Deutsche Bank National Trust Company v. Greenspon , 428 P.3d 749 ( 2018 )

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Electronically Filed
Supreme Court
SCWC-XX-XXXXXXX
17-SEP-2018
09:01 AM
IN THE SUPREME COURT OF THE STATE OF HAWAII
---o0o---
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE OF RESIDENTIAL
ASSET SECURITIZATION TRUST 2006-A8, MORTGAGE PASS-THROUGH
CERTIFICATES SERIES 2006-H UNDER THE POOLING AND SERVICING
AGREEMENT DATED JUNE 1, 2006,
Respondent/Plaintiff-Appellee,
vs.
MICHAEL C. GREENSPON,
Petitioner/Defendant-Appellant.
SCWC-XX-XXXXXXX
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-XX-XXXXXXX; DC-CIVIL NO. 10-1-2608)
SEPTEMBER 17, 2018
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.
OPINION OF THE COURT BY POLLACK, J.
This case considers whether a motion for sanctions may
be dismissed without prejudice when the underlying facts and
issues allegedly establishing the sanctionable conduct are also
at issue in another pending case involving the same parties. We
also consider whether a final order must be signed by a district
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court clerk or judge for an appeal to lie from that order. We
conclude that the trial court acted within its proper discretion
when it dismissed the motion for sanctions without prejudice.
We further hold that the signature of a court clerk or judge is
generally necessary for appellate review of a final order. In
the circumstances of this case, however, we determine that other
signed filings related to the order being appealed were
sufficient to provide appellate jurisdiction.
I. BACKGROUND AND PROCEDURAL HISTORY
On March 31, 2003, Michael C. Greenspon obtained a
loan from IndyMac Bank, F.S.B. (IndyMac) that was secured by a
mortgage (the Mortgage) encumbering the property acquired by
Greenspon (the Property). The Mortgage states that the
promissory note for the loan (the Note) was made payable to
IndyMac, and it identifies IndyMac as the mortgagee/lender. On
July 11, 2008, IndyMac was closed by the Federal Deposit
Insurance Corporation (FDIC). Upon IndyMac’s closure, IndyMac
Federal Bank, F.S.B. (IndyMac Federal) was assigned IndyMac’s
interest in the Mortgage.
In late 2008, Greenspon defaulted on the Note.
IndyMac Federal subsequently instituted a non-judicial
foreclosure sale. A notice of foreclosure was recorded in the
Bureau of Conveyances, and a public auction of the Property was
scheduled.
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The foreclosure auction was conducted in early 2010.
An affidavit regarding the foreclosure sale (Affidavit of Sale)
identified “FDIC as Receiver for IndyMac Federal Bank, FSB” as
mortgagee and Greenspon as mortgagor. The highest bidder at the
auction was listed as “Deutsche Bank National Trust Company”
(Deutsche Bank). A deed was filed in the Bureau of Conveyances,
identifying the grantor as FDIC as Receiver for “IndyMac Bank,
FSB” and the grantee as Deutsche Bank (the Deed). Deutsche Bank
then mailed a written notice to vacate to the occupants of the
Property. Greenspon remained on the premises.
A. Ejectment Complaint, Motion for Summary Judgment, and
Motion to Dismiss
Deutsche Bank filed a Verified Complaint for Ejectment
(ejectment action) against Greenspon in the District Court of
the Second Circuit, Lahaina Division (district court) seeking a
judgment and writ of possession for the Property. Deutsche Bank
subsequently filed a Motion for Summary Judgment and Writ of
Possession (Motion for Summary Judgment) asserting that, through
its purchase at the non-judicial foreclosure sale, it became the
fee simple owner of the Property and was entitled to possession.
In response to the Motion for Summary Judgment,
Greenspon filed a motion to dismiss based on lack of subject
matter jurisdiction by the district court and an opposition to
the Motion for Summary Judgment (Motion to Dismiss). Greenspon
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challenged the validity of Deutsche Bank’s interest in the
Property, arguing, inter alia, that IndyMac’s assignment of the
Mortgage to IndyMac Federal was fraudulently conducted seven
months after the FDIC’s closure of IndyMac. Further, Greenspon
asserted, the Deed conflicted with the Affidavit of Sale because
the Deed listed “FDIC as Receiver for IndyMac Bank, FSB” as the
grantor whereas the Affidavit of Sale listed “FDIC as Receiver
for IndyMac Federal, F.S.B.” as the mortgagee. Thus, Greenspon
contended, neither IndyMac nor IndyMac Federal had contractual
authority to conduct the power of sale or the non-judicial
foreclosure conveying the Property to Deutsche Bank. Because
title to the Property was in dispute, Greenspon concluded,
summary judgment was inappropriate and the district court lacked
jurisdiction under Hawaii Revised Statutes (HRS) § 604-5(d)
(1993)1 to hear the case.
Greenspon also filed a complaint in the Circuit Court
of the First Circuit (circuit court action) naming Deutsche
Bank; IndyMac Federal; OneWest Bank, F.S.B.; and Cal-Western
Reconveyance Corporation as defendants and asserting various
claims of fraud pertaining to the title of the Property.2
1
HRS § 604-5(d) provides in relevant part as follows: “The
district courts shall not have cognizance of real actions, nor actions in
which the title to real estate comes in question . . . .”
2
The complaint in the circuit court action set forth five counts.
Count One of the complaint alleged that Greenspon was entitled to a
(continued . . .)
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At the hearing on the Motion for Summary Judgment,3
Greenspon requested that the district court take judicial notice
of his circuit court action. The district court accepted a copy
of the circuit court action complaint, but, finding Deutsche
Bank had met its burden for summary judgment, orally granted
Deutsche Bank’s Motion for Summary Judgment.
Deutsche Bank subsequently filed its opposition to
Greenspon’s Motion to Dismiss. Deutsche Bank argued that the
oral ruling granting Deutsche Bank summary judgment rendered the
Motion to Dismiss moot.
The district court, however, granted Greenspon’s
Motion to Dismiss and dismissed the case without prejudice
(Dismissal Order).4 The Dismissal Order stated that the district
court had taken judicial notice of the circuit court action and
(. . . continued)
declaratory judgment that the non-judicial foreclosure sale and subsequent
transfer of title to Deutsche Bank were void and unenforceable as procured by
fraud and by unfair and/or deceptive predatory lending practices. Count Two
alleged that Greenspon was entitled to a declaratory judgment that the Note
and Mortgage were void and unenforceable as procured by fraud. Count Three
alleged that the Note and Mortgage were void and unenforceable because they
constituted unfair and deceptive acts and practices against consumers as
defined by HRS Chapter 480. Count Four requested that the court prohibit the
defendants from further transferring title to the Property or further
damaging Greenspon’s finances. Count Five alleged that Greenspon was
entitled to damages because the alleged mortgage fraud was done with criminal
disregard for the finances and feelings of Greenspon.
3
The Honorable Rhonda I. L. Loo presided.
4
The Honorable Judge Blaine J. Kobayashi presided over the Motion
to Dismiss and subsequent proceedings.
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that the district court lacked subject matter jurisdiction over
Deutsche Bank’s ejectment action because title to the Property
was in dispute. The district court also vacated the oral ruling
granting Deutsche Bank’s Motion for Summary Judgment.
B. Greenspon’s Motion for Sanctions
In June 2014, Greenspon submitted a motion for costs
and attorney’s fees based upon District Court Rules of Civil
Procedure (DCRCP) Rule 11 (1996)5 (Motion for Sanctions) for the
filing of a “false verified complaint.” Relying upon evidence
and proceedings in the circuit court action, Greenspon argued
that Deutsche Bank had no right to possession of the Property
5
DCRCP Rule 11 provides in pertinent part as follows:
Every pleading, motion, and other paper of a party
represented by an attorney shall be signed by at least one
attorney of record in that attorney’s individual name,
whose address shall be stated. A party who is not
represented by an attorney shall sign the party’s pleading,
motion, or other paper and state the party’s address. . . .
The signature of an attorney or party constitutes a
certificate by the signatory that the signatory has read
the pleading, motion, or other paper; that to the best of
the signatory’s knowledge, information, and belief formed
after reasonable inquiry it is well grounded in fact and is
not interposed for any improper purpose, such as to harass
or to cause unnecessary delay or needless increase in the
cost of litigation. . . . If a pleading, motion, or other
paper is signed in violation of this rule, the court, upon
motion or upon its own initiative, shall impose upon the
person who signed it, a represented party, or both, an
appropriate sanction, which may include an order to pay to
the other party or parties the amount of the reasonable
expenses incurred because of the filing of the pleading,
motion, or other paper, including a reasonable attorney’s
fee.
DCRCP Rule 11 (1996).
6
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and that its counsel negligently and recklessly failed to make
any reasonable inquiry into the validity of Deutsche Bank’s
title claims prior to filing the ejectment action.6 Thus,
Greenspon argued, sanctions against both Deutsche Bank and its
counsel were necessary because the ejectment action lacked a
factual basis, was frivolous, and was brought for improper
purposes. Accordingly, Greenspon requested that the district
court impose DCRCP Rule 11 sanctions and enter an award for all
attorney’s fees and costs Greenspon incurred in defending the
ejectment action, with interest.
In response, Deutsche Bank argued that its claims were
not frivolous and that the district court granted Greenspon’s
Motion to Dismiss primarily to allow the circuit court action to
be fully litigated and resolved. Any issues regarding title
raised by Greenspon in the Motion for Sanctions, Deutsche Bank
maintained, were determinations made in the circuit court action
that was then pending appeal and were thus beyond the district
6
Specifically, Greenspon pointed to answers by Deutsche Bank in
response to interrogatories in the circuit court action that indicated
Deutsche Bank had not been the highest bidder at the foreclosure auction, but
rather had been designated by IndyMac Federal to take record title. And,
IndyMac Federal, according to Deutsche Bank’s response to the interrogatory,
had made a credit bid and did not pay a cash dollar amount for the Property.
Greenspon further submitted that Deutsche Bank admitted that IndyMac Federal
was the foreclosing mortgagee, and that IndyMac Federal--not Deutsche Bank--
held physical possession of and controlled the Note at all times. Greenspon
additionally pointed to Deutsche Bank’s statement at the Motion for Summary
Judgment hearing regarding the circuit court Verified Complaint that “the
original deed was defective, that [the] defect was raised by [Greenspon], and
it’s been cured.”
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court’s jurisdiction. Deutsche Bank therefore contended that
the district court should not grant Greenspon’s Motion for
Sanctions.7
The district court held a hearing on the Motion for
Sanctions and issued an order denying the motion without
prejudice (Order Denying Sanctions).8 In a footnote in the
order, the district court explained that the denial was without
prejudice because the Motion for Sanctions raised issues of
title that were pending appeal in Greenspon’s circuit court
action:
As represented by counsel for [Deutsche Bank] in the
Opposition, Greenspon v. Deutsche Bank National Trust
Company, CAAP-XX-XXXXXXX, is currently on appeal. As the
Court understands, that case involves among other things,
issues relating directly to the issue of title to the
subject property. The outcome of said appeal may have a
direct bearing upon the instant case. Accordingly, unless
and until a decision has been made on said appeal, the
[Motion for Sanctions] may be premature and is therefore
being denied without prejudice.
7
Greenspon also filed a supplemental memorandum in support of the
Motion for Sanctions and a reply to Deutsche Bank’s Opposition to the Motion
for Sanctions. Greenspon asserted that the claims in the Motion for
Sanctions required different considerations from the circuit court action,
namely: the validity of Deutsche Bank’s title prior to filing the ejectment
action; whether Deutsche Bank obstructed Greenspon’s discovery in the
ejectment action; and whether Deutsche Bank’s counsel had engaged in reckless
business practices.
8
Greenspon filed a motion for reconsideration of the dismissal of
the Motion for Sanctions, which the court denied. The ICA’s affirmance of
the Order Denying Reconsideration is not raised in Greenspon’s application
for a writ of certiorari and therefore is not further addressed.
8
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C. Greenspon’s Motion for Taxation of Costs
On September 9, 2014, Greenspon filed an ex parte
request for taxation of costs (Request for Costs) citing DCRCP
Rule 54(d) (1996)9 and HRS §§ 607-910 and 607-13 (1993).11
Greenspon also filed a proposed “Order Granting Prevailing
Defendant’s Ex Parte Request for Taxation of Costs” (Proposed
Order for Costs). In the Request for Costs, Greenspon stated
9
DCRCP Rule 54(d) provides as follows:
Costs. Except when express provision therefor is made
either in a statute or in these rules, costs shall be
allowed as of course to the prevailing party unless the
court otherwise directs; but costs against the State or a
county, or an officer or agency of the State or a county,
shall be imposed only to the extent permitted by law.
Costs may be taxed by the clerk on 48 hours’ notice. On
motion served within 5 days thereafter, the action of the
clerk may be reviewed by the court.
10
HRS § 607-9 provides as follows:
No other costs of court shall be charged in any court in
addition to those prescribed in this chapter in any suit,
action, or other proceeding, except as otherwise provided
by law.
All actual disbursements, including but not limited to,
intrastate travel expenses for witnesses and counsel,
expenses for deposition transcript originals and copies,
and other incidental expenses, including copying costs,
intrastate long distance telephone charges, and postage,
sworn to by an attorney or a party, and deemed reasonable
by the court, may be allowed in taxation of costs. In
determining whether and what costs should be taxed, the
court may consider the equities of the situation.
11
HRS § 607-13 provides as follows:
Whenever any cause or proceeding, other than criminal,
probate, or divorce, is discontinued or dismissed in any
court, the defendant therein shall be entitled to have the
defendant’s traveling expenses, to be charged at the rate
of 10 cents a mile each way in going to and returning from
the court, taxed as costs.
9
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his costs as $1,695.61 through the termination of the ejectment
action. He provided documentation supporting his request,
including, inter alia, a copy of the minutes from a hearing on
Deutsche Bank’s motion for reconsideration of the order granting
Greenspon’s Motion to Dismiss at which the court indicated that
it would consider a request for costs from Greenspon when
submitted.
Deutsche Bank opposed the Request for Costs, arguing
that imposition of costs was inequitable because the district
court had first orally granted Deutsche Bank’s Motion for
Summary Judgment and later reversed its ruling. Greenspon
thereafter submitted a proposed “Judgment and Notice of Entry of
Judgment” for an award of the requested costs (Proposed Judgment
Regarding Costs) to the court.
On September 22, 2014, the district court stamped the
Proposed Order for Costs “DENIED” and “FILED” (Order Denying
Request for Costs). The next day, the district court stamped
the Proposed Judgment Regarding Costs “DENIED” and “FILED”
(Denial of Proposed Judgment). Neither document was signed by a
clerk or judge on the signature line provided for the “judge or
clerk of the above-entitled court.”
The Denial of Proposed Judgment is accompanied in the
record on appeal by a Second Circuit preprinted “denial form”
(Denial Form). The Denial Form provides a blank line for a
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civil case number that was filled in with “10-1-2608” and bears
a typewritten notation that reads, “This document is denied for
the following reason(s).” Various reasons for which a document
may be denied are listed along with checkboxes to indicate the
applicable reason for denial. One of the checkboxes is
designated “Other” and includes lines upon which to write a
reason. The space for “Other” on the Denial Form was marked,
and next to it was handwritten: “No judgment granted on
Defendant’s Sept. 9, 2014 Request for Taxation of Costs.”
Underneath the signature line of the Denial Form is typewritten
“Judge of the above-entitled Court,” and a handwritten signature
appears on the signature line.12
Greenspon appealed, inter alia, the district court’s
Order Denying Sanctions and the Order Denying Request for Costs.
II. ICA PROCEEDINGS
Greenspon and Deutsche Bank reasserted their arguments
related to the Motion for Sanctions to the Intermediate Court of
Appeals (ICA). Regarding the denial of the Request for Costs,
Greenspon contended that there is a strong presumption that
costs will be awarded to the prevailing party and a court may
not deny costs without explanation unless it is clear from the
record that the denial of costs is justified. Here, Greenspon
12
The name reflected in the signature is unclear.
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argued, the district court failed to provide any reasoning for
denying his Request for Costs. Deutsche Bank responded that it
would be inequitable to award Greenspon any costs because
Greenspon filed the Request for Costs three years after the
Motion to Dismiss was granted and because the district court had
wrongfully vacated its ruling granting Deutsche Bank’s Motion
for Summary Judgment prior to dismissing the case.
On November 30, 2017, the ICA issued a summary
disposition order (SDO).13 As to the Order Denying Sanctions,
the ICA noted that Greenspon’s circuit court action against
Deutsche Bank asserted claims for wrongful foreclosure and quiet
title; injunctive relief; unfair and deceptive acts and
practices; and fraud. The evidence Greenspon relied on to
question Deutsche Bank’s validity of title and right to
possession in the Motion for Sanctions, the ICA stated, derived
from discovery and filings in the circuit court action. Thus,
the ICA determined that the issues raised in the Motion for
Sanctions were the subject of ongoing litigation and that the
district court did not abuse its discretion by denying the
Motion for Sanctions without prejudice.14
13
The ICA’s SDO can be found at Deutsche Bank National Trust Co. v.
Greenspon, No. 14-1137, 2017 WL 5899869 (Haw. App. Nov. 30, 2017).
14
The ICA stated in a footnote that it had resolved the appeal of
the circuit court action and issued a Memorandum Opinion on June 14, 2016.
(Citing Greenspon v. Deutsche Bank Nat’l Tr. Co., No. CAAP-13-1432, 2016 WL
(continued . . .)
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Regarding the denial of Greenspon’s Request for Costs,
the ICA found that it lacked jurisdiction to review the matter.
The ICA described the Order Denying Request for Costs from which
Greenspon sought to appeal as a “taxation of costs document”
stamped “DENIED” but without any signature by a district court
clerk or judge. Because the document lacked the district court
clerk or judge’s signature required under HRS § 604-20 (2016),15
the ICA stated it was not an order subject to appellate review
under Hawaiʻi Rules of Appellate Procedure (HRAP) Rule 4(a)
(. . . continued)
3280366 (Haw. App. Jun. 14, 2016).) There, the ICA had affirmed the circuit
court’s grant of summary judgment in favor of Deutsche Bank regarding
Greenspon’s claims for wrongful foreclosure, unfair and deceptive acts and
practices, and fraud, but it had vacated the circuit court’s rulings
regarding Greenspon’s claim for quiet title and request for injunctive relief
and remanded those claims for further proceedings.
15
HRS § 604-20, “Powers of Clerk” provides as follows:
The clerks of the district court shall have, within the
scope of the jurisdiction of the district courts, all the
powers of clerks of other courts of record, including the
power to sign and enter judgments, subject to the direction
of the court; administer oaths; sign and issue garnishee
summons, writs of attachment, execution and possession, and
other process; and take depositions.
HRS § 604-20 (2016). Although the notice of appeal in this case was filed on
September 26, 2014, the ICA cited to the 2016 publication of HRS § 604-20.
Courts of other jurisdictions have long held that a court’s legal authority
to hear a case is an ongoing inquiry that may change while the case is
pending. See, e.g., Steel Co. v. Citizens for a Better Env't, 523 U.S. 83,
94 (1998) (citing Ex parte McCardle, 7 Wall. 506, 514 (U.S. 1868)). Because
the court rules and statutes relevant to the ICA’s jurisdiction did not
change substantively in any way pertinent to this case during the pendency of
Greenspon’s appeal, we assume without deciding that the ICA correctly
concluded that the laws in effect at the time of the November 30, 2017 SDO
provide the appropriate rules of decision regarding the ICA’s jurisdiction to
hear the appeal.
13
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(2016), which requires an appeal from an “entry of judgment or
appealable order”. The ICA accordingly held that it did not
have jurisdiction to consider an appeal of the Order Denying
Request for Costs.
Greenspon filed, and this court accepted, an
application for writ of certiorari from the ICA’s decision.
III. STANDARDS OF REVIEW
DCRCP Rule 11 is substantially similar to Hawai‘i Rules
of Civil Procedure (HRCP) Rule 11 (2000), and like HRCP Rule 11,
“[a]ll aspects of a [DRCRP] Rule 11 determination should be
reviewed under the abuse of discretion standard.” Canalez v.
Bob’s Appliance Serv. Ctr., Inc., 89 Hawaiʻi 292, 300, 972 P.2d
295, 303 (1999) (quoting Lepere v. United Pub. Workers, 77
Hawaiʻi 471, 473, 887 P.2d 1029, 1031 (1995)).
A ruling on a request for taxation of costs pursuant
to HRCP Rule 54(d) is reviewed for abuse of discretion. Wong v.
Takeuchi, 88 Hawaiʻi 46, 52, 961 P.2d 611, 617 (1998).
"When interpreting rules promulgated by the court,
principles of statutory construction apply. Interpretation of a
statute is a question of law which [the appellate court reviews]
de novo." Gap v. Puna Geothermal Venture, 106 Hawaiʻi 325, 331,
104 P.3d 912, 918 (2004) (italics, internal quotation marks and
citation omitted).
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Additionally, “the existence of jurisdiction is a
question of law that [is] review[ed] de novo under the
right/wrong standard.” Captain Andy’s Sailing, Inc. v. Dep’t of
Land & Natural Res., 113 Hawaiʻi 184, 192, 150 P.3d 833, 841
(2006) (internal quotation marks and citation omitted).
IV. DISCUSSION
A. Motion for Sanctions
On certiorari, Greenspon asserts that the district
court abused its discretion by not imposing DCRCP Rule 11
sanctions on Deutsche Bank and its counsel for filing the
ejectment action.16 Sanctions were necessary under DCRCP Rule
11, Greenspon argues, based on the evidence he presented that
Deutsche Bank lacked valid title to the Property and thus had no
basis to bring the ejectment action. Deutsche Bank responds
that the district court properly denied the Motion for Sanctions
because Greenspon’s claims regarding the validity of Deutsche
Bank’s title to the Property were the subject of ongoing
litigation. Further, Deutsche Bank asserts that the ICA
appropriately found that Greenspon could continue to litigate
his claims in circuit court and that Greenspon was not
16
Greenspon also contends in his second question presented that the
ICA erred by “giving the appearance of bias” and “prejudicially implying that
[Greenspon] has no claim for wrongful foreclosure on remand.”
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prejudiced by the denial of the Motion for Sanctions without
prejudice.
As stated, HRCP Rule 1117 is substantially similar to
DCRCP Rule 11, and the body of case law interpreting HRCP Rule
11 may therefore guide our interpretation of its DCRCP
counterpart. Like HRCP Rule 11, DCRCP Rule 11 requires the
signatory to make reasonable inquiry into the facts of the case
to ensure that “the filed document [is] supported by existing or
discoverable evidence.” Fujimoto v. Au, 95 Hawai‘i 116, 151-53,
19 P.3d 699, 735-36 (2001). DCRCP Rule 11 also requires the
signatory to certify that the filing was not undertaken for an
17
HRCP Rule 11 (2000), provides in relevant part as follows:
(b) Representations to Court. By presenting to the court .
. . a pleading, written motion, or other paper, an attorney
or unrepresented party is certifying that to the best of
the person’s knowledge, information, and belief, formed
after an inquiry reasonable under the circumstances:
(1) it is not being presented for any improper
purpose, such as to harass or to cause unnecessary
delay or needless increase in the cost of litigation;
. . .
(3) the allegations and other factual contentions
have evidentiary support or, if specifically so
identified, are likely to have evidentiary support
after a reasonable opportunity for further
investigation or discovery;
. . .
(c) Sanctions. If, after notice and a reasonable
opportunity to respond, the court determines that
subdivision (b) has been violated, the court may . . .
impose an appropriate sanction upon the attorneys, law
firms, or parties that have violated subdivision (b) or are
responsible for the violation.
16
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“improper purpose”.18 The determination of whether these
requirements have been met is fact intensive, requiring specific
findings regarding the nature of the potentially sanctionable
conduct and surrounding circumstances. See In re Hawaiian Flour
Mills, Inc., 76 Hawaii 1, 15, 868 P.2d 419, 433 (1994); Enos v.
Pacific Transfer & Warehouse, Inc., 79 Hawaii 452, 459, 903 P.2d
1273, 1280 (1995). Additionally, a trial court’s position “on
the front lines of litigation” affords it insight into the
practices of the local bar and the degree to which sanctions
would promote DCRCP Rule 11’s goals of general and specific
deterrence. Hawaiian Flour Mills, Inc., 76 Hawai‘i at 15, 868
P.2d at 433 (citing Cooter & Gell v. Hartmarx Corp., 496 U.S.
384, 404 (1990)); see also Gap v. Puna Geothermal Venture, 106
Hawai‘i 325, 341, 104 P.3d 912, 928 (2004) (holding that the
primary purpose of Rule 11 sanctions is to deter misconduct, not
to shift the burden of fees). A trial court’s decision as to
18
HRCP Rule 11 contains an additional requirement that the
signatory to a filing certify that “the claims, defenses, and other legal
contentions therein are warranted by existing law or by a nonfrivolous
argument for the extension, modification, or reversal of existing law or the
establishment of new law.” A variation of this requirement was contained in
HRCP Rule 11 when DCRCP Rule 11 was adopted in 1996. See Lepere v. United
Pub. Workers, Local 646, AFL-CIO, 77 Hawai‘i 471, 473, 887 P.2d 1029, 1031
(1995). Although the commentary to DCRCP Rule 11 indicates the rule was
intended to be a “verbatim” adoption of HRCP Rule 11 (save for small changes
to make the language gender neutral) the text of DCRCP Rule 11 does not
contain a requirement that a filing be supported by existing law or a good-
faith argument for a change of law. Given this ambiguity, the District Court
Civil Rules and Forms Committee may wish to consider amending DCRCP Rule 11
or its commentary to clarify whether the omission was intentional.
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whether to impose sanctions is thus “due a substantial degree of
deference,” Hawaiian Flour Mills, Inc., 76 Hawai‘i at 15, 868
P.2d at 433, and it will generally be upheld unless it “exceeds
the bounds of reason, all of the circumstances before it being
considered.” Gap, 106 Hawai‘i at 339, 104 P.3d at 926 (quoting
Enos v. Pac. Transfer & Warehouse, Inc., 79 Hawai‘i 452, 459 n.
7, 903 P.2d 1273, 1280 n. 7 (1995)).
Here, the filed document under consideration is
Deutsche Bank’s ejectment action. A prima facie ejectment case
requires, inter alia, a showing of valid title and right of
possession to the subject property. See Kondaur Capital Corp.
v. Matsuyoshi, 136 Hawaii 227, 241, 361 P.3d 454, 468 (2015).
In considering whether the ejectment action violated DCRCP Rule
11, the district court would have been required to determine if
Deutsche Bank and its counsel made reasonable inquiries into
whether the action was “well grounded in fact.” See Canalez v.
Bob’s Appliance Serv. Ctr., Inc., 89 Hawaii 292, 302, 972 P.2d
295, 305 (1999). In evaluating the reasonableness of Deutsche
Bank’s and counsel’s inquiries, the district court would likely
need to consider many of the same factual issues surrounding
Deutsche Bank’s obtainment of the Deed that were also at play in
the pending circuit court action.
18
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Further, the district court would have needed to
consider whether the ejectment action was filed for an improper
purpose, including as part of the larger fraudulent scheme that
Greenspon alleges. See Bank of Hawaii v. Kunimoto, 91 Hawaii
372, 390, 984 P.2d 1198, 1216 (1999) (defining bad faith as
“actual or constructive fraud or a neglect or refusal to fulfill
some duty . . . not prompted by an honest mistake as to one’s
rights or duties, but by some interested or sinister motive”
(citations omitted)). This would necessitate an evaluation of
the validity of Deutsche Bank’s title to and right to possession
of the Property--the same issues to be determined in the pending
circuit court action.
Therefore, the district court did not exceed the
bounds of reason in determining that resolving the Motion for
Sanctions prior to resolution of the circuit court action would
be premature. Further, because the Motion for Sanction was
dismissed without prejudice, Greenspon was free to refile the
motion for sanctions if appropriate after termination of the
circuit court action. Therefore, the district court did not
abuse its discretion in denying the Motion for Sanctions without
prejudice.19
19
Greenspon’s second question also contends that the ICA erred
because it “neglected to analyze the basis for the Rule 11 sanctions on the
record evidence.” However, the ICA correctly determined that the district
(continued . . .)
19
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B. Greenspon’s Request for Costs
Greenspon also maintains that the ICA erred in holding
that it lacked appellate jurisdiction over the Order Denying
Request for Costs because even though it was unsigned, the ICA
should have taken notice of the Denial of Proposed Judgment with
its accompanying Denial Form, which was signed by a judge and
included in the record on appeal. Together, Greenspon contends,
these documents provided the ICA with jurisdiction over the
Order Denying Request for Costs. Finally, Greenspon asserts
that, as the prevailing party, he is entitled to an award of
costs, and the district court improperly denied his Request for
Costs without explanation.
Deutsche Bank responds that the ICA correctly found
that it lacked jurisdiction under HRS § 604-20 and HRAP Rule
4(a) to hear the appeal because the Order Denying Request for
Costs and Denial of Proposed Judgment lacked the signature of a
(. . . continued)
court exercised its informed discretion in deferring a substantive
determination as to sanctions until interrelated factual issues were fully
resolved in the circuit court action.
Additionally, Greenspon asks this court to consider whether the
ICA gave the appearance of bias and prejudicially implied that Greenspon had
no claim for wrongful foreclosure on remand, assuming that the Motion for
Sanctions is remanded for hearing. The SDO does not, however, reflect any
indication of bias or appearance of prejudice regarding Greenspon’s claim for
wrongful foreclosure. Additionally, the ICA does not provide any comment on
whether wrongful foreclosure occurred and merely notes that a portion of the
circuit court action has been remanded to the circuit court.
20
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clerk or judge. Deutsche Bank also argues that the award of
costs to a prevailing party is discretionary, and thus, the ICA
“could not err” in affirming the Order Denying Request for
Costs.
1. A District Court Clerk or Judge’s Signature is Necessary for
an Appealable Order
In determining whether the signature of a district
court clerk or judge is generally necessary for an appellate
court to have jurisdiction over an appeal of a filed district
court order,20 we consider the statutes and rules of procedure
governing appeals. HRS § 641-1(a) provides that “appeals shall
be allowed in civil matters from all final judgments, orders, or
decrees of circuit and district courts and the land court to the
intermediate appellate court, subject to chapter 602.”21 HRS §
641-1 (2016). Under HRAP Rule 4(a)(1), a notice of appeal in a
civil case must be filed “after entry of the judgment or
appealable order.” HRAP 4(a)(1). Entry of an appealable order
is defined by HRAP Rule 4(a)(5) as “when a judgment or order is
filed in the office of the clerk of the court.” HRAP Rule
4(a)(5). Thus, the statute and rule authorizing appeals to the
20
In some instances, our court rules authorize a court to issue an
oral ruling that is considered entered upon the filing of a corresponding
notice of entry. See, e.g., HRPP Rule 44A (2011). This opinion’s use of the
term “order” encompasses a written notice of entry in these circumstances.
21
HRS Chapter 602 defines the composition and jurisdiction of
Hawaii’s courts of appeals, including the ICA and the Hawai‘i Supreme Court.
21
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ICA do not expressly provide that a signature is required for
entry of an appealable order or final judgment.
Significantly, district court clerks are empowered by
statute to “sign and issue garnishee summons, writs of
attachment, execution and possession, and other process” subject
to the direction of the court. HRS § 604-20. Further, Rule 10
of the Hawaii Rules of District Court (HRDC), “Orders and
Judgments Grantable by the Clerk,” provides that “the clerk may
grant, sign, and enter the following orders without further
direction by the court. . .” HRDC Rule 10 (1996).22 The
inclusion of the word “sign” indicates that it is a distinct
action separate from “granting” and “entering.” See Franks v.
City & County of Honolulu, 74 Haw. 328, 338, 843 P.2d 668, 673
(1993) (“[N]o clause, sentence, or word shall be construed as
22
HRDC Rule 10, Orders and Judgments Grantable by the Clerk,
provides:
The clerk may grant, sign, and enter the following orders
without further direction by the court, but any orders so
entered may be set aside or modified by the court:
. . .
(d) Judgments. Default judgments as provided in Rule
55(b)(1) and judgments pursuant to Rule 68 of the District
Court Rules of Civil Procedure. Attorneys’ fees may be
awarded as provided by law.
(e) Other orders. Any other order referred to in the
District Court Rules of Civil Procedure which is grantable
of course by the clerk.
HRDC Rule 10.
22
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superfluous . . . if a construction can be legitimately found
which will give force to and preserve all words of the
statute.”). In setting forth how a clerk may grant an order or
judgment in lieu of a judge, HRDC Rule 10 indicates that a judge
would similarly follow a three-step process, including granting
an order, signing the order, and directing it to be entered.
See HRDC Rule 10. Signing the order is treated as a distinct
step, and by describing all three steps, HRDC Rule 10 implies
that each is a necessary part of the sequence that concludes
with entry of the order.
HRDC Rule 2(e)23 also indicates that the signature of a
clerk or judge is necessary for an entered order or judgment to
have effect. See HRDC Rule 2(e) (2012). HRDC Rule 2(e)
provides that a facsimile signature of the clerk or judge on an
electronically filed order or judgment “has that same force and
effect as if the judge or clerk had affixed the judge’s or
23
HRDC Rule 2, Filing Procedure, subsection(e), Signature,
provides:
Any order or judgment that is filed electronically bearing
a facsimile signature in lieu of an original signature of a
judge or clerk has the same force and effect as if the
judge or clerk had affixed the judge’s or clerk’s signature
to a paper copy of the order or judgment and it had been
entered on the docket in a conventional manner. For
purposes of this rule and any rules of court, the facsimile
signature may be either an image of a handwritten signature
or the software printed name of the judge preceded by /s/.
HRDC Rule 2(e)(2012).
23
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clerk’s signature to a paper copy of the order or judgment and
it had been entered on the docket in a conventional manner.”
HRDC Rule 2(e). The provision to ensure that a facsimile
signature “has the same force and effect” indicates that a valid
clerk or judge’s signature on an order or judgment gives an
order or judgment “force” or “effect.” HRDC Rule 2(e).
Additionally, the reference to entry of an order or judgment “in
a conventional manner” indicates that a clerk or judge’s
signature on an order or judgment is the “conventional”
procedure. See id.Additionally, we have held that a written order
becomes appealable when it is signed by a judge. See State v.
Bohannon, 102 Hawaii 228, 232 n.7, 236, 74 P.3d 980, 984 n.7,
988 (2003). In Bohannon, this court considered whether the
timeliness of a prosecutor’s appeals were based upon (1) the
dates the written orders were filed; (2) when the orders were
signed by the judge; or (3) the dates the orders were noted in
the district court calendar. Id. at 232, 234-35, 74 P.3d at
984, 986-87. In our analysis, we compared HRAP Rule 4(b)(3)
(1999)24 with Hawaii Rules of Penal Procedure (HRPP) Rule
24
HRAP Rule 4(b)(3), “Entry of Judgment or Order” under the
subsection “Appeals in Criminal Cases,” provided: “[a] judgment or order is
entered within the meaning of this subsection when it is filed with the clerk
of the court.” HRAP Rule 4(b)(3).
24
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44(b)(1) (2000),25 which also dealt with the entry of orders in
penal proceedings. Id. at 235-36, 74 P.3d at 987-88. We held
that although under HRPP Rule 44(b)(1) “the notation of the
decision or the ruling on the calendar shall constitute the
order and entry thereof” and thus creates a “final” order, that
order would not become “appealable” until it satisfied HRAP Rule
4(b)(3)’s requirement that an entry of judgment or order be
filed with the clerk of the court. Id. at 236, 74 P.3d at 988.
This court further stated in a footnote that “[i]t is
common-sensical that an unsigned order is ineffective. That
being the case, the written order . . . did not become effective
until . . . Judge Devens signed it.” Id. at 232 n.7, 74 P.3d at984 n.7. Therefore, pursuant to HRAP 4(b)(3), this court held
that the orders in Bohannon became appealable on the date that
the written orders were signed by the judge, and thus the appeal
in that case was timely filed.26 See id. at 232, 232 n.7, 74
25
HRPP Rule 44, Settlement of findings of fact, conclusions of law,
and order; entry of order, subsection (b)(1) provided:
(b) In the district court.
(1) After the decision or ruling of the court
following a hearing on a motion, the clerk shall note
the decision or ruling on the calendar. The notation
of the decision or ruling on the calendar shall
constitute the order and the entry thereof . . . .
HRPP Rule 44(b)(1).
26
We note that our holding in Bohannon addressed only the
circumstances of that case and should not be read to approve modifying a
filed order by the subsequent addition of a judge or clerk’s signature. As
(continued . . .)
25
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P.3d at 984, 984 n.7. Taken together, HRS §§ 641-1(a) and 604-
20, the aforementioned court rules, and our holding in Bohannon
provide that a signature of a clerk or judge as to the text of
an order is necessary to fulfill the requirements of an “entry
of judgment or appealable order” under HRAP Rule 4(a).27
2. The ICA Had Jurisdiction of the Appeal Under the Circumstances
of This Case
“The policy of this court has always been to permit
litigants, where possible, to appeal and hear the case on its
merits.” State by Office of Consumer Prot. v. Joshua, 141
Hawaii 91, 99, 405 P.3d 527, 535 (2017) (quoting Jones v.
Dieker, 39 Haw. 208, 209 (Haw. Terr. 1952)). Dismissals due to
defects caused by the practices or procedure of trial courts
require “litigants to bear unnecessary expense and delay in
having their appeals addressed on the merits.” Id.In this case, the ICA held that it lacked jurisdiction
to review the Order Denying Request for Costs because the order
lacked a district court clerk or judge’s signature. It appears,
however, that the ICA did not consider other documents in the
(. . . continued)
discussed supra, adding a qualifying signature is a necessary step that is to
be completed prior to the entry of an order or judgment.
27
The signature of the clerk or judge must pertain to the text of
the order; the requirement is distinct from our court rules requiring a date
and time stamp by a clerk at filing, which may also include a signature by
the clerk responsible for filing the subject document. See HRDC Rule 2(b)
(2012).
26
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record that support a finding that the district court
effectively denied the Request for Costs. The Denial of
Proposed Judgment, similar to the Order Denying Request for
Costs, was stamped “DENIED” and “FILED.” Although the Denial of
Proposed Judgment did not include a signature on the signature
line of the judgment, it was accompanied in the record by a
signed Denial Form. The Denial Form specifically stated: “No
judgment granted on Defendant’s Sept. 9, 2014 Request for
Taxation of Costs” and was signed by a judge. Black’s Law
Dictionary defines “to grant” as “to approve, warrant, or
order.” Black’s Law Dictionary (10th ed. 2014). Thus, “no
judgment granted” may be read as “no judgment approved,” meaning
the district court did not approve--and therefore denied--the
Request for Costs. As such, the signed Denial Form indicates
that the judge denied the Request for Costs.
As discussed above, HRS § 641-1(a) permits appeals to
be heard from final orders. A final order is an order that
“ends litigation by fully deciding the rights and liability of
all parties and leaves nothing further to be adjudicated.”
Casumpang v. ILWU, Local 142, 91 Hawaii 425, 427, 984 P.2d 1251,
1253 (1999). Greenspon’s Request for Costs was a separate
matter from the ejectment action, which had already been
dismissed. See CRSC, Inc. v. Sage Diamond Co., 95 Hawaii 301,
307, 22 P.3d 97, 103 (App. 2001) (holding that entry of judgment
27
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on merits of case and taxation of costs are separate legal
acts). The denial of the Request for Costs left nothing to be
decided regarding the taxation of costs. Accordingly,
construing the Order Denying Request for Costs with the Denial
of Proposed Judgment and its accompanying Denial Form, we find
that there is appellate jurisdiction over the appeal from the
Order Denying Request for Costs.
3. The District Court Abused its Discretion in Denying the
Request for Costs Without Explanation
Because we find appellate jurisdiction to review the
Order Denying Request for Costs, we turn to the merits of
Greenspon’s argument that the district court abused its
discretion by denying the Request for Costs. “A court abuses
its discretion whenever it exceeds the bounds of reason or
disregards rules or principles of law or practice to the
substantial detriment of a party.” Kawamata Farms, Inc. v.
United Agri Prods., 86 Hawai‘i 214, 241, 948 P.2d 1055, 1082
(1997) (alteration omitted) (quoting Aloha Unlimited, Inc. v.
Coughlin, 79 Hawai‘i 527, 532–33, 904 P.2d 541, 546–47
(App.1995)).
DCRCP Rule 54(d) provides that “costs shall be allowed
as course to the prevailing party unless the court otherwise
directs.” DCRCP Rule 54(d) (1996). Although the award of costs
is discretionary, the parallel provision in the HRCP has been
28
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interpreted to create a strong presumption that costs will be
awarded and to also require a court denying costs to explain why
an award of costs would be inequitable “unless the circumstances
justifying the denial of costs are plain from the record.” Wong
v. Takeuchi, 88 Hawaii 46, 52, 961 P.2d 611, 617 (1998)
(brackets omitted) (discussing HRCP Rule 54(d)).
On the Denial Form accompanying the Denial of Proposed
Judgment, the district court’s explanation stated, “This
document is denied for the following reasons . . . No judgment
granted on Defendant’s Sept. 9, 2014 Request for Taxation of
Costs.” This statement does not provide an explanation of why
it would be inequitable to grant the taxation of costs as would
generally be required to justify the denial of Greenspon’s
request. See Wong, 88 Hawaii at 52, 961 P.2d at 617.
Further, “the circumstances justifying the denial of
costs are” not “plain from the record.” Id. To the contrary,
the evidence in the record appears to support a finding that
Greenspon was entitled to costs: Greenspon was the prevailing
party on the Motion to Dismiss; the district court stated that
it would consider Greenspon’s motion for taxation of costs in
2011 at a hearing on Greenspon’s Motion to Dismiss; and
Greenspon filed his Request for of Costs as the prevailing party
29
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in September 2014.28 By not setting forth reasons for its
denial, the district court disregarded principles of law
requiring a reasoned explanation for a denial of costs when
justifying circumstances are not clear from the record. See
Wong, 88 Hawai‘i 46, 52, 961 P.2d 611, 617 (1998). The denial of
the taxation of costs caused a substantial detriment to
Greenspon, requiring him to bear his full costs of litigation in
the district court. Therefore, the district court abused its
discretion by denying Greenspon’s Request for Costs without
stating any reasons why it would be inequitable to grant the
request. See State v. Davia, 87 Hawaiʻi 249, 253, 953 P.2d 1347,
1351 (1998).
V. CONCLUSION
Based on the foregoing, this court affirms the ICA’s
judgment on appeal except to the extent that the ICA concluded
that it lacked appellate jurisdiction to review the Order
Denying Request for Costs filed on September 22, 2014.
Accordingly, we vacate the portion of the ICA judgment on appeal
holding that it lacked appellate jurisdiction to review the
Order Denying Request for Costs, vacate the district court’s
Order Denying Request for Costs, and remand the case to the
28
Greenspon provided detailed invoices from his former counsel and
copies of the checks to his former counsel with his reply to Deutsche Bank’s
opposition to his request.
30
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district court for further proceedings consistent with this
opinion.
Michael C. Greenspon /s/ Mark E. Recktenwald
pro se
/s/ Paula A. Nakayama
J. Blaine Rogers
Jenny J.N.A. Nakamoto /s/ Sabrina S. McKenna
for respondent/plaintiff-
appellee /s/ Richard W. Pollack
/s/ Michael D. Wilson
31