U.S. BANK N.A. IN ITS CAPACITY AS TRUSTEE FOR THE REGISTERED HOLDERS OF MASTR ASSET BACKED SECURITIES TRUST 2005-NC1, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-NC1, Respondent/Plaintiff-Appellee,
JOSEPH KEAOULA MATTOS, CHANELLE LEOLA MENESES, Petitioners/Defendants-Appellants, and CITIFINANCIAL, INC., ASSOCIATION OF APARTMENT OWNERS OF TERRAZA/CORTEBELLA/LAS BRISAS/TIBURON, EWA BY GENTRY COMMUNITY ASSOCIATION, Respondents/Defendants-Appellees.
TO THE INTERMEDIATE COURT OF APPEALS (CAAP-14-0001134; CIVIL
Victor Dubin for petitioners
Blaine Rogers for respondent U.S. Bank N.A.
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON,
appeal arises from a judicial decree of foreclosure granted
in favor of plaintiff "U.S. Bank N.A. in its Capacity as
Trustee for the registered holders of MASTR Asset Backed
Securities Trust 2005-NCl, Mortgage Pass-Through
Certificates, Series 2005-NCl" ("U.S. Bank")
against defendants Joseph Keaoula Mattos ("Mattos")
and Chanelle Leola Meneses ("Meneses")
(collectively, "Defendants"). At issue is whether
the Circuit Court of the First Circuit ("circuit
court") properly granted U.S. Bank's "Motion
for Summary Judgment and Decree of Foreclosure Against All
Defendants on Complaint Filed July 21, 2011"
("motion" or "motion for summary
judgment"). In its published opinion, the Intermediate
Court of Appeals ("ICA") affirmed the circuit
court. U.S. Bank N.A. v. Mattos, 137 Hawai'i
209, 367 P.3d 703 (App. 2016) .
assert the ICA erred in concluding that the circuit court
properly granted summary judgment due to the existence of
genuine issues of material fact. Specifically, Defendants
allege U.S. Bank lacked standing to foreclose because:
1. the two mortgage assignments to the securitized trust in
the chain of U.S. Bank's alleged ownership of
[Defendants'] loan were "robo-signed" by
persons with insufficient authority or personal knowledge as
to what they swore to, and whose signatures differed among
similar mortgage assignments that they had supposedly signed
2. the two mortgage assignments to the securitized trust in
the chain of U.S. Bank's alleged ownership of
[Defendants'] loan violated the securitized trust's
governing instrument, known as its Pooling and Servicing
Agreement [("PSA")]. . . .
3. the two mortgage assignments to the securitized trust in
the chain of U.S. Bank's alleged ownership of
[Defendants'] loan were unproven as supported only by
hearsay declarations inadmissible pursuant to [Hawai'i
Rules of Civil Procedure ("HRCP")] Rule 56(e) and
Hawaii Evidence Rule 803 (b) (3) [sic] as U.S.
Bank's Declarants had no personal knowledge of how
earlier business records had been compiled in addition to the
two mortgage assignments having been invalid, supra.
address the third issue on certiorari first. We hold that the
ICA erred by concluding the declaration of Richard Work
("Work"), the Contract Management Coordinator of
Ocwen Loan Servicing, LLC ("Ocwen"), rendered him a
"qualified witness" under State v.
Fitzwater, 122 Hawai'i 354, 227 P.3d 520 (2010) for
U.S. Bank's records under the Hawai'i Rules of
Evidence ("HRE") Rule 803(b)(6) hearsay exception
for records of regularly conducted activity. In addition,
U.S. Bank failed to establish that it was a holder entitled
to enforce the note at the time the foreclosure complaint was
filed. See Bank of America, N.A. v. Reyes-Toledo,
139 Hawai'i 361, 370-71, 390 P.3d 1248, 1257-58 (2017).
respect to the first issue on certiorari, because it is
unclear what Defendants mean by "robo-signing" and
because a ruling on the legal effect of
"robo-signing" is not necessary to the
determination of this case, we set aside the ICA's
holding that conclusory assertions that fail to offer factual
allegations or a legal theory indicating how alleged
"robo-signing" caused harm to a mortgagee are
insufficient to establish a defense in a foreclosure action.
Addressing the factual allegations underlying the
"robo-signing" claim, however, we conclude there is
a genuine issue of material fact as to whether Ocwen had the
authority to sign the second assignment of mortgage to U.S.
respect to the second issue on certiorari, we affirm the ICA
in part. We adopt the majority rule followed by the ICA in
U.S. Bank Nat. Ass'n v. Salvacion, 134
Hawai'i 170, 338 P.3d 1185 (App. 2014) and hold that a
third party unrelated to a mortgage securitization pooling
and servicing agreement lacks standing to enforce an alleged
violation of its terms unless the violation renders the
mortgage assignment void, rather than voidable, but we limit
the holding to the judicial foreclosure context.
we vacate the ICA's March 9, 2016 Judgment on Appeal, as
well as the circuit court's August 26, 2014 Findings of
Fact, Conclusions of Law and Order Granting Plaintiff's
Motion for Summary Judgment and Decree of Foreclosure Against
All Defendants on Complaint Filed July 21, 2011, and remand
this case to the circuit court.
October 15, 2004, Mattos signed a mortgage and a note for
$296, 000 in favor of New Century Mortgage Corporation
("New Century"). The mortgage was recorded in the
Land Court on October 25, 2004.
21, 2011, U.S. Bank filed a foreclosure complaint. U.S. Bank
alleged it was the owner of the mortgage by virtue of an
Assignment of Mortgage dated January 3, 2007 ("first
assignment") and an Assignment of Mortgage dated
September 10, 2010 ("second assignment"), both of
which were recorded in the Land Court (the mortgage, first
assignment, and second assignment are sometimes collectively
referred to as "the mortgage documents"). Attached
to the complaint were copies of the note with an
allonge and the mortgage documents. The allonge
was apparently executed by Ocwen as New Century's
attorney-in-fact pursuant to a Limited Power of Attorney. The
allonge was dated June 22, 2010, although it stated it was
effective January 31, 2005.
January 23, 2014, U.S. Bank filed a motion for summary
judgment. The motion was supported by a declaration from
Work, which purported to authenticate various attached
exhibits, including the underlying note, allonge, and
April 15, 2014, Defendants filed their opposition to U.S.
Bank's motion. In summary, Defendants alleged that U.S.
Bank lacked standing to foreclose because (1) it failed to
show it was the holder of the note at the time of
foreclosure, (2) the mortgage assignments contained various
alleged defects, and (3) the motion's supporting
documents were inadmissible hearsay. Defendants'
opposition was also based on an affidavit from Maria Giddings
("Giddings"), a purported forensic and
securitization analysis expert retained to opine as to
whether U.S. Bank owned the note and mortgage. Giddings
asserted the assignments "suffer[ed] from several fatal
flaws, " namely that the signers and notaries were known
"robo-signers" who were employed by Ocwen and
appeared to have differing signatures on several documents.
Giddings also claimed the assignments violated the
securitized trust's PSA. On July 18, 2014, after a
hearing, the circuit court granted U.S. Bank's motion for
appealed to the ICA. In its opinion, the ICA rejected
Defendants' arguments and affirmed the grant of summary
judgment in U.S. Bank's favor. Mattos, 137
Hawai'i at 214, 367 P.3d at 708. The ICA rejected
Defendants' first argument regarding
"robo-signing" because their opposition to U.S.
Bank's motion "failed to assert facts or law
explaining how the alleged 'robo-signing' caused them
harm or damages." 137 Hawai'i at 210, 367 P.3d at
704. The ICA rejected Defendants' second argument that
the assignments were void, holding, "This court,
however, has held that the non-compliance with a PSA does not
render the assignment void. Given our holding in
Salvacion, Appellants have no standing to challenge
U.S. Bank's alleged noncompliance with the PSA." 137
Hawai'i at 211, 367 P.3d at 705. Finally, the ICA
rejected Defendants' third argument, determining that
Work was a "qualified witness" pursuant to
Fitzwater who was able to authenticate the records
attached to his declaration for admission under HRE Rule
803(b)(6). 137 Hawai'i at 211-213, 367 P.3d at 705-07.
address the questions presented on certiorari.
Standard of Review
award of summary judgment is reviewed de novo and "is
appropriate where there is no genuine issue as to the
material fact and the moving party is entitled to judgment as
a matter of law." French v. Hawaii Pizza Hut,
Inc., 105 Hawai'i 462, 466, 99 P.3d 1046, 1050
(2004) (citing Ross v. Stouffer Hotel Co., 76
Hawai'i 454, 457, 879 P.2d 1037, 1040 (1994)).
The burden is on the party moving for summary judgment
(moving party) to show the absence of any genuine issue as to
all material facts, which, under applicable principles of
substantive law, entitles the moving party to judgment as a
matter of law. This burden has two components.
First, the moving party has the burden of producing support
for its claim that: (1) no genuine issue of material fact
exists with respect to the essential elements of the claim or
defense which the motion seeks to establish or which the
motion questions; and (2) based on the undisputed facts, it
is entitled to summary judgment as a matter of law. Only when
the moving party satisfies its initial burden of production
does the burden shift to the non-moving party to respond to
the motion for summary judgment and demonstrate specific
facts, as opposed to general allegations, that present a
genuine issue worthy of trial.
Second, the moving party bears the ultimate burden of
persuasion. This burden always remains with the moving party
and requires the moving party to convince the court that no
genuine issue of material fact exists and that the moving