Philips v. Arensdorf

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
25-JUN-2025
07:59 AM
Dkt. 55 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

CRAIG PHILIPS, ANN PHILIPS, Plaintiffs-Appellants,
and MALIA AYAME BEACH, Plaintiff-Appellee,
v.
ERIK MICHAELE ARENSDORF, MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., CFBANK NATIONAL ASSOCIATION,
HAWAII STATE FEDERAL CREDIT UNION, and BANK OF AMERICA, N.A.,
Defendants-Appellees,
and
DOE DEFENDANTS 1-50, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CIVIL NO. 2CCV-XX-XXXXXXX)

SUMMARY DISPOSITION ORDER
(By: Leonard, Acting C.J., and Wadsworth and Guidry, JJ.)

Plaintiffs-Appellants Craig Philips and Ann Philips
(the Philipses) appeal from the August 2, 2022 Judgment entered
in favor of Defendant-Appellee CFBank National Association
(CFBank), pursuant to Hawai#i Rules of Civil Procedure Rule
54(b), by the Circuit Court of the Second Circuit (Circuit
Court).1/ The Philipses also challenge the Circuit Court's: (1)
August 2, 2022 "Order Granting . . . CFBank['s] . . . Motion to
Dismiss Complaint or Alternatively for Summary Judgment (Summary
Judgment Order); and (2) August 16, 2022 "Order Denying
Plaintiffs' Motion for Partial Reconsideration as to Count III in
the Order Granting in Part and Denying in Part Defendants Bank of
America, N.A. and Mortgage Electronic Registration Systems,
Inc.'s Motion to Dismiss Complaint, Filed March 29, 2021, Filed

1/
The Honorable Kirsten M. Hamman presided.
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

August 2, 2021 [Dkt. 52]" (Order Denying Reconsideration).
In 2009, BAC Home Loans Servicing, LP (BAC),
predecessor in interest to Defendant-Appellee Bank of America,
N.A. (BANA), initiated a non-judicial foreclosure of the
Philipses' property in Kihei (Property). The Property was sold
to BAC at public auction in 2010. BAC conveyed the Property to
Federal Home Loan Mortgage Corporation, which in turn conveyed
the Property to Defendant-Appellee Erik Michaele Arensdorf
(Arensdorf) via limited warranty deed in 2011. In 2018,
Arensdorf obtained a loan from CFBank, and encumbered the
Property with a mortgage in favor of Defendant-Appellee Mortgage
Electronic Registration Systems, Inc. (MERS), as nominee for
CFBank. In 2019, Arensdorf obtained a revolving line of credit
from Defendant-Appellee Hawaii State Federal Credit Union
(HSFCU), and encumbered the Property with a mortgage in favor of
HFSCU.
On November 2, 2020, the Philipses and Plaintiff-
Appellee Malia Ayame Beach filed a complaint comprising three
counts: (1) wrongful deprivation of real property against BANA
and its predecessors (Count I); (2) unfair and deceptive trade
practices and unfair methods of competition under Hawaii Revised
Statutes (HRS) Chapter 480 against BANA and its predecessors
(Count II); and (3) quiet title and ejectment (QTE) by the
Philipses only against Arensdorf, MERS, CFBank, and HSFCU
(collectively, the QTE Defendants) (Count III). Count III
alleged, in part by incorporation, that: (1) the Philipses seek
return of title and possession of property "taken from them in a
foreclosure contrary to the power of sale and the governing
statute"; (2) the non-judicial foreclosure of the Property failed
to comply with the power of sale clause in the subject mortgage
and the requirements of HRS Chapter 667; (3) therefore, all
resulting "sales, conveyances, and deeds must be treated as
void"; (4) because "the mortgagee's quitclaim deed to itself or
its nominee was void ab initio, the deed to the QTE Defendants
who claim title of record and the mortgagees to their mortgages
were likewise void ab initio"; and (6) alternatively, "the deed
and mortgages in question are at least voidable."

2
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

On March 29, 2021, BANA and MERS moved to dismiss the
complaint. MERS argued in part that Count III was time-barred by
the six-year statute of limitations (SOL) in HRS § 657-1. On
August 2, 2021 the Circuit Court2/ entered an order granting in
part and denying in part the motion, which granted the motion as
to Count III based on the six-year SOL (MERS Dismissal Order).
On May 24, 2022, CFBank filed a motion to dismiss the
complaint or alternatively for summary judgment (CFBank Motion)
based on the six-year SOL.
On June 9, 2022, the Philipses moved for
reconsideration of the MERS Dismissal Order (Reconsideration
Motion), which the Circuit Court, Judge Hamman presiding, denied
via a June 28, 2022 minute order.
On August 2, 2022, the Circuit Court entered the
Summary Judgment Order, which treated the CFBank Motion as a
summary judgment motion and granted it. The court also entered
the Judgment pursuant to HRCP Rule 54(b).
On appeal, the Philipses contend that the Circuit Court
erred in: (1) entering the Summary Judgment Order "because it
erroneously concluded that, as a matter of law, the Complaint
against the QTE Defendants in Count III was barred by a six-year
statute of limitations"; and (2) denying the Reconsideration
Motion.
After reviewing the record on appeal and the relevant
legal authorities, and giving due consideration to the issues
raised and the arguments advanced by the parties, we resolve the
Philipses' contentions as follows:
(1) The Philipses contend that the Circuit Court erred
because their QTE claim, as alleged in Count III of the
complaint, is not a personal action subject to the six-year SOL
in HRS § 657-1(4), but rather, is a "real action" subject to the
twenty-year SOL in HRS § 657-31 (2016).
We recently addressed a similar argument made in
consolidated appeals from a wrongful foreclosure lawsuit brought
against Bank of America, N.A. and others. See Panuelos v. Bank

2/
The Honorable Blaine J. Kobayashi presided over the motion.

3
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

of America, N.A., Nos. CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX & CAAP-
XX-XXXXXXX, 2024 WL 4275578 (Haw. App. Sept. 24, 2024) (Mem.).
There, we held that a plaintiff's quiet title and ejectment
claims against defendants who had bought the plaintiff's
foreclosed property from the bank after it sold the property to
itself in a nonjudicial foreclosure were time-barred under HRS
§ 657-1(4), Delapinia v. Nationstar Mortg. LLC, 150 Hawai#i 91,
104, 497 P.3d 106, 119 (2021) (Delapinia II), and Hancock v.
Kulana Partners, LLC, 145 Hawai#i 374, 382, 452 P.3d 371, 379
(2019). See Panuelos, 2024 WL 4275578 at *4-*5. We reasoned:

The First Amended Complaint doesn't allege that
[defendants] Bush and Bennett's deed was forged or had been
procured by fraud in the factum. Thus, the deed is at most
voidable, not void. See Delapinia[ II], 150 Hawai #i at 104,
497 P.3d at 119 ("sales pursuant to a wrongful foreclosure
are voidable, regardless of whether the violation was
statutory or contractual, substantial or a mere
irregularity"). HRS § 657-1(4)'s six-year statute of
limitations applies to a claim that a deed is voidable
because the foreclosure from which it resulted was wrongful.
Cf. Hancock[], 145 Hawai#i [at] 382, 452 P.3d [at] 379 . . .
(holding that HRS § 657-1(4) applies to claim that deed was
voidable).

[Plaintiff] Bui argues, "Count III (her quiet title
claim) is not a claim to void an instrument to which Bui was
a party, or a claim for compensation for deprivation of
title, but a claim to declare title in Bui" and "there is no
limitations period for a quiet title claim." Bui's argument
exalts form over substance. HRS Chapter 669 governs
quieting title. HRS § 669-1(a) (2016) allows actions
"brought by any person against another person who claims, or
who may claim adversely to the plaintiff, an estate or
interest in real property, for the purpose of determining
the adverse claim." HRS Chapter 669 prescribes a remedy; it
does not have its own statute of limitations. But there
must be a legal basis to invoke the remedy of determining
competing title claims. Here, Bui claims superior title
because Bush and Bennett's deed is voidable, having resulted
from a wrongful foreclosure. That claim is subject to HRS
§ 657-1(4)'s six-year statute of limitations.

Id. (footnote omitted; original brackets omitted).
The same analysis applies here. Based on the
allegations in the Philipses' complaint, the deed to Arensdorf is
at most voidable, not void. The Philipses' argument here is the
same argument that Bui made in Panuelos, and it similarly "exalts
form over substance." Id. at * 5. There must be a legal basis
to invoke the remedies the Philipses seek and, as in Panuelos, it
is the allegedly wrongful foreclosure. That claim is subject to
HRS § 657-1(4)'s six-year statute of limitations. The foreclosed

4
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Property was sold to BAC in 2010, and Arensdorf's deed was
recorded in 2011, over six years before the Philipses filed their
complaint in 2020. The Philipses' QTE "claim" against CFBank is
therefore time-barred.
The Philipses argue that Silva v. Lopez, 5 Haw. 262
(Haw. Kingdom 1884), was controlling case law when they filed the
complaint, and Delapinia II should not be applied retroactively.
We addressed this issue in denying plaintiff Bui's motion for
partial reconsideration in Panuelos v. Bank of America, N.A.,
Nos. CAAP-XX-XXXXXXX, CAAP-XX-XXXXXXX & CAAP-XX-XXXXXXX, 2024 WL
4633990 (Haw. App. Oct. 31, 2024). We ruled in relevant part:

In Delapinia II, the supreme court held "that wrongful
foreclosures in violation of the power of sale are voidable,
and to the extent Silva . . . is to the contrary, it is
overruled." 150 Hawai#i at 93, 497 P.3d at 108 . . . .

. . . .
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) . . . .
. . . .

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.

Id. at *1-*2.
For the same reason, we must apply the Delapinia II
opinion to the Philipses QTE "claim" against CFBank. As in
Panuelos, the Circuit Court here did not err in concluding that
the Philipses' QTE "claims" against CFBank were time-barred.
(2) The Philipses contend that the Circuit Court erred
in denying the Reconsideration Motion, which sought
reconsideration of the MERS Dismissal Order. The Philipses argue
that the Reconsideration Order "erroneously concluded that, as a
matter of law, the Complaint against the QTE Defendants in Count
III was barred by a six-year [SOL] . . . ." They assert that the

5
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

MERS Dismissal Order is wrong for the same reasons that the
Summary Judgment Order is wrong.
The Philipses acknowledge that the MERS Dismissal Order
itself "cannot be appealed directly[.]"3/ They argue, however,
that the order "was successfully relied on by CFBank as 'law of
the case' and hence incorporated into the Summary Judgment
Order[,]" and is therefore "necessarily subsumed into the
appealable final Judgment . . . ."
We concluded above that Count III is subject to HRS
§ 657-1(4)'s six-year statute of limitations, and Delapinia II
applies to Count III. To the extent the SOL ruling in the MERS
Dismissal Order formed the basis of the Summary Judgment Order,
the Circuit Court did not abuse its discretion in denying the
Reconsideration Motion.
For the reasons discussed above, the "Order Granting
Defendant CFBank National Association's Motion to Dismiss
Complaint or Alternatively for Summary Judgment" and the
Judgment, both entered on August 2, 2022, by the Circuit Court of
the Second Circuit, are affirmed.

DATED: Honolulu, Hawai#i, June 25, 2025.

On the briefs:
/s/ Katherine G. Leonard
James J. Bickerton, Acting Chief Judge
Bridget G. Morgan-Bickerton,
Jeremy K. O'Steen
(Bickerton Law Group) and /s/ Clyde J. Wadsworth
Van-Alan H. Shima Associate Judge
(Affinity Law Group)
for Plaintiffs-Appellants.
/s/ Kimberly T. Guidry
Kevin W. Herring and Associate Judge
Brennan M. Wong
(Ashford & Wriston)
for Defendant-Appellee
CFBank National Association.

3/
An order denying a post-judgment motion for reconsideration is
independently appealable under HRS § 641–1(a). See Ditto v. McCurdy, 103
Hawai#i 153, 160, 80 P.3d 974, 981 (2003). Here, however, the Circuit Court
did not reduce the MERS Dismissal Order to a judgment. The Order Denying
Reconsideration is therefore not an appealable post-judgment order.

6