“Fraud on the Court” Claims Against Opposing Counsel Demand a High, Particularized Showing of Egregious Misconduct (and Courts Must Screen Sufficiency at the Pleading Stage)

Case: Greenspon v. Deutsche Bank National Trust Company, 155 Haw. 258 (Haw. Feb. 12, 2026) (SCWC-20-0000590)

1. Introduction

This decision arises from long-running litigation by Michael C. Greenspon concerning an attempted nonjudicial foreclosure of his Maui property, purchased in 2003 and secured by a mortgage loan later associated with IndyMac and its successors. After a 2010 nonjudicial foreclosure purportedly transferred title to Deutsche Bank National Trust Company (“DBNTC”), Greenspon filed multiple suits. The present case is a separate 2019 action targeting, among others, DBNTC’s foreclosure counsel—Dentons US LLP and related attorneys (collectively, “Dentons”)—based on Dentons’ litigation filings and recordings in the remanded “Main Action.”

2. Summary of the Opinion

The Supreme Court largely agreed with the circuit court and disagreed with the ICA’s lone carve-out. It held:

• The ICA correctly affirmed dismissal of Greenspon’s claims against Dentons (e.g., UDAP and tort theories) because they were barred by doctrines protecting opposing counsel from civil liability based on litigation conduct, consistent with Hungate v. Law Office of David B. Rosen and the litigation privilege.
• The ICA erred in reinstating any “fraud on the court” claim against Dentons. Even assuming Greenspon’s allegations true, they did not meet the “high threshold” for fraud on the court.
• The circuit court did not abuse its discretion in declaring Greenspon a vexatious litigant under HRS § 634J-1(3) and (4).

Accordingly, the Court vacated the ICA’s judgment only to the extent it revived the fraud-on-the-court theory, and affirmed the circuit court’s final judgment in full.

3. Analysis

3.1. Precedents Cited (and How They Drove the Result)

• Hungate v. Law Office of David B. Rosen
  

  Hungate is the opinion’s anchor for rejecting borrower claims against a foreclosing lender’s counsel under HRS Chapter 480. The Court reiterated Hungate’s core policy: imposing duties to an adversary creates “unacceptable conflict of interest,” risks impairing zealous advocacy, and makes attorneys “especially vulnerable” under HRS § 480-2’s “capacity to deceive” standard. In Greenspon, because all challenged conduct arose from Dentons’ law practice in representing DBNTC, Hungate foreclosed Greenspon’s UDAP theory against counsel.

  The Court also invoked Hungate’s footnote 22 “patently illegal activities” caveat, but held the pleaded facts did not approach “patently illegal” conduct: Dentons sought leave to file a counterclaim for judicial foreclosure and recorded standard instruments (NOPA and Assignment/Transfer of Lien).

• Kahala Royal Corp. v. Goodsill Anderson Quinn & Stifel
  

  Kahala Royal supplied the general rule of the litigation privilege: claims by a civil litigant against the opposing party’s attorney are generally barred when based on litigation activity. The Court acknowledged Kahala Royal’s recognized exceptions—malicious prosecution and abuse of process—yet emphasized Greenspon neither pleaded (nor factually supported) those narrow pathways.

• James B. Nutter & Co. v. Namahoe
  

  Namahoe defined the modern Hawaiʻi “fraud on the court” framework and, critically here, its narrowness. The Court quoted Namahoe for the proposition that fraud on the court is a “wrong against the institutions” and must be interpreted narrowly to avoid perpetual attacks on judgments and hollowing out HRCP Rule 60(b)(3)’s one-year limit for ordinary fraud.

  The Court drew from Namahoe the operative screening instruction: courts must assess whether allegations meet the “high threshold” for fraud on the court; “only the most egregious misconduct” qualifies.

• Domingo v. James B. Nutter & Co.
  

  The ICA relied on Domingo to revive Greenspon’s fraud claim against Dentons. The Supreme Court did not reject Domingo outright; rather, it confined it to its facts—where the ICA recognized damages liability against counsel based on the same “egregious” foreclosure affirmation addressed in Namahoe.

  Greenspon thus functions as a limiting gloss on expansive readings of Domingo: “fraud on the court” is not triggered by ordinary disputes over chain-of-title or entity status, even if errors exist, absent the kind of extreme, system-threatening conduct present in Namahoe/Domingo.

• Cvitanovich-Dubie v. Dubie
  

  Cited through Namahoe for the principle that fraud on the court affects more than the litigants and is therefore narrowly construed. This supported the Court’s insistence on exceptional circumstances.

• Ray v. Ray and SEC v. N. Am. Clearing, Inc.
  

  These out-of-jurisdiction authorities reinforced the “most egregious misconduct” formulation and the idea that the fraud-on-the-court standard is “more exacting” than ordinary fraud under procedural rules.

• Exotics Hawaii- Kona, Inc. v. E.I. Du Pont De Nemours & Co.
  

  Appearing in the case’s earlier appellate history, Exotics Hawaii- Kona was used by the ICA in 2016 to stress that fraud (like other torts) requires breach, causation, and injury—context that underlines why mere allegations about litigation positions, absent cognizable injury and duty, fail.

• Ek v. Boggs; Ass'n of Apartment Owners of Wailea Elua v. Wailea Resort Co.; Trs. of Est. of Bishop v. Au
  

  These cases supplied the abuse-of-discretion standard and framing for reviewing vexatious-litigant determinations and discretionary trial-court rulings.

• Haw. Med. Ass'n v. Haw. Med. Serv. Ass'n, Inc.
  

  Provided the de novo standard for HRCP Rule 12(c) judgment on the pleadings and the requirement to view pleadings in the light most favorable to the nonmovant—yet still affirm dismissal where “beyond a doubt” no set of facts would entitle relief.

• Sosa v. DIRECTV, Inc. and Prop. Real Est. Invs., Inc. v. Columbia Pictures Indus., Inc.
  

  Cited in background for Noerr-Pennington and “sham litigation,” but the Supreme Court expressly declined to address Noerr-Pennington’s applicability because it was not at issue on appeal.

3.2. Legal Reasoning

A. Why the Court affirmed dismissal of all non–fraud-on-the-court claims against Dentons

The Court treated the suit as an attempt to repackage grievances about DBNTC’s litigation strategy into tort and statutory claims against opposing counsel. Two interlocking principles did the work:

• No-duty/conflict rationale for UDAP and attorney liability (from Hungate v. Law Office of David B. Rosen): imposing UDAP-based liability on opposing counsel threatens zealous representation and invites adversary-side end-runs around the attorney-client relationship.
• Litigation privilege (from Kahala Royal Corp. v. Goodsill Anderson Quinn & Stifel): absent pleaded and supportable malicious prosecution or abuse of process, litigation conduct remains privileged.

The Court also emphasized that Dentons’ actions (filing counterclaims; recording a NOPA; recording an assignment/transfer instrument) were standard litigation-related measures, not “patently illegal activities” that would defeat these protections.

B. Why the Court rejected the ICA’s reinstatement of a fraud-on-the-court theory

The Court’s central doctrinal move was to apply Namahoe’s instruction that courts must not merely accept the label “fraud on the court,” but must assess whether pleaded facts meet the doctrine’s exceptionally high bar.

The Court reiterated: fraud on the court is narrowly interpreted; “only the most egregious misconduct” qualifies; and courts must evaluate whether allegations reach that “high threshold.”

The Court then distinguished Namahoe/Domingo on both quality and consequence:

• Quality of alleged misconduct: In Namahoe and Domingo, the attorney affirmation was described as “egregious, legally and factually deficient, inaccurate and incomplete, materially false and misleading.” Here, at most, Greenspon alleged errors about which entity held the note/mortgage amid IndyMac’s collapse—insufficient to qualify as “most egregious.”
• Consequence/systemic harm: In Namahoe, the deficient affirmation contributed to a “grossly inequitable foreclosure” on a reverse mortgage; in Greenspon, there was no comparable end-result—indeed, the Court stressed it was “decisively determined” Greenspon stopped paying by August 2008 and he retained the property (no foreclosure dispossessing him occurred in the way that animated Namahoe).

Finally, the Court invoked HRCP Rule 9(b): fraud must be pleaded with particularity, and fraud on the court is even “more exacting” than ordinary fraud. On the pleadings presented, Greenspon did not allege “well-pleaded, particularized” facts implicating Dentons in the kind of institution-corrupting conduct the doctrine targets.

C. Why the vexatious-litigant order was affirmed

The Court upheld the circuit court’s findings under two statutory prongs:

• HRS § 634J-1(4): prior vexatious-litigant declaration by another state/federal court based on substantially similar facts
• HRS § 634J-1(3): in propria persona, bad-faith unmeritorious filings, unnecessary discovery, or tactics intended to delay

Two clarifications matter for future litigants:

• Out-of-state orders can matter: the circuit court properly took judicial notice of Florida vexatious-litigant restrictions and found substantial factual overlap.
• An express “bad faith” label is not required: the Court rejected Greenspon’s argument that HRS § 634J-1(3) demands an explicit bad-faith finding, while concluding the record independently contained ample evidence of delay, noncompliance, and disruptive conduct in Hawaiʻi proceedings.

3.3. Impact

• Fraud-on-the-court doctrine is reaffirmed as exceptional: Greenspon reinforces that courts must screen and reject attempts to transform ordinary litigation disputes (even allegations of misstatements) into “fraud on the court” unless the allegations plausibly show “most egregious” conduct harming the judicial institution.
• Constrains borrower suits against foreclosure counsel: the decision strengthens the combined shield of Hungate and the litigation privilege, signaling that claims premised on opposing counsel’s filings/recordings will usually fail absent narrow, well-pleaded exceptions.
• Limits expansive readings of Domingo v. James B. Nutter & Co.: the Court effectively cabins Domingo to Namahoe-level egregiousness rather than allowing “fraud on the court” to become a routine pleading strategy against attorneys.
• Vexatious-litigant enforcement is validated: trial courts may rely on robust records of delay/noncompliance and may consider substantially similar out-of-state vexatious-litigant determinations under HRS § 634J-1(4).

4. Complex Concepts Simplified

• Judgment on the pleadings (HRCP Rule 12(c)): a case can be dismissed based only on the pleadings when, even assuming the plaintiff’s factual allegations are true, the law still provides no viable claim.
• Litigation privilege: a doctrine generally protecting statements and actions made in the course of litigation from becoming the basis of later civil liability, to preserve candor and zealous advocacy (with narrow exceptions like malicious prosecution or abuse of process).
• UDAP (HRS § 480-2): prohibits unfair/deceptive acts in trade or commerce. Hungate limits attempts to use HRS Chapter 480 as a vehicle to sue opposing counsel for conduct arising from legal representation in foreclosure litigation.
• Fraud vs. “fraud on the court”: ordinary fraud typically concerns harm between parties; “fraud on the court” is rarer and targets conduct that undermines the integrity of the judicial system itself. The threshold is deliberately “high” and reserved for “most egregious misconduct.”
• HRCP Rule 9(b) particularity: fraud allegations must state the “who, what, when, where, and how” with specificity; conclusory labels are insufficient—especially for fraud on the court.
• Vexatious litigant (HRS Chapter 634J): a designation allowing courts to curb abusive self-represented litigation practices, including repetitive meritless filings and delay tactics, and it can be supported by similar prior orders from other jurisdictions.

5. Conclusion

Greenspon v. Deutsche Bank National Trust Company clarifies that Hawaiʻi courts must actively police the boundary between ordinary fraud allegations and the extraordinary doctrine of “fraud on the court.” The decision confirms that only institution-threatening, egregious, particularly pleaded misconduct—of the kind identified in James B. Nutter & Co. v. Namahoe and referenced in Domingo v. James B. Nutter & Co.—can support a fraud-on-the-court theory against foreclosure counsel. At the same time, the Court reinforces strong protections for opposing attorneys under Hungate v. Law Office of David B. Rosen and the litigation privilege, and it approves firm use of HRS Chapter 634J to address sustained abusive litigation conduct.