Aurora Loan Services, LLC v. Szymanski

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
18-NOV-2024
08:03 AM
Dkt. 93 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

AURORA LOAN SERVICES LLC, Plaintiff-Appellee,
v.
MICHAEL JON SZYMANSKI, Defendant-Appellant,
and
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., SOLELY AS
NOMINEE FOR COUNTRYWIDE MORTGAGE VENTURES, LLC DBA WESTERN
PARADISE FINANCIAL; and WAILEA COMMUNITY ASSOCIATION,
Defendants-Appellees,
and
DOES 1-20, inclusive, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CASE NO. 2CC101000507)

SUMMARY DISPOSITION ORDER
(By: Leonard, Acting Chief Judge, Hiraoka and Wadsworth, JJ.)

Michael Jon Szymanski appeals from the April 30, 2021
Amended Judgment entered by the Circuit Court of the Second
Circuit.1 We affirm the July 5, 2017 "Order Granting Plaintiff's
Non-Hearing Motion to Clarify Order of Dismissal" (Order No. 1)
and the April 14, 2021 "Amended Findings of Fact, Conclusions of
Law and Order Denying Defendant Szymanski's Non-Hearing Motion to
Set Aside the 7/5/2017 Order Granting Plaintiff's Non-Hearing
Motion to Clarify Order of Dismissal" (Order No. 2). But we
reverse the April 6, 2021 Judgment for Aurora Loan Services LLC

1
The Honorable Peter T. Cahill presided.
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

and the Amended Judgment because Aurora's foreclosure claim was
never adjudicated on the merits.
Aurora filed a foreclosure complaint against Szymanski
on August 11, 2010. Attached were copies of a promissory note
and mortgage for property in Wailea, Maui, and a December 19,
2008 notice of default mailed to Szymanski at a Salt Lake City,
Utah address.
A return purporting to show personal service on
Szymanski at the Wailea address was filed on September 8, 2010.
The return was not acknowledged; the process server wrote:
"Refused to sign — very uncooperative[.]" Szymanski's default
was entered on October 6, 2010.
Aurora did not file a pretrial statement. On
November 3, 2011, an Order of Dismissal was entered under
Rule 12(q) of the Rules of the Circuit Courts of the State of
Hawai#i (RCCH).2 Aurora did not move to set aside the Order of
Dismissal. No judgment was entered.
On June 20, 2017, Aurora moved for clarification that
the Order of Dismissal was without prejudice. The motion was
served on Szymanski by mail to the Wailea address. Order No. 1
granting Aurora's motion was entered on July 5, 2017.
We take judicial notice3 that Deutsche Bank Trust
Company Americas filed a foreclosure complaint against Szymanski
on January 11, 2018. Deutsche Bank claimed to be the holder of
Szymanski's note and the assignee of the mortgage on the Wailea
property.
Szymanski moved to set aside Order No. 1 on December 2,
2019. He signed a declaration stating he was never served with
Aurora's complaint or its motion for clarification. He submitted
copies of account statements from 2017 that had been mailed to
him in Utah to show Aurora knew where he lived. An evidentiary
hearing was held on October 23, 2020. The Judgment was entered

2
The Honorable Shackley F. Raffetto presided.
3
See Rule 201, Hawaii Rules of Evidence.

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

on April 6, 2021. Order No. 2 denying Szymanski's motion to set
aside was entered on April 14, 2021. The Amended Judgment was
entered on April 30, 2021. This appeal followed.
Szymanski states eight overlapping points of error.
The primary issue is whether the circuit court erred by
clarifying that the Order of Dismissal was without prejudice. We
review for abuse of discretion. Ryan v. Palmer, 130 Hawai#i 321,
323, 310 P.3d 1022, 1024 (App. 2013).
RCCH Rule 12(q) (2011) provided:

Dismissal for want of prosecution. An action may be
dismissed sua sponte with written notice to the parties if a
pretrial statement has not been filed within 8 months after
a complaint has been filed (or within any further period of
extension granted by the court) or if a trial setting status
conference has not been scheduled as required by Rule 12(c).
Such dismissal may be set aside and the action reinstated by
order of the court for good cause shown upon motion duly
filed not later than ten (10) days from the date of the
order of dismissal.

Former RCCH Rule 12(q) didn't specify whether a
dismissal for failure to file a pretrial statement was with or
without prejudice. The Order of Dismissal didn't state whether
the dismissal was with or without prejudice. The record does not
show "a deliberate attempt to delay or actions [by Aurora] rising
to the level of contumacious conduct, and the circuit court did
not make any such finding." Ryan, 130 Hawai#i at 324, 310 P.3d
at 1025. No judgment was entered on the Order of Dismissal.
Under these circumstances, the matter was not finally adjudicated
on the merits, and the dismissal was without prejudice. Saplan
v. U.S. Bank Nat'l Ass'n, 154 Hawai#i 181, 188-89, 549 P.3d 266,
273-74 (2024). The circuit court did not abuse its discretion by
clarifying that the Order of Dismissal was entered without
prejudice. However, the circuit court erred by entering the
Judgment and the Amended Judgment because there was no
adjudication on the merits of Aurora's foreclosure claim.
Szymanski argues his default should not have been
entered because he was never served with Aurora's foreclosure
complaint. He is not prejudiced by the entry of default because

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

Aurora's claim was never adjudicated on the merits and we are
reversing the Judgment and Amended Judgment.
Szymanski argues the dismissal without prejudice
prejudiced him because he has to defend against Deutsche Bank's
foreclosure action. The argument is not persuasive. Having to
defend a lawsuit without the benefit of res judicata for a claim
that was never decided on the merits is not prejudice. Cf. Chen
v. Mah, 146 Hawai#i 157, 180 n.28, 457 P.3d 796, 819 n.28 (2020)
("The mere fact that the nondefaulting party will be required to
prove his case without the inhibiting effect of the default upon
the defaulting party does not constitute prejudice which should
prevent a reopening.").
Szymanski's argument that he was prejudiced by
"Aurora's unreasonable and ridiculously-long 6 years of delay" is
also not persuasive. There is no prejudice because Szymanski
retained whatever defenses he may have had against Aurora to
assert against Deutsche Bank, including laches.
Szymanski's other points of error lack merit. We
affirm the July 5, 2017 "Order Granting Plaintiff's Non-Hearing
Motion to Clarify Order of Dismissal" and the April 14, 2021
"Amended Findings of Fact, Conclusions of Law and Order Denying
Defendant Szymanski's Non-Hearing Motion to Set Aside the
7/5/2017 Order Granting Plaintiff's Non-Hearing Motion to Clarify
Order of Dismissal[.]" The April 6, 2021 Judgment and the
April 30, 2021 Amended Judgment are reversed because Aurora's
foreclosure claim was never adjudicated on the merits.
DATED: Honolulu, Hawai#i, November 18, 2024.

On the briefs:
/s/ Katherine G. Leonard
Keith M. Kiuchi, Acting Chief Judge
for Defendant-Appellant.
/s/ Keith K. Hiraoka
Charles R. Prather, Associate Judge
Robin Miller,
Sun Young Park, /s/ Clyde J. Wadsworth
Peter T. Stone, Associate Judge
for Plaintiff-Appellee
Aurora Loan Services LLC.

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