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Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
23-APR-2021
08:36 AM
Dkt. 135 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
U.S. BANK NATIONAL ASSOCIATION,
as Trustee for the LXS 2006-16N,
Plaintiff/Cross-Claim Defendant/Appellee,
v.
JAMES JOSEPH FRANCO and EDNA ARDALES FRANCO,
Defendants/Counterclaim-Plaintiffs/Third-Party
Plaintiffs/Appellants,
and
BANK OF AMERICA, N.A.,
HAWAIIAN PARADISE PARK OWNERS ASSOCIATION,
Defendants-Appellees,
and
ONEWEST BANK, F.S.B., et al.,
Third-Party Defendants/Appellees,
and
JOHN DOES 1-50, JANE DOES 1-50,
DOE PARTNERSHIPS 1-50, DOE CORPORATIONS 1-50,
DOE ENTITIES 1-50, and DOE GOVERNMENTAL UNITS 1-50,
Defendants
APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT
(CIVIL NO. 13-1-0627)
SUMMARY DISPOSITION ORDER
(By: Ginoza, Chief Judge, Leonard and Nakasone, JJ.)
Defendants/Counterclaim Plaintiffs/Third-Party
Plaintiffs/Appellants James Joseph Franco and Edna Ardales Franco
(the Francos), self-represented litigants, appeal from the Final
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Judgment entered on March 11, 2016, by the Circuit Court of the
Third Circuit (Circuit Court).1
In response to a complaint for foreclosure filed by
Plaintiff/Counterclaim Defendant/Appellee U.S. Bank National
Association, as Trustee for Lehman XS Trust Mortgage Pass-Through
Certificates, Series 2006-16N, fka U.S. Bank National
Association, as Trustee for the LXS 2006-16N (U.S. Bank), the
Francos filed a pleading on January 2, 2014 (January 2, 2014
pleading) asserting claims against U.S. Bank, as well as against
Third-Party Defendants RCO Hawaii LLLC (RCO Hawaii) and its
"agent," Glenn Fukuhara (Fukuhara), Brett Ryan, a member of RCO
Hawaii (Ryan), OneWest Bank, F.S.B., and Steven Mnuchin,
principal owner of OneWest Bank (collectively Francos' claims).
The Francos asserted that U.S. Bank and the third-party
defendants committed violations of HRS §§ 480D-3 (Prohibited
practices), 443B-18 (Fraudulent, deceptive, and misleading
representations), 480-2 (Unfair or deceptive acts or practices
(UDAP)), 15 U.S.C. § 1692e (False or misleading representations),
and also that there was a lack of standing to foreclose. The
Francos' claims were ultimately dismissed, with judgment entered
in favor of U.S. Bank and the third-party defendants, and against
the Francos, in the March 11, 2016 Final Judgment.
On appeal,2 the Francos contend (1) the Circuit Court
erred in denying their Motion for Default Judgment and Summary
Judgment (Motion for Default and SJ) against U.S. Bank, and (2)
the Circuit Court erred in "approving to Set Aside Default at the
same hearing with Appellants [Motion for Default and SJ]" when
"there was no hearing date at the same time with the Appellants
Motion For Summary Judgment."
1
The Honorable Greg K. Nakamura presided.
2
This appeal was stayed for approximately two years due to Appellant
James Franco's filing, in April 2018, for voluntary bankruptcy in the U.S.
Bankruptcy Court for the District of Hawaii.
2
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The Francos' opening brief contains numerous
deficiencies, including arguments that consist of bare
allegations that are unsupported by citations to the record or
legal authority, and thus their opening brief does not comply
with Hawai#i Rules of Appellate Procedure (HRAP) Rule 28(b)(7).
The Francos' "points of appeal" also fail to cite "where in the
record the alleged error occurred" and "where in the record the
alleged error was objected to" or otherwise brought to the
court's attention, in violation of HRAP Rule 28(b)(4). Although
U.S. Bank asserts the Francos' opening brief must be disregarded,
we seek to address appeals on the merits where possible, see Erum
v. Llego, 147 Hawai#i 368, 380, 465 P.3d 815, 827 (2020), and
thus we address the Francos' appeal to the extent that we can
discern their contentions on appeal. We conclude the Francos'
discernable contentions lack merit and we affirm.
To the extent the Francos contend they were entitled to
summary judgment on their claims, they assert no relevant
argument, make no reference to relevant portions of the record,
or provide any legal authority. Further, to the extent the
Francos challenge U.S. Bank's standing to foreclose or contest
the foreclosure judgment that was previously entered against
them, the foreclosure judgment is final and binding. On April
15, 2015, the Circuit Court entered judgment on a decree of
foreclosure, from which the Francos appealed in a prior appeal,
CAAP-XX-XXXXXXX. However, the appeal in CAAP-XX-XXXXXXX was
dismissed on November 30, 2015, because the Francos failed to
file, inter alia, an opening brief. Given these circumstances,
the Francos are no longer entitled to challenge U.S. Bank's
alleged lack of standing to foreclose or the judgment of
foreclosure. See Mortg. Elec. Registration Sys., Inc. v. Wise,
130 Hawai#i 11, 17, 304 P.3d 1192, 1198 (2013) (holding that,
where appellant failed to appeal from a judgment of foreclosure,
that judgment "became final and binding[,]" and further the
appellant could not challenge the plaintiff's standing to
foreclose in a later appeal because "challenges to [the
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plaintiff's] standing were subsumed under the foreclosure
judgment, which had became final and binding.").3
The Francos also appear to assert the Circuit Court
improperly denied their Motion for Default and SJ because, on
January 31, 2014, the Circuit Court clerk (court clerk) had
entered default against U.S. Bank, RCO Hawaii, and Fukuhara. The
Francos apparently argue that, given the court clerk's entry of
default, the Circuit Court "should have no excuse" not to grant
the Motion for Default and SJ. However, on January 27, 2014 --
before the Francos requested entry of default on January 30,
2014, and before the court clerk's entry of default on January
31, 2014 -- U.S. Bank, RCO Hawaii, Fukuhara and Ryan filed a
motion to dismiss the Francos' claims. Further, on February 13,
2014, pursuant to HRCP Rule 55(c),4 U.S. Bank, RCO Hawaii, and
Fukuhara filed a Motion to Set Aside Default.5
3
We note there was no Hawai#i Rules of Civil Procedure (HRCP) Rule
60(b) motion filed by the Francos. Cf. PennyMac Corp. v. Godinez, 148 Hawai #i
323, 474 P.3d 264 (2020).
4
HRCP Rule 55 provides, in relevant part:
Rule 55. Default.
(a) Entry. When a party against whom a judgment for
affirmative relief is sought has failed to plead or
otherwise defend as provided by these rules and that fact is
made to appear by affidavit or otherwise, the clerk shall
enter the party's default.
(b) Judgment. Judgment by default may be
entered as follows:
. . . .
(2) BY THE COURT. In all other cases the party
entitled to a judgment by default shall apply to the
court therefor....
(c) Setting aside default. For good cause shown the
court may set aside an entry of default and, if a judgment
by default has been entered, may likewise set it aside in
accordance with Rule 60(b).
5
The Motion to Set Aside Default asserts that Fukuhara and Ryan were
not properly served, that U.S. Bank and the third-party defendants had filed a
motion to dismiss on January 27, 2014, the court clerk's entry of default was
filed on January 31, 2014, there was no prejudice to the Francos, there were
meritorious defenses to the Francos' claims, and any default was not the
result of inexcusable neglect or wilful act.
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The Hawai#i Supreme Court has stated its agreement with
decisions holding that "defaults and default judgments are not
favored and that any doubt should be resolved in favor of the
party seeking relief, so that, in the interests of justice, there
can be a full trial on the merits." BDM, Inc. v. Sageco, Inc.,
57 Haw. 73, 76, 549 P.2d 1147, 1150 (1976), abrogated by Chen v.
Mah, 146 Hawai#i 157, 457 P.3d 796 (2020)6 (citations omitted).
In general, and as applicable in this case,
a motion to set aside a default entry or a default judgment
may and should be granted whenever the court finds (1) that
the nondefaulting party will not be prejudiced by the
reopening, (2) that the defaulting party has a meritorious
defense, and (3) that the default was not the result of
inexcusable neglect or a wilful act.
BDM, 57 Haw. at 77, 549 P.2d at 1150. Under HRCP Rule 55,
default judgment is not automatic upon entry of default by the
clerk.
We review the application of HRCP Rule 55, and an order
setting aside entry of default, for abuse of discretion. Chen,
146 Hawai#i at 171, 457 P.3d at 810 (citation omitted); Wagner v.
World Botanical Gardens, Inc., 126 Hawai#i 190, 197, 268 P.3d
443, 450 (App. 2011).
Here, it appears that on March 6, 2014, the Circuit
Court addressed the Motion to Set Aside Default. On June 23,
2014, the Circuit Court entered an order granting the Motion to
Set Aside Default. Given the record in this case, we conclude
the Circuit Court did not abuse its discretion in setting aside
the court clerk's entry of default. The Francos present no
argument that the BDM factors were not met in this case, and they
6
The Hawai#i Supreme Court in Chen held, prospectively, that motions
to set aside entry of default are governed only by the "good cause" standard
explicitly stated in HRAP Rule 55(c), and need not satisfy the three-prong
test enunciated in BDM. 146 Hawai#i at 160, 457 P.3d at 799. As stated in
Chen, the holding in that case "applies only to decisions on motions to set
aside entry of default under HRCP Rule 55(c) after the date of this opinion,"
which was issued on January 30, 2020. Id. at 177, 457 P.3d at 816.
Therefore, in this case, the rule set out in BDM still applies.
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make no showing that the Circuit Court abused its discretion in
setting aside the default under these circumstances.7
Finally, regarding the Francos' asserted point of error
that the Circuit Court erred by setting aside the entry of
default "at the same hearing" with the Francos' Motion for
Default and SJ, the Francos present no discernable argument, no
reference to the record, and no legal authority. Therefore, this
point of error is deemed waived. HRAP Rule 28(b)(4) and (7).
Therefore, IT IS HEREBY ORDERED that the Final Judgment
entered on March 11, 2016, by the Circuit Court of the Third
Circuit is affirmed.
DATED: Honolulu, Hawai#i, April 23, 2021.
On the briefs: /s/ Lisa M. Ginoza
Chief Judge
James Joseph Franco,
Edna Ardales Franco, /s/ Katherine G. Leonard
Defendants-Appellants, self- Associate Judge
represented
/s/ Karen T. Nakasone
J. Blaine Rogers, Associate Judge
Lori King Stibb,
for Plaintiff-Appellee
7
We also note the Francos do not provide transcripts for the March 6,
2014 hearing, so we are not able to review any arguments presented or the
Circuit Court's reasoning in setting aside the entry of default.
6