Deutsche Bank National Trust Company v. Yata ( 2022 )

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
09-JUN-2022
07:53 AM
Dkt. 62 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
DEUTSCHE BANK NATIONAL TRUST COMPANY AS
TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC.
TRUST 2006-NC4, Plaintiff-Appellee,
v.
BLAINE T. YATA, Defendant-Appellant,
and
BROOKE J.C. RIOPTA; AMBER M. RIOPTA; CASIE A. RIOPTA,
COUNTY OF KAUAI WASTEWATER MANAGEMENT; AND
DOES 1-20, inclusive, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT
(CASE NO. 14-1-0185)
SUMMARY DISPOSITION ORDER
(By: Ginoza, Chief Judge, Leonard and Wadsworth, JJ.)
Defendant-Appellant Blaine T. Yata (Yata) appeals from
the November 1, 2018 Order Denying [Yata's] Motion for Rehearing
and/or Reconsideration of this Court's Decision Granting
Plaintiff's Motion for Summary Judgment as Against
all Defendants and for Interlocutory Decree of Foreclosure (Order
Denying Reconsideration) (quotation marks deleted) entered by the
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Circuit Court of the Fifth Circuit (Circuit Court).1 Yata also
challenges the Circuit Court's Findings of Fact; Conclusions of
Law; Order Granting Plaintiff's Motion for Summary Judgment as
Against All Defendants and for Interlocutory Decree of
Foreclosure (Foreclosure Decree), and Judgment, both entered on
July 19, 2018.
Yata raises a single point of error on appeal,
contending that Plaintiff-Appellee Deutsche Bank National Trust
Company, as Trustee for Morgan Stanley ABS Capital I Inc. Trust
2006-NC4 (Deutsche Bank) failed to establish its standing to
foreclose against Yata, and therefore, the Circuit Court erred in
entering the Order Denying Reconsideration, as well as the
Foreclosure Decree and Judgment.
Upon careful review of the record and the briefs
submitted by the parties, and having given due consideration to
the arguments advanced and the issues raised by the parties, we
resolve Yata's point of error as follows:
On April 17, 2018, Deutsche Bank filed Plaintiff's
Motion for Summary Judgment as Against All Defendants and for
Interlocutory Decree of Foreclosure, along with a supporting
memorandum, declaration and exhibits (Motion for Summary
Judgment); a hearing was set for May 24, 2018. At the May 24,
2018 hearing, counsel for Yata appeared and requested a
1
The Honorable Randal G.B. Valenciano presided.
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continuance to file an opposition, which was granted. Despite
the continuance, no opposition (or any form of objection) in
response to the Motion for Summary Judgment was filed. Neither
Yata nor his counsel appeared at the continued hearing on the
Motion for Summary Judgment, which was held on June 26, 2018.
Accordingly, to the extent that Yata contends – based on hearsay
objections that were not raised in response to the Motion for
Summary Judgment – that the Circuit Court erred in entering the
Foreclosure Decree and Judgment, Yata's arguments are without
merit. See generally Price v. AIG Haw. Ins. Co., Inc., 107
Hawai#i 106, 111, 111 P.3d 1, 6 (2005) (failure to raise
evidentiary objections to affidavits and exhibits in support of
summary judgment can result in waiver of such objections).
The Circuit Court considered the issue of standing –
i.e., whether Deutsche Bank established that it had possession of
the subject note (Note) at the time of the filing of the
complaint – in conjunction with [Yata's] Motion for Rehearing
and/or Reconsideration of this Court's Decision Granting
[Deutsche Bank's] Motion for Summary Judgment as Against All
Defendants and for Interlocutory Decree of Foreclosure (Motion
for Reconsideration) (quotation marks omitted) filed on July 3,
2018.
Yata challenges the Circuit Court's Order Denying
Reconsideration, arguing that Deutsche Bank offered no admissible
evidence that it possessed the Note at the time it filed the
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complaint herein, as required under Bank of Am. v. Reyes-Toledo,
139 Hawai#i 361, 390 P.3d 1248 (2017), and the Hawai#i Supreme
Court cases that followed Reyes-Toledo.
As discussed in U.S. Bank Tr., N.A. v. Verhagen, 149
Hawai#i 315, 325, 489 P.3d 419, 429 (2021), the "[t]estimony of a
witness with personal knowledge of a document may establish the
foundation necessary" to satisfy the authentication requirements
of Hawaii Rules of Evidence (HRE) Rule 901. In Verhagen, the
supreme court further explained:
[R]ecords received from another business and incorporated
into the receiving business' records may in some
circumstances be regarded as created by the receiving
business. [Thus,] when a record is treated as created by
the receiving business, a person is qualified to
authenticate it if the person has enough familiarity with
the record-keeping system of the business that created the
record, i.e., the receiving or incorporating business.
Accordingly, a person may be qualified to authenticate an
incorporated record even if the person lacks familiarity
with the records or record-keeping practices of the entity
that actually created the record.
Id. at 325, 489 P.3d at 429 (cleaned up).
The supreme court pointed to the importance of
considering whether records created by the other business were
incorporated into the loan servicer's own records and were not
merely in the servicer's custody, in particular where there is
testimony from the servicer's custodian or witness qualified to
testify about its records that: the servicer incorporated and
kept the documents in the normal course of business; the servicer
typically relies upon the accuracy of the contents of the
documents; and the circumstances otherwise indicate the
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trustworthiness of the documents. Id. at 326, 489 P.3d at 430
(citation omitted).
Here, with the Motion for Summary Judgment, Deutsche
Bank submitted, inter alia, a declaration of Matthew Mountes
(Mountes), Second Assistant Vice President of Specialized Loan
Servicing LLC (SLS), loan servicer for Deutsche Bank; and in
conjunction with its response to the Motion for Reconsideration,
Deutsche Bank submitted, inter alia, a declaration of Mark
McCloskey (McCloskey), Assistant Vice President of SLS, both
attesting to their personal review and knowledge of SLS's
records, including incorporated records. With careful
consideration of the supreme court's directives in Verhagen, and
upon review of the evidence presented by Deutsche Bank, we
conclude that Mountes and McCloskey were qualified witnesses with
personal knowledge of SLS's procedures for creating its records,
including its procedures for incorporation of records of other
businesses into SLS's records, and SLS's reliance on those
records and maintenance of those records in the course of its
regularly-conducted business activities, after a pre-
incorporation process of quality control and verification
procedures. Although indicia of trustworthiness are not profuse,
we conclude that the record provides sufficient indicia of
trustworthiness, including with respect to the evidence that the
Note was in the possession of Deutsche Bank, through its
custodian Deutsche Bank National Trust Company, at the time the
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foreclosure complaint was filed. Thus, we conclude that the
Circuit Court did not err or abuse its discretion in denying the
Motion for Reconsideration and rejecting Yata's argument that
Deutsche Bank did not have standing to foreclose on the subject
property.
For these reasons, the Circuit Court's November 1, 2018
Order Denying Reconsideration and its July 19, 2018 Foreclosure
Decree and Judgment are affirmed.
DATED: Honolulu, Hawai#i, June 9, 2022.
On the briefs:
/s/ Lisa M. Ginoza
Gary Victor Dubin, Chief Judge
Frederick J. Arensmeyer,
for Defendant-Appellant. /s/ Katherine G. Leonard
Associate Judge
Marvin S.C. Dang,
Amy Jackson, /s/ Clyde J. Wadsworth
for Plaintiff-Appellee. Associate Judge
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