Oral Argument Before the Hawaii Supreme Court–No. SCAP-17-0000035
No. SCAP-17-0000035, Thursday, March 15, 2018, 8:45 a.m.
The oral argument that was scheduled for 3/15/18 in the above-referenced case has been postponed.
TONY RADMILOVICH and ZDENKA RADMILOVICH, Plaintiffs-Appellants, vs. DANIEL JOHN FRACK and REBECCA SUE FRACK, Defendants-Appellees, and THE BANK OF NEW YORK MELLO; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; and DOE DEFENDANTS 1-50, Defendants-Appellees.
The above-captioned case has been set for argument on the merits at:
Supreme Court Courtroom
Aliʻiolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813
Attorneys for Plaintiffs-Appellants Tony Radmilovich and Zdenka Radmilovich:
James J. Bickerton, Stanley H. Roehrig, Bridget G. Morgan, John F. Perkin, and Van-Alan H. Shima
Attorneys for Defendants-Appellees Daniel John Frack and Rebecca Sue Frack:
Michael C. Bird and Summer H. Kaiawe
Attorneys for Defendant-Appellee Bank of New York Mellon:
Patricia J. McHenry and Allison Mizuo Lee
Attorney for Defendant-Appellee Mortgage Electronic Registration Systems, Inc.:
Charles A. Price
NOTE: Order granting Application for Transfer, filed 10/20/17.
COURT: MER, CJ; PAN, SSM, RWP, and MDW, JJ.
Appellants Tony and Zdenka Radmilovich lost their home in a non-judicial foreclosure, which was commenced in 2009. Mortgagee Bank of New York (“BONY”) was the purchaser at the March 12, 2010 public auction, and title was conveyed to BONY through a mortgagee’s deed on May 26, 2010. BONY then sold the home to Daniel and Rebecca Frack, who currently reside there. On May 12, 2016, the Radmiloviches filed a complaint against BONY, the Fracks, and MERS (the Fracks’ mortgagee) for wrongful foreclosure, on the basis that BONY failed to post a notice of the sale of the property before the proposed auction date, then postponed the sale without publication of the new auction date. The Radmiloviches sought money damages as well as an order voiding the foreclosure sale and quieting title in their favor. BONY filed a motion to dismiss, arguing that the Radmiloviches’ claims were time-barred whether under a two-year or six-year statute of limitations. BONY asserts that any cause of action accrued as of the March 12, 2010 public auction, and the complaint was not filed until more than six years later. The Fracks filed their own motion to dismiss, asserting they are bona fide purchasers for value. MERS filed a substantive joinder to the Fracks’ motion. The circuit court granted the respective motions to dismiss, ruling that the Radmiloviches’ claims were time-barred under either a two-year or six-year statute of limitations, which began to run as of the date of the public auction, and, in any event, that the Fracks were bona fide purchasers for value.
The Hawaii Supreme Court accepted transfer of this appeal from the Intermediate Court of Appeals. The issues are as follows: (1) What is the limitations period for the claims raised in this case (wrongful foreclosure and quiet title and ejectment): two years, six years, or twenty years, as alleged in the alternative by the Radmiloviches? (2) When does the limitations period begin to run: upon the date of the public auction, the date the bank records its foreclosure affidavit, the date the bank deeds the property to itself, the date the bank sells the property to a third party, or the date when the foreclosed-upon mortgagors lose possession of the property? (3) Were the Fracks bona fide purchasers for value, or were they on notice that BONY did not comply with the notice requirements in the non-judicial foreclosure statute? And did the Radmiloviches’ complaint establish the Fracks’ status as bona fide purchasers for value such that dismissal of the complaint was proper (i.e., who has the burden)? (4) Does improper notice of the public auction make the sale of the property void or voidable?