HSBC Bank USA v. Scardino

NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
23-OCT-2024
07:53 AM
Dkt. 54 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI‘I

HSBC BANK USA, NATIONAL ASSOCIATION,
AS TRUSTEE FOR THE HOLDERS OF THE CERTIFICATES ISSUED
BY DEUTSCHE ALT-A SECURITIES MORTGAGE LOAN TRUST,
SERIES 2006-AR3, Plaintiff-Appellee,
v.
NICHOLAS J. SCARDINO, Defendant-Appellant,
and
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
SOLELY AS NOMINEE FOR MERIDIAS CAPITAL, INC.;
ASSOCIATION OF APARTMENT OWNERS OF MAKIKI TOWERS,
Defendants-Appellees,
and
JOHN DOES 1-20; JANE DOES 1-20; DOE CORPORATIONS 1-20;
DOE ENTITIES 1-20; and DOE GOVERNMENTAL UNITS 1-20, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CASE NO. 1CC191001630)

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

This is a judicial foreclosure case. Self-represented

Defendant-Appellant Nicholas J. Scardino (Scardino), appeals

from (1) the Findings of Fact, Conclusions of Law, and Order

Granting Plaintiff's Motion for Summary Judgment Against All

Defendants and for Interlocutory Decree of Foreclosure,
NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

(Foreclosure Order), and (2) Judgment, both entered on

October 12, 2021 by the Circuit Court of the First Circuit

(circuit court).1 The Foreclosure Order and Judgment were

entered in favor of Plaintiff-Appellee HSBC Bank USA, National

Association, as Trustee for the Holders of the Certificates

Issued by Deutsche ALT-A Securities Mortgage Loan Trust, Series

2006-AR3 (HSBC Bank).

The summary judgment record reflects that Scardino

owned real estate in Honolulu (the Property). In May 2006,

Scardino executed a $318,400 promissory note (Note) in favor of

Meridias Capital, Inc. (Meridias). Scardino secured the Note

with a mortgage on the Property (the Mortgage). The Mortgage

identified Mortgage Electronic Registration Systems, Inc.

(MERS), solely as nominee for Meridias, as mortgagee. The

Mortgage was assigned to HSBC Bank by assignment of mortgage

recorded on September 3, 2008; the Note was specially indorsed

to HSBC Bank. Specialized Loan Servicing LLC (SLS) serviced the

loan.

Scardino defaulted on the Note in April 2008. HSBC

Bank sent Scardino notice of the default and acceleration of the

loan (Notice) in June 2010. The Notice provided Scardino 30

days to cure the default. Scardino did not timely cure the

1 The Honorable Jeannette H. Castagnetti presided.

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default, and HSBC Bank filed a Complaint for Mortgage

Foreclosure (the Complaint) on October 16, 2019.

HSBC Bank moved for summary judgment and interlocutory

decree of foreclosure in June 2021. The circuit court granted

HSBC Bank's Motion for Summary Judgment (MSJ), and entered

Judgment. On appeal, Scardino appears to contend that the

circuit court erred by granting HSBC Bank's MSJ because HSBC

Bank 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

Scardino's contention as follows.

We review the circuit court's grant of summary

judgment de novo, applying the following standard,

[S]ummary 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) (citation omitted).

HSBC Bank, as the foreclosing party, "must [inter

alia] prove its entitlement to enforce the note and mortgage."

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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).

Here, the summary judgment record reflects that HSBC

Bank provided the circuit court with: (1) the October 25, 2019

Declaration of Sylvia Meregillano (Meregillano), the Custodian

of Records for HSBC Bank's legal counsel, TMLF Hawaii LLLC

(TMLF), who declared under penalty of perjury that "[a]ccording

to the records and files of [TMLF], on 11/29/2016, [TMLF] was in

possession of the original Note, specially indorsed to [HSBC

Bank],. . .[o]n 10/16/2019, the date [the Complaint] was filed,

[HSBC Bank], through counsel, was in possession of the original

Note, specially indorsed to [HSBC Bank]," and that the original

Note was stored at TMLF's "designated storage facility in a

fire-proof safe"; (2) the November 25, 2016 Bailee Letter to

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TMLF, authenticated by Meregillano; (3) the May 26, 2021

Declaration of Indebtedness and on Prior Business Records of

Steven Ross, Second Assistant Vice President of SLS, who

declared under penalty of perjury that he has "personal

knowledge of SLS's procedures for creating" its business records

and is authorized to provide verification of these records, and

that "SLS's records indicate that [HSBC Bank], by and through

its counsel, had possession of the original Note, specially

indorsed to [HSBC Bank], as of 10/16/2019, the date of the

filing of the Complaint in this foreclosure," and (4) the Note,

Mortgage, and Assignment of Mortgage to HSBC Bank.

On this record, we conclude that HSBC Bank satisfied

its initial burden on summary judgment. See U.S. Bank Tr.,

N.A. v. Verhagen, 149 Hawaiʻi 315, 328, 489 P.3d 419, 432 (2021)

("Collectively, the evidence presented by U.S. Bank []

establishes the bank's possession of the Note on the day the

complaint was filed.").

The burden then shifted to Scardino, and Scardino did

not meet his burden of establishing that there is a genuine

question of material fact for trial. See Id. 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

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filed suit.") (citing Hawaiʻi Rules of Civil Procedure Rule

56(e)). Scardino offered no evidence that HSBC Bank, through

its counsel, did not possess the Note at the time the Complaint

was filed. Nor did Scardino provide evidence to support his

contention that HSBC Bank "falsified" the Note.

For the foregoing reasons, we affirm the circuit

court's Foreclosure Order and Judgment, filed October 12, 2021.2

DATED: Honolulu, Hawaiʻi, October 23, 2024.

On the briefs: /s/ Keith K. Hiraoka
Presiding Judge
Nicholas J. Scardino,
Self-represented /s/ Sonja M.P. McCullen
Defendant-Appellant. Associate Judge

Charles R. Prather, /s/ Kimberly T. Guidry
for Plaintiff-Appellee. Associate Judge

2 Scardino's "Motion for Preemptory Challenge – Disqualification or
Recusal of Judge Jeannette H. Castagnetti," attached to his opening brief as
pages 23-28, is denied.

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