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Peak Capital Group, LLC v. Perez

Supreme Court of Hawaii

December 7, 2017

PEAK CAPITAL GROUP, LLC, Respondent/Plaintiff-Appellee,
CHRISTOPHER HULL PEREZ, JENNIFER HULL PEREZ, Respondents/Defendants-Appellees, and LINDA WILCOX ROBINSON, Petitioner/Real-Party-In-Interest-Appellant, and CINDY A. PEDRO, Respondent/Real-Party-In-Interest.


          Linda Wilcox Robinson petitioner pro se

          Everett Walton for respondent/ plaintiff-appellee



          MCKENNA, J.

         I. Introduction

         Self-represented litigant Linda Wilcox Robinson ("Robinson") seeks review of the Intermediate Court of Appeals' ("ICA") judgment on appeal entered pursuant to its summary disposition order. The ICA affirmed the Circuit Court of the First Circuit's[1] ("circuit court") order denying Robinson's motion for return of her personal possessions allegedly taken during the execution of a writ of ejectment after the foreclosure sale of a house in which she resided. Peak Capital Grp., LLC v. Perez, CAAP-14-0001125 (App. Mar. 23, 2016) (SDO).

         We construe Robinson's certiorari application to assert that the ICA erred by affirming the circuit court's denial of her motion for the following reasons:[2] (1) the purchaser of the property at foreclosure, mortgagee Peak Capital Group, LLC ("Peak Capital"), did not give her the minimum 90-day notice to vacate required by the federal Protecting Tenants at Foreclosure Act of 2009 ("PTFA"); (2) Peak Capital violated her rights under Hawaii Revised Statutes ("HRS") Chapter 521, the Residential Landlord-Tenant Code ("landlord-tenant code"), including the 45-day notice to vacate required to be given to month-to-month tenants by HRS § 521-71 (2006 & Supp. 2008); (3) the circuit court's refusal to order return of her possessions violated her constitutional due process rights[3]; and (4) the circuit court's refusal to return her possessions was otherwise in error.

         We hold as follows: (1) although the PTFA does not require a residential lease to be in writing, Robinson was not entitled to PTFA protections because she did not qualify as a "bona fide tenant" as required by the PTFA; (2) in general, the landlord-tenant code applies to residential leases entered into before a lis pendens, but Robinson was not a residential tenant, and the lis pendens made the subsequent written lease to Robinson's nonprofit for a room/office in the property subject to the court's decision as to its appropriate disposition; and (3) under the circumstances of this case, Robinson was afforded her due process rights to notice and an opportunity to be heard at a meaningful time and in a meaningful manner; but (4) the circuit court should have granted Robinson's motion for return of possessions, when the possessions included items of no financial value to Peak Capital but with great sentimental value to Robinson, such as her grandparent's ashes.

         II. Background

         A. Loan and foreclosure

         On May 15, 1994, Christopher Hull Perez ("Perez") and Jennifer Hull Perez (collectively, "the Perezes") purchased a fee simple residence in Waialua, Hawai'i ("the property"), as tenants by the entirety.[4] On October 24, 2007, Perez, individually, refinanced the original loan through a mortgage loan from Bridgelock Capital ("Bridgelock"), which was secured by a mortgage. The deed and mortgage were recorded in the Office of the Assistant Registrar of the Land Court of the State of Hawai'i ("Land Court") .

         On November 18, 2009, the note and mortgage were assigned to Peak Capital Group. These documents were also recorded in Land Court. On December 16, 2009, Peak Capital filed a foreclosure complaint against the Perezes. Peak Capital also filed a notice of pendency of action ("lis pendens") pursuant to HRS § 634-51, which was recorded with the Land Court on December 17, 2009 pursuant to HRS § 501-151.

         Perez was served with the complaint at the property on December 17, 2009. A few weeks later, on January 4, 2010, Robinson prepared a two-page letter to counsel for Peak Capital on letterhead stating "CHRISTOPHER H. PEREZ & REV. DR. LINDA WILCOX ROBINSON" at the top, with the property address, a fax number, a cell phone number, and an email address listed below. Robinson, the only signator, indicated she was writing in response to the foreclosure complaint and requested an extension of time to answer, stating, "we will need to file a motion to extend the time to answer this complaint as we are currently obtaining legal counsel." (Emphasis added.) She also indicated she and Perez had thought legal counsel they had retained to negotiate a loan modification with Peak Capital would also represent them in the foreclosure lawsuit, but learned he would not. Robinson's letter ended as follows:

Also, I believe you have the "Power of Attorney" in your file for Christopher's consent in my communication with this subject matter. If you need an additional copy, I can provide it to you again. Again, Mahalo. Should there be any other information you need please feel to contact me.

         The foreclosure complaint included an allegation against Doe Defendants, [5] but Robinson was never named as a defendant.

         On January 6, 2010, Perez filed a pro se motion requesting until January 27, 2010 to respond to the complaint. Perez did not file an answer or make any other appearance in the foreclosure lawsuit for over three years, when he filed the May 8, 2013 motion discussed below.

         Jennifer Perez was served with the complaint in Texas on February 24, 2010. On October 12, 2010, default was entered against both Perezes. The next day, October 13, 2010, the circuit court entered a minute order denying Perez's January 6, 2010 motion for additional time to respond to the complaint, on the grounds that default had already been entered. Perez had already had more than eight months to respond to the complaint.

         On January 3, 2011, Peak Capital filed a motion for summary judgment and for an interlocutory decree of foreclosure. On February 15, 2011, the circuit court entered its findings of fact, conclusions of law, and order granting the motion. The circuit court appointed a commissioner and ordered that the property be sold at public auction. The circuit court also entered a judgment on the same day ("foreclosure judgment"). The Perezes did not appeal the foreclosure judgment.

         B. Sale of property and writ of ejectment

         Perez apparently refused to cooperate with the commissioner to arrange open houses before the foreclosure sale. Without any open houses, a public auction to sell the property took place on February 14, 2012. Peak Capital submitted the highest bid, a credit bid of $359, 000.

         On March 12, 2012, Peak Capital filed a motion to confirm the sale, to distribute its proceeds, and for a writ of ejectment ("motion to confirm"), which was scheduled for hearing on April 12, 2012. Perez filed a bankruptcy petition on April 11, 2012, the day before the scheduled hearing, so the motion was not heard on that date. Perez's bankruptcy petition was dismissed on May 14, 2012 for failure to file required documents. The hearing on the motion to confirm was therefore rescheduled for June 28, 2012. Just before that hearing, however, counsel for Peak Capital was notified that Perez's bankruptcy petition had been reactivated.

         Perez received a bankruptcy discharge on August 29, 2012. On August 31, 2012, he filed a motion in bankruptcy court to avoid Peak Capital's lien, which Peak Capital opposed; the record does not reflect the basis of the motion. It appears this motion was denied, as Peak Capital renoticed the hearing on its motion to confirm before the circuit court for April 11, 2013, and the court orally granted the motion at that hearing. Perez did not appear.

         On May 8, 2013, the circuit court entered the order granting Peak Capital's motion to confirm. A final judgment and a writ of ejectment were also entered on the same date. The writ of ejectment ordered that law enforcement personnel remove the Perezes and anyone "holding under or through them, " as well as their personal belongings, and put Peak Capital in possession of the property.

         C. Perez's preliminary post-judgment motions

         On May 8, 2013, the same date as the final judgment and writ of ejectment, Perez filed a pro se motion to set aside entry of default and default judgment ("motion to set aside default judgment"). Perez asserted the mortgage securing the personal loan he obtained in 2007 did not create a lien on the property because the Perezes, a married couple, owned the property as tenants by the entirety.

         Two days later, on May 10, 2013, Perez submitted an ex parte motion for a temporary restraining order to stay execution of the writ of ejectment, asserting the same grounds. In the ex parte motion, Perez represented that his 94-year-old physically infirm grandfather, "his immediate family longtime best friend & roommate, LINDA WILCOX ROBINSON, who facilitates & runs a Hawaii registered non-profit foundation, T.I.T.A., Inc. (Together in Total Aloha, Inc.), " ("T.I.T.A.") and two formerly homeless women, Cynthia Pedro ("Pedro") and Jane Silos ("Silos") resided with him on the property. He did not characterize any occupants as tenants. The circuit court denied the ex parte motion on May 14, 2013.

         On June 7, 2013, Peak Capital filed its memorandum in response to Perez's motion to set aside default judgment. Peak Capital argued Perez's motion was untimely because the foreclosure judgment had entered over two years earlier, on February 15, 2011. Peak Capital also argued it would be prejudiced if the motion was granted, as Perez had continued to live in the property for over five years without any payment. It also pointed out Perez had no meritorious defense, attaching documents showing that although Perez had previously held the property with his wife as tenants by the entirety, at the time the subject note and mortgage were signed, Perez held the property individually as a tenant in severalty, and that after the mortgage, he reconveyed the property to himself and his wife as tenants by the entirety. Peak Capital also argued Perez inexcusably neglected to respond to the foreclosure lawsuit. After the June 18, 2013 hearing on Perez's motion to set aside default judgment, the circuit court entered an order denying the motion on July 15, 2013.

         Title to the property was then transferred from Perez to Peak Capital via a commissioner's quitclaim deed dated September 30, 2013, which was filed in the Land Court on November 4, 2013.

         D. Execution of the writ of ejectment and additional post-judgment motions

         On December 7, 2013, deputy sheriff Thomas Cayetano, accompanied by two police officers and two other men, including investigator Terry Pennington, went to the property. Perez was not present, but Robinson and other occupants were. According to Pennington, Robinson told him she was Perez's girlfriend and had lived there for many years without a rental or lease agreement. The writ of ejectment was not executed; rather, the occupants were notified of Peak Capital's intent to evict them if they did not voluntarily leave within one week.

         On or about December 11, 2013, Robinson and the other occupants sent a letter to the circuit court regarding the writ of ejectment. In relevant part, the top left of the first page of this letter reflected T.I.T.A. as a tenant in unit A-2. Robinson signed the letter on behalf of T.I.T.A.; the letter discussed and asserted tenant rights under the PTFA.

         On December 13, 2013, Perez, now represented by counsel, filed another motion to lift the October 12, 2010 entry of default and for relief from the February 25, 2011 default judgment ("motion to lift default judgment"); this motion was scheduled for hearing on January 21, 2014. Counsel stated Perez had been served with the writ of ejectment and had been given one week to vacate the property. Counsel further represented he had requested an additional thirty days to vacate the property from Peak Capital's attorney, but that the request had been denied. Attached to the motion was a letter dated December 12, 2013 from Robinson to Peak Capital as agent for T.I.T.A. asserting the December 7, 2013 seven-day notice to vacate violated the PTFA. Also attached were the first and last pages of a purportedly eleven-page Rental Agreement between Perez and T.I.T.A., dated May 1, 2012, stating its "initial term" began May 1, 2012 and ended April 30, 2013, for rental of a "[r]oom/office in main house" in the property. This document did not reflect any lease rent amount; the last page was signed by Perez and Robinson as agent for T.I.T.A.

         On December 16, 2013, Robinson filed an ex parte motion to stay execution of writ of possession and judgment for possession ("motion to stay"). This motion asserted:

A Judgment for Possession and Writ of Execution for Possession was entered against me on the above date. I have filed a Motion to Set Aside Default Judgment[6] for reasons set forth in the attached declaration. I am requesting a Stay of the Judgment for Possession And Writ of Possession until the Motion to Set Aside Default Judgment is heard by this Court.

         Robinson attached a letter to the circuit court alleging PTFA violations along with a copy of the PTFA. The circuit court temporarily granted this motion and stayed enforcement of the writ of ejectment until a hearing set for December 27, 2013 on Robinson's motion to stay.

         Peak Capital filed its memorandum in opposition to the motion to stay on December 20, 2013. Peak Capital argued that (1) because its lis pendens had been filed on December 17, 2009, anyone that acquired an interest in the property after that date was subject to the May 8, 2013 final judgment and writ of ejectment; (2) as a foreclosing mortgagee, it was not acting as a landlord; (3) because the alleged tenants did not record or register their tenancy interests in the Land Court, their claims were unenforceable, citing City & County of Honolulu v. A.S. Clarke, Inc., 60 Haw. 40, 44-45, 587 P.2d 294, 297 (1978) .[7]

         Only counsel for Peak Capital and Pedro appeared at the December 27, 2013 hearing on the motion to stay. Peak Capital orally argued that because there was no lease filed, there was no documentation indicating that any of the occupants, including Robinson, qualified as bona fide tenants entitled to protection under the PTFA. The circuit court denied the motion without prejudice, finding that the occupants, including Robinson, had failed to properly file documents establishing they were bona fide tenants under the PTFA.

         Soon after the hearing ended, Robinson filed a reply memorandum. Robinson asserted Federal Emergency Management Agency records would show that after severe storms and flooding in December 2008, she became a tenant at the property through lease agreements beginning in April 14, 2009. She further alleged that she and Perez entered into an agreement for Robinson to act as his "Landlord Agent in exchange for her rent of T.I.T.A., Inc. office space/room" as it "was conducive for all parties as T.I.T.A." to act as "a liaison for those who need assistance in homelessness. ..." She again alleged PTFA violations.

         On January 3, 2014, Robinson filed an emergency motion for reconsideration of the court's December 27, 2013 ruling denying the motion to stay, again requesting an immediate temporary stay ("motion to reconsider"). Robinson stated that because Perez had a longtime friendship with her, there was a verbal agreement allowing her a tenancy for a live-in office. She also stated that after incorporating T.I.T.A., on April 30, 2012, a written lease began on May 1, 2012, and attached a complete copy of a May 1, 2012 rental agreement between Perez and "Linda Wilcox Robinson for T.I.T.A., Inc." for a "Room/office in main house" of the property; the stated rent was $200 a month. Robinson again alleged violations of PTFA. This renewed motion was scheduled for hearing on February 4, 2014.

         On January 13, 2014, Peak Capital filed a memorandum in opposition to Perez's December 13, 2013 motion to lift default judgment, repeating arguments contained in its December 20, 2013 memorandum in opposition to motion to stay. Counsel for Peak Capital and Perez appeared at the January 21, 2014 hearing on this motion. The circuit court denied Perez's motion via a minute order the next day.

         Ten days before the scheduled February 4, 2014 hearing on Robinson's renewed motion, on Saturday, January 25, 2014, Peak Capital executed the writ of ejectment. Robinson and Peak Capital presented differing accounts of the events of that day. Robinson indicated that although she got a U-Haul later in the day to take away some of the occupants' possessions, the movers quickly began packing and moving possessions soon after arrival, she was treated rudely, and at the end of seven and a half hours, the house was locked up and the occupants were unable to return. Pennington says the movers loaded Robinson's U-Haul with the things she instructed them to, that Robinson was allowed to pack up the entire office herself, and that he went back to the property for total of three days to allow Perez to remove his remaining possessions, and once finished, Perez authorized him to throw out the remaining items. Cayetano and an investigator hired by Peak Capital say they saw Robinson pack her belongings and direct movers on what to pack and move. Overall, there is no dispute that the occupants had no idea that law enforcement officials would be arriving early that morning to eject them and that some of the occupants' possessions, including Robinson's, were removed and taken to storage.

         On January 27, 2014, Peak Capital filed its memorandum in opposition to Robinson's January 3, 2014 motion to reconsider. Peak Capital argued the PTFA was inapplicable because Robinson did not have a "bona fide lease" resulting from "an arms-length transaction."

         On February 4, 2004, Robinson filed a reply memorandum regarding the motion to reconsider scheduled for hearing that day. Robinson asserted Perez had informed Peak Capital regarding her tenancy and lease agreements on multiple occasions along with loan modification application forms and tax returns, to provide requested proof of income to Peak Capital's loan servicers. Robinson argued that her friendship with Perez was not relevant because the "bona fide" lease was between Perez and T.I.T.A. Robinson alleged that in addition to requiring them to incur expenses for a U-Haul and storage rentals, the ejectment had resulted in damage to her personal and business property and there had been an unlawful taking of her possessions without disclosure of the location of the possessions or possible redemption methods. Robinson also argued violations of PTFA and due process, and requested a cancellation of the writ of ejectment.

         At the February 4, 2014 hearing on the motion to reconsider, counsel for Peak Capital and Perez appeared along with Robinson. Robinson asserted her due process rights had been violated through the sudden early morning ejectment and the taking of her property, and requested a return of her possessions. Peak Capital responded that a request for return of possessions was not the subject of the motion being heard and that the parties should make this request to the sheriff. It also argued there was no stay of the writ and that Robinson did not have a bona fide tenancy. Peak Capital further argued that because Robinson's lease was entered into a significant time after the foreclosure action had commenced, the motion should be denied. Perez pointed out that although the circuit court had denied the previous motion, it had encouraged the occupants to refile their motion with copies of the leases, which they had done immediately. Perez requested a return of all the personal possessions. Peak Capital responded that it had no problem with the request to return personal property, and asked Perez to put the request in writing. Robinson then argued that contrary to Peak Capital's arguments regarding the leases post-dating the lis pendens, the leases had begun in 2007. The court took the matter under advisement.

         On February 5, 2014, Peak Capital filed a supplemental memorandum in response to a question the circuit court had asked during the hearing regarding what the date the "notice of foreclosure" would be under 2010 amendments to the PTFA. According to Peak Capital, the PTFA defined "notice of foreclosure" as the "date on which complete title of a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust, or security deed." Peak Capital represented that transfer of title occurred upon the February 14, 2012 auction of the property. Peak Capital argued that because documents filed January 3, 2014 showed Robinson's lease was dated May 1, 2012, which post-dated the February 14, 2012 auction, she had no rights as a bona fide tenant under 2010 amendments to the PTFA.

         On February 13, 2014, Pennington e-mailed Robinson informing her that Peak Capital requested reimbursement of the eviction costs of $10, 713.47 to release her property, but that Peak Capital would also consider a counter-offer. The email also stated that if Robinson did not respond, Peak Capital would not continue to pay for the storage of her property.

         On February 14, 2014, the circuit court entered its minute order denying the motion to reconsider. In relevant part, the circuit court ruled as follows:


         Robinson responded to Pennington's February 14, 2014 e-mail on February 18, 2014, stating that she had been rear-ended by a drunk driver, and saying she would get back to him in a few days.

         On March 13, 2014, the circuit court entered its order denying the January 3, 2014 motion to reconsider.

         E. Robinson's motion for return of possessions

         On May 7, 2014 Robinson filed a motion for return of possessions on behalf of herself and Pedro. Among other things, Robinson alleged violations of the PTFA and landlord-tenant code. Robinson identified the property taken as yearbooks, baby pictures, memorabilia of her deceased father, ashes of her deceased grandparent, sentimental childhood books, toys, prescription medication, legal files and evidence for this case, bedding, food, dog food, shoes, a cable box, a DVD player and rentals, mail, and work tools; she also indicated third-party files related to her work as an Internal Revenue Service enrolled agent had been taken. Robinson also attached a "complaint" for damages to her motion, alleging that as a result of the unlawful eviction she had incurred charges for loss of the items above as well as to rent a U-Haul and storage unit, a hotel room, meals and outside facilities, pet boarding accommodations, other daily items, work loss, lost appliances left in the property (refrigerator, microwave, range and oven, and gas dryer), and prescription contacts and supplies.

         On June 9, 2014, Peak Capital filed its memorandum in opposition to the motion for return of possessions. Peak Capital did not contest the list of items Robinson alleged had been taken during execution of the writ of ejectment. It also did not indicate whether Robinson's possessions were still in storage or whether they had been sold or discarded. Instead, Peak Capital argued the circuit court had already ruled that Robinson was not entitled to relief under the PTFA because she was not a bona fide tenant. It also argued that Perez had no interest in the property to lease after being divested of any interest in the property as of the date of the commissioner's auction. Peak Capital also argued that Robinson had been advised of the status of her possessions through Pennington's February 13, 2014 e-mail, and that she was not entitled to the possessions until she paid the eviction costs.

         In her June 23, 2014 reply memo, Robinson represented she had personally entered into a lease agreement with Perez in 2005 and that on April 30, 2010, the tenant had changed to T.I.T.A. with herself as agent. She argued that she had become a holdover tenant pursuant to HRS § 521-71(c) at the time of the foreclosure auction and that, pursuant to that statute, Peak Capital, as purchaser, had sixty days to either file a new eviction action or renew the lease, and because it had done neither, pursuant to law, she became a holdover tenant subject to the landlord-tenant code. She also cited to a 1982 California Supreme Court case arising out of a writ of eviction for unlawful detainer (similar to summary possession in Hawai'i), Arrieta v. Mahon, 31 Cal. 3d. 381, 644 P.2d 1249 (1982), which held that eviction of occupants claiming a right to possession unnamed in a writ of eviction violated those occupants' procedural due process rights. Her reply memorandum also attached ...

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