OPINION
This сase requires us to determine whether a mortgage company violated Hawaii state law when it did not publicly announce the postponement of a foreclosure sale of property owned by Appellant Margery Kanamu-Kalehuanani Kekauoha-Alisa, and if so, to ascertain the proper remedy for that violation. A federal bankruptcy court held that Appellees’ failure publicly to announce the foreclosure violated the requirements of Hawaii’s nonjudicial foreclosure procedure under Hawaii Revised Statute (HRS) § 667-5, as well as its consumer protection law, HRS § 480-2. The court voided the sale of the Appellant’s property and awarded her treble damages of $417,761.66 under HRS § 480-13 for violation of the consumer protection statute. The Bankruptcy Appellate Panel reversed, ruling that the mortgagee’s actions did not violate state law.
We hold that (1) the lack of public announcement did violate Hawaii’s nonjudicial foreclosure statute, and (2) this defect was a deceptive practice under state law. Accordingly, we affirm the bankruptcy court’s avoidance of the foreclosure sale. However, we remand to the bankruptcy court for a proper calculation of attorneys’ fees and damages under HRS § 480-13.
I BACKGROUND
In 2002, Margery Kanamu-Kalehuanani Kekauoha-Alisa (Debtor) refinanced a mortgage on her property on Hawaii Island and executed a promissory note to Ameriquest Mortgage Company in the amount of $127,500. Debtor defaulted on her loan eight times, causing Ameriquest to initiate foreclosure proceedings in early 2005. On April 6, 2005 Ameriquest assigned its interest in the mortgage to WM Specialty Mortgage LLC, which later be *1086 came JPMC Mortgage, the named party in this action. The assignment notwithstanding, Ameriquest continued to service Debt- or’s mortgage (hereafter, Ameriquest and JPMC Mortgage are referred to collectively as “Lenders”). A foreclosure sale was scheduled for May 13, 2005.
On May 10, 2005, three days before the scheduled foreclosure sale, Debtor filed for Chapter 13 bankruptcy, triggering an automatic stay of the sale. To comply with the stay, a law firm employed by Lenders postponed the scheduled foreclosure sale. HRS § 667-5 1 authorizes a foreclosure sale to be “postponed from time to time by public announcement made by the mortgagee or by a person acting on the mortgagee’s behalf.” The law firm properly announced the postponement of the sale three times from May 13, 2005 until September 23, 2005.
On September 23, 2005, the law firm attempted to postpone the sale yet again, a fourth and final time. The auction was scheduled to occur at noon at a flagpole located in front of Hale Halewai, a local community center. The firm delegated the task to a legal secretary who had never before postponed a foreclosure sale. The secretary arrived ten or fifteen minutes before noon. Rather than shouting out the postponement to all those present, the secretary asked several of the people present if they were interested in Debtor’s property. Everyone she spoke to said they were not. She did not attempt to speak to thоse individuals who appeared to be there for another auction that was occurring at the same time, and she did not speak to everyone in the area. She did not tell those she spoke with that the auction was postponed to December 2, 2005. The secretary stayed at the flagpole until approximately 12:25 PM, after the other auction had finished and the area was deserted. She left without ever announcing or posting the information that the sale of Debtor’s property had been postponed.
On November 1, 2005, Lenders moved for relief from the stay to allow them to proceed on the foreclosure sale. On Nоvember 21, after Debtor failed to respond, the bankruptcy court granted Lenders’ motion. The foreclosure sale took place on December 2. The successful — and only bid — was a credit bid made by the auctioneer on behalf of Lenders. A quitclaim deed to the property was recorded on December 27, 2005. Lenders initiated an ejectment action in state court in January, 2006. Lenders obtained a judgment in their favor on April 11, 2006, which Debtor appealed. That appeal is still pending in state court — apparently waiting for our decision.
On April 26, 2006, Debtor filed a complaint in the bankruptcy court, alleging, inter alia, that the sale had violated the automatic stay, breached the terms of the mortgage contract, constituted an unfair and deceptive trade practice under HRS § 480-2, violated various requirements of nonjudicial foreclosure procedure under HRS § 667-5, and constituted a fraudulent transfer under HRS § 651C-7. The bankruptcy court dismissed on summary judgment Debtor’s claims alleging a violation of the stay and fraudulent transfer.
After a five-day bench trial on the remaining claims, the bankruptcy court issued amended findings of fact and conclusions of law. The court concluded that Lenders’ failure to publicly pronounce the postponement of the foreclosure sale on Seрtember 23, 2005, violated the “public announcement” requirement of HRS § 667-5 as well as the terms of the mort *1087 gage contract. Contrary to Debtor’s assertion on appeal, the court found only a single violation of HRS § 667-5. As a remedy, the court voided the foreclosure sale. The court held that the improper postponement was also a breach of the mortgage contract, because the contract required that Lenders comply with state law in any foreclosure proceeding.
In addition, the court ruled that the improper postponement was an unfair and deceptive trade practice under HRS § 480-2. It awarded Debtor treble damages, under HRS § 480-13, for damages sustained as a result of the violation of § 480-2, calculating the damages sustained as (1) Debtor’s lost equity in her house, (2) the rental value of the house for the time during which she lost possession of it, and (3) the attorneys’ fees Debtor expended defending against the state court ejectment action. The total money judgment was $417,761.66.
Finally, the court awarded Debtor additional attorneys’ fees under two Hawaii statutes: HRS § 607-14, allowing fees for the prevailing party in contract claims, and HRS § 480 — 13(b)(1), allowing fees for the party establishing a violation of HRS § 480-2. The court allocated attorneys’ fees equally between the contract claim and the HRS § 480-2 claim. Because HRS § 607-14 limits attorneys fees to twenty-five percent of the judgment on a contract claim, the court allowed recovery of only $38,945.01 for that portion of the attorneys’ fees claim, a sum which it arrived at by calculating twenty-five percent of the value of Debtor’s equity in the mortgaged property.
Lenders appealed the bankruptcy court’s decision to the Bankruptcy Appellate Panel (“BAP”), challenging both the bankruptcy court’s findings of liability and its calculation of damages and attorneys’ fees. Debtor cross-appealed, challenging only the bankruptcy court’s ruling that attorneys’ fees under HRS § 607-14 should be limited to twenty-five percent of the value of Debtor’s equity in the foreclosed property.
The BAP reversed the bankruptcy court on its findings of liability, holding that Lenders’ actions (1) met the public announcement requirement of HRS § 667-5, (2) did not breach the mortgage contract, and (3) did not constitute an unfair or deceptive practice under HRS § 480-2. Because it found in favor of Lenders on the liability issues, the BAP did not reach the parties’ challenges to damages and attorneys’ fees. Debtor now appeals the decision of the BAP.
II STANDARD OF REVIEW
We review the decisions of the BAP de novo.
Wood v. Stratos Prod. Dev., LLC (In re Ahaza Sys., Inc.),
Ill ANALYSIS
A. Hawaii Revised Statute § 667-5
HRS § 667-5 authorizes a foreclosure sale to be “postponed from time to time by public announcement made by the mortgagee or by a person acting on the mortgagee’s behalf.” In this case, we must first address whether the secretary’s actions on September 23rd constituted a “public announcement” under the meaning of Hawaii law. When interpreting state law, we are bound by the decision of the highest state court.
Sec. Pac. Nat’l Bank v. Kirkland (In re Kirkland),
Neither HRS § 667-5 nor Hawaii case law defines the term “public announcement.” Therefore, we apply Hawaii’s rules of statutory construction to interpret the term. Hawaii courts follow “certain well-established principles of statutory construction.”
Haw. Gov’t Emps. Ass’n, AFSCME Local 152, AFL-CIO v. Lingle,
Applying these principles, it is clear that any reasonable meaning of “public announcement” does not encompass Lenders’ actions in this instance. The bankruptсy court turned to the dictionary, noting that Merriam-Websters defines “announce” as “to make known publicly: PROCLAIM” and “announcement” as “public notification or declaration.” No party suggests a different definition, and this interpretation captures the essence of what the statute requires: Mortgagees shall publicly announce the postponement of a foreclosure sale to a subsequent date.
In this case, the secretary engaged in several conversations with individuals whom, based on the secretary’s judgment, appeared as if they might have been present because they were interested in the foreclosure of Debtor’s property. Even in these conversations, the secretary did not communicate that the sale had been postponed. The secretary did not, in private conversation or otherwise, announce that the Debtor’s property would be sold on December 2, 2005. The bankruptcy court’s conclusion, based on these facts, was that the secretary “never made an open, oral announcement to all those present of the date and time to which the auction was being postponed and she did not post or display such an announcement in written form.” Lenders do not dispute this finding of fact, and it suffices to establish under the plain meаning of HRS § 667-5 that there was no public announcement of a postponement.
The BAP acknowledged that “[i]t is undisputed that the secretary did not make a ‘public announcement’ within its commonly understood or dictionary meaning.” Nonetheless, it reasoned that the phrase must be given a “fair and reasonable construction” and interpreted in light of the purpose of the statute. The BAP concluded that the requirements of the statute could be met by “any mode of communication that reasonably achieves the spirit and purpose of the ‘public announcement’ requirement,” which they reasoned was to “inform those who appeared at a foreclosure sale that it has been postponed.”
The BAP erred in relying on statutory context and purpose to introduce ambiguity into the meaning of “public announcement” because, as it acknowledged, the meaning of the phrase is plain on its face.
See Ross v. Stouffer Hotel Co. Ltd.,
We turn to the question of the proper remedy for Lenders’ violation of HRS § 667-5. Hawaii law does not specify a remedy. The bankruptcy court, based on its reading of
Silva v. Lopez,
With all respect to the BAP, we agree with the bankruptcy court that Hawaii precedent is clear and controlling. Mortgagee violation of the nonjudicial foreclosure requirements of HRS § 667-5, whether those violations are grievously prejudicial or merely technical, voids a subsequent foreclosure sale. Id. at *7. In Silva, the Hawaii Supreme Court voided a mortgage sale of real estate and livestock because the mortgagee did not comply with the conditions of the power of sale set out in the mortgage contract. Id. The Silva mortgagee erred by scheduling the foreclosure sale one day too early: under the mortgage contract, the power of sale could be exercised only after three weeks of notice and the Silva mortgagee had scheduled the sale after only twenty days of notice. Id. at *3, *5. The Silva court affirmed the trial court’s ruling that “if the notice is insufficient, the sale under it is void and not merely voidable.” Id. at *7. Silva establishes that under Hawaii law, even technical violations of foreclosure procedures void a subsequent foreclosure sale.
The BAP attempted to distinguish Silva on two grounds. First, the BAP noted that the Silva court did not exрlain why strict, rather than substantial compliance, with foreclosure procedure is required. However, this undercuts, rather than supports, the BAP’s conclusion. The fact that the Silva court did not discuss prejudice or substantial compliance demonstrates that this factor is irrelevant to the mortgagor’s remedy under Hawaii law.
The BAP also distinguished
Silva
on the ground that there “the defect in the notice
*1090
requirement was coupled with another irregularity — the livestock was not available for inspection at the auction sale.” This assertion misreads
Silva.
In fact, the
Silva
court voided the sale of real estate solely on the basis of inadequate notice, and not because of the failure to display the auctioned cattle. The decision makes this clear: “[T]he third objection to the sale [that the mortgagee failed to display the cattle to bidders] ... applies
only
to the sale of the chattels.”
Silva,
That Hawaii law requires strict compliance with statutory foreclosure procedures is confirmed by the Hawaii Supreme Court’s recent decision in
Lee,
a decision that was not available at the time the BAP issued its decision. The
Lee
court, answering a question certified to it by a federal district court, held that a foreclosure sale conducted after the mortgagors had cured their default was not valid. The court cited
Silva
for the proposition that the “foreclosure sale did not comply with the requirements of HRS section 667-5 and was, thus, invalid.”
Lee,
Finally, we note that a strict compliance requirement is not so out of step with the law of other jurisdictions that we have reason to second-guess our interpretation of Hawaii law. The BAP is accurate in noting that the majority of states draw a distinction between procedural defects that are insignificant and those that are prеjudicial enough to render a foreclosure sale void or voidable.
See, e.g., Gilroy v. Ryberg,
We conclude that Lenders’ failure to postpone properly the foreclosure sale did violate HRS § 667-5 and that the proper remedy was avoidance of the sale.
B. Breach of Contract
The bаnkruptcy court ruled that the terms of the parties’ mortgage agreement specified that Lenders could foreclose only in compliance with the procedural requirements of HRS § 667-5. Lenders do not dispute the court’s interpretation of the contractual language. Therefore, because *1091 Lenders’ improper postponement of the foreclosure sale violated HRS § 667-5, it also constituted a breach of contract.
Lenders’ contractual breach is an alternative ground upon which the bankruptcy court properly voided the foreclosure sale. Lenders argue, however, that damages for the breach of contract should be subject to standard causation requirements, and that the breach was not the cause of the foreclosure. Lenders’ discussion of general contract principles of causation is not persuasive in the context of the mortgage at issue. The bankruptcy court read the mortgage contract as requiring compliance with the nonjudicial foreclosure statute as a condition precedent to Lenders’ right to exercise the power of sale in the contract. We agree. In the context of this interpretation of the mortgage, the avoidance of the sale is consistent both with case law particular to mortgage agreements and with general contract principles.
See Silva,
C. Hawaii Revised Statute § 480-2 and § 480-13
HRS § 480-2(a) prohibits “unfair or deceptive acts or practices in the conduct of any trade or commerce.” Consumers who establish a violation of § 480-2 are entitled to three-fold damages under HRS § 480-13 for those “damages sustained” as a result of the defendant’s deceptive actions. HRS § 480-13(a)(l). Whether a practice is deceptive or unfair is “ordinarily a question of fact,”
Balthazar v. Verizon Hawaii, Inc.,
The test for whether a practice is “deceptive” under HRS § 480-2 is distinct from whether a practice is “unfair,” and both tests are established by case law rather than by statute.
State ex rel. Bronster v. U.S. Steel Corp.,
The bankruptcy court found that failure to make a public announcement “is likely to mislead a consumer acting reasonably under the circumstances.... Proper notice of the actual date of a foreclosure auction is essential to ensure that foreclosed properties bring adequate prices and that the public has an appropriate opportunity to bid.” The court’s factual finding is a reasonable one to which we must defer.
The BAP’s reversal of this finding is premised on two errors. First, by focusing on whether there were, in fact, any consumers in the vicinity that would have heard a public announcement, the BAP failed properly to apply the requisite objective test. Given that “actual deception need not be shown; the capacity to deceive is sufficient,”
State ex rel. Bronster,
*1092
Second, the BAP did not afford the bankruptcy court’s factual finding the required degree of deference when it reasoned that it was “not required to accept [the bankruptcy court’s] conclusions as to the legal effect of [its factual findings].” Whether a reasonable consumer would likely be misled by a practice is a question of fact unless “no reasonable person would determine the issue in any way but one.”
Courbat,
Because we affirm the bankruptcy court’s finding that Lenders’ improper postponement was a deceptive practice under HRS § 480-2, we need not consider whether it was also an unfair prаctice.
However, our conclusion that Lenders’ improper postponement amounted to a deceptive practice does not automatically entitle Debtor to monetary damages.
2
Under HRS § 480 — 13(b)(1), a consumer injured by a violation of § 480-2 “[m]ay sue for damages sustained by the consumer, and, if the judgment is for the plaintiff, the plaintiff shall be awarded a sum not less than $1,000 or threefold damages.” Under this statute, consumers are entitled to damages for a violation of HRS § 480-2 only if they show that those acts “cause private damage.”
Ai v. Frank Huff Agency, Ltd.,
Any injury must be fairly traceable to the defendant’s actions.
Flores v. Rawlings Co., LLC,
The proper calculation of damages and causation are questions of fact under Hawaii law, which we do not disturb unless they are clearly erroneous.
Koto v. Funari,
Debtor urges us to overlook this omission and to construe the bankruptcy court’s calculation of damages as including an implicit factual finding of causation. If we were to adopt Debtor’s suggestion, which we do not, we would be compelled by the record to conclude that the bankruptcy court’s “implicit” finding of causation
was
clearly erroneous. The damages the bankruptcy court awarded all flow from the foreclosure on Debtor’s home and appear to give Debtor an inappropriate windfall. This seems irreconcilable with the bankruptcy court’s finding that Debtor did not experience foreclosure of her home
because of
Lenders’ imperfect postponement procedure. As the bankruptcy court phrased it, “There is no question, ... that the Mortgage was in default and that the mortgagee was entitled to foreclose. The only question is whether the proper party foreclosed the Mortgage in the proper manner.” In sum, the court’s findings of fact appear to establish that Debtor’s losses “resulted] from” her default, rather than Lenders’ failure to shout out the postponement of the foreclosure.
Haw. Med. Ass’n,
However, rather than reading an еrroneous finding of causation into the bankruptcy court’s decision, we follow our ordinary procedure when a necessary factual finding is absent, and remand the case to the bankruptcy court to make the proper requisite findings of fact under HRS § 480-13.
See Graves v. Myrvang (In re Myrvang),
D. Attorneys’ Fees
We also vacate the bankruptcy court’s order awarding attorneys’ fees and remand for calculation of reasonable attorneys’ fees in fight of our remand of the damages-causation issue in Debtor’s HRS § 480-13 claim.
See UFJ Bank Ltd. v. Ieda,
First, on remand, the bankruptcy court may, in its discretion, consider evidence of the settlement offer purportedly made by Lenders early in the course of
*1094
this litigation. The bankruptcy court initially ruled that it was prohibited from admitting evidence of the settlement offer by Federal Rule of Evidence Rule 408. With the benefit of our recent decision in
Ingram v. Oroudjian,
Second, Debtor challenges the bankruptcy court’s decision limiting the portion of attorneys’ fees allotted to the breach of contract claim to twenty-five percent of Debtor’s lost equity on the house. The bankruptcy court’s ruling was based on the twenty-five percent limit contained in HRS § 607-14, the statute governing attorneys’ fees in contract cases. That statute states that “[I]n all actions in the nature of as-sumpsit ... there shall be taxed as attorneys’ fees, to be paid by the losing party ... a fee that the court determines to be reasonable; ... provided that this amount shall not exceed twenty-five per cent of the judgment.” HRS § 607-14.
Debtor argues that the twenty-five percent limit does not apply to her under the exception created in
Food Pantry, Ltd. v. Waikiki Business Plaza, Inc.,
The bankruptcy court did not err in applying the twenty-five percent limit on attorneys’ fees. The
Food Pantry
exception applies only “if no money damages are sought or awarded, as in a complaint for declaratory judgment,[where] there is no monetary amount on the basis of which to calculate the twenty-five percent statutory ceiling.”
Amfac, Inc. v. Waikiki Beachcomber Inv. Co.,
IV CONCLUSION
We AFFIRM the decision of the bankruptcy court with respect to its findings of liability for a violation of HRS § 667-5, a violation of HRS § 480-2, and breach of contract. We also AFFIRM the bankruptcy court’s order voiding the foreclosure sale of Debtor’s property. We VACATE the bankruptcy court’s award of money damages under § 480-13 and attorneys’ fees under HRS § 607-14 and HRS § 480 — 13(b)(1), and we REMAND so that the bankruptcy court may (1) make the necessary findings of causation and damages under HRS § 480-13 and (2) properly calculate attorneys’ fees.
*1095 AFFIRMED in part, VACATED and REMANDED in part.
The parties shall bear their own costs on this appeal.
Notes
. We refer throughout this opinion to the version of HRS § 667-5 in effect at the time of the foreclosure. In 2008, § 667-5 was reordered, but the content was not changed.
. We do not consider Lenders’ argument that they cannot be held vicariously liable for the actions of an independent contractor because that argument was not made before the BAP and was therefore forfeited.
See Resolution Trust Corp. v. First Am. Bank,