Wilmington Savings Fund Society, FSB v. Domingo
151 Haw. 356
| Haw. App. | 2022Background
- Wilmington Savings Fund Society (Wilmington) substituted as plaintiff in a 2013 foreclosure action against Isabelo and Michele Domingo (the Domingos). The original promissory note was lost while in Bank of America's possession; Wilmington never possessed the original note but presented a Bank of America "Affidavit of Lost Note."
- The Circuit Court granted Wilmington summary judgment and entered a foreclosure decree and later confirmed the foreclosure sale; Wilmington bought the property at the commissioner’s sale.
- The Domingos appealed but failed to post a supersedeas bond or otherwise obtain a stay pending appeal.
- Wilmington subsequently conveyed the Land Court property to third‑party purchaser BBNY REO LLC (BBNY); Special Warranty Deed and Corrective Special Warranty Deed were recorded and title appears in Land Court Certificate of Title 1229619.
- Wilmington moved to dismiss the appeal as moot; the ICA held the appeal moot because (1) the Domingos did not obtain a stay and (2) BBNY is a good‑faith purchaser whose Land Court certificate conclusively establishes title, so no effective relief is possible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wilmington could enforce the lost original note | Wilmington: lost‑note affidavit, assignment, and equitable protections (including indemnity) permit enforcement under HRS §490:3‑309 | Domingos: Wilmington never possessed original note; HRS §490:3‑309 precludes enforcement without possession | Court did not reach merits — appeal dismissed as moot because no effective relief is possible after sale to third‑party purchaser |
| Whether the appeal is moot because appellants failed to obtain a stay and the property was sold | Wilmington: City Bank/Onaga rule requires appellant to post supersedeas bond; sale to bona‑fide purchaser BBNY renders appeal moot | Domingos: Onaga inapplicable because mortgagee (Wilmington) initially acquired the property and later sold it; thus exception should apply | Onaga and City Bank principles apply; failure to obtain stay + sale to bona‑fide purchaser = mootness, appeal dismissed |
| Whether BBNY is a bona‑fide purchaser | Wilmington: BBNY declaration shows arms‑length purchase, no affiliation with Wilmington or servicer; purchaser is innocent in fact and law | Domingos: Challenge sufficiency; requested remand for evidentiary hearing to adjudicate good‑faith status | The ICA accepted the documentary showing and declarations as sufficient; BBNY is a good‑faith purchaser; no remand required |
| Effect of Land Court certificate of title on relief | Wilmington: Land Court deeds and certificate conclusively establish title and bar undoing the sale | Domingos: Opposed but failed to obtain stay or otherwise prevent conveyance | Court: Land Court certificate is conclusive under Torrens principles; title passed to BBNY, reinforcing mootness |
Key Cases Cited
- City Bank v. Saje Ventures II, 748 P.2d 812 (Haw. App. 1988) (judicial‑sale confirmation cannot be undone on appeal where no supersedeas bond was filed and purchaser is in good faith)
- Bank of New York Mellon v. R. Onaga, Inc., 400 P.3d 559 (Haw. 2017) (adopting City Bank rule for Land Court properties; appellants must obtain stay or post supersedeas bond; sale to bona fide purchaser renders appeal moot)
- Aames Funding Corp. v. Mores, 110 P.3d 1042 (Haw. 2005) (Land Court certificate of title has conclusive effect on title questions)
- Lathrop v. Sakatani, 141 P.3d 480 (Haw. 2006) (appellant bears burden to seek stay if post‑appeal transactions could moot the appeal)
- Kaho'ohanohano v. State, 162 P.3d 696 (Haw. 2007) (mootness doctrine requires a live controversy through final appellate disposition)
- In re Nat'l Mass Media Telecomm. Sys., Inc., 152 F.3d 1178 (9th Cir. 1998) (failure to obtain stay after foreclosure and subsequent sale can render appeal moot)