SUMMARY DISPOSITION ORDER
Phongpun Gilbert appeals from the Judgment entered by the Circuit Court of the Fifth Circuit on July 30, 2019.
1
Gilbert challenges the Order granting Wells Fargo Banks motion for summary judgment and decree of foreclosure entered on July 30, 2019. We vacate the Order and the Judgment and remand for further proceedings.
Wells Fargo filed a complaint to foreclose Gilberts mortgage on April 27, 2018. Wells Fargo moved for summary judgment. The circuit court entered the Order and the Judgment. Gilbert appeals. She argues: (1) Wells Fargo did not prove it had standing to enforce her Note when its complaint was filed; (2) Wells Fargos business records were not authenticated; and (3) Wells Fargos foreclosure claim is barred by dismissal of an earlier lawsuit.
(1) A foreclosing plaintiff must show it had the right to enforce the note when its complaint was filed. Bank of Am., N.A. v. Reyes-Toledo, 139 Hawai‘i 361, 368, 390 P.3d 1248, 1255 (2017). Wells Fargos attorney filed a declaration on August 15, 2018. He stated he received Gilberts original promissory note on February 22, 2018 (before the complaint was filed); he “personally reviewed the original endorsed [sic] Note”; and the blank indorsement is “on the reverse side of page 4 of the Note.” Counsels declaration was based on personal knowledge and showed that Wells Fargo had the right to enforce Gilberts note when its complaint was filed.
(2) Wells Fargos motion for summary judgment was supported by the declaration of Rebecca C. Wallace. Wallace worked for Nationstar Mortgage LLC. According to Wallace: the original lender, Fremont Investment & Loan, assigned Gilberts mortgage to Wells Fargo; Nationstar serviced the loan for Wells Fargo; the servicer before Nationstar was Bank of America; and Nationstar incorporated Bank of Americas business records for Gilberts loan into its own business records. Wallaces declaration stated:
Before [Bank of America]s records were incorporated into Nationstar [sic] own business records, it conducted an independent check into [Bank of America]s records and found them in keeping with industry wide loan servicing standards and only integrated them into Nationstar [sic] own business records after finding [Bank of America]s records were made as part of a regularly conducted activity, met industry standards and determined to be trustworthy.
Wallace didnt describe what Nationstar did to verify the trustworthiness of Bank of Americas records, as required by Wells Fargo Bank, N.A. v. Behrendt, 142 Hawai‘i 37, 45-46, 414 P.3d 89, 97-98 (2018). Compare U.S. Bank Tr., N.A. v. Verhagen, 149 Hawai‘i 315, 325-27, 489 P.3d 419, 429-31 (2021) (discussing “scant” and “nebulously described” circumstances indicating trustworthiness of incorporated records), with Deutsche Bank Natl Tr. Co. v. Yata, 152 Hawai‘i 322, 334-35, 526 P.3d 299, 311-12 (2023) (noting that third Behrendt requirement wasnt satisfied). Wallaces declaration didnt establish admissibility of the incorporated Bank of America records under Hawaii Rules of Evidence Rule 803(b)(6) (2016). Wells Fargo did not meet its burden as movant under Verhagen, 149 Hawai‘i at 328 n.12, 489 P.3d at 432 n.12. It did not prove Gilberts default under the terms of the agreements or delivery of the notice of default. See Wells Fargo Bank, N.A. v. Fong, 149 Hawai‘i 249, 253, 488 P.3d 1228, 1232 (2021). The circuit court erred by granting Wells Fargos motion for summary judgment.
(3) Gilbert argues that Wells Fargo is “precluded” from pursuing foreclosure because Wells Fargos earlier lawsuit against her was dismissed. She doesnt specify whether claim preclusion or issue preclusion should apply. But it doesnt matter because she didnt provide the circuit court with Wells Fargos earlier complaint or any information about what claims were asserted or what issues were presented in the previous lawsuit. Her preclusion argument is without merit.
The circuit courts “Findings of Fact, Conclusions of Law and Order Granting Plaintiffs Motion for Default Judgment Against Defendants Phongpun Gilbert, Mortgage Electronic Registration Systems, Inc. and Summary Judgment Against All Defendants and Decree of Foreclosure Against All Defendants on Complaint Filed April 27, 2018” and “Judgment on Findings of Fact, Conclusions of Law and Order Granting Plaintiffs Motion for Default Judgment Against Defendants Phongpun Gilbert, Mortgage Electronic Registration Systems, Inc. and Summary Judgment Against All Defendants and Decree of Foreclosure Against All Defendants on Complaint Filed April 27, 2018,” both entered on July 30, 2019, are vacated, and this case is remanded for further proceedings consistent with this summary disposition order.
Keith K. Hiraoka Presiding Judge
Karen T. Nakasone Associate Judge
Sonja M.P. McCullen Associate Judge
FOOTNOTES
1
. The Honorable Kathleen N.A. Watanabe presided.