Citibank v. Gaspar

NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
22-OCT-2024
07:50 AM
Dkt. 50 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI‘I

CITIBANK, NA AS TRUSTEE FOR WAMU SERIES 2007-HE2 TRUST,
Plaintiff-Appellee,
v.
WILLIAM GASPAR and JOYAL GASPAR, Defendants-Appellants,
and
HAWAIIAN OCEAN VIEW ESTATES ROAD MAINTENANCE CORPORATION,
Defendant-Appellee,
and
JOHN DOES 1-50; JANE DOES 1-50; DOE PARTNERSHIPS 1-50;
DOE CORPORATIONS 1-50; DOE ENTITIES 1-50; and
DOE GOVERNMENTAL UNITS 1-50, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT
(CASE NO. 3CC171000137)

SUMMARY DISPOSITION ORDER
(By: Hiraoka, Presiding Judge, Nakasone and Guidry, JJ.)

This is a judicial foreclosure case. Self-represented

Defendants-Appellants William Gaspar and Joyal Gaspar (the

Gaspars), appeal from (1) the Findings of Fact; Conclusions of

Law; Order Granting Plaintiff's Motion for Summary Judgment, and

for Interlocutory Decree of Foreclosure Against All Parties
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Filed September 7, 2021 (Foreclosure Order), and (2) Judgment,

both entered on November 19, 2021 by the Circuit Court of the

Third Circuit (circuit court).1 The Foreclosure Order and

Judgment were entered in favor of Plaintiff-Appellee Citibank,

NA as Trustee for WAMU Series 2007-HE2 Trust (Citibank).

On appeal, the Gaspars appear to contend that the

circuit court's Judgment was barred by res judicata, and the

circuit court erred by granting Citibank's third Motion for

Summary Judgment (MSJ), filed on September 7, 2021, because

Citibank lacked standing to bring the foreclosure action.

Upon careful review of the record and relevant legal

authorities, and having given due consideration to the arguments

advanced and the issues raised by the parties, we resolve the

Gaspars' points of error as follows:

(1) The Gaspars appear to contend in their points of

error 1, 3, 4, and 7 that this appeal is barred by res judicata.

They contend that the circuit court erred in granting Citibank's

third MSJ "on similar issues already adjudicated on the 1st and

2nd MSJ." They also contend that the circuit court erred in

accepting testimony from Sherry Benight (Benight) because she

had previously testified in support of Citibank's first and

second MSJs, "the parties and their privies" to this appeal are

1 The Honorable Henry T. Nakamoto presided.

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the same as in the underlying circuit court proceeding, and "the

ICA[] previously [r]uled in this [f]oreclosure [a]ction." The

Gaspars' contentions lack merit.

"Application of res judicata is a question of law.

Questions of law are reviewed de novo under the right/wrong

standard." PennyMac Corp. v. Godinez, 148 Hawaiʻi 323, 327,

474 P.3d 264, 268 (2020) (citation omitted). As the Hawaiʻi

Supreme Court instructs,

We have often recognized that according to the doctrine of
res judicata, the judgment of a court of competent
jurisdiction is a bar to a new action in any court between
the same parties or their privies concerning the same
subject matter. A party asserting res judicata has the
burden of establishing: (1) there was a final judgment on
the merits, (2) both parties are the same or in privity
with the parties in the original suit, and (3) the claim
decided in the original suit is identical with the one
presented in the action in question.

Id. (cleaned up).

The Gaspars have not met their burden of establishing

that there was a final judgment on the merits. In No. CAAP-18-

0000493, this court vacated the circuit court's May 18, 2018

judgment in favor of Citibank -- which had awarded summary

judgment in favor of Citibank -- and remanded this case to the

circuit court for further proceedings. Citibank, NA v. Gaspar,

No. CAAP-XX-XXXXXXX, 2019 WL 2714820 (Haw. App. June 28, 2019)

(SDO). Citibank subsequently moved twice more for summary

judgment, and the circuit court's granting of Citibank's third

MSJ resulted in the present appeal.

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The circuit court proceedings underlying this appeal

are, therefore, along with the circuit court proceedings

underlying No. CAAP-XX-XXXXXXX, part of a single case, docketed

as Case No. 3CC171000137, to which res judicata does not apply.

Citibank was not precluded on remand from once again submitting

a declaration drafted by Benight in support of its third MSJ.

Godinez, 148 Hawaiʻi at 327, 474 P.3d at 268 ("By definition, the

doctrine of res judicata only applies to new suits: It is

inapplicable in a continuation of the same suit.") (citations

omitted).

(2) The Gaspars appear to contend, in points of error

6, 8 and 9, that the circuit court erred in granting Citibank's

third MSJ because Citibank lacks standing to bring its

foreclosure claim. We review the circuit court's grant of

summary judgment de novo, applying the following standard,

Summary judgment is appropriate if the pleadings,
depositions, answers to interrogatories and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law. A
fact is material if proof of that fact would have the
effect of establishing or refuting one of the essential
elements of a cause of action or defense asserted by the
parties. The evidence must be viewed in the light most
favorable to the non-moving party. In other words, we must
view all of the evidence and inferences drawn therefrom in
the light most favorable to the party opposing the motion.

Ralston v. Yim, 129 Hawaiʻi 46, 55-56, 292 P.3d 1276, 1285-86

(2013) (citations omitted).

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Citibank, as the foreclosing party, "must [inter alia]

also prove its entitlement to enforce the note and mortgage."

Bank of Am., N.A. v. Reyes-Toledo, 139 Hawaiʻi 361, 367, 390 P.3d

1248, 1254 (2017). In Reyes-Toledo, the Hawaiʻi Supreme Court

held that,

A foreclosing plaintiff's burden to prove entitlement to
enforce the note overlaps with the requirements of standing
in foreclosure actions as standing is concerned with
whether the parties have the right to bring suit.
Typically, a plaintiff does not have standing to invoke the
jurisdiction of the court unless the plaintiff has suffered
an injury in fact. A mortgage is a conveyance of an
interest in real property that is given as security for the
payment of the note. A foreclosure action is a legal
proceeding to gain title or force a sale of the property
for satisfaction of a note that is in default and secured
by a lien on the subject property. Thus, the underlying
"injury in fact" to a foreclosing plaintiff is the
mortgagee's failure to satisfy its obligation to pay the
debt obligation to the note holder. Accordingly, in
establishing standing, a foreclosing plaintiff must
necessarily prove its entitlement to enforce the note as it
is the default on the note that gives rise to the action.

Id. at 367-68, 390 P.3d at 1254-55 (cleaned up).

The summary judgment record reflects that Citibank

attached Benight's declaration to its third MSJ. Benight

testified, in her capacity as a Select Portfolio Servicing, Inc.

(SPS) Document Control Officer, of her familiarity with SPS's

practices, procedures, and business records (which include

Citibank's loan level business records):

2. In my duties, I am familiar with the practices and
procedures of SPS. I am familiar with the systems of
record that SPS uses to create and record information
related to residential mortgage loans that it services,
including the process by which information is entered into
those systems and how those records are maintained. I am
familiar with these systems because I utilize them on a
regular basis as a routine function of my employment. I am
authorized and trained to access these records. . . .

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3. As servicing agent and custodian of the servicing
business records for the loan at issue for [Citibank], SPS
holds and maintains all of the business records related to
the servicing of this loan. [Citibank] does not hold or
maintain any of the loan level business records, and thus
[Citibank] does not have loan level business records to
integrate into SPS's records.

4. . . . I have access to SPS's business records, including
the business records for and relating to the subject loan.
I make this Declaration based upon my review of those
records relating to the Borrowers' loan and from my own
personal knowledge of how the records are kept and
maintained. The loan records are maintained by SPS in the
course of its regularly conducted business activities and
are made at or near the time of the event, by or from
information transmitted by a person with personal
knowledge. It is the regular practice to keep such records
in the ordinary course of a regularly conducted business
activity.

Because SPS was not the original servicer of the

Gaspars' loan, Benight testified as to SPS's process for

incorporating original loan servicers' business records into

SPS's business records:

5. To the extent that the business records of the loan in
this matter were created by a prior servicer, the prior
servicer's records for the loan were incorporated and
boarded into SPS's systems, such that the prior servicer's
records concerning the loan are now part of SPS's business
records. SPS conducts quality control and verification of
the information received from the prior servicer as part of
the boarding process to ensure the accuracy of the boarded
records. It is the regular practice of SPS to integrate
prior servicers' records into SPS's business records, and
to rely upon the accuracy of those boarded records in
providing its loan servicing functions. These prior
servicer records are incorporated and relied upon by SPS as
part of SPS's business records.

See generally U.S. Bank Trust, N.A. v. Verhagen, 149 Hawaiʻi 315,

325, 489 P.3d 419, 429 (2021) ("[W]hen a record is treated as

'created' by the receiving business, a person is qualified to

authenticate it if the person has enough familiarity with the

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record-keeping system of the business that 'created' the record,

i.e., the receiving or incorporating business.") (cleaned up).

Benight further testified as to SPS's authority to

service the loan as attorney-in-fact for Citibank, SPS's

possession of the original indorsed in blank Note at the time

the Complaint was filed, and SPS's possession of the Note at the

time Citibank filed its third MSJ2:

5. . . . As part of its boarding process, meetings are
established with prior servicer's key personnel and
systems, method of delivery of the records, and the timing
of the delivery of the records are identified. Further,
SPS employs a proprietary system to board the prior
servicer records. This system validates the prior servicer
records using over 600 logical and financial checks. In
the event that any prior servicer records are identified as
being illogical or incorrect, SPS will work with the prior
servicer and review loan documentation to resolve the
record.

. . . .

7. This loan was serviced by another entity. SPS
currently services the loan as attorney-in-fact for
[Citibank]. SPS acquired the servicing rights for this
loan from JPMorgan Chase Bank, National Association. The
business records from the prior servicers have been
verified and incorporated into SPS' business records.

8. In consideration of a loan in the principal amount of
$282,600.00, defendant(s), William Gaspar and Joyal Gaspar
(the "Defendants") executed and delivered to Washington
Mutual Bank a note dated January 10, 2007 (the "Note"). A
true and correct copy of the Note, including its
endorsement, is attached hereto as Exhibit "1" and made a
part of this Declaration by reference.

9. To secure the obligations under the Note, the [Gaspars]
executed and delivered to Washington Mutual Bank a mortgage
dated January 10, 2007, recorded on January 24, 2007 in the
Bureau of Conveyances of the State of Hawaii as Document
Number 2007-014073. A true and correct copy of the

2 The Gaspars failed to make the transcript of the October 6, 2021
hearing on Citibank's third MSJ a part of the record on appeal. The circuit
court minutes of the hearing, however, reflect that Citibank's counsel
represented that it possessed the "original note if [the] court wants to see
it," and that the circuit court "reviewed [the] entire file."

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Mortgage is attached hereto as Exhibit "2" and made a part
of this Declaration by reference.

10. The Mortgage was subsequently assigned to CITIBANK, NA
AS TRUSTEE FOR WAMU SERIES 2007-HE2 TRUST by virtue of an
assignment of mortgage (the "Assignment of Mortgage")
recorded on April 27, 2009 in the Bureau of Conveyances of
the State of Hawaii as Document Number 2009-063098. A true
and correct copy of the Assignment of Mortgage is attached
hereto as Exhibit "3" and made a part of this Declaration
by reference.

. . . .

12. According to SPS's business records, [Citibank],
through its servicing agent SPS, has possession of the
Original note in this instant action ("Note"), which has
been duly endorsed, and [Citibank], through its servicing
agent SPS, was in possession of the Original Note at the
time of the filing of the complaint at the offices of SPS.
Therefore, [Citibank] has the right to enforce the Note. A
true and correct copy of the documentation supporting note
possession at the time of the filing of the complaint is
attached as Exhibit "4" and made a part of this Declaration
by reference.3

13. . . . SPS on behalf of [Citibank] was and is in
possession of the Original Note, not [Citibank], because
[Citibank] does not hold or maintain any of the loan level
business records.

. . . .

17. Select Portfolio Servicing, Inc. has authority to
execute this Declaration on behalf of [Citibank] pursuant
to a Limited Power of Attorney dated April 20, 2021. A
true and correct copy of the Limited Power of Attorney is
attached as Exhibit "8" and made part of this Declaration
by reference.

18. The Limited Power of Attorney dated November 9, 2016
was effective at the time the Complaint was filed on April
21, 2017. The Limited Power of Attorney contains a Limited
Power of Attorney from Citibank to JPMorgan signed on
October 28, 2016. On page 3 of 7 in the first full

3 Exhibit 4, attached to Benight's declaration, reflects the
location of the Note on April 12, 2017 as "note in file @ SPS." Citibank
filed its complaint in this foreclosure action nine days later, on April 21,
2017. See Verhagen, 149 Hawaiʻi at 327-28, 489 P.3d at 431-32 ("[T]here is
admissible documentary evidence showing that U.S. Bank possessed the Note
both a mere six weeks before the filing of the complaint and at the time of
summary judgment. Collectively, the evidence presented by U.S. Bank thus
establishes the bank's possession of the Note on the day the complaint was
filed.").

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paragraph, it states that "This limited power of attorney
has been executed and is effective as of this 28th day of
October 2016...". It also states on the same page in the
last paragraph, "This [L]imited Power of Attorney
supersedes all prior powers of attorney given by the
undersigned to JPMorgan Chase Bank, National Association
for the Loans, and all such powers and authority granted
thereunder are hereby revoked effective as of the date of
recording of this Limited Power of Attorney." The
recording date was November 14, 2016, as shown with the
recording information clearly stamped in the upper right
corner of the 1st page of the exhibit. It states 9 pages
were recorded which includes the Limited Power of Attorney
from Citibank to JPMorgan. A true and correct copy of the
Limited Power of Attorney is attached as Exhibit "9" and
made part of this Declaration by reference.

19. The Limited Power of Attorneys for this Pooling and
Servicing Agreement has a one-year expiration which is
stated in the Exhibit "B" of the Limited Power of
Attorneys. Therefore, a new one is drafted, executed, and
recorded each year.

. . . .

21. [Citibank] submits Exhibit "9" in response to the
Hawaii Intermediate Court of Appeals questioning whether
SPS had possession of the Note at the time of filing the
Complaint on April 21, 2017. Exhibit "9" shows that SPS
had the power of attorney effective October 28, 2016 for
one year which would corroborate that SPS had authority to
possess the Note on behalf of [Citibank] at the time of
filing the Complaint.[4]

22. Servicing of the loan transferred from JPMorgan Chase
Bank, N.A. to Select Portfolio Servicing, Inc. effective
May 1, 2014. A true and correct copy of the Hello Letter
is attached as Exhibit "10" and made part of this
Declaration by reference.

The record reflects that Citibank satisfied its

initial burden on summary judgment of establishing that it

possessed, through its authorized servicing agent SPS, the

original Note -- and therefore had standing -- at all relevant

4 Exhibit 9 is a Limited Power of Attorney, executed by JPMorgan
Chase Bank (JPMorgan) as Master Servicer for Citibank and dated November 9,
2016, through which JPMorgan appointed SPS as its sub-servicer in connection
with all mortgage or other loans serviced by JPMorgan for Citibank.

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times. The burden then shifted to the Gaspars, but the Gaspars

did not meet their burden of establishing that there is a

genuine issue of material fact for trial. See Verhagen, 149

Hawaiʻi at 328, 489 P.3d at 432 ("[A] defendant may counter this

inference of possession at the time of filing with evidence

setting forth 'specific facts showing that there is a genuine

issue' as to whether the plaintiff actually possessed the

subject note at the time it filed suit.") (citing Hawaiʻi Rules

of Civil Procedure Rule 56(e)). The Gaspars offered no evidence

that Citibank, through its counsel, did not possess the Note at

the time Citibank's foreclosure complaint was filed.

We conclude that Citibank had standing to bring its

foreclosure action, and the circuit court did not err in

granting the Plaintiff's Motion for Summary Judgment.

(3) The Gaspars contend, in points of error 2 and 5

that the circuit court erred "in its [d]ecision [a]warding

[Citibank] [m]inute [o]rder dated December 28, 2020," and in

denying the Gaspars' July 2020 Motion to Dismiss. They fail to

present any discernible argument on these points. We therefore

decline to address these points of error. See Kahoʻohanohano ex

rel. Morales-Kahoʻohanohano v. Dep't of Hum. Servs., State,

117 Hawaiʻi 262, 297 n.37, 178 P.3d 538, 573 n.37 (2008) (stating

that the Hawaiʻi Supreme Court will "disregard a particular

contention if the appellant makes no discernible argument in
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support of that position") (cleaned up); see also Hawaiʻi Rules

of Appellate Procedure Rule 28(b)(7) ("Points not argued may be

deemed waived.").

For the foregoing reasons, we affirm the circuit

court's Foreclosure Order and Judgment, filed November 19, 2021.

DATED: Honolulu, Hawaiʻi, October 22, 2024.

On the briefs: /s/ Keith K. Hiraoka
Presiding Judge
William Gaspar and
Joyal Gaspar, /s/ Karen T. Nakasone
Self-represented Associate Judge
Defendants-Appellants.
/s/ Kimberly T. Guidry
Justin S. Moyer, Associate Judge
for Plaintiff-Appellee.

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