FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT (CIVIL NO.
Thompson, for Defendant-Appellant.
Charles R. Prather and Aaron Masser, for Plaintiff-Appellee.
Ginoza, Chief Judge, Fujise and Leonard, JJ.
SUMMARY DISPOSITION ORDER
Erwin F. Chase III (Chase) appeals from the December 14, 2015
Judgment (Judgment) entered on the Findings of Fact,
Conclusions of Law, Order Granting Plaintiff's Motion for
Summary Judgment Against All Parties and for Interlocutory
Decree of Foreclosure filed August 5, 2015 (Order) by the
Circuit Court of the Third Circuit (Circuit Court).
appeal, Chase alleges that the Circuit Court erred in
granting summary judgment in favor of Plaintiff-Appellee
Nationstar Mortgage LLC (Nationstar) because (1) the Property
at issue was not subject to foreclosure; (2) the documents
attached to Nationstar's Verified Complaint for
Foreclosure (Complaint) constituted inadmissible hearsay; (3)
the assignments of the mortgage were invalid; and (4)
Nationstar was not entitled to enforce the Adjustable Rate
Note (Note) executed by Chase.
careful review of the record on appeal and the relevant legal
authorities, and giving due consideration to the issues
raised and the arguments advanced by the parties, we resolve
these points of appeal as follows:
argues that the documents attached to the Complaint are
hearsay that did not comply with the requirements of Hawaii
Rules of Evidence (HRE) Rule 803(b)(6), and are therefore
inadmissible to support Nationstar's motion for summary
In order to prove entitlement to foreclose, the foreclosing
party must demonstrate that all conditions precedent to
foreclosure under the note and mortgage are satisfied and
that all steps required by statute have been strictly
complied with. See 55 Am. Jur. 2d Mortgages
§ 575 (Nov. 2016 Update). This typically requires the
plaintiff to prove the existence of an agreement, the terms
of the agreement, a default by the mortgagor under the terms
of the agreement, and giving of the cancellation notice.
See Bank of Honolulu, N.A. v. Anderson, 3
Haw.App. 545, 551, 654 P.2d 1370, 1375 (1982) (citing 55 Am.
Jur. 2d Mortgages § 554 (1971)) . A foreclosing
plaintiff must also prove its entitlement to enforce the note
and mortgage. HRS § 4 90:3-301 (providing who is
entitled to enforce an instrument); see id. §
490:3-308 (concerning proof of signatures and status as a
holder in due course); id. cmt. 2 (noting that
"[i]f a plaintiff producing the instrument proves
entitlement to enforce the instrument, either as a holder or
a person with rights of a holder, the plaintiff is entitled
to recovery unless the defendant proves a defense or claim in
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."
Mottl v. Miyahira, 95 Hawai'i 381, 388, 23 P.3d
716, 723 (2001). Typically, a plaintiff does not have
standing to invoke the jurisdiction of the court unless the
plaintiff has suffered an injury in fact. Id. at
391, 23 P.3d at 726. A mortgage is a conveyance of an
interest in real property that is given as security for the
payment of the note. HRS § 490:9-102 (defining
"mortgage"). A foreclosure action is a legal
proceeding to gain title or force a sale of the property for
satisfaction of a note that is in default and secured by a
lien on the subject property. HRS § 667-1.5 (providing
for foreclosure by action); id. 490:9-601(a)
(providing that after default, a secured party "[m]ay
reduce a claim to judgment, foreclose, or otherwise enforce
the claim, security interest, or agricultural lien by any
available judicial procedure"). See generally
55 Am. Jur. 2d Mortgages § 573 (Nov. 2016
Update) (discussing the nature and purpose of a foreclosure
suit). Thus, the underlying "injury in fact" to a
foreclosing plaintiff is the mortgagee's failure to
satisfy its obligation to pay the debt obligation to the note
holder. Accordingly, in establishing standing, a foreclosing
plaintiff must necessarily prove its entitlement to enforce
the note as it is the default on the note that gives rise to
the action. See HRS § 490:9-601 (providing for
a secured party's rights after default).
. . . As standing relates to the invocation of the
court's jurisdiction, it is not surprising that standing
must be present at the commencement of the case. Sierra
Club v. Haw. Tourism Auth., 100 Hawai'i 242, 257, 59
P.3d 877, 892 (2002) (noting that "standing must be
established at the beginning of the case").
Bank of Am., N.A. v. Reyes-Toledo, 139
Hawai'i 361, 367-68, 390 P.3d 1248, 1254-55 (2017)
alleged in its Complaint that on November 6, 2006, Chase
executed the Note in favor of Lehman Brothers Bank, FSB.
Although not alleged in the Complaint, the purported copy of
the Note attached to the Complaint appears to bear a stamp,
executed by E. Todd Whittemore, Vice President for Lehman
Brothers Bank, FSB, indorsing the Note to Lehman Brothers
Holdings, Inc. and another stamp, executed by "Paul E.
Sveen, Authorized ...