custodian of records

September 2020 - Notes of Decision - Foreclosure & Property

*Disclaimer* - the below case summaries are not to be construed as legal advice, they are nonexhaustive, and they contain only my own summary/interpretation of the cases so noted. 

 NO. CAAP-18-0000699

U.S. BANK NA v. COMPTON, et al

Background: Appeal from the Court's grant of Appellee's (Bank's) motion for summary judgment on foreclosure.

 Errors Alleged:

  • Did U.S. Bank fail to meet its burden of establishing it was the holder of the subject promissory note (Note) at the time it filed the complaint and thus the bank lacked standing?

  • Did U.S. Bank fail to establish that Appellant had been provided adequate notice of the alleged default.

Standing:

Rules:

  • Holder of the Note: "In Bank of Am., N.A. v. Reyes-Toledo, 139 Hawaii 361, 390 P.3d 1248 (2017), the Hawaii Supreme Court held that in order for a foreclosing plaintiff to establish standing to foreclose, the plaintiff must show entitlement to enforce the promissory note at the time the foreclosure action was commenced. Id. at 368, 390 P.3d at 1255."

  • Custodian of Records Required: "even a custodian of records must lay a proper foundation for the admission of records of regularly conducted activity pursuant to HRE Rule 803(b)(6)."

Holding:

  • The testimony/declarations of the alleged custodians were insufficient:

    • The declarations "failed to establish the foundation for the Note to be admitted into evidence. Behrendt, 142 Hawaii at 45, 414 P.3d at 97; U.S. Bank N.A. v. Mattos, 140 Hawaii 26, 32-33, 398 P.3d 615, 621-22 (2017)", and the "declarations [did] not lay adequate foundation to establish that U.S. Bank had possession of the Note when the Complaint was filed. Behrendt, 142 Hawaii at 45-46, 414, P.3d at 97-98; Mattos, 140 Hawaii at 33, 398 P.3d at 622; Reyes-Toledo, 139 Hawaii at 370-71, 390 P.3d at 1257-58."

    • The Declarations did not attest that the "custodian" had "familiarity with the record-keeping system of the business that created the record to explain how the record was generated in the ordinary course of business." Behrendt, 142 Hawaii at 45, 414 P.3d at 97".

 

NO. CAAP-15-0000478

PROTECT AND PRESERVE KAHOMA AHUPUA#A ASSOCIATION v. MAUI PLANNING COMMISSION

 (MEMORANDUM OPINION)

 Background: Developer wanted a Special Management Area Permit.  Appellants (neighbors) moved to intervene citing environmental and aesthetic implications.  The Maui Planning Commission denied the intervention.

 Circuit Court Affirms: the circuit court affirmed the commission decision.

Appellants Argue:

  • They had injury-in-fact standing to intervene;

  • They had standing to intervene as a matter of right;

  • Denying permissive intervention constituted an abuse of discretion;

  • The commission engaged in unlawful de facto rule making on intervention and its intervention rules were invalid as written and applied;

  • The commission violated Appellants' due process rights, and;

  • The commission failed to find the project would be consistent with the General Plan and Community Plan before approving the permit.

 Holding re Intervention: Appellants argued that "the proposed Project would adversely affect their group as adjacent landowners because it would diminish their use and enjoyment of their properties, decrease their properties' sale and rental value, and would have adverse impacts on the protected resources within the Coastal Zone Management Area [and that] the proposed Project would threaten a variety of environmental and aesthetic interests protected under the Coastal Zone Management Act (CZMA)."

Rules:

  • Consistent Denials of Intervention = Administrative Rule Making: Appellants argued that the commission "has adopted a practice of always denying complete Petitions to Intervene claiming that all petitioners' interests are not distinguishable from the general public." and that this "amounted to the enforcement of "a new rule regarding those who have standing to intervene in SMA permit application proceedings" that was promulgated without following the rule making procedures under HRS chapter 91."

  • Rule - Need to be Affected Differently than General Public at Large: Because Appellants do "not have a property interest in the land that is subject to the Commission's action and did not lawfully reside on said land [then] under MPC Rule 12-201-41(b), [Appellants] would qualify to have standing to intervene as a matter of right only if they could demonstrate that they would "be so directly and immediately affected by the matter before the commission that their interest in the proceeding is clearly distinguishable from that of the general public."

  • Rules re Standing:

    • Injury in fact: "In order to establish standing to intervene in an administrative proceeding, plaintiffs must demonstrate an "injury-in-fact," which requires them to "have suffered an actual or threatened injury; the injury must be fairly traceable to the defendant's actions; and a favorable decision would likely provide relief for the plaintiff's injury." In re Application of Maui Elec. Co., 141 Hawaii 249, 270, 408 P.3d 1, 22 (2017) (MECO) (citation omitted).

    • Environmental Cases: "Environmental plaintiffs must meet this three-part standing test but need not assert an injury that is different in kind from an injury to the public generally." Id. (citation omitted). This less rigorous standing requirement that applies in environmental cases draws support from the Hawaii Constitution, article XI, section 9. Dep't of Transp., 115 Hawaii at 320, 167 P.3d at 313.

Holding re Standing to Intervene - Appellant's Had Standing via Threatened Injuries-in-Fact: Appellants' "direct personal environmental and aesthetic interests, including those of adjacent landowners, coupled with their articulated concerns of potential actual injury from the Project, sufficiently established a threatened injury that is fairly traceable to [the Project].

 Denial of Due Process:

  • Rules Re Asserting the Right:

    • Hearing Req'd: "'constitutional due process protections mandate a hearing whenever the claimant seeks to protect a "property interest." MECO, 141 Hawaii at 260, 408 P.3d at 12 (brackets omitted) (quoting Pele Def. Fund, 77 Hawaii at 68, 881 P.2d at 1214).

    • Two-Step Process: In determining claims of a due process right to a hearing, we apply a two step analysis: "(1) is the particular interest which claimant seeks to protect by a hearing 'property' within the meaning of the due process clauses of the federal and state constitutions, and (2) if the interest is 'property,' what specific procedures are required to protect it." Id. (citation omitted).

  • Rules re Whether Hearing is Required: When determining the procedures required to comply with constitutional due process, we consider the following three factors: "(1) the private interest which will be affected; (2) the risk of an erroneous deprivation of such interest through the procedures actually used, and the probable value, if any, of additional or alternative procedural safeguards; and (3) the governmental interest, including the burden that additional procedural safeguards would entail." HELCO, 145 Hawaii at 17, 445 P.3d at 689 (quoting Sandy Beach Def. Fund v. City Council Cty. of Honolulu, 70 Haw. 361, 378, 773 P.2d 250, 261 (1989).

  • Holding - Court Erred Because Appellants Properly Asserted a Property Interest:

    • Appellants "asserted a right to a clean and healthful environment in this case as defined by the CZMA, HRS Chapter 205A, which includes the duties and operation of the Commission in regulating the SMA use permit procedure and requirements."

    • Appellants "were entitled to a contested case hearing by the Commission to comply with procedural due process, which includes the right to submit evidence and argument."

 Commission's Duty to Make Findings:

  • Appellant's Contend: that "the Commission was required to find the Project consistent with the Maui County General and Community Plans prior to orally approving Carr Development's SMA permit application despite the County's designation of the Project as an HRS § 201H-38 housing development."

  • Holding: "we conclude that on remand, the Commission is required under the CZMA to make specific findings on the Project's consistency with the Maui County General and Community Plans prior to approval of Carr Development's SMA permit application.