Bank of America, N.A. v. Reyes-Toledo.
139 Haw. 361
| Haw. | 2017Background
- In 2007 Reyes-Toledo executed a note (payable to Countrywide Bank, FSB) secured by a mortgage recorded in Land Court.
- A 2011 assignment of the mortgage to Bank of America was recorded; a 2011 notice of intent to accelerate named BAC Home Loans Servicing, LP as servicer.
- Bank of America filed to foreclose in March 2012, alleging possession of the note and mortgage; Reyes-Toledo answered, denying Bank of America’s status and asserting counterclaims (wrongful foreclosure, declaratory relief, quiet title, UDAP).
- Bank of America moved for summary judgment attaching the note (showing a special endorsement and a later blank endorsement) and an officer’s declaration stating the bank had possession of the note; the declaration post‑dated the complaint and did not state when the blank endorsement occurred.
- The circuit court granted summary judgment and entered a foreclosure decree and a Rule 54(b) final judgment; the ICA affirmed. The Hawaiʻi Supreme Court granted certiorari.
Issues
| Issue | Plaintiff's Argument (Bank of America) | Defendant's Argument (Reyes-Toledo) | Held |
|---|---|---|---|
| Whether foreclosing plaintiff must prove standing/entitlement to enforce the note at commencement of suit | Bank said it was the holder entitled to enforce the note (possession shown at summary judgment) | Homeowner argued Bank had burden to prove it owned/held the note when suit began; evidence did not show date of transfer | Court held plaintiff must show entitlement to enforce the note at commencement; genuine issue of material fact existed as to whether Bank held the note when suit was filed, so summary judgment was erroneous |
| Adequacy of evidence of holder status (blank endorsement + declaration) | Bank argued blank endorsement and Egan declaration established holder status | Homeowner argued lack of evidence on timing of indorsement and that declaration post‑dated filing | Court held possession at time of summary judgment is insufficient; absence of evidence of timing creates material factual dispute |
| Whether appellate court had jurisdiction to review pre‑judgment orders dismissing counterclaims | Bank/ICA treated foreclosure judgment as appealable and limited review to foreclosure decree only | Homeowner argued ICA should review dismissal of counterclaims on appeal from final judgment | Court held foreclosure judgment was final and appealable under HRS §667‑51; appeal from final judgment brought up interlocutory orders, so ICA erred in declining jurisdiction over counterclaims and remanded for merits review |
| Whether characterization as "interlocutory" or Rule 54(b) language affected finality | Bank/circuit court labeled decree interlocutory and used Rule 54(b) language | Homeowner argued finality permitted review of prior interlocutory orders | Court held the label/Rule 54(b) language did not alter finality; decree was final and appealable, bringing up prior interlocutory orders |
Key Cases Cited
- Querubin v. Thronas, 107 Hawaiʻi 48, 109 P.3d 689 (Haw. 2005) (standard of review for summary judgment)
- Mottl v. Miyahira, 95 Hawaiʻi 381, 23 P.3d 716 (Haw. 2001) (standing requires injury in fact at commencement)
- Hanalei, BRC, Inc. v. Porter, 7 Haw. App. 304, 760 P.2d 676 (Haw. Ct. App. 1988) (premature foreclosure suit and possession requirement)
- Mortg. Elec. Registration Sys., Inc. v. Wise, 130 Hawaiʻi 11, 304 P.3d 1192 (Haw. 2013) (decree of foreclosure finally determines merits; bifurcated appeals)
- Deutsche Bank Nat. Trust Co. v. Johnston, 369 P.3d 1046 (N.M. 2016) (standing to foreclose must be established at filing; evidentiary problems from securitization)
- Sec. Pac. Mortg. Corp. v. Miller, 71 Haw. 65, 783 P.2d 855 (Haw. 1989) (appealability of orders confirming sale and Rule 54(b) context)