474 P.3d 264
Haw.2020Background
- In 2007 Godinez executed a mortgage; she defaulted in 2010 and the mortgage was assigned to J.P. Morgan Chase, which later assigned to PennyMac in 2014.
- Chase (later PennyMac) filed foreclosure in 2013; PennyMac moved for summary judgment in 2016 and the court orally granted it at hearing.
- After this court decided Reyes-Toledo (requiring possession of the note at filing), Godinez moved to dismiss for lack of standing; the trial court applied law of the case, allowed PennyMac to supplement, and entered written summary judgment, a foreclosure decree, and final judgment in 2017.
- Godinez did not appeal the foreclosure judgment; instead she filed a pro se HRCP Rule 60(b) motion in January 2018 alleging newly discovered evidence and lack of PennyMac standing; the circuit court summarily denied the motion.
- The Intermediate Court of Appeals affirmed, holding res judicata barred the standing challenge; Godinez sought certiorari to the Hawai`i Supreme Court.
- The Hawai`i Supreme Court held res judicata does not bar a Rule 60(b) motion (because such motions are a continuation of the original action), but nonetheless affirmed denial of relief on the merits for abuse-of-discretion and Rule 60(b)(6) reasons.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars a post-judgment HRCP Rule 60(b) challenge to plaintiff's standing | Res judicata prevents relitigation of standing after final judgment; Wise supports preclusion in foreclosure contexts | Rule 60(b) is a direct attack on the judgment and is a continuation of the original action, so res judicata (which applies to separate actions) does not bar it | Res judicata does not apply to Rule 60(b) motions here; Rule 60(b) is a continuation of the original action |
| Whether an HRCP Rule 60(b) motion is a new action or continuation of the original proceeding | PennyMac implied the Rule 60(b) motion improperly reopens final issues and should be treated as a separate attack | Rule 60(b) is ancillary/continuation of original suit (consistent with federal authority and Restatement) | The Court held Rule 60(b) motions are a continuation of the original action, not a new action |
| Whether Mortgage Elec. Registration Sys. v. Wise controls to bar the Rule 60(b) motion | Wise supports applying res judicata to standing challenges in foreclosure litigation | Wise involved separate proceedings (confirmation of sale) and does not address Rule 60(b) motions brought before any separate sale/confirmation action | Wise is inapplicable here because Godinez filed Rule 60(b) before any separate confirmation proceeding; ICA erred to rely on Wise |
| Whether the circuit court abused its discretion in denying Rule 60(b) relief (including under Rule 60(b)(6)) | Denial was appropriate; PennyMac had opportunity to supplement and trial court found standing; no extraordinary circumstances | Godinez argued lack of standing and invoked Rule 60(b)(6) "extraordinary circumstances" due to standing issues and newly discovered evidence | No abuse of discretion: court reasonably applied law of the case, Godinez had full opportunity to litigate, and she failed to show extraordinary circumstances or reliable evidence that PennyMac lacked standing |
Key Cases Cited
- Mortgage Electronic Registration Systems, Inc. v. Wise, [citation="130 Hawai'i 11, 304 P.3d 1192"] (Haw. 2013) (treated foreclosure as bifurcated for res judicata when separate confirmation action follows)
- Bank of America, N.A. v. Reyes-Toledo, [citation="139 Hawai'i 361, 390 P.3d 1248"] (Haw. 2017) (foreclosing plaintiff must show physical possession of the note at the time the action was commenced)
- Tax Foundation of Hawai'i v. State, [citation="144 Hawai'i 175, 439 P.3d 127"] (Haw. 2019) (standing in Hawai'i state courts is a prudential, not jurisdictional, matter)
- Beneficial Hawai'i, Inc. v. Casey, [citation="98 Hawai'i 159, 45 P.3d 359"] (Haw. 2002) (Rule 60(b) may be filed after a foreclosure decree and courts may consider its merits)
- Hawai'i Hous. Auth. v. Uyehara, [citation="77 Hawai'i 144, 883 P.2d 65"] (Haw. 1994) (trial court has broad discretion in ruling on Rule 60(b) motions)
- Arizona v. California, 460 U.S. 605 (U.S. 1983) (res judicata and collateral estoppel do not apply when a party moves the rendering court in the same proceeding to modify its judgment)