JPMorgan Chase Bank v. Van Cleave

NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
05-APR-2024
08:36 AM
Dkt. 110 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Plaintiff-Appellee,
v.
JON S. VAN CLEAVE; JVC PARTNERS-II, A LIMITED LIABILITY
PARTNERSHIP, Defendants-Appellants,
and
LISA ANNE RACITI; JAY MARTINEZ; ALLIANCE BANCORP;
BANK ONE NATIONAL ASSOCIATION, AS TRUSTEE UNDER THE POOLING AND
SERVICING AGREEMENT DATED AS OF NOVEMBER 1, 2002 FOR SACO 1
TRUST 2002-1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2002-1;
JOHN AND MARY DOES 1-20; DOE PARTNERSHIPS, CORPORATIONS OR OTHER
ENTITIES 1-20, Defendants-Appellees

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT
(CASE NO. 13-1-0278)

SUMMARY DISPOSITION ORDER
(By: Wadsworth, Presiding Judge, Nakasone and McCullen, JJ.)

Defendants-Appellants Jon S. Van Cleave (Van Cleave)
and JVC Partners-II, a Limited Liability Partnership (JVC)
(collectively, Appellants), appeal from the: (1) March 9, 2018
"Findings of Fact and Conclusions of Law; Order Granting
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Plaintiff's Motion for Summary Judgment and for Interlocutory
Decree of Foreclosure Filed October 12, 2017" (Foreclosure
Decree); (2) March 9, 2018 Judgment; and (3) April 20, 2018
"Order Denying Defendants Jon S. Van Cleave and JVC Partners-II,
a Limited Partnership's Non-Hearing Motion for Reconsideration
of March 9, 2018 Order Granting Plaintiff's Motion for Summary
Judgment and for Interlocutory Decree of Foreclosure and the
Judgment Thereon, Filed on March 19, 2018" (Order Denying
Reconsideration), all filed and entered by the Circuit Court of
the Fifth Circuit (Circuit Court). 1
On appeal, Appellants challenge the Foreclosure
Decree, arguing that Plaintiff-Appellee JPMorgan Chase Bank,
National Association (JPMorgan) failed to prove it "had standing
to file and to prosecute a foreclosure action" and "never proved
that they had ownership of the underlying promissory note and
mortgage . . . ." 2
Upon careful review of the record and the briefs
submitted by the parties, and having given due consideration to
the arguments advanced and the issues raised, we affirm.
On September 26, 2013, JPMorgan filed a "Complaint to
Foreclose Mortgage" (Complaint) on the property located on
Kukuna Road, Anahola, HI 96745 (Property) due to Defendant-
Appellee Lisa Anne Raciti's (Raciti) default under the terms of
the note, and Raciti and Defendant-Appellee Jay Martinez's
(Martinez) default under the terms of the mortgage. The

1 The Honorable Randal G.B. Valenciano presided.

2 While Appellants appeal from the Order Denying Reconsideration,
they do not raise any point of error or present any argument challenging the
Order Denying Reconsideration, and such challenge is waived. See Hawai‘i
Rules of Appellate Procedure (HRAP) Rule 28(b)(7) ("Points not argued may be
deemed waived."). We address Appellants' point of error challenging the
Foreclosure Decree.

2
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Complaint named the following defendants: Raciti; Martinez;
Alliance Bancorp; Bank One National Association, as Trustee
under the Pooling and Servicing Agreement dated as of November
1, 2002 for SACO 1 Trust 2002-1 Mortgage Pass-Through
Certificates, Series 2002-1; the County of Kaua‘i; Van Cleave;
and JVC. The Complaint alleged, inter alia, that Raciti
executed and delivered a March 27, 2007 promissory note (Note)
to Washington Mutual Bank, FA, a federal savings bank; the Note
was secured by a March 27, 2007 mortgage on the Property
(Mortgage) executed by Raciti and Martinez; JPMorgan is the
current holder of the Mortgage and Note; due to Raciti's default
on the Note, Martinez is in default under the terms of the
Mortgage; and JPMorgan is entitled to foreclose on the Property.
The other parties were named as defendants because of their
possible interests in the Property. Regarding Appellants, the
Complaint alleged that Appellants "may have an interest in the
Property by virtue of a First Amended Notice of Pendency of
Action" (NOPA) filed in the Circuit Court on July 27, 2009, and
recorded against the Property that referenced a pending action
in another case; and that Appellants' "interest may no longer be
valid" as the other case "was dismissed on August 8, 2012 per
order of the Circuit Court . . . ." The Complaint requested
that:
any interest or lien claimed by any Defendants herein named
and all persons claiming any interest in the Property
through or under said Defendants, . . . be forever barred
and foreclosed of and from all right, title and interest
and claims at law or in equity in and to said Property and
every part hereof; and that these interests or liens be
adjudicated subordinate to the lien of [JPMorgan]'s
Mortgage[.]

On January 31, 2017, the clerk entered default against
Raciti and Martinez for failing to answer the Complaint.

3
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

On October 12, 2017, JPMorgan filed a Motion for
Summary Judgment and for Interlocutory Decree of Foreclosure
(MSJ).
On November 8, 2017, Appellants filed an opposition to
the MSJ, arguing that in August 2005, JVC, the previous owner of
the Property, 3 executed a note and mortgage in favor of SFG
Income Fund VI, LLC (SFG), and on August 3, 2006, SFG commenced
a foreclosure action against Appellants. Appellants claimed
that to avoid foreclosure, on January 26, 2007, they entered
into a real estate purchase contract with Raciti and Martinez
for the sale of the Property. Van Cleave alleged he "signed the
closing documents under extreme duress" to avoid foreclosure;
Van Cleave has "an equitable interest in the Property based on
the fraudulent activities associated with the conveyance of the
Property in 2007"; "Raciti and Martinez obtained title to the
Property through fraudulent means"; and their "suspect" title
creates a genuine issue of material fact, which precludes
summary judgment. 4
On January 8, 2018, JPMorgan filed its reply, arguing
that Appellants "lack[ed] standing" to challenge the MSJ because
Appellants: (1) have not had a legal interest in the Property
for over ten years "since title to the Property was transferred
from JVC to RACITI and MARTINEZ in 2006"; (2) are not parties to
the Note or Mortgage at issue; (3) failed to successfully assert
a claim against any party to "theor[etically] give them an

3 Van Cleave declared that he purchased the Property in 2000, and
conveyed it in 2003 to JVC.

4 In their MSJ opposition below, Appellants did not raise the
argument they now make on appeal that JPMorgan lacked standing to bring the
foreclosure action. The MSJ opposition also did not contain Appellants'
argument that JPMorgan failed to prove "ownership of the underlying
promissory note and mortgage."
4
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

interest in the Property"; and (4) are time-barred from
asserting any such claim.
At the January 9, 2018 MSJ hearing, the Circuit Court
orally granted the MSJ.
On March 9, 2018, the Circuit Court entered the
Foreclosure Decree and Judgment.
On March 19, 2018, Appellants filed a non-hearing
Motion for Reconsideration arguing that the Circuit Court's
grant of the MSJ should be set aside because JPMorgan lacked
standing to foreclose.
On March 29, 2018, JPMorgan filed an opposition to the
Motion for Reconsideration, arguing that it had standing to
foreclose on the Property; it was improper for Appellants to
assert their standing argument for the first time in their
Motion for Reconsideration; and under the recent Behrendt
opinion cited by Appellants, that Appellants, and not JPMorgan,
lacked standing to challenge the foreclosure because Appellants
"have no legal interest in the subject property, and . . . have
admitted that they have not had an interest in the subject
property for over 10 years."
On April 20, 2018, the Circuit Court entered its Order
Denying Reconsideration.
Appellants waived the arguments they raise on appeal
challenging the Foreclosure Decree and Judgment.
The record reflects that Appellants' arguments on
appeal were raised for the first time in their Motion for
Reconsideration and not in their MSJ opposition. Appellants
argued in their Motion for Reconsideration that JPMorgan did not
establish its standing to foreclose under Wells Fargo Bank, N.A.
v. Behrendt, 142 Hawai‘i 37, 414 P.3d 89 (2018), Bank of America,
N.A. v. Reyes-Toledo, 139 Hawai‘i 361, 390 P.3d 1248 (2017), and

5
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

U.S. Bank, N.A. v. Mattos, 140 Hawai‘i 26, 398 P.3d 615 (2017)
because "evidence of a foreclosing plaintiff's ownership of the
underlying promissory note" and "detailed personal knowledge to
the authenticity of the loan documents" are required to have
standing in a foreclosure action. None of these arguments and
cases raised in Appellants' 254-page Motion for Reconsideration
were raised in Appellants' opposition to the MSJ.
"The purpose of a motion for reconsideration is to
allow the parties to present new evidence and/or arguments that
could not have been presented during the earlier adjudicated
motion[.]" Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw.
85, 114, 839 P.2d 10, 27 (1992) (citation omitted). "[A] motion
for reconsideration is not the time to relitigate old matters."
Briggs v. Hotel Corp. of the Pac., Inc., 73 Haw. 276, 287 n.7,
831 P.2d 1335, 1342 n.7 (1992). While subject matter
jurisdiction may be raised at any time, "standing is not an
issue of subject matter jurisdiction" and may be waived. Tax
Found. of Haw. v. State, 144 Hawai‘i 175, 192, 439 P.3d 127, 144
(2019). With the sole exception of the argument regarding the
Behrendt case, which was issued March 15, 2018 after the Circuit
Court's entry of the March 9, 2018 Foreclosure Decree,
Appellants' arguments should have been presented in their
opposition to the previously adjudicated MSJ. See Amfac, Inc.,
74 Haw. at 114, 839 P.2d at 27. These arguments are waived.
See id.
Even without waiver, Appellants nonetheless lack
standing to challenge the Foreclosure Decree.
JPMorgan argues on appeal that Appellants lack
standing to challenge the Foreclosure Decree because they
transferred their interest in the Property more than ten years
prior to Raciti and Martinez; and that Appellants "set forth no

6
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

law" to support that they met the requirement of standing.
Appellants respond that they were named as defendants in the
foreclosure action below; they "had possession of the [P]roperty
for nearly ten years"; and they "claim an equitable reversionary
interest following being defrauded."
"[T]he injury prong of the standing inquiry requires
an assertion of a judicially-cognizable injury, that is, a harm
to some legally-protected interest." Sierra Club v. Dep't of
Transp., 115 Hawai‘i 299, 321, 167 P.3d 292, 314 (2007)
(citations omitted). In Behrendt, 142 Hawai‘i at 41, 414 P.3d at
93, the Hawai‘i Supreme Court held that a subsequent purchaser
who was not a party to the mortgage and note at issue could
challenge the foreclosure decree. The supreme court explained
that because a subsequent purchaser "obtains an interest in
[the] property," the subsequent purchaser had the right to
"'defend against the taking of a bona fide interest in the
property through a foreclosure sale.'" Id. at 42-43, 414 P.3d
at 94-95 (citation omitted) (emphasis added). Behrendt
clarified that in the foreclosure context, standing to defend
against, or to challenge, a foreclosure is dependent upon
whether one has an interest in the property that may be harmed
by foreclosure. See id.; Sierra Club, 115 Hawai‘i at 321,
167 P.3d at 314.
Here, based on the parties' MSJ submissions, the
Circuit Court appears to have determined that any interest
Appellants had or may have had from the NOPA filed in a 2007
breach of contract lawsuit, "Civil No. 09-4-0220" [sic], was no
longer legally "valid" because the 2007 breach of contract
lawsuit was dismissed on August 8, 2012. We also take judicial
notice that the pending action the above-referenced NOPA refers
to, a breach of contract lawsuit against Raciti and Martinez in
7
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

the Fifth Circuit Court in Civil No. 09-1-0200, was dismissed on
August 8, 2012, as noted in the Foreclosure Decree. Because the
record reflects that Appellants have no interest in the
Property, Appellants have no standing to challenge the
Foreclosure Decree in this appeal. See Behrendt, 142 Hawai‘i at
42-43, 414 P.3d at 94-95.
For the foregoing reasons, the (1) March 9, 2018
"Findings of Fact and Conclusions of Law; Order Granting
Plaintiff's Motion for Summary Judgment and for Interlocutory
Decree of Foreclosure Filed October 12, 2017"; (2) March 9, 2018
Judgment; and (3) April 20, 2018 "Order Denying Defendants Jon
S. Van Cleave and JVC Partners-II, a Limited Partnership's Non-
Hearing Motion for Reconsideration of March 9, 2018 Order
Granting Plaintiff's Motion for Summary Judgment and for
Interlocutory Decree of Foreclosure and the Judgment Thereon,
Filed on March 19, 2018," all filed and entered by the Circuit
Court of the Fifth Circuit, are affirmed.
DATED: Honolulu, Hawai‘i, April 5, 2024.
On the briefs:
/s/ Clyde J. Wadsworth
Gary Victor Dubin,
Presiding Judge
for Defendants-Appellants.
/s/ Karen T. Nakasone
Adrian L. Lavarias,
Associate Judge
for Plaintiff-Appellee.
/s/ Sonja M.P. McCullen
Associate Judge

8