Legal News and Updates
from the Law Office of Paul J. Sulla, Jr.
For the latest news and postings, please go to http://hilawupdate.blogspot.com/
*This is a static copy of the official blog*
Tuesday, March 24, 2015
Mount v. Apao shows how a counterclaim can make matters worse, not better.
Fighting a post-foreclosure eviction? You may lose your home even before the case is over and be ordered to pay the other side’s attorneys’ fees. Mount v. Apao shows how a counterclaim can make matters worse, not better.
In Mount v. Apao, CAAP 13-0002610 (decided on January 9, 2015) the Hawaii Court of Appeals upheld the Circuit Court’s order entering a writ of possession before final judgment and upheld an award forcing a foreclosed homeowner to pay the bank’s attorneys’ fees for a mortgage-based counterclaim.
While it is not very common, the banks can and do sometimes ask the court to eject a foreclosed homeowner from their home even before the case is finished. And when the case is finished, if the homeowner loses on a counterclaim for violations of the mortgage contract, the court can order the evicted former homeowners to pay attorneys’ fees for the bank. Why? Because some counterclaims are considered claims “in the nature of assumpsit”. In the other words, they are contract-based claims and H.R.S. § 607-14 allows the winning party to claim attorneys’ fees.
With many homeowners tempted to fight as long as possible, even if they have to fight pro se, this is a trap to be avoided. Avoid any boilerplate counterclaims based on your mortgage contract unless you are confident you will win (if you do, the bank will have to pay YOUR attorneys’ fees!). While it is tempting to fight as hard as possible, you do not want to end up losing your home and still owing even more money.
If you are unsure if you have a good case and you do not know if your counterclaims are “in the nature of assumpsit” it makes sense to consult an attorney before asserting them. The Hawaii courts appear more and more poised to fast track cases that they feel lack merit, including dispossessing homeowners even before the case is fully over. As Mount v. Apao indicates, “it is unusual for a circuit court to enter a writ of possession before issuing a corresponding judgment… Even if the timing was in error [the court] holds it was harmless [error]”.
The moral of the story? If you are sure you have been wronged, fight it. But consult an attorney to make sure your efforts don’t backfire and leave you in a worse position than before you started your fight…
Tuesday, March 3, 2015
Is the house you bought at a foreclosure auction really yours?
Is the house you bought at a foreclosure auction really yours? In Fair Horizon v. Agard, the Hawaii Court of Appeals says “Yes!… as long as you are truly a bona fide purchaser”.
As many of you know, the foreclosure crisis led to a record number of non-judicial foreclosure auctions and, for some, this meant excellent deals on real estate. Hawaii is no exception. For those of you who bought property during the crisis instead of lost property, you may wonder whether a former homeowner can come back and make you leave if the foreclosure was done incorrectly. In most cases, the answer in Hawaii appears to be “no”, as long as:
1) you were a “bona fide purchaser” at the foreclosure sale,
2) there was no lis pendens recorded at the time you bought the property,
3) you were not aware of any foreclosure or title dispute at the time you bought the property, and
4) the Affidavit of Foreclosure was recorded prior to your receiving any notice of title defects.
See FairHorizon LLC v. Agard, Hawaii Intermediate Court of Appeals Case No. CAAP-12-0000437 opinion dated January 26, 2015.
While a separate case apparently concluded that the seller, Deutsche Bank National Trust did not improperly foreclose, the court ruled that even if it could be proven that Deutsche’s foreclosure and title to the note and mortgage were faulty it would not affect the bona fide purchaser’s title, citing Lee v. HSBC Bank USA, 121 Hawai’i 287, 291, 218 P.3d 775, 779 (2009) (noting that”[n]onjudicial foreclosure sales] are final between the parties and conclusive as to bona fide purchasers”).
So how does it affect those of you still hoping to save your homes, even after foreclosure? The key to this ruling is the Lis Pendens, also known as a “Notice of Pendency of Action”. If you are or were facing a foreclosure that you believe wrongful, get that Lis Pendens filed as soon as possible to preserve your rights! A lis pendens can only be filed when there is a lawsuit pending, so it makes sense not to sit on your claims, but to see a qualified attorney who can file your case and record a lis pendens right away to preserve any rights to the property you may have against future “bona fide purchasers”.
For buyers, and Hawaii property owners generally, this ruling is good news. As long as you run a title report on your prospective purchase and it comes out clean, you should be able to rely on that title. This ruling enhances the finality of real estate transactions in Hawaii generally. Prior case law in Hawaii was not so clear on this issue in prior rulings, giving foreclosed homeowners hope that perhaps eventually they can undo the foreclosure and get their title back. This ruling changes the legal landscape in the Hawaii real estate market, and may help in the recovery of property values in Hawaii.
Tuesday, February 3, 2015
The bank wants you to sign WHAT?
Wednesday, January 21, 2015
Drones in Hawaii
Wednesday, January 14, 2015
Hester v. Horowitz update
Sunday, November 16, 2014
Lava flows and legal implications
As the lava flows over more and more private parcels, legal questions by homeowners and renters in Puna abound.
by Paul J. Sulla, Jr.
We all know that Hawaii Island is currently in the midst of a very slow-moving but potentially devastating social and economic tragedy: lava has reached Pahoa and is oozing over recently occupied property and disrupting the lives of many. But what many lower Puna residents don’t know is: what are my legal rights? Yes, a state of emergency has been declared and crimes are punished more severely as a result. But what about property rights? What about renter’s rights? What about insurance? What about property values? What if your home is in the middle of a loan modification or foreclosure? What if you are an absentee landowner? Residents and nonresidents with an interest in Puna currently have many more questions than answers.
For now the focus is purely on keeping everyone safe. Keeping property safe has been declared an impossibility. But you do have legal rights and responsibilities in relation to your property, the debts owed on it, the insurance that covers it, any lease agreements regarding it. And you have the right to relocate without facing price gouging and unfair treatment. If you live in affordable housing on the Hilo-side of the flow you also have rights. Most importantly, the right not to have your rent raised or to be evicted at this time just because your landlord sees that he or she can earn more from a lava refugee.
The maze of legal questions and issues often leaves those effected by an emergency situation further disempowered, deflated, and confused. But it doesn’t have to be this way. There is no reason to be in denial: the island is changing and your legal or property rights may be effected significantly now and for decades into the future. While it is impossible to predict the future, it makes no sense to be in denial and refuse to act in the face of uncertainty. Disasters are much more bearable if one has a disaster preparedness plan. In this type of large-scale property disaster –a major lava flow over a densely populated area—landowners, land seller, land managers, tenants, and prospective purchasers all have legal rights and duties. Doesn’t it make sense to also have a plan to protect your legal rights? An experienced Hawaii real estate lawyer who knows the community, the lava, and the law should be contacted right away if you feel like your assets and/or your legal rights are being affected. If you would like to schedule an initial free telephone consultation, please call me at (808) 933-3600. This firm is currently offering discounted rates for any clients currently being adversely impacted by the lava flow.
Saturday, November 15, 2014
Sulla v. Horowitz part II – Paul J. Sulla, Jr. wins on Summary Judgment!
As many of you may be aware, I have been the subject of a vicious cyber-defamation attack for years which I describe in more detail in my earlier posts below. Well the internet isn’t the only weapon the disaffected adverse parties have used against me in their effort to punish me for effective representation of my client. One of the other weapons that was used against me by Leonard Horowitz was something called a “nonconsensual common law lien” which Mr. Horowitz filed against all the property that I own or have ever owned or been associated with on island.
This lien, while having no basis in fact or law, created an encumbrance on the properties, even when own by innocent non-parties, and prevented or delayed the closing of escrow for many. After receiving several calls from affected landowners, I was compelled to once again take legal action again Leonard Horowitz.
I am delighted to report that this matter recently came for hearing on my summary judgment motion and I won, including an award of costs. While this may be a small win in a much bigger battle, I wanted to share it with you. Every once in a while the legal process works and works well and those who abuse the law and legal processes are held accountable. This is one of those instances. If you or someone you know owns any of the 50+ properties affected by an invalid lien filed by Leonard Horowitz, please contact this office and let me know. The lien should be expunged soon!
Thank you again for taking the time to read this and for your support of the legal work I do for the people of Hawaii!
Wednesday, November 12, 2014
Tuesday, October 7, 2014
You may still own your foreclosed home in Hawaii!
Cases stayed pending appeal assessing legality of foreclosure process
Often those subject to nonjudicial foreclosures in Hawaii before the foreclosure laws changed felt, well… violated. The process moved too quickly, the loan modification negotiations too chaotic, and there were a few too many surprises. Attorneys statewide fought and lost case after case trying to get the courts to see that the nonjudicial foreclosures in Hawaii weren’t being conducted legally. At first the courts across Hawaii, both federal and state judges, generally turned a deaf ear to the complaints of homeowners finding that, if they owed the money and couldn’t pay, then even if the foreclosure and oft-accompanied loan modification process wasn’t perfect, there were no damages to the homeowner who was going to lose their home to foreclosure if they couldn’t pay the amounts owed anyway.
Over and over again the Hawaii courts ruled that the homeowner had no standing to challenge the legality of robo-signed assignments and faulty securitization of their loans, that it didn’t matter if the lender even owned or held the note they were foreclosing on, that homeowners had no private right of action under HAMP, US Treasury Consent Decrees, and other laws and orders that the big national banks such as Bank of America (including BAC and Countrywide), JP Morgan Chase, US Bank, Wells Fargo, and HSBC knowingly and admittedly violated in their pursuit of foreclosure and alienation of thousands of Hawaii residents from their homes in the past ten years.
Because the Hawaii state and federal courts have by and large been hostile to the claims of fraud and wrongdoing by homeowners thus far, my law office often focuses on gaining a decent loan modification and loan reinstatement for clients despite the obvious fact that wrongdoing DID occur and the banks, during the foreclosure crisis, were by and large found over and over again to be bad actors nationwide. However, a new line of cases in Hawaii may finally find that the nonjudicial foreclosure procedure used by many of the big banks and law firms here was procedurally deficient and thus the nonjudicial foreclosure auction conducted is actually void as a matter of Hawaiian law. In other words, thousands of Hawaiian property owners may still own their foreclosed homes!
In the past few weeks I have found renewed hope in the form of several cases currently pending before the Ninth Circuit Court of Appeal and the Hawaii Supreme Court. Judge Derrick K. Watson of the U.S. District Court of Hawaii has so far ordered a stay of at least three wrongful foreclosure cases pending the Ninth Circuit appeals ruling in the following: 1) Gibo v. U.S. Bank National Association et al., No. 1:12-cv-00514-SOM-RLP (on appeal to Ninth Circuit No. 13-16092); 2) Lima v. Deutsche Bank National Trust Company et al., No. 1:12-cv-00509-SOM-RLP (on appeal to Ninth Circuit No. 13-16091); 3) Bald v. Wells Fargo Bank, N.A. et al., No. 1:13-cv-00135-SOM-KSC (on appeal to Ninth Circuit No. 13-16622); 4) Lowther v. U.S. Bank N.A. et al, No. 1:13-cv-00235-LEK-BMK (on appeal to Ninth Circuit No. 14-16345); 5) Lizza v. Deutsche Bank National Trust Company et al, No. 1:13-cv-00190-HG-BMK (on appeal to Ninth Circuit No. 14-16483); and Sigwart v. U.S. Bank National Association et al., No. 1:13-cv-00529-LEK-RLP (on appeal to Ninth Circuit No. 14-16346).
State court judges are beginning to follow suit, with two pending cases with the same or similar arguments regarding the procedural problems with the foreclosure process used by attorneys Derek Wong, RCO Hawaii, and the Law Office of David Rosen. These appeals include: 1) Ilar v. Lava Rock Properties LLC et al., pending in Hawaii state court, No. 11-1-003091; and 2) Sigwart v. Rosen, Hawaii state court, No. 13-1-002097 (appeal to Hawaii Supreme Court pending).
While all wrongful foreclosure cases have minor procedural and substantive differences, the same core legal theory often applies. All of the above cases allege that mortgage servicers engages in deceptive practices, failed to comply with Hawaii Revised Statutes (“H.R.S.”) § 667-5, and violated the terms of the foreclosure sale by causing properties foreclosed non-judicially to sell at public auctions after postponing sales without re-publishing the new sale date in the same manner the first sale date had been published.
Because Hawaii’s foreclosure statute requires strict compliance, if the Appeals Courts finds that Hawaii law actually requires a re-publication of postponed foreclosure auction dates, then thousands of foreclosures conducted in the past decade in Hawaii will be invalidated. I’ve met with hundreds of clients with the same stories about surprise foreclosures and unscrupulous practices by servicers and bank counsel during the foreclosure process and it is remarkable that most foreclosures in Hawaii are supported by strikingly similar Affidavits of Foreclosure by RCO and attorneys Derek Wong and David Rosen. However, decorated Honolulu attorney James Bickerton, lead counsel in most of the above cases, has found that these very Affidavits of Foreclosure are the most suspect. For those of you still in possession of your homes but facing ejectment from a nonjudicial foreclosure that was initially postponed, you should contact an attorney immediately. Hawaii judges should not rush to dispossess residents from their homes if there exists any doubt as to the legality of the foreclosure sale that precipitated eviction in the first place!
Ironically, in cases where the former homeowner is not still in possession of their foreclosed homes, the big banks are asking the court to stay the homeowner lawsuits pending these appeals. However, in the cases where the homeowner retains possession, the big banks are ignoring the effect of the pending appeals. Allowing the foreclosed homeowners to remain in their homes while the issue of whether or not the foreclosure was legal is still on appeal, makes sense. It prevents a potential wrongful dispossession and associated damages and allows the occupant to continue maintenance of the property rather than exist in limbo and contribute to the glut of post-foreclosure unoccupied properties causing community blight.
It is prudent for Hawaii Courts to give the appeals courts time to resolve the most fundamental question: whether or not the foreclosure conducted was legal or whether it is void as a matter of law. If thousands of the Hawaii foreclosures are ultimately found to be void, it will be an amazing, hard-fought, and long-awaited victory for the people of Hawaii.
Wednesday, September 10, 2014
Bank of America loses mortgage modification case before the 9th Circuit Court of Appeals
The Ninth Circuit recently issued an Opinion in Compton v. Countrywide Financial Corp. et al., (11-cv-00198 Aug. 4, 2014) finally overturning the U.S. District Court for the District of Hawaii on a mortgage loan modification-related case. Describing the homeowner’s experience in applying for a loan modification from BAC (now Bank of America) as a “20 month Kaffka-esque nightmare” where Bank of America intentionally frustrated the homeowner’s efforts, gave misleading and erroneous advise while imposing a never-ending list of new requirements (sound familiar?), and began the foreclosure process while assuring Compton no foreclosure would take place, the Ninth Circuit overturned the U.S. District Court in Hawaii which found that, despite these allegations, the homeowners did not have a claim against the bank under HRS § 480-2 prohibiting Unfair and Deceptive Acts and Practices (UDAP). The Ninth Circuit found that the homeowner had alleged sufficient facts for a claim against the bank under Hawaii’s unfair and deceptive practices act. Notably, the Court found that the prolonged loan modification negotiations, transaction costs incurred in providing notarized documents and enduring lengthy delays constituted considerable hardship which was sufficient to state a claim of injury that caused damages for the purpose of a UDAP claim.
Attorney Paul Sulla, Jr. cleared of suspicion of misconduct
Previously under investigation for ethics violations brought on by complaints filed against him, Hilo attorney Paul Sulla, Jr. has been cleared of any suspicion misconduct and the investigation has been closed. In a letter to Attorney Paul Sulla Jr. sent by Chief Disciplinary Counsel Charlene M. Norris, she dismisses the complaints filed by complainant Leonard Horowitz, citing a lack of evidence of any wrongdoing on Mr. Sulla‘s behalf.
HOW TO RESPOND TO CYBERBULLIES.
The continuing saga of Sulla v. Horowitz…or….
As some of you may know, I have been the victim of a vicious cyber-defamation campaign from well-known cyberbullies Leonard Horowitz and Sherri Kane since 2010. I had been quiet about this because I thought eventually it would go away. Anyone who has encountered this problem knows how hard it is to make it stop. Unfortunately in the case of emerging new technology, the laws have not kept up with some of the abuses that arise as is the case of someone maliciously posting derogatory, false and misleading information for their own gain.
After nearly two years of this relentless attack on the internet in which they dug up and posted everything they could find derogatory (or not) to use against me, and then report it sensationally, falsely and misleadingly in their attempt to reverse a foreclosure of their non-profit corporation’s real property by one of my clients, I am speaking up. Numerous attempts by these perpetrators to have me investigated, disbarred, arrested by the FBI, DEA, Hawaii Bar Association, Hawaii Supreme Court, Hawaii State and County prosecutors and police departments have all met with the same response: no action. This is because the claims of wrongdoing being made against me by Horowitz and Kane are false.
The legal dispute that spawned the attacks against me online by Horowitz and Kane is actually a legal dispute between them and my client. It is not even my issue. It is as if no one informed Horowitz and Kane of the difference between the client’s property and the attorney’s. In fact they have even further abused and harassed me, the attorney, by recording a fraudulent, unpermitted and unlawful lien against real property that I own, sold or represented an entity that sold over the past 20 years the State of Hawaii Bureau of Conveyances. I have presently filed a Petition to have this lien revoked and these perpetrators fined the statutory $5000 penalty under HRS § 507D-1 et seq. (This recording abuse has already significantly harmed two unrelated third parties trying to sell their homes).
In July 2012 prior to the tolling of the Statute of Limitations I filed suit for defamation against Leonard Horowitz and Sherri Kane Hawaii Circuit Court, Third Circuit Case No. 3CC12-1-000417 seeking an injunction to stop their continued defamation. I succeeded in obtaining a Preliminary Injunction on June 17, 2013 in this defamation action but soon found that the Injunction could not be enforced because the actionable content was moved to web servers outside of the United States and posts made by anonymous authors. Local courts are not prepared to regulate what is actually a global issue.
However, recently I dismissed my defamation case against Mr. Horowitz and Ms. Kane because I realized that after several years and several thousand dollars, even if I win in court the defamatory content will likely stay online forever. Instead I am now focusing my law firm’s efforts on representing the client that foreclosed on Mr. Horowitz and Ms. Kane who –through their cyber-attacks—they are trying to keep me from representing: the owner of the land that they currently live on, rent and mortgage free.
Because the underlying case that spawned the attacks against me is not over yet, it is not prudent for me to comment about any of the details. To do so would not only be imprudent, it violates client confidentiality. Let’s just say that after years of attacks from the cyberbullies I not only still believe in the case against them, I refuse to abandon my client even though it would make my life and my law practice much more enjoyable.
For those of you who have stuck by me and my law firm despite the crazy lies Mr. Horowitz and Ms. Kane are telling about me on the internet, THANK YOU! I humbly promise to represent your interests as diligently and effectively as possible. Cyberbullying and cyber-defamation are very real and very large problems in modern society, and the courts are having a hard time grappling with how to control this problem on the internet. By standing by the victims of these attacks, you are doing your part to make sure the cyberbullies’ tactics are not rewarded. I will keep you informed of my progress.
With much Aloha,
Paul J. Sulla, Jr.
For an excellent article on the subject of cyberbullies, please also see this article by internet writer Sarah Payne, that also mentions my particular predicament.
 I am not Mr. Horowitz or Sherri Kane’s only victims. See, e.g. http://educate-yourself.org/cn/horowitzgonenuts05jun11.shtml , http://atrueott.wordpress.com/2013/04/24/leonard-horowitz-and-his-royal-bloodline-of-david-delusion-and-fraud/ , http://atrueott.wordpress.com/tag/leonard-horowitz/ , http://www.skepdic.com/horowitz.html , http://waronyou.com/forums/index.php?topic=25973.0 which indicates that what Mr. Horowitz and Ms. Kane have done to me is just their modus operando for dealing with those they have disputes with.
Welcome to the Law Office of Paul J. Sulla, Jr. of Hilo, Hawaii Legal News and Updates site
I have been working on some interesting cases lately and I look forward to sharing with you news and insights about myself, my law practice, and developments in law and litigation in Hawaii and nationally, with a special emphasis on my firms practice areas: Trusts, Estates, Probate, Real Estate Law, Civil Litigation, Foreclosure, Elder Law, and Business Organization and Transactions.
If you have any specific questions, please contact my law office to schedule an initial consultation.