that it was the holder of the note at the time
it filed the complaint. Id.
HRS § 490:3-301 does not require a person to be in
possession of any modifications to a note in order to be entitled
to enforce the note. 3 We conclude that Yap's argument is without
merit.
3 We further note that HRS § 490:3-117 (2008) provides:
§ 490:3-117 Other agreements affecting instrument. Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented, or nullified by an agreement under this section, the agreement is a defense to the obligation.
HRS § 490:3-117 does not indicate that possession of a loan modification agreement is required for the enforcement of an instrument. Rather, it provides otherwise by stating that a loan modification agreement may be used as a defense to an obligation.
3 NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
(2) Yap argues that the Circuit Court erred in
granting the Second MSJ because the Amended Complaint contained
no verification from U.S. Bank's counsel regarding possession of
the original Note or the Loan Modification. As discussed supra,
U.S. Bank need not demonstrate that it had possession of the Loan
Modification to prove its entitlement to enforce the Note.
The Circuit Court determined in COLs 4 and 5 as
follows: 4. Plaintiff is the holder of the Note and Mortgage and is entitled to enforce them. Plaintiff qualifies as the Note holder with standing to prosecute the instant action as the Note is indorsed in blank, thereby converting the Note to a bearer instrument, and Plaintiff is currently in rightful possession of the indorsed Note.
5. Plaintiff was the holder of the Note, indorsed in blank, at the time the Complaint was filed.
COLs 4 and 5 are supported by the record. U.S. Bank
attached a copy of the Note as well as Allonges 1 and 2 to the
Second MSJ. Allonge 1 was indorsed in blank, and Allonge 2 was
void. U.S. Bank has standing if it possessed the original Note
at the time it brought the foreclosure action. See Reyes-Toledo,
139 Hawai i at 370, 390 P.3d at 1257.
Possession of the original note may be established by
sworn testimony corroborated by admissible documentary evidence.
U.S. Bank Tr., N.A. as Tr. for LSF9 Master Participation Tr. v.
Verhagen, 149 Hawai i 315, 327-28, 489 P.3d 419, 431-32 (2021).
Here, U.S. Bank produced the declaration testimony of Juliana
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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 05-SEP-2025 08:31 AM Dkt. 48 SO NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI I
U.S. BANK NATIONAL ASSOCIATION, as Trustee, Successor in interest to Bank of America National Association, as Trustee, Successor by Merger to LaSalle Bank National Association, as Trustee for Residential Asset Mortgage Products, Inc., Mortgage Asset-Backed Pass-through Certificates, Series 2007-SP2, Plaintiff-Appellee, v. PAULINE FRANCES PILIALOHA YAP, Defendant-Appellant, and JOHN DOES 1-20; JANE DOES 1-20; DOE CORPORATIONS 1-20; DOE ENTITIES 1-20; DOE GOVERNMENTAL UNITS 1-20, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CASE NO. 1CC191000217)
SUMMARY DISPOSITION ORDER (By: Nakasone, Chief Judge, Leonard and Wadsworth, JJ.) Defendant-Appellant Pauline Frances Pilialoha Yap (Yap)
appeals from the June 1, 2023 Judgment and challenges the June 1,
2023 Findings of Fact, Conclusions of Law and Order Granting
Plaintiff's Motion for Summary Judgment Against All Defendants
and for Interlocutory Decree of Foreclosure [(Second MSJ)]
(FOFs/COLs/Order), entered by the Circuit Court of the First
Circuit (Circuit Court), in favor of Plaintiff-Appellee U.S. Bank
National Association, as Trustee, successor in interest to Bank
of America National Association, as Trustee, successor by merger
to LaSalle Bank National Association, as Trustee for Residential NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
Assert Mortgage Products, Inc., Mortgage Asset-Backed Pass-
Through Certificates, Series 2007-SP2 (U.S. Bank).1
Yap raises three points of error on appeal, contending
that the Circuit Court erred in granting the Second MSJ because:
(1) U.S. Bank failed to demonstrate possession of a January 26,
2009 loan modification document (Loan Modification); (2) there
was no verification from U.S. Bank's counsel regarding possession
of either the November 6, 2006 fixed rate balloon note Yap
executed and delivered to People's Choice Home Loan, Inc.
(People's Choice) in the principal amount of $526,500.00 (Note)
or the Loan Modification; and (3) there was no business record or
document establishing LaSalle Bank as an original Trustee or U.S.
Bank as a successor-in-interest.
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 Yap's
points of error as follows:
(1) Yap argues that U.S. Bank failed to demonstrate
possession of the Loan Modification under Bank of Am., N.A. v.
Reyes-Toledo, 139 Hawai i 361, 390 P.3d 1248 (2017). Yap does
not point to any authority to support the proposition that a
foreclosing plaintiff must demonstrate possession of a loan
modification agreement for a note to prove its entitlement to
enforce the note, nor could we find any. 2
1 The Honorable Jeannette H. Castagnetti presided. 2 We note that Yap failed to raise this argument in the Circuit Court.
2 NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
To establish standing to foreclose, the plaintiff must
prove its entitlement to enforce the note and mortgage.
Reyes-Toledo, 139 Hawai i at 367, 390 P.3d at 1254. Under Hawaii
Revised Statutes (HRS) § 490:3-301 (2008), a "'[p]erson entitled
to enforce' an instrument means (i) the holder of the instrument,
or (ii) a nonholder in possession of the instrument who has the
rights of a holder[.]" An instrument is a "note" if it is a
promise. HRS § 490:3-104(e) (2008). When a note is indorsed in
blank, it becomes payable to the bearer and may be negotiated by
transfer of possession alone unless specially indorsed. Id. at
370, 390 P.3d at 1257 (citing HRS § 490:3-205(b) (2008)). A
foreclosing plaintiff establishes their standing to foreclose by
producing evidence that it was the holder of the note at the time
it filed the complaint. Id.
HRS § 490:3-301 does not require a person to be in
possession of any modifications to a note in order to be entitled
to enforce the note. 3 We conclude that Yap's argument is without
merit.
3 We further note that HRS § 490:3-117 (2008) provides:
§ 490:3-117 Other agreements affecting instrument. Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented, or nullified by an agreement under this section, the agreement is a defense to the obligation.
HRS § 490:3-117 does not indicate that possession of a loan modification agreement is required for the enforcement of an instrument. Rather, it provides otherwise by stating that a loan modification agreement may be used as a defense to an obligation.
3 NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
(2) Yap argues that the Circuit Court erred in
granting the Second MSJ because the Amended Complaint contained
no verification from U.S. Bank's counsel regarding possession of
the original Note or the Loan Modification. As discussed supra,
U.S. Bank need not demonstrate that it had possession of the Loan
Modification to prove its entitlement to enforce the Note.
The Circuit Court determined in COLs 4 and 5 as
follows: 4. Plaintiff is the holder of the Note and Mortgage and is entitled to enforce them. Plaintiff qualifies as the Note holder with standing to prosecute the instant action as the Note is indorsed in blank, thereby converting the Note to a bearer instrument, and Plaintiff is currently in rightful possession of the indorsed Note.
5. Plaintiff was the holder of the Note, indorsed in blank, at the time the Complaint was filed.
COLs 4 and 5 are supported by the record. U.S. Bank
attached a copy of the Note as well as Allonges 1 and 2 to the
Second MSJ. Allonge 1 was indorsed in blank, and Allonge 2 was
void. U.S. Bank has standing if it possessed the original Note
at the time it brought the foreclosure action. See Reyes-Toledo,
139 Hawai i at 370, 390 P.3d at 1257.
Possession of the original note may be established by
sworn testimony corroborated by admissible documentary evidence.
U.S. Bank Tr., N.A. as Tr. for LSF9 Master Participation Tr. v.
Verhagen, 149 Hawai i 315, 327-28, 489 P.3d 419, 431-32 (2021).
Here, U.S. Bank produced the declaration testimony of Juliana
Thurab (Thurab), an employee and authorized record custodian of
PHH Mortgage Corporation (PHH), who is the successor by merger to
4 NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
the prior loan servicer, Ocwen Loan Servicing, LLC (Ocwen).4
Thurab declared, inter alia, "PHH's records indicate that [U.S.
Bank], by and through its counsel, had possession of the original
Note, indorsed in blank, as of 12/20/2021, the date of the filing
of the Amended Complaint. A true and correct copy of the
Attorney Bailee, which I have reviewed, reflecting possession of
the original Note, indorsed in blank, by [U.S. Bank's] attorney
is attached as Exhibit '5' and is incorporated herein by
reference." Thurab's testimony is corroborated by the Attorney
Bailee letter dated January 17, 2019, which confirmed that The
Mortgage Law Firm attorney Brian Nii currently held the original
Note and two allonges on behalf of U.S. Bank and/or the loan
servicer, Ocwen. Accordingly, the Attorney Bailee letter and
Thurab Declaration established that U.S. Bank's counsel held the
original Note and pertinent Allonge on behalf of U.S. Bank as of
January 17, 2019, twenty-one days prior to the filing of the
Complaint on February 7, 2019, and nearly three years prior to
the filing of the Amended Complaint on December 20, 2021. See
Verhagen, 149 Hawai i at 327-28, 489 P.3d at 431-32. We conclude
that the Circuit Court did not err in determining that there was
no genuine issue of material fact as to U.S. Bank's standing to
foreclose as the holder of the Note.
(3) Yap argues that the Circuit Court erred in
granting the Second MSJ because U.S. Bank failed to establish
that (1) the Trust document existed, (2) LaSalle Bank National
4 Effective June 1, 2019, the prior loan servicer, Ocwen, merged into PHH as reflected in the approved October 8, 2019 Petition for Order re: Change of Name of Ocwen Loan Servicing, LLC to PHH Mortgage Corporation filed in the Land Court of the State of Hawai i.
5 NOT FOR PUBLICATION IN WEST'S HAWAI I REPORTS AND PACIFIC REPORTER
Association (LaSalle Bank) was Trustee, (3) Bank of America was
the successor-by-merger to LaSalle Bank such that it became
Trustee, and (4) U.S. Bank was the successor-in-interest to Bank
of America such that it became the Trustee.
U.S. Bank established that it was the holder of the
Note, indorsed in blank, at the time the Complaint was filed.
Accordingly, U.S. Bank established its entitlement to enforce the
Note and was not required to further produce evidence that it was
the Trustee. See, e.g., U.S. Bank, Nat'l Ass'n as Tr. Under
Pooling & Servicing Agreement Dated as of March 1, 2007, GSAMP
Tr. 2007-HE2, Mortgage Pass-Through Certificates, Series 2007-HE2
v. Lelenoa, No. CAAP-XX-XXXXXXX, 2024 WL 5154817, *3 (Haw. App.
Dec. 18, 2024) (SDO) ("U.S. Bank established its possession of
the Note and was not required to introduce evidence that it was
the trustee"); see also U.S. Bank Nat. Ass'n v. Salvacion, 134
Hawai i 170, 175, 338 P.3d 1185, 1190 (App. 2014). We conclude
that Yap's third point of error is without merit.
For these reasons, the Circuit Court's June 1, 2023
Judgment is affirmed.
DATED: Honolulu, Hawai i, September 5, 2025.
On the briefs: /s/ Karen T. Nakasone Chief Judge Richard T. Forrester, (Forrester Legal, LLLC) /s/ Katherine G. Leonard for Defendant-Appellant. Associate Judge
David A. Nakashima, /s/ Clyde J. Wadsworth Jade Lynne Ching, Associate Judge Michelle N. Comeau, Ryan B. Kasten, (Nakashima Ching LLC) for Plaintiff-Appellee.