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Bruser v. Bank of Hawaii

United States District Court, D. Hawaii

August 8, 2019

MICHAEL DAVID BRUSER, TRUSTEES UNDER THAT CERTAIN UNRECORDED REVOCABLE LIVING TRUST AGREEMENT DATED JULY 11, 1988, AS AMENDED, DOING BUSINESS AS DISCOVERY BAY CENTER; AND LYNN BRUSER, TRUSTEES UNDER THAT CERTAIN UNRECORDED REVOCABLE LIVING TRUST AGREEMENT DATED JULY 11, 1988, AS AMENDED, DOING BUSINESS AS DISCOVERY BAY CENTER; Plaintiffs,
v.
BANK OF HAWAII, A HAWAII CORPORATION, AS TRUSTEE, AS SUCCESSOR BY MERGER WITH HAWAIIAN TRUST COMPANY, LIMITED, A FORMER HAWAII CORPORATION AND AS SUCCESSOR TRUSTEE UNDER THAT CERTAIN TRUST AGREEMENT DATED JUNE 6, 1974; Defendant.
v.
JULIE G. HENDERSON, as Trustee of the Julie G. Henderson Irrevocable Trust, and as Trustee of the Jean K. Gowans Irrevocable Trust, and as Trustee of the Louis L. Gowans, Jr. Irrevocable Trust; RICHARD L. GOWANS, as Trustee of the Richard L. Gowans Irrevocable Trust; KEVIN I. YOKOHAMA; ASSOCIATION OF APARTMENT OWNERS DISCOVERY BAY; SUSAN SHEETZ; and PATRICIA SHEETZ BOW, Intervening Defendants. BANK OF HAWAII, a Hawaii corporation, as Trustee, as successor by merger with Hawaiian Trust Company, Limited, a former Hawaii corporation and as successor Trustee under that certain Trust Agreement dated June 6, 1974, Counterclaim Plaintiff,
v.
MICHAEL DAVID BRUSER and LYNN BRUSER, Trustees under that certain unrecorded Revocable Living Trust Agreement dated July 11, 1988, as amended, doing business as Discovery Bay Center, Counterclaim Defendants.

          ORDER DENYING PLAINTIFFS' OBJECTIONS AND ADOPTING THE MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION TO GRANT DEFENDANT'S MOTION FOR ORDER TO SHOW CAUSE AND TO DENY PLAINTIFFS' COUNTER MOTION

          Leslie E. Kobayashi United States District Judge.

         On May 2, 2019, the magistrate judge filed his Findings and Recommendation to Grant Defendant's Motion for Order to Show Cause and to Deny Plaintiffs' Counter Motion

         (“F&R”). [Dkt. no. 253.[1] Plaintiffs/Counterclaim Defendants Michael David Bruser and Lynn Bruser (“the Brusers”) their objections to the F&R (“Objections”) on May 17, 2019. [Dkt. no. 254.] On June 3, 2019, Defendant/Counterclaim Plaintiff Bank of Hawaii (“BOH”) filed its memorandum in opposition to the Objections. [Dkt. no. 257.] The Brusers filed a reply memorandum on June 17, 2019. [Dkt. no. 258.] The Court has considered the Objections as a non-hearing matter pursuant to Rule LR7.2(e) of the Local Rules of Practice for the United States District Court for the District of Hawaii (“Local Rules”).

         The Brusers' Objections are hereby denied and the F&R is adopted for the reasons set forth below. Further, the Brusers are ordered to appear on September 4, 2019, at 3:30 p.m., to show cause why they should not be held in contempt.

         BACKGROUND

         The factual and procedural background of this matter is summarized in this Court's February 7, 2019 amended order (“2/7/19 Order”) granting BOH's motion for the appointment of a temporary receiver and granting in part and denying in part Intervenor Defendant/Counterclaim Plaintiff Association of Apartment Owners of Discovery Bay's substantive joinder, [dkt. no. 242, [2] and the F&R, and only relevant facts will be discussed here.

         On February 13, 2019, this Court approved the Order Appointing Temporary Receiver (“Receivership Order”), which granted Steve K. Sombrero (“Temporary Receiver”) with the authority to, inter alia: “collect and hold proceeds from the rental and operation of the Commercial Unit”;[3] [Receivership Order, dkt. no. 243, at 4;] “take full possession, control and custody of the records of the Commercial Unit necessary to carry out the duties set forth herein”; [id. at 5;] and “do any and all other acts as the Temporary Receiver shall determine are reasonable or necessary to complete the Temporary Receiver's duties hereunder relating to the Commercial Unit, ” [id. at 6]. On March 26, 2019, BOH filed its Motion for Order to Show Cause Why Plaintiffs Should Not be Held in Contempt for Failing to Comply with Receivership Order (“OSC Motion”), which sought a court order directing the Brusers to immediately turn over to the Temporary Receiver the proceeds from the rental and operation of the Commercial Unit, and its records; and hold the Brusers in civil contempt for their failure to comply with the Receivership Order. [Dkt. no. 244.] The Brusers filed their memorandum in opposition to the OSC Motion on April 16, 2019 (“OSC Opposition”), which included their Counter-Motion for a Stay of All District Court Proceedings, or in the Alternative for the Removal of the Present Temporary Receiver (“Counter-Motion”). See dkt. nos. 250 (OSC Opp.), 250-3 (Counter-Motion). The Counter-Motion stated it was brought pursuant to Local Rule 7.9, and sought a stay of the instant proceedings, pending the Brusers' appeals before the Hawai`i Supreme Court and the Ninth Circuit, or in the alternative, to replace and appoint a new temporary receiver.[4] [Counter-Motion at 11-15.]

         In the F&R, the magistrate judge recommended the OSC Motion be granted because the Brusers had violated a specific and definite order of this Court when they failed to provide the records of the Commercial Unit to the Temporary Receiver, and failed to either take every reasonable step to comply with the Receivership Order, or articulate a reason why compliance was not possible. F&R, 2019 WL 2194857, at *3-4. The magistrate judge also recommended this Court deny the Counter-Motion, because, inter alia, it did not raise the same subject matter as the OSC Motion pursuant to Local Rule 7.9, and because this Court and the Ninth Circuit previously rejected the Brusers' request for a stay of the instant action. Id. at *4-5.

         The Brusers now object to: 1) the magistrate judge's summary of the relevant background, which states the Brusers had failed to pay the amounts owed under the Judgment in a Civil Case (“Judgment”), [5] or abide by its terms, for over two years; [Objections at 4-5;] 2) the magistrate judge's statement that BOH continued to suffer harm because the Brusers refused to pay the full amount of the trustee fees; [id. at 5-6;] 3) the magistrate judge's statement that the equities weighed against granting the Brusers' request for a stay; [id. at 6;] 4) the portion of the F&R stating the Brusers violated this Court's order by failing to turn over records to the Temporary Receiver; [id. at 7-9;] 5) the portion of the F&R stating the Brusers failed to take every reasonable step to comply, or to explain why they could not comply, with the Receivership Order; [id. at 9-10;] and 6) the magistrate judge's denial of their Counter-Motion, [id. at 11-12].

         STANDARD

         Although the Brusers argue their Objections are brought pursuant to Local Rule 74.1, this rule applies to a party's right to appeal the magistrate judge's determination of “any pretrial matter pending before the court, except those motions delineated in LR72.4(a).” (Emphasis added). Because the Judgment was entered on June 28, 2016, BOH's OSC Motion is actually a post-judgment motion for sanctions. Therefore, Local Rules 72.9 and 74.2 apply to the F&R.[6] With regard to objections brought pursuant to Local Rule 74.2, this Court has stated:

Local Rule 74.2 provides: “Any party may object to a magistrate judge's case dispositive order, findings, or recommendations . . . within fourteen (14) days after being served with a copy of the magistrate judge's order, findings, or recommendations.” See also Fed.R.Civ.P. 72(b) (“Within 14 days after being served with a copy of the recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations.”).
This Court reviews a magistrate judge's findings and recommendations under the following standard:
When a party objects to a magistrate judge's findings or recommendations, the district court must review de novo those portions to which the objections are made and “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1); see also United States v. Raddatz, 447 U.S. 667, 673 (1980); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“[T]he district judge must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise.”).
Under a de novo standard, this Court reviews “the matter anew, the same as if it had not been heard before, and as if no decision previously had been rendered.” Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006); United States v. Silverman, 861 F.2d 571, 576 (9th Cir. 1988). The district court need not hold a de novo hearing; however, it is the court's obligation to arrive at its own independent conclusion about those portions of the magistrate judge's findings or recommendation to which a party objects. United States v. Remsing, 874 F.2d 614, 616 (9th Cir. 1989).
PJY Enters., LLC v. Kaneshiro, Civil No. 12-00577 LEK-KSC, 2014 WL 3778554, at *2 (D. Hawaii July 31, 2014) (alteration in PJY) (some citations omitted).
However, “‘[f]rivolous, conclusive, or general objections [to a magistrate judge's report and recommendation] need not be considered by the district court.'” Rodriguez v. Hill, No. 13CV1191-LAB (DHB), 2015 WL 366440, at *1 (S.D. Cal. Jan. 23, 2015) (some alterations in Rodriguez) (quoting Marsden v. Moore, 847 F.2d 1536, 1548 (11th Cir. 1988)). Thus, an objection to findings “without any analysis as to why [they are] inaccurate” is “insufficient to trigger review of those findings.” United States v. Rudisill, Nos. CR 97-327-PHX-ROX, CV 04-466-PHX-ROX, 2006 WL 3147663, at *1 (D. Ariz. Nov. 1, 2006) (citation omitted). If courts required review in such circumstances, “‘judicial resources would be wasted and the district court's effectiveness based on help from magistrate judges would be undermined.'” Bridgeman v. Stainer, No. 12-CV-212 BEN (PCL), 2014 WL 1806919, at *1 (S.D. Cal. May 7, 2014) (some citations omitted) (quoting United State[s] v. Midgette, 478 F.3d 616, 622 (4th Cir. 2007)); see also Reyna-Tapia, 328 F.3d at 1122 (“the underlying purpose of the Federal Magistrates Act is to improve the effective administration of justice” (citing Peretz v. United States, 501 U.S. 923, 928, 111 S.Ct. 2661, 115 L.Ed. 2D 808 (1991)). Further, “[objections that would not alter the outcome are moot, and can be overruled on that basis alone.” Rodriguez, 2015 WL 366440, at *1.

Muegge v. Aqua Hotels & Resorts, Inc., Civil 09-00614 LEK-BMK, 2015 WL 4041313, at *2 (D. Hawaii June 30, 2015) (some alterations in Muegge).

         DISCUSSION

         I. Prelim ...


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