The Bank of New York Mellon v. Perry et al

Filing 112

ORDER AWARDING DAMAGES TO AND DIRECTING THE ENTRY OF JUDGMENT IN FAVOR OF PLAINTIFF 96 , 97 , 98 , 99 , 100 , 101 - Signed by JUDGE DERRICK K. WATSON on 1/22/2019. For the reasons set forth herein, Plaintiff i s awarded damages in the total amount of $161,187.75. Perry and Lewis' Motions in Opposition, Dkt. Nos. 96, 99, Motions to Dismiss, Dkt. Nos. 97, 100, and Motions to Clarify Order Granting Plaintiff's Motion for Summary Judgement, Dkt . Nos. 98, 101, are DENIED. The Clerk is ORDERED to enter Judgment in favor of Plaintiff in the amount of $161,187.75, and then close this case. (emt, )COURT'S CERTIFICATE of Service - Len C. Perry, Jr. and Nathan Jon Lewis served by First Class Mail to the addresses listed on the Notice of Electronic Filing (NEF) on January 22, 2019. Registered Participants of CM/ECF received the document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI‘I

THE BANK OF NEW YORK
MELLON FKA THE BANK OF NEW
YORK, AS TRUSTEE FOR THE
CERTIFICATEHOLDERS OF THE
CWMBS INC., CHL MORTGAGE
PASS-THROUGH TRUST 2006-OA5,
MORTGAGE PASS THROUGH
CERTIFICATES, SERIES 2006-OA5,

Case No. 17-cv-00297 DKW-RLP

ORDER AWARDING DAMAGES
TO AND DIRECTING THE ENTRY
OF JUDGMENT IN FAVOR OF
PLAINTIFF

Plaintiff,
vs.
LEN C. PERRY JR.,
NATHAN JON LEWIS, and
3925 KAMEHAMEHA RD
PRINCEVILLE, HI 96722, LLC,
Defendants.

On September 11, 2018, this Court granted Plaintiff The Bank of New York
Mellon’s motion for summary judgment on its claims for quiet title and slander of
title, and request for declaratory relief against Defendants Len C. Perry, Nathan J.
Lewis, and 3925 Kamehameha Rd Princeville, HI 96722, LLC (“the LLC,” and,
together with Perry and Lewis, “Defendants”). Thereafter, Plaintiff stipulated to
the dismissal of its other causes of action and, during a status conference, the

parties agreed to submit the sole remaining issue of damages on the briefs. Those
briefs (including supplemental filings) have now been submitted. Because
Plaintiff has established its entitlement to damages, the Court awards damages as
set forth below. In addition, Perry and Lewis have each filed motions to dismiss
and motions to clarify the September 11, 2018 Order. Because Perry and Lewis
have failed to show that this case should be dismissed or that the September 11,
2018 Order requires clarification, those motions are denied.
DAMAGES1
Plaintiff seeks damages on the slander of title claim for which it was granted
summary judgment. Dkt. No. 95 at 2-9. In Hawaii, the common law tort of
slander of title requires a party to establish “special damages” proximately
resulting from a slander of title. Isobe v. Sakatani, 279 P.3d 33, 42-43 (Haw. Ct.
App. 2012) (citing 50 Am. Jur. 2d Libel and Slander § 530 (2006); B&B Inv. Grp.
v. Gitler, 581 N.W.2d 17, 20 (Mich. Ct. App. 1998)). Although the Hawaii courts
have not extensively discussed the damages recoverable in an action for slander of
title, the authorities to which the Isobe court cited provide some illumination.
Specifically, attorney’s fees and lost rent, both of which Plaintiff seeks here, are

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The Court adopts the factual and procedural background set forth in the September 11, 2018
Order.
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recoverable. See 50 Am. Jur. 2d Libel and Slander § 534 (explaining that a
plaintiff may recover “the attorney’s fees incurred in removing the cloud upon the
plaintiff’s property title.”); B&B Inv. Grp., 581 N.W.2d at 20 (stating that special
damages include loss of rent). In their initial and supplemental oppositions, Dkt.
Nos. 96, 99, 109, 111,2 neither Perry nor Lewis challenge the principle that a
plaintiff is entitled to attorney’s fees or lost rent as special damages in a slander of
title claim if those damages are proven. As a result, for purposes of this case, the
Court finds that Plaintiff may recover the attorney’s fees it has incurred and the
rent it has lost as a result of Defendants’ slander of title.
In its damages brief, Plaintiff seeks $126,500 in lost rent and $34,687.75 in
attorney’s fees, for a total of $161,187.75 in special damages. In their initial
oppositions, Dkt. Nos. 96, 99, neither Perry nor Lewis challenge Plaintiff’s
calculation of the amount of damages to which it is purportedly entitled or whether
the purported damages proximately resulted from their slander of title. In their
supplemental oppositions, however, Perry and Lewis, in near identical fashion,

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Lewis has filed two almost identical supplemental oppositions, Dkt. Nos. 110, 111, one of
which is unsigned, Dkt. No. 110. The Court, therefore, only refers to the signed version, Dkt.
No. 111.
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argue that Plaintiff is not entitled to lost rent. The Court addresses those
arguments below.
Turning to attorney’s fees first, although Perry and Lewis do not challenge
Plaintiff's calculation of its attorney’s fees, the Court nevertheless finds that
Plaintiff has established its entitlement to damages for attorney’s fees. Plaintiff
asserts that it has been represented by two law firms, lead counsel in California and
local counsel in Hawaii, and, in total, those firms have spent 154.9 hours in
bringing this case. The total number of hours spent on bringing this case is
supported by the Declaration of Neeru Jindal, Dkt. No. 95-7 at ¶¶ 9-10, and the
amount of attorney’s fees Plaintiff has incurred in bringing this case is supported
by the same Declaration as well as by an exhibit listing the amounts paid on
various invoices to Plaintiff’s lead counsel, see id. at ¶ 5; Dkt. No. 95-6.3
Because Perry and Lewis do not challenge these amounts in any way, the Court
finds that they are sufficiently supported by the record presented, and further finds
that Plaintiff is entitled to $34,687.75 in special damages for attorney’s fees
incurred in bringing this case.

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More specifically, with respect to the exhibit, the amount of attorney’s fees incurred is
supported by adding the total of the numbers in the “Net” column through the October 4, 2018
“Invoice Date.” See Dkt. No. 95-6.
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With respect to lost rent, Plaintiff asserts that the fair market rental value of
the real property at 3925 Kamehameha Road, Princeville, Hawaii (“the
Property”)−the property at issue in this case−was $5,000 per month from
November 9, 2016 through May 31, 2018, and $5,500 per month from June 1,
2018 through December 1, 2018. These assertions are supported by the
Declaration of Donna Holevoet, a broker with “first-hand knowledge” of the real
estate market in Princeville, Hawaii. See Decl. of Donna Holevoet at ¶¶ 1, 7, 9,
10, Dkt. No. 95-1.
In their initial oppositions, Perry and Lewis made no challenge to Ms.
Holevoet’s representations of the fair market rental value of the Property or her
qualifications to do so. In their supplemental oppositions, Perry and Lewis still
do not challenge Ms. Holevoet’s qualifications, but they do (in a roundabout way)
challenge the fair market rental value of the Property. More specifically, Perry
and Lewis both argue that, when they took possession of the Property, it was not in
rentable condition, they invested over $65,000 and 1,000 man hours in the
Property, and they increased the value of the Property by $1 million. Other than
purported pictures of the Property before and after they took possession, though,
Perry and Lewis provide no evidence for their assertions. In addition, the
assertions do not refute Ms. Holevoet’s statements that, on November 9, 2016, the
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fair market rental value of the Property was $5,000. Moreover, the Court has
already found that Plaintiff is the owner of the Property and Perry and Lewis have
no valid legal claim to the same. Dkt. No. 64 at 11-14. In that light, the
purported fact that they invested capital in a property without consent and to which
they did not own can only be considered folly.
This leaves the amount of rent Plaintiff has lost as a result of Defendants’
slander of title. Plaintiff asserts that the total amount of lost rent is $126,500. If
the fair market rental values provided by Ms. Holevoet are multiplied by the days
and months from November 9, 2016 through December 1, 2018, Plaintiff is correct
that the total equals $126,500.4 However, because it was not clear from
Plaintiff’s damages brief as to what evidence in the record it was relying to support
the contention that it was unable to collect rent on the Property beginning
November 9, 2016, the Court ordered supplemental briefing on that matter. In its
supplemental response, Plaintiff relies on a Supplemental Declaration of Ms.
Holevoet. Dkt. Nos. 108, 108-1. In her Supplemental Declaration, Ms.
Holevoet states that Plaintiff retained her in June 2015 to market the Property for

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The calculation is essentially: ($5,500 multiplied by 6−for the months of June 2018 through
November 2018) plus ($5,000 multiplied by 18−for the months of December 2016 through May
2018) plus $3,500 (for the 21 days left in November 2016 following the ninth of that month).
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sale, she conducted weekly walkthroughs of the Property, during her walkthrough
on September 27, 2016, she noticed that the lockbox had been removed and the
locks changed, and, at around the same time, she discovered that utility services
had been changed from her company’s name. Suppl. Decl. of Donna Holevoet at
¶¶ 7-9, Dkt. No. 108-1. Ms. Holevoet further states that, following her October 3,
2016 walkthrough, she noted that the Property had been removed from the market,
utilities had been transferred, and there had been a purported substitution of the
trustee. Id. at ¶ 10. In addition, following her November 28, 2016 walkthrough,
Ms. Holevoet recorded that there was a no trespassing sign on the front door of the
Property and papers had been posted stating that there had been a full
reconveyance. Id. at ¶ 11. Ms. Holevoet further states that Lewis began renting
the Property at least by January 2017. Id. at ¶¶ 12-15. In light of this evidence,
including the changing of locks in September 2016 and Lewis’ renting of the
Property, the Court finds that as of at least November 9, 2016, Plaintiff was unable
to rent the Property due to Defendants’ activities connected to the slandering of its
title and those damages continued through December 1, 2018.
In their supplemental oppositions, Dkt. Nos. 109, 111, the only argument
Perry and Lewis make as to why Plaintiff should not be awarded damages for lost
rent is that, because Plaintiff is not registered to do business in Hawaii and because
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collecting rent is doing business, Plaintiff could not have collected the rent it
purportedly lost. Perry and Lewis, though, provide no legal support for this
argument. Moreover, given that Ms. Holevoet has stated that Plaintiff retained
her and she has been a licensed real estate broker in Hawaii since 2001, see
Holevoet Suppl. Decl. at ¶¶ 3, 7, Perry and Lewis’ argument is of little merit, see
Haw. Rev. Stat. § 467-1 (providing that a real estate broker is any person who,
inter alia, “leases or offers to lease, or rents or offers to rent, or manages or offers
to manage, any real estate, or the improvements thereon, for others, as a whole or
partial vocationˮ).
As a result, the Court finds that Plaintiff is entitled to $126,500 in special
damages for lost rent due to Defendants’ slander of title to the Property. When
combined with the special damages for attorney’s fees incurred in bringing this
case, the Court finds that Plaintiff is entitled to a total damages award of
$161,187.75.
Perry and Lewis’ Motions
At the same time as filing their initial oppositions to Plaintiff’s damages
brief, Perry and Lewis also each filed separate motions to dismiss and motions to
clarify the September 11, 2018 Order. Dkt. Nos. 97, 98, 100, 101.

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As for the motions to clarify the September 11, 2018 Order, Dkt. Nos. 98,
101, Perry and Lewis do not identify anything in the September 11, 2018 Order
that requires clarification. As a result, the motions to clarify are DENIED.
As for the motions to dismiss, Dkt. Nos. 97, 100, Perry and Lewis, in
identical fashion, argue that this case should be dismissed because Plaintiff is not a
Delaware corporation and is a non-existent entity. To the extent Perry and Lewis
make this argument in an attempt to challenge the substantive merits of Plaintiff’s
claims, it is now far too late for them to do so, given that the time to file dispositive
motions expired long ago. See Dkt. No. 32 (setting the dispositive motion
deadline for May 23, 2018). To the extent Perry and Lewis’ argument can be
construed as challenging the subject matter jurisdiction of this Court because the
same is premised upon diversity, the Court rejects such an argument. Although
Perry and Lewis appear to accurately assert that, contrary to the Complaint,
Plaintiff is not a Delaware corporation, the Complaint also alleged that Plaintiff is
headquartered in and is a citizen of New York. See Compl. at ¶ 1, Dkt. No. 1; see
also Dkt. No. 106 (acknowledging that Plaintiff is not a Delaware corporation).
Perry and Lewis do not challenge Plaintiff’s New York citizenship in their motions
to dismiss. As a result, because Plaintiff is a citizen of a State different from the

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citizenship of all Defendants, this Court still has subject matter jurisdiction over
this case based on diversity.
For these reasons, the motions to dismiss are DENIED.
CONCLUSION
For the reasons set forth herein, Plaintiff is awarded damages in the total
amount of $161,187.75. Perry and Lewis’ Motions in Opposition, Dkt. Nos. 96,
99, Motions to Dismiss, Dkt. Nos. 97, 100, and Motions to Clarify Order Granting
Plaintiff’s Motion for Summary Judgement, Dkt. Nos. 98, 101, are DENIED.
The Clerk is ORDERED to enter Judgment in favor of Plaintiff in the
amount of $161,187.75, and then close this case.
IT IS SO ORDERED.
DATED: January 22, 2019 at Honolulu, Hawai‘i.

The Bank of New York Mellon v. Perry et al., Case No. 17-cv-00297 DKW-RLP; ORDER
AWARDING DAMAGES TO AND DIRECTING THE ENTRY OF JUDGMENT IN
FAVOR OF PLAINTIFF

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