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Fergerstrom v. PNC Bank, N.A.

United States District Court, D. Hawaii

April 5, 2019

WAYNE FERGERSTROM, SHENANDOAH KAIAMA, WINDY KAIAMA, individually and on behalf of all others similarly situated, Plaintiffs,
v.
PNC BANK, N.A., Defendant.

          ORDER (1) DENYING MOTION FOR RECONSIDERATION AND (2) DENYING IN PART AND DENYING AS MOOT IN PART MOTION TO STRIKE [1]

          DERRICK K. WATSON, UNITED STATES DISTRICT JUDGE

         At summary judgment, Defendant argued, among other things, that the relief Plaintiffs sought in this action was barred by the operation of Hawai‘i law requiring those who wish to impeach a foreclosure proceeding to do so before entry of a new certificate of title for the subject property. In support of this argument, Defendant submitted four certificates of title for the subject properties in this action, which, on their face, respectively stated: “Issued: 5/13/2010”; “Issued: 12/03/2010”; “Issued: 4/15/2010”; and “Issued: 09/02/2011[.]”

         In response, Plaintiffs argued, among other things, that Defendant had failed to establish when the certificates of title had been entered. In support of this argument, Plaintiffs provided no evidence. Instead, Plaintiffs asked this Court to take judicial notice of a statement made in a decision by the Supreme Court of Hawai‘i. Faced with this evidentiary imbalance on summary judgment, the Court, perhaps predictably, found that the certificates of title provided by Defendant were “issued and entered as of the date indicated on the face of each certified copy…” and therefore precluded Plaintiffs' subsequent foreclosure impeachment efforts.

         Four months after the Court ruled in favor of Defendant at summary judgment, and after Plaintiffs had appealed that ruling to the Ninth Circuit Court of Appeals, Plaintiffs filed the instant motion for reconsideration pursuant to Rules 60(b) and 62.1 of the Federal Rules of Civil Procedure. Plaintiffs argue that newly discovered evidence warrants reconsidering the Court's summary judgment ruling because, since then, the State of Hawai‘i has begun “altering” certificates of title, including the ones at issue in this case, to reflect when they were entered. Because Plaintiffs' appeal is still pending, this Court lacks jurisdiction to grant their motion for reconsideration. However, the Court does have jurisdiction to deny the motion or indicate whether it raises a substantial issue. Exercising that jurisdiction, the Court DENIES the motion for reconsideration because Plaintiffs have failed to show reasonable diligence for purposes of Rule 60(b).

         RELEVANT PROCEDURAL BACKGROUND

         On October 10, 2013, Defendant PNC Bank, N.A. (PNC Bank or Defendant) removed Plaintiff Wayne Fergerstrom's (Fergerstrom) September 9, 2013 state court Complaint. Dkt. Nos. 1, 1-1. On May 18, 2018, Fergerstrom, as well as new plaintiffs Shenandoah and Windy Kaiama (Shenandoah Kaiama and Windy Kaiama, together, “the Kaiamas, ” and, collectively with Fergerstrom, “Plaintiffs”), filed an Amended Complaint against PNC Bank. Dkt. No. 91.

         On July 13, 2018, PNC Bank moved for summary judgment on various grounds, including the one mentioned above with respect to the certificates of title. Dkt. Nos. 100, 100-1. On the same day, Plaintiffs filed a motion for class certification. Dkt. No. 103. On August 7, 2018, Plaintiffs opposed the motion for summary judgment on various grounds, including as described above with respect to the certificates of title. Dkt. No. 117. At the same time, PNC Bank opposed the motion for class certification. Dkt. No. 115.

         On September 18, 2018, after holding a hearing on the motions for summary judgment and class certification, Dkt. No. 135, this Court entered an Order granting the motion for summary judgment and denying the motion for class certification (“the September 18 Order”), Dkt. No. 140. As mentioned above, among other things, this Court found that the four certificates of title provided by PNC Bank (collectively, “the PNC certificates of title”) were “issued and entered as of the date indicated on the face of each certified copy…[, ]” thereby precluding Plaintiffs later challenge to the foreclosure proceedings relating to the subject properties. Id. at 27. Judgment was entered in favor of PNC Bank the next day. Dkt. No. 142.

         On October 16, 2018, Plaintiffs filed a notice of appeal. Dkt. No. 144. The parties agree that the appeal is still pending before the Ninth Circuit Court of Appeals.

         On January 22, 2019, Plaintiffs filed the instant motion for reconsideration of the September 18 Order. Dkt. No. 151. Plaintiffs assert that the motion is “based upon the discovery of new evidence.” Specifically, Plaintiffs rely upon four certificates of title (collectively, “Plaintiffs' certificates of title”) that they say were not available when they opposed summary judgment. On February 22, 2019, PNC Bank filed an opposition to the motion for reconsideration, to which Plaintiffs replied on March 7, 2019. Dkt. Nos. 153-154. As part of their reply, Plaintiffs attached a Declaration of Leslie T. Kobata (Kobata), the Assistant Registrar of the Land Court for the State of Hawai‘i. Dkt. No. 154-1. A few days later, PNC Bank moved to strike Plaintiffs' reply on the ground that it relied on evidence not submitted with the motion for reconsideration, or, alternatively, for leave to file a sur-reply (“the motion to strike”). Dkt. No. 155. On March 21, 2019, Plaintiffs filed an opposition to the motion to strike. Dkt. No. 156.

         LEGAL STANDARD

         The Court may relieve a party from a final judgment or order for, inter alia, “newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b)[.]” Fed.R.Civ.P. 60(b)(2). A Rule 60(b) motion must be filed within a reasonable time, and, when relying on subsection (2), “no more than a year after the entry of the judgment or order or the date of the proceeding.” Fed.R.Civ.P. 60(c)(1).

         A party moving under Rule 60(b)(2) must show that the evidence relied upon “(1) existed at the time of the trial, (2) could not have been discovered through due diligence, and (3) was of such magnitude that production of it earlier would have been likely to change the disposition of the case.” Jones v. Aero/Chem Corp., 921 F.2d 875, 878 (9th Cir. 1990).

         When an appeal is pending and a timely motion for relief has been made, a district court may “(1) defer considering the motion; (2) deny the motion; or (3) state either that it would grant the motion if the court of appeals remands for that purpose or that the motion raises a substantial issue.” Fed.R.Civ.P. 62.1(a).

         DISCUSSION

         Plaintiffs' motion for reconsideration states that it is “based upon the discovery of new evidence….” Dkt. No. 151 at 1. In their opening memorandum, Plaintiffs, in fact, bold and italicize that part of Rule 60(b) pertaining to newly discovered evidence. Dkt. No. 151-1 at 2.[2] The opening memorandum is, thus, notable by what it fails to discuss: the standard for relief under Rule 60(b)(2). Read naturally, the opening memorandum suggests that there is no such standard beyond a party stumbling upon some evidence they wish they had encountered earlier. Reality, however, is far different. A party is only entitled to relief under Rule 60(b)(2) if they show that the evidence relied upon “(1) existed at the time of the trial, (2) could not have been discovered through due diligence, and (3) was of such magnitude that production of it earlier would have been likely to change the disposition of the case.” Jones, 921 F.2d at 878.

         Not one of these prerequisites is even mentioned in Plaintiffs' opening memorandum. That is reason alone to deny Plaintiffs the relief they seek. Due diligence is perhaps the most obvious problem with Plaintiffs' motion, illustrated by the following example. In the opening memorandum, it is asserted that Plaintiffs' certificates of title were not available when they opposed summary judgment and, “at some time after” summary judgment, Plaintiffs' certificates of title became available. Conceivably, these assertions pertain to the issue of diligence. But instead of explaining how, Plaintiffs shirk their burden, relying instead on their imprecision and leaving it to the Court to discern whether discovery “some time after” satisfies their diligence obligation under Rule 60(b)(2). This Court rejects any suggestion that counseled litigants can abandon their responsibility to present their argument in the context of the applicable governing law. This is precisely what Plaintiffs have done with their motion for reconsideration.

         Things are little better in the reply memorandum. Again, Plaintiffs refuse to acknowledge that there is an actual legal standard for analyzing evidence relied upon for purposes of Rule 60(b)(2). Instead, Plaintiffs indicate the importance they attach to the fundamental standard for the relief they seek when they contemptuously state that PNC Bank's more-than-valid arguments in opposition- that the opening memorandum failed to explain how Plaintiffs' certificates of title constituted evidence in existence at the time of judgment or how Plaintiffs had exercised due diligence-are “post-hoc” “red herrings.” What Plaintiffs mean by “post-hoc” in ...


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