Deutsche Bank National Trust Company v. Kozma.
140 Haw. 494
| Haw. | 2017Background
- Deutsche Bank sued Kozma in 2010 to foreclose a 2005 mortgage, attaching the note, mortgage, and recorded assignments. Kozma admitted default but disputed Deutsche Bank’s status as real party in interest, alleging invalid assignments.
- Deutsche Bank moved for summary judgment twice; the trial court ultimately granted summary judgment and a decree of foreclosure on December 22, 2015, finding Deutsche Bank was the holder of an indorsed-in-blank note.
- Kozma appealed to the Intermediate Court of Appeals (ICA), which, applying this court’s decision in Bank of America v. Reyes-Toledo, concluded Deutsche Bank had not shown it possessed the note at the time it filed the complaint, vacated the judgment, and remanded for further proceedings.
- Kozma then requested appellate attorney’s fees under HRS § 607-14 and costs under HRAP Rule 39 (seeking $16,625 in fees and $440.52 in costs); the ICA denied the request, finding no prevailing party for fees or costs.
- The Hawai‘i Supreme Court granted certiorari to resolve whether vacatur-and-remand after a foreclosure summary-judgment ruling makes the mortgagor a prevailing party for (1) attorney’s fees under HRS § 607-14 and (2) appellate costs under HRAP Rule 39.
Issues
| Issue | Plaintiff's Argument (Deutsche Bank) | Defendant's Argument (Kozma) | Held |
|---|---|---|---|
| Whether Kozma is a prevailing party on appeal for entitlement to attorney’s fees under HRS § 607-14 | Vacatur doesn’t necessarily make Kozma prevailing; fees require a prevailing party determination | Vacatur and remand achieved Kozma’s requested remedy (vacatur), so he prevailed and should receive fees | Kozma is not a prevailing party for HRS § 607-14 when appeal only vacates and remands a foreclosure summary judgment; fees denied |
| Whether Kozma is entitled to appellate costs under HRAP Rule 39 after vacatur/remand | Costs should not be awarded absent a clear prevailing party overall | Kozma prevailed on the relief sought on appeal (vacatur), so he should recover costs | ICA applied wrong standard; appellate court must exercise discretion and determine which party prevailed on the appeal; here Kozma prevailed for HRAP Rule 39 costs |
| Proper standard for determining prevailing party on appeal for costs | Look to entire proceeding to decide prevailing party | Prevailing party should be determined by which party prevailed on the appeal itself and requested appellate remedy | Court reiterates that HRAP Rule 39 requires the appellate court to determine, on balance, who prevailed on the appeal (not the entire case) |
| Effect of Reyes-Toledo on foreclosure summary-judgment appeals | Reyes-Toledo requires plaintiff to show possession of the note at filing; failure creates genuine issue precluding summary judgment | Kozma argued Reyes-Toledo supports vacatur; relief sought was remand for plaintiff to supplement proof | Court applies Reyes-Toledo: vacatur appropriate where plaintiff failed to show possession at filing; this outcome does not automatically create prevailing party for fee statutes |
Key Cases Cited
- Bank of Am., N.A. v. Reyes-Toledo, 139 Hawai‘i 361, 390 P.3d 1248 (Haw. 2017) (holding foreclosing plaintiff must demonstrate possession of the note at the time the foreclosure complaint was filed to prevail on summary judgment)
- Kaleikini v. Yoshioka, 129 Hawai‘i 454, 304 P.3d 252 (Haw. 2013) (explaining how to identify which party prevailed for awarding fees and costs)
- Sierra Club v. Dep’t of Transp., 120 Hawai‘i 181, 202 P.3d 1226 (Haw. 2009) (discussing prevailing-party analysis for fee awards)
- Sapp v. Wong, 62 Haw. 34, 609 P.2d 137 (Haw. 1980) (vacatur and remand can leave no party deemed losing party for fee awards)
- Nelson v. Univ. of Hawai‘i, 99 Hawai‘i 262, 54 P.3d 433 (Haw. 2002) (vacatur placing party back where it started does not in itself support attorney-fee award)
- Jou v. Argonaut Ins. Co., 133 Hawai‘i 471, 331 P.3d 449 (Haw. 2014) (HRAP Rule 39 requires appellate courts to determine which party prevailed on the appeal itself when awarding appellate costs)
- Hawaiian Ass’n of Seventh-Day Adventists v. Wong, 130 Hawai‘i 36, 305 P.3d 452 (Haw. 2013) (illustrates that when appellate disposition leaves no party prevailing on appeal, costs should not be awarded)