Galima v. Ass'n of Apartment Owners of Palm Court
| Decision Date | 31 December 2018 |
| Docket Number | CIVIL 16-00023 LEK-KSC |
| Parties | RUDY AKONI GALIMA and ROXANA BEATRIZ GALIMA, Plaintiffs, v. ASSOCIATION OF APARTMENT OWNERS OF PALM COURT, by and through its Board of Directors; BRYSON CHOW, Defendants. |
| Court | U.S. District Court — District of Hawaii |
Before the Court are: Plaintiffs Rudy Akoni Galima and Roxana Beatriz Galima's ("Plaintiffs") Motion for Partial Summary Judgment on Counts I and II (Wrongful Foreclosure and Violation of the Fair Debt Collection Practices Act) ("Plaintiffs' Motion"), filed on January 19, 2018; Defendant Association of Apartment Owners of Palm Court's ("AOAO")1 Motion for Summary Judgment ("AOAO Motion"), filed on January 24, 2018; and Defendant Bryson Chow's ("Chow") Motion for Summary Judgment Regarding the Fair Debt Collection Practices Claim in Count II of the Third Amended Complaint [Dkt. 88] ("Chow Motion"), also filed on January 24, 2018. [Dkt. nos. 115, 117, 118.]
The Motions are hereby granted in part and denied in part, for the reasons set forth below. In summary, this case will proceed to trial on: 1) the AOAO's defenses as to Count I; 2) if Plaintiffs prevail on the AOAO's asserted defenses to Count I, Plaintiffs' damages arising from the wrongful foreclosure; and 3) all of the parties' asserted issues related to Counts II and V, except for Plaintiffs' argument that the statute of limitations for each of those claims was tolled based on fraudulent concealment.
This matter arises out of the purchase and foreclosure of a condominium unit. Plaintiffs originally filed this action in the State of Hawai`i Circuit Court of the First Circuit ("state court"). The AOAO then timely removed to federal district court based on federal question jurisdiction. [Notice of Removal, filed 1/22/16 (dkt. no. 1), at ¶ 3.] The operative pleading at this time is the Third Amended Complaint, which was filed on May 22, 2017. [Dkt. no. 88.] It pleads the following claims: wrongful foreclosure against the AOAO ("Count I"); violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692(f), et seq., against Chow ("Count II"); a Haw. Rev. Stat. Chapter 480 claim against the AOAO for unfair or deceptive acts or practices ("UDAP" and "Count III"); a fraud claim against the AOAO ("Count IV"); and a claim against the AOAO for mental anguish and emotional distress, which has been construed as a claim for intentional infliction of emotional distress ("IIED" and "Count V").2
All parties seek summary judgment as to some or all of Plaintiffs' claims.
I. Purchase and Foreclosure
In 2006, Plaintiffs purchased Apartment No. 10A in a condominium project known as Palm Court, Increment 1C ("Unit" and "Palm Court"). Plaintiffs financed the purchase of the Unit with a first mortgage securing a $249,600 loan, and a second mortgage securing a $62,400 loan. ( )
The AOAO is the Palm Court's condominium association.
Plaintiffs rented the Unit, but their tenants failed to pay the rent in a timely manner. This caused Plaintiffs to fall behind on their payments of condominium association fees. CSOF at ¶ 4; Chow Responsive CSOF at ¶ 17 ; AOAO Responsive CSOF at ¶ 4 (denying Pltfs.' ¶ 4 only to the extent the AOAO points out the payment of the fees was solely Plaintiffs' responsibility).] The AOAO's attorneys sent Mr. Galima letters demanding payment for the unpaid association fees. One example of such letters is the letter received by Mr. Galima on April 15, 2010. The 4/8/10 Demand Letter stated the total amount due, as of the date of the letter, was: $6,433.91 in association fees; $473.18 in late fees; and $625.97 in attorneys' fees and costs. [Galima Decl., Exh. G at 1.]
Mr. Galima, as a result, asked for a reasonable payment plan through which he would pay off the unpaid association fees in his letter sent on April 18, 2010 ("4/18/10 Letter"). [Galima Decl. at ¶¶ 13-14, Exh. H.] It stated:
I'm a member of the United States Marine Corps stationed onboard the USS Cleveland. My wife has received a letter in the mail regarding a payment for maintenance fee [sic] for my property at Palm Court (91-869 Puamaeole St. Apt lOA Ewa Beach). I am currently deployed on ship so my communication with you will be limited to when the phones and email are working. We were stationed in Hawaii until I received orders in 2008 to report to Camp Pendleton, CA. I have hired a property manager to take care of my property and to find tenants. The first tenant I had fell behind on payments and the current tenant was also falling behind payments. Between my family's expenses in California and my property expenses in Hawaii I was falling behind on payments due to the tenants I had not making their payments to me. I had to decide which payment to make first between my actual mortgage and the maintenance fee for Palm Court. In the hardship situation that I am in, I am respectfully requesting to have a chance to make a payment plan with your company before you push this any further. Please advise me on what actions I need to take or any other information you need from me. As of right now I can afford to make a payment of $150.00 a month in addition to the regular maintenance fee payments. I will also make a payment of $1500 towards the outstanding balance. . . .
[Galima Decl., Exh. H at 1 (emphases added by Pltfs.).] The 4/18/10 Letter is also dated December 29, 2009 and addressed to the attention of Joseph Megill at Motooka Yamamoto & Revere ("MYR"). It states it was "(Resubmitted to:)" the attention of "Mrs. Kimura" at PTQCW. [Id.]
On April 1, 2010, the AOAO recorded, in the Land Court, a Notice of Lien and Notice of Special Assessment Lien ("Lien Notice") on the Unit for Plaintiffs' unpaid association fees, in the amount of $6,882.86. CSOF at ¶ 5; Chow Responsive CSOF at ¶ 18 ; AOAO Responsive CSOF at ¶ 5 .]
Plaintiffs sent emails offering to make payments to the AOAO. Among these emails is a May 18, 2010 email from Mr. Galima to Happi Kimura, with PTQCW, asking for the status of his request - presumably the 4/18/10 Letter; a June 10, 2010 email from Mr. Galima to Ms. Kimura, noting that the May maintenance fee payment had been made the previous month; and a June 22, 2010 email in which Mr. Galima asked Happi Kimura to "let [him] know how [he] can start making payments towards [his] balance." ( )
Chow is an attorney. His client was the AOAO. In September 2010, Chow filed a nonjudicial foreclosure of the lien on Plaintiffs' Unit, pursuant to Chapter 667, Part I, on behalf of the AOAO. CSOF at ¶ 7; Chow Responsive CSOF at ¶ 17 ; AOAO Responsive CSOF at ¶ 7 (admitting cited portions of Pltfs.' ¶ 7, but stating Chow was an independent contractor); CSOF at ¶ 10; Chow Responsive CSOF at ¶ 17 ; AOAO Responsive CSOF at ¶ 10 (admitting cited portions of Pltfs.' ¶ 10, but stating Chow initiated the nonjudicial foreclosure proceedings pursuant to Chapter 667, Part I, as well as the Palm Court's Declaration of Condominium Property Regime ("Palm Court Declaration") and the Palm Court By-Laws).3]
On September 1, 2010, the AOAO recorded in the Bureau of Conveyances ("BOC") a Notice of Association's Non-Judicial Foreclosure Under Power of Sale ("Foreclosure Notice"). [Galima Decl., Exh. I.] The Foreclosure Notice stated that the AOAO would sell the Unit by public auction on October 19, 2010 and, on that date and at the auction, the AOAO sold the Unit to itself. CSOF at ¶¶ 11-12; Chow Responsive CSOF at ¶ 17 ; AOAO Responsive CSOF at ¶ 11 (admitting Chow sold the Unit at a public auction on that date, but stating he was acting in his capacity as an independent contractor) Chow conducted the public auction as stated in the Foreclosure Notice. There were no other bidders present at the auction, and the sale price was one dollar. [Galima Decl., Exh. C (AOAO's Aff. of Non-Judicial Foreclosure Sale Under Power of Sale, recorded in the Land Court on 11/4/10 ("Foreclosure Aff.")) at 2-3.]
As the AOAO's attorney, Chow completed and signed the Foreclosure Affidavit. CSOF at ¶ 17; Chow Responsive CSOF at ¶ 17 ; AOAO Responsive CSOF at ¶ 17 (admitting Pltfs.' ¶ 17, but stating Chow was acting in his capacity as an independent contractor).] The Foreclosure Notice states: [Galima Decl., Exh....
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