Tilley v. Bank of New York Mellon, The et al

Filing 29

ORDER GRANTING INTERVENING DEFENDANT SHIRLEY A. ESTES, AS TRUSTEE'S MOTION FOR JUDGMENT ON THE PLEADINGS (ECF NO. 19 ) re 26 - Signed by JUDGE HELEN GILLMOR on 3/21/2018. "The Intervening Defendant's Motion for Judgment on the Pleadings (ECF No. 19) as to Plaintiff is GRANTED. Plaintiff is not entitled to seek return of title to the Subject Property. Plaintiff is not entitled to seek ejectment of the Intervening Defendant from the Su bject Property. The Court DIRECTS the Clerk of Court to ENTER FINAL JUDGMENT in favor of Intervening Defendant Shirley A. Estes, as Trustee of the Survivor's Trust Created Under The Estes Living Trust dated December 5, 198 0, as to all of Plaintiff's claims involving the Intervening Defendant. Pursuant to Federal Rule of Civil Procedure 54(b), the Court FINDS there is no just reason for delay of entry of Judgment as to Plaintiff's claims involvi ng the Intervening Defendant. Intervening Defendant's Cross-Claim remains." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notific ations received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
)
Plaintiff,
)
)
)
vs.
)
)
)
THE BANK OF NEW YORK MELLON;
)
DOE DEFENDANTS 1-50,
)
)
Defendant,
)
)
vs.
)
)
SHIRLEY A. ESTES, as Trustee of )
the Survivor’s Trust Created
)
Under The Estes Living Trust
)
Dated December 5, 1980,
)
)
Intervenor Defendant. )
)
__________________________________)
)
SHIRLEY A. ESTES, as Trustee of )
)
the Survivor’s Trust Created
)
Under The Estes Living Trust
)
Dated December 5, 1980,
)
Cross-Claimant, )
)
)
vs.
)
)
THE BANK OF NEW YORK MELLON,
)
Cross-Defendant. )
__________________________________)
KIMBERLY TILLEY,

Civil No. 17-00524 HG-RLP

ORDER GRANTING INTERVENING DEFENDANT SHIRLEY A. ESTES, AS
TRUSTEE’S MOTION FOR JUDGMENT ON THE PLEADINGS (ECF No. 19)

Plaintiff Kimberly Tilley has filed a Complaint against The
1

Bank of New York Mellon (“BONY”) asserting claims of wrongful
foreclosure, quiet title, and ejectment.

After Plaintiff filed

her Complaint against BONY, Shirley A. Estes intervened as a
defendant in the action, seeking to protect her interest in the
real property as a bona fide purchaser for value.

There was no

objection to her filing.
Plaintiff claims that she and her now deceased husband
executed a Note, in the amount of $817,500 in favor of First
Magnus Financial Corporation, to obtain a Loan to purchase real
property (“Subject Property”) on the island of Lanai.

The Loan

was secured by a Mortgage in favor of Mortgage Electronic
Registration Systems, Inc. (“MERS”).
On January 4, 2006, the Mortgage was recorded in the Office
of the Assistant Registrar, Land Court for the State of Hawaii
(“Land Court”).
On December 29, 2010, the Mortgage assignment to Defendant
BONY from MERS was recorded in Land Court.

On the same day, BONY

recorded a Notice of Mortgagee’s Intention to Foreclose Under
Power of Sale in the State of Hawaii Bureau of Conveyances.
Plaintiff’s Complaint alleges that on May 23, 2011, BONY
acted under a power of sale in the Mortgage and initiated a
nonjudicial foreclosure pursuant to Haw. Rev. Stat. 667 Part I
(2008).

Plaintiff asserts that BONY subsequently foreclosed on

the Subject Property and conveyed the property to itself at

2

auction.
Following the nonjudicial foreclosure, Land Court issued a
Transfer Certificate of Title on June 9, 2011, that certified
BONY as the registered owner of the Subject Property.
On March 1, 2012, BONY sold and conveyed the Subject
Property to Intervening Defendant Shirley A. Estes, as Trustee of
the Survivor’s Trust Created Under the Estes Living Trust dated
December 5, 1980.

On March 9, 2012, Land Court issued a Transfer

Certificate of Title that certified Shirley A. Estes, as Trustee,
as the registered owner of the Subject Property.
Plaintiff’s Complaint seeks to challenge Defendant BONY’s
actions under the Hawaii nonjudicial foreclosure statute and the
power of sale in the Mortgage.
Intervening Defendant Estes filed a Motion for Judgment on
the Pleadings on the basis that she is now the certified owner of
the Subject Property.

Intervening Defendant challenges

Plaintiff’s right to two forms of relief sought by Plaintiff in
the Complaint.
Specifically, the Intervening Defendant moves for judgment
on the pleadings as to Plaintiff’s requests for:
(1)

“judgment compelling BONY to return title to and
possession of the Property to Plaintiff” and

(2)

“declaratory judgment that BONY’s non-judicial
foreclosure sale and transfer of the Property described
herein was contrary to law and declaring that Plaintiff
may pursue a further action for ejectment against
Estes.”
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Intervening Defendant Shirley A. Estes, as Trustee’s Motion
for Judgment on the Pleadings (ECF No. 19) is GRANTED.

PROCEDURAL HISTORY
On February 17, 2017, Plaintiff filed her Complaint in the
Circuit Court of the Second Circuit, State of Hawaii. (Complaint,
attached as Ex. A to Def.’s Notice of Removal, ECF No 1-2).
On October 13, 2017, the Hawaii State Court entered an ORDER
GRANTING PROPOSED INTERVENOR SHIRLEY A. ESTES, AS TRUSTEE OF THE
SURVIVOR’S TRUST CREATED UNDER THE ESTES LIVING TRUST DATED
DECEMBER 5, 1980'S MOTION TO INTERVENE.

(ECF No. 1-4).

On October 17, 2017, Intervening Defendant filed a Notice of
Removal to the United States District Court for the District of
Hawaii.

(ECF No. 1).

On November 7, 2017, Intervening Defendant filed a CrossClaim against Defendant The Bank of New York Mellon.

(ECF No. 6-

1).
On December 7, 2017, Intervening Defendant filed a MOTION
FOR JUDGMENT ON THE PLEADINGS.

(ECF No. 19).

On January 3, 2018, Plaintiff filed PLAINTIFF’S MEMORANDUM
IN OPPOSITION TO INTERVENING DEFENDANT SHIRLEY A. ESTES, AS
TRUSTEE’S MOTION FOR JUDGMENT ON THE PLEADINGS.

(ECF No. 21).

On January 9, 2018, Plaintiff filed PLAINTIFF’S SUBMISSION
PURSUANT TO LR 7.8.

(ECF No. 22).

4

The submission attached

previously uncited authorities of unpublished decisions in a case
in the Circuit Court of the Third Circuit, State of Hawaii.
(Id.)
On January 17, 2018, Intervening Defendant filed her REPLY.
(ECF No. 25).
On February 5, 2018, the Court held a hearing on Intervening
Defendant’s Motion for Judgment on the Pleadings.
BACKGROUND

The Complaint alleges that on January 4, 2006, Plaintiff
Kimberly Tilley and her now deceased husband executed a Note in
the amount of $817,500 to First Magnus Financial Corporation to
purchase real property located at 15 Kukui Circle, Apartment 15D, on the island of Lanai (“Subject Property”).
1, 12-13, ECF No. 1-2).

(Complaint at ¶

A warranty deed was recorded in the

Office of the Assistant Registrar, Land Court for the State of
Hawaii (“Land Court”) conveying the Subject Property to Plaintiff
and her now deceased husband.

(Warranty Deed, recorded on Jan.

4, 2006 in Land Court, Doc. 3374599, attached as Ex. A to Pla.’s
Complaint, ECF No. 19-11).
The Complaint asserts that repayment of the Note was secured
by a Mortgage in favor of Mortgage Electronic Registration
Systems, Inc. (“MERS”) as nominee for First Magnus Financial
Corporation.

(Complaint at ¶ 13, ECF No. 1-2).

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The Mortgage was

recorded against the Subject Property in Land Court.

(Mortgage,

recorded on Jan. 4, 2006 in Land Court, Doc. 3374600, attached as
Ex. A to Inter. Def.’s Motion, ECF No. 19-3).
On December 4, 2010, the Mortgage was assigned to Defendant
The Bank of New York Mellon (“BONY”).

The Assignment of Mortgage

was recorded in Land Court on December 29, 2010.

(Complaint at ¶

14, ECF No. 1-2; Assignment of Mortgage, recorded on Dec. 29,
2010 in Land Court, Doc. 4033870, attached as Ex. B to Inter.
Def.’s Motion, ECF No. 19-4).
On December 29, 2010, Defendant BONY recorded a Notice of
Mortgagee’s Intention to Foreclose Under Power of Sale in the
State of Hawaii Bureau of Conveyances.

(Complaint at ¶ 26, ECF

No. 1-2; Notice of Sale, recorded on Dec. 29, 2010 in the Bureau
of Conveyances, Doc. 2010-203162, attached as Ex. C to Inter.
Def.’s Motion, ECF No. 19-5).
On March 22, 2011, a Mortgagee’s Affidavit of Foreclosure
Under Power of Sale was recorded in Land Court.

(Mortgagee’s

Affidavit of Foreclosure, recorded on Mar. 22, 2011, Doc.
4058653, attached as Ex. D to Inter. Def.’s Motion, ECF No. 196).
The Complaint asserts that two months later, on May 23,
2011, Defendant BONY acted pursuant to a power of sale in the
Mortgage to conduct a nonjudicial foreclosure sale as set forth
in former Haw. Rev. Stat. § 667 Part I (2008).

6

(Complaint at ¶¶

15-16, ECF No. 1-2).

Plaintiff claims that BONY conducted an

auction pursuant to the power of sale and sold the Subject
Property to itself.

(Id. at ¶¶ 15-16, 36).

On June 9, 2011, a Mortgagee’s Quit Claim Deed was recorded
in Land Court that conveyed the Subject Property from BONY to
itself.

(Mortgagee’s Quit Claim Deed, recorded on June 9, 2011,

Doc. 4078520, attached as Ex. E to Inter. Def.’s Motion, ECF No.
19-7).
Also on June 9, 2011, Land Court issued a Transfer
Certificate of Title certifying BONY as the new registered owner
of the Subject Property.

(Transfer Certificate of Title issued

on June 9, 2011, Cert. No. 1025903, attached as Ex. F to Inter.
Def.’s Motion, ECF No. 19-8).
The Complaint alleges that on March 1, 2012, BONY sold the
Subject Property to Intervening Defendant Shirley A. Estes, as
Trustee of her living trust.

(Complaint at ¶ 18, ECF No. 1-2).

On March 9, 2012, a Special Warranty Deed was recorded in
Land Court that conveyed the Subject Property from BONY to
Shirley A. Estes, as Trustee.

(Id.; Special Warranty Deed

recorded on Mar. 9, 2012, Doc. T-8103065, attached as Ex. G to
Inter. Def.’s Motion, ECF No. 19-9).
Also on March 9, 2012, Land Court issued a Transfer
Certificate of Title to Shirley A. Estes, as Trustee of the
Survivor’s Trust Created Under The Estes Living Trust dated

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December 5, 1980.

(Transfer Certificate of Title issued on March

9, 2012, Cert. No. 1039409, attached as Ex. H to Inter. Def.’s
Motion, ECF No. 19-10).
Plaintiff’s Complaint alleges that BONY did not strictly
comply with the requirements of the nonjudicial foreclosure
statute and the power of sale provision in the Mortgage.
(Complaint at ¶¶ 15, 17, 20, 24-47, ECF No. 19-11).
The Complaint states:
BONY failed to strictly comply with HRS §§ 667-5 et
seq. (2008) and the power of sale in the Mortgage as
set forth above, the non-judicial foreclosure sale and
transfer of the Property to BONY was void as a matter
of law, or at least voidable, and hence all subsequent
transfers were likewise void or at the very least
voidable as to non-bona fide purchasers. BONY should
be compelled to return title to and possession of the
Property to Plaintiff.
(Complaint at ¶ 47, ECF No. 19-11).
Plaintiff seeks a judgment “compelling BONY to return title
to and possession of the Property to Plaintiff” and a declaratory
judgment that allows Plaintiff to “pursue a further action for
ejectment against Estes.”

(Complaint at p. 15, ECF No. 1-2).

STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(c) permits a party to
move for judgment on the pleadings after the pleadings are
closed.

Judgment on the pleadings “is properly granted when

there is no issue of material fact in dispute, and the moving

8

party is entitled to judgment as a matter of law.”

Fleming v.

Pickard, 581 F.3d 922, 925 (9th Cir. 2009).
For a Rule 12(c) motion, all material allegations contained
in the nonmoving party’s pleadings are accepted as true.

Chavez

v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012); Hal Roach
Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550
(9th Cir. 1989).
The district court’s review is generally limited to the
contents of the complaint.

The court may consider documents

attached to the complaint, documents incorporated by reference in
the complaint, or matters of judicial notice without converting
the Rule 12(c) motion into a motion for summary judgment.

Lee v.

City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).
When a Rule 12(c) motion raises the defense of failure to
state a claim, the standard governing the motion is the same as
that governing a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6).

McGlinchy v. Shell Chemical Co., 845 F.2d

802, 810 (9th Cir. 1988).
Rule 12(b)(6) allows dismissal where a complaint fails to
state a claim upon which relief can be granted.

Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007).

Conclusory allegations of law and

unwarranted inferences are insufficient to defeat such a motion.
Iqbal, 556 U.S. at 678-79.

The Court need not accept as true

9

allegations that contradict matters properly subject to judicial
notice or allegations contradicting the exhibits attached to the
complaint.

Sprewell v. Golden State Warriors, 266 F.3d 979, 988

(9th Cir. 2001).
ANALYSIS
The Court may consider exhibits attached to the Complaint
and documents whose contents are incorporated by reference in the
Complaint without converting a motion to dismiss to a motion for
summary judgment.

Davis v. HSBC Bank Nevada, N.A., 691 F.3d

1152, 1160 (9th Cir. 2012).
The Court may also consider matters that are the proper
subject of judicial notice pursuant to Federal Rule of Evidence
201.

Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir.

2001); Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S.
308, 322 (2007).

Federal Rule of Evidence 201 allows a court to

take judicial notice of public documents.

Barber v. Ohana

Military Communities, LLC, 2014 WL 3529766, *4 (D. Haw. July 15,
2014).
Here, the Court takes judicial notice of the following
documents in evaluating Intervening Defendant’s Motion for
Judgment on the Pleadings:
(1)

Plaintiff’s Warranty Apartment Deed recorded on January
4, 2006 (attached as Ex. A to Pla.’s Complaint, ECF No.
19-11 at pp. 19-39);

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(2)

Mortgage recorded on January 4, 2006 (attached as Ex. A
to Inter. Def.’s Motion, ECF No. 19-3);

(3)

Assignment of Mortgage recorded on December 29, 2010
(attached as Ex. B to Inter. Def.’s Motion, ECF No. 194);

(4)

Notice of Mortgagee’s Intention to Foreclose Under
Power of Sale recorded on December 29, 2010 (attached
as Ex. C to Inter. Def.’s Motion, ECF No. 19-5);

(5)

Mortgagee’s Affidavit of Foreclosure Under Power of
Sale recorded on March 22, 2011 (attached as Ex. D to
Inter. Def.’s Motion, ECF No. 19-6);

(6)

Mortgagee’s Quit Claim Deed recorded on June 9, 2011
(attached as Ex. E to Inter. Def.’s Motion, ECF No. 197);

(7)

Transfer Certificate of Title to The Bank of New York
Mellon issued on June 9, 2011 (attached as Ex. F to
Inter. Def.’s Motion, ECF No. 19-8);

(8)

Intervening Defendant Shirley A. Estes, as Trustee’s
Special Warranty Deed recorded on March 9, 2012
(attached as Ex. G to Inter. Def.’s Motion, ECF No. 199);

(9)

Transfer Certificate of Title to Shirley A. Estes,
Trustee of the Survivor’s Trust Created Under The Estes
Living Trust dated December 5, 1980, issued on March 9,
2012 (attached as Ex. H to Inter. Def.’s Motion, ECF
No. 19-10).

Intervening Defendant Shirley A. Estes, as Trustee of the
Survivor’s Trust Created Under The Estes Living Trust dated
December 5, 1980 (“Intervening Defendant”), has filed a Motion
for Judgment on the Pleadings.

Intervening Defendant argues that

even if the Complaint’s allegations of wrongful foreclosure
against Defendant Bank of New York Mellon (“BONY”) are true,

11

Plaintiff is not entitled to the remedies of quiet title and
ejectment.
Intervening Defendant asserts that she has conclusive and
unimpeachable title to the Subject Property.

On June 9, 2011,

BONY was issued a Transfer Certificate of Title by the Office of
Assistant Registrar, Land Court for the State of Hawaii (“Land
Court”).
On March 9, 2012, after she purchased the Subject Property
from Defendant BONY, Intervening Defendant was issued a
subsequent Transfer Certificate of Title by Land Court.
Intervening Defendant argues that Plaintiff is precluded from
challenging the Transfer Certificates of Title issued by the Land
Court in 2011 and 2012.
Intervening Defendant argues that even if the Defendant BONY
conducted a defective foreclosure as alleged in the Complaint,
the conveyance of title to BONY in 2011 is voidable, not void.
Intervening Defendant claims that in 2012, she was a
subsequent bona fide purchaser from BONY.

Intervening Defendant

argues that as an innocent, good faith purchaser for value, her
title and possession of the Subject Property is legally
protected.

Intervening Defendant argues that as a bona fide

purchaser, she cannot be ejected from the Subject Property and
her title cannot be revoked.

12

I.

PLAINTIFF’S CHALLENGES TO TITLE AND POSSESSION OF THE
SUBJECT PROPERTY ARE UNTIMELY
A.

Registration of Land With The Hawaii Land Court

Hawaii Land Court is a court of limited jurisdiction created
for the special purpose of carrying into effect the Torrens title
system of land registration.

Wells Fargo Bank, N.A. v. Omiya,

398 P.3d 838, *5 (Haw. App. July 24, 2017).
Hawaii Revised Statutes Chapter 501 provides for the
registration of title with the Land Court.
501-1.

Haw. Rev. Stat. §

The system codified in Chapter 501 is a “system for

registration of land under which, upon the landowner’s
application, the court may, after appropriate proceedings, direct
the issuance of a certificate of title.”
P.2d 206, 208-09 (Haw. 1983).

In re Campbell, 662

The purpose of the registration

system is to conclusively establish title to land through the
issuance of a certificate of title.

Bank of New York Mellon v.

R. Onaga, Inc., 400 P.3d 559, 569 (Haw. 2017).

The Hawaii Land

Court system is intended to promote certainty, economy,
simplicity, and facility.

Id.

When property registered with Land Court is sold, a
purchaser must present to the Land Court the deed that contains
the proper number of the certificate of the land affected and
also contains or has endorsed upon it a full memorandum of all
encumbrances affecting the land, if any, or a statement that
13

there are no outstanding encumbrances affecting the land.
Land Ct. R. 59(d).

Haw.

Thereafter, the assistant registrar of Land

Court shall issue a Transfer Certificate of Title.

Id.; Omiya,

398 P.3d 838 at *5.
The Transfer Certificate of Title is a single document that
lists each current registered owner of the property and every
encumbrance or other interest that binds the property.

This

enables anyone who is interested to easily ascertain who has an
ownership or other interest in a parcel of Land Court property.
Hon. Gary W.B. Chang, Land Court: Demystifying An Enigma, HAWAII
BAR JOURNAL 4 (Sept. 21, 2017).
B.

Foreclosure Of Property Registered In Land Court

Haw. Rev. Stat. § 501-118 addresses foreclosure proceedings
for Land Court registered property.

Section 501-118 limits the

ability to challenge foreclosure proceedings affecting a property
registered in Land Court.
Section 501-118 states:
Mortgages of registered land may be foreclosed like
mortgages of unregistered land.
In case of foreclosure by action, a certified copy of
the final judgment of the court confirming the sale may
be filed or recorded with the assistant registrar or
the deputy after the time for appealing therefrom has
expired and the purchaser shall thereupon be entitled
to the entry of a new certificate.
In case of foreclosure by exercising the power of sale
without a previous judgment, the affidavit required by
14

chapter 667 shall be recorded with the assistant
registrar. The purchaser or the purchaser’s assigns at
the foreclosure sale may thereupon at any time present
the deed under the power of sale to the assistant
registrar for recording and obtain a new certificate.
Nothing in this chapter shall be construed to prevent
the mortgagor or other person in interest from directly
impeaching by action or otherwise, any foreclosure
proceedings affecting registered land, prior to the
entry of a new certificate of title.
After a new certificate of title has been entered, no
judgment recovered on the mortgage note for any balance
due thereon shall operate to open the foreclosure or
affect the title to registered land.
(emphasis added).
C.

Transfer Certificates Of Title Issued By Land Court Are
“Conclusive” and “Unimpeachable” And Generally Cannot
Be Challenged After Entry

The Hawaii Supreme Court has explained that Transfer
Certificates of Title are generally unimpeachable because the
Hawaii Land Court registration system is designed to preserve the
integrity of titles.

Waikiki Malia Hotel, Inc. v. Kinkai

Properties Ltd. P’ship, 862 P.2d 1048, 1060 (Haw. 1993).
In Waikiki Malia, the Hawaii Supreme Court ruled that
conclusive effect is required to be given to the content of a
Transfer Certificate of Title issued by Land Court.

In Waikiki

Malia, there had been an encumbrance on building height
documented on a certificate of title issued by Land Court.
property was sold and the subsequent Transfer Certificate of

The

Title did not list the building height encumbrance on the

15

document.

The Hawaii Supreme Court held that the encumbrance on

building height no longer applied to the parcel of land after it
was sold because the restriction was not listed as an encumbrance
on the newly issued Transfer Certificate of Title.
61.

Id. at 1059-

The Hawaii Supreme Court explained that the buyer’s prior

knowledge of the encumbrance did not alter the conclusive nature
of the Transfer Certificate of Title.

The Court explained that

the buyer’s “admission to having knowledge of the height
restriction is of no consequence because such knowledge was not
obtained from the information contained on the [Transfer
Certificate of Title].”

Id. at 1060.

Citing In re Bishop Trust,

35 Haw. 816, 825 (Haw. 1941), the Hawaii Supreme Court stated:
If, as we hold, a certificate of title is unimpeachable
and conclusive except as otherwise provided by law, it
would be illogical to say that it may be impeached if
the purchaser for value had knowledge of an existing
unregistered encumbrance. To do so would be to rob a
certificate of title of its conclusive and
unimpeachable character and place it in the same
category as the ordinary record in the bureau of
conveyances.
Waikiki Malia Hotel, Inc., 862 P.2d at 1060.
In 2005, the Hawaii Supreme Court revisited the issue
concerning the impeachability of Transfer Certificates of Title
issued by Land Court.

In Aames Funding Corp. v. Mores, 110 P.3d

1042, 1048-49 (Haw. 2005), the Hawaii Supreme Court held that
pursuant to Haw. Rev. Stat. § 501-118, conclusive effect is to be
given to newly issued Transfer Certificates of Title on the

16

question of title to registered land.

The Hawaii Supreme Court

ruled that a mortgagor’s right to impeach a foreclosure
proceeding is generally limited to the period of time before
entry of a new Transfer Certificate of Title.

Id.

The Hawaii Supreme Court explained that once the Land Court
issues a Transfer Certificate of Title, the title to the subject
property becomes “conclusive and unimpeachable.”

Id. at 1050.

The Supreme Court found a narrow exception to allow for an
untimely challenge to a “conclusive and unimpeachable title.”

An

untimely challenge to a Transfer Certificate of Title may be
brought only when:
(1)

there was fraud to which the purchaser was a party;
and,

(2)

there has been no subsequent bona fide purchaser.

Id. (citing In re Bishop Trust Co., 35 Haw. 816 (Haw. Terr.
1941)).
In this case, the Hawaii Land Court issued a Transfer
Certificate of Title to The Bank of New York Mellon on June 9,
2011. (Transfer Certificate of Title to BONY, issued on June 9,
2011, Cert. No. 1025903, attached as Ex. F to Inter. Def.’s
Motion, ECF No. 19-8).
The Hawaii Land Court issued a subsequent Transfer
Certificate of Title on March 9, 2012 to the Intervening
Defendant after she purchased the property from BONY.

17

(Transfer

Certificate of Title to Shirley A. Estes, Trustee of the
Survivor’s Trust Created Under The Estes Living Trust dated
December 5, 1980, issued on March 9, 2012, Cert. No. 1039409,
attached as Ex. H to Inter. Def.’s Motion, ECF No. 19-10).
Plaintiff did not file her Complaint until February 17,
2017, nearly six years after the Hawaii Land Court issued the
Transfer Certificate of Title to BONY.
Plaintiff’s challenges to title of the Subject Property are
untimely as to the Intervening Defendant, absent a demonstration
of fraud to which the Intervening Defendant was a party.

In re

Bishop Trust, 35 Haw. at 825; Omiya, 398 P.3d 838 at *7 (citing
Am. Home Mortg. Serv., Inc. v. Yeung, 2011 WL 661794, *1 (Haw.
App. Feb. 23, 2011) (finding plaintiff’s challenge to the
foreclosure proceeding of the Land Court registered property was
untimely pursuant to Aames); Provident Funding Assocs., L.P. v.
Vimahi, 241 P.3d 571, *2 (Haw. App. Nov. 10, 2010) (finding
challenge to certificate of title was untimely absent allegations
of fraud)).
D.

Untimely Challenges To Transfer Certificates Of Title
May Be Brought In Cases Of Fraud

The Hawaii Supreme Court held in Aames that a mortgagor may
assert an untimely challenge to a Transfer Certificate of Title
only in cases of fraud and when the property has not been
subsequently sold to a bona fide purchaser.
18

Aames, 110 P.3d at

1050.
The Supreme Court explained that under Hawaii law there are
three types of fraud: (1) fraud in the factum, (2) fraud in the
inducement, and (3) constructive fraud.

Id.

The first type of fraud identified by the Hawaii Supreme
Court is fraud in the factum.

Fraud in the factum is fraud that

goes to the nature of the document itself.

Adair v. Hustace, 640

P.2d 294, 299 n.4 (Haw. 1982) (abrogated on other grounds in
Assn. of Apt. Owners of Royal Aloha v. Certified Mngmt., Inc.,
386 P.3d 866, 871 (Haw. 2016)).

Courts have explained that fraud

in the factum occurs rarely, “as when a blind person signs a
mortgage when misleadingly told that it is just a letter.”
Bringas v. Asset Mortgage of Hawaii, LLC, Civ. No. 17-00125JMSRLP, 2017 WL 4928617, *4 (D. Haw. Mar. 17, 2017) (quoting Black’s
Law Dictionary 732, fraud in the factum (9th ed. 2009)).
The second type of fraud is fraud in the inducement.

Fraud

in the inducement occurs when a party misrepresents a material
fact in order to induce another party to act to his detriment.
Honolulu Fed. Sav. and Loan Ass’n v. Murphy, 753 P.2d 807, 811
(Haw. App. 1988).
Finally, the third type of fraud is constructive fraud.
Constructive fraud arises from a breach of duty by one in a
confidential or fiduciary relationship.
P.3d

Scholes v. Kawaguchi,

, 2017 WL 4251611, *6 (Haw. App. Sept. 26, 2017).

19

Here, Plaintiff Tilley does not argue that either fraud in
the factum or fraud in the inducement applies to this case.
Rather, Plaintiff argues that she is able to challenge the 2011
nonjudicial foreclosure of the Subject Property due to
constructive fraud.
1.

(Pla.’s Opp. at p. 14, ECF No. 21).

Constructive Fraud

Constructive fraud has been defined by the Hawaii
Intermediate Court of Appeals as an act done or omitted which is
construed as a fraud because of its detrimental effect upon
public interests and public or private confidence, even though
the act is not done or omitted with an actual design to
perpetrate actual fraud or injury.

Yoneji v. Yoneji, 354 P.3d

1160, 1167-68 (Haw. App. 2015) (see Wolfer v. Mut. Life Ins. Co.
of New York, 641 P.2d 1349, 1357 (Haw. App. 1982) (J. Kanbara,
dissenting)).
Constructive fraud requires a breach of a fiduciary or
confidential relationship.

Honolulu Fed. Sav. And Loan Ass’n v.

Murphy, 753 P.2d 807, 811 n.6 (Haw. App. 1988) (citing Silva v.
Bisbee, 628 P.2d 214, 216 (Haw. App. 1981)).
In 2015, the Hawaii Intermediate Court of Appeals defined
“fiduciary or confidential relationship” as follows:
Relationships between trustee and beneficiary,
principal and agent, and attorney and client are
familiar examples in which the principle of fiduciary
or confidential relationship applies in its strictest
20

sense. Wolfer v. Mut. Life Ins. Co. of New York, 3
Haw. App. 65, 76, 641 P.2d 1349, 1357 (Haw. App. 1982);
see Silva v. Bisbee, 2 Haw. App. 188, 190, 628 P.2d
214, 216 (Haw. App. 1981) (holding that constructive
fraud occurred where brokers with a fiduciary
relationship with their client failed to disclose to
the client their pecuniary interest in the purchase of
the property). “Its operation, however, is not limited
to dealings between the parties standing in such
relations, but extends to all instances when a
fiduciary or confidential relation exists as a fact, in
which there is confidence reposed on one side and a
resulting superiority and influence on the other.”
Wolfer, 641 P.2d at 1357.
Yoneji, 354 P.3d at 1167-68.
Here, there is no fiduciary or confidential relationship
between Plaintiff and the Intervening Defendant that would
support a claim for constructive fraud.
2.

There Is No Fiduciary Or Confidential Relationship
Between A Mortgagor And Mortgagee

Plaintiff urges the Court to allow her to make an untimely
challenge to the Transfer Certificates of Title on the basis that
a mortgagor and a mortgagee are in a “fiduciary or confidential
relationship” for purposes of constructive fraud.

Plaintiff

relies on the Supreme Court of the Territory of Hawaii’s decision
in Ulrich v. Sec. Inv. Co., 35 Haw. 158, 171-72 (Haw. Terr.
1939).
In Ulrich, the Supreme Court for the Territory of Hawaii
discussed the relationship between a mortgagor and mortgagee.
The Territory Court stated that when a mortgagee conducts a

21

foreclosure under a power of sale it must “deal fairly and
justly” and “exercise reasonable care and diligence.”
171.

Id. at

The Territory Court explained that the relationship between

the mortgagor and the mortgagee is not the same level of
relationship of a trustee to a beneficiary, but the mortgagee
must act in “good faith.”

Id. at 172.

In other words, a

fiduciary is required to act in the best interest of another
while a mortgagee in a nonjudicial foreclosure situation must
only deal fairly and justly and with due care.
The requirement that a mortgagee act in good faith does not
establish a “fiduciary or confidential relationship” for purposes
of constructive fraud.

Courts in the District of Hawaii have

repeatedly held that lenders, loan servicers, and mortgagees
generally do not owe a mortgagor a fiduciary duty.

Menashe v.

Bank of New York, 850 F.Supp.2d 1120, 1140 (D. Haw. 2012); Tedder
v. Deutsche Bank Nat. Trust Co., 863 F.Supp.2d 1020, 1031 (D.
Haw. 2012).
Nor is there a confidential relationship present in this
case.

Hawaii courts have limited “confidential relationships” to

relationships between family members or close personal friends.
Scholes, 2017 WL 4251611, *6-*8 (Haw. App. Sept. 26, 2017);
Small v. Badenhop, 701 P.2d 647, 653-54 (Haw. 1985); Lee v. Wong,
552 P.2d 635, 638-39 (Haw. 1976) (explaining a confidential
relationship exists because of a family relationship); Keanu v.

22

Kamanoulu, 20 Haw. 96, 99-100 (Haw. Terr. 1910) (finding fraud in
a land transaction involving a confidential relationship between
a daughter and her parents).
A mortgagor and a mortgagee are not in a relationship akin
to an attorney-client or a broker-client relationship.
they have a confidential relationship.

Nor do

Rather, a mortgagor and

mortgagee are in a contractual relationship that is not fiduciary
in nature.

See Ramos v. Chase Home Finance, 810 F.Supp.2d 1125,

1140 (D. Haw. 2011).
There is no fiduciary relationship between Plaintiff and the
Intervening Defendant.

Nor can Plaintiff demonstrate a

confidential relationship with the Intervening Defendant.

There

are no allegations of any prior relationship between them.

There

is no familial or close personal relationship that would allow
for a finding of constructive fraud.

Absent a fiduciary or

confidential relationship with the Intervening Defendant,
Plaintiff is unable to establish constructive fraud as a matter
of law.
Plaintiff’s attempt to seek title and possession of the
Subject Property is untimely.

The Intervening Defendant’s

Transfer Certificate of Title is conclusive and unimpeachable.
Plaintiff is unable to establish the requisite relationship with
the Intervening Defendant in order to demonstrate constructive
fraud that would allow for an untimely challenge to her Transfer

23

Certificate of Title.

II.

A DEFECTIVE NONJUDICIAL FORECLOSURE SALE IS VOIDABLE UNDER
HAWAII LAW
The Parties dispute if under Hawaii law an unlawful

nonjudicial foreclosure is void or merely voidable.
Intervening Defendant relies on three recent decisions from
the Hawaii Supreme Court addressing the issue.
Plaintiff relies on a decision from the Supreme Court for
the Kingdom of Hawaii from 1884.
A.

Kondaur Capital Corp v. Matsuyoshi, 361 P.3d 454, 467
(Haw. 2015)

In Kondaur Capital Corp. v. Matsuyoshi, 361 P.3d 454, 467
(Haw. 2015), the Hawaii Supreme Court ruled that a mortgagee’s
failure to conduct a nonjudicial foreclosure in a manner that is
fair, reasonably diligent, and in good faith would render the
foreclosure sale “voidable.”
Two subsequent Hawaii Supreme Court decisions issued in 2016
have also held that an unlawful nonjudicial foreclosure sale is
“voidable.”
B.

Santiago v. Tanaka, 366 P.3d 612, 633 (Haw. 2016)

In January 2016, the Hawaii Supreme Court again ruled that
an unlawful nonjudicial foreclosure is “voidable.”
24

Santiago v.

Tanaka, 366 P.3d 612, 633 (Haw. 2016).

In Santiago, Louis and

Yong Santiago entered into a purchase contract with Ruth Tanaka
to buy the Nawiliwili Tavern.

The Santiagos paid $800,000 with

an additional $500,000 secured by a mortgage financed by the
seller Tanaka.

Id. at 615.

Tanaka made disclosures that misrepresented the sewer fees
applicable to the property.

Id. at 625-29.

The Santiagos

stopped making mortgage payments and attempted to engage in
mediation with Tanaka.

Id. at 618-20.

Tanaka initiated a nonjudicial foreclosure after the
Santiagos stopped making mortgage payments.

The Santiagos made

up the late mortgage payments to Tanaka but she continued with
the nonjudicial foreclosure because she believed she was entitled
to additional fees and costs.

Tanaka conducted a foreclosure

auction and sold the Tavern back to herself.

Id. at 620.

subsequently sold the Tavern to a third-party purchaser.

Tanaka
Id. at

633.
The Santiagos filed suit in the Hawaii Circuit Court against
Tanaka for misrepresentation and they also challenged the
nonjudicial foreclosure.

The Circuit Court ruled in favor of

Tanaka and the Intermediate Court of Appeals affirmed.

Id. at

622-23.
The Hawaii Supreme Court ruled that Tanaka engaged in
misrepresentation and failed to disclose material terms relating

25

to the sewer services for the Tavern.

Id. at 626.

In addition, the Hawaii Supreme Court ruled that the
nonjudicial foreclosure was unlawful because the Santiagos had
made payments and cured the default in their mortgage before the
foreclosure sale was conducted.

Id. at 632.

The Hawaii Supreme

Court explained the damages that were available to the Santiagos,
as follows:
Where it is determined that the nonjudicial foreclosure
of a property is wrongful, the sale of the property is
invalid and voidable at the election of the mortgagor,
who shall then regain title to and possession of the
property...Voiding the foreclosure sale at this time,
however, has been rendered impracticable because the
Tavern has already been resold by Tanaka to a third
party. See 123 Am.Jur. Proof of Facts 3d § 31 (2011)
(“It has long been held that if the property has passed
into the hands of an innocent purchaser for value, an
action at law for damages is generally the appropriate
remedy.”). Thus, based on our power to fashion an
equitable relief in foreclosure cases, see Beneficial
Haw., Inc. v. Kida, 30 P.3d 895, 918 (Haw. 2001)
(reiterating that mortgage foreclosure is a proceeding
equitable in nature), we consider appropriate relief.
Santiago, 366 P.3d at 633 (emphasis added).
The Hawaii Supreme Court ruled that because Tanaka had
already sold the property to a third-party and the Santiagos no
longer occupied it, the Santiagos were entitled to money damages
as their remedy, rather than ejectment and return of title.
C.

Mount v. Apao, 384 P.3d 1268, 1270 (Haw. 2016)

In November 2016, in Mount v. Apao, 384 P.3d 1268, 1270
(Haw. 2016), the Hawaii Supreme Court again addressed the
26

Id.

remedies available where there was an improper nonjudicial
foreclosure.

In Mount v. Apao, a mortgagor died and her son and

sister were appointed as personal representatives of her estate.
Id. at 1269.

The estate failed to make payments on the mortgage

and U.S. Bank National Association (“U.S. Bank”) recorded a
Notice of Mortgagee’s Intent to Foreclose Under Power of Sale.
Id. at 1271.
A third personal representative named Sesha Lovelace was
appointed for the estate.

Lovelace requested information from

U.S. Bank and the mortgage servicer regarding the funds that
would be required to reinstate the loan and cure the default.
Id. at 1272-73.
Id.

The information was not provided to Lovelace.

U.S. Bank conducted a nonjudicial foreclosure auction and

sold the property to Gerald and Jane Mount.

Id. at 1273.

The Mounts filed an ejectment and quiet title action in
Hawaii State Circuit Court against Lovelace and the other
personal representatives of the estate.

Id.

The Circuit Court

ruled that the foreclosure sale was valid and that Lovelace was
not entitled to any response by U.S. Bank as to the reinstatement
amount.

Id. at 1274.

The Hawaii Intermediate Court of Appeals

affirmed the Circuit Court’s judgment.

Id. at 1275.

On appeal to the Hawaii Supreme Court, the appellants argued
that Lovelace was entitled to information from U.S. Bank to cure
the default.

The Hawaii Supreme Court ruled in favor of Lovelace

27

and found that the nonjudicial foreclosure sale was unlawful due
to “U.S. Bank’s failure to provide reinstatement or cure
information to Lovelace, as required by HRS § 667-5(c)(1).”

Id.

at 1280.
The Hawaii Supreme Court directly addressed what remedies
were available given that the property had subsequently been sold
to the Mounts following the nonjudicial foreclosure sale.

The

Hawaii Supreme Court explained that “the Mounts completed the
sale, took possession of the Property, and have now had the
Property for some time, similar to the facts in Santiago.”
at 1281.

Id.

The appeals court again held that “where it is

determined that the nonjudicial foreclosure of a property is
wrongful, the sale of the property is invalid and voidable.”

Id.

(citing Santiago, 366 P.3d at 633) (emphasis added).
In the case before this Court, Plaintiff Tilley seeks title
and possession of the Subject Property from the Intervening
Defendant.

Plaintiff claims that she is allowed to challenge the

Transfer Certificate of Title on the basis that the foreclosure
sale to Defendant BONY is void.
Plaintiff does not rely on the 2015 and 2016 Hawaii Supreme
Court decisions.

Instead, Plaintiff primarily relies on a

decision from more than a century ago, by the Supreme Court for
the Kingdom of Hawaii in Silva v. Lopez, 5 Haw. 262, 272 (Haw.
Kingdom 1884).

28

D.

Plaintiff’s Reliance on Silva v. Lopez, 5 Haw. 262, 272
(Haw. Kingdom 1884) Is Misplaced

In Silva, a group of mortgagors defaulted on payments for
chattels, including cattle and horses, along with parcels of real
estate.

Id. at 263.

The mortgage provided that “the mortgagee

may give notice of his intention to foreclose by publication for
three weeks before advertising the mortgaged property for sale.”
Id. at 264.

Twenty days after the first publication of the

notice, the defendant conducted a foreclosure sale by auction.
Id.
The Kingdom of Hawaii Supreme Court found that the defendant
Lopez violated the power of sale because he was required to wait
at least twenty-one days before conducting the sale.

Id. at 265.

The appellate court also found the sale was unlawful because it
was not conducted for the “best advantage” of the mortgagors.
Id. at 267.

The chattel were sold in lots and were not

identified and were not made available for inspection to the
buyers.

Id.

The Kingdom of Hawaii Supreme Court found the sale

was “void” based on the lower court reasoning that the sale must
be “void for uncertainty” because it was unclear from the sale
which livestock were actually purchased.

Id. at 271.

Plaintiff seeks to rely on Silva rather than the 2015 and
2016 Hawaii Supreme Court decisions.
distinguishable from the instant case.

Silva is notably

29

There were no facts in

Silva as to whom the real property was sold or if the real
property was possessed and occupied by new owners.

Silva also

did not involve the Land Court Torrens system or Transfer
Certificates of Title.
In Silva, the holding by the Kingdom of Hawaii Supreme Court
that the foreclosure sale was “void” was premised on the idea
that the contents of the sale were uncertain and not yet
possessed by new owners.
this case.

Id. at 271.

Silva is not applicable to

Here, there is no question as to the identity of the

Subject Property, and the property has been sold to a subsequent
purchaser.
The most recent decisions in Kondaur, Santiago, and Mount v.
Apao apply.

In the 2015 and 2016 decisions, the Hawaii Supreme

Court has repeatedly stated that an improper nonjudicial
foreclosure is “voidable” not “void.”
In 2017, Judge Faris of the Bankruptcy Court for the Federal
District Court for the District of Hawaii examined the Hawaii
case law on the issue of whether an unlawful nonjudicial
foreclosure is “voidable” or “void.”
(Bankr. Haw. 2017).

In re Ho, 564 B.R. 49, 55

In a cogent and well-reasoned decision,

Judge Faris ruled that the Hawaii Supreme Court’s decisions in
Kondaur, Santiago, and Mount v. Apao have impliedly overruled
some earlier inconsistent decisions, including Silva.

Id.

The

bankruptcy court held that “an improperly conducted foreclosure

30

sale under Hawaii law is voidable, not void.”

This Court agrees.

Plaintiff is unable to challenge the Intervening Defendant’s
title on the basis that the foreclosure sale conducted by the
Defendant BONY is void.
III. THE INTERVENING DEFENDANT’S TITLE AND POSSESSION OF THE
SUBJECT PROPERTY ARE PROTECTED BECAUSE SHE IS A BONA FIDE
PURCHASER
The Hawaii Supreme Court has defined a bona fide purchaser
as one who acquires an interest in a property for valuable
consideration, in good faith, and without notice of any
outstanding claims against the property by third parties.
Kondaur Capital Corp., 361 P.3d at n.27 (citing Akagi v. Oshita,
33 Haw. 343, 347 (Haw. Terr. 1935); Achiles v. Cajigal, 39 Haw.
493, 499 (Haw. Terr. 1952)).
The Hawaii Supreme Court has explained that a plaintiff is
not entitled to possession or return of title to a defectively
foreclosed property if it was subsequently sold to a bona fide
purchaser.

Mount, 384 P.3d at 1281; Santiago, 366 P.3d at 633.

Instead, an action at law for damages is generally the
appropriate remedy.

Santiago, 366 P.3d at 633.

Plaintiff makes conclusory allegations that the Intervening
Defendant was not a bona fide purchaser as a matter of law.
A subsequent bona fide purchaser is not liable for any
wrongdoing by the grantee if she lacked knowledge of the

31

wrongdoing.
1941).

In re Bishop Trust Co., 35 Haw. 816, 825 (Haw. Terr.

The Supreme Court for the Territory of Hawaii has

explained that a buyer is a “non-bona fide purchaser” when she:
(1)

does not pay adequate consideration;

(2)

buys registered land with full notice of the fact that
the land is in litigation between the transferor and a
third party; or,

(3)

takes with knowledge that his transferor acquired title
by fraud.

Akagi, 33 Haw. at 347.
First, construing the Complaint in favor of the Plaintiff,
there is no basis to find that the Intervening Defendant did not
pay adequate consideration.

There are no allegations in the

Complaint that the Intervening Defendant did not purchase the
Subject Property for value.
Second, the Complaint does not provide any basis to find
that there was notice to the Intervening Defendant of any lis
pendens or other litigation involving the Subject Property prior
to her purchase.

Plaintiff did not file this Complaint regarding

the Subject Property until 2017, more than five years after the
Intervening Defendant purchased the Subject Property.
Finally, the Complaint does not allege any facts to support
Plaintiff’s allegation that the Intervening Defendant had
knowledge that BONY acquired the Subject Property by fraud.
Plaintiff claims that the Intervening Defendant had notice
that BONY conducted a defective nonjudicial foreclosure based on
32

documents that were recorded in Land Court and the Hawaii Bureau
of Conveyances.

Plaintiff argues these documents resulted in

“constructive notice” to the Intervening Defendant that BONY
engaged in fraud.
Plaintiff asserts that the Intervening Defendant was put on
notice of defects in the nonjudicial foreclosure proceeding based
on the publicly recorded Foreclosure Affidavit, Notice of Sale,
and Mortgage.

Specifically, Plaintiff claims that the

Intervening Defendant had constructive notice about defects in
the postponement of the foreclosure sale and the defective
description of the Subject Property in the Affidavit.
Plaintiff relies on the Hawaii Supreme Court’s 1962 decision
in Decano v. Hutchinson Sugar Co., 371 P.2d 217, 224 (Haw. 1962)
in support of her argument.

In Decano, the Hawaii Supreme Court

stated that the heirs of a mortgagor had constructive notice of
their rights under the terms of the mortgage based on the
certificate of entry that was recorded.

Id.

Plaintiff claims

that under Decano, recordation of a Foreclosure Affidavit, Notice
of Sale, and a Mortgage is sufficient to provide constructive
notice that a nonjudicial foreclosure was defective.
The Court disagrees.

There is nothing on the face of the

Foreclosure Affidavit, Notice of Sale, and Mortgage that would
have provided the Intervening Defendant with constructive notice
of BONY’s alleged wrongdoing.

33

Plaintiff’s theory concerning constructive notice has been
specifically rejected by another Judge in this District.

In

Lynch v. Bank of New York Mellon, Civ. No. 17-00195 LEK-RLP, 2017
WL 3568667, *4-*5 (D. Haw. Aug. 15, 2017), the Hawaii District
Court Judge rejected Plaintiff’s theory that recordation of a
notice of sale and a foreclosure affidavit, without more, is
sufficient to provide constructive notice of fraud to a thirdparty purchaser.

Id. at *5.

The order explained that the

reliance on Decano “widely misses the mark.”

Id. at *4.

The

District Court stated that “Decano cannot be interpreted as
suggesting that mere recordation of a notice of sale or a
foreclosure affidavit is sufficient to provide notice to a third
party, such as a bona fide purchaser, that a foreclosure was
defective.”

(Id.)

Plaintiff’s theory is based on an expectation that
Intervening Defendant, as a purchaser from the foreclosing bank,
would know from the recorded documents if the bank strictly
complied with the power of sale provision in the Mortgage and
Hawaii nonjudicial foreclosure law.

A review of the documents

cited by the Plaintiff demonstrates that there was nothing
evident that would have given the Intervening Defendant or any
other reasonably prudent buyer notice that the foreclosure sale
conducted by Defendant BONY was unlawful.
Nor would the Intervening Defendant have constructive notice

34

of any purported fraud conducted by BONY based on the recorded
documents.

A finding to the contrary would require all

purchasers to have the knowledge and experience of a skilled
lawyer.

Finding constructive notice under the circumstances

alleged in the Complaint would go against the public policy that
protects good faith bona fide purchasers.
In addition, there is nothing on the Transfer Certificate of
Title that would have provided constructive notice of any defects
in the foreclosure sale to the Intervening Defendant.
There are no allegations to support a finding that the
Intervening Defendant is a non-bona fide purchaser.
Haw. at 347.

Akagi, 33

Plaintiff’s theory based on “constructive notice”

is not supported by the law or the record in this case.

Lynch,

Civ. No. 17-00195 LEK-RLP, 2017 WL 3568667, at *4-*5.
The recorded documents are insufficient to support a finding
that the Intervening Defendant had actual or constructive notice
of any wrongdoing committed by BONY in the nonjudicial
foreclosure.

There are no additional allegations that plausibly

suggest that the Intervening Defendant is a non-bona fide
purchaser.
Intervening Defendant’s Motion for Judgment on the Pleadings
(ECF No. 19) is GRANTED.

35

CONCLUSION
The Intervening Defendant's Motion for Judgment on the
Pleadings (ECF No. 19) as to Plaintiff is GRANTED.
Plaintiff is not entitled to seek return of title to the
Subject Property.
Plaintiff is not entitled to seek ejectment of the
Intervening Defendant from the Subject Property.
The Court DIRECTS the Clerk of Court to ENTER FINAL JUDGMENT
in favor of Intervening Defendant Shirley A. Estes, as Trustee of
the Survivor's Trust Created Under The Estes Living Trust dated
December 5, 1980, as to all of Plaintiff's claims involving the
Intervening Defendant.
Pursuant to Federal Rule of Civil Procedure 54(b), the Court
FINDS there is no just reason for delay of entry of Judgment as
to Plaintiff's claims involving the Intervening Defendant.
Intervening Defendant's Cross-Claim remains.
IT IS SO ORDERED.
DATED:

Honolulu, Hawaii, March 21, 2018.

TED STATES DISTRICT JUDGE
Kimberly Tilley v. The Bank of New York Mellon; Doe Defendants 1-50; v. Intervenor Defendant
Shirley A. Estes, as Trustee of the Survivor's Trust Created Under The Estes Living Trust dated
December 5, 1980; Cross-Claimant Shirley A. Estes, as Trustee of the Survivor's Trust Created
Under The Estes Living Trust dated December 5, 1980 v. Cross-Defendant The Bank of New York
Mellon, 17-cv-00524 HG-RLP; ORDER GRANTING INTERVENING DEFENDANT SHIRLEY A. ESTES, AS TRUSTEE'S
MOTION FOR JUDGMENT ON THE PLEADINGS (ECF No. 19)

36