2026-09-10 · Hawaii · Courts

A bank that foreclosed defectively, bought the unit itself, paid maintenance fees for a decade and then sued to have its own foreclosure declared void has lost. The Intermediate Court of Appeals vacated the judgment it had won below, and the Hawaii Supreme Court rejected certiorari on July 7, 2026.¹²

The Bank of New York Mellon v. Association of Apartment Owners of Palm Villas II, No. CAAP-23-0000402, was decided by summary disposition order on February 6, 2026 — unpublished, which under Hawaii Rules of Appellate Procedure Rule 35 limits its citation value, though not its practical significance.

What happened

BNYM nonjudicially foreclosed a mortgage at Palm Villas II in 2009. The auction was postponed three times and no postponement notice was ever published. BNYM bought the unit at its own sale, took a quitclaim conveyance, and paid the association’s maintenance fees for roughly ten years.

Then it stopped, and sued to have the 2009 foreclosure declared “null and void,” the mortgage reinstated, and its lien restored to Land Court — which would have unwound its ownership and the fee obligation that came with it. The circuit court granted it partial summary judgment.

What the ICA held

The bank had standing to seek declaratory relief under HRS § 632-1 — the association “may claim an interest in the Property by virtue of… unpaid maintenance fees,” which is a live controversy. On the merits it lost.

Quoting Delapinia v. Nationstar Mortgage LLC: “[I]f a foreclosure violates a statute governing the nonjudicial foreclosure scheme, or other law extrinsic to the mortgage itself, the sale is voidable at the election of the mortgagor.” And then the sentence that decides the case: “BNYM presented no evidence that either of its mortgagors elected to void the nonjudicial foreclosure.… BNYM’s argument is contrary to the law.”

1. BNYM v. AOAO of Palm Villas II, No. CAAP-23-0000402, Hawaii ICA summary disposition order, February 6, 2026 ↩
2. Order rejecting application for writ of certiorari, SCWC-23-0000402, July 7, 2026 ↩