Atooi Aloha, LLC, by Millicent Andrade and Craig B. Stanley, Its Managing Members et al v. Gaurino et al, No. 1:2016cv00347 - Document 350 (D. Haw. 2018)
Court Description: ORDER GRANTING DEFENDANT/THIRD-PARTY PLAINTIFF APT-320 LLC'S MOTION FOR CONFIRMATION OF SALE, DISTRIBUTION OF PROCEEDS, AND DEFICIENCY JUDGMENT re: 329 . Signed by JUDGE JILL A. OTAKE on 10/19/2018. (afc)WRITTEN ORDER follows hearing held 10/19/2018. Minutes of hearing: ECF 349 .
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Atooi Aloha, LLC, by Millicent Andrade and Craig B. Stanley, Its Managing ... et al v. Gaurino et al Doc. 350 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII ATOOI ALOHA, LLC, by Millicent ) Andrade and Craig B. Stanley, its ) Managing Members, et al., ) ) Plaintiffs, ) ) vs. ) ) ABNER GAURINO, et al., ) ) Defendants. ) _____________________________ ) CIVIL NO. 16-00347 JAO-RLP ORDER GRANTING DEFENDANT/THIRD-PARTY PLAINTIFF APT-320 LLC’S MOTION FOR CONFIRMATION OF SALE, DISTRIBUTION OF PROCEEDS, AND DEFICIENCY JUDGMENT; EXHIBIT A ORDER GRANTING DEFENDANT/THIRD-PARTY PLAINTIFF APT-320 LLC’S MOTION FOR CONFIRMATION OF SALE, DISTRIBUTION OF PROCEEDS, AND DEFICIENCY JUDGMENT INTRODUCTION Defendant/Third-Party Plaintiff APT-320 LLC (“APT-320”) requests confirmation of the sale of the real property being foreclosed upon in this action, located at 3721 Kanaina Street, Honolulu, Hawaii TMK (1)-3-1-025-008 CPR 0088 (“Property”). APT-320 further requests that the Court: 1) determine reasonable expenses and attorneys’ fees for the Commissioner; 2) determine other amounts due and owing for its other claims; 3) determine the priorities and claims of all other parties to this action; 4) enter a deficiency judgment in its favor if the sale proceeds are insufficient to pay its claims; 5) issue a judgment for possession Dockets.Justia.com and a writ of possession giving the purchaser possession of the Property; 6) deem abandoned any personal property found in the Property and authorize the purchaser to dispose of said personal property; 7) discharge the Commissioner following the conveyance and distributions and filing of the distribution statement; and 8) enter judgment pursuant to Federal Rule of Civil Procedure (“FRCP”) 54(b). For the reasons articulated below, the Court GRANTS the Motion. BACKGROUND As the Court and the parties are familiar with the history of this case, the Court includes only those facts relevant to the disposition of the instant Motion. On February 13, 2014, Plaintiff Atooi Aloha, LLC (“Atooi Aloha”) entered into an agreement to purchase 333 shares of Better Living Global Marketing (“BLGM”) in exchange for the conveyance of the Property to Defendant Abigail Gaurino (“Abigail”). Following the conveyance of the Property, Abigail obtained a $200,000.00 mortgage on the property from Investors Funding Corporation (“IFC”), which IFC then assigned to APT-320. On January 31, 2018, Chief U.S. District Judge J. Michael Seabright issued an Order Re: Motions for Summary Judgment and Motion for Interlocutory Decree of Foreclosure (“SJ/Foreclosure Order”), Doc. No. 238, wherein he granted summary judgment in APT-320’s favor and concluded that APT-320 2 established a prima facie case that it is entitled to foreclose on the mortgage. On March 1, 2018, Chief Judge Seabright issued a Foreclosure Decree. Doc. No. 262. In it, he ordered that the mortgage be foreclosed upon, that Thomas J. Wong be appointed as Commissioner, and that the Property be sold in a manner allowed by law. On September 20, 2018, the Commissioner filed his Report. Doc. No. 318. According to the Report, the Commissioner published a notice in the Honolulu Star-Advertiser, which contained a description of the Property, and location of the public auction. The auction took place on May 22, 2018, at noon, in front of the Judiciary Building, Honolulu, Hawaii. APT-320 presented the winning bid in the amount of $399,000.00. The Commissioner recommends that this bid be confirmed and seeks compensation totaling $5,414.53, which is comprised of $4,425.00 in fees and $989.53 in expenses. On September 30, 2018, APT-320 filed the Motion for Confirmation of Sale, Distribution of Proceeds, and Deficiency Judgment (“the Motion”). Doc. No. 329. On October 10, 2018, APT-320 filed a Motion for Attorney’s Fees and Costs, requesting $84,219.86 in fees and $701.47 in costs. Doc. No. 340. 3 LEGAL STANDARD Under Hawai‘i law, a “court’s authority to confirm a judicial sale is a matter of equitable discretion.” Sugarman v. Kapu, 104 Haw. 119, 124, 85 P.3d 644, 649 (Haw. 2004) (quoting Brent v. Staveris, 7 Haw. App. 40, 45, 741 P.2d 722, 726 (Haw. Ct. App. 1987) (citation omitted)). In the absence of arbitrary action, courts enjoy broad discretion with respect to the confirmation of judicial sales. Id. (citation omitted). “In exercising its discretion, the ‘court should act in the interest of fairness and prudence, and with a just regard to the rights of all concerned and the stability of judicial sales.’” Brent, 7 Haw. App. at 45, 741 P.2d at 726 (quoting Hoge v. Kane II, 4 Haw. App. 533, 540, 670 P.2d 36, 40 (Haw. Ct. App. 1983)). Courts may deny the confirmation of a sale when the highest bid is so grossly inadequate as to shock the conscience. Id. (citing Hoge, 4 Haw. App. at 540, 670 P.2d at 40; Indus. Mortg. Co., L.P. v. Smith, 94 Hawai‘i 502, 510, 17 P.3d 851, 859 (Haw. Ct. App. 2001)). DISCUSSION As an initial matter, the Court notes that it has received no written or other opposition or objection to this Motion. There being no objection or opposition, and no other individual having appeared at the hearing to request that bidding be reopened, the Court makes the following findings and GRANTS the 4 Motion as stated below: 1. The Property is the property foreclosed upon in this action and is more fully described in Exhibit A, attached to this Order. 2. The Commissioner complied with the requirements of the Foreclosure Decree and the sale was legally made and fairly conducted. 3. The Court ratifies, approves, and confirms the Commissioner’s Report in all respects. 4. The Court confirms the sale of the Property and authorizes the Commissioner to execute and deliver conveyance documents for the Property to APT-320 or its nominee.1 5. APT-320’s $399,000.00 bid, the highest bid, is fair and equitable and as high as any that could reasonably be obtained under the circumstances. 6. The Commissioner is authorized to accept the balance, if any, of the purchase price. 7. The closing date for the sale of the Property shall occur within 40 days after the filing of this Order, unless the Commissioner 1 At the hearing, the Commissioner clarified that APT-320, not IFC, had the winning bid. 5 determines that additional time is required.2 8. Pursuant to the Foreclosure Decree and Hawai‘i Revised Statutes (“HRS”) § 634-51, Atooi Aloha, Plaintiff Craig B. Stanley (“Stanley”), as Trustee for the Edmon Keller and Cleavette Mae Stanley Family Trust (“the Trust”), Plaintiff Stanley, Plaintiff Millicent Andrade, Defendant Abner Gaurino, Defendant Aurora Gaurino, Abigail, Third-Party Defendant AOAO, Third-Party Cross Defendant Abigail, Third-Party Cross Defendant Stanley, as Trustee for the Trust, and Third-Party Cross Defendant Stanley, and all persons claiming by, through, or under those parties, shall be and are hereby forever barred from any and all right, title, and interest claims at law or in equity in the Property. 9. The Commissioner reasonably and necessarily incurred $989.53 in expenses and $4,425.00 in fees, which shall be the first and second priority funds, respectively, payable out of the sale and rental proceeds of the Property. 2 This closing period is not intended to (nor should it) curtail Defendant Association of Apartment Owners of Diamond Head Sands’ (“AOAO”) rights under Hawai‘i’s Condominium Property Act. 6 10. APT-320 requests $353.00 in expenses. The Court finds that these expenses were reasonably incurred. Said expenses, along with allowable costs and attorneys’ fees,3 shall be the third priority funds payable out of the sale and rental proceeds of the Property. 11. In its Motion for Attorney’s Fees and Costs, APT-320 submits that it is owed the following, exclusive of attorneys’ fees, costs, expenses, charges, or other amounts: $220,000.00 in principal $ 73,031.90 in interest to August 31, 2017 $ 40,150.00 in interest to August 31, 2018, plus $110.00 per diem thereafter $ 4,713.23 in property tax $337,895.13 Total APT-320 is therefore currently owed $337,895.13 in accordance with the SJ/Foreclosure Order and Foreclosure Decree.4 This amount shall be the fourth priority funds payable from the sale and rental proceeds of the Property. 3 The Motion for Attorney’s Fees and Costs is pending before Magistrate Judge Richard Puglisi. 4 This amount may be subject to adjustment based on additional expenses, fees, costs, and interest incurred through the conveyance of the Property. 7 12. Pursuant to HRS §§ 514B-146 and 667-3 and the Stipulations between AOAO and Plaintiffs and Abigail, Doc. Nos. 334, 335, AOAO is entitled to remaining proceeds, to the extent such proceeds are available, as next lien holder. 13. If the proceeds are insufficient to pay APT-320’s claims, expenses, charges, costs, and attorneys’ fees, or amounts due and owing to AOAO, deficiency judgments shall enter in favor of APT-320 and AOAO against Abigail, upon the filing of appropriate declarations by APT-320 and AOAO. 14. A Judgment for Possession and a Writ of Possession shall issue, giving the Purchaser Possession of the Property. APT-320 is to submit a proposed Judgment for Possession and Writ of Possession by October 29, 2018 to otake_orders@hid.uscourts.gov. 15. Any personal property found in or on the Property is deemed abandoned and may be disposed of as the Purchaser sees fit. 16. After the Commissioner has made the conveyance and distributions as set forth in this Order, and filed his distribution statement, he is discharged from further responsibilities and duties as Commissioner. 8 17. This Order shall be entered as a final judgment pursuant to FRCP 54(b) as there is no just reason for delay. IT IS SO ORDERED. DATED: Honolulu, Hawaii, October 19, 2018. CIVIL NO. 16-00347; ATOOI ALOHA, LLC, ET AL. V. GAURINO, ET AL.; ORDER GRANTING DEFENDANT/THIRD-PARTY PLAINTIFF APT-320 LLC’S MOTION FOR CONFIRMATION OF SALE, DISTRIBUTION OF PROCEEDS, AND DEFICIENCY JUDGMENT; EXHIBIT A 9 EXHIBIT A 10 (c··. . ., ." .. •' PlRBT: HBAD SANDS•. a coadOlllbUum project (henfnlftm' caUed the "Project") 11 deaaribcd'in md ealaWfabld by Decliradoa of}[odrmdal Plopeltt R.eslme dated Nowmbor 12, 1974. l1ICOlded fn Ibo B1Da1I otConvoyaucea ofthe hdo ofHawaii, in Uber 103'4, Pap 4171 111 die same may Jiavo been amended hm time to dm.o (hena8er oalled ibe "I>eclantkm") u ahoWll cm tho plans of the pmjoat ncordad ID salcl Buroall u Coadmnlnfaa Piled Plu No. 392, as tho l8ll10 may bavo been amnclecl &om dmo to tbne (herelnaBer oalled the 11QmdomlnfmD Map"). . TOOBIBBk wrm a exo1uaivo eueaHmt to uao tbo parldq atall .havlq tbe same ammded, and u 1bow1a on tbe amber u tho ApartlQellt u Ht forth ID Ibo DcollJadoa. u Ccmcfomlnimn M.6p. TOOBTHB1l. W1TB aan-e:xc1ualvo ...,..,.. rorlaptaa ud . . . udnpport of tile Aputmart tbroaab 1lao eJeateml and farropah-ortta, 1p11'11118Dt1 ID tlae and thmlah tbe cxnnmon elem.,., SBC'C»m: thzough all odm . ·AJi undivided 1.Q37% intmeat in all common olnmdl oftlae pzoJtctiachscliaatho bmd upon · wbl6h said plOjeol .. Jocaied .. NCablisMd fbr aald ,Apatmim by the O.laratloa, u emended. or such odsar peroemap lntenllt u Jlmelaaftmo oalabUUed b a8lcl ipadmeDt by IDY amendmatl ofthe DecJamdcm. II tr:mmf mOOllllDOQ with tlae odulrOWIUID and tllDlllt8 tlullcot &ins Ill of cmm,ecl by tb tilowtns: Aplrtmellt Deed Onntor. . dnmee: A.tool Aloha LLC, a &await Umlled UabWty oompanr · f'\bfaall Lee Qamlno, a alnalo woman. 11 sole 8IUl 1epanto projlerty. u Tenant In Sovmlly Febnmy 13. 2014 HaWali. u ... 20, 2014 iD 1be Ban8ll of Ccmveyaacos of tbe Slate of Doaflmmt No. A-51640502 • . . Tho !-d{•) upoa wbJob l8id Qmdc411inlum Project Ja looaci la diacdbod 11 follows: .. 11 EXHIBll A . . t ···. ·.( ... · .... • • All of that cartafD jimet ofland (belna a portion oftho lad delcribed in llld covaed by Land Commfntoii Awmd A;aa f2 to w.c.'Um•Do) aitute, lyjag and being· OD the w t lido ofKmaina Awnue. at Kapeln!la, HoD0JuJa. City ad Comity of llon9Julu, State ofHawaii. being PARCEL B. and 1hm bounded IDd delcrlbed u per smvey prepared by Maaru T..W.. bsfstcted Piofenional Lalld Sm VCS)Ot, Clatod Soplember24, 1971, to· wJt: .. . . bemg Beglnnlna at a nodhout CODIOI' ol this pazoal also 011" tile woaterly boundary or Avenue, die oomdlaatea ot wblah ro6nd to Oovemmmt Surv.oyTrianpJadon S1adon "LBABl" being 3.,251.92 feet DOltb. and 522.54 feet west and nmnfna byubmnba "t. 10• ftom 11uo Soutta: 30" 409.69 t6 teetalonatboweata'lyakfeoflCanallaAveauotoan Iron pin 2. 90• 36' 3. 10- 16' 3()• 105.00 teetalongthenm•lnderOfLandComml•alcm Award 8559-B, Apana 32 tO LM•HJo to a pipe; .· &etaJmlathor-eJnderofl.andCoqnl..tonAward 8559-8, Apana 31 to Wm. C. I.nnalPo to a hon pba (fomld); . . . 4. 90• 36' PS.52 feet alonaLeabl Avenue 8abdMsion (PUo Plap No. 613) to ID 8DOW s. 1909 16' 30" • 515.24 fl9et alcma Oovtmmeat Lu4 - Walkild B1ematmy Slllool, to a pJpo; · 45' '·. '205.43' .. mt alona . . · more or 1eaa. · •· ' . nnnatncfor ot Land Commiaaicm Award 8559-B. Apana 32 to Wm. C. Luaalilo, to the point ofNghmfq ad oontamlng a uea of 2.134 ICRS, · · and..,_..,..;.,. · ·rooB'l'HBi WITH 1111 easomom torlngreu ovar ud 80IOl8 Patcol A·1, deacribed in Ccmfodon Deed datucl ,May 11, Jm_ noorde4 in ·tbo Bana1l 'of Conveyanca ot tbo StldD of HawaJl In. Uber at Pap 4'0, wbfob aald easement II dctedbed as fbllowi: · • · . Bogbnrina at a pipO cm tho aortbwost comeroldlis perool of land, OA stdo ofMouana&Aveoae, bainsUC>theDOltbeaalllVlyoomerofWaUdldBlm_..rySolsoolalte, dle OOOJdlnara of whlOh nfened to Cowmmmlt Samy 1'rlllfaaJadGn Station "LBAHP Mm& 3,362.06 6et amthaad 708.4'7 feetweatandmmdna.,, u!nmlb• mwmecl cloclcw1ac • !mm tnl• IOOtb: 19 .. 1. fee! on.aoutherly.side 2700 Tbcnce alongmn•fnder oflt.P. 8124 and 8165, LC. Aw. 8559-B, Apaaa 32, so Wm. . C. Luulilo, on a carve ro dae left with a ndlu of J0.00 teer the aJuml azlmudl llld dlltaOOo • . . . beiq: ·.. 2. soo 3. 100 16' 20•. 4. 90° 451 12.92 . ' toot;. 100.75 teot a1oq mafnder of R.P. 8124 and 8165, L.C. Aw. 8'59-B, Araaa32 to Wm. C. 12.17 feet alcmg Nmamder of LP. -124 ad 8165, .L:C. Aw. 8S59-B. Apual2 to Wm. c. Lunalilo; 109.21 l!ietalqnaaov•••••wrtlad{wailcikiBJ1111mtuy School). to dae point of. begtnnmg .incl coatafnfq an aea of 1,367 squaro feet. mme m Jess. . s.. 190° 16' 300 dsatoertamJlln'OI of'hmd ewvo7cd totb City and . BxceptfDa ao.d County of Honolulu, by Rebma Rawati 1'2uee. Ino...a Misaoad oozporatfcm. bydeednioorded Alapat 4, J 'Y/7 • IJber 12361 Pap 43 of Ofllolal lleoorda, more pardcllllarly deaoribed u follOWB: ' • • Lot 2, tan (10.00) ft. wide rOad IOlbaCk,. befna a portion oflclta 2o all 21 oftho IClpahulu Put, &.las allo a portion ofI.and Pateata,124 uuf 8165, Jud Loll a4faccmt to C-omudafcm Award 8559-B, Apaa32 to WJl.Halll C. IWIUosftaatoatKapalmlu, Honolulu, OahU, Bawati. • side of Beginning If. the aoJtbeut comer of tbla parcel of Japd, OD tho peaem ref'cmd to pearm.edt earvoy K!mJtlna AYID1ll, the eoordhmea ofsaid point and rmming by feet 522.54 md nordt &et S,251.'2 bCfna "Loabl' Jriangnlatlon atatloD azfnmtlls meuuntd oloc&iae &cHD ne souda: west. 1.. 10° 16' . l. 900 36' 30' 409.69 feet &itoua. the presat weat llde of Avmmo; i0.14 feet aJcma mmatndm ofLand Pat.mm 8124 and 816', LC. aw. 8S5'-B,Apllta32 to WUliam C. · Laall!o; ... .. .. 20 '• 409.71 .. • 4. 270° 45' ·· J0.14 Ceot along 8165, LC. aw. 8559'-«5, Lunalilo; Pa1md& fl24 and 32 to William C. foot alongnmamdorofLandPatonts 8124 and · 8165, L. C. 8559-B, Apana 32 to Wllllam C. Lunalllo, to fho .,POint of bogiuing IDd containing ap mea of4,096 feet,'moie or aw. Jess. • SUBJBCT, HOWBVBll, to tbe tollowing: I. R.eserwdon in layer oftbo State ofHawail of all miura1 and motallio mines. · 2. Baaomenl(s) forOulpmpoae(s)ahoWD below amlriabfs inblden1Bl tbmeto as condemned by FiDal of Conclemnalion. Circuit Court of tbo: first CilcvJt Comt Civil No.:' s · Chy and County of Bonofulu · lnfava\'of Pmpoao: sewer · R.ecorded: In tbe Bureau of Conveyances of the • ... '3101,.Pap17 . . land herein dosoribocl Aff'ecta: . of Hawall. Uber . . 3. Condominium Map No. 392, nsconled In iha Bmeau of ConvfYIDcea of tho Stato of . . ·Bawa.ti. 4. Covc:nants,conditionsadrestrictlcma(deletlqthereftomaayrestrictlonaindloadnamay preferenco. Umftadou. or d&criminaticm based on noe. color,,nliglon. ,._ handicap, ftrmilial ar national odsin) as set toztb in 1he followiq: Deolandcm oteorizmd.iPmpaty Rosbno Dated: Recorded: November 12, 1974 in 1he Bureau · PiQe417 Tho Declaratfoa aad/or BBAD SANDS of the State of Hawaii. Uber 10334, · woro . . by tho toUowfng: in die Bunsau .of Convoyanccs of the Stalls of Bawall, Uber 10463, . . .. 21 . • R.ecordod: .. \ . 1n tho Bmeau otConveyanoos oftbe S1ate of Bawail Llbor11010, ... . 1 . Page.540 • . . ill'the Bmeau of Conveyanoee of the State of Bawali, Llber 11493, lteoorded: ,Plp263 1tecorded: la the Bunm of ConY8)'IDOel of the State of Hawaii. Book 15085, Jt.ecarded: In th4 Bureau Pap 10.S Pase ro1 of the State of Rawall, Book 15085, mtbo Bureau of Ccmv.,_,. of tho State o!Hawali, Boole 19958,. lleootded: Jn tbo Bureau of ConftYIDdea of tbo State of Hawaii, Boot 23561, Pap.418 ltecordcd: . .. Note: A:Ay recorded amendmODts to tha DeoJaradoa of Hdrir.ontal Property hslma toanc1 hmapartmmta dehertban tbo specific amendina apartment described Junfn, have bem purpoaely omitted hereftoom. s. Baaemem(•) f'or Ibo pmpoae(1) ahOWIL below and rlsbll faddental thereto u set fOl1!a bl a document; Jnfilvorof Pmpoeo: R.eoorded: .Atfecb: •Hawalhm Bleoldo Coi"JG¥, lao. • snmtbaB ID 881"ad i1r electdcal PU1P*8 ID Ciao B1Jl'elll ofCon¥oJlllCOI oftbe.Sllte ofllawali, Libor 11072, . : Pap2'1 deacribed l•d lndioatiDgany 6. Covenants, coaclltlom bmldicap, . sex, rellgkm, oolor, l8C8, on baaed prefenmco, llmltadan or dlscdminaffon lollowins: tho ID lortb set aa orisln) D!dfonaJ or atatos 1imuta1 Apartment Dcod . ' . July 13, 1976 In die Bmeaa ofConwyimoea of the State • ..:a i'ap 147 . In Uber 11631 \ 7. Tnma. poYiaioDa and OODd1ticma 11 contained ID the Odglna1 Apartment Deed and tho • eJfeot of any failure to comply with Rah tmma. provialom ad coaditlom. • 22 .· .. ., c· ·.. .. • • I . c} . 8. AnyandaUoaeementseacumbarin1tb.eapaztmmtl•9buiiemtlOIUMl.adlort1a9C01D1DOD thereto, • cnated by or moatlohed In aid Declaraiioa, ea aaid IDterelt DecJaradoa may bo amcaded tom 1imo to tbu JD i&ooorduco with tbl lawa ad/or in the OrisfnaJ .Aputmem Deed -4/or as dolln•ced on lllfd Concfomhri"111l Map. attwohcd arist1q 1btturet. billlt·ln TOOBTHBR. ALSO, wr1'B all bldlt..fn appHanrea, wafer b.amr, eJOCUical and/01 pl ad phllDbJq fb:lmps, attacbed CllpOtfis,. existing . . . . range, reftigerator, diaposal.,dlahwuhm:. Wiiber, dryer act telmaton cablo situa1e on or uaed In comioodon witb tho above demised pmporty. BNJ> OP1MIJ'D' "'A"' .. .. ·•
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