Panuelos v. Bank of America, N.A.

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
31-OCT-2024
08:47 AM
Dkt. 102 ORD

NOS. CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX and CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

CAAP-XX-XXXXXXX
BERNARDO PANUELOS, Plaintiff-Appellant,
and
CATHERINE BOYD; STEPHEN BURGSTALLER; CRISTINA
BURGSTALLER; JACQUELINE BUI; MARIETTA B. HICKEY
aka MARIETTA BOMBARDIERI; PAMELA B. SHULTS;
ANDRICK C.Y. TONG; BARBARA J.K. DUARTE;
BRUCE A. FOX; STEVEN V. TAYLOR; MIA B. TAYLOR;
SHELLEY M. BUCK; FARZAD AZAD; KATHRYN M. AZAD;
GARY W. FEINER; MICHAEL J. HILLINGER;
and LISA M. HILLINGER, Plaintiffs-Appellees,
v.
BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; HIGHTECHLENDING, INC.;
DAVID FUGATE; AMERICAN SAVINGS BANK, F.S.B.;
JEFFREY T. DANA; JENNIFER M. HAGUE; MATTHEW ROBERT BUSH;
HEATHER NOEL BENNETT; QUICKEN LOANS, INC.; MARK BURROWES;
RONALD K. SCOTT; SHERYL RAE SCOTT; PROVIDENT FUNDING
ASSOCIATES, L.P.; DEREK D. KAWAIAEA; ACADEMY MORTGAGE
CORPORATION; FERNANDO FRONDA; EVERGREEN MONEYSOURCE
MORTGAGE COMPANY; ALVIN LEO SIPE AND SUSAN KITANIK SIPE,
INDIVIDUALLY AND AS TRUSTEES OF THE BLACK INK TRUST DATED
DECEMBER 27, 2016; GABRIEL L. BONDE; FRANK WHITNEY MacLEAN
AND PAMLA HAY MacLEAN, INDIVIDUALLY AND AS TRUSTEES
OF THE FRANK WHITNEY MacLEAN AND PAMLA HAY MacLEAN
REVOCABLE LIVING TRUST DATED NOVEMBER 3, 2004;
CHARLES Z. FEDAK; MERI L. FEDAK; CLAYTON T. HAUSEUR
AND GRACE K. HAUSEUR, INDIVIDUALLY AND AS
TRUSTEES OF THE HAUSEUR FAMILY TRUST DATED
JANUARY 17, 2008; WELLS FARGO BANK, N.A.,
Defendants-Appellees;
and DOE DEFENDANTS 1-50, Defendants
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CIVIL NO. 2CC191000153)

and
CAAP-XX-XXXXXXX
MICHAEL J. HILLINGER and LISA M. HILLINGER,
Plaintiffs-Appellants,
and
CATHERINE BOYD; STEPHEN BURGSTALLER; CRISTINA
BURGSTALLER; JACQUELINE BUI; MARIETTA B. HICKEY
aka MARIETTA BOMBARDIERI; PAMELA B. SHULTS;
ANDRICK C.Y. TONG; BARBARA J.K. DUARTE;
BRUCE A. FOX; STEVEN V. TAYLOR; MIA B. TAYLOR;
SHELLEY M. BUCK; FARZAD AZAD; KATHRYN M. AZAD;
GARY W. FEINER; BERNARDO PANUELOS,
Plaintiffs-Appellees,
v.
BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; HIGHTECHLENDING, INC.;
DAVID FUGATE; AMERICAN SAVINGS BANK, F.S.B.;
JEFFREY T. DANA; JENNIFER M. HAGUE; MATTHEW ROBERT BUSH;
HEATHER NOEL BENNETT; QUICKEN LOANS, INC.; MARK BURROWES;
RONALD K. SCOTT; SHERYL RAE SCOTT; PROVIDENT FUNDING
ASSOCIATES, L.P.; DEREK D. KAWAIAEA; ACADEMY MORTGAGE
CORPORATION; FERNANDO FRONDA; EVERGREEN MONEYSOURCE
MORTGAGE COMPANY; ALVIN LEO SIPE AND SUSAN KITANIK SIPE,
INDIVIDUALLY AND AS TRUSTEES OF THE BLACK INK TRUST DATED
DECEMBER 27, 2016; GABRIEL L. BONDE; FRANK WHITNEY MacLEAN
AND PAMLA HAY MacLEAN, INDIVIDUALLY AND AS TRUSTEES
OF THE FRANK WHITNEY MacLEAN AND PAMLA HAY MacLEAN
REVOCABLE LIVING TRUST DATED NOVEMBER 3, 2004;
CHARLES Z. FEDAK; MERI L. FEDAK; CLAYTON T. HAUSEUR
AND GRACE K. HAUSEUR, INDIVIDUALLY AND AS
TRUSTEES OF THE HAUSEUR FAMILY TRUST DATED
JANUARY 17, 2008; WELLS FARGO BANK, N.A.,
Defendants-Appellees;
and DOE DEFENDANTS 1-50, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CIVIL NO. 2CC191000153)

and
CAAP-XX-XXXXXXX
JACQUELINE BUI, Plaintiff-Appellant,
and
CATHERINE BOYD; STEPHEN BURGSTALLER; CRISTINA
BURGSTALLER; MARIETTA B. HICKEY
aka MARIETTA BOMBARDIERI; PAMELA B. SHULTS;
ANDRICK C.Y. TONG; BARBARA J.K. DUARTE;
BRUCE A. FOX; STEVEN V. TAYLOR; MIA B. TAYLOR;
SHELLEY M. BUCK; FARZAD AZAD; KATHRYN M. AZAD;
GARY W. FEINER; BERNARDO PANUELOS;
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

MICHAEL J. HILLINGER; and LISA M. HILLINGER,
Plaintiffs-Appellees,
v.
BANK OF AMERICA, N.A.; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; HIGHTECHLENDING, INC.;
DAVID FUGATE; AMERICAN SAVINGS BANK, F.S.B.;
JEFFREY T. DANA; JENNIFER M. HAGUE; MATTHEW ROBERT BUSH;
HEATHER NOEL BENNETT; QUICKEN LOANS, INC.; MARK BURROWES;
RONALD K. SCOTT; SHERYL RAE SCOTT; PROVIDENT FUNDING
ASSOCIATES, L.P.; DEREK D. KAWAIAEA; ACADEMY MORTGAGE
CORPORATION; FERNANDO FRONDA; EVERGREEN MONEYSOURCE
MORTGAGE COMPANY; ALVIN LEO SIPE AND SUSAN KITANIK SIPE,
INDIVIDUALLY AND AS TRUSTEES OF THE BLACK INK TRUST DATED
DECEMBER 27, 2016; GABRIEL L. BONDE; FRANK WHITNEY MacLEAN
AND PAMLA HAY MacLEAN, INDIVIDUALLY AND AS TRUSTEES
OF THE FRANK WHITNEY MacLEAN AND PAMLA HAY MacLEAN
REVOCABLE LIVING TRUST DATED NOVEMBER 3, 2004;
CHARLES Z. FEDAK; MERI L. FEDAK; CLAYTON T. HAUSEUR
AND GRACE K. HAUSEUR, INDIVIDUALLY AND AS
TRUSTEES OF THE HAUSEUR FAMILY TRUST DATED
JANUARY 17, 2008; WELLS FARGO BANK, N.A.,
Defendants-Appellees;
and DOE DEFENDANTS 1-50, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CIVIL NO. 2CC191000153)

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

Jacqueline Bui seeks reconsideration of part III.D of
our September 24, 2024 Memorandum Opinion, in which we held that
her quiet title and ejectment claims against Matthew Robert Bush
and Heather Noel Bennett (who bought Bui's foreclosed property
from Bank of America, N.A. (BANA) after BANA sold the property to
itself in a nonjudicial foreclosure) were time-barred under
Hawaii Revised Statutes (HRS) § 657-1(4), Delapinia v. Nationstar
Mortgage LLC, 150 Hawai#i 91, 104, 497 P.3d 106, 119 (2021)
(Delapinia II) ("sales pursuant to a wrongful foreclosure are
voidable, regardless of whether the violation was statutory or
contractual, substantial or a mere irregularity"), and Hancock v.
Kulana Partners, LLC, 145 Hawai#i 374, 382, 452 P.3d 371, 379
(2019) (holding that HRS § 657-1(4) applies to claim that deed
was voidable).

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

Bui's only argument warranting consideration under
Hawai#i Rules of Appellate Procedure Rule 40(b) is that we should
not have applied Delapinia II retroactively. In Delapinia II,
the supreme court held "that wrongful foreclosures in violation
of the power of sale are voidable, and to the extent Silva[ v.
Lopez, 5 Haw. 262 (Haw. Kingdom 1884)] is to the contrary, it is
overruled." 150 Hawai#i at 93, 497 P.3d at 108. Bui contends
that Silva was good law when she filed her amended complaint in
2019, and there is no statute of limitations to challenge a void
foreclosure.
BANA and Bush and Bennett counter that Delapinia II
didn't create a new rule of law — it clarified "that a wrongful
foreclosure that violates the power of sale is voidable, not
void." Id. at 101, 497 P.3d at 116. We stated as much in
Delapinia v. Nationstar Mortgage LLC, 146 Hawai#i 218, 229, 458
P.3d 929, 940 (App. 2020), aff'd in part, vacated in part, 150
Hawai#i 91, 497 P.3d 106 (2021):

While it is true that the supreme court has not expressly
overruled Silva, the supreme court has more recently held
that improper foreclosure sales are voidable.
. . . .

In light of the supreme court's more recent holdings,
we decline to adopt the Delapinias' reliance on Silva and
Lee[ v. HSBC Bank USA, 121 Hawai#i 287, 218 P.3d 775
(2009)]. We conclude that improper foreclosure sales are
voidable, rather than void, and that the supreme court has
either distinguished or impliedly overruled its earlier
decisions holding to the contrary.

Id. at 229, 458 P.3d at 940.
Of this, the supreme court stated: "to the extent the
ICA concluded that Silva has been impliedly overruled, it erred.
. . . That said, Silva is inconsonant with the direction of our
recent precedent, and we clarify today that a wrongful
foreclosure that violates the power of sale is voidable, not
void." Delapinia II, 150 Hawai#i at 101, 497 P.3d at 116.

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

Whether or not Delapinia II created new law, judicial
decisions are assumed to apply retroactively. League of Women
Voters of Honolulu v. State, 150 Hawai#i 182, 207, 499 P.3d 382,
407 (2021); State v. Ikezawa, 75 Haw. 210, 220, 857 P.2d 593, 597
(1993). As for the retroactive effect of new law, the supreme
court has stated:

We recognize that we announce a new rule in this case,
and that we are free to apply this new rule with or without
retroactivity. This court has generally considered three
primary alternatives in deciding to what degree a new rule
is to have retroactive effect. First, this court may give a
new rule purely prospective effect, which means that the
rule is applied neither to the parties in the law-making
decision nor to those others against or by whom it might be
applied to conduct or events occurring before that decision.
Second, this court may give a new rule limited or pipeline
retroactive effect, under which the rule applies to the
parties in the decision and all cases that are on direct
review or not yet final as of the date of the decision.
Third, this court may give a new rule full retroactive
effect, under which the rule applies both to the parties
before the court and to all others by and against whom
claims may be pressed. . . .

In exercising our discretion in deciding the effect of
a new rule, we weigh the merits and demerits of retroactive
application of the particular rule in light of (a) the
purpose of the newly announced rule, (b) the extent of
reliance . . . on the old standards, and (c) the effect on
the administration of justice of a retroactive application
of the new standards.

Lewi v. State, 145 Hawai#i 333, 349 n.21, 452 P.3d 330, 346 n.21
(2019) (cleaned up).
When the supreme court intended to limit new law's
retroactive effect, it has said so and explained why. See, e.g.,
Wilmington Sav. Fund Soc'y, FSB v. Domingo, 155 Hawai#i 1, 16,
556 P.3d 347, 362 (2024) (giving limited retroactive effect to
partial overruling of Bank of Am., N.A. v. Reyes-Toledo, 143
Hawai#i 249, 428 P.3d 761 (2018)). The Delapinia II opinion did
not give its overruling of Silva purely prospective or limited
retroactive effect. We must, and did, apply it to Bui's claims
against Bush and Bennett for quiet title and ejectment.

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

Bui's October 8, 2024 Motion for Partial
Reconsideration of the September 24, 2024 Memorandum Opinion is
denied.
DATED: Honolulu, Hawai#i, October 31, 2024.

/s/ Keith K. Hiraoka
Presiding Judge

/s/ Karen T. Nakasone
Associate Judge

/s/ Kimberly T. Guidry
Associate Judge

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