Au v. The Association of Apartment Owners of the Royal Iolani et al

Filing 35

ORDER DENYING MOTION FOR RECONSIDERATION re 27 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 9/9/2014. (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). Ronald Git Sum Au served by first class mail at the address of record on September 9, 2014.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
RONALD GIT SUM AU,

)
)
Plaintiff,
)
)
vs.
)
)
THE ASSOCIATION OF APARTMENT )
OWNERS OF THE ROYAL IOLANI,
)
et al.
)
)
Defendants.
)
_____________________________ )

CIVIL NO. 14-00271 SOM/BMK
ORDER DENYING MOTION FOR
RECONSIDERATION

ORDER DENYING MOTION FOR RECONSIDERATION
I.

INTRODUCTION.
Plaintiff Ronald Git Sum Au moves for reconsideration

of this court’s partial dismissal of his Complaint, and denial of
his motion to expunge, motion to set aside nonjudicial power of
sale, and motion for temporary restraining order.

Au’s motion

for reconsideration is denied.
II.

STANDARD.
A motion for reconsideration may be granted under Rule

60(b) of the Federal Rules of Civil Procedure on any one of six
grounds:
(1) mistake, inadvertence, surprise, or
excusable neglect;
(2) newly discovered evidence that, with
reasonable diligence, could not have been
discovered in time to move for a new trial
under Rule 59(b);
(3) fraud (whether previously called
intrinsic or extrinsic), misrepresentation,
or misconduct by an opposing party;

(4) the judgment is void;
(5) the judgment has been satisfied, released
or discharged; it is based on an earlier
judgment that has been reversed or vacated;
or applying it prospectively is no longer
equitable; or
(6) any other reason that justifies relief.
Rule 60(b) motions are committed to the discretion of the trial
court.

S.E.C. v. Lyndon, Civ. No. 13-00486 SOM-KSC, 2014 WL

4181464, at *1-2 (D. Haw. Aug. 20, 2014).
Under Local Rule 60.1, motions for reconsideration of
interlocutory orders can be brought only upon the following
grounds: (1) an intervening change in controlling law; (2) the
discovery of new evidence not previously available; and (3) the
need to correct clear or manifest error in law or fact in order
to prevent manifest injustice.

Wereb v. Maui Cnty., 830 F. Supp.

2d 1026, 1031 (D. Haw. 2011).

“Mere disagreement with a previous

order is an insufficient basis for reconsideration.”

White v.

Sabatino, 424 F. Supp. 2d 1271, 1274 (D. Haw. 2006).

“Whether or

not to grant reconsideration is committed to the sound discretion
of the court.”

Id. (internal quotation marks omitted).

Au bases his motion for reconsideration on the
discovery of new material facts not previously available and on
the need to correct manifest error in law or fact.
PageID # 1191.

2

ECF No. 27,

III.

ANALYSIS.
A.

Au Fails to Show Reconsideration is Justified
Based on the Discovery of New Evidence.

To support reconsideration on the basis of new
evidence, Au must show that evidence was newly discovered or
unknown to him, and that he could not with reasonable diligence
have previously discovered and produced such evidence.

See

Engelhard Indus., Inc. v. Research Instr. Corp., 324 F.2d 347,
352 (9th Cir. 1963).

Au does not clearly identify any piece of

evidence that was previously unknown to him.

As a result, he

fails to demonstrate that reconsideration is justified on this
basis.
B.

Au Fails to Show Clear or Manifest Error in Law Or
Fact.
1.

Attorneys’ Fees.

Au makes a number of arguments regarding the attorneys’
fees and costs incurred by Defendant Association of Apartment
Owners of the Royal Iolani (the “AOAO”).

None of his arguments

proves a clear or manifest error in law or fact.
Au contends for the first time on this motion for
reconsideration that the AOAO’s “prior” attorneys’ fees are not
authorized under sections 514A-90 and 667-92 of Hawaii Revised
Statutes.

ECF No. 27-1, PageID # 1192.

Au cannot raise a new

argument in support of his motions on this motion for
reconsideration.

See Trading Bay Energy Corp. v. Union Oil Co.
3

of Cal., 225 F. App’x 428, 430 (9th Cir. 2006) (“[I]t is not
appropriate for a party to raise a new argument on a motion for
reconsideration.”); Novato Fire Prot. Dist. v. United States, 181
F.3d 1135, 1142 n.6 (9th Cir. 1999) (“A district court has
discretion to decline to consider an issue raised for the first
time in a motion for reconsideration.”); see also N.W. Acceptance
Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 925-26 (9th Cir.
1988).
Even if this argument were considered, it would not
support reconsideration here.

Nothing in sections 514A-90 or

667-92 of Hawaii Revised Statutes suggests that an association
may not collect “prior” attorneys’ fees, and the various
subsections Au quotes in his motion do not support his argument.
Au spends considerable time, for example, asserting that prior
attorneys’ fees are barred because only “estimated” attorneys’
fees and costs are statutorily permitted.
1194.

ECF No. 27-1, PageID #

Au’s basis for this argument, however, is section 667-

92(a)(5) of Hawaii Revised Statutes, which merely states that
“the estimated amount of the association’s attorney’s fees and
costs, and all other fees and costs related to the default
estimated to be incurred by the association by the deadline date”
must be included in a notice of default and intention to
foreclose.

Nowhere does section 667-92(a)(5) limit an

association to recovery of estimated attorneys’ fees, to the

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exclusion of attorneys’ fees actually incurred.

Such a rule

would be nonsensical.
Au also argues that the AOAO’s assessment of prior
attorneys’ fees violates the Fair Debt Collection Practices Act
(“FDCPA”).

ECF No. 27-1, PageID # 1197.

Au did not rely on the

FDCPA in his original motions, and, as noted above, cannot raise
a new argument in his motion for reconsideration.
Even assuming Au’s FDCPA argument could be considered,
it would not entitle Au to the relief he seeks.

Nowhere does Au

demonstrate that the collection of attorneys’ fees previously
incurred by an association in connection with a default and
nonjudicial foreclosure violates the FDCPA.
In his motion for reconsideration, Au also asserts that
the AOAO’s attorneys’ fees have not been explained or itemized,
as required by section 514A-90(c)(3) of Hawaii Revised Statutes.1
ECF No. 27-1, PageID # 1195.

Au does not appear to have

previously relied upon section 514A-90(c)(3), and cannot raise a
new argument in support of his motions at this stage of the
proceedings.
Even assuming Au’s prior complaints regarding
itemization of the AOAO’s attorneys’ fees were based on section
514A-90(c)(3), that section does not require what Au says it

1

Au incorrectly cites section 514A-90(c)(3) of Hawaii
Revised Statutes as section 514-90(4)(c)(3). See ECF No. 27-1,
PageID # 1195.
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does.

Section 514A-90(c)(3) merely states that “[a]n apartment

owner who disputes the amount of an assessment may request a
written statement clearly indicating . . . [t]he amount of
attorneys’ fees and costs, if any, included in the assessment[.]”
Nowhere does section 514A-90(c)(3) require an explanation or
itemization of the AOAO’s attorneys’ fees and costs in order for
such fees and costs to be recoverable or for a nonjudicial
foreclosure to proceed.
Au’s remaining arguments regarding the AOAO’s
attorneys’ fees are based on misconceptions as to the nature of
the attorneys’ fees at issue.

As in his original motions, Au

appears to confuse an association’s attorneys’ fees in the
context of a nonjudicial foreclosure with an award of attorneys’
fees by the court.

Au argues, for example, that a declaration

detailing how the AOAO’s attorneys’ fees were incurred should
have been provided.

ECF No. 27-1, PageID # 1196.

While such a

declaration may be required for a court to award attorneys’ fees
to a litigant, an association is not required to submit such a
declaration to this court in order to proceed with a nonjudicial
foreclosure.
Similarly, Au may not rely on this court’s statement in
its order of August 12, 2014, that all requests for attorneys’
fees and costs are denied without prejudice.
PageID # 1184.

See ECF No. 26,

That ruling was made with respect to attorneys’

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fees requested in connection with Au’s motions, not with respect
to the AOAO’s attorneys’ fees incurred through Au’s default and
the nonjudicial foreclosure.
Au also questions how Defendant R. Laree McGuire
incurred attorneys’ fees when Keith K. Hiraoka is acting as
McGuire’s attorney.

ECF No. 27-1, PageID # 1196.

This is a new

argument that Au has not previously raised, and may, therefore,
be disregarded.

However, even assuming that this argument were

considered, it would not demonstrate clear or manifest error in
law or fact because Au again misunderstands the nature of the
attorneys’ fees at issue.

Keith K. Hiraoka is representing

McGuire in this action that Au has brought against McGuire and
others.

Hiraoka is not representing the AOAO in its foreclosure

proceedings against Au.

McGuire has acted as the AOAO’s attorney

in the foreclosure proceedings, and the fees that Au complains
about relate to that representation, not to Hiraoka’s
representation of McGuire in the present case.
2.

Rule 408 of the Hawaii Rules of Evidence.

In his motion for reconsideration, Au complains about a
letter from McGuire dated August 12, 2014, regarding Au’s
default, in which McGuire states: “The foregoing offer is
submitted pursuant to Rule 408 of the Hawaii Rules of Evidence.
As such, evidence thereof is not admissible in any proceeding
save that relating to the enforcement of this Agreement, in the

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event of its acceptance.”

ECF No. 27-10, PageID # 1250.

Au

contends that McGuire “unfairly and deceptively required Au to
sign a Hawaii Rules of Evidence Rule 408 communication with full
knowledge that Au’s presentation before a court of law, to
recover a refund will be obstructed by the Rule 408
communication.”

ECF No. 27-1, PageID # 1199.

Au also contends

that McGuire’s use of Rule 408 “constitutes unfair or
unconscionable means to collect or attempt to collect the
disputed claim” in violation of section 443B-19 of Hawaii Revised
Statutes.
Au’s arguments regarding McGuire’s statement about Rule
408 were not previously raised and may not be raised for the
first time in his motion for reconsideration.
Even if the court considers these arguments, the court
concludes that they are without merit.

First, mention of Rule

408 in a letter from an association’s attorney does not violate
section 443B-19 of Hawaii Revised Statutes.

That section is not

relevant to the circumstances at issue.
Second, it is unclear how McGuire’s statement that the
AOAO’s offer is submitted pursuant to Rule 408 in any way
precludes Au from later recovering amounts he believes he does
not owe.

In relevant part, Rule 408 simply bars evidence of “(1)

furnishing or offering or promising to furnish, or (2) accepting
or offering or promising to accept, a valuable consideration in

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compromising or attempting to compromise a claim which was
disputed as to either validity or amount” and evidence of
“conduct or statements made in compromise negotiations or
mediation proceedings” to “prove liability for or invalidity of
the claim or its amount.”

There is no basis in Rule 408 or any

other source of law for this court to either enjoin or set aside
a nonjudicial foreclosure because an attorney included a
statement regarding Rule 408 in a letter concerning unpaid
assessments.

Rule 408 is not relevant to the relief Au is

seeking, and there is no connection between McGuire’s letter and
Au’s ability to obtain a refund.
3.

Section 514A-90(c) of Hawaii Revised
Statutes.

Au argues that the court disregarded section 514A-90(c)
of Hawaii Revised Statutes by placing the burden on him to
establish that he does not owe unpaid assessments and attorneys’
fees, and that the AOAO’s attorneys’ fees are unreasonable, and
by requiring him to pay 100% of the delinquency.

ECF No. 27-1,

PageID # 1200, 1203.
Section 514A-90(c) states, in relevant part: “Nothing
in this section shall limit the rights of an owner to the
protection of all fair debt collection procedures mandated under
federal and state law.”

Although Au relies on this language in

section 514A-90(c), he does not explain how it is applicable to
the circumstances at issue.
9

Au is the plaintiff in this lawsuit, and the motion
relevant to this argument was brought by Au to prevent the
nonjudicial foreclosure.

In such a scenario, the burden is not

on the AOAO to prove that Au owes past assessments and attorneys’
fees.

It is Au’s burden to meet the standard necessary for the

court to award him a temporary restraining order.
Further, nowhere did the court require Au to pay 100%
of the delinquency.

The court did not consider, and did not rule

on, the amount of the delinquency that Au must pay.
Au fails to demonstrate that this court’s order
violated section 514A-90(c).
4.

Constitutionality of Sections 667-92 and
514A-90(c).

Au appears to argue that sections 667-92 and 514A90(c)2 of Hawaii Revised Statutes violate due process, equal
protection, and the takings clause of the Constitution by
requiring that Au pay 100% of the alleged default.

ECF No. 27-1,

PageID # 1201.
Au did not previously challenge the constitutionality
of section 514A-90(c). He cannot raise this argument for the
first time on his motion for reconsideration.
Even if Au’s challenge to section 514A-90 were to be

2

Au erroneously cites section 514A-90(c) of Hawaii Revised
Statutes as section 514-90(4)(c). See ECF No. 27-1, PageID #
1201.
10

considered alongside his challenge to section 667-92, Au would
not be entitled to relief.

As this court noted in its prior

order, Au bears the burden of demonstrating that a statute is
unconstitutional.

Am. Promotional Events, Inc.-Nw. v. City &

Cnty. of Honolulu, 796 F. Supp. 2d 1261, 1283 (D. Haw. 2011)
(“[L]egislative enactments are presumptively constitutional, and
the party challenging a statute has the burden of showing the
alleged unconstitutionality beyond a reasonable doubt.” (internal
quotation marks omitted)).

Au has failed to meet this burden,

and does not demonstrate any clear or manifest error in law or
fact compelling this court to reverse its prior decision.
Au does not offer any constitutional analysis
supporting his allegations, and nowhere explains why the
obligation to pay 100% of the default to the AOAO violates due
process, equal protection, or the takings clause.

At most, Au

may be repeating the argument in his motion for a temporary
restraining order that his constitutional rights were violated by
the requirement that he pay 100% of the default before receiving
a due process hearing.

ECF No. 21-1, PageID # 1205.

Once again,

however, Au offers no explanation as to what hearing he is
referring to, and no constitutional analysis demonstrating a
violation.

Au himself notes that Defendants are private

entities, and fails to explain, as this court noted in its prior
order, how the various constitutional provisions he cites would

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be implicated by the nonjudicial foreclosure of his property.
See, e.g., Apao v. Bank of N.Y., 324 F.3d 1091, 1095 (9th Cir.
2003) (“While the bar for state action is low . . . non-judicial
foreclosure procedures like Hawaii’s nevertheless slip under it
for want of direct state involvement.”).

Under such

circumstances, Au’s constitutional arguments do not demonstrate
that reconsideration should be granted.
5.

Chapter 443 of Hawaii Revised Statutes and 15
U.S.C. § 1692g.

Au appears to argue for the first time on this motion
for reconsideration that McGuire violated chapter 443 of Hawaii
Revised Statutes and 15 U.S.C. § 1692g.
1202.

ECF No. 27-1, PageID #

Not having been previously raised, these arguments may be

disregarded by this court.
Even if the court considers these arguments, they are
not sustainable.
repealed.

Chapter 443 of Hawaii Revised Statutes has been

If Au is instead relying on chapter 443B, section

443B-1 explicitly states that “‘collection agency’ does not
include licensed attorneys at law acting within the scope of
their profession[.]”

Therefore, McGuire’s actions in

representing the AOAO would not be considered those of a
“collection agency” pursuant to chapter 443B.
Au’s 15 U.S.C. § 1692g argument does not fare any
better.

Au does not clearly and specifically describe the

conduct that he believes violates 15 U.S.C. § 1692g.
12

Instead, he

merely describes, in general terms, what 15 U.S.C. § 1692g
provides.

Perhaps Au is arguing that McGuire’s failure to

itemize “prior” attorneys’ fees violates 15 U.S.C. § 1692g.
ECF No. 27-1, PageID # 1203.

See

There does not appear, however, to

be any requirement in 15 U.S.C. § 1692g that attorneys’ fees be
itemized.
6.

Expunging the Notice of Default and Intention
to Foreclose.

In his motion for reconsideration, Au argues that this
court should have expunged the Notice of Default and Intention to
Foreclose (the “Notice”) filed on January 21, 2014, because it
erroneously stated the date by which Au had to cure his default.
ECF No. 27-1, PageID # 1206.
Au fails to show any clear or manifest error in law or
fact in this court’s prior decision not to expunge the Notice.
Au does not explain why he believes this court’s decision was
based on a clear or manifest error, instead repeating his
argument that the Notice must be expunged because the cure date
was incorrect.

Merely regurgitating an argument does not

demonstrate that reconsideration is warranted.

Kowalski v. Anova

Food, LLC, 958 F. Supp. 2d 1147, 1154 (D. Haw. 2013).
Further, as noted in this court’s prior decision, Au
has failed to demonstrate that the Notice should be expunged.
Even assuming that the Notice misstated the date by which Au
needed to cure his default, Au was actually provided with the
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sixty-day cure period he claims he was owed.

Additionally, the

existence of an incorrect cure date in the Notice does not affect
whether the Notice was improperly recorded and must be expunged.
7.

Standard for Estimated Attorneys’ Fees.

Au contends that section 667-92(a)(4) and (5) may not
be enforced against him because they lack any standard as to how
estimated attorneys’ fees are determined.
1207.

ECF No. 27-1, PageID #

Because this argument was raised for the first time in

Au’s motion for reconsideration, it may be disregarded.
Even assuming the court were to consider it, Au’s
argument that sections 667-92(a)(4) and (5) may not be enforced
against him is without merit.

Section 667-92(a) merely provides

a list of what a notice of default and intention to foreclose
must contain.
Au.

It is not a statute that can be “enforced against”

Additionally, Au fails to produce any authority suggesting

that a standard for estimating attorneys’ fees under section 66792(a)(5) is required.
8.

Partial Dismissal of Complaint.

Au argues that he is entitled to reconsideration of
this court’s dismissal of Count IV of his Complaint to the extent
it asserts a claim against McGuire for violation of chapter 480D
of Hawaii Revised Statutes.

ECF No. 27-1, PageID # 1203-04.

fails, however, to show any clear or manifest error in this
court’s dismissal.

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Au

Au contends that this court’s prior decision was in
error because McGuire did not provide a declaration or affidavit
stating that she was not seeking to collect a debt owed to
herself.

Id., PageID # 1204.

Contrary to Au’s assertions, no

such declaration or affidavit was necessary.

McGuire was acting

as counsel for the AOAO and seeking to collect a debt owed to the
AOAO.

There is no allegation in Au’s Complaint that the debt was

owed to McGuire herself or that McGuire made any such assertion.
Au also argues that McGuire “has never billed, or
invoiced the [AOAO]” for her fees.

Id.

This allegation has been

made for the first time in Au’s motion for reconsideration, and
even if previously raised, would not defeat the motion to
dismiss.

Whether McGuire billed or invoiced the AOAO for her

fees is irrelevant to whether Au states a plausible claim for
relief against McGuire under chapter 480D of Hawaii Revised
Statutes.
As this court noted in its order granting McGuire’s
motion to dismiss, McGuire’s actions could not have violated
section 480D-3.

McGuire was not acting as a “debt collector”

under chapter 480D, as she was not collecting a debt owed, or
asserted to be owed, to herself.

See Haw. Rev. Stat. § 480D-2.

Instead, McGuire was seeking to collect a debt owed to the AOAO,
and any suggestion to the contrary is implausible and
contradicted by exhibits attached to Au’s Complaint.

15

See ECF No.

1-1, PageID # 30, 41.

Au’s statement that McGuire is “personally

responsible as an agent of Defendant Association and the
Defendant Management Company” is irrelevant and does not alter
the above conclusion.

ECF No. 27-1, PageID # 1206.

Au also contends that this court should have provided
him with leave to amend his Complaint.

Id., PageID # 1204.

When

a motion to dismiss is granted, “[l]eave to amend may be denied
if a court determines that allegation of other facts consistent
with the challenged pleading could not possibly cure the
deficiency.”

Abagninin v. AMVAC Chemical Corp., 545 F.3d 733,

742 (9th Cir. 2008) (internal quotation marks and citation
omitted).

The allegation of additional facts consistent with the

Complaint in this matter could not possibly establish a plausible
chapter 480D claim against McGuire.

As a result, the court

properly dismissed the claim with prejudice.
IV.

CONCLUSION.
For the foregoing reasons, Au’s motion for

reconsideration is denied.

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IT IS SO ORDERED.
DATED: Honolulu, Hawaii, September 9, 2014.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge

Au v. The Association of Apartment Owners of the Royal Iolani, et al., Civ.
No. 14-00271 SOM/BMK; ORDER DENYING MOTION FOR RECONSIDERATION

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