Kondaur Capital Corp. v. Matsuyoshi

• Decision Date: 09 April 2021
• Docket Number: NO. CAAP-19-0000696,CAAP-19-0000696
• Parties: KONDAUR CAPITAL CORPORATION, A DELAWARE CORPORATION, Plaintiff-Appellee, v. LEIGH MATSUYOSHI, Defendant-Appellant, and JOHN DOES 1-10, JANE DOES 1-10, DOE PARTNERSHIPS 1-10, DOE CORPORATIONS 1-10, DOE ENTITIES 1-10, ALL PERSONS RESIDING WITH AND ANY PERSONS CLAIMING BY AND THROUGH OR UNDER THEM, Defendants
• Court: Hawaii Court of Appeals

KONDAUR CAPITAL CORPORATION, A DELAWARE CORPORATION, Plaintiff-Appellee, v. LEIGH MATSUYOSHI, Defendant-Appellant,andJOHN DOES 1-10, JANE DOES 1-10, DOE PARTNERSHIPS1-10, DOE CORPORATIONS 1-10, DOE ENTITIES 1-10,ALL PERSONS RESIDING WITH AND ANY PERSONS CLAIMINGBY AND THROUGH OR UNDER THEM, Defendants

NO. CAAP-19-0000696

INTERMEDIATE COURT OF APPEALS OF THE STATE OF HAWAI'I

APRIL 9, 2021

FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT

(CIVIL NO. 12-1-0185 (RGV))

GINOZA, CHIEF JUDGE, WADSWORTH AND NAKASONE, JJ.

ORDER DENYING MOTION FOR RECONSIDERATION

BY GINOZA, CHIEF JUDGE

Defendant-Appellant Leigh Matsuyoshi (Matsuyoshi) seeks reconsideration of the February 18, 2021 "Order Denying Motion for Recusal or Disqualification by Wadsworth, J." (Order), pursuant to, inter alia, Hawai'i Rules of Appellate Procedure (HRAP) Rule 27(c). See Kondaur Capital Corp. v. Matsuyoshi, 2021 WL 640548, at *1 n.1 (Haw. App. Feb. 18, 2021).¹ In the Order, Judge Wadsworth declined to recuse himself under Hawai'i Revised Code of Judicial Conduct (HRCJC) Rules 2.11(a) and 1.2 because: (1) his prior representation of mortgagees in other nonjudicial foreclosure cases while in private practice does not provide an objective basis to conclude that his impartiality in this appeal "might reasonably be questioned," HRCJC Rule 2.11(a); (2) his prior representation of mortgagees in other cases, including in Bald v. Wells Fargo Bank (Bald), Civil No. 13-00135 SOM/KSC, 2013 WL 3864449 (D. Haw. July 25, 2013), does not concern "the matter in controversy," HRCJC Rule 2.11(a)(6)(A); (3) his February 14, 2014 declaration filed in Bald v. Wells Fargo Bank, N.A. (Bald appeal), 688 Fed. Appx. 472 (9th Cir. 2017), does not render him "a witness concerning the matter [in controversy]," HRCJC Rule 2.11(a)(6)(C); and (4) the above factors do not create "an appearance of impropriety," HRCJC Rule 1.2.² See Order, 2021 WL 640548, at *9-19.

In "[Matsuyoshi's] Motion for Full Court Reconsideration of Dkt. 122, 'Order Denying Motion for Recusal or Disqualification by Wadsworth, J.,' Filed on February 18, 2021," filed on March 1, 2021 (motion for reconsideration), Matsuyoshi argues that: (a) "[t]he analysis of H[R]CJC Rule 2.7 comes only after the [HRCJC] Rule 2.11 analysis is complete"; (b) "Judge Wadsworth is an appellate judge and the matter in controversy isan appellate issue of law that will directly impact currently pending cases[,]" including Bald; (c) "[t]he instant case involves an issue that is also present in [Bald,] . . . so this decision will have [a] real and significant impact on one of Judge Wadsworth's former cases";³ and (d) "Judge Wadsworth formerly claimed that the group of cases being handled by mortgagors' counsel were all 'directly related' to each other, and were all part of an 'effort' to 'rewrite' Hawaii law at the appellate level[.]"⁴ (Capitalization altered.)

Upon a thorough review of the issues raised, we deny the motion for reconsideration. See HRAP Rule 40.⁵

I. Standard of Review

Matsuyoshi's motion for reconsideration is governed by HRAP Rule 40(b), which provides in pertinent part that a motion for reconsideration "shall state with particularity the points of law or fact that the moving party contends the court has overlooked or misapprehended, together with a brief argument on the points raised." In addressing a motion for reconsideration of an appellate decision, the Hawai'i Supreme Court stated that "[t]he purpose of a motion for reconsideration is to allow the parties to present new evidence and/or arguments that could not have been presented during the earlier adjudicated motion." Citizens for Equitable & Responsible Gov't v. County of Hawai'i, 108 Hawai'i 318, 335, 120 P.3d 217, 234 (2005) (quoting Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 114, 839 P.2d 10, 27 (1992)). Thus, a motion for reconsideration is not thetime to present new evidence or arguments that could have been raised earlier. Id.

II. Discussion

A. Recusal Standard

Matsuyoshi first argues that the Order "misapprehend[s] the recusal standard" because it "emphasize[s] a judge's duty not to recuse unnecessarily" over the recusal criteria of HRCJC Rule 2.11.

We disagree. The Order accurately sets forth the relevant disqualification and recusal standards based on the applicable statute and rules, as well as pertinent case law interpreting and applying those authorities. See Order, 2021 WL 640548, at *6-8. As part of this discussion, the Order acknowledges that in reviewing recusal decisions, the Hawai'i Supreme Court has repeatedly stated that

a judge owes a duty not to withdraw from a case — [howevermuch] his personal feelings may incline him to do so — where the circumstances do not fairly give rise to an appearance of impropriety and do not reasonably cast suspicion on his [or her] impartiality.

Id. at *7 (quoting State v. Ross, 89 Hawai'i 371, 377, 974 P.2d 11, 17 (1998) (quoting State v. Brown, 70 Haw. 459, 467 n.3, 776 P.2d 1182, 1188 n.3 (1989))). The Order properly recognizes the above relevant considerations in recusal decisions, which are ultimately anchored by the statement, "the circumstances do not fairly give rise to an appearance of impropriety and do not reasonably cast suspicion on his [or her] impartiality." Id.

Indeed, the Order sets out, and then applies, the two-part analysis for addressing the issue of disqualification or recusal, as summarized in Chen v. Hoeflingner, 127 Hawai'i 346, 361, 279 P.3d 11, 26 (2012). See also Arquette v. State, 128 Hawai'i 423, 447, 290 P.3d 493, 517 (2012).⁶

Matsuyoshi also argues that "a judge's duty not to recuse unnecessarily" addresses only the "lesser evil" of "a judge who . . . recuses himself or herself for the wrong reasons[,]" i.e., because a case presents difficult or controversial issues. We note, however, that recusal decisions reflect the need to ensure public confidence in the impartiality of the courts, as well as "the need to prevent parties from too easily obtaining the disqualification of a judge, thereby potentially manipulating the system for strategic reasons, perhaps to obtain a judge more to their liking." Belue v. Leventhal, 640 F.3d 567, 574 (4th Cir. 2011) (quoting In re United States, 441 F.3d 44, 67 (1st Cir. 2006) (construing parallel federal law)); see also Philip Morris USA Inc. v. United States Food & Drug Admin., 156 F. Supp. 3d 36, 48 (D.D.C. 2016) (declining to recuse in part "because [the judge's] acceptance of Plaintiff's position would encourage judge-shopping by litigants").

We conclude that the Order did not overlook or misapprehend the applicable recusal standards.

B. The Present Appeal and Bald

We next address Matsuyoshi's third contention, see supra, as it appears to underlie her remaining arguments. Specifically, Matsuyoshi contends that the current appeal involves an issue that is present in Bald, which is still pendingbefore the federal district court in Hawai'i,⁷ and in which Judge Wadsworth represented Defendant Wells Fargo Bank, N.A. (Wells Fargo) until December 2016.

In the recusal motion, Matsuyoshi argued that "[a] decision herein on the question of whether certified mail is deemed delivered upon mailing will directly impact and call into question a large number of foreclosures conducted by . . . Wells Fargo . . ., which used the certified mail method extensively, including foreclosures that remain at issue in Bald . . ., a case in which Judge Wadsworth formerly acted as counsel for the mortgagee bank." (Emphasis added.) In the motion for reconsideration, however, Matsuyoshi now argues that "[t]he Order's reference to the issue as 'the mail delivery issue' gives it an overly narrow appearance." We do not agree with this assertion.

The Order quotes at length Matsuyoshi's opening brief in this appeal in describing the "mail delivery issue." See Order, 2021 WL 640548, at *4. In the recusal motion, Matsuyoshi pointed to Paragraph 17.a. of the First Amended Complaint in Bald as raising the same issue. The Order accurately states that Paragraph 17.a. does not appear to raise the same issue.⁸ Seeid. at *17.⁹ Accordingly, the record does not support Matsuyoshi's current assertion that the same mail delivery issue raised in this appeal has been raised in Bald. To the contrary, a fair reading of the pleadings in Bald indicates otherwise.

Matsuyoshi further contends that the Order is wrong in concluding that, given the current procedural posture of Bald, one can only speculate as to whether a decision in this appeal will have any effect on the plaintiffs' claims in Bald, such that Matsuyoshi has not established a sufficient relationship between the present appeal and Bald for purposes of considering the two cases the same "matter in controversy" under HRCJC Rule 2.11(a)(6)(A). See Order, 2021 WL 640548, at *17. In this regard, Matsuyoshi argues that the "'same matter in controversy' [test] applies only to recusals resting on H[R]CJC Rule 2.11(a)(6), and Matsuyoshi relies generally on Rule 2.11(a), which makes clear that recusal is mandated 'in any proceeding in which the judge's impartiality might reasonably be questioned[.]'"

We first note that Matsuyoshi devoted several pages of her recusal motion asserting that the present appeal and Bald are so substantially related as to constitute the same "matter in controversy" for purposes of HRCJC Rule 2.11(a)(6)(A). The Order properly addresses that argument. The Order also analyzes Matsuyoshi's arguments regarding Judge Wadsworth's former representation of mortgagees in other litigation under HRCJC Rules 2.11(a) and 1.2. See Order, 2021 WL 640548, at *10-12, *18-19. Matsuyoshi's failure to establish a close relationshipbetween the present appeal and Bald is relevant to this analysis. As stated in the Order, "[w]here the connection to an alleged disqualifying interest is 'too attenuated,' the Hawai'i Supreme Court has rejected arguments that such...