* * * NOT FOR PUBLICATION * * *
NO. 26706
IN THE SUPREME COURT OF THE STATE OF HAWAI`I
AAMES CAPITAL CORPORATION, Plaintiff-Appellee,
vs.
and
---------------------------------------------------------------------------------------------------------------------------------
vs.
and
In this mortgage foreclosure and ejectment action, defendants-appellants and counterclaimants-appellants Jimena D. Hernando, Arnold D. Cruz, Genevieve H. Cruz, Paul Hernandez, and Rochelle Hernandez [hereinafter collectively, Defendants] appeal from the June 18, 2004 final judgment and writ of possession entered by the Circuit Court of the Fifth Circuit (1) in favor of plaintiff-appellee and counterclaim defendant-appellee Aames Capital Corporation and counterclaim defendant-appellee Aames Funding Corporation [hereinafter collectively, Aames]. On appeal, Defendants argue that the circuit court erred in granting summary judgment in favor of Aames because: (1) the "power of sale" clause contained in the mortgage was part of a contract of adhesion and thus unenforceable; (2) there were genuine issues of material fact in dispute as to whether (a) the "power of sale" was exercised in good faith, and (b) default, cure, and acceleration notices were actually provided as required by the mortgage; (3) Aames failed to advertise the non-judicial foreclosure sale in a newspaper of general circulation in Kauai County as required by Hawai`i Revised Statutes (HRS) § 667-5 (1993); (2) and (4) the findings of fact and conclusions of law contained in the summary judgment order were incomplete, unclear, and provide an inadequate basis for meaningful appellate review.
Upon carefully reviewing the record and briefs submitted, we hold as follows:
(1)
The mortgage containing the power of sale clause was not an
unenforceable contract of adhesion because there is
no
evidence that Aames was the only source of home mortgage loans in Kauai
or that the power of sale clause was
unconscionable. See Brown v. KFC Nat'l Mgmt. Co.,
82 Hawai`i 226, 247, 921 P.2d 146, 167 (1996) (holding
that a
contract is an unenforceable contract of adhesion where (1) the party
seeking to avoid enforcement had no
viable
alternative source to obtain the services contracted for, and (2) the
contract unconscionably advantages the
stronger party);
(2)
Assuming arguendo that a breach of the covenant of good faith and fair
dealing would be sufficient to rescind the
mortgage loan transaction
and set aside the foreclosure sale, (3)
Aames tendered evidence that the foreclosure sale
price was
approximately $15,000 more than the amount of the mortgage loan taken
out by Defendants Jimena
Hernando, Genevieve
Cruz, and Arnold Cruz two years earlier and Defendants failed to meet
their burden of
demonstrating "specific
facts" to
show that this price was unreasonable. See French v. Hawaii Pizza Hut, Inc.,
105 Hawai`i 462, 470, 99
P.3d 1046, 1054
(2004) (holding that where the party moving for summary judgment has
met its burden of
production, the opposing party
must respond with specific facts);
(3)
There is no requirement that the amount of the loan default be proved
with the general loan ledger in order to
validate a
non-judicial foreclosure sale. See Aames Funding Corp. v. Mores,
107 Hawai`i 95, 104 n.10, 110 P.3d
1142, 1151 n.10
(2005) (observing that there is no support for the proposition that a
loan default must be proven
by admissible evidence
before summary adjudication of an ejectment action arising out of a
non-judicial foreclosure
sale is permissible); Maile, 17
Haw. at 52 (holding that a non-judicial foreclosure sale will not be
set aside for
failure to provide an
accounting or
statement of the amount due);
(4)
The Honolulu Star-Bulletin, in which Aames advertised the foreclosure
sale, is a newspaper of general circulation in
Kauai County within the
meaning of HRS § 667-5 because it publishes news of general
interest and circulates
within the
county to some extent, even though its circulation may be limited. Nevada State Press Ass'n v. Fax,
Inc.,
378 P.2d 674,
675 (Nev. 1963) (citing 68 A.L.R. 542 (1930)); see also Great Southern Media, Inc. v.
McDowell
County, 284 S.E.2d 457,
462-68 (N.C. 1981) (collecting cases for the proposition that a
newspaper with limited
circulation may
nevertheless be
deemed to be in general circulation);
(5)
Assuming without deciding that the circuit court was required to enter
findings of fact and conclusions of law in the
instant case, its failure
to do so was not reversible error because the record on appeal is
sufficiently clear to provide
a
meaningful basis for appellate review. See Lalakea v. Baker, 43 Haw.
321, 329 (1959) (holding that the failure of
the trial
court to make findings of fact is a waivable defect if it is not
substantial in a given case); Richards
v. Kailua
Auto Mech.
Serv., 10 Haw. App. 613, 621, 880 P.2d 1233, 1238 (1994)
(concluding that under Hawai`i Rules of
Civil Procedure Rule
52(a), "findings of fact by the circuit court are not jurisdictional
and the appellate court may
proceed where the record is
clear and findings are unnecessary"). Therefore,
IT IS HEREBY ORDERED that the circuit court's June 18, 2004 final judgment and writ of possession are affirmed.
DATED: Honolulu, Hawai`i, April 17, 2006.
On the briefs:
1. The Honorable George M. Masuoka presided over this matter.
2. HRS § 667-5 provides in relevant part:
When a power of sale is contained in a mortgage, the mortgagee, or the mortgagee's successor in interest, or any person authorized by the power to act in the premises, may, upon a breach of the condition, give notice of the mortgagee's, successor's, or person's intention to foreclose the mortgage and of the sale of the mortgaged property, by publication of the notice once in each of three successive weeks (three publications), the last publication to be not less than fourteen days before the day of sale, in a newspaper having a general circulation in the county in which the mortgaged property lies; and also give such notices and do all such acts as are authorized or required by the power contained in the mortgage. Copies of the notice shall be filed with the state director of taxation and shall be posted on the premises not less than twenty-one days before the day of sale.
3. See Ulrich v. Sec. Inv. Co., 35
Haw. 158, 168 (1939) (holding that a mortgagee's legal duties when
foreclosing include
the duty "to use all fair and reasonable means in obtaining the best
price for the property on sale"). But see Maile v. Carter,
17 Haw. 49, 53 (1905) ("The alleged inadequacy of the price obtained
for the property [at a non-judicial foreclosure sale]
cannot in itself be considered sufficient cause for setting aside the
sale[.]").