The Hawaii Intermediate Court of Appeals recently ruled on a complex property dispute involving Gerald K. Mount, Jr. and Jane R. Mount against Margaret Apao and Dirk Apao, as the personal representative of the Estate of Rose Marie Alvaro. This case, docket number CAAP-23-0000590, has spanned over 15 years and is significant for its implications on wrongful foreclosure claims and property rights in Hawaii.
The court's decision, issued on May 22, 2026, addresses the long-standing legal battle over a property in Honolulu, Hawaii. The ruling is particularly important as it clarifies the legal standards regarding wrongful foreclosure and the rights of parties involved in property disputes. The outcome will affect the Mounts, who claimed ownership of the property after a nonjudicial foreclosure sale, and the Apao family, who contested the legitimacy of that sale.
Background
The dispute began in 2011 when the Mounts filed a complaint against Margaret Apao, Dirk Apao, and Sesha Lovelace, as co-personal representatives of the Estate of Rose Marie Alvaro. The Mounts alleged they purchased the property located at 2979 Mākālei Place at a nonjudicial foreclosure sale, and that Margaret was living there with permission from the Estate. They sought possession of the property, leading to claims for ejectment and quiet title.
Dirk Apao, in his capacity as the personal representative of the Estate, counterclaimed against the Mounts and filed a third-party complaint against U.S. Bank National Association, asserting that the nonjudicial foreclosure was improper. Dirk claimed that the foreclosure violated Hawaii's probate code and nonjudicial foreclosure statutes, arguing that the transfer of the property was defective and fraudulent. This case has seen multiple appeals, with significant rulings from both the Hawaii Supreme Court and the Intermediate Court of Appeals.
The Ruling
The Intermediate Court of Appeals ruled in favor of the Mounts on several issues but found that the circuit court erred in granting summary judgment to U.S. Bank regarding the Estate's wrongful foreclosure claim. The court stated, "The Estate presented sufficient evidence to raise a genuine issue of material fact regarding its ability to reinstate the loan and, therefore, it was error to grant summary judgment in favor of U.S. Bank on the Estate's wrongful foreclosure claim." This ruling emphasized the need for a trial to determine the damages suffered by the Estate due to the wrongful foreclosure.
The court also affirmed the circuit court's decisions on other issues, including the denial of Dirk's motion for leave to amend his third-party complaint and the summary judgment regarding the violation of the probate code claim. The judges involved in this ruling included Presiding Judge McCullen and Judge Guidry, with Circuit Court Judge Costa participating in place of Chief Judge Nakasone.
Impact
This ruling has significant implications for property law in Hawaii, particularly regarding wrongful foreclosure claims. It underscores the importance of providing reinstatement figures to borrowers and clarifies the standards for determining damages in such cases. The court's decision to allow the Estate's claim to proceed means that parties in similar situations may have a stronger basis for challenging wrongful foreclosures in the future.
The case also highlights the complexities involved in property disputes, especially those that involve multiple parties and lengthy legal histories. As the court noted, the proceedings in this case have been ongoing for over 15 years, illustrating the potential for protracted litigation in property disputes.
What's Next
The ruling can potentially be appealed to the Hawaii Supreme Court, although details on whether the Apao family plans to pursue this option were not available in the court filing. Given the complexities of the case and its lengthy history, further legal developments may arise as the parties continue to navigate the implications of this ruling.