GAAP-17-0000746

IN THE INTERMEDIATE COURT OF APPEALS OF THE STATE OF HAWAII

-0-
U.S. BANK TRUST, N.A., AS TRUSTEE
FOR LSFg MASTER PART¡CIPATION TRUST,

Plaintiff-Appellee,
VS.

PATRICK LOWELL VERHAGEN ANd PATRICK LOWELL VERHAGEN,

TRUSTEE OF THE PATRICK LOWELL VERHAGEN REVOCABLE TRUST
DATED OCTOBER 29, 1999,

D efe n d a nts-Ap pe I I a nts,

and
WELLS FARGO BANK, N.A. and DOES 1 THROUGH 20, INCLUSIVE,
Defendants.
t-
APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
crvrL No. 16-1-0147 (1)
The Honorable Rhonda l. L. Loo, Presiding

OPENING BRIEF
0-
GARY VICTORY DUBIN 3181
FREDERICK J. ARENSMEYER 8417
55 Merchant Street, Suite 3100
Honolulu, Hawaii 96813
Telephone: (808) 537-2300
Attorneys for Ap pellants
 GAAP-17-0000746

IN THE INTERMEDIATE COURT OF APPEALS OF THE STATE OF HAWAII

-0-
U.S. BANK TRUST, N.4., AS TRUSTEE
FOR LSFg MASTER PARTICIPATION TRUST,

Plaintíff-Appellee,
vs.
PATRICK LOWELL VERHAGEN and PATRICK LOWELL VERHAGEN,
TRUSTEE OF THE PATRICK LOWELL VERHAGEN REVOCABLE TRUST
DATED OCTOBER 29, 1999,

D efe n d a nts-Ap pe I I a nts,

and
WELLS FARGO BANK, N.A. and DOES 1 THROUGH 20, INCLUSIVE,
Defendants.
o-
APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
crvrL No. 16-1-0147 (1)
The Honorable Rhonda l. L. Loo, Presiding

OPENING BRIEF
0-
 A. STATEMENT OF THE GASE

Appellee U.S. Bank Trust, N.4., as Trustee for LSF9 Master Participation Trust

('U.S. Bank") as Plaintiff filed in the Second Circuit Court its "Verified Complaint To

Foreclose Mortgage" below on March 23, 2016, against Appellants as Defendant

Borrowers ("Verhagen") (Record , al ll-17).

1. U.S. Bank's Transactional Glaims Below

Accompanying the Verified Complaint was a "Verification to Foreclosure

Complaint" (Record, at 18-73), reciting the following transactional claims:

First, that Verhagen allegedly borrowed $1,730,000.00 from Washington Mutual

FA (WaMu FA) on September 24, 2007 (Record, at 26-31), secured by a mortgage on

the Verhagen residence (Record, at 35-52).

Second, that the Note allegedly was in the possession of U.S. Bank which has an

undated blank rubber stamp bearer endorsement on it with the printed signature of

Cynthia A. Riley allegedly purporting to be the Vice President of WaMu FA (Record, at

31).

Three, that there allegedly were subsequently recorded purported mortgage

assignments, one dated November 18,2014 from the FDIC to JPMorgan Chase Bank,

N.A. ("Chase") (Record, at 65-66), with Chase curiously signing on both sides of the

transaction, and one thereafter dated July 31, 2015 from Chase to U.S. Bank (Record,

at62-64).

2. Verhaoen's Obiections Below to U.S. Bank's Standino as Foreclosino Plaintiff

While Verhagen below admitted signing a 2007 Note and Mortgage, borrowing

the amount stated above from WaMu FA, Verhagen denied the rest of U.S. Bank's
transactional claims, arguing that U.S. Bank had not proven that it owned and

possessed the Verhagen note when its foreclosure complaint was filed and that its

verifying declarations lacked personal firsthand knowledge, for the reasons set forth and

documented by the Exhibits referenced below, bearing the same identifying exhibit

numbers 1 through 9 for purposes of facilitating reference here, in its opposition to

summary judgment (Record, at220-628), as follows:

3. The Undated Blank Rilev Endorsement on the Verhaqen Note Was Fraudulent

It is a matter of common knowledge that Riley was fired by Chase on November

6, 2006 and thus could not have endorsed the 2007 Verhagen promissory note as Vice

President of WaMu FA almost a year after her employment discharge. That fact was not

even contested by U.S. Bank below.

lndeed, Riley in her sworn deposition taken on January 15,2013, in the judicial

foreclosure litigation entitled JP Morqan Chase Bank. N.A. v. Eduardo Ordzco, Case

No. 09-29997 CA (11), admitted that she was no longer a Vice President of Washington

Mutual FA and not even employed by WaMu FA when Patrick Verhagen signed his

promissory note (Declaration, Exhibit 1 - admissible against U.S. Bank pursuant to

Hawaii Evidence Code Rules 803(aX2), (a) and (5)).

Specifically: (a) Riley is currently employed by Chase (Deposition, page 4); (b)

Riley moved from California to Florida in June 2004 (id., page 33); (c) Riley had 10 to 12

employees using her endorsement "facsimile signature stamp" (/d., page aB); (d) Riley

had 9 to 10 rubber stamps with her signature on it (/d., page 9): (e) Riley's team

endorsed-stamped 200 to 300 promissory notes per day (/d., page 59); (f) Riley was laid

off on November 11, 2006, more than one year before Verhagen signed the WaMu FA

2
promissory note (1d., pages 61-65); and (g) Riley's stamp was authorized to be used

only while she was employed with WaMu FA from June 2004 to November 2006 (/d.,

pages 70,82).

lf more evidence of tampering with the Verhagen promissory note were needed,

Caliber, Verhagen's alleged loan servicer since 2015, provided Verhagen in response to

Verhagen's three separate requests for a copy of the subject promissory note by letters

of transmittal dated September 1, 2015 (Exhibit 2(A)), May 27, 2016 (Exhibit 2(B)) and

July 28, 2016 (Exhibit 2(C)), with a copy, all three of which copies had no endorsement

of Cynthia Riley on them, the last two sent to Verhagen after the foreclosure complaint

below was filed below, admissible in evidence as admissions against interest, signed by

a Vice President and Assistant Vice President of Caliber and certified as true copies no

less.

4- The FDIC N ever Even Had a Ve rhaoen WaMrr FA Morfoaoe To To Chase

Next, U.S. Bank's claim to own the Verhagen mortgage was also false, since

according to the evidence below the FDIC never even owned the Verhagen mortgage,

thus it could not have assigned it to Chase and Chase therefore had nothing to assign

to U.S. Bank. That fact was also not even contested by U.S. Bank below.

The FDIC Receiver in Charge of the WaMu, lnc. Receivership, Robert Schoppe,

has, for instance, testified, as an admission against interest, in a criminal case entitled

U.S. v. Williams, in the United States District Court for the Northern District of Florida, in

Case No. 3:12cr7OlLAC, that neither he nor the FDIC knew what mortgage loans

WaMu, lnc. actually owned - none -- when it went into receivership, only that Chase

was given all of WaMu lnc.'s records and if one wanted to know what WaMu, lnc.

3
owned one would have to ask Chase (see Exhibit 3, page 25 (lines 23-25) through page

26 (lines 1-11), for a certified court copy of Schoppe's testimony), which is what he has

moreover voluntarily told everyone who has bothered to ask him (see Exhibit 4 for a

certified copy of the affidavit of Stehrenberger in ln re Kellev, U.S. Bankruptcy Court,

Northern District of California, Adversary Case No. 10-05245), which has also been

collaborated under oath in numerous court proceedings by officers of Chase themselves

(see Exhibit 5).

Chase has however in other litigation claimed in rebuttal that it secured the
WaMu FA notes from the "Purchase and Assumption Agreement it entered into with

Chase when the WaMu, lnc. Receivership took place, set forth in Exhibit 6, but the

problem with that argument is that nowhere in that Agreement called the PAA is there a

list of the mortgages that WaMu, lnc. owned at the time, and as we know from the

testimony under oath by Schoppe, supra, no one knew at the time of the signing of the

PAA what WaMu, lnc. owned, and there has never been such a list presented by the

FDIC or Schoppe or Chase or anyone in or outside of court to this day.

And as an employee of Chase, it violates a power of attorney for a conflicted

exercise of that power of attorney on behalf on one's self or one's employer, especially

when one is assuming to act on behalf of a federal agency, yet Chase assigned the

purported FDIC government asset by being on both sides of the assignment transaction

(Record, at 65-66).

Moreover, it is well documented by WaMu FA itself that it did not keep the
originals of its promissory notes, but digitized them and shredded them, although being

negotiable instruments (hence voluntarily destroyed) and the evidence of that is in íts

4
own "Guide" to it servicers specifically authorizing such destruction, Exhibit 7, page

103-3 ("8. Records Storaoe. ln lieu of retaining copies and originals as required above,

the Servicer may maintain its loan files in the form of microfilm, microfiche or electronic

media . . . [and] bear the entire cost of restoring loan files and related documents"),

another admission against interest. None of these facts also were ever contested by

U.S. Bank below.

5. WaMu FA D¡d Not Even Exist the Verhaoen 2007 Note Was Siqned

Moreover, when the 2007 Verhagen promissory note was signed, WaMu FA did

not even exist, as it was merged into WaMu, Inc. on January 1, 2005, as shown in the

SEC filing set forth in Exhibit 8, which was several years before loaning money to

Verhagen when it had disappeared as an entity with no legal capacity to make loans,

yet apparently WaMu, lnc. kept WaMu FA alive, using it surreptitiously as a dba and

falsely claiming to the public and to recording offices nationwide that it was still a

"Federal Association" in violation of federal regulatory banking statutes, a felony in fact,

and using it as a mortgage broker, although at least in Hawaii not having a mortgage

broker's license or having ever registered as a fictitious name with the DCCA, that

mortgage was dead on arrival at our State Bureau of Conveyances as therefore

otherwise a completely fraudulent recordation.

Moreover, there are more than one thousand WaMu FA Hawaii "zombie" loans

recorded at the Hawaii State Bureau of Conveyances dated after it ceased to have legal

capacity on January 1,2005, which this Court may take judicial notice of, which is a fact

readily available online at the Official Bureau of Conveyances Government Website,

even though "dba's" are not permitted to be used in recorded documents at our Bureau

5
of Conveyances, cf. Honolulu Memorial Park v. Citv and Countv of Honolulu, 50 Haw.

189, 436 P.2d 207 (1967), rendering them subject to expungement, just another reason

why the Verhagen mortgage is void, Beneficial Hawaii. lnc. v. Kida, 96 Haw. 289,312,

30 P.3d 8e5 (2001).

Apparently it was only belatedly that Chase decided years after WaMu, lnc. was

forced into receivership by the FDIC, headed by Mr. Schoppe in change of WaMu, lnc.,

to create a written mortgage assignment pertaining to allegedly mortgage loans

purchased from the FDIC, which it then belatedly did in this case, contemporaneously

after the Courts began to reject the theory that the transfer of mortgage loans from the

FDIC to Chase had automatically occurred "by operation of law," since not being able to

show any list of acquired mortgages in its PAA, supra, or at any time thereafter; see Kim

v. JP Morqan Chase Bank. N.4., 493 Mich. 98, 825 N.W.2d 329 (2012).

6. U.S. Bank's Salvers' Declaration Below Was Lackinq Personal Knowledqe

U.S. Bank presented below only the Declaration of Ms. Salyers (Record, at 119-

125), set forth in Exhibit 9, purporting to be a "Foreclosure Document Specialist ll"

employed by U.S. Bank's new loan servicer, Caliber.

However, not only does she not even attempt to establish that U.S. Bank owned

and possessed the Verhagen promissory note before it filed its foreclosure lawsuit or

even when it filed for summary judgment.

Ms. Salyers furthermore does not even provide her dates of employment with

Caliber, and even if she did, she obviously had no personal knowledge of anything that

she was trying to testify about, since according to the "Limited Power of Attorney" she

6
attaches to her Declaration as her Exhibit "A" (Record, at 129-133), Caliber came

aboard (with or without her) only after February 5, 2015.

And that was well after the loan was made to Verhagen, well after the WaMu,

lnc. receivership, and well after the purported assignment from the FDIC to Chase - yet

Ms. Salyers as a "Foreclosure Document Specialist ll," which qualifications are similarly

lacking explanation in her Declaration, purports to authenticate all of those earlier

documents based upon personal knowledge, even the records of prior servicers for the

first eight years of the Verhagen loan, in violation of not only our evidence rules but the

laws of physics.

7. The April 6. 2017 Summarv Judqment Hearins

At the April 6, 2017 summary judgment hearing, the Official Transcript of which is

set forth in Exhibit 10, U.S. Bank's counsel made no effort whatsoever to oppose a

single Verhagen objection as to U.S. Bank's lack of, supra, summa¡ized for the

Presiding Judge by Verhagen's counsel (Transcript, pages 3-6), U.S. Bank's counsel

relying instead solely on the previously filed "Verification to Foreclosure Complaint":

MR. PRATHER: Your Honor, again, this is a verified complaint. We

had the ctient swear that they were in possession of the original note
at the time the complaint was filed. They're in possession now. I
have the original note with me. . . .

THE COURT: Anything further, Mr. Dubin?

MR. DUBIN: Well, your Honor, a verified complaint - you can't verify
a forgery. This was clearly a forgery. This was clearly a forgery. This
is not a bearer note. The plaintiff has no basis to be in this
proceeding even as a party.

U.S. Bank's counsel at the hearing was referring to the "Verification to

Foreclosure Complaint" of Julia Jackson, "Authorized Signatory" of Caliber, her claiming

7
familiarity with and having access only to Caliber's books and records (Exhibit 11,

Record, at 18-21), but how did she know? Who told her?

Ms. Jackson did not explain and was apparently unaware of the lateness of the

rubber-stamping of Riley's bearer note endorsement thereon, or the three unendorsed

copies sent to Verhagen before and after Ms. Jackson's Verification was filed

accompanying the foreclosure complaint, or the many uncontested breaks in the chain

of title of the mortgage before and thereafter.

Similarly, U.S. Bank's counsel's accompanying "AttorneyAffirmation" (Exhibit 12,

Record, at 81-83) was therefore triple hearsay, merely relying on Ms. Jackson's

unsupported double hearsay "Verification".

Nevertheless, the Presiding Judge ruled at the hearing (Exhibit 10, pages 7-9)

that U.S. Bank had satisfied "the standing requirement," as follows:

1. based on the "Verification," even though not based on any disclosed personal

knowledge as to how all the loan documents had been created, keep, and by whom,

2. based on the business records hearsay exception, even though the verifier
claimed to have no personal knowledge of even who the prior loan servicers were or

what they did between 2007 and 2015 before Caliber became the loan servicer only

after February 5, 2015, supra, since according to the Presiding Judge "records of

regularly conducted activity . . . are self-authenticating, and without even any claim that

Ms. Jackson was Caliber's custodian of records,

3. based on the belief of the Presiding Judge that "a borrower does not have
standing to challenge an endorsement of a note because the borrower is not a party to

the endorsement, nor is the borrower a third-party beneficiary to the endorsement,"

I
 4. based on the Presiding Judge's understanding of the "long standing principle

that a transfer of the original note automatically transfers with it the secured instrument

used to secure the underlying debt,"

5. based on the Presiding Judge's belief that Chase had "authority to assign the

mortgage on behalf of the FDIC,' because of the WaMu, lnc. receivership,

6. based on Ms. Salyers having sworn under oath according to the Presiding
Judge that she possessed personal knowledge "of the existence and possession of

documents," apparently the Presiding Judge confusing the statements actually made by

Ms. Jackson, and not by Ms. Salyers, neither of which explained however why and how

they had personal knowledge, and

7. without even either Ms. Salyers or Ms. Jackson claiming under oath or
othenruise to be the custodian for records, instead only having "access to the records."

8. Court Grants Summaru Judqment lqnorinq Verhagen's Obiections to Standinq

On September 25,2017, the Presiding Judge entered written findings of fact and

conclusions of law granting summary judgment and a decree of foreclosure (Exhibit 13,

Record, at 684-694) and a Rule 58/Rule 54(b) judgment thereon (Exhibit 14, Record, at

695-696), and Verhagen timely appealed on October 24,2017 (Record , at716-734\.

B, POINTS OF E R ON APPEAL

The lower court committed reversible error by granting summary judgment when

there were numerous independent material issues of fact in genuine dispute centered

around whether Chase and U.S. Bank had standing to file and to prosecute a

foreclosure action against Verhagen, because of the abundant and verified and

I
documented evidence in the record below that they never had ownership of the

underlying promissory note and entitlement to enforce the Verhagen loan.

The five material issues in genuine dispute were (1) the undated Riley blank

endorsement on the Verhagen Note being fraudulent, (2) the FDIC never even having a

Verhagen WaMu FA mortgage to assign to Chase, (3) WaMu FA not even being in

existence when the 2OO7 Verhagen Note was signed, (4) Caliber's employees'

Verification and Declaration not from custodians of record with personal knowledge, (4)

the Attorney Affirmation being based on double hearsay, and (5) Verhagen having
periodically requested and having thereafter received three copies of the promissory

note from Caliber, one at a time, with no Riley endorsement on any of the three, the last

two received after the foreclosure complaint was filed below, questioning when the Riley

bearer endorsement was actually rubber-stamped on the note or a copy of the note and

by whom.

Rule 28 Compliance: Verhagen objected (April 6,2017, Official Transcript, pages

3-6; Record at 220-235, opposing memorandum), whose objections were completely

ignored by the lower court (April 6, 2017 Official Transcript, pages 7-9; Exhib¡t 13,

Record, at 684-694, findings of fact and conclusions of law granting summary judgment

and a decree of foreclosure; and Exhibit 14, Record, at 695-696, a Rule 58/Rule 54(b)

judgment thereon, the Presiding Judge moreover adopting verbatim the above

referenced dispositive drafts proposed by U.S. Bank's counsel with no mention of

granting or denying any of Verhagen's objections).

10
 C. STANDARDS OF REVIEW

1. Standins Standards

"lt is well-settled that courts must determine as a threshold matter whether they

have jurisdiction to decide the issues presented. lf a party is found to lack standing, the

court is without subject matter jurisdiction to determine the action." Hawaii Medical

Association v. Hawai'i Medical Service Association,llS Hawaii 77,94,148 P.3d 1179,

I 196 (2006) (citations omitted).

The test for standing in this jurisdiction and throughout the entire United States

for whether a Plaintiff has standing is threefold: (1) whether the Plaintiff has suffered an

injury in fact, (2) whether the injury is fairly traceable to the defendant's actions, and (3)

whether the injury in fact is redressable by the court. Sierra Club v. Department of

Transportation, I 1 5 Haw ati 299, 31 9, 167 P.3d 292, 31 2 (2007 ).

Those standing issues are considered to be jurisdictional and the burden of proof

is on a foreclosing plaintiff to prove standing as a material element of its foreclosure

case, no longer considered to be just an affirmative defense; Bank of America. N.A. v.

Reves-Toledo, 139 Haw. 361, 390 P.3d 1248 (2017) (the published opinion in which is

set forth in Exhibit 15); U.S. Bank v. Mattos,140 Haw. 26, 398 P.3d 615 (2017) (the

published opinion in which is set forth in Exhibit 16).

When a factual determination is first required with respect to any of the elements

of standing, the Circuit Court must conduct an evidentiary hearing on that threshold
issue before even reaching the merits of the action. See, e.9., Martin v. Morgan Drive

Awav. |nc.,665 F.2d 598,602 (sth Cir. 1982) ("the trial court erred in not holding an

evidentiary hearing on the issue of [the plaintitf's] standing to prosecute this action");

11
Munoz-Mendoza v. Pierce,711 F.2d 421 (1st Cir. 1983) ("The court must resolve any

genuine disputed factual issue concerning standing, either through a pretrial evidentiary

proceeding or at trial itself').

As a matter of law, "the injury prong of the standing inquiry requires an assertion

of a judicially-cognizable injury, that is, harm to some legally-protected interest." Sierra

Club v. Department of Transportation, 115 Hawaii at 31 4, 167 P.3d at 321.

Such lack of standing is jurisdictional, and whenever discovered, it requires

immediate dismissal at any stage of a case, Fairlev v. Patterson, 493 F.2d 598, 603 (5th

Cir. 1974), Skolnick v. Board of Commissioners,43S F.2d 361, 363 (7th Cir. 1970); a

trial court has "an independent obligation" to examine its own subject matter jurisdiction,

including standing, and whenever it appears that there is a lack of standing, the court

must dismiss the action, Benavidez v. Eu, 34 F.3d 825, 830 (9th Cir. 1994), citing the

requirements of Rule 12(hX3) of the Federal Rules of Civil Procedure, adopted verbatim

as Rule 12(hX3) of the Hawaii Rules of Civil Procedure.

Such jurisdictional requirements always remain open for review and cannot be

waived, ln re Landmark Hotel & Casino. lnc., 78 B.R. 575,582 (9th Cir. BAP 1987); the

requirement of standing is best understood in that it "contemplates access to the courts

only for those litigants suffering an injury," Texas Association of Business v. Texas Air

Control Board, 852 S.W.2d 440,444 (Tex.1993).

Moreover, the Hawaii Supreme Court has thoroughly defined the applicable

standing doctrine in this State in such circumstances, having long acknowledged that:

12
 [S]tanding is that aspect of justiciability focusing on the party
seeking a forum rather than on the issue he or she wants
adjudicated." Sierra Club v. Hawai'i Tourism Auth., 100
Hawai'i 242, 271, 59 P.3d 877, 906 (2002) (brackets,
citation, and internal quotation marks omitted); Warth v.
Seldin, 422 U.5.490, 498, 95 S.Ct. 2197,45 L.Ed.2d 343
(1975) ("ln essence the question of standing is whether the
litigant is entitled to have the court decide the merits of the
dispute or of particular issues."). lt is well-settled that courts
must determine as a threshold matter whether they have
jurisdiction to decide the issues presented. Pub. Access
Shoreline Hawai'i v. Hawai'i Countv Plannino Comm'n, 79
Hawai'i 425, 431, 903 P.2d 1246, 1252 (1995). lf a party is
found to lack standing, the court is without subject matter
iurisdiction to determine the action. See Pele Defense Fund
v. Puna Geothermal Venture, 77 Hawai'¡ 64, 67, 881 P.2d
1210,1213 (1994).

2. Summarv Adiudication Standards

The policy of the law favors disposition of litigation on the merits. Webb v.

Harvev, 103 Haw.63,67,79 P.3d 681,685 (2003) (citing Compass Development. lnc.

v. Blevins, 10 Haw. App. 388, 402,876 P.2d 1335, 1341 (199a)); Rearden Familv Trust

v. Wisenbaker, 101 Haw . 237 ,255, 65 P.3d 1046 (2003\ (citing Oahu Plumbinq & Sheet

Metal. lnc. v. Constr.. lnc.. 60 Haw. 372,380,590 P.2d 570, 576 (1979) (noting

"the preference for giving parties an opportunity to litigate claims or defenses on the

merits").

Summary judgment should not be granted by a trial court unless the entire record

shows a right to judgment with such clarity as to leave no room for controversy and

establishes affirmatively that the opposing party cannot prevail under any

circumstances. Balt hazar v. Ve n Hawaii. lnc.. 109 Haw. 69, 123 P.3d 19a (2005);

Ralston v. Yim, 129 Haw. 46,292 P.3d 1276 (2013)

13
 On ruling on a motion for summary judgment, a Court must view the evidence

and all inferences that can be drawn therefrom in a manner most favorable to the

opposing party. Nuuanu Vallev Ass'n v. Citv and Countv of Honolulu, 119 Haw. 90, 96,

194 P.3d 531 , 537 (2008) (quoting Kahale v. Citv and Countv of Honolulu , 104 Haw.
341,344,90 P.3d 233,236 (2004)).

Summary judgment must be used by a Court with due regard for its purpose and

should be cautiously invoked so that no party will be improperly deprived of a trial of

disputed factual issues. Bhatka v. Countv of Maui, 109 Haw. 198, 1 24 P.3d 943 (2005).

ln summary judgment adjudications in this State, the moving party must establish

the absence of each and every eleme nt of the claim for relief. GECC Financial Corp. v.

Jaffarian, 79 Haw. 516, 521-22,904 P.2d 530 (App. 1995), modified on other grounds,

80 Haw. 118, 905 P.2d 624 (1995).

ln such summary adjudications, a Court may not under any circumstances resort

to speculation beyond inferences of which the evidence is reasonably susceptible.

Waimea Falls Park. lnc. v. Brown, 6 Haw. App. 83, 97 ,712 P.2d 1 136, 1146 (1985).

Moreover, in summary adjudications, judgment for the moving party is universally

considered to be a drastic remedy, depriving a party of the right to a trial on the merits

of the dispute, and therefore must always only be cautiously invoked. lndvMac Bank v.

Miquel, 117 Haw.506, 519, 184 P.3d 821, 834 (App.2008) (citing Ocwen Fed. Bank.

FSB v. Russell, 99 Haw. 1 73, 182, 53 P.3d 312, 321 (App. 2OO2))

The same strict evidentiary burdens imposed upon a party moving for summary

judgment are not imposed upon those opposing summary judgment. ln Miller v. Manuel,

14
9 Haw. App.56,66,828 P.2d286,292(1991), cert. denied,72 Haw.618,841 P.2d

1075 (1992), infra.

"[A]ny doubt concerning the propriety of granting the motion ffor summary

judgmentl should be resolved in favor of the non-moving party." IndvMac Bank, 117

Haw. at 519, 184 P.3d at 834 (quoting GECC Financial Corp. v. Jaffarian, 79 Haw.516,

521 , 904 P.2d 530, 535 (App. 1995), modified on other grounds, S0 Haw. 1 18, 905 P.2d

624 (1ee5)).

3. Admissibil itv Standards

ln Millerv. Manuel, g Haw. App.56,66,828 P.2d286,292(1991), cert. denied,

72Haw.618, 841 P.2d 1075 (1992), this Court explained:

Courts will treat the documents submitted in support of a motion for

summary judgment differently from those in opposition. Although
they carefully scrutinize the materials submitted by the moving party
to ensure compliance with the requirements of Rule 56(e), HRCP
(1990), the courts are more indulgent towards the materials
submitted by the non-moving party. This is because of the drastic
nature of summary judgment proceedings, which should not become
a substitute for existing methods of determining factual issues.

Regarding the use of computer screen shots, especially in opposing summary

judgment motions, they are admissible as evidence throughout State and Federal

Courts in the United States if sworn to and they accurately reflect the content and image

of downloaded page printouts personally secured from Declarant's office computer. See

Declaration of Gary Victor Dubin (Record, at237-238).

Courts allow screenshots to be authenticated by accurate eye-witness

representations of what was downloaded, Ksolo. lnc. v. Catona, 2008 WL 4906115

(c.D. Cal.).

15
 A proper foundation is laid for screen shots where there is an authenticating

declaration attesting to its origin based on personal knowledge stating that the printout

accurately reflects content and image of the page on the computer from which the

printout was made, ToytrackerzLLC v. Koehler, 2008 WL 2591329 (D. Kan.).

With regard to computer printouts, only a prima facre showing of authenticity is

required by sufficient proof that a reasonable trier of fact could find in favor of
authenticity or identification, whereas any question as to the accuracy of the printouts

would affect only the weight of the printouts and not their admissibility, U.S. v. Tank, 200

F.3d 627 (9th Cir. 2000).

Hawaii Evidence Rule 901(bX4) permits authentication of electronic

communications based on content and circumstances, the burden of proof for such

authentication being slight; see Griffin v. Marvland, 192 Md. App. 518, 995 A.2d 791

(2010).

D. LEGAL ARGUMENT REQUIRING REVERSAL

This Court need not spend any more of its valuable time deciding whether to

reverse the summary judgment below, as the outcome of this Appeal is already

controlled by at least five prominent Hawaii appellate cases.

re!, the decision of the Hawaii Supreme Court in Bank of America. N.A. v.

Reves-Toledo (Exhibit 15), makes summary judgment unavailable where material

issues exist as to whether a foreclosing plaintiff owned and possessed the note when it

first filed for foreclosure or was a stranger to the proceedings (the standing-at-inception

rule).

16
 The Toledo decision, on the uncontested record of this Appeal, clearly renders

the lower court's denial of Verhagen's standing arguments grounds alone for summary

reversal in the factual circumstances of this Appeal, consistent with the Hawaii Supreme

Court's reasoning in Toledo, 139 Haw. aL370-371:

Although Bank of America produced evidence that it possessed the

blank-indorsed Note at the time it sought summary judgment, a
material question of fact exists as to whether Bank of
America possessed the Note, or was otherwise a holder, at the time
it brought the foreclosure action. Indeed, the copy of the Note
attached to the summary judgment motion does not reflect the date
of the blank indorsement, and the Egan Declaration, which was
made after the filing of the complaint in this case, does not indicate
when the indorsement occurred. Further, there is no additional
evidence in the record regarding the date of the indorsements or
whether Bank of America possessed the Note at the time of the filing
of the complaint. Thus, there is a material question of fact as to
whether Bank of America was the holder of the Note at the time the
foreclosure proceedings were commenced, which in turn raises the
issue of whether Bank of America had standing to foreclose on the
Property at the time it brought the foreclosure action.

Both the ICA and the circuit court appear to have determined that
Bank of America was entitled to enforce the Note as the holder at the
time Bank of America moved for summary judgment. As the moving
party, it was Bank of America's burden to demonstrate there was no
genuine issue as to any material fact with respect to the essential
elements of a foreclosure action. See French v. Haw. Pizza Hut, lnc.,
105 Haw. 462,470,99 P.3d 1046, 1054 (2004). Here, there is no
evidence in the record, either through the Note itself, the Egan
Declaration, or the other documents attached to the motion for
summary judgment, showing that the blank indorsement on the Note
occurred prior to the initiation of the suit. Consequently, there is a
genuine issue as to whether Bank of America was entitled to
foreclose when it commenced the proceeding. Thus, viewing the
facts and inferences in the light most favorable to Homeowner, there
is a genuine issue of material fact as to whether Bank of America
held the Note at the time it filed the complaint. Accordingly, Bank of
America failed to meet its burden of demonstrating that it was
entitled to judgment as a matter of law, and the circuit court erred in
granting Bank of America's motion for summary judgment.

The ability and the evidentiary right of borrowers to challenge a foreclosing

mortgagee's standing at the time a foreclosure complaint is first filed (and in this case

17
thereafter) is therefore beyond question, and has been so in almost every other
jurisdiction in the United States, even before Toledo was decided.

To othenruise allow a stranger to the loan to foreclose would also be

unconstitutional state action and a clear violation of a borrower's state and federal due

process and equal protect rights.

District Judge Seabright, for example, in Deutsche Bank National Trust Companv

v. Williams,2012 WL 1081174 (D. Haw.), decided five years before Toledo, explained

why and when a borrower has a legal right to assert a challenge to a purported

foreclosing mortgagee's standing, even in the context of a borrower's motion to dismiss

an entire foreclosure action, which is a procedural context even much more demanding

of a borrower than here:

The issue of whether Plaintiff was validly assigned the Mortgage and
Note is inextricably intertwined with the merits of the Plaintiffs claims
seeking to foreclose on the subject property - that is, Plaintiff must
prove that it was assigned the Mortgage and Note before it has the
ability to foreclose. As a result, the court determines whether the
evidence presented, viewed in a light most favorable to Plaintiff,
establishes a genuine issue of material fact that Plaintiff was validly
assigned the Mortgage and Note. . . .
ln this action, the proverbial shoe is on the other foot - Deutsche
Bank asserts atfirmative claims against the Williamses seeking to
enforce the Mortgage and Note, and therefore must establish its
legal right (r.e., standing) to do so. See, e.9., lndyMac v. Miguel, 117
Haw. 506, 513, 184 P.3d 821 , 828 (Haw. App. 2008) (explaining that
for standihg, a mortgagee must have "a sufficient interest in the
Mortgage to have suffered an injury from [the mortgagor's] default."
As explained above, Deutsche Bank has failed to do so. The court
therefore GRANTS the Williamses' Motion to Dismiss.

Second, the decision of this Court in U.S. Bank N.A. v. Ramos-Newton, 138

Haw. 143,377 P.3d 1061 (2016), also makes summary judgment on these facts

unavailable here.

18
 Ramos-Newton requires reversal, based upon the absence of an adequate

Attorneys Affirmation, without which summary judgment cannot be granted.

For, the moving Declaration of Ms. Salyers here, supra, as well as the

Verification of Ms. Jackson, both relied upon by U.S. Bank's counsel, as was the

situation in Newton, does not even make any claim to having personally reviewed all of

the relevant and material loan documents U.S. Bank was relying on, nor to confirming

their factual accuracy as to all of the facts relating to the 2007 Verhagen mortgage prior

to the Verhagen mortgage having been supposedly acquired by U.S. Bank in 2015, the

limit of their personal knowledge going fonryard, which was eight years after the

Verhagen mortgage was first made and seven years after lhe FDIC in 2008 purportedly

acquired the Verhagen mortgage and one year after Chase purportedly acquired the

Verhagen mortgage from the FDIC, exactly the type of evidentiary defect that this Court

was criticizing in Newton:

This attorney affirmation fails to state that a representative of USBNA

informed counsel that he/she "personally reviewed plaintiff's
documents and records relating to this case for factual accuracy; and
(b) confirmed the factual accuracy of the allegations set forth in the
Complaint.' HRS S 667-17. As this court has previously noted, "[t]he
intent of [the statute's] attorney affirmation requirements was to
ensure that attorneys investigate foreclosure materials for
themselves and authenticate documents they represent to the
courts."Bank of America, N.A. v. Lanzi, 134 Haw. 116, 334 P.3d
779,2014 Haw. App. LEXIS 427, *3, 2014 WL 4648169, at 1
(Hawai'i App. Sept. 17,2014) (SDO). Without these provisions, an
affirmation does not further the intent of the statute. ld. Here, the
affirmation fails to provide the critical assurance and authentication.
Thus, we conclude that the affirmation does not substantially
conform with HRS S 667-17. As the affirmation is deficient, USBNA
has not shown that it is entitled to summary judgment. Therefore, we
conclude that the Circuit Court erred in granting summary judgment
to USBNA in this case.

19
 fþ!¡g!, the decision of the Hawaii Supreme Court in Arakaki v. CD-Olanani

Corp., 110 Haw. 1,8-7,129 P.3d 504 (2006) makes summary judgment unavailable in

the absence of a presiding judge having reviewed all of the evidence in the record of a

case even where, unlike here, there is not even any opposition filed objecting to

summary judgment

Absent a local rule to the contrary, a party need not affirmatively

oppose a motion for summary judgment that fails to show prima
facie (1) that the undisputed facts foreclose "genuine issue(s) as to
any material fact(s)) and [(2)] that the moving party is entitled to
judgment as a matter of law." A non-movant's failure to oppose the
facts averred by the movant may constitute admission of those
facts, Ftynn v. Sandahl, 58 F.3d 283, 288 (7th Cir. 1995); Saucier v.
Sfafe lax Assessor, 2000 ME 8, 745 A.2d 972,974 (Me. 2000), but
those facts must nonetheless establish that the movant is entitled to
relief. See Adickes v. S. H. Kress & Co.,398 U.S. 144,157, 90 S. Ct.
1598, 26 L. Ed. 2d 142 (1970); Amaker v. Foley, 274 F.3d 677, 680-
81 (2d Cir. 2001) ("Even when a nonmoving party chooses the
perilous path of failing to submit a response ., the [trial] court may
not grant the motion ffor summary judgmentl without first examining
the moving party's submission to determine if it has met its burden of
demonstrating that no material issue of fact remains for trial."); Peter
v. Lincoln Tech. lnst.,255 F. Supp. 2d 417,426 (E.D.Pa.
2OO2); Andrews v. Tex. Park & Wildlife Dep't, 196 F. Supp. 2d 424,
426 (E.D. Tex. 2001); [***17] San Juan Sfar Co. v. Casiano
Communications, lnc., 176 F. Supp. 2d 110, 112 (D.P.R.
2OO1); Greater Ariz. Sav. & Loan Assh v. Tang, 97 Ariz. 325, 400
P.2d 121, 123 (Ariz. 1965) ("lf the papers of the moving party fail to
show that he is entitled to judgment as a matter of law, the opposing
party need not file an opposing affidavit."); E O. Dorsch Elec. Co. v.
Plaza Constr. Co.,413 S.W.2d 167, 170 (Mo. 1967) ("The failure of
[the] plaintiff to . . . present any proof in respect to the motion . . .
forces us to accept . . . that there is no factual issue concerning the
terms of the contracts attached to the motion . . . . However, this . . .
does not necessarily require [summary judgment]" where, as here,
the "moving party may not have shown by'unassailable proof' that
as a matter of law it was entitled thereto."'); Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure$ 1190 & n.17 (3d
ed. 2004 & Supp. 2005) (citing Harriman v. Liberian Mar. Corp., 204
F. Supp. 205, 206 (D. Mass. 1962) ("'lt is elementary that in either
State or Federal practice a motion is not automatically allowed by the

20
 mere filing of an 'assent,' or a notation of 'no opposition' thereto, and
it is a matter of daily experience that Courts frequently deny motions
which have been assented to.")); cf. Perez v. Tomberlin, 86 Ariz. 66,
340 P.2d 982, 985 (Ariz. 1959) ("The supporting affidavits . . . by [the
defendantsl . . . were clearly strong enough to cast grave doubts
upon the assertions found in [the] plaintiff's . . complaint. lt was
therefore necessary for [the plaintiff] to controvert this opposing
evidence in order to preclude [summary judgment in the defendants'
favor].").

þrth, the decision of the Hawaii Supreme Court in U.S. Bank v. Mattos, 140

Haw. 26, 33,398 P.3d 615 (2017), reversing this Court in precisely the same situation

as here where the testifying foreclosing plaintiffs witnesses had no personal firsthand

knowledge of prior loan servicers' recordkeeping and were not custodians of record

capable of testifying as to the authenticity of those records:

Work's declaration does not indicate that U.S. Bank's Records were
received by Ocwen and incorporated into the Ocwen Records.
Work's declaration also does not establish that Work is familiar with
the record-keeping system of U.S. Bank. Rather, Work merely states
that he has access to and is familiar with U.S. Bank's records. Thus
Work's declaration does not satisfy foundational requirements to
make him a "qualified witness" for U.S. Bank's records pursuant to
Fitzwater.

Ei¡!h, the decision of the Hawaii Supreme Court last month in Wells Faroo Bank

v. Behrendt,2018 Haw. LEXIS 57, *20-*21, the published opinion in which is set forth in

Exhibit 17, reversing this Court in part based upon virtually identical hearsay errors as

found in the record of this Appeal, namely Ms. Salyers and Ms. Jackson not being

custodians of records and claiming only to have access to the present servicer's records

only:

21
 Here, as in Mattos, the Lewis Declaration does not establish that the
loan documents were received by Ocwen and then incorporated into
Ocwen's records. ln addition, although Lewis averred that Ocwen's
records relating to the loan were made and maintained in the regular
course of Ocwen's business, Lewis asserted only that she had
"access to and [was] familiar" with Wells Fargo's records and
documents relat ing to this case. (Emphasis added.) The Lewis
Declaration does not establish that Lewis was familiar with Wells
Fargo's record-keepinq svstem. lt also makes no assertions as to
Lewis's familiarity with the record-keeping systems of Funding Group
or Option One, which first created the Note and allonges. Thus, the
Lewis Declaration satisfies the foundational requirements to make
Lewis a qualified witness only with respect to
Ocwen's oriqinal records about the loan and not any records of Wells
Fargo or the loan documents themselves. See Mattos. 140 Hawai'i at
32-33. 398 P.3d at 621 -22.

Sixth, additionally the lower court entered findings of fact that ignored

Verhagen's objections entirely. HRCP Rule 52(a), on the other hand, requires that

findings of fact be "clear, specific, and complete," and "sufficiently comprehensive and

pertinent to the issues to form a basis for the decision and whether they are supported

bythe evidence." Shannon v. Murphv,49 Haw.661,668, 426P.2d 816 (1967).

Hawaii Circuit Courts, moreover, are required to make findings of fact in

foreclosure decrees as they are injunctive in nature that are "definite" and "pertinent,"

and "they must include as much of the subsidiary facts as are necessary to disclose to

this court [on appeal] the steps by which the trial court reached his ultimate conclusion

on each factual issue." Lopez v. Tavares, 51 Haw. 94,97,451 P.2d 804, rehearing

denied,51 Haw. 141 , 451 P.2d 804 (1969).

"A bare statement of ultimate conclusion" is insufficient under Hawaii case law to

support a judgment. Scott v. Contractors License Board ,2 Haw. App. 92, 94,626 P.2d

199 (1981); such egregious an error requires our appellate courts to normally vacate

22
judgments and to remand for mandatory compliance with Rule 52(a) on that ground

alone. Ventura v. Grace, 3 Haw. App. 371 ,376,650 P.2d 620 (1982).

Moreover, "adopted findings" - when circuit courts merely swallow whole

proposed findings prepared by prevailing parties as here -- have always been subject to

great mistrust, United States v. El Paso Natural Gas Co .,376 U.S. 651, 656-657 and fn.

4 (1964) (rubber stamping adopted findings "has been denounced by every court of
appeals save one" as "an abandonment of the duty and trust" placed in judges).

Such mechanically "adopted findings" are furthermore considered contrary to

sound judicial policy, causing disrespect for the judiciary, Photo Electronics Corp. v.

Enqland,581 F.2d 772,776-777 (9th Cir. 1978) ("wholesale adoption of the prevailing

party's proposed findings complicates the problems of appellate review. . . . [t raises]

the possibility that there was insufficient independent evaluation of the evidence and

may cause the losing party to believe that his position has not been given the

consideration it deserves. These concerns have caused us to call for more careful

scrutiny of adopted findings We scrutinize adopted findings by conducting a

painstaking review of the lower court proceedings and the evidence").

E. GONCLUSION

For each and for all of the above reasons, this Appeal should be expedited, and

the decisions challenged below should be summarily reversed.

23
DATED: Honolulu, Hawaii; April 1 1,2018.

GARY VICT BIN

FREDERICK J. ARENSMEYER
Attorneys for Defendants-Appellants
Patrick Lowell Verhagen and
Patrick Lowell Verhagen, Trustee
of the Patrick Lowell Verhagen
Revocable Trust Dated October 29, 1999

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STATEMENT OF LATED CASES

None

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