Nationstar Mortgage LLC v. Kanahele

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
31-OCT-2024
08:32 AM
Dkt. 115 AMSDO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

NATIONSTAR MORTGAGE LLC, Plaintiff-Appellant,
v.
DANIEL KALEOALOHA KANAHELE; THE ESTATE OF MARCUS C. KANAHELE;
CHILD SUPPORT ENFORCEMENT AGENCY, STATE OF HAWAII; UNITED STATES
OF AMERICA; FIA CARD SERVICES, N.A.; and GLORIA KANAHELE,
PERSONAL REPRESENTATIVE OF THE ESTATE OF MARCUS C. KANAHELE,
Defendants-Appellees,
and
DOES 2-20, inclusive, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CASE NO. 2CC141000584)

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

Nationstar Mortgage LLC appeals from the May 27, 2021
Judgment entered by the Circuit Court of the Second Circuit.1
Nationstar challenges the May 27, 2021 "Order Granting in Part
and Denying in Part Plaintiff's Motion To: (1) Set Aside Order of
Dismissal Filed June 26, 2020, and Re-set Trial Deadlines; or
(2) Alternatively, to Amend the Order Entered June 26, 2020,
Filed March 9, 2021." We affirm.
Nationstar filed a residential mortgage foreclosure
complaint against Daniel Kaleoaloha Kanahele and others on

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NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

October 7, 2014. The complaint was signed by attorney Lloyd T.
Workman. The circuit court granted Nationstar's motion for
summary judgment and decree of foreclosure and entered a judgment
against all defendants. Kanahele appealed. We vacated the
judgment, holding that Nationstar did not show it was entitled to
enforce the Note when its complaint was filed as required by Bank
of America, N.A. v. Reyes-Toledo, 139 Hawai#i 361, 390 P.3d 1248
(2017). Nationstar Mortg. LLC v. Kanehele, No. CAAP-XX-XXXXXXX,
2018 WL 2944168, at *9 (Haw. App. June 12, 2018) (mem. op.),
aff'd, 144 Hawai#i 394, 443 P.3d 86 (2019).
Kanahele applied for certiorari. The supreme court
affirmed our conclusion on the standing issue, but held we erred
by concluding that Nationstar's business records were admissible
under the business records exception to the hearsay rule, and we
should have clarified that the circuit court must address
Kanahele's affirmative defenses because Nationstar was a holder,
not a holder in due course. Nationstar Mortg. LLC v. Kanahele,
144 Hawai#i 394, 396, 443 P.3d 86, 88 (2019). The supreme court
remanded the case to the circuit court and its judgment on appeal
was entered on June 4, 2019.
Nationstar took no action after the remand. On
June 26, 2020, the circuit court entered an "Order of Dismissal
(No Activity)" and electronically served Workman. The order
stated the case was dismissed with prejudice, but could be
reinstated for good cause by motion filed within ten days.
Hawai#i Rules of Civil Procedure (HRCP) Rule 41(b)(2).
On March 9, 2021 Nationstar moved to set aside the
Order of Dismissal or, alternatively, to amend the dismissal to
be without prejudice. The motion was heard on April 21, 2021.
The circuit court declined to reinstate the case, but granted
Nationstar's request that the dismissal be without prejudice.
The Order and the Judgment were entered on May 27, 2021. This
appeal followed. We review for abuse of discretion. Ryan v.
Palmer, 130 Hawai#i 321, 323, 310 P.3d 1022, 1024 (App. 2013).

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Nationstar's briefing suggests the circuit court is to
blame for Nationstar's omissions. Nationstar argues it did not
receive notice of the Order of Dismissal because it "was
inexplicably and inexcusably not served" on Nationstar's "primary
counsel," David B. Rosen. The argument is not persuasive. On
October 31, 2019, the supreme court entered its Second Amended
Order Amending the Hawai#i Rules of Civil Procedure. In re Haw.
Rules of Civ. Proc., SCRU-XX-XXXXXXX (Haw. Oct. 31, 2019). New
HRCP Rule 1.1 required that "each attorney representing a party
to a case maintained in the Judiciary Information Management
System (JIMS) shall register as a Judiciary Electronic Filing and
Service System (JEFS) User and shall file all documents
electronically." Amended HRCP Rule 1(c) provided: "Documents
filed and notices given in accordance with the Hawai#i Electronic
Filing and Service Rules shall be deemed to comply with the . . .
service requirements of any part of these Rules." Hawai#i
Electronic Filing and Service Rules Rule 6.1 provided: "The
Notice of Electronic Filing automatically generated by JEFS [the
Judiciary Electronic Filing and Service System] and JIMS [the
Judiciary Information Management System] constitutes service of
the electronically filed document to JEFS Users."
The new and amended rules took effect nunc pro tunc
October 28, 2019. In re Haw. Rules of Civ. Proc., SCRU-11-
0000051 (Haw. Oct. 31, 2019). On March 31, 2020, Kanahele's
attorney electronically filed a notice of address change. The
Notice of Electronic Filing (NEF) for the notice of address
change shows service on Workman — the attorney who signed
Nationstar's complaint — as does the June 26, 2020 NEF for the
Order of Dismissal. Rosen was not served with notice of address
change or the Order of Dismissal because he did not file an
appearance in JEFS until March 9, 2021, almost nine months after
the June 26, 2020 Order of Dismissal was entered.
Nationstar argues it includes multiple attorneys on its
cases for various reasons, and while it "certainly does not

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expect the Circuit Court to know which attorney is handling what
aspect of a foreclosure action" "it is reasonable to expect that
if there are attorneys identified in its case caption, that all
of those attorneys will receive notices (albeit electronically)."
We disagree. None of the attorneys listed in Nationstar's
captions entered appearances in JEFS for the case, which was
maintained in JIMS. After October 28, 2019, it was not
reasonable for an attorney who didn't register as a JEFS user in
a JIMS-maintained case to expect to receive an NEF. The circuit
court's failure to serve the June 26, 2020 Order of Dismissal on
Rosen or any of the Aldridge Pite attorneys besides Workman was
neither inexplicable nor inexcusable.
Nationstar argued in circuit court that "due to
COVID-19 stay at home orders, typical Aldridge Pite procedures by
which Mr. Workman (or his paralegal) might have forwarded the
Order of Dismissal to Mr. Rosen were not in practice."
Nationstar argues on appeal that the Order of Dismissal "was
entered in the beginning months of a global pandemic of COVID-19"
and Workman was "working from home and did not yet have the same
procedures in place that had existed previously." But HRCP
Rule 1.1, which required each attorney representing a party in a
JIMS-maintained case to register as a JEFS user in the case, took
effect more than four months before March 5, 2020, the date then-
Governor David Y. Ige declared a state of emergency due to the
COVID-19 pandemic. See Order, In re Judiciary's Response to the
COVID-19 Outbreak, SCMF-XX-XXXXXXX (Haw. Mar. 16, 2020). The
circuit court is not to blame for attorneys not entering
appearances in JEFS before or after Governor Ige's emergency
order was issued.
There was no clerical mistake warranting relief under
HRCP Rule 60(a); nor does the record establish excusable neglect
or any other reason justifying relief from the Order of Dismissal
under HRCP Rule 60(b)(1) or (6). Workman was served with the
Order of Dismissal. Nationstar did not move to reinstate within

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the time prescribed by HRCP Rule 41(b)(2) and stated in the Order
of Dismissal. Under these circumstances the circuit court acted
within its discretion by declining to reinstate Nationstar's
foreclosure action.2
Nationstar argues the circuit court abused its
discretion because Nationstar might not be legally able to refile
its foreclosure action. That argument was not made to the
circuit court. Rather, Nationstar specifically asked the court
to amend the Order of Dismissal to be without prejudice. It
represented that it "will ensure that it will promptly commence a
new foreclosure action[.]" The court granted that relief. "It
is unfair to the trial court to reverse on a ground that no one
even suggested might be error. It . . . does not comport with
the concept of an orderly and efficient method of administration
of justice." Kawamata Farms, Inc. v. United Agri Prods., 86
Hawai#i 214, 248, 948 P.2d 1055, 1089 (1997).
The "Order Granting in Part and Denying in Part
Plaintiff's Motion To: (1) Set Aside Order of Dismissal Filed
June 26, 2020, and Re-set Trial Deadlines; or (2) Alternatively,
to Amend the Order Entered June 26, 2020, Filed March 9, 2021"
and the "Judgment[,]" both entered by the circuit court on
May 27, 2021, are affirmed.
DATED: Honolulu, Hawai#i, October 31, 2024.

On the briefs:
/s/ Katherine G. Leonard
David B. Rosen, Acting Chief Judge
for Plaintiff-Appellant
Nationstar Mortgage LLC. /s/ Keith K. Hiraoka
Associate Judge
Kalama M. Lui-Kwan,
for Plaintiff-Appellant /s/ Clyde J. Wadsworth
Nationstar Mortgage LLC. Associate Judge

2
Rosen, who signed Nationstar's opening brief, is cautioned about
making unsubstantiated allegations that the circuit court had "a bias against
mortgage lenders" and characterizing the circuit court's decision as
"abusive." See Hawai#i Rules of Professional Conduct Rule 3.5(b) and Comment
[2].

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Sean C. Aronson,
Lance D. Collins,
for Defendant-Appellee
Daniel Kaleoaloha Kanahele.

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