Galima et al v. Association of Apartment Owners of Palm Court

Filing 195

ORDER Denying Defendant Bryson Chow's Motion For Partial Reconsideration re 177 . Signed by JUDGE LESLIE E. KOBAYASHI on 3/8/2019. (cib)

UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII

RUDY AKONI GALIMA, ROXANA
BEATRIZ GALIMA,

CIV. NO. 16-00023 LEK-RT

Plaintiffs,
vs.
ASSOCIATION OF APARTMENT OWNERS
OF PALM COURT, BY AND THROUGH
ITS BOARD OF DIRECTORS; DOE
DEFENDANTS 1-10, BRYSON CHOW,
Defendants.

ORDER DENYING DEFENDANT BRYSON CHOW’S
MOTION FOR PARTIAL RECONSIDERATION
Plaintiffs Rudy Akoni Galima and Roxana Beatriz Galima
(“Plaintiffs”) filed their Motion for Partial Summary Judgment
on Counts I and II (Wrongful Foreclosure and Violation of the
Fair Debt Collection Practices Act) (“Plaintiffs’ Motion for
Summary Judgment”),1 on January 19, 2018, and Defendant Bryson
Chow (“Chow”) filed his Motion for Summary Judgment Regarding
the Fair Debt Collection Practices Claim in Count II of the
Third Amended Complaint [Dkt. 88] (“Chow’s Motion for Summary

1

The portion of Plaintiffs’ Motion for Summary Judgment
addressing Count I – Plaintiff’s wrongful foreclosure claim
against Defendant Association of Apartment Owners of Palm Court,
by and through its Board of Directors (“AOAO”) – is not at issue
in this Order.

Judgment”), on January 24, 2018.

[Dkt. nos. 115, 118.]

On

December 31, 2018, this Court issued an order that, inter alia,
denied Plaintiffs’ Motion for Summary Judgment as to Count II
and denied Chow’s Motion for Summary Judgment (“12/31/18
Order”).

[Dkt. no. 173.2]

Before the Court is Chow’s motion for

partial reconsideration of the 12/31/18 Order (“Motion for
Reconsideration”), filed on January 9, 2019.

[Dkt. no. 177.]

Plaintiffs filed their memorandum in opposition on January 24,
2019, and Chow filed his reply on February 6, 2019.

[Dkt.

nos. 181, 186.]
The Court has considered the Motion for
Reconsideration as a non-hearing matter pursuant to
Rule LR7.2(e) of the Local Rules of Practice for the United
States District Court for the District of Hawaii (“Local
Rules”).

For the reasons set forth below, Chow’s Motion for

Reconsideration is hereby denied because the discovery rule
applies to Plaintiffs’ remaining claim against Chow.
BACKGROUND
The relevant factual and procedural background of this
case is set forth in the 12/31/18 Order.

Only the facts that

are relevant to the Motion for Reconsideration will be repeated
here.

2

The 12/31/18 Order is also available at 2018 WL 6841818.
2

The AOAO is the condominium association for the Palm
Court, Increment 1C, a project in which Plaintiffs previously
owned a unit (“Unit”).

After Plaintiffs became delinquent in

their condominium association fees, the AOAO, through its
attorneys (one of whom was Chow), engaged in various collection
efforts to recover those fees.

The AOAO ultimately placed a

lien on the Unit and sold the Unit through a nonjudicial
foreclosure process, which was conducted pursuant to Haw. Rev.
Stat. Chapter 667, Part I.
foreclosure process.

Chow represented the AOAO in the

He conducted a public auction on

October 19, 2010, and the AOAO – the only bidder – sold the Unit
to itself for one dollar.
at *1-5.

See 12/31/18 Order, 2018 WL 6841818,

A quitclaim deed conveying the Unit from the AOAO to

itself was recorded on November 9, 2010.

See id. at *5 n.6.

However, Plaintiffs did not file this action until January 12,
2016.

See Notice of Removal, filed 1/22/16 (dkt. no. 1), Decl.

of David R. Major, Exh. A (First Amended Complaint, filed on
January 15, 2016 in state court).
Plaintiffs’ only remaining claim against Chow is their
claim alleging that he violated the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. (“Count II”).
[Third Amended Complaint, filed 5/22/17 (dkt. no. 88), at ¶¶ 3640.]

FDCPA claims are subject to a one-year limitations period,

but the discovery rule applies to the determination of when the
3

statute of limitations begins to run.

12/31/18 Order, 2018 WL

6841818, at *14 (some citations omitted) (citing 15 U.S.C.
§ 1692k(d); Lyons v. Michael & Assocs., 824 F.3d 1169, 1171-72
(9th Cir. 2016)).

Plaintiffs assert their FDCPA claim is timely

because they did not know, and could not reasonably have known,
about their claim against Chow until December 2015.

See

Separate & Concise Statement of Material Facts in Supp. of
Pltfs.’ Motion (“Pltfs.’ CSOF”), filed 1/19/18 (dkt. no. 116),
Decl. of Rudy Akoni Galima (“Galima Decl.”) at ¶ 22.
Both Plaintiffs’ request and Chow’s request for
summary judgment as to Count II were denied.

The 12/31/18 Order

addressed numerous issues related to Count II, but only one is
relevant to the Motion for Reconsideration.

This Court found

that there are genuine issues of material fact that preclude
summary judgment as to the issue of whether Plaintiffs’ FDCPA
claim is timely, in light of the discovery rule.

12/31/18

Order, 2018 WL 6841818, at *15.
In the Motion for Reconsideration, Chow argues
reconsideration is necessary because this Court failed to
address his argument that Plaintiffs’ lack of knowledge about
the law cannot be used to invoke the discovery rule to delay the
running of the statute of limitations.

Chow urges this Court

to: reconsider the 12/31/18 Order; conclude that Plaintiffs’

4

FDCPA claim is time-barred; and grant summary judgment in his
favor as to Count II.
STANDARD
Chow brings his Motion for Reconsideration pursuant to
Local Rule 60.1(c), [Mem. in Supp. of Motion for Reconsideration
at 3,] which states: “Motions for reconsideration of
interlocutory orders may be brought only upon the following
grounds . . . (c) Manifest error of law or fact.”

This Court

has previously stated a motion for reconsideration
“must accomplish two goals. First, a motion for
reconsideration must demonstrate reasons why the
court should reconsider its prior decision.
Second, a motion for reconsideration must set
forth facts or law of a strongly convincing
nature to induce the court to reverse its prior
decision.” See Davis v. Abercrombie, Civil
No. 11-00144 LEK-BMK, 2014 WL 2468348, at *2 (D.
Hawaii June 2, 2014) (citation and internal
quotation marks omitted). . . . “Mere
disagreement with a previous order is an
insufficient basis for reconsideration.” Davis,
2014 WL 2468348, at *3 n.4 (citations and
internal quotation marks omitted).
Heu v. Waldorf=Astoria Mgmt. LLC, CIVIL 17-00365 LEK-RLP, 2018
WL 2011905, at *1 (D. Hawai`i Apr. 30, 2018) (alteration in Heu)
(some citations omitted).
DISCUSSION
I.

Plaintiffs’ FDCPA Claim
Count II alleges Chow violated 15 U.S.C. § 1692f,

which states, in pertinent part:

5

A debt collector may not use unfair or
unconscionable means to collect or attempt to
collect any debt. Without limiting the general
application of the foregoing, the following
conduct is a violation of this section:
. . . .
(6) Taking or threatening to take any
nonjudicial action to effect dispossession
or disablement of property if –
(A) there is no present right to
possession of the property claimed as
collateral through an enforceable
security interest[.]
In various documents, including letters to Plaintiffs and
filings in the foreclosure process, Chow represented that the
AOAO had a right to foreclose upon the Unit through Chapter 667,
Part I.

See, e.g., AOAO’s response to Pltfs.’ CSOF, filed

5/14/18 (dkt. no. 146), Decl. of Rich Hargrave (“Hargrave
Responsive Decl.”), Exh. 13 (letter dated 8/31/10 to Plaintiffs
from Chow and Christian Porter);3 Galima Decl., Exh. C (AOAO’s
Aff. of Non-Judicial Foreclosure Sale Under Power of Sale,
recorded in the Land Court on 11/4/10) at ¶ 3.

That

representation was false.
This Court has concluded that the AOAO was not
authorized to utilize Chapter 667, Part I to foreclose upon
Plaintiffs’ Unit because the AOAO did not have an agreed upon

3

As of the date of the declaration, Rich Hargrave was the
AOAO’s president. [Hargrave Responsive Decl. at ¶ 1.]
6

power of sale provision or other contractual agreement
authorizing it to utilize Part I.

In order to legally foreclose

upon Plaintiffs’ Unit, the AOAO was required to utilize Haw.
Rev. Stat. Chapter 667, Part II.
6841818, at *9.

See 12/31/18 Order, 2018 WL

Thus, at the time of the foreclosure, the AOAO

did not have a present right to possess the Unit through
Chapter 667, Part I.

If Plaintiffs prove all of the other

elements of their FDCPA claim, Chow may be liable for violating
of § 1692f(6)(A).4

Plaintiffs suffered damages as a result of

this alleged violation because they lost their Unit in the
illegal Part I foreclosure.
It is undisputed that Plaintiffs did not file their
FDCPA claim against Chow within one year of their loss of the
Unit.

However, Plaintiffs assert that, under the discovery

rule, the statute of limitations did not begin to run at the
time of the foreclosure because they did not know, or have
reason to know, about Chow’s misrepresentation until December
2015.

In both Chow’s Motion for Summary Judgment and the Motion

for Reconsideration, Chow argues Plaintiffs’ lack of knowledge

4

Examples of other issues that remain include: whether
Plaintiffs’ obligation to pay their condominium association fees
was a “debt” for purposes of the FDCPA; and whether Chow is
entitled to the bona fide error defense. See 12/31/18 Order,
2018 WL 6841818, at *15-17 (finding genuine issues of material
fact as to those issues).
7

about the improper use of Chapter 667, Part I is ignorance of
the law, which cannot support the invocation of the discovery
rule.

[Mem. in Supp. of Chow’s Motion for Summary Judgment at

7; Mem. in Supp. of Motion for Reconsideration at 6 (both citing
Crow v. Ocwen Loan Servicing, LLC, CIVIL NO. 15-00161 SOM/KJM,
2016 WL 3557008, at *9 (D. Hawai`i June 24, 2016); Jestes v.
Saxon Mortg. Servs., Inc., No. 2:11-00059 2014 WL 1847806, at *9
(M.D. Tenn. May 8, 2014)).]
As noted in the 12/31/18 Order, “under the federal
discovery rule, the statute of limitations applicable to a claim
begins to run when the plaintiff knew or reasonably should have
known about the defendant’s act and that it was wrongful.”
12/31/18 Order, 2018 WL 6841818, at *15 (citing Lyons, 824 F.3d
at 1171 (discussing Mangum v. Action Collection Serv., Inc., 575
F.3d 935, 941 (9th Cir. 2009); Tourgeman v. Collins Fin. Servs.,
Inc., 755 F.3d 1109, 1118 n.5 (9th Cir. 2014))).

Lyons is

controlling Ninth Circuit authority and, to the extent Crow and
Jestes are contrary to Lyons, this Court need not consider them.5

5

In addition, Jestes is not persuasive because it was
decided by a district court within the Sixth Circuit. Jestes
notes the Ninth Circuit’s holding in Mangum that the discovery
rule applies to FDCPA claims, Jestes, 2014 WL 1847806, at *9,
but Jestes was decided prior to Lyons. Crow was decided within
a few weeks after the Ninth Circuit issued the Lyons opinion.
Crow cites Mangum, but does not cite Lyons. Crow, 2016 WL
3557008, at *9.
8

The plaintiff, Deborah A. Lyons, alleged the
defendants violated the FDCPA by filing a debt collection action
against her in a judicial district that was neither the one in
which she signed the contract that was the basis of the debt nor
the one where she was residing at the time the collection action
was filed.
§ 1692i).

Lyons, 824 F.3d at 1170 (discussing 15 U.S.C.
The collection action was filed on December 7, 2011.

Although Lyons did not file her FDCPA action until January 3,
2013, she argued her FDCPA action was timely, based on the
discovery rule, because she did not know or have reason to know
about the collection action until she was served with process in
mid-January 2012.

Id.

The Ninth Circuit noted it held in Mangum, which
involved the wrongful disclosure of debt information to another
party, that the discovery rule applied in FDCPA actions.6
1171 (discussing Mangum, 575 F.3d at 937-41).

Id. at

The Ninth Circuit

held that Lyons timely filed her FDCPA action because:
The fact that the alleged violation was the
wrongful filing of a debt collection action –
rather than the wrongful disclosure of
information to third parties as in Mangum, or a
violation in debt collection letters as in
Tourgeman – makes no difference to our analysis.
We therefore hold that the discovery rule applies
equally regardless of the nature of the FDCPA
violation alleged by a plaintiff.
6

This disclosure was allegedly a violation of 15 U.S.C.
§ 1692a(6). See Mangum, 575 F.3d 935 at n.22.
9

Id. (emphasis added).
In the instant case, Chow made a misrepresentation
about the law in letters to Plaintiffs and in filings regarding
the foreclosure process.

As previously noted, this may

constitute a violation of § 1692f(6)(A).

The discovery rules

applies regardless of the factual basis of the alleged FDCPA
violation.

See Lyons, 824 F.3d at 1173 (“While Mangum did not

involve the filing of a collection lawsuit, we see no reason to
limit our conclusion that the discovery rule applies to 15
U.S.C. § 1692k(d) to its particular facts.”).

It certainly

applies to Chow’s alleged violation of § 1692f(6)(A).

Chow’s

argument that his misrepresentation about the AOAO’s authority
to foreclose under Chapter 667, Part I cannot support the
application of the discovery rule because the AOAO’s authority
is an issue of law is therefore rejected.

Chow’s erroneous

statement is one of the factual elements of Plaintiffs’ FDCPA
claim – the AOAO did not have a present right to possess the
Unit through Chapter 667, Part I, see § 1692f(6)(A).7

7

The

Crow is distinguishable because the district court stated,
“Crow is not relying on his discovery of facts. He is instead
looking at when he learned what the law provided.” See 2016 WL
3557008, at *9. The district court rejected Crow’s argument
that, “under the discovery rule, the limitations period only
began to run when he became aware of his claims after consulting
‘knowledgeable third parties’ regarding his legal options.” Id.
(emphasis added). In essence, Chow conceded that he was aware
(. . . continued)
10

statute of limitations on Plaintiffs’ FDCPA claim against Chow
did not begin to run until they knew or reasonably could have
known that Chow’s representation about the AOAO authority to
utilize Part I was false.

See Tourgeman, 755 F.3d at 1118 n.5

(“The district court appropriately concluded that ‘the first
time that [Tourgeman] reasonably could have become aware of the
allegedly false and misleading representations in Defendants’
letters was when his father was served with summons and
complaint in the state court lawsuit in October 2007,’ after
which litigation discovery revealed the existence of the
collection letters.” (alteration in Tourgeman) (emphasis added)
(quoting Tourgeman v. Collins Fin. Servs., Inc., No. 08–CV–1392
JLS (NLS), 2011 WL 3176453, at *6 (S.D. Cal. July 26, 2011))).
As this Court found in the 12/31/18 Order, there are
genuine issues of material fact that preclude summary judgment
on the issue of whether Plaintiffs’ FDCPA claim is timely.
WL 6841818, at *15.

2018

Thus, Chow is not entitled to summary

judgment.

of all of the relevant facts, but he asserted he was not aware
that the FDCPA provided him with legal remedies for the
defendant’s actions. That is not the case here. Plaintiffs’
position is that they were not aware of a fact, i.e., that Chow
had made misrepresentations.
11

II.

Chow’s Motion for Reconsideration
Chow’s argument that Plaintiffs’ lack of knowledge

about the law cannot support the application of the discovery
rule was presented in Chow’s Motion for Summary Judgment.
in Supp. of Chow’s Motion for Summary Judgment at 7.]

[Mem.

This

argument was rejected when this Court found there were genuine
issues of material fact that precluded summary judgment on the
issue of whether Plaintiffs’ FDCPA claim was timely.
12/31/18 Order, 2018 WL 6841818, at *15.

See

Further, the

controlling Ninth Circuit case in the analysis above, Lyons, was
cited in the 12/31/18 Order, see id. at *14-15, and Chow simply
rehashes old arguments already raised and decided by this Court.
The Motion for Reconsideration is therefore denied.
CONCLUSION
On the basis of the foregoing, Chow’s January 9, 2019
motion for partial reconsideration of the order that this Court
filed on December 31, 2018 is HEREBY DENIED.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAI`I, March 8, 2019.

RUDY AKONI GALIMA, ET AL. VS. AOAO PALM COURT, ET AL.; CV 1600023 LEK-RT; ORDER DENYING DEFENDANT BRYSON CHOW'S MOTION FOR
PARTIAL RECONSIDERATION
12