JAMES RICHARD MCCARTY and VICTORIA L. MCCARTY v. GCP MANAGEMENT, LLC, a Utah limited liability company;

This disposition is not appropriate for publication and is not precedent*
except as provided by 9th Cir. R. 36-3.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JAMES RICHARD MCCARTY and
VICTORIA L. MCCARTY,
Plaintiffs - Appellants,
v.
GCP MANAGEMENT, LLC, a Utah
limited liability company; et al.,
Defendants - Appellees.
No. 11-15039
D.C. No. 1:10-cv-00133-JMS-
KSC
MEMORANDUM*
JAMES RICHARD MCCARTY and
VICTORIA L. MCCARTY,
Plaintiffs - Appellants,
v.
GCP MANAGEMENT, LLC, a Utah
limited liability company; et al.,
Defendants - Appellees.
No. 11-16592
D.C. No. 1:10-cv-00133-JMS-
KSC
FILED
NOV 07 2012
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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Appeal from the United States District Court
for the District of Hawaii
J. Michael Seabright, District Judge, Presiding
Argued and Submitted October 15, 2012
Honolulu, Hawaii
Before: REINHARDT, THOMAS, and PAEZ, Circuit Judges.
James and Victoria McCarty appeal the district court’s order granting
summary judgment in favor of GCP Management, LLC (“GCP”) and Gateway
Capital Partners, LLC, and its subsequent confirmation of the foreclosure sale of
the mortgaged property to GCP. We have jurisdiction under 28 U.S.C. § 1291, and
we affirm. Because the parties are familiar with the history of this case, we need
not recount it here.
I
Contrary to the McCartys’ claim, the defendants are not prohibited under
Hawaii law from defending this action because neither entity holds a state
certificate of authority to transact business in Hawaii. Hawaii law expressly
permits a foreign limited liability company to defend an action instituted against it
in a Hawaii court. Haw. Rev. Stat. § 428-1008(b). Moreover, because the
provision of mortgage loans does not qualify as “transacting business” within the

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meaning of Haw. Rev. Stat. § 428-1008, that provision does not bar GCP’s
counterclaim. Haw. Rev. Stat. § 428-1003.
II
We have carefully reviewed the district court’s grant of summary judgment
de novo, see Bamonte v. City of Mesa, 598 F.3d 1217, 1220 (9th Cir. 2010), and
affirm the judgment of the district court for the reasons set forth in the district
court’s well-reasoned summary judgment order dated November 17, 2010.
III
We affirm the district court’s order confirming the foreclosure sale of the
mortgaged property to GCP. Under Hawaii law, we may reverse the district court
judge’s confirmation of a foreclosure sale only if “a clear abuse of the discretion
vested in him is apparent.” City & Cnty. of Honolulu v. Int’l Air Serv. Co., 628
P.2d 192, 197-98 (Haw. 1981).
The district court did not abuse its discretion in confirming the foreclosure
sale. See Brent v. Staveris Dev. Corp., 741 P.2d 722, 726 (Haw. App. 1987)
(“[T]he lower court’s authority to confirm a judicial sale is a matter of equitable
discretion”). Though GCP’s bid of $1.5 million was considerably less than the
McCartys’ outstanding debt on the foreclosed mortgage, as well as the property’s

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appraised value at the time the loan was made, the McCartys did not establish that
the bid was “so grossly inadequate as to shock the conscience.” Sugarman v.
Kapu, 85 P.3d 644, 652 (Haw. 2004) (quoting Hoge v. Kane, 670 P.2d 36, 40
(Haw. App. 1983)). The McCartys’ speculative assertion that a higher price could
be obtained is not sufficient to warrant reversal. Brent, 741 P.2d at 726-27. The
district court properly reviewed the evidence, including that furnished by the
neutral foreclosure commissioner.
The district court also properly conducted a de novo review of those findings
of the magistrate judge to which the McCartys filed objections. No hearing was
required. 28 U.S.C. § 636(b)(1)(C); United States v. Raddatz, 447 U.S. 667, 674
(1980); United States v. Remsing, 874 F.2d 614, 617 (9th Cir. 1989). The record
shows that the district court judge independently reviewed the evidence supporting
the challenged findings of the magistrate judge, which sufficed to discharge his
obligation under 28 U.S.C. § 636(b)(1)(C).
AFFIRMED.

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