Collins v. The Ass'n of Apartment Owners of Kemoo by the Lake

• Docket Number: CAAP-18-0000850
• Decision Date: 27 June 2024
• Parties: GABI K. COLLINS, Plaintiff-Appellant, v. THE ASSOCIATION OF APARTMENT OWNERS OF KEMOO BY THE LAKE; EKIMOTO & MORRIS, LLLC, Defendants-Appellees, and JOHN DOES 1-100; JANE DOES 1-100; DOE PARTNERSHIPS 1-100; and DOE CORPORATIONS 1-100, Defendants
• Court: Hawaii Court of Appeals

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GABI K. COLLINS, Plaintiff-Appellant, v. THE ASSOCIATION OF APARTMENT OWNERS OF KEMOO BY THE LAKE; EKIMOTO & MORRIS, LLLC, Defendants-Appellees, and JOHN DOES 1-100; JANE DOES 1-100; DOE PARTNERSHIPS 1-100; and DOE CORPORATIONS 1-100, Defendants

No. CAAP-18-0000850

Intermediate Court of Appeals of Hawaii

June 27, 2024

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT(CIVILNO 13-1-2513-09 VLC)

Gabi K. Collins Self Represented Plaintiff- Appellant.

James Shin and Jodie D. Roeca(Roeca Luria Shin LLP) for Defendants-Appellees.

Leonard, Acting C.J., and Wadsworth and Nakasone, JJ.

SUMMARY DISPOSITION ORDER

Self-represented Plaintiff-AppellantGabi Kim Collins(Collins) appeals from the July 2, 2018 Final Judgment as to All Claims and Parties(Judgment), entered in favor of Defendants-Appellees The Association of Apartment Owners of Kemoo by the Lake (the AOAO) and Ekimoto & Morris, LLLC (E&M)(collectively Defendants) by the Circuit Court of the First Circuit (Circuit Court).Collins also appears to challenge the Circuit Court's:

(1)July 20, 2016"Order Granting . . . [E&M's]Motion to Dismiss, or in the Alternative, Motion for Summary Judgment on . . . Collins'[s] Complaint Filed on September 7, 2013(Motion Filed November 23, 2015)"(Order Granting E&M's MTD/MSJ);

(2)July 20, 2016"Order Denying . . . Collins'[s]Motion to Vacate and Set Aside Wrongful Non-judicial Foreclosure Sale Under [Hawai'i Rules of Civil Procedure (HRCP)]Rule 60(b)(3), (4), and (6)(Filed July 21, 2015)"(Order Denying Motion to Vacate Foreclosure);

(3)March 19, 2018"Order Granting in Part and Denying in Part [Collins's]Motion to Vacate and Set Aside Orders Entered July 20, 2016, Under HRCP Rule 60(b)(3), (4), and (6), or in the Alternative, Revise Decision UnderRule 54(b)(Non-hearing Motion filed July 20, 2017)"(Order on Motion to VacateJuly 20, 2016 Orders); and

(4)July 2, 2018"Order Granting [AOAO's]Motion for Summary Judgment, Filed on May 16, 2018"(Order Granting AOAO's MSJ).^[1]

For the reasons explained below, we affirm in part, vacate in part, and remand.

I.Background

On September 17, 2013, Collins filed a 14-count Complaint against the AOAO and its counsel E&M, an ex parte motion for temporary restraining order(TRO), and a motion for preliminary injunction to prevent Defendants from proceeding with a pending nonjudicial foreclosure of the AOAO's lien on Collins's unit (Unit) in the Kemo'o by the Lake condominium project.Collins alleged, among other things, that in 2009, she began to withhold payment of monthly assessments to the AOAO, partially due to the AOAO's failure to address a pest infestation problem and partially due to Collins's financial inability to pay the monthly assessments because of the economic downturn.The AOAO's attempts to collect the past due amounts owed by Collins allegedly led to a "deficient nonjudicial foreclosure" process and related "unfair and deceptive collection activities" by Defendants.The Complaint asserted the following claims: (1) breach of contract against the AOAO (Count I); (2) breach of fiduciary duty against the AOAO (Count II); (3) negligence, gross negligence and violation of Hawaii Revised Statutes (HRS) §§ 514Aand514B against the AOAO (Count III); breach of the covenant of good faith and fair dealing against the AOAO (Count IV); violation of HRS § 667 against the AOAO (Count V); violation of HRS § 480-2 against the AOAO and E&M (Count VI); violation of HRS § 480D-1 against E&M (Count VII); violation of the Federal Debt Collection Practices Act (FDCPA) against E&M (Count VIII); and civil conspiracy/joint and several liabilities against the AOAO and E&M (Count IX).

The Circuit Court conducted a two-day evidentiary hearing on the motion for preliminary injunction.On October 30, 2013, the court entered its order denying the motion (Order Denying Preliminary Injunction), which included extensive findings of fact and conclusions of law, dissolved the previously entered TRO, and allowed the scheduled non-judicial foreclosure sale of the Unit to go forward.^[2]

A few hours after the Order Denying Preliminary Injunction was filed, Collins filed a voluntary Chapter 13 petition in the United States Bankruptcy Court for the District of Hawaii.After Collins failed to offer a viable Chapter 13 plan, on August 29, 2014, the bankruptcy court dismissed the Chapter 13 case.On November 7, 2014, a public sale of the Unit was held, and the Unit was sold, subject to the mortgage and the AOAO's lien, to the AOAO.

On July 21, 2015, Collins filed a motion to vacate and set aside the foreclosure sale, pursuant to HRCP Rule 60(b)(3),(4), and (6)(Motion to Vacate Foreclosure), making many of the same allegations and arguments that were resolved in the Order Denying Preliminary Injunction.E&M opposed the motion, arguing that it had followed the relevant procedures required by then-applicable HRS §§ 667-22, -96(d), and -92(f)(3), and the AOAO later filed a supplemental brief opposing the motion.Following hearings on December 8, 2015, and February 16, 2016, the Circuit Court denied the motion via a May 31, 2016 minute order and the July 20, 2016 Order Denying Motion to Vacate Foreclosure.

Meanwhile, on November 23, 2015, E&M filed a motion to dismiss the Complaint or, alternatively, for summary judgment (E&M's MTD/MSJ).The AOAO joined the motion and Collins opposed it.Following a February 16, 2016 hearing, the Circuit Court granted the motion via a May 31, 2016 minute order and the July 20, 2016 Order Granting E&M's MTD/MSJ.

On July 29, 2016, Collins filed a motion for reconsideration, which was opposed on August 9, 2016, and denied on September 30, 2016.

On July 20, 2017, Collins filed a motion to vacate and set aside the orders entered on July 20, 2016, which was opposed on August 1 and 2, 2017, and granted in part and denied in part via the March 19, 2018 Order on Motion to VacateJuly 20, 2016 Orders.

On March 21, 2018, Collins filed a motion for equitable estoppel pertaining to the July 20, 2017 motion to vacate, which was opposed on March 29 and April 2, 2018, and denied on June 29, 2018.

On May 16, 2018, the AOAO filed a motion for summary judgment.Following a June 5, 2018 hearing, the Circuit Court granted the motion via the July 2, 2018 Order Granting AOAO's MSJ.

On July 2, 2018, the Judgment was entered.On July 12, 2018, Collins filed a motion for reconsideration, styled as a motion for "new trial," which was opposed by the AOAO on July 24, 2018, and denied on October 2, 2018.

II.Discussion

On appeal, Collins contends that the Circuit Court erred by: (1) dismissing her claims against E&M with prejudice based on a finding that E&M was not a "debt collector" for purposes of HRS §§ 480-2 and 480D-1 and the FDCPA;(2) denying Collins's Motion to Vacate Foreclosure, where the AOAO violated HRS Chapter 667, Part VI;^[3](3) entering the Judgment and finding that all claims were resolved, where the Circuit Court"missed" Counts I-V of the Complaint; (4) granting summary judgment in favor of the AOAO; and (5)"applying the wrong pleading standard" in dismissing all claims against E&M with prejudice and granting summary judgment in favor of the AOAO.Collins also contends that one of her former attorneys, James Porter DeVries(DeVries) violated Rules 1.16,1.17and4.1 of the Hawai'i Rules of Professional Conduct(HRPC).^[4]

We address Collins's contentions as they relate to her claims against the AOAO first.We then turn to her contentions as they relate to E&M and DeVries.

A.Claims Against the AOAO

Collins's second and fourth contentions (supra) are dispositive of her claim that the AOAO violated HRS chapter 667 in conducting the nonjudicial foreclosure of its lien on the Unit (Count V).Collins argues in part that the nonjudicial foreclosure was invalid under Sakal v. Ass'n of Apartment Owners of Hawaiian Monarch, 143 Hawai'i 219, 426 P.3d 443(App.2018), aff'd in part, vacated in part, remanded, 148 Hawai'i 1, 466 P.3d 399(2020), because there was no contract authorizing the Association's power of sale.In Sakal, this court held that in order for an association to avail itself of the nonjudicial power of sale foreclosure procedures set forth in HRS chapter 667, a power of sale in its favor must have existed in association bylaws or in another enforceable agreement with unit owners.143 Hawai'i at 220-21, 426 P.3d at 444-45;seeMalabe v. Ass'n of Apartment Owners of Exec. Ctr., 147 Hawai'i 330, 339, 465 P.3d 777, 786(2020).

In response, E&M argues in part that the AOAO documents differ from those in Sakal.E&M contends that the Declaration of Horizontal Property Regime of Kemoo by the Lake (Declaration) explicitly provides for foreclosure via the Horizontal Property Act, HRS chapter 514A, and the By-Laws of the Association of Apartment Owners of Kemoo by the Lake (Bylaws) discuss the costs of collecting delinquent assessments and "foreclosing its lien therefor."

Similar arguments were rejected in Sakal.See143 Hawai'i at 229-30, 426 P.3d at 453-54.Neither the Declaration nor the Bylaws unambiguously gave the AOAO a power of sale over its units.The AOAO's nonjudicial foreclosure of Collins's Unit was not authorized by an enforceable agreement with unit owners.

E&M further argues that Act 282 of 2019(Act 282)"confirms the legislative intent that condominium associations should be able to use nonjudicial foreclosure to collect delinquencies regardless of the presence or absence of power of sale language in an association's governing documents."2019 Haw. Sess. LawsAct 282, § 1 at 780.In other words, E&M argues that under Act 282, the legislature"clarified...