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Electronically Filed Supreme Court SCAP-30686 15-MAR-2013 08:36 AM

IN THE SUPREME COURT OF THE STATE OF HAWAI#I ----o0o--________________________________________________________________ EASTERN SAVINGS BANK, FSB, Respondent/Plaintiff-Appellee, vs. EDUARDSON ESTEBAN and EMALYN P. GABRIEL-ESTEBAN, Petitioners/Defendants-Appellants. ________________________________________________________________ SCAP-30686 APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT (ICA NO. 30686; CIV. NO. 09-1-0022) March 15, 2013 RECKTENWALD, C.J., NAKAYAMA, ACOBA, AND MCKENNA, JJ., AND CIRCUIT JUDGE LEE, IN PLACE OF DUFFY, J., RECUSED OPINION OF THE COURT BY MCKENNA, J. I. Introduction Defendants-Appellants Eduardson Esteban and Emalyn P. Gabriel-Esteban ("the Estebans"), borrowers and mortgagors under a residential mortgage loan, appeal the Circuit Court of the Fifth Circuit's ("circuit court") judgment confirming the

***FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER***

foreclosure sale of real property to Plaintiff-Appellee Eastern Savings Bank, FSB ("Eastern").1 This court accepted a

discretionary transfer of the case. The issue presented is whether Hawai#i res judicata principles prohibit a debtor from asserting federal Truth in Lending Act ("TILA") rescission rights after a foreclosure judgment has become final, even if TILA's three-year time limit for rescission has not expired. For the reasons discussed below, we answer in the affirmative. Therefore, we affirm the judgment of the circuit

court confirming sale of the foreclosed property to Eastern, granting a writ of possession, and entering a deficiency judgment against the Estebans.

II.

Background This case arises out of a foreclosure2 on a mortgage on

property located on Kaua#i ("the Property"), granted by the Estebans to Eastern as security for a $489,000 loan obtained on August 15, 2007. The Estebans defaulted on the loan and, on

1

The Honorable Randal Valenciano presided.

"The term `foreclosure' is defined as a legal proceeding to terminate a mortgagor's interest in property, instituted by the mortgagee either to gain title or to force a sale in order to satisfy the unpaid debt secured by the property." 55 Am. Jur. 2d Mortgages

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Hawaii Law