NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
27-AUG-2026
08:22 AM
Dkt. 50 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAIʻI
WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE,
ON BEHALF OF THE HOLDERS OF THE STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., BEAR STEARNS MORTGAGE FUNDING TRUST 2007-AR1, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-AR1,
Plaintiff-Appellee,
v.
BRYCE JARET ISHIMITSU, Defendant-Appellee, and
ASSOCIATION OF APARTMENT OWNERS OF HAVENS OF IʻI VISTAS;
Defendant/Cross-Claimant-Appellee,
MILILANI TOWN ASSOCIATION; MARINER'S VILLAGE THREE COMMUNITY
ASSOCIATION, Defendants-Appellees, and
SEAN CHEUNG TONG, TRUSTEE OF THE UNRECORDED KOOLANI TRUST DATED JANUARY 1, 2015, Defendant/Cross-Claim Defendant-Appellant, and
JOHN AND MARY DOES 1-20; DOE PARTNERSHIPS,
CORPORATIONS OR OTHER ENTITIES 1-20, Defendants.
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CASE NO. 1CCV-XX-XXXXXXX)
SUMMARY DISPOSITION ORDER
(By: Nakasone, Chief Judge, Hiraoka and McCullen, JJ.)
Defendant/Cross-Claim Defendant-Appellant Sean Cheung
Tong, Trustee of the Unrecorded Koolani Trust Dated January 1,
2015 (Tong), appeals from the Circuit Court of the First
Circuit's October 28, 2024 "Findings of Fact; Conclusions of NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
Law; Order Granting Plaintiff's Motion for Summary Judgment and
for Interlocutory Decree of Foreclosure Against All Parties,
Filed July 26, 2024" (Summary Judgment Order) and Judgment in
favor of Plaintiff-Appellee Wells Fargo Bank, National
Association, as Trustee on Behalf of the Holders of the
Structured Asset Mortgage Investments II Inc., Bear Sterns
Mortgage Funding Trust 2007-AR1, Mortgage Pass-Through
Certificates, Series 2007-AR1 (Wells Fargo). 1
On appeal, Tong raises seven points of error (POE),
contending that the circuit court erred by: (1) concluding Tong
lacked standing to challenge that notice of default was
provided; (2) concluding Tong's Answer to the Complaint admitted
that notice of default was provided by failing to deny it with
specificity and particularity; (3) finding the mortgagor was
provided notice of default via first class mail; (4) concluding
Wells Fargo provided admissible evidence of delivery of the
notice of default under the business records hearsay exception
via testimony of knowledge of standard mailing practices;
(5) denying Tong's request for a continuance to conduct further
discovery on the purported notice of default; (6) granting
summary judgment despite the foreclosure claim being barred
1 The Honorable James H. Ashford presided.
2
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
under the applicable six-year statute of limitations; and
(7) concluding Wells Fargo established standing to foreclose.
Upon careful review of the record and the briefs
submitted by the parties, and having given due consideration to
the issues raised and the arguments advanced, we resolve this
appeal as discussed below and affirm.
In 2006, Defendant-Appellee Bryce Jaret Ishimitsu
(Ishimitsu) executed an Adjustable Rate Note (the Note) in favor
of Franklin Financial, a Corporation (Franklin Financial),
secured by a Mortgage (the Mortgage) in favor of Mortgage
Electronic Registration Systems, Inc., solely as nominee for
Franklin Financial, its successors and assigns, that encumbered
the property located at 95-1111 Koolani Drive #214, Mililani,
Hawaiʻi 96789 (the Property). The Property was subsequently sold
to Defendant-Appellee Mililani Town Association via a quitclaim
deed recorded on May 27, 2014, and was later conveyed to Tong
via an apartment deed recorded in the Land Court on November 3,
2016. Ishimitsu defaulted on the Mortgage loan.
On February 15, 2023, Wells Fargo filed the underlying
Complaint for foreclosure. Wells Fargo moved for summary
judgment and an interlocutory decree of foreclosure (First
Motion). Tong opposed, and the circuit court denied the First
Motion without prejudice.
3
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
On July 26, 2024, Wells Fargo again moved for summary
judgment and an interlocutory decree of foreclosure (Second
Motion). Tong again opposed. The circuit court granted the
Second Motion. Tong appealed.
(1) We first address POE 7 regarding Wells Fargo's
standing to foreclose on the Property. Tong contends the
circuit court erroneously granted summary judgment in favor of
Wells Fargo because genuine issues of material fact remained
with respect to Wells Fargo's standing to foreclose.
Specifically, Tong asserts that Wells Fargo failed to meet its
burden of establishing by admissible evidence (1) its capacity
as "a Trustee 'on behalf of the holders of the Structured Asset
Mortgage Investments II Inc., Bear Sterns Mortgage Funding Trust
2007-AR1, Mortgage Pass-Through Certificates, Series 2007-AR1'"
(2007-AR1 Trust); (2) the existence of a valid assignment of the
Mortgage to the 2007-AR1 Trust; or (3) whether the Note included
a special indorsement to "Wells Fargo Bank, N.A., as Trustee,"
at the time it was received.
We review the grant or denial of summary judgment de
novo. Nationstar Mortg. LLC v. Kanahele, 144 Hawaiʻi 394, 401,
443 P.3d 86, 93 (2019).
To establish its right to foreclose on a mortgage, a
foreclosing plaintiff must establish its standing, or
entitlement to enforce the subject note, at the time the action
4
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
was commenced. Bank of America, N.A. v. Reyes-Toledo, 139
Hawaiʻi 361, 367-71, 390 P.3d 1248, 1254-58 (2017). Standing may
be established through admissible evidence showing that the
foreclosing plaintiff was in possession of the note at the time
the complaint was filed. Id. at 368, 390 P.3d at 1255. This
requirement applies where the subject note is specially
indorsed. E.g., U.S. Bank Nat'l Ass'n as Tr. for C-Bass Mortg.
Loan Asset-Backed Certificates, Series 2007-CB1 v. Jung Hoon
Kim, 144 Hawaiʻi 383, 442 P.3d 446, 2019 WL 2205680, at *1
(App. May 22, 2019) (SDO).
[A] special indorsement occurs if the indorsement is made
by the holder of an instrument and the indorsement
identifies a person to whom it makes the instrument
payable. [Hawaiʻi Revised Statutes (HRS)] § 490:3-205(a)
[(2008)]. When an instrument is specially indorsed, it
becomes payable to the identified person and may be
negotiated only by the indorsement of that person. Id.
Reyes-Toledo, 139 Hawaiʻi at 370, 390 P.3d at 1257.
Here, the Second Motion was supported by the
declaration of Gari-Ann Wise (Wise), the custodian of records of
collateral files for Wells Fargo's counsel. The Wise
declaration stated that the original wet ink indorsed Note was
received on November 9, 2017, and that Wise personally confirmed
possession of the Note on January 10, 2023. The Wise
declaration further stated that had the Note left the firm's
possession, it would have been logged in the firm's document
management system. The "true and correct redacted copies of the
documents that were received and scanned within [the firm's]
5
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
record-keeping system" show that the Note was specially indorsed
to "Wells Fargo Bank, N.A., as Trustee."
Because Wells Fargo's counsel was in possession of the
Note as its bailee on February 15, 2023, when the foreclosure
complaint was filed, and the Note was specially indorsed to
Wells Fargo, Wells Fargo was entitled to enforce the Note. See
id.
Because Wells Fargo carried its burden of showing it
was in possession of the Note at the relevant time and had
standing to foreclose on the Property, the burden then shifted
to Tong to point to specific facts in evidence to show a
challenged fact was material and in genuine dispute. See U.S.
Bank N.A. v. Mattos, 140 Hawaiʻi 26, 30, 398 P.3d 615, 619 (2017)
(quoting French v. Hawaii Pizza Hut, Inc., 105 Hawaiʻi 462, 470,
99 P.3d 1046, 1054 (2004)). Tong points to no such facts. See
id.
Wells Fargo was not separately required to establish
the validity of the assignment of the Mortgage because the
transfer of a promissory note also transfers the right to
enforce the mortgage. See HRS § 490:9-203(g) (2008) ("The
attachment of a security interest in a right to payment or
performance secured by a security interest or other lien on
personal or real property is also attachment of a security
interest in the security interest, mortgage, or other lien.");
6
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
Reyes-Toledo, 139 Hawaiʻi at 371 n.17, 390 P.3d at 1258 n.17
(stating that "the security follows the debt").
Moreover, as a third party, Tong lacks "standing to
challenge the validity of an assignment of its loans because
they are not parties to the agreement." U.S. Bank Nat'l Ass'n
v. Salvacion, 134 Hawaiʻi 170, 175, 338 P.3d 1185, 1190 (App.
2014). While "Hawaiʻi courts may recognize exceptions when a
challenge would deem the assignment void, not voidable," Tong
makes no such argument on appeal. Id.
Tong similarly lacks standing to challenge the
assignment of a mortgage to a securitized trust. See Bank of
New York Mellon v. Rumbawa, 137 Hawaiʻi 206, 366 P.3d 1085, 2016
WL 482170, at *1-2 (App. Feb. 4, 2016) (SDO) ("Courts have
rejected the argument that before a party may foreclose on a
property, 'it must first prove the validity of every transfer in
the chain of title.'" (quoting Deutsche Bank Tr. Co. v. Beesley,
Civil No. 12-00067 SOM/KSC, 2012 WL 5383555, at *4 (D. Haw.
Oct. 30, 2012)). Moreover, "noncompliance with a trust's
governing document is irrelevant to the assignee's standing to
foreclose," and it "does not render the assignment void."
Salvacion, 134 Hawaiʻi at 175-76, 338 P.3d at 1190-91.
Accordingly, the circuit court did not err by
concluding Wells Fargo had standing to enforce the Note through
its foreclosure complaint.
7
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
(2) We now turn to POE 3 and 4, where Tong argues the
circuit court erroneously found Wells Fargo gave the requisite
notice of default in compliance with the terms of the Mortgage
because, Tong contends, delivery of the notice was not supported
by admissible evidence.
To establish entitlement to foreclose, the foreclosing
party must demonstrate (1) the existence of the agreement,
(2) the terms of the agreement, (3) default under the terms of
the agreement, and (4) the giving of requisite notice. Bank of
Honolulu, N.A. v. Anderson, 3 Haw. App. 545, 551, 654 P.2d 1370,
1375 (App. 1982).
Here, the Second Motion was supported by, among other
things, two Notices of Default, both dated August 24, 2021, and
addressed to Ishimitsu at the Property; the declaration of
Cynthia May (May), an officer for Wells Fargo's loan servicer;
and screenshots of the loan servicer's correspondence tracker
and log. The Notices of Default and the correspondence tracker
and log all show a code, "LR062," which, May averred, "indicates
that [the] notices were sent via first class mail," consistent
with the servicer's standard mailing practices.
Tong contends that May's declaration regarding the
meaning of the "LR062" code is inadmissible hearsay that cannot
support proof that notice was given:
8
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
To the extent Ms. May's purported personal knowledge
as to the use by [the servicer] and meaning of the code
"LR062" may have been based upon her review and knowledge
of things such as [the servicer's] written policies,
training guides, operation procedures, or other similar
business records, because those records were not identified
and produced, Ms. May's allegation of having personal
knowledge if based thereon that the notices of Default were
mailed by first class mail on August 24, 2021, remains
inadmissible hearsay.
"Though hearsay is generally inadmissible, [Hawaiʻi
Rules of Evidence (HRE)] Rule 803(b)(6) establishes a hearsay
exception for 'records of regularly conducted activity.'" U.S.
Bank Tr., N.A. as Tr. for LSF9 Master Participation Tr. v.
Verhagen, 149 Hawaiʻi 315, 325, 489 P.3d 419, 429 (2021). HRE
Rule 803(b)(6) provides in relevant part:
The following are not excluded by the hearsay rule,
even though the declarant is available as a witness:
(b) Other exceptions.
(6) Records of regularly conducted activity. A
memorandum, report, record, or data
compilation, in any form, of acts, events,
conditions, opinions, or diagnoses, made in the
course of a regularly conducted activity, at or
near the time of the acts, events, conditions,
opinions, or diagnoses, as shown by the
testimony of the custodian or other qualified
witness, or by certification that complies with
rule 902(11) or a statute permitting
certification, unless the sources of
information or other circumstances indicate
lack of trustworthiness.
(Emphases added.)
A witness is qualified to provide the testimony
required under HRE Rule 803(b)(6) where they have "enough
familiarity with the record-keeping system of the business that
9
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
created the record to explain how the record was generated in
the ordinary course of business." Wells Fargo Bank, N.A. v.
Behrendt, 142 Hawaiʻi 37, 45, 414 P.3d 89, 97 (2018) (citing
Mattos, 140 Hawaiʻi at 32, 398 P.3d at 621 (quoting State v.
Fitzwater, 122 Hawaiʻi 354, 365-66, 227 P.3d 520, 531-32
(2010))).
May was qualified to lay a foundation for the
admission of these records. See id.; HRE Rule 803(b)(6). The
May declaration stated, "[a]s an officer of [Wells Fargo's loan
servicer], I am personally familiar with [the servicer]'s
standard mailing practices and procedures," because "I am
authorized and trained to access these records" and use the
relevant systems "on a regular basis as a routine function of my
employment."
Thus, Wells Fargo carried its burden of showing the
Notices of Default were mailed to Ishimitsu on or around
August 24, 2021. The burden then shifted to Tong to point to
specific facts in evidence to show a challenged fact was
material and in genuine dispute. See Mattos, 140 Hawaiʻi at 30,
398 P.3d at 619 (quoting French, 105 Hawaiʻi at 470, 99 P.3d at
1054). Tong points to no such facts. See id.
Accordingly, the circuit court did not err by granting
Wells Fargo's Second Motion.
10
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
(3) As to POE 6, Tong contends the foreclosure action
was subject to a six-year statute of limitations. After the
parties briefed the matters in this case, the Hawaiʻi Supreme
Court held that "the statute of limitations for mortgage
foreclosure actions is twenty years per HRS § 657-31." Bank of
New York Mellon as Tr. for Certificateholders of CWABS, Inc.
Asset-Backed Certificates, Series 2006-11 v. White, 156 Hawaiʻi
246, 249, 573 P.3d 629, 632 (2025). Thus, POE 6 fails.
(4) Finally, we decline to reach Tong's remaining
points of error, contending the circuit court erred by
concluding Tong lacked standing to challenge that notice of
default was provided (POE 1); concluding Tong's Answer to the
Complaint admitted that notice of default was provided by
failing to deny it with specificity and particularity (POE 2);
and denying Tong's request for a continuance to conduct further
discovery on the purported notice of default (POE 5).
As discussed above, Wells Fargo established standing
and entitlement to bring its foreclosure action as a matter of
law. Error, if any, in concluding Tong lacked standing to
challenge notice of default, concluding Tong failed to deny with
specificity, and denying Tong's continuance request to conduct
discovery would be harmless. See Salvacion, 134 Hawaiʻi at 176,
338 P.3d at 1191 ("Further discovery would not have rebutted
11
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
USBNA's showing of absence of genuine issue of fact." (citation
modified)).
Based on the foregoing, we affirm the circuit court's
October 28, 2024 Summary Judgment Order and Judgment.
DATED: Honolulu, Hawaiʻi, August 27, 2026.
On the briefs: /s/ Karen T. Nakasone
Chief Judge
Frederick J. Arensmeyer,
for Defendant/Cross- /s/ Keith K. Hiraoka Claim Defendant-Appellant. Associate Judge
Lansen H.G. Leu, /s/ Sonja M.P. McCullen (Leu Okuda & Doi), Associate Judge
for Plaintiff-Appellee.
12