United States of America v. Perez et al
Filing
31
ORDER GRANTING PLAINTIFF UNITED STATES OF AMERICA'S MOTION FOR INTERLOCUTORY DECREE OF FORECLOSURE, AND DEFICIENCY JUDGMENT 27 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 7/1/11. ("The United States is ordered to submit, n o later than July 14, 2011, a proposed foreclosure decree, leaving the name of the foreclosure Commissioner blank. Fees are to be set at no more than $150 per hour, with an overall cap of $4,000, in accordance with prevailing rates in Hawai i. Resumes of at least three proposed Commissioners should be submitted to the court by the same date.") (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
Plaintiff,
)
)
vs.
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)
ALFRED R. PEREZ; ISLAND
COMMUNITY LENDING
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)
CORPORATION; HAWAII FIRST
FEDERAL CREDIT UNION; HICKAM )
)
FEDERAL CREDIT UNION;
COUNTRYWIDE HOME LOANS, INC., )
)
)
Defendants.
_____________________________ )
UNITED STATES OF AMERICA,
CIVIL NO. 10-00535 SOM/RLP
ORDER GRANTING PLAINTIFF
UNITED STATES OF AMERICA’S
MOTION FOR SUMMARY JUDGMENT,
INTERLOCUTORY DECREE OF
FORECLOSURE, AND DEFICIENCY
JUDGMENT
ORDER GRANTING PLAINTIFF UNITED STATES OF AMERICA’S
MOTION FOR SUMMARY JUDGMENT, INTERLOCUTORY
DECREE OF FORECLOSURE, AND DEFICIENCY JUDGMENT
This foreclosure action is based on a mortgage executed
by Defendant Alfred R. Perez on property located at 5246 Kalae
Place, in Kamuela, Hawaii, Tax Map Key No. (3) 6-4-025-030 (CPR
0002).
Plaintiff United States of America (the “Government”), on
behalf of noteholder and mortgage assignee Department of Veterans
Affairs (the “VA”), has moved for an interlocutory decree of
foreclosure and deficiency judgment against Perez.
The court
finds that a hearing on this matter is neither necessary nor
appropriate.
See LR7.2(d).
For the reasons set forth in this
order, the court GRANTS the Government’s motion for summary
judgment.
I.
FACTUAL AND PROCEDURAL BACKGROUND.
On or about December 13, 2000, Perez executed and
delivered a mortgage and note in favor of Island Community
Lending Corporation in the amount of $202,980.00.
Pl.’s Concise
Stmt. Mat’l Facts Supp. Mot. Summ. J., Interlocutory Decree of
Foreclosure, & Deficiency J. (“Facts”) No. 2; see also Aff. Keith
Hendricks (“Hendricks Aff.”) ¶ 3 & Exh. A (Mortgage Note).
The
loan carried an interest rate of 7.875 percent per year.
Hendricks Aff. Exh. A.
The 30-year note provided for monthly
payments of $1,471.75, commencing on February 1, 2001, with a
final payment due on January 1, 2031.
Id.
To provide security
on the note, Perez executed a mortgage in favor of Island
Community Lending Corporation, dated December 18, 2000.
3; see Hendricks Aff. ¶ 4 & Exh. B.
Fact No.
The mortgage was recorded on
December 22, 2000, in the Bureau of Conveyances for the State of
Hawaii as Document No. 2000-179967.
Id.
The mortgage was ultimately assigned to the Secretary
of Veterans Affairs through an assignment of mortgage, recorded
on January 19, 2005, in the Bureau of Conveyances as Document No.
2005-010738.
See Fact No. 4; Hendricks Aff. ¶ 5 & Exhs. C-D.
On or about March 11, 2005, Perez entered into a
mortgage modification agreement with the VA.
Hendricks Aff. ¶ 6 & Exh. E.
Fact No. 5;
The mortgage modification agreement
was recorded on March 22, 2005, in the Bureau of Conveyances as
2
Document No. 2005-056423.
Id.
Under the mortgage modification
agreement, Perez promised to pay the total amount of indebtedness
at that time, $208,084.75, together with interest at the rate of
4 percent per year.
Hendricks Aff. Exh. E.
Perez’s monthly
payment was set at $993.43, beginning on April 1, 2005, with a
final payment due on March 1, 2035.
See id.
On or about March 31, 2010, the VA sent Perez a letter
notifying him of his default and providing him with two
alternatives in lieu of foreclosure.
Aff. ¶ 8 & Exh. F.
See Fact No. 7; Hendricks
These options were (1) a private sale of the
property, and (2) voluntary conveyance of title of the property
to the VA.
See Hendricks Aff. Exh. F.
The letter informed Perez
that the VA planned to refer the account to the U.S. Attorney’s
Office shortly to commence foreclosure.
See id.
Perez was still in default as of May 10, 2011, shortly
before the Government filed its Motion.
Hendricks Aff. ¶ 11.
According to a statement provided by the Government, as of April
25, 2011, the amounts due and owing were as follows:
Principal Balance:
Interest to 4/25/11:
Uncollected Late Charges:
Escrow Balance Due:
TOTAL:
$190,961.12
15,142.67
178.30
18,595.13
$224.877.22
Fact No. 12; Hendricks Aff. ¶ 9 & Exh. 1.
$20.9272.
Hendricks Aff. Exh. 1.
3
The daily interest is
On September 17, 2010, the United States filed its
Complaint against Perez, naming also Island Community Lending
Corporation, Hawaii First Federal Credit Union (“Hawaii First”),
Hickam Federal Credit Union, and Countrywide Home Loans, Inc.
ECF No. 1.
Hawaii First answered the Complaint and filed a
counterclaim and cross-claim, but did not dispute the existence
or terms of the VA mortgage, note, or mortgage modification
agreement at issue here.
See ECF No. 9.
Perez failed to appear,
and the Clerk of Court entered default against him on January 24,
2011.
ECF No. 16.
The other named Defendants, Island Community
Lending Corporation, Hickam Federal Credit Union, and Countrywide
Home Loans, Inc., were voluntarily dismissed from this action.
ECF Nos. 4, 5, 20.
II.
STANDARD.
Summary judgment shall be granted when “the movant
shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.”
R. Civ. P. 56(a).
Fed.
A moving party has both the initial burden of
production and the ultimate burden of persuasion on a motion for
summary judgment.
Nissan Fire & Marine Ins. Co. v. Fritz Cos.,
210 F.3d 1099, 1102 (9th Cir. 2000).
The burden initially falls on the moving party to
identify for the court “the portions of the materials on file
that it believes demonstrate the absence of any genuine issue of
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material fact.”
T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors
Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp.
Catrett, 477 U.S. 317, 323 (1986)); accord Miller v. Glenn Miller
Prods., Inc., 454 F.3d 975, 987 (9th Cir. 2006).
“A fact is
material if it could affect the outcome of the suit under the
governing substantive law.”
Miller, 454 F.3d at 987.
When the moving party meets its initial burden on a
summary judgment motion, the “burden then shifts to the nonmoving
party to establish, beyond the pleadings, that there is a genuine
issue for trial.”
Id.
The court must not weigh the evidence or
determine the truth of the matter but only determine whether
there is a genuine issue for trial.
180 F.3d 1047, 1054 (9th Cir. 1999).
See Balint v. Carson City,
On a summary judgment
motion, “the nonmoving party’s evidence is to be believed, and
all justifiable inferences are to be drawn in that party’s
favor.”
Miller, 454 F.3d at 988 (quotations and brackets
omitted).
Summary judgment may also be appropriate when a mixed
question of fact and law involves undisputed underlying facts.
See EEOC v. UPS, 424 F.3d 1060, 1068 (9th Cir. 2005); Colacurcio
v. City of Kent, 163 F.3d 545, 549 (9th Cir. 1998).
III.
ANALYSIS.
In general, there is no federal foreclosure law;
rather, state law serves as the law of decision in foreclosure
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actions.
See Whitehead v. Derwinski, 904 F.2d 1362, 1371 (9th
Cir. 1990), overruled on other grounds by Carter v. Derwinski,
987 F.2d 611 (9th Cir. 1993); see also In re Morris, 204 B.R.
783, 785 (Bankr. N.D. Ala. 1996) (“[t]here is no federal
foreclosure law”).
Under Hawaii law, a court may issue a foreclosure
decree when the moving party establishes all four of the
following: (1) the existence of a promissory note, mortgage, or
other debt agreement; (2) the terms of the promissory note,
mortgage, or other debt agreement; (3) default by the borrower
under the terms of the promissory note, mortgage, or other debt
agreement; and (4) the giving of the cancellation notice and
recordation of an affidavit to such effect.
See IndyMac Bank v.
Miguel, 117 Haw. 506, 520, 184 P.3d 821, 835 (Ct. App. 2008)
(citing Bank of Honolulu, N.A. v. Anderson, 3 Haw. App. 545, 551,
654 P.2d 1370, 1375 (Ct. App. 1982)).
The party seeking to
foreclose must provide evidence of default, but need not
determine a sum certain before obtaining a decree of foreclosure.
Miguel, 117 Haw. at 520, 184 P.2d at 835 (citing Anderson, 3 Haw.
App. at 549, 654 P.2d at 1374).
Because Perez has failed to appear in the case, neither
answering the Complaint nor filing any opposition to the present
motion, he has foregone any ability he may have had to dispute
Cf. Miller, 454 F.3d at 987
the facts underlying the action.
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(once moving party meets its burden on summary judgment, the
burden shifts to nonmoving party to present evidence beyond the
pleadings demonstrating an issue of material fact).
Hawaii
First, the only Defendant that has appeared in this action, filed
a statement of no opposition on June 27, 2011.
ECF No. 30.
Accordingly, the court reviews the evidence produced by the
Government to determine if it is sufficient to establish that the
Government is entitled to judgment as a matter of law.
First, the Government has shown the existence and terms
of the note, mortgage, and mortgage modification agreement.
Hendricks Aff. ¶¶ 3-4, 6 & Exhs. A-B, E.
See
Under the terms of the
December 13, 2000, note and mortgage, Perez agreed to a 30-year
loan of $202,980, at 7.875 percent interest.
Exhs. A-B.
Hendricks Aff.
Perez was required to make monthly principal and
interest payments of $1,471.75, commencing on February 1, 2001,
with the final payment due on January 1, 2031.
See id.
Likewise, under the terms of the March 11, 2005 modification
agreement, Perez agreed to a 30-year loan of $208,084.75 at 4
percent interest.
Id. Exh. E.
Perez was required to make
monthly principal and interest payments of $993.43.
See id.
The
court finds that the existence and terms of the note, mortgage,
and modification agreement are sufficiently proven, and the
Government is entitled to judgment as a matter of law with
respect to the first two Anderson elements.
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The Government has also produced evidence that Perez
defaulted on the loan and modification agreement.
As of May 10,
2011, Perez remained in default under the terms of the
modification agreement.
See Hendricks Aff. ¶ 11.
Finally, the Government has satisfied Anderson’s
requirement that Perez be notified of the cancellation of his
loan.
On March 31, 2010, after Perez became delinquent in his
payments, the VA notified Perez that he was in default and that
the VA was requiring “full reinstatement funds” to avoid
foreclosure.
Hendricks Aff. Exh. F.
Accordingly, the court finds that the Government has
produced evidence sufficient to establish its right to judgment
as a matter of law with respect to each of the four Anderson
elements.
Perez, for his part, has failed to “set forth specific
facts showing that there is a genuine issue” of material fact.
This court therefore finds that summary judgment is appropriate.
Miller, 454 F.3d at 987.
IV.
CONCLUSION.
For the reasons set forth above, the court GRANTS the
Government’s Motion for Summary Judgment, Interlocutory Decree of
Foreclosure, and Deficiency Judgment.
The amount of the
deficiency judgment does not need to be established at this time,
however, as such sum can only be determined after sale of the
property.
See Anderson, 3 Haw. App. at 552, 654 P.2d at 1375-76.
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The United States is ordered to submit, no later than July 14,
2011, a proposed foreclosure decree, leaving the name of the
foreclosure Commissioner blank.
Fees are to be set at no more
than $150 per hour, with an overall cap of $4,000, in accordance
with prevailing rates in Hawaii.
Resumes of at least three
proposed Commissioners should be submitted to the court by the
same date.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, July 1, 2011.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
United States v. Perez; Civil No. 10-00535 SOM/RLP; ORDER GRANTING PLAINTIFF UNITED
STATES OF AMERICA’S MOTION FOR SUMMARY JUDGMENT, INTERLOCUTORY DECREE OF FORECLOSURE,
AND DEFICIENCY JUDGMENT.
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