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Oral Argument Before the Hawaii Supreme Court
No. SCWC-11-0000697, Thursday, May 21, 2015, 11:15 a.m.
LOUIS ROBERT SANTIAGO, as Trustee of the Louis Robert Santiago Revocable Living Trust dated November 17, 1999, as amended, and YONG HWAN SANTIAGO, as Trustee of the Yong Shimabukuro Revocable Living Trust dated July 25, 1996, as amended, Petitioners/Plaintiffs-Appellants/Cross-Appellees, vs. RUTH TANAKA, Respondent/Defendant-Appellee/Cross-Appellant.
The above-captioned case has been set for argument on the merits at:
Supreme Court Courtroom
Ali`iolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813
Attorneys for Petitioners:
Gary Victor Dubin, Frederick J. Arensmeyer, and Lila C.A. King
Attorney for Respondent:
NOTE: Order accepting Application for Writ of Certiorari, filed 03/17/15.
COURT: MER, CJ; PAN, SSM, RWP, and MDW, JJ.
Following petitioners Louis Robert Santiago and Yong Hwan Santiago’s (the Santiagos) partial seller-financed purchase of commercial property on Kaua`i from respondent Ruth Tanaka (Tanaka), the Santiagos filed suit against Tanaka, alleging, inter alia, that she failed to disclose and misrepresented material facts regarding the property. Sometime thereafter, the Santiagos made a late mortgage payment, and Tanaka initiated nonjudicial foreclosure proceedings and asserted numerous counterclaims against the Santiagos relating to their alleged default. At the conclusion of a bench trial, the Circuit Court of the Fifth Circuit (circuit court) issued its Findings of Fact, Conclusions of Law, and Order.
In regards to the Santiagos nondisclosure and misrepresentation claims, the circuit court found that Tanaka provided appropriate disclosures of all material facts and that the Santiagos failed to exercise due diligence during their purchase of the property; thus, the court concluded that the Santiagos failed to prove their claim for nondisclosure or misrepresentation. With respect to Tanaka’s counterclaims, the court concluded that the then-in-effect nonjudicial foreclosure statute, HRS § 667-5, did not require that the mortgage contain any particular words and that the mortgage agreement provided Tanaka with the ability to foreclose on the property by power of sale. The court further concluded that the Santiagos did not have the right to cure their default under Hawai`i law or the terms of the mortgage agreement. Accordingly, the court ordered judgment entered in favor of Tanaka and against the Santiagos, awarded Tanaka attorneys’ fees, and issued a writ of ejectment against the Santiagos.
The Santiagos filed a notice of appeal, and the Intermediate Court of Appeals’ (ICA) subsequently affirmed the circuit court’s judgment in its entirety in a memorandum opinion issued on November 28, 2014.
On February 5, 2015, the Santiagos filed an Application for Writ of Certiorari (Application) seeking review of the ICA’s Judgment on Appeal, in which the Santiagos presented the following questions: 1) whether the ICA erred in concluding that Tanaka disclosed, and did not misrepresent, material facts during the sale of the property; 2) whether the ICA erred by finding that the mortgage contained a power of sale as required to conduct a nonjudicial foreclosure under HRS § 667-5; and 3) whether the ICA erred by affirming the circuit court’s judgment that allegedly resulted in a forfeiture of both the property and all monies paid under the mortgage.