“Implied Dissolution of Litigation Stays upon Reinstatement Orders”
Greenspon v. CIT Bank, N.A. — Supreme Court of Hawaiʻi, 29 July 2025

Introduction

Greenspon v. CIT Bank, N.A. concerns prolonged post-foreclosure litigation that ricocheted between the Circuit Court of the Second Circuit, the Intermediate Court of Appeals (ICA), and ultimately the Supreme Court of Hawaiʻi. At its center is Michael C. Greenspon, whose Maui property was sold non-judicially in 2010. Greenspon sued CIT Bank and its counsel, alleging a broad spectrum of tort and statutory wrongs linked to the foreclosure.
The litigation trajectory was marred by:

• a 2015 stay pending a related ICA appeal,
• dismissal for failure to file a pre-trial statement under Rule 12(q),
• reinstatement of the action in 2019, followed by renewed inactivity,
• a 2020 dismissal with prejudice under Rule 41(b)(1) and a designation of Greenspon as a “vexatious litigant” under HRS Chapter 634J.

The ICA vacated the dismissal, reasoning the 2015 stay was never formally lifted. Both parties sought certiorari: Greenspon to purge the vexatious-litigant order, and CIT Bank to restore the dismissal and final judgment.

Summary of the Judgment

The Supreme Court of Hawaiʻi unanimously reversed the ICA, holding that the circuit court’s March 4 2019 order—granting Greenspon’s motion to set aside the Rule 12(q) dismissal and imposing a new pre-trial-statement deadline—necessarily and implicitly lifted the 2015 stay. Accordingly, all subsequent filings (including CIT Bank’s April 2020 motions) were procedurally proper.

The Court further affirmed (1) dismissal of Greenspon’s case with prejudice for failure to prosecute and (2) his designation as a vexatious litigant, finding no abuse of discretion in light of protracted delay, prejudice to CIT Bank, and a pattern of meritless filings.

Analysis

Precedents Cited

1. Herrmann v. Herrmann, 138 Haw. 144 (2016) and Bank of Hawaiʻi v. DeYoung, 92 Haw. 347 (2000)
   • Established that interpretation of court orders presents pure questions of law, reviewed de novo.
2. Wohlschlegel v. Uhlmann-Kihei, Inc., 4 Haw. App. 123 (1983); Smith v. Smith, 56 Haw. 295 (1975); Ahuna v. DHHL, 64 Haw. 327 (1982)
   • Articulated canons for construing orders “reasonably and as a whole” and considering necessary implications as well as express language.
3. State v. Nelson, 140 Haw. 123 (2017)
   • Reaffirmed the above rules on order interpretation.
4. Erum v. Llego, 147 Haw. 368 (2020)
   • Provided criteria for dismissal with prejudice for failure to prosecute—namely, prejudice to the defendant and insufficiency of lesser sanctions.

These authorities supplied the doctrinal scaffolding for the Court’s conclusion that lifting of the stay could be derived implicitly, and that dismissal and vexatious-litigant sanctions were within the circuit court’s discretionary ambit.

Legal Reasoning

1. Interpreting the March 4 2019 Order
   The Court viewed the order reasonably and as a whole. Because it reinstated the case and fixed a deadline for the pre-trial statement (which under RCCH 12(c) automatically launches trial-setting procedures), it necessarily signaled the resumption of litigation. The phrase unavoidably and necessarily implied—borrowed from Ahuna—became pivotal; an explicit line lifting the stay was unnecessary.
2. Procedural Validity of Later Filings
   Once the stay was deemed lifted, CIT Bank’s April 2020 Rule 41(b)(1) dismissal motion and Chapter 634J motion were proper. The ICA’s contrary view—treating all post-2015-stay filings as null—was therefore erroneous.
3. Dismissal with Prejudice
   Applying Erum, the Court found: (a) Greenspon’s year-long inactivity after the reinstatement, (b) witness/property document issues accruing over the ten-year litigation arc, and (c) futility of lesser sanctions. These satisfied the prejudice and proportionality prongs, justifying dismissal.
4. Vexatious Litigant Designation
   Under HRS § 634J-1(3), courts may label as vexatious any party who files unmeritorious papers or engages in bad-faith tactics. The record—serial suits, disregard of orders, ad hominem attacks—met that threshold; the Supreme Court upheld all restrictions imposed by the circuit court.

Impact

• Clarifies Effect of Reinstatement Orders. Hawaiʻi trial courts now have precedent that an order vacating a dismissal and resetting deadlines ipso facto lifts prior stays, absent contrary language. That expedites litigation and reduces satellite motions to “lift stay.”
• Reinforces Discretionary Muscle for Rule 41(b)(1) Dismissals. The decision signals appellate willingness to uphold dismissals where plaintiffs are dilatory, even after earlier leniency.
• Strengthens Chapter 634J Utilization. It green-lights trial courts to invoke vexatious-litigant statutes in foreclosure-related and consumer cases featuring repetitive filings.
• Influence Beyond Hawaiʻi. Though a state ruling, its reasoning on implicit lifting of stays and pretrial-statement mechanics feeds persuasive authority in jurisdictions with analogous rules.

Complex Concepts Simplified

Stay of Proceedings

An order that temporarily halts all activity in a case. Think of pressing a “pause” button; deadlines and motions are frozen until the court “unpauses.”

Rule 12(q) Dismissal

Under Hawaiʻi’s Circuit Court Rules, if a plaintiff does not file a pre-trial statement within eight months (or an extension), the court can dismiss the case on its own initiative.

Rule 41(b)(1) Dismissal for Failure to Prosecute

Allows a defendant to seek dismissal where the plaintiff does nothing to advance the case, analogous to a coach forfeiting the game for no-shows.

Vexatious Litigant (HRS Chapter 634J)

A party who repeatedly files baseless motions or lawsuits, causing delay or harassment. Courts may require such litigants to obtain leave before filing future actions.

Implicit vs. Explicit Orders

An explicit order states its command directly (e.g., “the stay is lifted”). An implicit order conveys the same effect through necessary implication—actions ordered would be impossible unless the stay were gone.

Conclusion

Greenspon v. CIT Bank, N.A. crystallizes a practical, commonsense rule: when a court reinstates a case and re-sets operative deadlines, earlier litigation stays are presumed dissolved unless expressly retained. By restoring the circuit court’s dismissal and vexatious-litigant order, the Supreme Court of Hawaiʻi re-affirmed trial judges’ discretion to police docket inertia and abusive tactics. Going forward, Hawaiʻi litigants and courts alike can treat reinstatement orders as green lights to proceed—no separate lift-stay motion required. Simultaneously, parties who ignore such green lights do so at peril of dismissal and vexatious-litigant sanctions.