Ruppersberger v. Ramos
Filing
134
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT, DENYING DEFENDANT'S COUNTER-MOTION TO DISMISS, AND ISSUING DECREE OF FORECLOSURE, re ECF 110 and ECF 119 - Signed by JUDGE ALAN C. KAY on 4/16/2020.For the for egoing reasons, the Court GRANTS Plaintiff's Motion for Summary Judgment and Decree of Foreclosure, and to Strike Defendant's Demand for Trial by Jury, ECF No. 110, and DENIES Defendant's Counter-Motion to Dismiss, ECF No. 119. Accordingly, Plaintiff is entitled to, and the Court hereby issues, a decree of foreclosure on the subject property as outlined above. Charles M. Heaukulani, Esq. is hereby appointed by this Court as Commissioner. (jni)
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 1 of 42
819
PageID #:
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI`I
)
)
)
)
)
) Civ. No. 11-00145 ACK-KJM
)
)
)
)
)
)
JOHN SIDNEY RUPPERSBERGER,
Plaintiff,
vs.
ROSARIO MAE RAMOS,
Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT, DENYING
DEFENDANT’S COUNTER-MOTION TO DISMISS, AND ISSUING DECREE OF
FORECLOSURE
For the reasons discussed below, the Court GRANTS
Plaintiff’s Motion for Summary Judgment and Decree of
Foreclosure, and to Strike Defendant’s Demand for Trial by Jury,
ECF No. 110 (the “Motion”), and DENIES Defendant’s CounterMotion to Dismiss, ECF No. 119.
The Court hereby issues a
decree of foreclosure in favor of Plaintiff.
BACKGROUND
For the past nine years, Plaintiff Ruppersberger has
been trying to collect on promissory notes executed by Defendant
Ramos.
Years of litigation led up to Plaintiff’s now-pending
Motion for Summary Judgment.
Those facts are largely
undisputed.
- 1 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 2 of 42
820
I.
PageID #:
Initial Action and Settlement
On March 8, 2011, Plaintiff filed a Complaint in this
Court to collect on two promissory notes executed by Defendant
in favor of Plaintiff in the principal amount of $80,000.
Compl. ¶¶ 9, 14, ECF No. 1.
Later that year, the parties
reached a settlement at a conference held before Magistrate
Judge Barry Kurren.
ECF No. 28.
The parties filed a
stipulation for dismissal with prejudice, which provided for the
Court’s approval as to form only.
on January 3, 2012.
1/
The Court approved as to form
ECF No. 35. 1/
The stipulation provided as follows.
1.
The parties hereby agree that the above-captioned action is
dismissed and discontinued with prejudice, as to the named
defendant, pursuant to Rule 41(a) of the Federal Rules of
Civil Procedure.
2.
Any and all claims of damages by plaintiff which are the
subject of this action or otherwise arise out of any
incidents alleged in the Complaint are hereby settled, as
against the named defendant, by the terms of the $118,000
mortgage, promissory note and limited power of attorney
(collectively hereinafter the “Settlement Documents”) in full
satisfaction of all claims for damages, costs, disbursement
and legal fees.
3.
The Settlement Documents stated in Paragraph #2, above, were
signed by defendant before a notary on December 21, 2011 and
mailed to plaintiff at his 619 Wakehurst Drive, Cary, NC
27519 address.
4.
In consideration for the execution of the Settlement
Documents stated in Paragraph #2, above, plaintiff hereby
releases the named defendant and her heirs, executors,
administrators and assigns, from any and all claims,
liabilities and causes of action related to or arising out of
any and all of the events set forth in the Complaint in the
above-captioned action.
(Continued . . .)
- 2 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 3 of 42
821
II.
PageID #:
Plaintiff Seeks Enforcement of the Settlement
Agreement
Three years later, Plaintiff moved to enforce the
settlement agreement.
ECF No. 36.
At an initial hearing, the
Magistrate Judge questioned whether the Court had jurisdiction
to enforce the settlement.
See ECF No. 45 at 2.
Plaintiff’s
Counsel filed a supplemental memorandum addressing this issue.
Id. at 3-7.
Magistrate Judge Kurren issued Findings and
Recommendation to Grant Plaintiff’s Motion to Enforce Settlement
Agreement (“F&R”).
ECF No. 51.
The F&R found that the Court
had “jurisdiction to enforce the settlement agreement, as the
Stipulation for Dismissal incorporated the material terms of the
settlement, thus granting this Court ancillary jurisdiction to
enforce the settlement.”
Id., Conclusions of Law (“COL”) ¶ 2.
Additionally, the F&R stated that the Court had diversity
jurisdiction.
Id.
The F&R found that as part of the settlement
agreement, Defendant executed a new $118,000 promissory note
5.
This settlement does not establish right or wrong on either
parties’ part.
6.
This Stipulation of Dismissal and any Order entered thereon
shall have no precedential value or effect whatsoever and
shall not be admissible in any other action or proceeding as
evidence or for any other purpose except in an action or
proceeding to enforce this Stipulation of Dismissal.
ECF No. 35.
- 3 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 4 of 42
822
PageID #:
(the “Promissory Note”), addendum to that note (the “Addendum”),
and mortgage (the “Mortgage”) in favor of Plaintiff.
Findings of Fact (“FOF”) ¶ 6(a), (f).
Id.
The Promissory Note and
Mortgage are secured by rental real property, referred to as the
“Kaloli Property,” located at 15-1414 18th Avenue, Puna,
Hawai`i, Tax Map Key No. (3) 1-5-044-114.
Id.
The Promissory
Note provides for a quick payment upon the sale of the Kaloli
Property, which was to occur by June 30, 2012.
Id. FOF ¶ 6(b).
The parties agreed that, if the Kaloli Property was not sold by
that date, Plaintiff would be authorized to market and sell it.
Id. FOF ¶ 6(c).
Specifically, Defendant agreed that she would
cause the tenants to vacate the premises, and Plaintiff would be
authorized to market the Kaloli Property for sale and move into
the Kaloli Property and pay Defendant rent.
Id.
To enable
Plaintiff to market the Kaloli Property, Defendant executed a
limited power of attorney so authorizing Plaintiff.
6(d).
Id. FOF ¶
If the sale proceeds were insufficient to satisfy the
amounts due under the Promissory Note and Mortgage, the
deficiency would be rolled over into a new promissory note and
mortgage on another real property owned by Defendant, located at
12 Akamai Loop, Hilo, Hawai`i, Tax Map Key No. (3) 2-6-020-019
(the “Akamai Property”).
Id.
¶ 6(e).
The F&R concluded that Defendant breached the
settlement agreement by, inter alia, failing to pay the
- 4 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 5 of 42
823
PageID #:
Promissory Note and not attempting to sell the Kaloli Property.
Id. FOF ¶ 8.
Defendant also failed to evict the tenants and
interfered with Plaintiff’s attempts to market and sell the
Kaloli Property by removing “For Sale” signs, unsuccessfully
seeking a restraining order against Plaintiff, and purportedly
revoking the limited power of attorney.
Id.
The Magistrate
Judge recommended that the Court appoint a Receiver to market
and sell the Kaloli Property.
Id. at 8.
The F&R recommended
that the Court retain jurisdiction to supervise and assist the
Receiver to perform his duties, and—in the event the sale
proceeds from the Kaloli Property are insufficient to satisfy
the amounts owed under the Promissory Note—to consider
Plaintiff’s requests to compel Defendant to execute another
promissory note and mortgage on the Akamai Property, impose an
equitable lien or constructive trust, enter a deficiency
judgment, or take other action.
Id. at 9-10.
No objections to
the F&R were filed and on July 27, 2015, the Court entered its
Order adopting the F&R.
ECF No. 53.
III. A Receiver is Appointed
A Receiver was appointed to market and sell the Kaloli
Property on September 4, 2015, ECF No. 54, and Charles M.
Heaukulani was appointed as a substitute Receiver on May 3,
2016, ECF No. 63.
The Receiver was authorized to (1) take
immediate possession and control of the Kaloli Property;
- 5 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 6 of 42
824
PageID #:
(2) collect rents from any tenants or occupants of the house;
(3) if necessary, seek to evict or eject any tenants or
occupants; and (4) if necessary, seek court authority to proceed
by way of auction in the event the Kaloli Property could not be
sold by a private sale within a reasonable time period.
Id.
Defendant was enjoined from interfering with the Receiver’s
efforts to market and sell the Kaloli Property and from
attempting to regain possession and control of the Kaloli
Property during the pendency of the action.
Id. at 3-4.
The
Court also retained jurisdiction to supervise and assist the
Receiver in performing his duties.
IV.
Id. at 4.
Receiver Seeks Court Intervention While Defendant
Contests Jurisdiction
When neither Defendant nor the occupants of the Kaloli
Property were cooperative in the Receiver’s efforts to market
and sell the property, the Receiver moved for a writ of
possession and ejectment (the “Motion for Writ”).
ECF No. 64.
Defendant opposed the Motion for Writ and, concurrently with her
opposition, filed a Rule 60(b) motion to set aside the order
adopting the Magistrate Judge’s F&R, arguing that the Court’s
decision that it retained jurisdiction over the settlement
agreement was void.
ECF No. 67.
Specifically, Defendant argued
that because the stipulation of dismissal entered by the Court
in 2012 had dismissed the action with prejudice, the Court
- 6 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 7 of 42
825
PageID #:
thereafter lacked subject matter jurisdiction to enforce the
settlement agreement under the U.S. Supreme Court’s ruling in
Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 114
S. Ct. 1673, 128 L. Ed. 2d 391 (1994).
ECF No. 67.
The Court denied Defendant’s Rule 60(b) motion,
finding that the Court had diversity jurisdiction to enforce the
settlement agreement.
ECF No. 81.
The Court noted it did not
need to reach whether the settlement terms were incorporated
into the stipulation of dismissal (thereby providing ancillary
jurisdiction) because diversity jurisdiction existed regardless.
Id.
Defendant appealed the Court’s order denying the Rule
60(b) motion.
ECF No. 85.
The Ninth Circuit dismissed the case
due to Defendant’s failure to file an opening brief.
No. 95.
ECF
Defendant moved to reinstate the case, which the Ninth
Circuit denied. 2/
Defendant then filed her opening brief and
again moved to reinstate the case, which the Ninth Circuit also
denied.
ECF No. 96.
On December 4, 2018, the Court denied the Receiver’s
Motion for Writ.
ECF No. 99.
The Court found that, pursuant to
Hawai`i law, in order to maintain a possession and ejectment
action a plaintiff must have both the title to and right of
2/
These filings can be found on the Ninth Circuit’s docket, Case No.
17-15716, ECF Nos. 19, 22.
- 7 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 8 of 42
826
possession of the parcel in issue.
ECF No. 99 at 11.
PageID #:
Neither
Plaintiff nor the Receiver had ownership of or title to the
Kaloli Property.
Id.
The Court noted that it would have the
power to issue a writ of possession and ejectment if Plaintiff
brought a foreclosure action that established title to the
property.
Id. at 13.
The Court thus denied the Receiver’s
Motion for Writ, but granted Plaintiff leave to file an amended
complaint to foreclose on the Mortgage.
Id. at 14.
On December 20, 2018, Plaintiff filed the First
Amended Complaint seeking (1) foreclosure on the Kaloli
Property; (2) a rollover mortgage and foreclosure on the Akamai
Property; and (3) a deficiency judgment.
ECF No. 100.
Defendant filed an answer and included a demand for a jury
trial.
ECF No. 102.
V.
The Instant Motion for Summary Judgment and
Counter-Motion to Dismiss
On November 12, 2019, Plaintiff filed a Motion for
Summary Judgment seeking (1) foreclosure on the Kaloli Property;
(2) a Commissioner be appointed and directed to sell, collect
rents from, and evict any occupants from the Kaloli Property;
(3) if the proceeds from the sale of the Kaloli Property are
insufficient to pay off the amounts owed to Plaintiff—including
attorney’s fees and costs—that the remaining balance be rolled
over into a new promissory note and mortgage on the Akamai
- 8 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 9 of 42
827
PageID #:
Property, or, in the alternative, a deficiency judgment in
Plaintiff’s favor be ordered against Defendant; and (4) the
Court strike Defendant’s demand for jury trial.
ECF No. 110.
Defendant filed an Opposition to the Motion for
Summary Judgment and also filed a Counter-Motion to Dismiss on
January 23, 2020, ECF No. 119.
Plaintiff filed his Reply and
Opposition to Defendant’s Counter Motion to Dismiss on
January 29, 2020, ECF No. 120. 3/
Defendant filed a citation to
supplemental authority on February 6, 2020, providing the Court
with Anago Franchising, Inc. v. Shaz, LLC, 677 F.3d 1272 (11th
Cir. 2012).
A hearing was held on Friday, February 7, 2020.
At
the hearing, the Court raised concerns regarding the issue of
compound interest.
Plaintiff stated that he would submit a
declaration recalculating the amount of interest and principal,
3/ The Court scheduled a hearing on the Motion for February 6, 2020.
On
January 17, 2020, Defendant moved to continue the February 6 hearing or, in
the alternative, to have the briefing schedule modified. ECF No. 115.
Defendant attested that Plaintiff consented to a one-week extension of the
opposition and reply briefs. ECF No. 115. Plaintiff’s brief confirmed that
he had consented to the one-week extension but otherwise opposed the
Defendant’s motion to extend time. ECF No. 116. On that basis, the Court
granted the one-week extension but denied a continuance of the hearing. ECF
No. 117. When Defendant filed her Opposition, she also filed a CounterMotion to Dismiss. Plaintiff notes in his Reply that “in making his untimely
request for an extension of time to file his Opposition, Defendant RAMOS’
counsel never asked for an extension of time to file a Counter Motion, and
never indicated that he would be filing a Counter Motion, which would have
been rejected by Plaintiff’s counsel.” Reply at 3 n.1. As explained below,
the Court acknowledges the concern but, because subject matter jurisdiction
may be raised at any time, the Court elects to consider the late-filed
Counter-Motion to Dismiss. The Court ultimately heard both the Motion and
Counter-Motion on February 7, 2020.
- 9 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 10 of 42
828
which he filed on February 14, 2020.
ECF Nos. 123, 124.
PageID #:
The
Court provided Defendant an opportunity to respond but Defendant
filed no response.
On March 30, the Court issued a minute order
directing Defendant to file any objections or requesting
additional time by April 9.
no response.
ECF No. 132.
Defendant again filed
On April 13, Defendant’s counsel sent an email
apparently waiving any objection to the interest computations.
ECF No. 133.
On March 5, 2020, the Court issued a minute order
permitting Plaintiff to file a response specifically addressing
Defendant’s supplemental citation to the Eleventh Circuit’s
decision in Anago.
ECF No. 129.
on March 11, 2020.
Plaintiff filed that response
ECF No. 130.
STANDARD
I.
Summary Judgment Standard
Summary judgment is proper where there is no genuine
issue of material fact and the moving party is entitled to
judgment as a matter of law.
Fed. R. Civ. P. 56(a).
Federal
Rule of Civil Procedure (“Rule”) 56(a) mandates summary judgment
“against a party who fails to make a showing sufficient to
establish the existence of an element essential to the party’s
case, and on which that party will bear the burden of proof at
trial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see
- 10 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 11 of 42
829
PageID #:
also Broussard v. Univ. of Cal., 192 F.3d 1252, 1258 (9th Cir.
1999).
“A party seeking summary judgment bears the initial
burden of informing the court of the basis for its motion and of
identifying those portions of the pleadings and discovery
responses that demonstrate the absence of a genuine issue of
material fact.”
Soremekun v. Thrifty Payless, Inc., 509 F.3d
978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323); see
also Jespersen v. Harrah’s Operating Co., 392 F.3d 1076, 1079
(9th Cir. 2004).
“When the moving party has carried its burden
under Rule 56[(a)] its opponent must do more than simply show
that there is some metaphysical doubt as to the material facts
[and] come forward with specific facts showing that there is a
genuine issue for trial.”
Matsushita Elec. Indus. Co. v. Zenith
Radio, 475 U.S. 574, 586–87 (1986) (citation and internal
quotation marks omitted); see also Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247–48 (1986) (stating that a party cannot
“rest upon the mere allegations or denials of his pleading” in
opposing summary judgment).
“An issue is ‘genuine’ only if there is a sufficient
evidentiary basis on which a reasonable fact finder could find
for the nonmoving party, and a dispute is ‘material’ only if it
could affect the outcome of the suit under the governing law.”
In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing
- 11 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 12 of 42
830
Anderson, 477 U.S. at 248).
PageID #:
When considering the evidence on a
motion for summary judgment, the court must draw all reasonable
inferences on behalf of the nonmoving party.
Matsushita Elec.
Indus. Co., 475 U.S. at 587; see also Posey v. Lake Pend Oreille
Sch. Dist. No. 84, 546 F.3d 1121, 1126 (9th Cir. 2008) (stating
that “the evidence of [the nonmovant] is to be believed, and all
justifiable inferences are to be drawn in his favor” (internal
citation and quotation omitted)).
II.
Federal Rule of Civil Procedure 12(h)(3)
Rule 12(h)(3) provides that “[i]f the court determines
at any time that it lacks subject-matter jurisdiction, the court
must dismiss the action.”
“The difference between a
Rule 12(h)(3) motion and a motion to dismiss for lack of
subject-matter jurisdiction under Rule 12(b)(1) is simply that
the former may be asserted at any time and need not be
responsive to any pleading of the other party.”
Hamidi v. Serv.
Employees Int’l Union Local 1000, 386 F. Supp. 3d 1289, 1294
(E.D. Cal. 2019) (internal quotation marks and citations
omitted); see also Augustine v. United States, 704 F.2d 1074,
1075 n.3 (9th Cir. 1983) (finding the issue of subject matter
jurisdiction properly before the court as a Rule 12(h)(3)
motion, despite the government’s framing of the motion as a
- 12 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 13 of 42
831
PageID #:
12(b)(1) motion, because the motion was made after the
government’s responsive pleading).
DISCUSSION
Defendant styles her Opposition as an “Opposition to
the Motion for Summary Judgment and in Support of a Counter
Motion to Dismiss.”
ECF No. 119 (“Opp.”).
Yet the entirety of
the Opposition argues that the Court lacks subject matter
jurisdiction and does not otherwise address the arguments raised
by Plaintiff.
See Opp.
Defendant’s Opposition fails to comply
with Local Rule 56.1, requiring that she admit or dispute each
fact in Plaintiff’s concise statement of facts (“CSF”), ECF
No. 111, although Defendant acknowledges that Plaintiff’s CSF
“represent[s] the law of the case” since it is drawn from prior
rulings in this action.
Opp. at 5. 4/
The Court will proceed by addressing Defendant’s
argument on subject matter jurisdiction and will otherwise
consider the facts asserted by Plaintiff as admitted.
I.
Subject Matter Jurisdiction
a. Rule 41(a)(1)(A)(ii)
Rule 41(a)(1)(A) provides for voluntary dismissal of
an action by a plaintiff without a court order.
4/
If the opposing
Defendant also states that she reserves her “objections in the prior
record on this case.” Opp. at 5.
- 13 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 14 of 42
832
PageID #:
party has not served an answer or motion for summary judgment,
the plaintiff may dismiss the action without a court order by
simply filing a notice of dismissal.
Fed. R. Civ. P.
41(a)(1)(A)(i); see also Galaza v. Wolf, ___ F.3d ___, 2020 WL
1698434 at n.1 (9th Cir. Apr. 8, 2020) (“Galaza was not required
to seek the district court’s permission to voluntarily dismiss
these claims, because the government never served an answer or a
motion for summary judgment.” (citing Fed. R. Civ. P.
41(a)(1)(A)(i))).
Otherwise, to obtain dismissal of an action
without a court order, a plaintiff must file “a stipulation of
dismissal signed by all parties who have appeared.”
Civ. P. 41(a)(1)(A)(ii).
Fed. R.
In either event, the dismissal “is
effective on filing, no court order is required, [and] the
parties are left as though no action had been brought.”
Commercial Space Mgmt. Co. v. Boeing Co., 193 F.3d 1074, 1078
(9th Cir. 1999) (involving a dismissal under Rule 41(a)(1)(A)(i)
but referring to dismissals under Rule 41(a)(1) generally); see
also Galaza, 2020 WL 1698434 (noting that “Rule 41(a)(1) did not
require appellant “to seek permission of the court to
voluntarily dismiss her remaining claims”).
b. The Supreme Court’s Kokkonen Decision
The Supreme Court addressed the possible retention of
jurisdiction following a voluntary dismissal by stipulation in
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 114 S.
- 14 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 15 of 42
833
Ct. 1673, 128 L. Ed. 2d 391 (1994).
PageID #:
After the parties reached a
settlement in that case, the district court filed a “Stipulation
and Order to Dismiss with Prejudice,” signed by the parties and
by the district judge under the notation “it is so ordered.”
Id. at 376-77.
The stipulation and order did not reserve
jurisdiction or refer to the settlement agreement.
Id. at 377.
The respondent later filed a motion to enforce the settlement
agreement, but the petitioner argued that the court lacked
subject matter jurisdiction over the enforcement action.
Id.
The Supreme Court held that district courts have
ancillary jurisdiction to enforce their orders.
Thus, if
compliance with the settlement agreement was made part of a
court order, ancillary jurisdiction to enforce the settlement
agreement would exist.
Id. at 380-81.
In the context of a
stipulation and order for dismissal under Rule 41(a)(1)(A)(ii),
a settlement agreement may be deemed part of a court order if
the court (1) embodies the settlement agreement in its dismissal
order; or (2) explicitly retains jurisdiction over the
settlement agreement in its dismissal order.
Id. at 381-82.
“Absent such action, however, enforcement of the settlement
agreement is for state courts, unless there is some independent
basis for federal jurisdiction.”
Id. at 382.
Because the court order in Kokkonen neither retained
jurisdiction nor incorporated the terms of the settlement
- 15 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 16 of 42
834
PageID #:
agreement, the district court lacked jurisdiction to
subsequently enforce the settlement agreement.
Id. at 380-81.
c. Requirement for a Court Order
The Kokkonen decision made clear that ancillary
jurisdiction to enforce a settlement agreement requires a court
order.
Because the parties here entered a self-executing
dismissal of the case without any court order, the Court finds
there is no ancillary jurisdiction. 5/
As conceded by Defendant,
however, Plaintiff may bring his claim either as a new action in
federal court (on the basis of diversity) or in state court.
5/
The Stipulation itself merely references Rule 41(a). It states:
“The parties hereby agree that the above-captioned action is dismissed and
discontinued with prejudice, as to the named defendant, pursuant to Rule
41(a) of the Federal Rules of Civil Procedure.” ECF No. 35. Because it
lacks any court order, the document is a voluntary dismissal under Rule
41(a)(1). Cf. Fed. R. Civ. P. 41(a)(2) (permitting dismissal by court
order). Rule 41(a)(1)(A) provides for dismissal without a court order by
either:
(i) a notice of dismissal before the opposing party serves
either an answer or a motion for summary judgment; or
(ii) a stipulation of dismissal signed by all parties who
have appeared.
Because the document takes the form of a stipulation signed by all parties
that had appeared, the Court analyzes it as submitted pursuant to Rule
41(a)(1)(A)(ii). However, since no answer or motion for summary judgment had
been filed, the document could be deemed submitted under Rule 41(a)(1)(A)(i).
Both methods of voluntary dismissal are self-executing and either
construction would render the same result here. See Anago Franchising, Inc.
v. Shaz, LLC, 677 F.3d 1272, 1276 (11th Cir. 2012) (discussing the “two
different modes of dismissal—Rule 41(a)(1), which allows for dismissal
without a court order, and Rule 41(a)(2), which requires the court to order
the case dismissed”—and further explaining that Rule 41(a)(1) permits a
plaintiff to “dismiss an action voluntarily without a court order in two
circumstances: by filing a notice of dismissal before the opposing party
serves an answer or motion for summary judgment, Fed. R. Civ. P.
41(a)(1)(A)(i), or at any time during the litigation by filing a stipulation
of dismissal signed by all parties who have appeared, Fed. R. Civ. P.
41(a)(1)(A)(ii)”); Commercial Space Mgmt. Co. v. Boeing Co., 193 F.3d 1074,
1078 (9th Cir. 1999) (“[I]t is beyond debate that a dismissal under Rule
41(a)(1) is effective on filing, [and] no court order is required . . . .
Unlike a Rule 41(a)(1) dismissal, a Rule 41(a)(2) dismissal requires court
approval.”).
- 16 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 17 of 42
835
ECF No. 119 at 22-23.
PageID #:
As discussed below, the court concludes
that Plaintiff’s Amended Complaint may be, and hereby is,
construed as a new action.
The Court previously relied on Sixth and Seventh
Circuit authorities to find diversity jurisdiction alone
sufficient to enforce the settlement agreement.
Limbright v.
Hofmeister, 566 F.3d 672 (6th Cir. 2009); Blue Cross & Blue
Shield Association v. American Express Co., 467 F.3d 634 (7th
Cir. 2006).
But in reviewing those decisions in conjunction
with the Eleventh Circuit’s decision in Anago Franchising, Inc.
v. Shaz, LLC, 677 F.3d 1272 (11th Cir. 2012), the Court
recognizes that a court order is required to maintain the
original action for purposes of enforcing a settlement
agreement.
Although both Limbright and Blue Cross ultimately
relied on diversity jurisdiction, both actions had been
dismissed by a single combined stipulation and court order.
That is, while both cases involved voluntary dismissals, those
dismissals were effected by a court order. 6/
Here, a self-executing stipulation with the Court’s
approval “as to form” effected the voluntary dismissal; there
6/
The Ninth Circuit has not explicitly addressed this issue. In
O'Connor v. Colvin, 70 F.3d 530, 532 (9th Cir. 1995), the court found that a
stipulation and order failed to comply with the requirements of Kokkonen to
permit subsequent enforcement of the settlement agreement. The court
mentioned that no other facts justified federal jurisdiction since there was
neither diversity nor any relevant federal statute. Id. But despite the
cursory reference to diversity, that case—like Limbright and Blue Cross and
unlike the instant case—involved dismissal by stipulation and court order.
- 17 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 18 of 42
836
was no court order.
PageID #:
This case is thus more analogous to Anago,
where the parties entered a voluntary stipulation dismissing the
action, and a later-issued court order was deemed inoperative
because the court had been divested of jurisdiction when the
stipulation was filed.
677 F.3d at 1280-81.
The Anago court
explained that
for a district court to retain jurisdiction over
a settlement agreement where the parties dismiss
the case by filing a stipulation of dismissal
pursuant to Rule 41(a)(1)(A)(ii), either (1) the
district court must issue the order retaining
jurisdiction under Kokkonen prior to the filing
of the stipulation, or (2) the parties must
condition the effectiveness of the stipulation on
the district court’s entry of an order retaining
jurisdiction.
Anago, 577 F.3d at 1280.
If the stipulation of dismissal takes effect without a
court order, the court is immediately divested of jurisdiction
and cannot act to enforce the settlement agreement.
Id.
(“ancillary jurisdiction allows a district court to effectuate
its orders, not to enforce stipulations”); see also
SmallBizPros, Inc. v. MacDonald, 618 F.3d 458, 463 (5th Cir.
2010) (“Because filing a voluntary stipulation of dismissal
under Rule 41(a)(1)(A)(ii) is effective immediately, any action
by the district court after the filing of such a stipulation can
- 18 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 19 of 42
837
PageID #:
have no force or effect because the matter has already been
dismissed by the parties themselves without any court action.”).
Here, the original action was terminated and the Court
was divested of jurisdiction when the parties voluntarily
dismissed this action without any court order on January 3,
2012.
For the federal court to enforce the settlement agreement
on the basis of diversity jurisdiction, then, Plaintiff was
required to file a new action.
The Court construes Plaintiff’s
Amended Complaint as a new action.
d. The Amended Complaint Constituted a New Action
Plaintiff filed his Amended Complaint on December 20,
2018, asserting diversity jurisdiction.
ECF No. 100, at 2 ¶ 2.
Although the Court no longer had jurisdiction over the original
action, Plaintiff’s Amended Complaint was, in effect, the
initiation of a new action.
The Court relies on precedent for
construing it as such.
In Janus v. American Federation of State, County, &
Mun. Employees, Council 31, 138 S. Ct. 2448, 201 L. Ed. 2d 924
(2018), the Supreme Court approved of a district court
construing an amended complaint as a new lawsuit.
In that case,
a governor had initially filed an action and the petitioner
moved to intervene on the governor’s side.
Id. at 2462.
The
governor was dismissed for lack of standing, but the district
court permitted the petitioner who had intervened on the
- 19 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 20 of 42
838
governor’s side to file an amended complaint.
Id.
PageID #:
The
respondents argued that the petitioner’s amended complaint must
be dismissed for lack of standing like the governor’s underlying
suit, but the Supreme Court found the petitioner’s complaint was
in effect a new action.
Id.
The Supreme Court explained that the respondents’
argument
rests on the faulty premise that petitioner
intervened in the action brought by the Governor,
but that is not what happened. The District
Court . . . essentially treated petitioner’s
amended complaint as the operative complaint in a
new lawsuit. And when the case is viewed in that
way, any Article III issue vanishes. . . . It is
true that the District Court docketed
petitioner’s complaint under the number
originally assigned to the Governor’s complaint,
instead of giving it a new number of its own.
But Article III jurisdiction does not turn on
such trivialities.
Id. (internal citation omitted).
Similarly, the Ninth Circuit has refused “to insist
upon an empty formalism” of refiling an identical pleading as a
new action.
In United States for Use of Atkins v. Reiten, 313
F.2d 673 (9th Cir. 1963), the appellant submitted a supplemental
pleading introducing a cause of action not alleged in the
original complaint and not in existence when the original
complaint was filed.
Id. at 674.
Appellees objected to the
supplemental pleading, but the court permitted it, explaining
that “no objection could have been raised” if, instead of the
- 20 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 21 of 42
839
PageID #:
supplemental pleading, the appellant “had instead filed
precisely the same pleading as an initial complaint in a new
action.
To require appellant to commence a new and separate
action in these circumstances would have been to insist upon an
empty formalism.”
Id. at 675.
In a D.D.C. decision, the court considered whether it
had subject matter jurisdiction over an amended complaint.
Ulico Cas. Co. v. E.W. Blanch Co., 200 F.R.D. 3 (D.D.C.
2001).
The plaintiffs’ initial complaint asserted diversity
jurisdiction, but when defendants moved to dismiss, the
plaintiffs filed an amended complaint asserting federal question
jurisdiction.
Id. at *4.
The defendants argued that the court
would not have had jurisdiction over the first complaint, and
the plaintiffs could not secure jurisdiction by filing an
amended complaint.
Id.
The court rejected this argument,
explaining that “if the amended complaint was stricken, all
plaintiffs need do is re-file the amended complaint as a new
action to put everyone in the same position they would be in if
their motion to strike was denied.”
Id.
While filing of a new
action might impact the statute of limitations analysis, it had
“nothing to do” with subject matter jurisdiction.
Id.
Regardless of whether the plaintiffs brought a new claim or an
amended one, “plaintiffs have brought a matter before the court
- 21 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 22 of 42
840
PageID #:
which it has the power and concomitant responsibility to
adjudicate.”
Id.
Other courts have found a number of situations merit
the construction of an amended complaint as a new action.
See,
e.g., Morlan v. Universal Guar. Life Ins. Co., 298 F.3d 609, 617
(7th Cir. 2002) (where a plaintiff filed a class action and lost
standing but later filed an amended complaint after regaining
standing, the court found “the filing of the amended complaint
was the equivalent of filing a new suit, and so it wouldn't
matter had there been no jurisdiction over Morlan’s original
suit . . . unless one wanted to make a fuss over the filing
fee”); Johnson v. Heublein Inc., 227 F.3d 236, 241 (5th Cir.
2000) (“[A] lapsed right to remove an initially removable case
within thirty days is restored when the complaint is amended so
substantially as to alter the character of the action and
constitute essentially a new lawsuit.”); Duplan v. Harper, 188
F.3d 1195, 1199 (10th Cir. 1999) (where “the amended complaint
was treated by the parties and the court as the institution of a
new suit,” the appellate court treated it the same, citing cases
implying that in certain circumstances an amended complaint
might institute a new action).
The Court here has diversity jurisdiction.
While the
Court acknowledges that it was divested of jurisdiction when the
parties voluntarily dismissed the action without a court order,
- 22 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 23 of 42
841
PageID #:
it holds that Plaintiff’s Amended Complaint constituted the
initiation of a new enforcement action, over which the Court has
diversity jurisdiction. 7/
As noted earlier, Defendant does not
seriously contest diversity; her Opposition and Counter-Motion
instead demand Plaintiff refile the matter as a new action.
ECF
No. 119 at 22-23 (arguing the Court should “requir[e] Mr.
Ruppersberger to bring any separate enforcement action anew,
either in this District Court in the regular course or in Hawaii
County State Third Circuit Court”).
require such empty formalism.
The Court refuses to
Like the Ulico Casualty Co.
court, this Court finds that a matter is before it, which it has
the power and responsibility to adjudicate.
200 F.R.D. at *4.
The Court now turns to the merits of that action.
II.
Foreclosure on the Kaloli Property
a. Entitlement to Foreclose
Plaintiff Ruppersberger first seeks summary judgment
as to his claim for a decree of foreclosure against the Kaloli
7/
This holding does create the problem that the Court’s actions taken
after the entry of the voluntary dismissal but prior to the filing of the
Amended Complaint lacked subject matter jurisdiction. This includes the
Magistrate Judge’s entry, and this Court’s adoption, of the F&R. The Court
is therefore precluded from relying on the F&R and this Court’s adoption
thereof as the law of the case. However, Plaintiff himself submitted the
relevant facts as undisputed in his CSF supporting his Motion, and Defendant
did not dispute those facts, as set forth in Plaintiff’s CSF, instead solely
contesting the subject matter jurisdiction of the Court. As stated earlier,
the Court therefore concludes the facts submitted by Plaintiff are
undisputed. L.R. 56.1(g) (“For purposes of a motion for summary judgment,
material facts set forth in the movant’s concise statement will be deemed
admitted unless controverted by a separate concise statement of the opposing
party.”).
- 23 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 24 of 42
842
Property.
PageID #:
“In order to prove entitlement to foreclose, the
foreclosing party must demonstrate that all conditions precedent
to foreclosure under the note and mortgage are satisfied and
that all steps required by statute have been strictly complied
with.”
Bank of Am., N.A. v. Reyes-Toledo, 139 Haw. 361, 367,
390 P.3d 1248, 1254 (2017) (citing 55 Am. Jur. 2d Mortgages
§ 575 (Nov. 2016 Update)).
“This typically requires the
plaintiff to prove the existence of an agreement, the terms of
the agreement, a default by the mortgagor under the terms of the
agreement, and giving of the cancellation notice,” as well as
the plaintiff’s “entitlement to enforce the note and mortgage.”
Id. (citing Bank of Honolulu, N.A. v. Anderson, 3 Haw. App. 545,
551, 654 P.2d 1370, 1375 (Ct. App. 1982); Haw. Rev. Stat.
§§ 490:3-301, 3-308, cmt. 2). 8/
Plaintiff has first clearly shown the existence of an
agreement and the terms of that agreement.
Plaintiff holds a
Mortgage on the Kaloli Property in amount of $118,000 which
Defendant executed as part of the Settlement Agreement.
Ex. C.
CSF,
Plaintiff’s Mortgage on the Kaloli Property secures the
Promissory Note and the Addendum.
CSF Exs. A, B.
The Mortgage
8/ The Hawai`i Supreme Court cites to 55 Am. Jur. 2d Mortgages § 575 for
the requirements entitling a party to foreclose. That treatise further
states, “On the other hand, the mortgagee may foreclose where the parties
have agreed that upon a certain contingency or default—such as a nonpayment
of principal, interest, taxes, or the like—the mortgagee shall have such
right.” Id. This provision would apply to Plaintiff here. However, because
Plaintiff complies with either articulation, the Court applies the specific
language cited by the Hawai`i Supreme Court.
- 24 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 25 of 42
843
PageID #:
sets forth Plaintiff’s remedies, including his right to
foreclose the Mortgage in the event Defendant fails to pay the
Promissory Note or breaches a covenant contained in the
Mortgage.
CSF, Ex C.
The Promissory Note provided for payment upon the sale
of the Kaloli Property, which Defendant agreed to sell by
June 30, 2012.
CSF Ex. A.
If the Kaloli Property was not sold
by that date, the parties agreed that any tenants would be
vacated, and Plaintiff would be authorized to move into the
Kaloli Property and to market it for sale.
Id.
To enable
Plaintiff to market the Kaloli Property, Defendant executed a
limited power of attorney so authorizing Plaintiff.
Id.
Plaintiff has likewise clearly shown a default under
the terms of the agreement by the mortgagor.
Plaintiff submits
a declaration that, “among other things,” Defendant Ramos “has
not made any payments on the Promissory Note.”
Ruppersberger
Decl. ¶ 6-7.
The Court finds that Plaintiff has also given adequate
cancellation notice.
This obligation “merely requires that the
foreclosing party comply with the notice provisions of the
parties’ agreement.”
Cty. of Kaua`i v. Girald, No. CV 15-00204
LEK-BMK, 2015 WL 5884859, at *5 (D. Haw. Oct. 6, 2015).
Mortgage here contains a minimal notice requirement:
- 25 -
The
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 26 of 42
844
PageID #:
Should Mortgagor fail to make any payment as
provided under the Note, or on the breach of any
covenant or agreement hereof or in any promissory
note or terms of any other obligation herby
secured . . . then the whole amount of all
indebtedness owing by or chargeable to Mortgagor
under any provision of this Mortgage or intended
to be secured hereby shall at the option of the
Mortgagee and without notice at once become due
and payable, and with or without foreclosure,
Mortgagee shall have the immediate right to
receive and collect all rents and profits due,
accrued, or to become due.
. . .
Mortgagee may foreclose this mortgage by suit in
equity . . . .
CSF, Ex C. (Mortgage) (emphasis added).
Further, in contrast to a typical mortgage, the
agreements between the parties here specifically contemplated
the quick sale of the Kaloli Property, which was to occur by
June 30, 2012.
CSF, Ex. A.
In April 2015, Plaintiff filed a
notice of pendency of action with the Hawai`i Bureau of
Conveyances regarding the sought compelled sale of the Kaloli
Property or, in the alternative, the foreclosure thereof.
Ex. D.
CSF,
Plaintiff has submitted a number of Court filings
seeking to compel Defendant to sell the property and pay the
Promissory Note.
Plaintiff filed the Amended Complaint praying
for foreclosure in December 2018 and filed the instant Motion
for Summary Judgment seeking that foreclosure in November 2019.
To wit, Defendant has been on ample notice regarding her
- 26 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 27 of 42
845
PageID #:
violations of the agreements and Plaintiff’s intention to take
possession of the Kaloli Property.
Finally, Plaintiff’s entitlement to enforce the
Promissory Note and Mortgage is clear from those documents, to
which Plaintiff and Defendant here are the signatories.
As
indicated above, Plaintiff has submitted a declaration that
“Defendant RAMOS has not made any payments on the Promissory
Note,” which Defendant does not dispute.
¶ 6.
Ruppersberger Decl.
There are no genuine issues of material fact as to the
requirements for a decree of foreclosure against the Kaloli
Property, and Plaintiff is entitled to summary judgment.
b. Amount Owed
Although not raised by Defendant, the Court notes two
concerns with the total amount of money sought by Plaintiff from
the sale of the Kaloli Property.
First, the Promissory Note
provides for compound interest.
Second, Plaintiff seeks all
rental proceeds from the Kaloli Property.
The Court next
addresses each of these concerns.
i. Interest Award
Under Hawai`i law, “[n]o action shall be maintainable
in any court of the State to recover compound interest upon any
consumer credit transaction.”
Haw. Rev. Stat. § 478-7.
consumer credit transaction is defined to include
- 27 -
A
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 28 of 42
846
PageID #:
credit extended to a natural person primarily for
a personal, family, or household purpose: (1) In
which the principal amount does not exceed
$250,000 . . . ; or (2) Such credit is secured by
real property or by personal property used or
expected to be used as the borrower’s principal
dwelling.
Haw. Rev. Stat. § 478-1.
Although Defendant does not make an argument to this
effect, the transaction at issue appears to qualify as a
consumer credit transaction under the Hawai`i statute, and the
Court therefore does not award compound interest.
Rather,
although the Promissory Note provides for compound interest, the
Court will only award simple interest as permissible under
Hawai`i law.
See In re Anderson, 69 B.R. 105, 109 n.2 (B.A.P.
9th Cir. 1986) (“Hawaii itself has a long held policy adverse to
the allowance of compound interest.” (citing Haw. Rev. Stat.
§ 478-7; Bolte v. Akau, 8 Haw. 742, 743 (1892)); United States v.
Guerette, No. 09-00133ACK-KSC, 2010 WL 3260191, at *3 n.5 (D.
Haw. Aug. 13, 2010) (where the note at issue provided for
compound interest, finding that “Hawai`i has a statute that
prohibits compound interest” and therefore “the Court is of the
opinion that Defendant Jones–Hart is only entitled to simple
interest”).
At the hearing on the Motion, the Court instructed
Plaintiff to file an affidavit calculating interest at 5% per
annum simple interest and provided Defendant an opportunity to
- 28 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 29 of 42
847
respond.
ECF No. 123.
February 14, 2020.
response. 9/
PageID #:
Plaintiff filed his Affidavit on
ECF No. 124.
Defendant did not file a
The Court finds Plaintiff’s calculations appropriate
and therefore adopts the calculations provided by Plaintiff:
Principal: $118,000.00 (as of 12/21/2011)
(date of Promissory Note).
-- 5% simple interest = $5,900 per year
-- $5,900 divided by 365 days = $16.164 per day
Interest from 12/21/2011 to 12/21/2019 (8 years):
-- $5,900 per year x 8 years: $47,200.00
Interest from 12/22/2019 to 2/7/2020
(hearing date on MSJ) (48 days):
-- 48 days x $16.164 per day: $775.87
Total Interest as of 2/7/2020: $47,975.87
(plus $16.164 per diem interest)
ECF No. 124, ¶ 4.
ii. Rental Proceeds
The Mortgage provides that all rents are deemed a part
of the mortgaged premises covered by the Mortgage, and further
9/ The Court’s chambers called Defendant’s counsel on February 24, 2020
to determine if Defendant intended to file a response and was instructed to
leave a message on counsel’s answering machine. The Court’s chambers never
heard back. On March 30, 2020, the Court filed a minute order directing
Defendant to file a response by April 9, 2020, indicating whether Defendant
had any objection to Plaintiff’s declaration, or stating any objections that
Defendant may have, or stating whether additional time was needed to file any
substantive response. ECF No. 132. On April 13, Defendant’s counsel sent an
email apparently waiving any objection to the interest computation.
- 29 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 30 of 42
848
PageID #:
gives Plaintiff the right to rental proceeds in the event of the
Defendant’s breach:
Should Mortgagor fail to make any payment as
provided under the Note, or on the breach of any
covenant or agreement hereof or in any promissory
note or terms of any other obligation hereby
secured . . . with or without foreclosure,
Mortgagee shall have the immediate right to
receive and collect all rents and profits due,
accrued, or to become due. Such rents and
profits are hereby assigned to Mortgagee and
Mortgagee is irrevocably appointed the attorney
in fact of Mortgagor in the name of Mortgagor or
in its own name to demand, sue for, collect,
recover, and receive all such rents and
profits . . . .
CSF, Ex. C.
Plaintiff therefore concludes he is entitled to all
rental proceeds.
Mot. at 9.
While the Court agrees the language of the Mortgage
entitles Plaintiff to rents based on Defendant’s failure to make
any payments on the Promissory Note, which is secured by the
Mortgage, Plaintiff has not provided any information regarding
the specific amount of rents owed and the Court will not award
rents in the absence of that information.
Prior to the hearing confirming the sale of the
property, Plaintiff is instructed to file an affidavit
specifying all amounts sought and providing the basis and
calculations for those specific amounts.
See Bank of Honolulu,
3 Haw. App. at 552 (“The exact amounts of interest and other
- 30 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 31 of 42
849
PageID #:
charges and credits, if any, could be determined after the
confirmation of the foreclosure sale.”).
The Court notes that under the agreement, Plaintiff
was required to demand the rents.
evidence that he ever did.
Plaintiff has not submitted
Therefore, Plaintiff is likely only
entitled to rents, if any, from the date that the Commissioner
is appointed until the date the property is sold.
III. Rollover Mortgage
Plaintiff seeks an order that, should the sale of the
Kaloli Property be insufficient to pay off the Promissory Note
and Mortgage, the balance remaining be rolled over into a new
promissory note and mortgage on the Akamai Property.
In the
alternative, Plaintiff seeks a deficiency judgment against
Defendant Ramos.
The Promissory Note explicitly provides that, “should
the proceeds from the sale of the ‘Kaloli’ house be insufficient
to pay off the Promissory Note/Mortgage, then the remainder of
the balance shall be rolled over into a new Promissory Note and
Mortgage on the property located at 12 Akamai Loop, Hilo,
Hawaii.”
CSF, Ex. A.
Under Hawai`i law, the Court must construe a
settlement agreement under ordinary contract principles.
See
State Farm Fire & Cas. Co. v. Pacific Rent-All, Inc., 90 Haw.
315, 323-24, 978 P.2d 753, 761-62 (1999).
- 31 -
When the terms of a
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 32 of 42
850
PageID #:
contract are definite and unambiguous there is no room for
interpretation.
Wong v. Cayetano, 111 Haw. 462, 481, 143 P.3d
1, 20 (2006).
Here, the Promissory Note provides for a rollover
mortgage on the Akamai Property in the event the proceeds from
the sale of the Kaloli House are insufficient to pay the amount
owed.
Defendant has not contested this.
That said, the Court
observes that a rollover mortgage or deficiency judgment may not
be necessary in this matter.
If, following the foreclosure sale
of the Kaloli Property, it appears that the proceeds of such
sale shall be insufficient to pay all the amounts owed Plaintiff
and a deficiency exists, the Court will rule on the issues of a
rollover mortgage or deficiency judgment at that time.
IV.
Demand for Jury Trial
Finally, Plaintiff requests that the Court strike
Defendant Ramos’s Demand for Jury Trial.
“That the Seventh
Amendment gives no right to a jury trial in a suit in equity,
even though legal issues may be involved, is well
settled . . . . This principle has been applied in numerous
types of cases including the foreclosure of a mortgage.”
Honolulu Sav. & Loan Co. v. Reed, 40 Haw. 269, 272 (1953); see
also Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41-42, 109
S. Ct. 2782, 2790, 106 L. Ed. 2d 26 (1989) (discussing the
Seventh Amendment’s right to trial by jury as applicable in
- 32 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 33 of 42
851
PageID #:
cases where courts determine legal rights, but not where courts
sit in equity); Haw. Nat’l Bank v. Cook, 100 Haw. 2, 7, 58 P.3d
60, 65 (2002) (holding that “foreclosure is an equitable action”
(citing Honolulu, Ltd. v. Blackwell, 7 Haw. App. 210, 219, 750
P.2d 942, 948 (1988))).
As it relates specifically to judicial foreclosures, a
court’s entitlement to reach judgment without submitting the
case to a jury has been codified in Hawai`i Revised Statute
§ 667-1.5.
The statute provides that circuit courts “may assess
the amount due upon a mortgage . . . without the intervention of
a jury, and shall render judgment for the amount awarded, and
the foreclosure of the mortgage.”
“A trial court, sitting in equity, may nevertheless
employ an advisory jury.”
Traxler v. Multnomah Cty., 596 F.3d
1007, 1013 (9th Cir. 2010); see also Honolulu Sav. & Loan, 40
Haw. at 273 (“Equity courts may decide both fact and law, but
they may, if they see fit, refer doubtful questions of fact to a
jury.”).
court.”
“The ultimate decision, however, rests with the
Traxler, 596 F.3d at 1013; see also Honolulu Sav. &
Loan, 40 Haw. at 273 (“Findings of the kind, however, are not
conclusive, and, if not satisfactory, they may be set aside.”).
Defendant here is not entitled to a jury trial nor
does the Court find it helpful to employ an advisory jury.
Defendant’s demand for a jury trial is hereby struck.
- 33 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 34 of 42
852
PageID #:
Finally, the Court notes that since the Court has
found that there are no material issues of fact and consequently
Plaintiff is entitled to summary judgment, this matter would not
proceed to a determination by a jury anyway. 10/
V.
Decree of Foreclosure
Having held Plaintiff is entitled to foreclose, the
Court hereby orders an interlocutory decree of foreclosure.
In
view of the ongoing COVID-19 pandemic, the government shutdown
and stay-at-home order, the common-law duty to obtain the best
price for the property as enunciated in Hungate v. Law Office of
David B. Rosen, 139 Haw, 394, 408, 391 P.2d 1, 15 (2017), and
the fact that the real estate market is mostly inactive and
Hawai`i has temporarily halted evictions, the Court finds that
it would be inequitable and not in the interest of either party
to proceed with the foreclosure sale under the existing
conditions.
The Court thus finds and so orders that the
Commissioner may not commence any actions to foreclose on
Defendant Ramos’s property until further ordered by this Court.
Either party may petition the Court to authorize proceeding with
the sale when it appears that the foregoing conditions have
ended and the real estate market is once again active; and the
other party will have an opportunity to respond.
10/
Accordingly, the trial and other scheduled dates are withdrawn.
- 34 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 35 of 42
853
PageID #:
It is hereby ORDERED, ADJUDGED, and DECREED for the
reasons stated herein that:
1.
That Plaintiff Ruppersberger’s Motion for Summary
Judgment and Decree of Foreclosure, and to Strike Defendant’s
Demand for Trial by Jury, ECF No. 110, is hereby GRANTED; and
that Defendant’s Counter-Motion to Dismiss, ECF No. 119, is
DENIED.
2.
Defendant Ramos is in default under the terms of
the Promissory Note, Addendum, and Mortgage, which are currently
held by Plaintiff.
3.
The Mortgage currently held by Plaintiff shall be
and is hereby foreclosed as prayed, and the property described
in the Mortgage, CSF, Ex. C, shall be sold at public auction or
by private sale without an upset price. 11/
Such sale of the
Kaloli Property shall not be final until approved and confirmed
by the Court.
The Court hereby reserves the question of the
exact amount of the indebtedness secured by the Mortgage.
4.
The Commissioner as appointed herein by the Court
shall sell the property within four (4) months after the
Commissioner is notified of a separate and forthcoming order
issued by this Court in which the Court recognizes that the
11/ The Court notes that at the hearing, the parties agreed it would be
in their respective best interests to endeavor to sell the property at a
private sale. See Minutes for Court Proceeding on February 7, 2020, ECF No.
123 (noting that, “Parties request authority to sell property by private
sale”).
- 35 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 36 of 42
854
PageID #:
COVID-19 threat has passed, other conditions satisfied, and that
the foreclosure sale may commence.
The Commissioner shall hold
all proceeds of the sale of the property in an interest-bearing
account to the credit of this cause subject to the directions of
this Court.
Upon payment according to such directions, the
Commissioner shall file an accurate accounting of the
Commissioner’s receipts and expenses.
5.
Charles M. Heaukulani is hereby appointed by this
Court as Commissioner, and as Commissioner he shall henceforth
sell the property at foreclosure sale to the highest bidder at
the Commissioner’s sale by public auction or by private sale,
without an upset price, after first giving notice of such sale
by publication in at least one newspaper regularly issued and of
general circulation in the District of Hawai‘i.
Said notice
shall be published once a week for at least four (4) consecutive
weeks, with the auction to take place no sooner than fourteen
(14) days after the appearance of the third advertisement.
Said
notice shall give the date, time, and place of the sale and an
intelligible description of the property, including any
improvements, and shall follow the format described in Haw. Rev.
Stat. § 667-20.
The Commissioner shall have further authority
to continue the sale from time to time at the Commissioner’s
discretion.
Any change in the time, place, or terms specified
in the original notice of sale requires that Plaintiff ensure
- 36 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 37 of 42
855
PageID #:
that the Commissioner publishes a new notice of postponed sale
with the new terms, and such notice shall follow the format
described in Haw. Rev. Stat. § 667-20.1.
The public sale shall
take place no sooner than fourteen (14) days after the date of
the notice of postponed sale, and not less than fourteen (14)
days before the rescheduled date a copy of the new notice of
postponed sale shall be posted on the mortgaged property and
delivered to Defendant, Plaintiff, and any other person entitled
to receive such notifications.
6.
No bond shall be required of the Commissioner.
7.
In the event that the Commissioner refuses, or
becomes unable, to carry out his duties set forth herein, the
Court shall appoint another without further notice of hearing.
8.
The Commissioner shall sell the subject property
by foreclosure sale in its “AS IS” condition, without any
representations or warranties whatsoever as to title,
possession, or condition.
9.
The Commissioner and all persons occupying the
subject property shall allow reasonable access to view the
subject property, a minimum of two separate days prior to the
sale of the subject property, by means of an open house or other
reasonable means.
10.
The fee of the Commissioner shall be such as the
Court deems just and reasonable, together with actual and
- 37 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 38 of 42
856
PageID #:
necessary expenses incurred with the sale of the subject
property.
11.
The sale so made and confirmed shall perpetually
bar Defendant Ramos and all persons and parties claiming by,
through or under Defendant Ramos, except governmental
authorities enforcing liens for unpaid real property taxes, from
any and all right, title and interest in the Kaloli Property or
any part thereof.
12.
Plaintiff Ruppersberger is hereby authorized to
purchase the Kaloli Property at the foreclosure sale.
The
successful bidder at the public auction, or the purchaser in the
event of a private sale, shall be required at the time of such
sale to make a down payment to the Commissioner in an amount not
less than ten percent (10%) of the highest successful price bid
or of the agreed price in the event of a private sale, such
payment to be in cash, certified check or cashier’s check,
provided that should Plaintiff Ruppersberger be the highest
bidder or the purchaser at a private sale, he may satisfy the
down payment by way of offset up to the amount of his secured
debts.
The balance of the purchase price must be paid in full
at the closing of the sale, which shall take place 35 days after
entry of the order confirming the sale; such payment also to be
in cash, certified check, or cashier’s check.
The balance of
the purchase price shall be paid in cash, certified check, or
- 38 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 39 of 42
857
PageID #:
cashier’s check, provided that, should Plaintiff Ruppersberger
be the highest bidder or purchaser at a private sale, he may
satisfy the balance of the purchase price by way of offset up to
the amount of his secured debts, as discussed above, as
appropriate.
Costs of conveyancing, including preparation of
the conveyance document, conveying tax, securing possession of
such mortgage property, escrow services, and recording of such
conveyance, shall be at the expense of such purchaser.
13.
If the successful bidder at a public auction or
purchaser at a private sale fails to fulfill this requirement,
the deposit shall be forfeited and applied to cover the cost of
sale, including the Commissioner’s fee, with distribution of any
amount remaining to be determined by the Court.
The property
then shall be again offered for sale under the terms and
conditions of this Order.
14.
Pending the sale of the mortgaged Kaloli
Property, Defendant Ramos shall take all reasonable steps
necessary to preserve the real property (including all
buildings, improvements, fixtures, and appurtenances on the
property) in its current condition.
Defendant Ramos shall not
commit waste against the property, nor shall she cause or permit
anyone else to do so.
Defendant Ramos shall not do anything
that tends to reduce the value or marketability of the property,
nor shall she cause or permit anyone else to do so.
- 39 -
Defendant
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 40 of 42
858
PageID #:
Ramos shall not record any instruments, publish any notice, or
take any other action (such as running newspaper advertisements
or posting signs) that may directly or indirectly tend to
adversely affect the value of the property or that may tend to
deter or discourage potential bidders from participating in the
public auction or private sale, nor shall she cause or permit
anyone else to do so.
15.
All persons occupying the mortgaged Kaloli
Property shall leave and vacate the property permanently within
sixty (60) days of the date of the Court’s order finding that
the COVID-19 threat has passed, other conditions satisfied, and
the foreclosure may commence, each taking with them their
personal property (but leaving all improvements, buildings, and
appurtenances to the property).
If any person fails or refuses
to leave and vacate the Kaloli Property by the time specified in
this Decree, the Commissioner is authorized and directed to take
all actions that are reasonably necessary to bring about the
ejectment of those persons, including obtaining a judgment for
possession and a writ of possession.
If any person fails or
refuses to remove his or her personal property from the premises
by the time specified herein, any personal property remaining on
the property thereafter is deemed forfeited and abandoned, and
the Commissioner is authorized to remove it and dispose of it in
any manner the Commissioner sees fit, including sale, in which
- 40 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 41 of 42
859
PageID #:
case the proceeds of the sale are to be applied first to the
expenses of sale and the balance to be paid into the Court for
further distribution.
16.
The Commissioner shall be authorized to take
possession and control of the Kalohi Property sixty (60) days of
the date of the Court’s order finding that the COVID-19 threat
has passed, other conditions satisfied, and the foreclosure may
commence, or when the property is vacated, whichever occurs
first.
17.
The sale can be supplemented with the practices
and procedures in the State of Hawai`i and Section 667 of the
Hawai`i Revised Statutes.
18.
The Court reserves jurisdiction to determine the
party or parties to whom any surplus shall be awarded herein.
19.
At the hearing on confirmation herein above
mentioned, if it appears that the proceeds of such sale shall be
insufficient to pay all the amounts which are valid claims
against Defendant Ramos and a deficiency exists, the Court will
rule on the issues of a rollover mortgage or deficiency judgment
at that time.
CONCLUSION
For the foregoing reasons, the Court GRANTS
Plaintiff’s Motion for Summary Judgment and Decree of
- 41 -
Case 1:11-cv-00145-ACK-KJM Document 134 Filed 04/16/20 Page 42 of 42
860
PageID #:
Foreclosure, and to Strike Defendant’s Demand for Trial by Jury,
ECF No. 110, and DENIES Defendant’s Counter-Motion to Dismiss,
ECF No. 119.
Accordingly, Plaintiff is entitled to, and the
Court hereby issues, a decree of foreclosure on the subject
property as outlined above.
IT IS SO ORDERED.
DATED:
Honolulu, Hawai`i, April 16, 2020.
________________________________
Alan C. Kay
Sr. United States District Judge
Ruppersberger v. Ramos, Civ. No. 11-00145 ACK-KJM, Order
Granting Plaintiff’s Motion for Summary Judgment, Denying
Defendant’s Counter-Motion to Dismiss, and Issuing a Decree of
Foreclosure.
- 42 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?