Background
PHH Mortgage Corporation filed a foreclosure action against Frank Diaz and Olga V. Diaz in Hawaii’s First Circuit Court (Case No. 1CC171001566). Several other parties were joined in the litigation, including USAA Federal Savings Bank, the United States of America, the State of Hawaiʻi and its Department of Taxation, Hawaii Kai Marina Community Association, and the Association of Apartment Owners of Kaimala Marina. The United States also filed a cross-claim against several of the co-defendants.
The Diazes, appearing as defendants and counterclaimants, were unsuccessful at the trial court level. They appealed to the Intermediate Court of Appeals (ICA) under docket CAAP-23-0000319, which ruled against them. They then sought further review by petitioning the Hawaii Supreme Court for a writ of certiorari on May 15, 2026.
The Court’s Holding
The Supreme Court of Hawaiʻi, in a brief order signed by Chief Justice Devens and Justices McKenna, Eddins, and Ginoza, along with Circuit Judge Souza sitting by assignment, unanimously rejected the Diazes’ application for writ of certiorari. The court issued no written opinion elaborating on its reasoning, which is consistent with a summary denial of discretionary review.
The rejection of the certiorari application leaves the ICA’s decision as the final appellate ruling in the case, affirming the outcome below in favor of PHH Mortgage Corporation.
Key Takeaways
- The Hawaii Supreme Court declined to grant discretionary review of the ICA’s decision, exhausting the Diazes’ state appellate options.
- The denial of certiorari is not a ruling on the merits; the court simply chose not to exercise its discretionary jurisdiction.
- The foreclosure proceedings initiated by PHH Mortgage Corporation may now proceed without further impediment from state appellate litigation.
Why It Matters
While a certiorari denial carries no precedential weight on the underlying legal questions, it signals the conclusion of the Diazes’ state court appellate path. For practitioners, the case underscores that Hawaii’s Supreme Court retains full discretion to decline review of ICA decisions, even in contested foreclosure matters involving multiple lienholders and government parties.
The presence of federal and state tax lien claimants alongside a community association and a condominium owners association illustrates the layered priority disputes that commonly arise in Hawaii mortgage foreclosures, an area where lenders and title professionals should remain attentive to proper joinder and lien resolution procedures.