U.S. Bank Trust National Association v. Budget Printers, Inc.

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
09-APR-2020
11:42 AM
NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

U.S. BANK TRUST NATIONAL ASSOCIATION, AS OWNER TRUSTEE
OF THE SN 2011-A REO TRUST, Plaintiff-Appellee, v.
BUDGET PRINTERS, INC.; ALVIN S. ISHIHARA,
Defendants-Appellants, and MADELINE H. MIURA-
ISHIHARA; DEPARTMENT OF LABOR & INDUSTRIAL
RELATIONS, STATE OF HAWAI#I; CITY BANK, a Hawaii
Corporation, now known as CENTRAL PACIFIC BANK,
DEPARTMENT OF TAXATION, STATE OF HAWAI#I; LILLY A.
ISHIHARA, Defendants-Appellees, NORIKO SOTTA,
Defendant-Appellant; and JOHN and MARY DOES 2-20;
DOE PARTNERSHIPS, CORPORATIONS OR OTHER ENTITIES
1-20, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 09-1-0112)

SUMMARY DISPOSITION ORDER
(By: Fujise, Presiding Judge, Leonard and Chan, JJ.)

Defendants-Appellants Budget Printers, Inc., Alvin S.
Ishihara (Ishihara), and Noriko Sotta (collectively, Budget)
appeal from the August 3, 2016 "Order Granting In Part and
Denying In Part Purchaser Lohoco Properties LLC's [(Lohoco)]
Motion to Dispose of Personal Belongings and Properties Filed
April 11, 2016," (Order to Dispose) entered by the Circuit Court
of the First Circuit (Circuit Court).1
On appeal, Budget contends that the Circuit Court
lacked jurisdiction and legal authority, and violated due process
in to allowing Lohoco, a non-party, to dispose of Ishihara's
personal property without an evidentiary hearing.

1
The Honorable Jeannette H. Castagnetti presided.
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Upon careful review of the record on appeal and
relevant legal authorities, and giving due consideration to the
issues raised and arguments advanced by the parties, we resolve
Budget's appeal as follows and affirm.
As a preliminary matter, Lohoco2 argues that the
instant appeal should be dismissed as moot. On appeal, Budget
seeks, as its sole remedy, to vacate the Order to Dispose.
Budget apparently did not obtain a stay of the Order to Dispose,
and Lohoco asserts in its answering brief that Budget's personal
property has been disposed of. Therefore, it maintains, vacating
the Order to Dispose will not provide any real relief because
there is no personal property to recover and no affirmative claim
for relief in the form of damages has been asserted here.
The Hawai#i Supreme Court has stated:
[A] case is moot where the question to be determined is
abstract and does not rest on existing facts or rights.
Thus, the mootness doctrine is properly invoked where events
have so affected the relations between the parties that the
two conditions of justiciability relevant on appeal—-adverse
interest and effective remedy—-have been compromised.

Bank of New York Mellon v. R. Onaga, Inc., 140 Hawai#i 358, 365,
400 P.3d 559, 566 (2017).
Here, Lohoco points to no evidence in the record that
shows it actually sold any of Budget's personal property or if
there is any personal property left to recover. Therefore, we
cannot conclude that this appeal is moot.
While not entirely clear, Budget's jurisdictional
argument appears to be based on its contentions that the Circuit
Court had no authority to award the relief requested by Lohoco,
and that Lohoco was not a party to this action.
The circuit courts generally have discretion in civil
actions to make such orders "as may be necessary to carry into
full effect the powers which are or shall be given to them by law
or for the promotion of justice in matters pending before them."
OneWest Bank, F.S.B. v. Ass'n of Owners of Kumulani at the
Uplands at Mauna Kea, 146 Hawai#i 105, 112-13, 456 P.3d 178, 185-

2
Throughout the proceedings before the Circuit Court, Kenwei Chong,
managing member of Lohoco, Lohoco, and "his nominee" have been used
interchangeably. For simplicity's sake, we refer to them collectively as
"Lohoco" unless otherwise indicated.

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86 (2020) (quoting HRS § 603-21.9 (6) (2016); First Hawaiian Bank
v. Timothy, 96 Hawai#i 348, 357, 31 P.3d 205, 214 (App. 2001), as
amended (Aug. 30 and Sept. 17, 2001) (citing HRS § 603-21.9
(1993) (holding that "the circuit court in this case was
statutorily authorized, in aid of its original jurisdiction over
mortgage foreclosure actions, to enter appropriate orders against
[the purchaser] after he defaulted on his agreement to purchase
the mortgaged property at the foreclosure sale"). The Hawai#i
State Legislature has vested the circuit courts with general
jurisdiction over "[c]ivil actions and proceedings, HRS § 603-
21.5(a)(3) (Supp. 2000), and specific jurisdiction over mortgage
foreclosure actions. See HRS chapter 667, part I (1993 &
Supp. 2000)." Timothy, 96 Hawai#i at 356, 31 P.3d at 213.
In addition, this Court has recognized that
for reasons of judicial economy, we are not inclined to hold
that a court that enters an order confirming sale does not
have jurisdiction to enforce its order, since such a holding
would effectively require an independent action to be
brought each time a confirmed purchaser at a mortgage
foreclosure sale defaults, thus resulting in an unnecessary
multiplicity of suits, delay, and added costs.

Id. at 357-58, 31 P.3d at 214-15 (citation omitted).
Circuit courts also have jurisdiction over a successful
bidder at a judicial foreclosure sale, even though he or she was
not a party to the original foreclosure proceedings.
A successful bidder at a judicial sale becomes a so-called
quasi party to the proceedings, by virtue of the bid, even
though originally not a party to the action or proceeding in
which the sale was ordered, for some purposes, including the
right to urge or to oppose confirmation. Purchasers subject
themselves to the jurisdiction of the court in the original
suit as to all matters connected with the sale and therefore
have the right to interfere in the proceedings for their own
benefit and protection and to claim equitable relief. They
become subject to the future orders of the court, and are
bound as parties by the decree of the court confirming or
setting aside the sale. They can be compelled by summary
processes of the court, so long as the court's control over
the cause and the parties continues, to perform their
agreement specifically and comply with the terms of the
purchase, by payment or otherwise.

Timothy, 96 Hawai#i at 357, 31 P.3d at 214 (quoting 47 Am. Jur.
2d Judicial Sales § 162, at 573 (1995) (emphasis added)).
We fail to see why a confirmed purchaser, such as
Lohoco, would be any less a party when it seeks authorization on
matters substantially related to enforcement of its rights as a

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foreclosure purchaser. Likewise, we are not inclined to require
Lohoco to make these requests in a separate lawsuit.
We agree with Budget that the provisions in HRS
ch. 521, the Residential Landlord-Tenant Code, do not apply in
this foreclosure action. However, the circuit courts have the
power
[t]o make and award such judgments, decrees, orders and
mandates, issue such executions and other processes and do
such other acts and take such other steps as may be
necessary to carry into full effect the powers which are or
shall be given to them by law or for the promotion of
justice in matters pending before them.

HRS § 603-21.9(6). Under the unique circumstances in this case,
we hold that the Order to Dispose was necessary to give full
effect to the Writ of Ejectment the Circuit Court had issued in
this case by weighing the equities of the respective parties and
apportioning the costs in a just manner.
It is undisputed that, pursuant to the August 18, 2014
Judgment of foreclosure and subsequent submission by Lohoco of
the winning bid, the Circuit Court entered the September 29, 2015
Order Confirming Sale and Writ of Ejectment. No appeal was taken
from either the Judgment of foreclosure or the Order Confirming
Sale and Writ of Ejectment.
The Writ of Ejectment authorized removal of
Defendants BUDGET PRINTERS, INC.; ALVIN S. ISHIHARA,
MADELINE N. MIURA-ISHIHARA, NORIKO SOTTA from the premises
. . . , including their personal belongings and properties,
and [to] put KEN WEI CHONG or his nominee, in full
possession thereof, and make due return of this Writ with
what you have endorsed thereon.

(Emphasis added.)
Budget does not dispute that through counsel and
directly, Lohoco was in contact with Budget on multiple
occasions, seeking a mutually agreeable transfer of possession of
the subject Property, without success. As late as March 4, 2016,
Chong approached Ishihara directly with a proposal for a lease
agreement for the Property, which Ishihara refused to discuss.
Finally, on March 6, 2016, the civil deputy/process server,
Sandra Whang (Whang), plus another process server, two deputy
sheriffs, a locksmith, and movers arrived to remove Ishihara and
his personal property pursuant to the Writ of Ejectment. After

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eight hours, while Ishihara was allowed by Chong to complete a
printing job in progress, and after Ishihara refused to move his
personal property or pay the movers to remove his property from
the premises, personal property--with the exception of several
pieces of large commercial printing equipment--was removed from
the premises and placed in storage with commercial storage
companies.
After several subsequent communications between counsel
failed to reach a settlement of the matter, on April 11, 2016,
Lohoco filed its Motion to Dispose, asking the Circuit Court to
authorize the disposal of all property found on the premises when
the Writ of Ejectment was executed, or the return of Budget's
property contingent upon its payment of all costs and expenses in
connection with the removal and storage of the personal property,
as well as the value of lost rental income for the space on the
premises occupied by the personal property remaining on the
premises. Budget filed a memorandum in opposition with
attachments and Lohoco filed a reply with attachments.
At the hearing on the Motion to Dispose, counsel
presented argument, but no testimony was taken. In making its
ruling, the Circuit Court noted,
As both sides have noted, there is no direct statutory
authority on point as to what a purchaser of a foreclosed
property should do with respect to disposal of personal
property that is remaining on the property by the defendants
upon serving the writ of ejectment.
And in this particular circumstance, I'll note that,
again, purchaser had attempted to try to resolve the issue
with the defendants. And resolution was not reached,
including up to the day when the ejectment, the writ, was
served. There was the proposal for the defendants to take
the personal property to another location, and that was
refused.
So then the next question is whether or not the
purchaser's actions were reasonable in storing the property
and looking for direction. I don't believe it would be
reasonable for the purchaser to simply take the property and
put it on the street.

The Circuit Court subsequently ordered that if Budget
paid Lohoco its incurred movers' fees and storage costs in the
amount of $16,890.59 within two weeks of the hearing, Lohoco
would permit Budget to regain his personal property, at Budget's
sole expense. If Budget failed to do so, Lohoco was authorized

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to advertise and sell Budget's personal property, the proceeds of
which, after deducting $16,890.59, would be held in trust for
Budget for thirty days--thereafter, the proceeds would be
forfeited to Lohoco; any remaining personal property not sold
could be disposed of by Lohoco without liability to Budget.
Given the unique circumstances of this case, we
conclude the Circuit Court did not abuse its authority to fashion
a remedy in furtherance of its Writ of Ejectment in Lohoco's
favor. The court carefully considered the equities of the
situation, including Lohoco's attempts to reach an amicable
resolution with Budget before seeking the court's assistance and
placing the personal property in a safe and secure environment
while the dispute was resolved, and considering the lack of
reasonable alternatives, affording still another opportunity for
Budget to recover its personal property by paying the costs
incurred by Lohoco was a reasonable resolution to the impasse.
Finally, Budget argues a violation of due process by
the Circuit Court when it denied an evidentiary hearing prior to
ruling on the Motion to Dispose. See U.S. Const. amend. XIV,
§ 1; Haw. Const. art. I, § 5. "Due process calls for such
procedural protections as the particular situation demands. . . .
The basic elements of procedural due process are notice and an
opportunity to be heard at a meaningful time and in a meaningful
manner." Peak Capital Group, LLC v. Perez, 141 Hawai#i 160, 178,
407 P.3d 116, 134 (2017). However, circumstances of this case
show that these fundamental elements were met.
Budget received service of the Motion to Dispose and
filed a memorandum in opposition to the motion. Budget appeared
at a hearing on the motion where it presented extensive argument
in opposition to the motion. Budget argues that, under the rules
of court, it was unable to file a rebuttal to Lohoco's reply
memorandum and it was deprived of due process when the Circuit
Court made findings regarding the reasonableness of Lohoco's
actions without an evidentiary hearing. Budget's argument is
without merit.
Budget appeared at the hearing, having received
Lohoco's reply memorandum. It did not offer evidence, nor did it

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make an offer of proof regarding what evidence it could present
if an evidentiary hearing were held. Under these circumstances,
Budget has failed to show it was denied due process.
Based on the foregoing, the August 3, 2016 "Order
Granting In Part and Denying In Part Purchaser Lohoco Properties
LLC’s Motion to Dispose of Personal Belongings and Properties
Filed April 11, 2016," entered by the Circuit Court of the First
Circuit is affirmed.
DATED: Honolulu, Hawai#i, April 9, 2020.

On the briefs: /s/ Alexa D.M. Fujise
Presiding Judge
Gary Victor Dubin
Frederick J. Arensmeyer /s/ Katherine G. Leonard
for Defendants-Appellants. Associate Judge

Christopher Shea Goodwin /s/ Derrick H.M. Chan
Robert S. Alcorn Associate Judge
for Purchaser-Appellee
LOHOCO Properties, LLC.

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