Bank of Hawaii v. Kunimoto
Hawaii Intermediate Court of Appeals · 1997-09-04 · cited 6×
The case was a mortgage foreclosure action brought by the Bank of Hawaii against borrower Alan Kunimoto and related parties to recover on five promissory notes secured by real property, followed by a request for deficiency judgments after the property sale. The court held that the bank, as holder of the notes, was required to communicate its election to accelerate the maturity dates by an affirmative act such as notice to the borrower, and therefore vacated the portion of the deficiency judgment tied to the First and Fifth Notes for further proceedings to determine when acceleration occurred. The core reasoning was that acceleration clauses in the notes do not automatically mature the debt upon default without the holder taking some overt step to exercise the option, which affects the start of any higher default interest rate and the amounts owed.